PROJECT MANUAL · containing the respective items described in Paragraph 6 below. All Bid envelopes will be time-stamped to reflect their submittal time. Envelope shall be due by

DOCUMENT 00001

PROJECT MANUAL

PORT OF STOCKTON PORT POLICE FUSION CENTER

Contract Number 5-19-1

FEMA GRANT 2016-PU-00450 at

WEST COMPLEX

PORT OF STOCKTON STOCKTON, CA

Juan G. Villanueva Director, Development & Planning

Port of Stockton

MAILING ADDRESS: P.O. Box 2089 Stockton, CA 95201

ADMINISTRATION BUILDING: 2201 W Washington St. Stockton, CA 95203

00001- 1

FEMA Grant 2016-PU-00450 Contract No. 5-19-1

DOCUMENT 00010 TABLE OF CONTENTS

Division Section Title INTRODUCTORY INFORMATION 00001 Title Page

00010 Table of Contents

BIDDING REQUIREMENTS 00100 Advertisement for Bid 00200 Instructions to Bidders 00320 Geotechnical Data and Existing Conditions 00335 Hazardous Materials Survey 00400 Bid Form 00411 Bond Accompanying Bid 00420 Bidder Registration Form 00430 Subcontractors List 00481 Non-Collusion Affidavit 00482 Bidder Certifications CONTRACT FORMS 00505 Notice of Intent to Award for Construction 00510 Notice of Award 00520 Agreement 00550 Notice to Proceed 00610 Construction Performance Bond 00620 Construction Labor and Material Payment Bond 00630 Guaranty 00650 Agreement and Release of Any and All Claims 00660 Substitution Request Form 00680 Escrow Agreement for Security Deposits in Lieu of Retention CONDITIONS OF THE CONTRACT 00700 General Conditions

00800 Supplementary General Conditions -- Attachment I – Federal Requirements -- Attachment II – Federal Requirements / Required Documents, Reporting Forms & Instructions

00821 Insurance and Indemnification 00822 Apprenticeship Program 00910 Addenda GENERAL REQUIREMENTS 01100 Summary Attachment A – Special Provisions Attachment B – Construction Management Fact Sheet 01200 Price and Payment Procedures 01250 Modification Procedures 01315 Project Meetings 01320 Progress Schedules and Reports 01330 Submittal Procedures 01340 Safety Submittals 01410 Regulatory Requirements 01420 References and Definitions 01500 Temporary Facilities and Controls Port of Stockton Table of Contents Port Police Fusion Center 00010- 1


01540 Site Security and Safety 01600 Product Requirements 01740 Cleaning 01770 Contract Closeout 01780 Project Record Documents DRAWINGS

CIVIL Package 1 Port of Stockton Fusion Building

Sheet 1 – Topographic Sheet

ARCHITECTURAL Package 2 Port of Stockton Fusion Center

Sheet T1.1 – TITLE SHEET Sheet T2.1 – OCCUPANY PLAN / SYMBOLS / ABBREVIATIONS Sheet T2.2 – CODE COMPLIANCE / CALGREEN Sheet T3.2 – POSETD SIGNAGE – BUILDING ACCESSIBILITY Sheet A2.1 – DIMENSION / NOTATION FLOOR PLAN Sheet A2.3 – FOUNDATION PLAN Sheet A3.1 – EXTERIOR ELEVATIONS Sheet A4.1 – SECTIONS Sheet A5.1 – WALL SECTION Sheet A6.1 – DETAILS Sheet A7.1 – ROOF PLAN Sheet A8.1 – DOOR / WINDOW SCHEDULE Sheet A9.1 – REFLECTED CEILING PLAN Sheet A10.1 – FINISH SCHEDULE / INTERIOR ELEVATIONS

ELECTRICAL

Package 3 Port of Stockton Fusion Building Sheet E0.1– GENERAL NOTES Sheet E1.1 – EXISTING ELECTRICAL SITE PLAN & ELECTRICAL SITE PLAN Sheet E2.1 – LIGHTING FLOOR PLAN Sheet E3.1 – POWER FLOOR PLAN Sheet E4.1 – PANEL SCHEDULES, ELECTRICAL DETAILS, ONE LINE DIAGRAM & LEGEND Sheet ET24A – COMPLIANCE Sheet ET24B – COMPLIANCE Sheet ET24C – COMPLIANCE Sheet ET24D – COMPLIANCE

MECHANICAL

Package 4 Port of Stockton Fusion Center Sheet P2.1 – PLUMBING FLOOR PLAN Sheet P8.1 – PLUMBING SCHEDULES & DETAILS Sheet P8.2 – PLUMBING SPECIFICATIONS Sheet M2.1 – MECHANICAL FLOOR PLAN Sheet M8.1 – MECHANICAL SCHEDULES & DETAILS Sheet M8.2 – MECHANICAL DETAILS Sheet M8.3 – MECHANICAL SPECIFICATIONS Sheet M8.4 – MECHANICAL SPECIFICATIONS Sheet T24.1 – ENERGY CALCULATIONS Sheet T24.2 – ENERGY CALCULATIONS Sheet T24.3 – ENERGY CALCULATIONS

END OF DOCUMENT

Port of Stockton Table of Contents Port Police Fusion Center 00010- 2


DOCUMENT 00100

ADVERTISEMENT FOR BIDS

1. NOTICE. The PORT OF STOCKTON, a municipal corporation of the State of California (“Port”) hereby gives notice that it will accept Bids for construction of the following public work:

PORT CONTRACT NUMBER 5-19-1

PORT OF STOCKTON PORT POLICE FUSION CENTER

2. BID SUBMISSION. Port will receive sealed Bids no later than 3:00 p.m. on Wednesday, November 20, 2019 Port’s

representative will call out the designated time in the Port Administration Building lobby, stating that the period for accepting Bids is closed. The Bid opening will be in accordance with procedures set forth in Document 00200 (Instructions to Bidders).

3. CONTACT INFORMATION. Mailing Address: Janice Dias P.O. Box 2089 Stockton, California 95201 Website address for more information: www.portofstockton.com Owner’s Representative: Juan G. Villanueva Director, Development & Planning Or Port Designated Representative Telephone: (209) 946-0246 Fax: (209) 465-7244 4. DESCRIPTION OF THE WORK. The Fusion Center Project is a Technology and Security grant project to provide

the necessary infrastructure to satisfy Maritime Transportation Security Act requirements and implementation according to the Department of Homeland Security (DHS), Transportation Security Administration (TSA), and the US Coast Guard (USCG). Thus the scheduling and completion of this project is critical to the Port to succeed in achieving their objectives and commitments with respect to government grant funding. This project consists of the construction of the new Port Fusion Center, Building 17A; a multi-departmental workspace with offices for the Port Police Department, USCG, DHS, and TSA TWIC offices. The new building will represent the original building that was demolished at the same location. Scope of work includes the construction of a new efficient 1,601 square foot, single-story, wood framed office structure on a new concrete pad foundation, and a 6’ x 56’ 6” covered walkway. The roof structure includes a combination of prefabricated / pre-engineered wood trusses and conventional wood framed construction, with a roof envelope of 50-year asphalt shingles over 30# felt, roof deck plywood, and roof insulation. The exterior wall envelope is a 3-coat plaster system over insulated wood framed walls, energy efficient dual paned windows, and hollow metal doors and frames.

The building includes two open offices, four private offices, two all-gender accessible restrooms, and two open kitchen/ coffee areas. Interior finishes consist of taped, textured & painted gypsum board walls, 2 x 4 ceiling tiles, carpet tile, walk-off matt, 4” rubber base, sheet vinyl at wet areas and FRP wainscot in the restrooms. Millwork consists of approximately 10 lineal feel of upper and lower casework, and interior doors are prefinished wood in hollow metal frames.

Advertisement for Bids Port of Stockton Port Police Fusion Center 00100 - 1

http://www.portofstockton.com/


The mechanical, electrical, and plumbing systems will meet and exceed the California mandatory energy conservation requirements set forth in California Title 24, and the California Green Building Code. The electrical system will be energy efficient LED lighting and will include power connections to an Electric Vehicle charger.

The data communications systems for the building are a protected resource with Port secure communications for the Port office and externally protected resources for the TWIC facility. The building will be pre-wired to support multiple fixed workstations, mobile assets brought to the facility, and data devices, including infrastructure and pre-wiring to support the future installation of multi-source AV, secure video management and access control technologies.

To ensure “continued operations” in the event of a disaster, the facility is designed to be powered by a mobile backup generator provided by the Port.

5. CONTRACT TIME. Work shall be finally completed within four (4) months from the date when Contract Time commences to run.

6. REQUIRED CONTRACTOR’S LICENSE(S). A California “A” contractor’s license is required to Bid this Contract.

Joint ventures must secure a joint venture license prior to award of this Contract.

7. PREVAILING WAGE LAWS. The successful Bidder must comply with all prevailing wage laws applicable to the Project, and related requirements contained in the Contract Documents.

8. INSTRUCTIONS. Bidders shall refer to Document 00200 (Instructions to Bidders) for required documents and items

to be submitted in sealed envelopes for deposit at the Port of Stockton administration building lobby.

9. SUBSTITUTION OF SECURITIES. Port will permit successful Bidder to substitute securities for retention monies withheld to ensure performance of Contract, as set forth in Document 00680 (Escrow Agreement for Security Deposits in Lieu of Retention), in accordance with California Public Contract Code, Section 22300. By this reference, Document 00680 (Escrow Agreement for Security Deposits in Lieu of Retention) is incorporated in full in this Document 00100.

10. MANDATORY PRE-BID CONFERENCE AND SITE VISIT. Port will conduct a Mandatory Pre-Bid Conference and Site Visit at 10:00 a.m. on Wednesday, October 16, 2019, initially meeting at the Port Administration Building, 2201 W. Washington Street, Stockton, California. Each Bidder must be represented at the meeting. To be eligible, each Bidder’s representative is required to sign an attendance sheet prior to 10:00 a.m. identifying the Bidder represented. Any Bidder arriving after that time will not be permitted to attend the meeting or Bid on the Work. Any Bidder wishing to investigate subsurface conditions at the Site must schedule such a visit with the Port in accordance with Document 00200 (Instructions to Bidders).

11. PROCUREMENT OF BIDDING DOCUMENTS. Bidders may examine the Bidding Documents, including the Instructions to Bidders and the plans and specifications for the work at the Port’s offices. Documents will be available

for download from the Port’s website, www.portofstockton.com – Business section, Bids & Proposals, Out to Bid. Port expects documents to be available on or after October 9, 2019. The Bidders’ attention is drawn to the Instructions to Bidders for complete instructions regarding submission of a Bid.

12. BID PREPARATION COST. Bidders are solely responsible for the cost of preparing their Bids. 13. INELIGIBLE CONTRACTORS AND SUBCONTRACTORS: Port shall not accept a Bid from a Bidder who is

ineligible to bid or work on, or be awarded, a public works project pursuant to California Labor Code Section 1777.1 or 1777.7. Bidder shall not include in its Bid any subcontractor who is ineligible to bid or work on, or be awarded, a public works project pursuant to California Labor Code Section 1777.1 or 1777.7. Federal ineligible listings are located at https://www.epls.gov/.

14. RESERVATION OF RIGHTS. Port specifically reserves the right, in its sole discretion, to reject any or all Bids, or

rebid, or to waive inconsequential deviations from Bid requirements not involving time, price, or quality of the Work. By order of the Board of Commissioners of the Port of Stockton.

END OF DOCUMENT

Advertisement for Bids Port of Stockton Port Police Fusion Center 00100 - 2

http://www.portofstockton.com/

https://www.epls.gov/


DOCUMENT 00200

INSTRUCTIONS TO BIDDERS

Bids are requested by the Stockton Port District, a California Port District with municipal powers organized pursuant to Harbors and Navigations Code Sections 6200 et seq. (“Port”), for a general construction contract, or work described in general, as follows:

CONTRACT NUMBER 5-19-1 PORT OF STOCKTON

PORT POLICE FUSION CENTER 1. RECEIPT OF BIDS: Sealed Bids will be received by Port at Port’s office (see paragraph 2 below) on

Wednesday, November 20, 2019. Port will accept Bids only from Bidders duly licensed in accordance with the California Business & Professions Code. Port will receive Bids in opaque sealed 10 inch x 13 inch envelope(s), containing the respective items described in Paragraph 6 below. All Bid envelopes will be time-stamped to reflect their submittal time. Envelope shall be due by 3:00 p.m. Port shall reject all Bids received after the specified time and will return such Bids to Bidders unopened. Bidders must submit Bids in accordance with this Document 00200.

2. CONTACT INFORMATION: Sealed Bids shall be received at Port’s Administration Building lobby located

at 2201 West Washington Street, Stockton, California 95203. The telephone number for Port is (209) 946-0246.

3. PROCUREMENT OF BID DOCUMENTS: Bidders may obtain Bidding Documents from the Port’s website

at www.stocktonport.com, Business section, Bids/Proposals, Out to Bid. 4. MANDATORY PRE-BID SITE VISIT AND CONFERENCE: Port will conduct Pre-Bid Conference and

Site Visit at 10:00 a.m. on Wednesday, October 16, 2019, initially meeting at the Port Administration Building, 2201 W. Washington Street, Stockton, California, and then moving to the project site, to consider such matters as Bidders may request and a Site Visit immediately following, at the Site. Bidders must attend Pre-Bid Conference and Site Visit and sign an attendance roster as a condition to bidding. The Pre-Bid Conference and Site Visit will last approximately 1 hour.

4.1. Other Pre-Bid Site Visits may be scheduled at Port’s sole discretion, depending on staff availability.

4.2. Port will transmit to all parties recorded as having received Bidding Documents such Addenda as Port in

its discretion considers necessary in response to questions arising at the Pre-Bid Conference. Bidders shall not rely on oral statements. Oral statements will not be binding or legally effective. Port will issue Minutes of the Pre-Bid Conference, which shall constitute the sole and exclusive record and statement of the results of the Pre-Bid Conference. The Minutes issued by Port are not Contract Documents.

4.3. While Bidders will be allowed to observe Site conditions, invasive testing will not be allowed.

5. BID SUBMISSION: Bidder shall mark its Bid envelope as BID FOR THE PORT OF STOCKTON, PORT

POLICE FUSION CENTER, CONTRACT NUMBER 5-19-1. Bids shall be deemed to include the written responses of the Bidder to any questions or requests for information of Port made as part of Bid evaluation process after submission of Bid. Bidder’s failure to submit all required documents strictly as required entitles Port to reject the Bid as non-responsive.

5.1. The submission of a Bid does not commit Port to award a contract for the Project, to pay costs incurred in

the preparation of a Bid, or to procure or contract for any goods or services. 6. REQUIRED CONTENTS OF BIDS: All Bidders must submit Bids containing each of the fully executed

documents supplied in this Project Manual.

Port of Stockton Instructions to Bidders Port Police Fusion Center 00200- 1

http://www.stocktonport.com/


6.1. Bidders must submit Bids on Document 00400 Bid Form in accordance with the provisions of Document 00400. Port will reject as non-responsive any Bid not submitted on the required form. Bids must be full and complete. Bidders must complete all Bid items and supply all information required by Bid documents and specifications. Port reserves the right in its sole discretion to reject any Bid as non-responsive as a result of any error or omission in the Bid. Bidders must submit clearly written Bids without erasure or interlineation. Bidders must clearly make any changes in the Bid. Bidders shall make any change in the Bid by crossing out the original entry, entering and initialing the new entry. Port reserves the right to reject any Bid not clearly written. Bidders may not modify the Bid Form or qualify their Bids.

6.2. Bidders must submit Document 00411 (Bond Accompanying Bid) accompanied by a cashier’s check,

certified check (certified without qualification and drawn on a solvent bank of the State of California or a National Bank doing business in the State of California) or surety bond of not less than 10% of the Total Bid Price payable to “Port of Stockton,” and completed in accordance with the provisions of Document 00411. (Port may retain Bid securities and Bid bonds of other than the Apparent Low Bidder for a period of 90 Days after award or full execution of the Contract, whichever first occurs.)

6.3. Bidders must submit Document 00420 (Bidder Registration) completed in accordance with the provisions

of Document 00420. Bidder must complete this form and include comprehensive answers to all questions. Port shall reject as non-responsive any Bid submitted without the Bidder Registration and Experience Form.

6.4. Bidders must submit Document 00430 (Subcontractors List) completed in accordance with the provisions

of Document 00430. The Subcontractors List must include the names of all subcontractors and their respective Bid item sub-Bids for those subcontractors who will perform any portion of work, including labor, rendering of service, or specially fabricating and installing a portion of the work or improvement according to detailed drawings contained in the plans and specifications, in excess of one half of one percent (0.5%) of the total Bid amount. Any violation of this requirement may result in a Bid being deemed non-responsive and not being considered.

6.5. Bidders must submit Document 00481 (Non-Collusion Affidavit) completed in accordance with the

provisions of Document 00481. Port shall reject as non-responsive any Bid submitted without the Non-Collusion Affidavit.

6.6. Bidders must submit Document 00482 (Bidder Certifications) completed in accordance with the

provisions of Document 00482. Port shall reject as non-responsive any Bid submitted without the Bidder Certifications.

6.7. Any item required by the Special Conditions (Document 00800, Attachments I & II).

7. OTHER REQUIREMENTS PRIOR TO BIDDING: Submission of Bid signifies Bidder’s careful

examination of Bidding Documents and complete understanding of the nature, extent, and location of Work to be performed. As a condition to Bidding, Bidder must complete tasks listed in Document 00520 (Agreement), Article 5. Submission of Bid shall constitute Bidder’s express representation to Port that Bidder has fully completed these tasks.

8. EXISTING CONDITIONS INFORMATION AND GEOTECHNICAL DATA: Bidders may examine any

available existing conditions information (e.g., record documents, specifications, studies, drawings of previous work), as well as applicable environmental assessment information (if any) regarding the Project, by giving Port reasonable advanced notice. Document 00320 (Geotechnical Data and Existing Conditions) applies to all supplied existing conditions information. Port will make copies available for a fee. A Bidder must give five (5) days advanced notice if copies are desired.

9. ADDENDA: Bidders must direct all questions about the meaning or intent of Bidding Documents to Port

(Attention: Juan G. Villanueva) in writing. Interpretations or clarifications considered necessary by Port in response to such questions will be issued by Addenda mailed, faxed, or delivered to all parties recorded by Port as having received Bidding Documents. Addenda will be written and will be issued to each Bidder to the



address or fax number supplied Port by Bidder. Port may not answer questions received less than ten Days prior to the date for opening Bids. Only questions answered by formal written Addenda will be binding. Oral and other interpretations or clarifications will be without legal effect.

9.1. Addenda may also be issued to modify the Bidding Documents as deemed advisable by Port.

9.2. Addenda shall be acknowledged by number with signature in Document 00400 (Bid Form) and shall be

part of the Contract Documents. A complete listing of Addenda may be secured from Port. 10. EQUAL EMPLOYMENT OPPORTUNITY: Contractor shall comply with all applicable federal, state, and local laws, rules, and regulations in regard to nondiscrimination in employment because of race, color, ancestry, national origin, religion, sex, marital status, age, medical conditions, disability, or any other reason. 11. WAGE RATES: The Contractor acknowledges that it has examined the prevailing rate of per diem wages as established by California Director of Industrial Relations. The Contractor agrees to pay workers not less than the applicable prevailing rate of per diem wages, as set forth in these requirements. 12. WITHDRAWAL OF BIDS: Bidders may withdraw their Bids at any time prior to the Bid opening time fixed in this Document 00200, only by written request for the withdrawal of Bid filed with the Port at the Port’s office. Bidder or its duly authorized representative shall execute request to withdraw Bid. The submission of a Bid does not commit the Port to award a contract for the Project, to pay costs incurred in the preparation of a Bid, or to procure or contract for any goods or services. 13. BID OPENING: Port will open all Bidders’ Envelopes immediately after 3:00 p.m. on the date specified in

Paragraph 1 above, initially evaluate them for responsiveness, and determine an Apparent Low Bidder as specified herein.

14. DETERMINATION OF APPARENT LOW BIDDER: Apparent Low Bid will be determined as provided in

Document 00400 (Bid Form). All Bidders are required to submit Bids on all Bid items.

14.1. If any Apparent Low Bidder is determined to be non-responsive or non-responsible, Port may proceed to the next Apparent Low Bidder’s Bid pursuant to any procedures determined in its reasonable discretion, and proceed for all purposes as if this Apparent Low Bidder were the original Apparent Low Bidder.

15. BID EVALUATION: Port may reject any or all Bids and waive any informalities or minor irregularities in the

Bids. Port also reserves the right, in its discretion, to reject any or all Bids and to re-Bid the Project. Port reserves the right to reject any or all nonconforming, non-responsive, unbalanced, or conditional Bids, and to reject the Bid of any Bidder if Port believes that it would not be in the best interest of Project to make an award to that Bidder, whether because the Bid is not responsive or the Bidder is unqualified or of doubtful financial ability or fails to meet any other pertinent standard or criteria established by Port. For purposes of this paragraph, an “unbalanced Bid” is one having nominal prices for some Bid items and enhanced prices for other Bid items.

15.1. In evaluating Bids, Port will consider Bidders’ qualifications, whether or not the Bids comply with the

prescribed requirements, bid item prices, and other data, as may be requested in Document 00400 (Bid Form) or prior to the Notice of Award.

15.2. Port may conduct reasonable investigations and reference checks of Bidder and other persons and

organizations as Port deems necessary to assist in the evaluation of any Bid and to establish Bidder’s responsibility, qualifications, financial ability and ability to perform the Work in accordance with the Contract Documents to Port’s satisfaction within the prescribed time. Submission of a Bid constitutes Bidder’s consent to the foregoing. Port shall have the right to consider information provided by sources other than Bidder. Port shall also have the right to communicate directly with Bidder’s surety regarding Bidder’s bonds.



15.3. Discrepancies between the multiplication of units of Work and unit prices will be resolved in favor of the unit prices. Discrepancies between the indicated sum of any column of figures and the correct sum thereof will be resolved in favor of the correct sum. Discrepancies between written words and figures will be resolved in favor of the words.

15.4. Port may determine whether a Bidder is qualified in its sole discretionary judgment.

16. BID PROTEST: Any Bid protest must be submitted in writing to the Port’s offices (Attention: Juan G.

Villanueva), before 5:00 p.m. of the tenth Day following posting in the front and back entrances of the Administration Building of Document 00505 (Notice of Intent to Award for Construction). Time will be determined by the clock on the wall of the Administration Building lobby. Port will use reasonable efforts to deliver by facsimile a copy of Document 00505 to all Bidders who submitted Bids no later than the business Day after issuance, although any delay or failure to do so will not extend the Bid protest deadline described above.

16.1. The initial protest document must contain a complete statement of the basis for the protest.

16.2. The protest must refer to the specific portion of the document that forms the basis for the protest.

16.3. The protest must include the name, address, and telephone number of the person representing the

protesting party.

16.4. Only Bidders who Port otherwise determines are responsive and responsible are eligible to protest a Bid; protests from any other Bidder will not be considered. In order to determine whether a protesting Bidder is responsive and responsible, Port may evaluate all information contained in any protesting Bidder’s Bid, and conduct the same investigation and evaluation as Port is entitled to take regarding an Apparent Low Bidder.

16.5. The party filing the protest must concurrently transmit a copy of the initial protest document and any

attached documentation to all other parties with a direct financial interest that may be adversely affected by the outcome of the protest. Such parties shall include all other Bidders who appear to have a reasonable prospect of receiving an award depending upon the outcome of the protest.

16.6. The procedure and time limits set forth in this paragraph are mandatory and are Bidder’s sole and

exclusive remedy in the event of Bid protest. Bidder’s failure to comply with these procedures shall constitute a waiver of any right to further pursue the Bid protest, including filing a Government Code Claim or legal proceedings. A Bidder may not rely on a protest submitted by another Bidder, but must timely pursue its own protest.

17. AWARD: It is the intent of the Port to award a contract to accomplish the Work described in the Contract Documents. If a Contract is awarded, it will be awarded to the lowest responsible responsive Bidder within ninety (90) days after the opening of the Bids.

18. PERMITS: It is the bidder’s responsibility to furnish prior to the start of work any and all applicable permits to this project. Actual costs of permits will be reimbursed upon receipt of appropriate documentation.

19. SUBSTITUTIONS: Bidders must base their Bids on products and systems specified in Contract Documents or listed by name in Addenda.

19.1. Except as provided in Paragraph 20.4 below, Port will consider substitution requests only for “or equal

items.” Bidders wanting to use “or equal” item(s) may submit Document 00660 (Substitution Request Form) no later than 5 Days before the Bid Date. After that date, Port will not accept “or equal” substitution requests. To assess “or equal” acceptability of product or system, submittals of substitutions shall contain the information required in Document 00660 (Substitution Request Form). Insufficient information will be grounds for rejection of substitution. Port shall, within a reasonable period of time after having



received a Request for Substitution, issue in writing its decision as to whether the proposed substitute item is an Equal item. Port’s decision shall be conclusive on all Bidders.

19.2. Approved substitutions shall be listed in Addenda and become part of Contract Documents.

19.3. Substitutions may be requested after submitting Bids and Award of Contract only in accordance with

requirements specified in the Contract Documents.

19.4. As a limitation on Bidder's privilege to substitute “or equal” items, Port has found that certain items are designated as Port standards and certain items are designated to match existing items in use on a particular public improvement either completed or in the course of completion or are available from one source. As to such items, Port will not permit substitution. Such items are:

19.4.1. N/A

20. POST NOTICE OF AWARD REQUIREMENTS: Successful Bidder must execute and submit the documents set forth in this Document to Port by 5:00 p.m. of the 7th Day following the Notice of Award. Execution of Contract by Port depends upon approval of these documents.

20.1. Document 00520 (Agreement) must be executed by successful Bidder. Submit two originals, each bearing

an original signature and initials on each page.

20.2. Document 00610 (Construction Performance Bond) must be executed by successful Bidder and surety, in the amount set forth in Document 00610 (Construction Performance Bond). Submit one original.

20.3. Document 00620 (Construction Labor and Material Payment Bond) must be executed by successful

Bidder and surety, in the amount set forth in Document 00620 (Construction Labor and Material Payment Bond). Submit one original.

20.4. Document 00630 (Guaranty) must be executed by successful Bidder.

20.5. Insurance certificates and endorsements required by Document 00821 (Insurance and Indemnification)

must be submitted by successful Bidder. Submit one original set

20.6. Port shall have the right to communicate directly with Apparent Low Bidder’s proposed performance bond surety, to confirm the performance bond. Port may elect to extend the time to receive faithful performance and labor and material payment bonds.

20.7. Successful Bidder’s failure to submit the documents required herein, in a proper and timely manner,

entitles Port to rescind its award, and to cause Bidder’s Bid security to be forfeited as provided herein. 21. FAILURE TO EXECUTE AND DELIVER DOCUMENTS: If Bidder to whom Contract is awarded shall,

within the period described in Paragraph 19 of this Document 00200, fails or neglects to execute and deliver all required Contract Documents and file all required bonds, insurance certificates, and other documents, Port may, in its sole discretion, foreclose on Bidder’s surety bond, or deposit Bidder’s cashier’s check or certified check for collection, and retain the proceeds thereof as liquidated damages for Bidder’s failure to enter into the Contract Documents. Bidder agrees that calculating the damages Port may suffer as a result of Bidder’s failure to execute and deliver all required Contract Documents would be extremely difficult and impractical and that the amount of Bidder’s required Bid security shall be the agreed and presumed amount of Port’s damages.

21.1. Upon such failure to timely deliver all required Contract Documents as set forth in Paragraph 21 through

Paragraph 21.8 of this Document 00200, Port may determine the next Apparent Low Bidder and proceed accordingly. Such Award, if made, will be made within the time described in paragraph 19 above.

22. MODIFICATION OF COMMENCEMENT OF WORK: Port expressly reserves the right to modify the

date for the Commencement of Work under the Contract and to independently perform and complete work



related to the Project. Port accepts no responsibility to Contractor for any delays attributed to its need to complete independent work at the Site.

23. CONFORMED PROJECT MANUAL: Following Award of Contract, Port may prepare a conformed Project

Manual reflecting Addenda issued during bidding, which will, failing objection, constitute the approved Project Manual.

INELIGIBLE CONTRACTORS AND SUBCONTRACTORS: Port shall not accept a Bid from a Bidder who is ineligible to bid or work on, or be awarded, a public works project pursuant to California Labor Code section 1777.1 or 1777.7. Bidders and the Contractor who is awarded the project contract shall not utilize, or allow work by, any subcontractor who is ineligible to bid or work on, or be awarded, a public works project pursuant to California Labor Code Section 1777.1 or 1777.7. (See California Public Contract Code Section 6109.) The California Division of Labor Standards Enforcement publishes a list of debarred contractors and subcontractors on the Internet at https://www.dir.ca.gov/DLSE/debar.html. Federal government listings are located at https://www.sam.gov/SAM/.

24. DEFINITIONS: All abbreviations and definitions of terms used in this Document 00200 are set forth in

Document 00700 (General Conditions) and Section 01420 (References and Definitions).

END OF DOCUMENT


https://www.dir.ca.gov/DLSE/debar.html

https://www.sam.gov/SAM/


DOCUMENT 00320

GEOTECHNICAL DATA AND EXISTING CONDITIONS PORT POLICE FUSION CENTER

1. REPORT AND INFORMATION

1.1 Existence of Reports: The Port, its consultants, and prior contractors may have collected documents providing a general description of the Site and conditions of the Work. These documents may consist of geotechnical reports for and around the Site, contracts, contract specifications, tenant improvement contracts, as-built drawings, utility drawings, and information regarding Underground Facilities. These reports, documents and other information are not part of the Contract Documents.

1.2 Inspection of Reports: Bidders may inspect geotechnical reports and information regarding existing conditions at the Site. These documents are available for review at the Port located at 2201 West Washington Street, Stockton, California 95203 and copies may be obtained for the cost of reproduction and handling upon Bidder’s payment for the costs. These reports, documents and other information are not part of the Contract Documents. Nevertheless, by submitting a Bid, Bidder accepts full responsibility for reviewing, knowing and understanding the contents of all of these materials.

1.3 Inclusion in Project Manual: Geotechnical reports may be included in the Project Manual and information regarding existing conditions may also be included in the Project Manual, but neither shall be considered part of the Contract Documents.

1.4 Alternative Documentation Location: Documentation for CONTRACT NUMBER 5-19-1 referred to at paragraph 1.2 above is also available for review at the following website: http://geotracker.waterboards.ca.gov/

2. USE OF INFORMATION ON EXISTING CONDITIONS

2.1 Aboveground Existing Conditions: Under no circumstances shall Port be deemed to make a warranty or representation of existing aboveground conditions, as-built conditions, or other aboveground actual conditions verifiable by reasonable independent investigation. These conditions are verifiable by Bidder by the performance of its own independent investigation that Bidder must perform prior to bidding and Bidder must not rely on the information supplied by Port regarding existing conditions. Bidder represents and agrees that in submitting its Bid, it is not relying on any information regarding existing conditions supplied by Port.

2.2 Underground Facilities: Information supplied regarding existing Underground Facilities at or contiguous to the Site is based on information furnished to Port by others (e.g., the builders of such Underground Facilities or others). Except as expressly set forth in this Document 00320, Port does not assume responsibility for the accuracy, completeness or thoroughness of this information, and Bidder is solely responsible for any interpretation or conclusion drawn from this information. Except as expressly set forth in this Document 00320, Port will be responsible only for the general accuracy of information regarding Underground Facilities, and only for those Underground Facilities that are owned by Port. This express assumption of responsibility applies only if Bidder has conducted the independent investigation required of it and discrepancies were not apparent.

3. LIMITED RELIANCE PERMITTED ON CERTAIN GEOTECHNICAL INFORMATION

3.1 Geotechnical Data: Except as expressly set forth in this Document 00320, Port does not warrant, and makes no representation regarding, the accuracy or thoroughness of any geotechnical data. Bidder represents and agrees that in submitting its Bid, it is not relying on any geotechnical data supplied by Port, except as specifically set forth herein.

Port of Stockton Geotechnical Data and Existing Conditions Port Police Fusion Center

00320- 1

http://geotracker.waterboards.ca.gov/


A. Bidder may rely upon the general accuracy of the “technical data” contained in the geotechnical reports and drawings identified above, but only insofar as it relates to subsurface conditions, provided Bidder has conducted the independent investigation required of it and discrepancies were not apparent. The term “technical data” in the referenced reports and drawings shall be limited as follows:

1. The term “technical data” shall include actual reported depths, reported quantities, reported soil types, reported soil conditions, and reported material, equipment, or structures that were encountered during subsurface exploration.

2. The term “technical data” does not include, and Bidder may not rely upon, any other data, interpretations, opinions or information shown or indicated in such drawings or reports that otherwise relate to subsurface conditions or described structures.

3. The term “technical data” shall not include the location of Underground Facilities.

4. Bidder may not rely on the completeness of reports and drawings for the purposes of bidding or construction. Bidder may rely upon the general accuracy of the “technical data” contained in such reports or drawings.

5. Bidder is solely responsible for any interpretation or conclusion drawn from any “technical data” or any other data, interpretations, opinions, or information contained in supplied geotechnical data.

4. INVESTIGATIONS

4.1 Before submitting a Bid, each Bidder shall be responsible to obtain such additional or supplementary examinations, investigations, explorations, tests, studies and data concerning conditions (surface, subsurface, and Underground Facilities) at or contiguous to the Site or otherwise, which may affect cost, progress, performance or furnishing of Work or which relate to any aspect of the means, methods, techniques, sequences or procedures of construction to be employed by Bidder and safety precautions and programs incident thereto or which Bidder deems necessary to determine its Bid for performing and furnishing the Work in accordance with the time, price and other terms and conditions of Contract Documents. Bidders shall advise Port in writing during the Bid period of any questions, suppositions, inferences or deductions Bidders may have for Port’s review and response.

4.2 Port has provided time in the period prior to bidding for Bidder to perform these investigations.

5. ACCESS TO SITE FOR INVESTIGATIONS

5.1 During the Pre-Bid Site Visit(s), Port will provide each Bidder access to the Site to conduct such examinations, investigations, explorations, tests, and studies, as each Bidder deems necessary for submission of a Bid. Bidders must fill all holes and clean up and restore the Site to its former conditions upon completion of such explorations, investigations, tests, and studies. Such investigations may be performed only under the provisions of Document 00200 (Instructions to Bidders) and Document 00700 (General Conditions) including, but not limited to, proof of insurance and obligation to indemnify against claims arising from such investigation work. Each Bidder shall supply all equipment required to perform any investigations as each Bidder deems necessary. Port has the right to limit the number of pieces of machinery operating at one time due to safety concerns.

END OF DOCUMENT

Port of Stockton Geotechnical Data and Existing Conditions Port Police Fusion Center

00320- 2


SECTION 00335 - HAZARDOUS MATERIALS SURVEY PORT POLICE FUSION CENTER

1. SUMMARY

1.1 This Document 00335 describes hazardous material surveys included with the Contract Documents and use of data therein.

2 REPORTS AND INFORMATION

2.1 The Port of Stockton, its consultants, contractors and tenants have prepared documents providing a general description of the Site and locations of hazardous materials subject of the Work. These documents are made available for review and copying. The documents are the following:

2.1.1 No known hazardous materials are present in the area of the proposed improvements.

2.2 Bidders may inspect such documents at Port’s offices, and copies may be obtained at cost of reproduction and handling upon Bidder’s payment for the costs. These documents are not part of the Contract Documents.

3. USE OF DATA AND INFORMATION

3.1 Data and information regarding the locations of hazardous materials are not part of Contract Documents. Bidders may rely on this data and information for general accuracy regarding the locations of potentially hazardous materials subject of the Work.

3.2 The Port does not warrant and makes no representation regarding the completeness or thoroughness of

any data or information regarding existing conditions or hazardous materials, including, but not limited to, quantities, characteristics, volumes, or associated structural features. Bidder represents and agrees that in submitting a Bid it is not relying on any such data, information or deductions.

4. INVESTIGATIONS

4.1 See Document 00320 (Geotechnical Data and Existing Conditions) regarding access to the Site for investigation. Additionally, any investigation performed by Bidder to verify hazardous materials/waste conditions must comply with the provisions of Document 00700 (General Conditions), including but not limited to the requirements regarding compliance with all laws, permits, giving of all notices, and indemnification. Bidder must fill all holes and clean up and restore the Site to its former condition upon completion of such explorations, investigations, tests and studies. Bidders shall also present proof of any additionally required insurance satisfactory to Port.

END OF DOCUMENT 00335

Port of Stockton Port Police Fusion Center 00335 - 1 Hazardous Materials Survey


DOCUMENT 00400

BID FORM

TO THE PORT OF STOCKTON

THIS BID IS SUBMITTED BY:

____________________________________________________________________________________________

(Firm/Company Name)

Re: Port of Stockton, Port Police Fusion Center, Contract Number 5-19-1. 1. The undersigned Bidder proposes and agrees, if this Bid is accepted, to enter into an agreement with the

Port of Stockton, (“Port”) in the form included in the Contract Documents, Document 00520 (Agreement), to perform and furnish all Work as specified or indicated in the Contract Documents for the Contract Sum and within the Contract Time indicated in this Bid and in accordance with all other terms and conditions of the Contract Documents.

2. Bidder accepts all of the terms and conditions of the Contract Documents, Document 00100 (Notice Inviting Bids), and Document 00200 (Instructions to Bidders), including, without limitation, those dealing with the disposition of Bid Security. This Bid will remain subject to acceptance for 90 Days after the day of Bid opening.

3. In submitting this Bid, Bidder represents:

(a) Bidder has examined all of the Contract Documents and the following Addenda (receipt of all of which is hereby acknowledged).

Addendum Number Addendum Date Signature of Bidder

(b) Bidder acknowledges receipt of Pre-Bid Conference minutes, if any.

(c) Bidder has visited the Site and performed all tasks, research, investigation, reviews, examinations,

and analysis and given notices, regarding the Project and the Site, as set forth in Document 00520 (Agreement), Article 5.

(d) Bidder has given Port prompt written notice of all conflicts, errors, ambiguities, or discrepancies

that it has discovered in or among the Contract Documents and as-built drawings and actual conditions and the written resolution thereof through Addenda issued by Port is acceptable to Contractor.

4. All Bid items, including lump sums, must be filled in completely. Bid items are described in Section 01100 (Summary). Quote in figures only, unless words are specifically requested.

Port of Stockton Bid Form Port Police Fusion Center

00400- 1


ITEM ITEM DESCRIPTION AMOUNT

1. FUSION CENTER

TOTAL BID AMOUNT:

Total Bid Amount: _____________________________________________________________________________

(Words)

This amount shall constitute full compensation for furnishing all labor, materials, apparatus, facilities, transportation, tools, equipment, bonds and insurance for performance of all the work contemplated and embraced in this contract, and for all risks of every description connected with the work, and for well and faithful completing of the work and the whole thereof in the manner and according to the Contract Documents and the requirements of designated Port Project representative.

Discrepancies between the words and numbers will be resolved in favor of the words.

5. Selection of Apparent Low Bidder: The undersigned acknowledges that the Apparent Low Bidder will be the Bidder submitting the lowest Lump Sum Bid.

6. Subcontractors for work included in all Bid items are listed on the attached Document 00430 (Subcontractors List).

7. The undersigned Bidder understands that Port reserves the right to reject this Bid. 8. If written notice of the acceptance of this Bid, hereinafter referred to as Notice of Award, is mailed or

delivered to the undersigned Bidder within the time described in Paragraph 2 of this Document 00400 or at any other time thereafter before it is withdrawn, the undersigned Bidder will execute and deliver the documents required by Document 00200 (Instructions to Bidders) within the times specified therein. These documents include, but are not limited to, Document 00520 (Agreement), Document 00610 (Construction Performance Bond), Document 00620 (Construction Labor and Material Payment Bond), and Document 00821 (Insurance and Indemnification).

9. Notice of Award or request for additional information may be addressed to the undersigned Bidder at the

address set forth below. 10. The undersigned Bidder herewith encloses cash, a cashier’s check, or certified check of or on a responsible

bank in the United States, or a corporate surety bond furnished by a surety authorized to do a surety business in the State of California, in form specified in Document 00200 (Instructions to Bidders), in the amount of ten percent (10%) of the Total Bid Price and made payable to “Port of Stockton.”

11. The undersigned Bidder agrees to commence Work under the Contract Documents on the date established

in Document 00700 (General Conditions) and to complete all Work within the time specified in Document 00520 (Agreement). The undersigned Bidder acknowledges that Port has reserved the right to delay or modify the commencement date. The undersigned Bidder further acknowledges Port has reserved the right to perform independent work at the Site, the extent of such work may not be determined until after the opening of the Bids, and that the undersigned Bidder will be required to cooperate with such other work in accordance with the requirements of the Contract Documents.

12. The undersigned Bidder agrees that, in accordance with Document 00700 (General Conditions), liquidated

damages for failure to complete all Work in the Contract within the time specified in Document 00520 (Agreement) shall be as set forth in Document 00520 (Agreement).


00400- 2


13. The names of all persons interested in the foregoing Bid as principals are: 14. Any Bid item may be deleted from the Work and Contract Sum, in total or in part, prior to or after award of

Contract without compensation in any form or adjustment of other Bid items or prices therefore. Addition or deletion of Work will be paid or deducted based on unit cost.

IMPORTANT NOTICE: If Bidder or other interested person is a corporation, give the legal name of

corporation, state where incorporated, and names of president and secretary thereof; if a partnership, give name of the firm and names of all individual co-partners composing the firm; if Bidder or other interested person is an individual, give first and last names in full.

NAME OF BIDDER: __________________________________________________________________________ Licensed in accordance with an act for the registration of Contractors, and with license number: ________________________________________________________________ Expiration: __________________. ______________________________________________ ___________________________________________ (Place of Incorporation, if Applicable) (Principal) ___________________________________________ (Principal) ___________________________________________ (Principal)

I certify (or declare) under penalty of perjury under the laws of the State of California that the foregoing is true and correct. x__________________________________________

(Signature of Bidder) NOTE: If Bidder is a corporation, set forth the legal name of the corporation together with the signature of the officer or officers authorized to sign contracts on behalf of the corporation. If Bidder is a partnership, set forth the name of the firm together with the signature of the partner or partners authorized to sign contracts on behalf of the partnership. Business Address: _________________________________________ __________________________________________ Contractor’s Representative(s): __________________________________________

(Name/Title) __________________________________________

(Name/Title) Officers Authorized to Sign Contracts __________________________________________

(Name/Title) __________________________________________

(Name/Title) Telephone Number(s): __________________________________________ (Area Code) (Number) Port of Stockton Bid Form Port Police Fusion Center

00400- 3


__________________________________________ (Area Code) (Number) Fax Number: __________________________________________ (Area Code) (Number) Date of Bid: __________________________________________

END OF DOCUMENT


00400- 4


DOCUMENT 00411

BOND ACCOMPANYING BID PORT POLICE FUSION CENTER

KNOW ALL BY THESE PRESENTS: That the undersigned ___________________________________________________________________ , (Name of Contractor) as Principal and the undersigned as Surety are held and firmly bound unto the Port of Stockton, (“Port”), as obligee, in the penal sum of _______________________________________ Dollars ($______________) lawful money of the United States of America being at least ten percent (10%) of the aggregate amount of said Principal ____________________________________________________________’s base Bid, for the payment of which, well and truly to be made, we bind ourselves, our successors, executors, administrators, and assigns, jointly and severally, firmly by these presents. WHEREAS, the said Principal is submitting a Bid for Port Contract Number 5-19-1, PORT OF STOCKTON, PORT POLICE FUSION CENTER. THE CONDITION OF THIS OBLIGATION IS SUCH that if the Bid submitted by the said Principal be accepted and the Contract be awarded to said Principal and said Principal shall within the required periods enter into the Contract so awarded and provide the required Construction Performance Bond, Construction Labor and Material Payment Bond, insurance certificates, and all other endorsements, forms, and documents required under Document 00200 (Instructions to Bidders), then this obligation shall be void, otherwise to remain in full force and effect. IN WITNESS WHEREOF, the above bounden parties have executed this instrument this ______ day of ______________________________, 2019. (Month) (Corporate Seal) By _______________________________________________

Principal

By _______________________________________________ Surety

(Corporate Seal) By _______________________________________________

Attorney in Fact

END OF DOCUMENT

Port of Stockton Bond Accompanying Bid Port Police Fusion Center

00411- 1


DOCUMENT 00420

BIDDER REGISTRATION FORM PORT POLICE FUSION CENTER

INSTRUCTIONS

In order to register to undertake work for the Port of Stockton, Bidder must:

1) Fill out this registration form completely; do not leave blanks.

2) Provide certificates of insurance or a letter evidencing coverage complying with Paragraph 2.01of Document 00700 (General Conditions).

INDEPENDENT CONTRACTOR REGISTRATION Contractor’s License # Date: Fed I.D. # Full Corporate Name of Company: Street Address: Mailing Address: Phone: Fax: Name of Principal Contact: Type of Business: _____ Sole Proprietor _____ Partnership _____ Non-Profit 501(c)(3) _____ Corporation _____ other (please explain:__________________________________)

INSURANCE Workers’ Compensation: Carrier: Address: Phone and Fax: Policy Number: Port of Stockton Bidder Registration Form Port Police Fusion Center

00420- 1


Worker’s Compensation United States Longshoreman’s and Harbor Worker Act (USL&H): [N/A] Carrier: ______________________________________________________________________________________ Address: _____________________________________________________________________________________ Phone and Fax: ________________________________________________________________________________ Policy Number: ________________________________________________________________________________ General Liability: Carrier: Address: Phone and Fax: Policy Number: Policy Limits: $ A.M. Best Rating: Rail Protective Insurance: [N/A] Carrier: Address: Phone and Fax: Policy Number: Policy Limits: $ A.M. Best Rating: Automobile Liability: Carrier: Address: Phone and Fax: Policy Number: Policy Limits: $ A.M. Best Rating:

Port of Stockton Bidder Registration Form Port Police Fusion Center

00420- 2


All-risk Course of Construction: [N/A] Carrier: Address: Phone and Fax: Policy Number: Policy Limits: $ A.M. Best Rating: Professional Liability (if applicable, as required by Document 00821 [Supplementary Conditions – Insurance]): [N/A] Carrier: Address: Phone and Fax: Policy Number: Policy Limits: $ A.M. Best Rating: Pollution Legal Liability Insurance (if applicable, as required by Document 00821 Supplementary Conditions – Insurance): Carrier: Address: Phone and Fax: Policy Number: Policy Limits: $ A.M. Best Rating: BIDDER CERTIFIES, UNDER PENALTY OF PERJURY, THAT THE COST OF ALL INSURANCE IS INCLUDED IN THE BID AMOUNT, THE FOREGOING INFORMATION IS CURRENT AND ACCURATE AND AUTHORIZES THE PORT OF STOCKTON, AND ITS AGENTS AND REPRESENTATIVES TO OBTAIN A CREDIT REPORT AND/OR VERIFY ANY OF THE ABOVE INFORMATION. SIGNATURE DATE


00420- 3


SAFETY EXPERIENCE The following statements as to the Bidder’s safety experience are submitted with the Bid, as part thereof, and the Bidder guarantees the truthfulness and accuracy of all information. 1. List Bidder’s interstate Experience Modification Rate for the last three years. [20__] _____ [20__] _____ [20__] _____ 2. Use Bidder’s last year's Cal/OSHA 200 log to fill in the following number of injuries and illnesses: a. Number of lost workday cases _______________ b. Number of medical treatment cases _______________ c. Number of fatalities _______________ 3. Employee hours worked last year _______________ 4. State the name of Bidder’s safety engineer/manager:

Attach a resume or outline of this individual's safety and health qualifications and experience.

I CERTIFY, UNDER PENALTY OF PERJURY, THAT THE FOREGOING INFORMATION IS CURRENT AND ACCURATE AND I AUTHORIZE THE PORT OF STOCKTON, AND ITS AGENTS AND REPRESENTATIVES TO OBTAIN A CREDIT REPORT AND/OR VERIFY ANY OF THE ABOVE INFORMATION. [BIDDER’S NAME] By: ________________________________________________ Signature Its: _________________________________________________ Title Date: _______________________________________________

END OF DOCUMENT


00420- 4


DOCUMENT 00430

SUBCONTRACTORS LIST PORT POLICE FUSION CENTER

Bidder submits the following information as to the subcontractors Bidder intends to employ if awarded the Contract. Full Name of Subcontractor and

Address of Mill or Shop Description of Work:

Reference To Bid Items Subcontractor’s License No.

(Bidder to attach additional sheets if necessary)

END OF DOCUMENT

Port of Stockton Subcontractors List Port Police Fusion Center

00430- 1


DOCUMENT 00481

NON-COLLUSION AFFIDAVIT PORT POLICE FUSION CENTER

PUBLIC CONTRACT CODE §7106

NON-COLLUSION AFFIDAVIT TO BE EXECUTED BY BIDDER AND SUBMITTED WITH BID STATE OF CALIFORNIA ) ) ss. COUNTY OF _________________) _________________________________________________________________________, being first duly sworn, (Name of Principal of Bidder) deposes and says that he or she is _______________________________________________________________ (Office of Affiant) of _________________________________________________________________________________, the party (Name of Bidder)

making the foregoing Bid, that the Bid is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that the Bid is genuine and not collusive or sham; that Bidder has not directly or indirectly induced or solicited any other bidder to put in a false or sham Bid, and has not directly or indirectly colluded, conspired, connived or agreed with any bidder or anyone else to put in a sham Bid, or that anyone shall refrain from bidding, and that the Bidder has not in any manner, directly or indirectly, sought by agreement, communication or conference with anyone to fix the Bid price of Bidder or any other bidder, or to fix any overhead, profit or cost element of the Bid price, or of that of any other bidder, or to secure any advantage against the Port of Stockton, or anyone interested in the proposed contract; that all statements contained in the Bid are true; and further, that Bidder has not, directly or indirectly, submitted its Bid price or any breakdown thereof, or the contents thereof, or divulged information or data relative thereto, or paid, and will not pay, any fee to any corporation, partnership, company association, organization, Bid depository, or to any member or agent thereof to effectuate a collusive or sham Bid. Executed under penalty of perjury under the laws of the State of California:

(Name of Bidder) (Signature of Principal)

Subscribed and sworn before me This _____________ day of ____________________________, 20___ Notary Public of the State of ________________________________________________ In and for the County of____________________________________________________ My Commission expires____________________________________________________ (Seal) NOTE: If Bidder is a partnership or a joint venture, this affidavit must be signed and sworn to by every

member of the partnership or venture. Port of Stockton Non-Collusion Affidavit Port Police Fusion Center

00481- 1


NOTE: If Bidder [including any partner or venturer of a partnership or joint venture] is a corporation, this affidavit must be signed by the Chairman, President, or Vice President and by the Secretary, Assistant Secretary, Chief Financial Officer, or Assistant Treasurer.

NOTE: If Bidder’s affidavit on this form is made outside the State of California, the official position of

the person taking such affidavit shall be certified according to law.

END OF DOCUMENT

Port of Stockton Non-Collusion Affidavit Port Police Fusion Center

00481- 2


DOCUMENT 00482

BIDDER CERTIFICATIONS

PORT POLICE FUSION CENTER

CONTRACT NUMBER 5-19-1

TO BE EXECUTED BY BIDDERS

The undersigned Bidder certifies to the Port of Stockton as set forth in sections 1 through 7 below.

1. STATEMENT OF CONVICTIONS By my signature hereunder, I hereby swear, under penalty of perjury, that no more than one final,

unappealable finding of contempt of court by a Federal Court has been issued against Bidder within the past two years because of failure to comply with an order of a Federal Court or to comply with an order of the National Labor Relations Board. 2. CERTIFICATION OF WORKER’S COMPENSATION INSURANCE

By my signature hereunder, as the Bidder, I certify that I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for worker's compensation or to undertake self-insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the performance of the work of this Contract.

3. CERTIFICATION OF PREVAILING WAGE RATES AND RECORDS By my signature hereunder, as the Bidder, I certify that I am aware of the provisions of Section 1773 of the

California Labor Code, which requires the payment of prevailing wage on public projects. Also, that the Bidder and any subbidders under the Bidder shall comply with California Labor Code §1776, regarding wage records, and with California Labor Code §1777.5, regarding the employment and training of apprentices. It is the Bidder’s responsibility to ensure compliance by any and all subcontractors performing work under this Contract.

4. CERTIFICATION OF COMPLIANCE WITH PUBLIC WORKS CHAPTER OF LABOR CODE By my signature hereunder, as the Bidder, I certify that I am aware of Sections 1777.1 and 1777.7 of the

California Labor Code and Bidder and Subcontractors are eligible to bid and work on public works projects. 5. CERTIFICATE OF NON-DISCRIMINATION

By my signature hereunder, on behalf of the Bidder making this Bid, the undersigned certifies that there will be no discrimination in employment with regard to race, color, religion, gender, sexual orientation, age or national origin; that all federal, state, and local directives and executive orders regarding non-discrimination in employment will be complied with; and that the principle of equal opportunity in employment will be demonstrated positively and aggressively. 6. CERTIFICATION REGARDING PREVIOUS DISQUALIFICATIONS

By my signature hereunder, I hereby swear, under penalty of perjury, that the below indicated Bidder, any officer of such Bidder, or any employee of such Bidder who has a proprietary interest in such Bidder, has never been disqualified, removed or otherwise prevented from bidding on, or completing a Federal, State, or local government project because of a violation of law or a safety regulation except as indicated on the separate sheet attached hereto entitled “Previous Disqualifications.” If such exceptions are attached, please explain the circumstances.

Port of Stockton Bidder Certifications Port Police Fusion Center 00482- 1


7. CERTIFICATION OF ADEQUACY OF CONTRACT AMOUNT By my signature hereunder, as the Contractor, pursuant to Labor Code Section 2810(a), I certify that, if

awarded the Contract based on the undersigned’s Bid, the Contract will include funds sufficient to allow the Contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided. I understand that the Port will be relying on this certification if it awards the Contract to the undersigned.

BIDDER:

(Name of Bidder)

Date: ___________________, 20[__] By: (Signature)

Name: (Print Name)

Its: (Title)

END OF DOCUMENT

Port of Stockton Bidder Certifications Port Police Fusion Center 00482- 2


DOCUMENT 00505

NOTICE OF INTENT TO AWARD DATE POSTED: ______________________ CONTRACT NUMBER: 5-19-1 PROJECT TITLE: PORT POLICE FUSION CENTER

I, the Port Director of the Port of Stockton, intend to recommend to the Board of

Commissioners of the Port of Stockton the award of the above-referenced project to

_________________________________________.

SIGNATURE DATE Richard Aschieris, Port Director

END OF DOCUMENT

Port of Stockton Notice of Intent to Award for Construction Port Police Fusion Center 00505- 1


DOCUMENT 00510

NOTICE OF AWARD

Dated: ________________________

TO: ______________________________

ADDRESS: CONTRACT NO.: 5-19-1

CONTRACT FOR: PORT POLICE FUSION CENTER

The Contract Sum of your contract is _______________________ dollars ($___________). 1. Two copies of the proposed Contract Documents (except Specifications and Drawings) accompany this Notice of

Award. One set of Specifications and Drawings will be delivered separately or otherwise made available to you immediately.

2. You must comply with the following conditions precedent by 5:00 p.m. of the 14th Day following the date of this

Notice of Award, that is, by ______________________________.

a. Deliver to Port two fully executed counterparts of Document 00520 (Agreement). Each of the Contract Documents must bear your signature on the cover page.

b. Deliver to Port one original Document 00610 (Construction Performance Bond), executed by you and your surety. c. Deliver to Port one original Document 00620 (Construction Labor and Material Payment Bond), executed by you

and your surety. d. Deliver to Port one original set of the insurance certificates and endorsements required under Document 00700

(General Conditions). e. Deliver to Port two original copies of Document 00630 (Guaranty), each executed by you. f. Submit a copy of completed Construction Management Fact Sheet for approval. (Must be approved before work

begins).

3. Failure to comply with these conditions within the time specified will entitle Port to consider your Bid abandoned, to annul this Notice of Award, and to declare your Bid security forfeited.

4. Within 7 Days after you comply with the conditions in paragraph 2 of this Document 00510, Port will return to you

one fully signed counterpart of Document 00520 (Agreement) with the Contract Documents. 5. Upon commencement of the Work, you and each of your Subcontractors shall certify and make available for

inspection payroll records on forms provided by the Division of Labor Standards Enforcement, in accordance with Section 1776 of the California Labor Code.

6. Before you may start any Work at the Site, as according to the Notice to Proceed, you must:

a. Submit and obtain Port approval for all plans and programs required by Section 01340 (Safety Submittals). b. Submit approved fire protection plan, if applicable. c. Submit and obtain Port approval for Traffic Control Plan 14 days prior to commencement of work. d. Submit to the port a copy of any and all necessary permits for this project.

Port of Stockton 00510- 1 Notice of Award Port Police Fusion Center


PORT OF STOCKTON, a political subdivision of the State of California (“Port”)

BY: ITS: PORT DIRECTOR, RICHARD ASCHIERIS

RESOLUTION NO. _________ ADOPTED _______________ By Port’s Board of Port Commissioners is attached hereto

END OF DOCUMENT

Port of Stockton 00510- 2 Notice of Award Port Police Fusion Center


DOCUMENT 00520

AGREEMENT

THIS AGREEMENT, dated this ___________________, 2019, by and between the STOCKTON PORT DISTRICT, a California Port District with municipal powers organized pursuant to Harbors and Navigations Code Sections 6200 et seq. (“Port”) and _____________________ whose place of business is located at _______________________ (“Contractor”). WHEREAS, Port, by its Board Resolution No. ______adopted on ______________ awarded to Contractor the following Contract:

CONTRACT NUMBER 5-19-1


At

WEST COMPLEX STOCKTON, CA

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, Contractor and Port agree as follows: Article 1. Work

1.1 Contractor shall complete all Work specified in the Contract Documents, in accordance with the Specifications, Drawings, and all other terms and conditions of the Contract Documents. Unless otherwise specified, Contractor shall furnish all labor, materials, tools, equipment, and incidentals, and do all the work involved in executing the Work in a satisfactory and workmanlike manner.

Article 2. Architect/Engineer and Authorized Representative(s)

2.1 Dillon & Murphy Engineering and HCS Engineering designed the Project and furnished the Plans and Specifications. Port shall have the rights assigned to Architect/Engineer in the Contract Documents.

2.2 Port has designated Juan G. Villanueva to act as Port’s Authorized Representative. Port

may change the individual(s) acting as Port’s Authorized Representative(s), or delegate one or more specific functions to one or more specific Port’s Representatives, including without limitation engineering, architectural, inspection and general administrative functions, at any time with notice and without liability to Contractor. Each Port’s Representative is the beneficiary of all Contractor obligations to Port, including without limitation, all releases and indemnities.

2.3 All notices or demands to Port under the Contract Documents shall be to Port’s

Authorized Representative at: 2201 W. Washington Street, Stockton, CA 95203 - P.O. Box 2089, Stockton, CA, 95201.

Port of Stockton Agreement_v2 Port Police Fusion Center 00520- 1


Article 3. Contract Time and Liquidated Damages

3.1 Contract Time

Contractor shall commence Work on the date established in the Notice to Proceed. Port reserves the right to modify or alter the commencement date of the Work.

3.1.1 Contractor shall achieve Final Completion of the entire Work within four (4)

months from the date when the Contract Time commences to run as provided in Document 00700 (General Conditions).

3.2 Liquidated Damages

Port and Contractor recognize that time is of the essence of this Agreement and that Port will suffer financial loss in the form of Contract administration expenses (such as Project management and consultant expenses), if all or any part of the Work is not completed within the times specified above, plus any extensions thereof allowed in accordance with the Contract Documents. Contractor and Port agree that because of the nature of the Project, it would be impractical or extremely difficult to fix the amount of actual damages incurred by Port because of a delay in completion of all or any part of the Work. Accordingly, Port and Contractor agree that as liquidated damages for delay Contractor shall pay Port:

3.2.1 One Thousand Dollars ($1000.00) for each Day that expires after the time

specified herein for Contractor to achieve Final Completion of the entire Work, until achieved.

These measures of liquidated damages shall apply cumulatively and except as provided below, shall be presumed to be the damages suffered by Port resulting from delay in completion of the Work. Liquidated damages for delay shall only cover administrative, overhead, interest on bonds, and general loss of public use damages suffered by Port as a result of delay. Liquidated damages shall not cover the cost of completion of the Work, damages resulting from defective Work, lost revenues or costs of substitute facilities, or damages suffered by others who then seek to recover their damages from Port (for example, delay claims of other contractors, subcontractors, tenants, or other third-parties), and defense costs thereof.

Article 4. Contract Sum

4.1 Port shall pay Contractor the Contract Sum for completion of Work in accordance with Contract Documents as set forth in Contractor’s Bid (Document 00400):

Article 5. Contractor’s Representations In order to induce Port to enter into this Agreement, Contractor makes the following representations and warranties:

5.1 Contractor has visited the Site and has examined thoroughly and understood the nature and extent of the Contract Documents, Work, Site, locality, actual conditions, as-built conditions, and all local conditions, and federal, state and local laws and regulations that in any manner may affect cost, progress, performance or furnishing of Work or which



relate to any aspect of the means, methods, techniques, sequences or procedures of construction to be employed by Contractor and safety precautions and programs incident thereto.

5.2 Contractor has examined thoroughly and understood all reports of exploration and tests of

subsurface conditions, as-built drawings, drawings, products specifications or reports, available for Bidding purposes, of physical conditions, including Underground Facilities, which have been made available for Bidders or which may appear in the Drawings. Contractor accepts the determination set forth in these Documents and Document 00700 (General Conditions) of the limited extent of the information contained in such materials upon which Contractor may be entitled to rely. Contractor agrees that except for the information so identified, Contractor does not and shall not rely on any other information contained in such reports and drawings.

5.3 Contractor has obtained and has understood all such examinations, investigations,

explorations, tests, reports and studies (in addition to or to supplement those referred to in Section 5.2 of this Document 00520) that pertain to the subsurface conditions, as-built conditions, Underground Facilities and all other physical conditions at or contiguous to the Site or otherwise that may affect the cost, progress, performance or furnishing of Work, as Contractor considers necessary for the performance or furnishing of Work at the Contract Sum, within the Contract Time and in accordance with the other terms and conditions of the Contract Documents, including specifically the provisions of Document 00700 (General Conditions); and no additional examinations, investigations, explorations, tests, reports, studies or similar information or data are or will be required by Contractor for such purposes.

5.4 Contractor has correlated its knowledge and the results of all such observations,

examinations, investigations, explorations, tests, reports and studies with the terms and conditions of the Contract Documents.

5.5 Contractor has given Port prompt written notice of all conflicts, errors, ambiguities, or

discrepancies that it has discovered in or among the Contract Documents and as-built drawings and actual conditions and the written resolution thereof through Addenda issued by Port is acceptable to Contractor.

5.6 Contractor is duly organized, existing and in good standing under applicable state law,

and is duly qualified to conduct business in the State of California. 5.7 Contractor has duly authorized the execution, delivery and performance of this

Agreement, the other Contract Documents and the Work to be performed herein. The Contract Documents do not violate or create a default under any instrument, agreement, order or decree binding on Contractor.

5.8 Contractor has listed the following Subcontractors pursuant to the Subcontractor Listing

Law, California Public Contracting Code §4100 et seq.:



Name of Subcontractor and Location of Mill or Shop

Description of Work: Reference To Bid Items

Subcontractor’s License No.

Article 6. Contract Documents

6.1 Contract Documents consist of the following documents, including all changes, Addenda, and Modifications thereto:

Document 00510 Notice of Award Document 00520 Agreement Document 00550 Notice to Proceed Document 00610 Construction Performance Bond Document 00620 Construction Labor and Material Payment Bond Document 00630 Guaranty Document 00650 Agreement and Release of Any and All Claims Document 00660 Substitution Request Form Document 00700 General Conditions Document 00800 Supplementary General Conditions Document 00800 Attachments I & II – Federal Requirements Document 00821 Insurance and Indemnification Document 00910 Addenda Division 1 General Requirements Specifications City of Stockton Drawings

6.2 There are no Contract Documents other than those listed in this Document 00520, Article 6. Document 00320 (Geotechnical Data and Existing Conditions) and Document 00335 (Hazardous Material Survey), and the information supplied or referenced therein, are not Contract Documents. The Contract Documents may only be amended, modified or supplemented as provided in Document 00700 (General Conditions).

Article 7. Miscellaneous

7.1 Terms and abbreviations used in this Agreement are defined in Document 00700 (General Conditions) and will have the meaning indicated therein.

7.2 It is understood and agreed that in no instance are the persons signing this Agreement for

or on behalf of Port or acting as an employee, agent, or representative of Port, liable on this Agreement or any of the Contract Documents, or upon any warranty of authority, or otherwise, and it is further understood and agreed that liability of the Port is limited and confined to such liability as authorized or imposed by the Contract Documents or applicable law.



7.3 Contractor shall not assign any portion of the Contract Documents, and may subcontract portions of the Contract Documents only in compliance with the Subcontractor Listing Law, California Public Contract Code §4100 et seq.

7.4 The Contract Sum includes all allowances (if any). 7.5 In entering into a public works contract or a subcontract to supply goods, services or

materials pursuant to a public works contract, Contractor or Subcontractor offers and agrees to assign to the awarding body all rights, title and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. §15) or under the Cartwright Act (Chapter 2 (commencing with §16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, services or materials pursuant to the public works contract or the subcontract. This assignment shall be made and become effective at the time Port tenders final payment to Contractor, without further acknowledgment by the parties.

7.6 Copies of the general prevailing rates of per diem wages for each craft, classification, or

type of worker needed to execute the Contract, as determined by Director of the State of California Department of Industrial Relations, are deemed included in the Contract Documents and on file at Port’s Office, and shall be made available to any interested party on request. Pursuant to California Labor Code §1861, Contractor represents that it is aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that Code, and Contractor shall comply with such provisions before commencing the performance of the Work of the Contract Documents.

7.7 Should any part, term or provision of this Agreement or any of the Contract Documents,

or any document required herein or therein to be executed or delivered, be declared invalid, void or unenforceable, all remaining parts, terms and provisions shall remain in full force and effect and shall in no way be invalidated, impaired or affected thereby. If the provisions of any law causing such invalidity, illegality or unenforceability may be waived, they are hereby waived to the end that this Agreement and the Contract Documents may be deemed valid and binding agreements, enforceable in accordance with their terms to the greatest extent permitted by applicable law. In the event any provision not otherwise included in the Contract Documents is required to be included by any applicable law, that provision is deemed included herein by this reference (or, if such provision is required to be included in any particular portion of the Contract Documents, that provision is deemed included in that portion).

7.8 This Agreement and the Contract Documents shall be deemed to have been entered into

in the County of San Joaquin, State of California, and governed in all respects by California law (excluding choice of law rules). The exclusive venue for all disputes or litigation hereunder shall be in San Joaquin County Superior Court. Contractor accepts the terms of Document 00700, Article 12 as a claims procedure by agreement under the California Government Code, Title 1, Division 3.6, Part 3, Chapter 5.



IN WITNESS WHEREOF the parties have executed this Agreement in duplicate the day and year first above written. CONTRACTOR: _________________ By: ______________________________ By: _____________________________

(Signature) (Signature) Its: _______________________________ Its: _____________________________ Title (If Corporation: Chairman, President or Title (If Corporation: Secretary, Vice President) Assistant Secretary, Chief Financial Officer or Assistant Treasurer) PORT: PORT OF STOCKTON By: Port Director

END OF DOCUMENT



DOCUMENT 00550

NOTICE TO PROCEED Dated: To: Address: CONTRACT FOR: PORT POLICE FUSION CENTER

CONTRACT NO: 5-19-1

You are notified that the Contract Time under the above Contract will commence to run on

______________________. On that date, you are to start performing Work under the Contract Documents. In

accordance with Article 3 of Document 00520 (Agreement), the dates of Substantial Completion and Final

Completion for the entire Work are __________________ and ___________________, respectively.

Before you may start any Work at the Site, you must:

1. Submit and obtain Port approval for all plans and programs required by Section 01340 (Safety Submittals).

2. Submit copy of completed Construction Management Fact Sheet.

3. Submit to the Port any and all necessary Permits required for this project.

PORT OF STOCKTON By : _______________________________________________ Richard Aschieris Its: Port Director

END OF DOCUMENT

Port of Stockton Notice to Proceed Port Police Fusion Center 00550- 1

Port of Stockton


DOCUMENT 00610

CONSTRUCTION PERFORMANCE BOND THIS CONSTRUCTION PERFORMANCE BOND (“Bond”) is dated [__________________], [20__] is in the penal sum of [________________] which is one hundred percent of the Contract Sum, and is entered into by and between the parties listed below to ensure the faithful performance of the Construction Contract listed below. This Bond consists of this page and the Bond Terms and Conditions, Paragraphs 1 through 12, attached to this page. Any singular reference to [________________] (“Contractor”), [_________________] (“Surety”), PORT OF STOCKTON (“Port”), or other party shall be considered plural where applicable. CONTRACTOR: SURETY: _____________________________________________ ___________________________________________ Name Name Address Principal Place of Business City/State/Zip City/State/Zip CONSTRUCTION CONTRACT: PORT POLICE FUSION CENTER

PROJECT NUMBER: 5-19-1 Located at West Complex, Port of Stockton in Stockton, California. DATED , [20__] in the Amount of $ (the “Penal Sum”). CONTRACTOR AS PRINCIPAL SURETY Company: (Corp. Seal) Company: (Corp. Seal) Signature: Signature: Name: Name: Title: Title:

Port of Stockton Construction Performance Bond Port Police Fusion Center 00610- 1


BOND TERMS AND CONDITIONS 1. Contractor and Surety, jointly and severally, bind themselves, their heirs, executors, administrators,

successors and assigns to Port for the complete and proper performance of the Construction Contract, which is incorporated herein by reference.

2. If Contractor completely and properly performs all of its obligations under the Construction Contract,

Surety and Contractor shall have no obligation under this Bond. 3. If there is no Port Default, Surety’s obligation under this Bond shall arise after:

3.1 Port has declared a Contractor Default under the Construction Contract pursuant to the terms of the Construction Contract; and

3.2 Port has agreed to pay the Balance of the Contract Sum:

3.2.1 To Surety in accordance with the terms of this Bond and the Construction Contract; or

3.2.2 To a contractor selected to perform the Construction Contract in accordance with the terms of this Bond and the Construction Contract.

4. When Port has satisfied the conditions of Paragraph 3, Surety shall promptly (within 30 Days) and at

Surety’s expense elect to take one of the following actions:

4.1 (Finance the Contractor.) Arrange for Contractor, with consent of Port, to perform and complete the Construction Contract (but Port may withhold consent, in which case the Surety must elect an option described in Paragraphs 4.2, 4.3 or 4.4, below); or

4.2 (Complete the Contract itself.) Undertake to perform and complete the Construction Contract

itself, through its agents or through independent contractors; provided, that Surety may not select Contractor as its agent or independent contractor without Port’s consent; and provided, the Construction Contract shall define Surety’s performance obligation and payment rights (and the Board’s Penal Sum shall not apply.)

4.3 (Secure a replacement Contractor.) Undertake to perform and complete the Construction Contract

by obtaining bids from qualified contractors acceptable to Port for a contract for performance and completion of the Construction Contract and, upon determination by Port of the lowest responsive and responsible Bidder, arrange for a contract to be prepared for execution by Port and the contractor selected with Port’s concurrence, to be secured with performance and payment bonds executed by a qualified surety equivalent to the bonds issued on the Construction Contract; and, if Surety’s monetary obligations defined in Paragraph 6, below, exceed the Balance of the Contract Sum, then Surety shall pay to Port the amount of such excess; or

4.4 (Tender a cash payment.) Waive its right to perform and complete, arrange for completion, or

obtain a new contractor and with reasonable promptness under the circumstances and, after investigation and consultation with Port, determine in good faith its monetary obligation to Port under Paragraph 6, below, for the performance and completion of the Construction Contract and, as soon as practicable after the amount is determined, tender payment therefor to Port with full explanation of the payment’s calculation. If Port accepts Surety’s tender under this Paragraph 4.4, Port may still hold Surety liable for future damages then unknown or unliquidated resulting from the Contractor Default. If Port disputes the amount of Surety’s tender under this Paragraph 4.4, Port may exercise all remedies available to it at law to enforce Surety’s liability under Paragraph 6, below.



5. If Surety does not proceed as provided in Paragraph 4, above, then Surety shall be deemed to be in default on this Bond ten Days after receipt of an additional written notice from Port to Surety demanding that Surety perform its obligations under this Bond. At all times Port shall be entitled to enforce any remedy available to Port at law or under the Construction Contract including, without limitation, and by way of example only, rights to perform work, protect Work, mitigate damages, advance critical Work to mitigate schedule delay, or coordinate Work with other consultants or contractors.

6. For Options 4.1, 4.3 and 4.4, Surety’s monetary obligation under this Bond is limited by the amount of this

Bond identified herein as the Penal Sum. This monetary obligation shall augment the Balance of the Contract Sum. Subject to these limits, Surety’s obligations under this Bond are commensurate with the obligations of Contractor under the Construction Contract. Surety’s performance and monetary obligations shall include, but are not limited to:

6.1 The responsibilities of Contractor under the Construction Contract for completion of the

Construction Contract and correction of Defective Work; 6.2 The responsibilities of Contractor under the Construction Contract to pay liquidated damages, and

for damages for which no liquidated damages are specified in the Construction Contract, actual damages caused by non-performance of the Construction Contract including, but not limited to, all valid and proper back charges, offsets, payments, indemnities, or other damages;

6.3 Additional legal, design professional and delay costs resulting from Contractor Default or

resulting from the actions or failure to act of the Surety under Paragraph 4, above (but excluding attorney’s fees incurred to enforce this Bond).

7. No right of action shall accrue on this Bond to any person or entity other than Port or its successors or

assigns. 8. Surety hereby waives notice of any change, alteration or addition to the Construction Contract or to related

subcontracts, purchase orders and other obligations, including changes of time. Surety consents to all terms of the Construction Contract, including provisions on changes to the Contract. No extension of time, change, alteration, Modification, deletion, or addition to the Contract Documents, or of the Work required thereunder, shall release or exonerate Surety on this Bond or in any way affect the obligations of Surety on this Bond.

9. Any proceeding, legal or equitable, under this Bond shall be instituted in any court of competent

jurisdiction where a proceeding is pending between Port and Contractor regarding the Construction Contract, or in the courts of the County of San Joaquin, or in a court of competent jurisdiction in the location in which the Work is located. Communications from Port to Surety under Paragraph 3.1 of this Bond shall be deemed to include the necessary agreements under Paragraph 3.2 of this Bond unless expressly stated otherwise.

10. All notices to Surety or Contractor shall be mailed or delivered (at the address set forth on the signature

page of this Bond), and all notices to Port shall be mailed or delivered as provided in Document 00520 (Agreement). Actual receipt of notice by Surety, Port or Contractor, however accomplished, shall be sufficient compliance as of the date received at the foregoing addresses.

11. Any provision in this Bond conflicting with any statutory or regulatory requirement shall be deemed

deleted herefrom and provisions conforming to such statutory requirement shall be deemed incorporated herein.

12. Definitions

12.1 Balance of the Contract Sum: The total amount payable by Port to Contractor pursuant to the terms of the Construction Contract after all proper adjustments have been made under the



Construction Contract, for example, deductions for progress payments made, and increases/decreases for approved Modifications to the Construction Contract.

12.2 Construction Contract: The agreement between Port and Contractor identified on the signature

page of this Bond, including all Contract Documents and changes thereto. 12.3 Contractor Default: Material failure of Contractor, which has neither been remedied nor waived, to

perform or otherwise to comply with the terms of the Construction Contract including, but not limited to, “default” or any other condition allowing a termination for cause as provided in Document 00700 (General Conditions).

12.4 Port Default: Material failure of Port, which has neither been remedied nor waived, to pay

Contractor progress payments due under the Construction Contract or to perform other material terms of the Construction Contract, if such failure is the cause of the asserted Contractor Default and is sufficient to justify Contractor termination of the Construction Contract.

END OF DOCUMENT



SECTION 00620 - CONSTRUCTION LABOR AND MATERIAL PAYMENT BOND KNOW ALL PERSONS BY THESE PRESENTS: 1. THAT WHEREAS, the Port of Stockton (“Port”) has awarded to [_______________________________]

as Principal Contract Number 5-19-1 dated the [_________] (date) day of [__________] (month), 2019 (the “Contract”), titled PORT POLICE FUSION CENTER located at the West Complex, Stockton, California in the amount of [$______________________________], which Contract is by this reference made a part hereof, for the work described as follows:

[The Work includes, but is not limited to _______________________________________].

2. AND WHEREAS, Principal is required to furnish a bond in connection with the Contract to secure the

payment of claims of laborers, mechanics, material suppliers, and other persons as provided by law; 3. NOW, THEREFORE, we, the undersigned Principal and [__________________________] (Surety), as

Surety, are held and firmly bound unto District in the sum of 100% OF THE CONTRACT PRICE [($_________________)], for which payment well and truly to be made we bind ourselves, our heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents.

4. THE CONDITION OF THIS OBLIGATION IS SUCH, that if Principal, or its heirs, executors,

administrators, successors, or assigns approved by District, or its subcontractors shall fail to pay any of the persons named in California Civil Code §3181, or amounts due under the State of California Unemployment Insurance Code with respect to work or labor performed under the Contract, or for any amounts required to be deducted, withheld, and paid over to the State of California Employment Development Department from the wages of employees of Principal and subcontractors pursuant to Section 13020 of the State of California Unemployment Insurance Code with respect to such work and labor, that Surety will pay for the same in an amount not exceeding the sum specified in this bond, plus reasonable attorneys’ fees, otherwise the above obligation shall become and be null and void.

5. This bond shall inure to the benefit of any of the persons named in California Civil Code §3181, as to give

a right of action to such persons or their assigns in any suit brought upon this bond. The intent of this bond is to comply with the California Mechanic’s Lien Law.

6. Surety, for value received, hereby expressly agrees that no extension of time, change, modification,

alteration, or addition to the undertakings, covenants, terms, conditions, and agreements of the Contract, or to the work to be performed thereunder, shall in any way affect the obligation of this bond; and it does hereby waive notice of any such extension of time, change, modification, alteration, or addition to the undertakings, covenants, terms, conditions, and agreements of the Contract, or to the work to be performed thereunder.

7. Surety’s obligations hereunder are independent of the obligations of any other surety for the payment of

claims of laborers, mechanics, material suppliers, and other persons in connection with Contract; and suit may be brought against Surety and such other sureties, jointly and severally, or against any one or more of them, or against less than all of them without impairing District’s rights against the other.

8. Correspondence or claims relating to this bond shall be sent to Surety at the address set forth below.

Port of Stockton 00620 - 1 Construction Labor And Material Payment Bond Port Police Fusion Center

FEMA Grant 2016-PU-00450 Contract No. 5-19-1 IN WITNESS WHEREOF, we have hereunto set our hands this [_______] (date) day of [__________] (month),

2019. CONTRACTOR AS PRINCIPAL SURETY Company: (Corp. Seal) Company: (Corp. Seal) Signature Signature Name Name Title Title Street Address Street Address City, State, Zip Code City, State, Zip Code

END OF DOCUMENT

Port of Stockton 00620 - 2 Construction Labor And Material Payment Bond Port Police Fusion Center


DOCUMENT 00630

GUARANTY TO: The Port of Stockton (“Port”) Project, PORT POLICE FUSION CENTER, located at the West Complex, Stockton, California.

The undersigned guarantees all construction performed on this Project and also guarantees all material and equipment incorporated therein.

Contractor hereby grants to Port for a period of one year following the date of Final Acceptance of the Work completed, or such longer period specified in the Contract Documents, its unconditional warranty of the quality and adequacy of all of the Work including, without limitation, all labor, materials and equipment provided by Contractor and its Subcontractors of all tiers in connection with the Work.

Neither final payment nor use nor occupancy of the Work performed by the Contractor shall constitute an acceptance of Work not done in accordance with this Guaranty or relieve Contractor of liability in respect to any express warranties or responsibilities for faulty materials or workmanship. Contractor shall remedy any defects in the Work and pay for any damage resulting therefrom, which shall appear within one year, or longer if specified, from the date of Final Acceptance of the Work completed.

If within one year after the date of Final Acceptance of the Work completed, or such longer period of time as may be prescribed by laws or regulations, or by the terms of Contract Documents, any Work is found to be Defective, Contractor shall promptly, without cost to Port and in accordance with Port’s written instructions, correct such Defective Work. Contractor shall remove any Defective Work rejected by Port and replace it with Work that is not Defective, and satisfactorily correct or remove and replace any damage to other Work or the work of others resulting therefrom. If Contractor fails to promptly comply with the terms of such instructions, or in an emergency where delay would cause serious risk of loss or damage, Port may have the Defective Work corrected or the rejected Work removed and replaced. Contractor shall pay for all claims, costs, losses and damages caused by or resulting from such removal and replacement. Where Contractor fails to correct Defective Work, or defects are discovered outside the correction period, Port shall have all rights and remedies granted by law.

Inspection of the Work shall not relieve Contractor of any of its obligations under the Contract Documents. Even though equipment, materials, or Work required to be provided under the Contract Documents have been inspected, accepted, and estimated for payment, Contractor shall, at its own expense, replace or repair any such equipment, material, or Work found to be Defective or otherwise not to comply with the requirements of the Contract Documents up to the end of the guaranty period.

All abbreviations and definitions of terms used in this Agreement shall have the meanings set forth in the Contract Documents, including, without means of limitation, Document 00700 (General Conditions) and Section 01420 (References and Definitions).

Port of Stockton Guaranty Port Police Fusion Center

00630- 1


The foregoing Guaranty is in addition to any other warranties of Contractor contained in the Contract Documents, and not in lieu of, any and all other liability imposed on Contractor under the Contract Documents and at law with respect to Contractor’s duties, obligations, and performance under the Contract Documents. In the event of any conflict or inconsistency between the terms of this Guaranty and any warranty or obligation of the Contractor under the Contract Documents or at law, such inconsistency or conflict shall be resolved in favor of the higher level of obligation of the Contractor.

Date: _____________________________, 20__ Contractor's name

By: Signature

Print Name

Title

Street Address

City, State, Zip code

END OF DOCUMENT

Port of Stockton Guaranty Port Police Fusion Center

00630- 2


DOCUMENT 00650

AGREEMENT AND RELEASE OF ANY AND ALL CLAIMS THIS AGREEMENT AND RELEASE OF ANY AND ALL CLAIMS (“Agreement and Release”), made and entered into this [_______] (date) day of [________] (month), [20___], by and between the Port of Stockton (“Port”), and ________________ (“Contractor”), whose place of business is at ___________________ (Address of Contractor).

RECITALS A. Port and Contractor entered into Contract Number 5-19-1 (the “Contract”) for PORT POLICE FUSION

CENTER, located at West Complex, Stockton, California. B. The Work under the Contract has been completed.

AGREEMENT NOW THEREFORE, it is mutually agreed between Port and Contractor as follows: 1. Contractor will not be assessed liquidated damages except as detailed below: Original Contract Sum $ Modified Contract Sum $ Payment to Date $ Liquidated Damages $ Payment Due Contractor $ 2. Subject to the provisions of this Agreement and Release, Port will forthwith pay to Contractor the sum of

________________________________________________________ ($______) under the Contract, less any amounts withheld under the Contract or represented by any Notice to Withhold Funds on file with Port as of the date of such payment.

3. Contractor acknowledges and hereby agrees that there are no unresolved or outstanding claims in dispute

against Port arising from the Contract, except for the claims described in Paragraph 4 of this Document 00650. It is the intention of the parties in executing this Agreement and Release that this Agreement and Release shall be effective as a full, final and general release of all claims, demands, actions, causes of action, obligations, costs, expenses, damages, losses and liabilities of Contractor against Port, and all if its agents, employees, consultants, inspectors, representatives, assignees and transferees, except for the Disputed Claims set forth in Paragraph 4 of this Document 00650. Nothing in this Agreement and Release shall limit or modify Contractor’s continuing obligations described in Paragraph 6 of this Document 00650.

4. The following claims submitted under Document 00700 (General Conditions), Article 12, are disputed (hereinafter, the “Disputed Claims”) and are specifically excluded from the operation of this Agreement and Release.

Port of Stockton Agreement and Release of Any and All Claims Port Police Fusion Center 00650- 1


[Insert information in Chart below, affix attachment if necessary] Claim No.

Date Submitted

Description of Claim

Amount of Claim

5. Consistent with California Public Contract Code §7100, Contractor hereby agrees that, in consideration of

the payment set forth in Paragraph 2 of this Document 00650, Contractor hereby releases and forever discharges Port, and all of its agents, employees, consultants, inspectors, assignees and transferees from any and all liability, claims, demands, actions or causes of action of whatever kind or nature arising out of or in any way concerned with the Work under the Contract.

6. Guarantees and warranties for the Work, and any other continuing obligation of Contractor, shall remain in

full force and effect as specified in the Contract Documents. 7. Contractor shall immediately defend, indemnify and hold harmless Port, any of the Port’s Representatives,

Project Manager, and all of their agents, employees, consultants, inspectors, assignees and transferees, from any and all claims, demands, actions, causes of action, obligations, costs, expenses, damages, losses and liabilities that may be asserted against them by any of Contractor’s suppliers and/or Subcontractors of any tier and/or any suppliers to them for any and all labor, materials, supplies and equipment used, or contemplated to be used in the performance of the Contract, except for the Disputed Claims set forth in Paragraph 4 of this Document 00650.

8. Contractor hereby waives the provisions of California Civil Code §1542, which provide as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR

DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

9. The provisions of this Agreement and Release are contractual in nature and not mere recitals and shall be

considered independent and severable, and if any such provision or any part thereof shall be at any time held invalid in whole or in part under any federal, state, county, municipal or other law, ruling, or regulation, then such provision, or part thereof shall remain in force and effect only to the extent permitted by law, and the remaining provisions of this Agreement and Release shall also remain in full force and effect, and shall be enforceable.

10. Contractor represents and warrants that it is the true and lawful owner of all claims and other matters

released pursuant to this Agreement and Release, and that it has full right, title and authority to enter into this instrument. Each party represents and warrants that it has been represented by counsel of its own choosing in connection with this Agreement and Release.

11. All rights of Port shall survive completion of the Work or termination of the Contract, and execution of this

Agreement and Release. Port of Stockton Agreement and Release of Any and All Claims Port Police Fusion Center 00650- 2


* * * CAUTION: THIS IS A RELEASE - READ BEFORE EXECUTING * * *

PORT OF STOCKTON By: ___________________________________________________ Signature Name: ________________________________________________ Print Its: ___________________________________________________ Title ATTEST: ______________________________________________________ Secretary ______________________________________________________ Print [CONTRACTOR] By: ___________________________________________________ Signature Name: ________________________________________________ Print Its: ___________________________________________________ Title [CONTRACTOR] By: ___________________________________________________ Signature Name: ________________________________________________ Print Its: ___________________________________________________ Title

END OF DOCUMENT Port of Stockton Agreement and Release of Any and All Claims Port Police Fusion Center 00650- 3


DOCUMENT 00660

SUBSTITUTION REQUEST FORM To: Juan G. Villanueva Director, Development & Planning (209) 946-0246 Project: Port of Stockton, Port Police Fusion Center, Stockton, California Contractor: Subcontractor/Supplier: Drawing Sheet Reference/Detail No: The undersigned Bidder submits for consideration the following equipment instead of the specified item for the above Project: Section Paragraph Specified Item Proposed Substitution: The undersigned encloses the information required herein. If this Document 00660 is being submitted by a Bidder wishing to use “equal” item(s) as provided in Document 00200 (Instructions to Bidders), the undersigned Bidder must also enclose the technical information (other than cost). The undersigned has (a) attached manufacturer’s literature, including complete technical data and laboratory test results, if applicable, (b) attached an explanation of why proposed substitution is a true equivalent to specified item, (c) included complete information on changes to Contract Documents that the proposed substitution will require for its proper installation, and (d) filled in the blanks below: A. Does the substitution affect dimensions shown on Drawings?

B. Are the manufacturer’s guarantees and warranties on the proposed substitution items identical to those on the

specified items? If there are differences, please specify each and every difference in detail.

C. What effect does the substitution have on other contractors, trades, or suppliers?

Port of Stockton Substitution Request Form Port Police Fusion Center 00660- 1


What are the differences between the proposed substitution and the specified item? If proposed substitution has a color or pattern, provide a color board showing proposed substitution in relation to the other adjacent colors and patterns.

D. Will granting the requested substitution cause any schedule delay? (If yes, please explain)

E. Financial benefit to the Port in accepting substitution?

The undersigned Bidder certifies that the function, appearance, and quality of the proposed substitution are equivalent or superior to those of the specified item. Submitted by:

Bidder/Contractor [note applicable] Signature

For Use by Port: Accepted Accepted as Noted Not Accepted Received Too Late (after bid submission due date/time)

Name Address City/State/Zip Telephone: Date:

By: Port’s Project Manager Date: Remarks:

END OF DOCUMENT

Port of Stockton Substitution Request Form Port Police Fusion Center 00660- 2


DOCUMENT 00680

ESCROW AGREEMENT FOR SECURITY DEPOSIT IN LIEU OF RETENTION

California Public Contract Code §22300 THIS ESCROW AGREEMENT (“Escrow Agreement”) is made and entered into this [ ] day of [ ], 20___, by and between the Port of Stockton, (“Port”), whose address is 2201 West Washington Street, Stockton, California 95203, or P.O. Box 2089, Stockton, California 95201, [ ] (“Contractor”), whose place of business is located at [ ]; and Port, as escrow agent OR [ ] (“Bank”), a state or federally chartered bank in the State of California, whose place of business is located at [ ] (“Escrow Agent”). For the consideration hereinafter set forth, Port, Contractor and Escrow Agent agree as follows: 1. Pursuant to California Public Contract Code §22300, Contractor has the option to deposit securities with

Escrow Agent as a substitute for retention earnings required to be withheld by Port pursuant to Contract Number 5-19-1 entered into between Port and Contractor for the Port of Stockton, PORT POLICE FUSION CENTER, Stockton, California, in the amount of [__________________] dated [________________, 20___] (the “Contract”). Alternatively, on written request of Contractor, Port shall make payments of the retention earnings directly to Escrow Agent. When Contractor deposits the securities as a substitute for Contract earnings, Escrow Agent shall notify Port within ten Days of the deposit. The market value of the securities at the time of substitution shall be at least equal to the cash amount then required to be withheld as retention under terms of Contract between Port and Contractor. Securities shall be held in name of __________________________________, and shall designate Contractor as the beneficial owner.

2. Port shall make progress payments to Contractor for those funds which otherwise would be withheld from

progress payments pursuant to Contract provisions, provided that Escrow Agent holds securities in form and amount specified in Paragraph 1 of this Document 00680.

3. When Port makes payment(s) of retention earned directly to Escrow Agent, Escrow Agent shall hold said

payment(s) for the benefit of Contractor until the time that the escrow created under this Escrow Agreement is terminated. Contractor may direct the investment of the payments into securities. All terms and conditions of this Escrow Agreement and the rights and responsibilities of the parties shall be equally applicable and binding when Port pays Escrow Agent directly.

4. Contractor shall be responsible for paying all fees for the expenses incurred by Escrow Agent in

administering the Escrow Account, and all expenses of Port. Such expenses and payment terms shall be determined by Port, Contractor, and Escrow Agent.

5. Interest earned on securities or money market accounts held in escrow and all interest earned on that

interest shall be for sole account of Contractor and shall be subject to withdrawal by Contractor at any time and from time to time without notice to Port.

6. Contractor shall have the right to withdraw all or any part of the principal in the Escrow Account only by

written notice to Escrow Agent accompanied by written authorization from Port to Escrow Agent that Port consents to withdrawal of amount sought to be withdrawn by Contractor.

7. Port shall have the right to draw upon the securities in event of default by Contractor. Upon seven Days

written notice to Escrow Agent from Port of the default, Escrow Agent shall immediately convert the securities to cash and shall distribute the cash as instructed by Port.

Port of Stockton Escrow Agreement for Security Deposit In Lieu of Retention Port Police Fusion Center

00680- 1


8. Upon receipt of written notification from Port certifying that the Contract is final and complete, and that Contractor has complied with all requirements and procedures applicable to the Contract, Escrow Agent shall release to Contractor all securities and interest on deposit less escrow fees and charges of the Escrow Account. The escrow shall be closed immediately upon disbursement of all moneys and securities on deposit and payments of fees and charges.

9. Escrow Agent shall rely on written notifications from Port and Contractor pursuant to Paragraphs 5 through

8, inclusive, of this Document 00680 and Port and Contractor shall hold Escrow Agent harmless from Escrow Agent’s release and disbursement of securities and interest as set forth.

10. Names of persons who are authorized to give written notice or to receive written notice on behalf of Port

and on behalf of Contractor in connection with the foregoing, and exemplars of their respective signatures are as follows:

ON BEHALF OF PORT: ON BEHALF OF CONTRACTOR: _______________________________________ _______________________________________ Title Title _______________________________________ _______________________________________ Name Name _______________________________________ _______________________________________ Signature Signature _______________________________________ _______________________________________ Address Address _______________________________________ _______________________________________ City/State/Zip Code City/State/Zip Code ON BEHALF OF ESCROW AGENT: ____________________________________ Title ____________________________________ Name ____________________________________ Signature ____________________________________ Address ____________________________________ City/State/Zip Code


00680- 2


IN WITNESS WHEREOF, the parties have executed this Escrow Agreement by their proper officers on the

date first set forth above. PORT CONTRACTOR ____________________________________ _______________________________________ ____________________________________ _______________________________________ Title Title ____________________________________ _______________________________________ Name Name ____________________________________ _______________________________________ Signature Signature ESCROW AGENT _____________________________________ _____________________________________ Title _____________________________________ Print Name _____________________________________ Signature

END OF DOCUMENT


00680- 3


DOCUMENT 00700

GENERAL CONDITIONS

TABLE OF CONTENTS

PAGE

1. INTERPRETATION OF CONTRACT .................................................................................................................... 1 A. Defined Terms ...................................................................................................................................................... 1 B. Contract Documents.............................................................................................................................................. 1 C. Precedence Of Documents .................................................................................................................................... 1

2. BID PERIOD INVESTIGATIONS AND SUBCONTRACTORS .......................................................................... 1 A. Contractor’s Investigations Before Bidding .......................................................................................................... 2 B. Supplied Information on Underground Existing Conditions ................................................................................ 3 C. Supplied Information on Above Ground Existing Conditions .............................................................................. 3 D. Subcontractors ...................................................................................................................................................... 3

3. CONTRACT AWARD AND COMMENCEMENT OF THE WORK .................................................................. 4 A. Time Allowances For Performance Of Contract Documents ............................................................................... 4 B. Commencement Of Work ..................................................................................................................................... 4

4. INSURANCE AND INDEMNIFICATION .............................................................................................................. 4 A. Insurance ............................................................................................................................................................... 4

5. DRAWINGS AND SPECIFICATIONS.................................................................................................................... 4 A. Intent ..................................................................................................................................................................... 4 B. Drawing Details .................................................................................................................................................... 5 C. Interpretation Of Drawings And Specifications .................................................................................................... 5 D. Checking Of Drawings ......................................................................................................................................... 5 E. Standards To Apply Where Specifications Are Not Furnished ............................................................................ 6 F. Deviation from Specifications and Drawings ....................................................................................................... 6 G. Ownership And Use Of Drawings, Specifications And Contract Documents ...................................................... 6

6. CONSTRUCTION BY PORT OR BY SEPARATE CONTRACTORS ................................................................ 6 A. Port’s Right To Perform Construction And To Award Separate Contracts .......................................................... 6 B. Mutual Responsibility ........................................................................................................................................... 7 C. Port Authority Over Coordination ........................................................................................................................ 7

7. PAYMENT BY PORT ................................................................................................................................................ 7 A. Receipt And Processing Of Applications For Payment ........................................................................................ 8

8. CONTROL OF THE WORK .................................................................................................................................... 8 A. Subcontractors. ..................................................................................................................................................... 8 B. Supervision Of Work By Contractor .................................................................................................................... 8 C. Observation Of Work By Port .............................................................................................................................. 8 D. Access To Work .................................................................................................................................................... 9

9. CONTRACTOR’S WARRANTY, GUARANTY, AND INSPECTION OF WORK ......................................... 10 A. Warranty And Guaranty ...................................................................................................................................... 10 B. Inspection Of Work ............................................................................................................................................ 11 C. Correction Of Defective Work ............................................................................................................................ 12

Port of Stockton General Conditions Port Police Fusion Center 00700- i


D. Acceptance And Correction Of Defective Work By Port ................................................................................... 13 E. Rights Upon Inspection Or Correction ............................................................................................................... 14 F. Samples And Tests Of Materials And Work ....................................................................................................... 14 G. Proof Of Compliance Of Contract Provisions .................................................................................................... 14 H. Acceptance .......................................................................................................................................................... 14 I. Substantial Completion ....................................................................................................................................... 14

10. CONTRACTOR’S ORGANIZATION AND EQUIPMENT ............................................................................ 14 A. Contractor’s Legal Address ................................................................................................................................ 15 B. Contractor’s Office At The Work Site ................................................................................................................ 15 C. Contractor’s Superintendents Or Forepersons .................................................................................................... 15 D. Proficiency In English......................................................................................................................................... 15 E. Contractor’s And Subcontractors’ Employees .................................................................................................... 15 F. Contractor To List Trades Working .................................................................................................................... 15 G. Contractor’s Use Of The Site .............................................................................................................................. 15

11. PROSECUTION AND PROGRESS OF THE WORK ..................................................................................... 16 A. Contractor to Submit Required Schedules .......................................................................................................... 16 B. Contractor to Submit Submittals and Shop Drawings. ....................................................................................... 16 C. Contractor to Maintain Cost Data ....................................................................................................................... 16 D. Contractor To Supply Sufficient Workers And Materials................................................................................... 17 E. Contractor to Locate Underground Facilities. ..................................................................................................... 18 F. Contractor’s to Protect Underground Facilities. ................................................................................................. 18 G. Contractor to Not Disrupt Port Operation. .......................................................................................................... 19

12. CLAIMS BY CONTRACTOR / NON-JUDICIAL SETTLEMENT PROCEDURE ..................................... 19 A. Scope................................................................................................................................................................... 19 B. Procedure ............................................................................................................................................................ 19 C. Claim Format ...................................................................................................................................................... 21 D. Mediation ............................................................................................................................................................ 21 E. Subcontractor Claims .......................................................................................................................................... 22 F. Waiver. ................................................................................................................................................................ 22

13. LEGAL AND MISCELLANEOUS ..................................................................................................................... 22 A. Laws And Regulations ........................................................................................................................................ 22 B. Permits And Taxes .............................................................................................................................................. 22 C. Suspension Of Work ........................................................................................................................................... 23 D. Termination Of Contract For Cause .................................................................................................................... 23 E. Termination Of Contract For Convenience ......................................................................................................... 25 F. Contingent Assignment Of Subcontracts ............................................................................................................ 27 G. Remedies and Contract Integration ..................................................................................................................... 27 H. Patents ................................................................................................................................................................. 28 I. Substitution For Patented And Specified Articles............................................................................................... 28 J. Interest Of Public Officers .................................................................................................................................. 28 K. Limit Of Liability ................................................................................................................................................ 28 L. Severability ......................................................................................................................................................... 28

14. MODIFICATIONS OF CONTRACT DOCUMENTS ...................................................................................... 29 A. Alterations, Modifications And Force Account Work ........................................................................................ 29 B. Time Allowances ................................................................................................................................................ 30 C. Notice Of Delay .................................................................................................................................................. 30 D. Non-Compensable Time Extensions; Adverse Weather Parameters. ................................................................. 31 E. Compensable Time Extensions ........................................................................................................................... 31 F. Liquidated Damages ........................................................................................................................................... 32 G. Differing Site Conditions. ................................................................................................................................... 32 H. Change Orders Related to Underground Facilities. ............................................................................................ 34

Port of Stockton General Conditions Port Police Fusion Center 00700- ii


15. WORKING CONDITIONS AND PREVAILING WAGES ............................................................................. 34 A. Use Of Site/Sanitary Rules ................................................................................................................................. 34 B. Protection Of Work, Persons, Property And Operations .................................................................................... 35 C. Responsibility For Safety And Health ................................................................................................................ 36 D. Emergencies ........................................................................................................................................................ 36 E. Use Of Roadways And Walkways ...................................................................................................................... 36 F. Nondiscrimination .............................................................................................................................................. 36 G. Prevailing Wages ................................................................................................................................................ 36 H. Environmental Controls ...................................................................................................................................... 38 I. Shoring Safety Plan ............................................................................................................................................ 38

Port of Stockton General Conditions Port Police Fusion Center 00700- iii


GENERAL CONDITIONS 1. INTERPRETATION OF CONTRACT

A. Defined Terms

All abbreviations and definitions of terms used and not otherwise defined in this Document 00700 are set forth in Section 01420 (References and Definitions). This Document 00700 subdivides at first level into Articles, and then into paragraphs, then into subparagraphs.

B. Contract Documents

Contract Documents are complementary; what is called for by one is as binding as if called for by all. Contract Documents shall not be construed to create a contractual relationship of any kind between (1) Architect/Engineer, Project Manager or any Port Representative and Contractor; (2) Port and/or its representatives and (except as provided in Article 13 below) a Subcontractor, sub-Subcontractor, or supplier of any Project labor, materials, or equipment; or (3) between any persons or entities other than Port and Contractor.

C. Precedence Of Documents

1. In the case of discrepancy or ambiguity in the Contract Documents, the following order of precedence shall prevail:

a. Modifications in inverse chronological order (i.e., most recent first), and in the same order as specific portions they are modifying;

b. Document 00520 (Agreement), and terms and conditions referenced therein;

c. Supplemental Conditions, including without limitation Document 00800 (Supplemental Conditions) (if used) and Document 00821 (Insurance and Indemnification);

d. Document 00700 (General Conditions);

e. Division 1 Specifications;

f. Division 2 through 16 Specifications;

g. Drawings;

h. Written numbers over figures, unless obviously incorrect;

i. Figured dimensions over scaled dimensions;

j. Large-scale drawings over small-scale drawings.

2. Any conflict between Drawings and Division 2 through 16 Specifications will be resolved in favor of the document of the latest date (i.e., the most recent document), and if the dates are the same or not determinable, then in favor of Specifications.

3. Any conflict between a bill or list of materials shown in the Contract Documents and the actual quantities required to complete Work required by Contract Documents, will be resolved in favor of the actual quantities.

4. In the event the Specifications include divisions above Division 16 (e.g., Division 17 and above), then such divisions shall be included within the Contract Documents unless identified otherwise.

2. BID PERIOD INVESTIGATIONS AND SUBCONTRACTORS

Port of Stockton General Conditions Port Police Fusion Center 00700- 1


A. Contractor’s Investigations Before Bidding

1. Prior to submitting its Bid, Contractor must investigate fully the Work of the Contract. Contractor must visit the Site, examine thoroughly and understand fully the nature and extent of the Contract Documents, Work, Site, locality, actual conditions and as-built conditions, and all other information made available for bidding. Contractor’s investigation shall include, but is not limited to, a thorough examination of all reports of exploration and tests of subsurface conditions, as-built drawings, drawings, product specification(s) or reports, available for Bidding purposes, of physical conditions, including Underground Facilities and information identified in Document 00320 (Geotechnical Data and Existing Conditions) and/or Document 00335 (Hazardous Materials Surveys) (if used), or which may appear in the Contract Documents, and all local conditions, and federal, state and local laws and regulations that in any manner may affect cost, progress, performance or furnishing of Work or which relate to any aspect of the means, methods, techniques, sequences or procedures of construction to be employed by Contractor and safety precautions and programs incident thereto. Contractor shall completely and thoroughly correlate all such information and consider such information fully, prior to and as a condition of submitting its Bid. Contractor shall make inquiry as required in Document 00320 (Geotechnical Data and Existing Conditions.)

2. Prior to submitting its Bid, Contractor shall take care to note the existence and potential existence of Underground Facilities, in particular, above and below grade structures, drainage lines, storm drains, sewers, water, gas, electrical, chemical, hot water, and other similar items and utilities. Contractor shall carefully consider all supplied information, request additional information Contractor may deem necessary, and visually inspect the Site for above ground indications of Underground Facilities (such as, for example not by way of limitation, the existence of existing service laterals, appurtenances or other types of utilities, indicated by the presence of an underground transmission main or other visible facilities, such as buildings, new asphalt, meters and junction boxes, on or adjacent to the Site).

3. Prior to submitting its Bid, Contractor must correlate its experience, knowledge and the results of its required investigation with the terms and conditions of the Contract Documents, and must give Port prompt written notice of all conflicts, errors, ambiguities, or discrepancies of any type, that it may discover in or among the Contract Documents, as-built drawings (if any) and/or actual conditions. Contractor shall give this notice during the bid period and submission of a bid indicates Contractor’s agreement that Port responded to the notice through Addenda issued by Port which is acceptable to Contractor.

4. Prior to submitting its Bid, Contractor must consider fully the fact that information supplied regarding existing Underground Facilities at or contiguous to the Site is in many cases based on information furnished to Port by others (e.g., the builders of such Underground Facilities or others), and that due to their age or their chain of custody since preparation, may not meet current industry standards for accuracy. Contractor must also consider local underground conditions and typical practices for Underground Facilities, either through its own direct knowledge or through its subcontractors, and fully consider this knowledge in assessing the existing information and the reasonableness of its reliance.

5. Prior to submitting its Bid, Contractor shall conduct (or request that Port have conducted) any such additional or supplementary examinations, investigations, explorations, tests, studies and data concerning conditions (surface, subsurface, and Underground Facilities) at or contiguous to the Site or otherwise, which may affect cost, progress, performance or furnishing of Work or which relate to any aspect of the means, methods, techniques, sequences or procedures of construction to be employed by Contractor and safety precautions and programs incident thereto or which Contractor deems necessary to determine its Bid for performing and furnishing the Work in accordance with the time, price and other terms and conditions of Contract Documents.

6. Prior to submitting its Bid, Contractor may rely on Port supplied information regarding existing conditions only where such conditions are underground and not subject to reasonable verification.



If existing information supplied by Port indicates a discrepancy or a substantial risk of inaccuracy or omission, then Contractor must request specific additional information. Contractor shall advise Port in writing during the Bid period of any questions, suppositions, inferences or deductions Contractor may have, for Port’s review and response by Addenda, and may not assert any such matters later that were not brought forth during the Bid period.

7. During performance of the Contract, Contractor will be charged with knowledge of all information that it should have learned in performing this required pre-bid investigation, and shall not be entitled to change orders (time or compensation) due to information or conditions that Contractor should have known as a part of this pre-bid investigation.

B. Supplied Information on Underground Existing Conditions

1. Regarding Underground Facilities shown in the Contract Documents or supplied through Document 00320, Port has compiled this information in good faith, relying on its records and third party records. Because of the nature and location of Port and the Project, the existence of Underground Facilities is deemed inherent in the Work of the Contract, as is the fact that Underground Facilities are not always accurately shown or completely shown on as-built records, both as to their depth and location. In Article 14 of this Document 00700, this Contract establishes a heightened standard for claims involving Underground Facilities. Contractor shall consider this fact in its bidding and in its planning and execution of the Work involving Underground Facilities.

2. Regarding subsurface conditions other than Underground Facilities, shown on the Contract Documents or supplied in Document 00320 (Existing Conditions), Contractor may rely only upon the general accuracy of actual reported depths, actual reported character of materials, actual reported soil types, actual reported water conditions, or actual obstructions shown or indicated in the Contract Documents. Port is not responsible for the completeness of any subsurface condition information for bidding or construction, Contractor’s conclusions or opinions drawn from any subsurface condition information, or subsurface conditions that are not specifically shown. (For example, Port is not responsible for soil conditions in areas contiguous to areas where a subsurface condition is shown.)

C. Supplied Information on Above Ground Existing Conditions

1. Regarding aboveground and as-built conditions shown on the Contract Documents or supplied through Document 00320 (Existing Conditions), such information has been compiled in good faith, however, Contractor must independently verify such information. Port does not expressly or impliedly warrant or represent that information as to aboveground conditions or as-built conditions indicated in the Contract Documents or Document 00320, is correctly shown or indicated, or otherwise complete for construction purposes.

2. As a condition to bidding, Contractor shall verify by independent investigation all such

aboveground and as-built conditions, and bring any discrepancies to Port’s attention through written question. In submitting its Bid, Contractor shall rely on the results of its own independent investigation and shall not rely on Port-supplied information regarding aboveground conditions and as-built conditions, and Contractor shall accept full responsibility for its verification work sufficient to complete the Work as intended.

D. Subcontractors

1. Consistent with Public Contract Code Sections 4101 et seq., Contractor shall not substitute any other person or firm in place of any Subcontractor listed in the Bid. Subcontractors shall not assign or transfer their subcontracts or permit them to be performed by any other contractor without Port’s written approval. At Port’s request, Contractor shall provide Port with a complete copy of all executed subcontracts or final commercial agreements with Subcontractors and/or suppliers.



2. Subcontract agreements shall preserve and protect the rights of Port under the Contract Documents so that subcontracting will not prejudice such rights. To the extent of the Work to be performed by a Subcontractor, Contractor shall require the Subcontractor’s written agreement (1) to be bound to the terms of Contract Documents and (2) to assume vis-à-vis Contractor all the obligations and responsibilities that Contractor assumes toward Port under the Contract Documents. (These agreements include for example, and not by way of limitation, all warranties, claims procedures and rules governing submittals of all types to which Contractor is subject under the Contract Documents.)

3. Contractor shall provide for the assignment to Port of all rights any Subcontractor may have against any manufacturer, supplier, or distributor for breach of warranties and guaranties relating to the Work performed by the Subcontractor under the Contract Documents.

4. Port shall be deemed to be an intended third-party beneficiary of all Subcontracts (of any tier) for the provision of labor, services, supplies or material to the Project, and each such agreement shall so provide.

3. CONTRACT AWARD AND COMMENCEMENT OF THE WORK

A. Time Allowances For Performance Of Contract Documents

1. When Contractor and Port have signed the Contract Documents, Port will serve a Notice to Proceed upon Contractor to that effect, either by depositing notice in a post office or post office box regularly maintained by United States Postal Service in a pre-paid wrapper directed to Contractor at legal address or (at Port’s option) by delivery by other means authorized for notices under the Contract documents at legal address.

2. The start date for Contract Time shall be on the date indicated in the applicable Notice to Proceed. If no date is indicated, the start date for Contract Time shall be the fifth Day from the date that Contractor receives, by hand or overnight delivery or facsimile transmission, Port’s written Notice to Proceed, unless the Notice to Proceed is served by mail only, in which case the start date for Contract Time shall be the fifth Day following the mailing date.

3. The total number of Days for completion of the Work under the Contract Documents shall be as provided in Document 00520 (Agreement).

B. Commencement Of Work

The Contract Time will commence to run on the 30th Day after the issuance of the Notice of Award or, if a Notice to Proceed is given, on the date indicated in the Notice to Proceed. Port may give a Notice to Proceed at any time within 30 Days after the Notice of Award. Contractor shall not do any Work at the Site prior to the date on which the Contract Time commences to run.

4. INSURANCE AND INDEMNIFICATION

A. Insurance

See Document 00821 (Insurance and Indemnification), incorporated herein by this reference.

5. DRAWINGS AND SPECIFICATIONS

A. Intent

1. Drawings and Specifications are intended to describe a functionally complete and operable Project (and all parts thereof) to be constructed in accordance with the requirements of Contract Documents. Contractor shall perform any work, provide services and furnish any materials or equipment that may reasonably be inferred from the requirements of Contract Documents or from prevailing custom or trade usage as being required to produce this intended result. Contractor



shall interpret words or phrases used to describe work (including services), materials or equipment, that have well-known technical or construction industry or trade meaning in accordance with that meaning. Drawings’ intent specifically includes the intent to depict construction that complies with all applicable laws, codes and standards, including without limitation Title 24 of the California Code of Regulations.

2. As part of the “Work,” Contractor shall provide all labor, materials, equipment, machinery, tools, facilities, services, employee training and testing, hoisting facilities, shop drawings, storage, testing, security, transportation, disposal, the securing of all necessary or required field dimensions, the cutting or patching of existing materials, notices, permits, documents, reports, agreements and any other items required or necessary to timely and fully complete Work described and the results intended by Contract Documents and, in particular, Drawings and Specifications. Divisions and Specification Sections and the identification on any Drawings shall not control Contractor in dividing Work among Subcontractors or suppliers or delineating the Work to be performed by any specific trade.

3. Contractor shall perform reasonably implied parts of Work as “incidental work” although absent from Drawings and Specifications. Incidental work includes any work not shown on Drawings or described in Specifications that is necessary or normally or customarily required as a part of the Work shown on Drawings or described in Specifications. Incidental work includes any Work necessary or required to make each installation satisfactory, legally operable, functional, and consistent with the intent of Drawings and Specifications or the requirements of Contract Documents including required tasks to be performed under Division 1 of Specifications. Contractor shall perform incidental work without extra cost to Port. Incidental work shall be treated as if fully described in Specifications and shown on Drawings, and the expense of incidental work shall be included in price Bid and Contract Sum.

B. Drawing Details

A typical or representative detail on Drawings shall constitute the standard for workmanship and material throughout corresponding parts of Work. Where necessary, and where reasonably inferable from Drawings, Contractor shall adapt such representative detail for application to such corresponding parts of Work. The details of such adaptation shall be subject to prior approval by Port. Repetitive features shown in outline on Drawings shall be in exact accordance with corresponding features completely shown.

C. Interpretation Of Drawings And Specifications

Should any discrepancy appear or any misunderstanding arise as to the import of anything contained in Drawings and Specifications, or should Contractor have any questions or requests relating to Drawings or Specifications, Contractor shall refer the matter to Port, in writing. Port will issue with reasonable promptness written responses, clarifications or interpretations as Port may determine necessary, which shall be consistent with the intent of and be reasonably inferable from Contract Documents. Such written clarifications or interpretations shall be binding upon Contractor. If Contractor believes that a written response, clarification or interpretation justifies an adjustment in the Contract Sum or Contract Time, Contractor shall give Port prompt written notice as provided in Section 01250 (Modification Procedures). If the parties are unable to agree to the amount or extent of the adjustment, if any, then Contractor shall perform the Work in conformance with Port’s response, clarification, or interpretation and may make a written claim for the adjustment as provided in Article 12 of this Document 00700. D. Checking Of Drawings

Before undertaking each part of Work, Contractor shall carefully study and compare Contract Documents and check and verify pertinent figures shown in the Contract Documents and all applicable field measurements. Contractor shall be responsible for any errors that might have been avoided by such comparison. Figures shown on Drawings shall be followed; Contractor shall not scale measurements. Contractor shall promptly report to Port, in writing, any conflict, error, ambiguity or discrepancy that Contractor may discover. Contractor shall obtain a written interpretation or clarification from Port before



proceeding with any Work affected thereby. Contractor shall provide Port with a follow-up correspondence every ten days until it receives a satisfactory interpretation or clarification. E. Standards To Apply Where Specifications Are Not Furnished

The following general specifications shall apply wherever in the Specifications, or in any directions given by Port in accordance with or supplementing Specifications, it is provided that Contractor shall furnish materials or manufactured articles or shall do work for which no detailed specifications are shown. Materials or manufactured articles shall be of the best grade, in quality and workmanship, obtainable in the market from firms of established good reputation. If not ordinarily carried in stock, the materials or manufactured articles shall conform to industry standards for first-class materials or articles of the kind required, with due consideration of the use to which they are to be put. Work shall conform to the usual standards or codes, such as those cited in Section 01420 (References and Definitions), for first-class work of the kind required. Contractor shall specify in writing to Port the materials to be used or Work to be performed under this paragraph ten Business Days prior to furnishing such materials or performing such Work. F. Deviation from Specifications and Drawings

1. Contractor shall perform Work in accordance with Drawings and Specifications, and Contractor shall not be relieved of this responsibility by the activities of the Port or Architect/Engineer. Deviations from Drawings and from the dimensions therein given, or from the Specifications, whether or not error is believed to exist, shall be made only when approved in writing by Port. Contractor acknowledges the authority of Port to order removal of non-conforming construction. Contractor may deviate from Drawings or the dimensions given in the Drawings, and may deviate from the Specifications, only upon Port’s advance written approval of the proposed deviation by Change Order.

2. Contractor’s prior construction experience was a material factor in selection as Contractor for this Project. Contractor, also, acknowledges that changes are a normal feature of construction projects. Contractor shall rely on its experience and proactively cooperate, coordinate and schedule RFI’s, submittals, field questions, inspections, and document assembly, to facilitate the prompt and efficient use of the Change Order procedure as necessary to prevent delay in actual field construction.

3. Port may order that locations, lines and grades for Work vary from those shown on Drawings. Changes may be made in locations, lines or grades for Work under any item of Contract Documents. No payment in addition to unit price fixed in the Contract Documents for Work under respective items will be allowed on account of variations from Drawings in unit price items. In lump sum contracts, or where there are no unit price items covering Work affected by variations of locations, lines or grades, all changes in the Contract Documents will be made as set forth in Article 14 of this Document 00700.

G. Ownership And Use Of Drawings, Specifications And Contract Documents

Drawings, Specifications and other Contract Documents were prepared for use for Work of Contract Documents only. No part of Contract Documents shall be used for any other construction or for any other purpose except with the written consent of Port. Any unauthorized use of Contract Documents is prohibited and at the sole liability of the user.

6. CONSTRUCTION BY PORT OR BY SEPARATE CONTRACTORS

A. Port’s Right To Perform Construction And To Award Separate Contracts

1. Port may perform with its own forces, construction or operations related to the Project. Port may also award separate contracts in connection with other portions of the Project or other construction or operations, on the Site or areas contiguous to the Site, under conditions similar to these



Contract Documents, or may have utility owners perform other work. When separate contracts are awarded for different portions of the Project or other construction or operations on the Site, the term “Contractor” in these Contract Documents shall mean the Contractor herein.

2. Currently anticipated separate construction contracts (if any) are described in Section 01100. B. Mutual Responsibility

1. Contractor shall afford all other contractors, utility owners and Port (if Port is performing work with its own forces), proper and safe access to the Site, and reasonable opportunity for the installation and storage of their materials. Contractor shall ensure that the execution of its Work properly connects and coordinates with others’ work, and shall cooperate with them to facilitate the progress of the Work.

2. Contractor shall coordinate its Work with the work of other separate contractors, Port, and utility owners. Contractor shall hold coordination meetings with other contractors, Port and its representatives, and utility owners as required by Section 01315 (Project Meetings).

3. Unless otherwise provided in the Contract Documents, Contractor shall do all cutting, fitting and patching of the Work that may be required to make its several parts come together properly and integrate with such other work. Contractor shall not endanger any work of other separate contractors, Port or utility owners by cutting, excavating or otherwise altering their work and will only cut or alter their work with the written consent of Port and the others whose work will be affected.

4. To the extent that any part of Contractor’s Work is to interface with work performed or installed by other contractors or utility owners, Contractor shall inspect and measure the in-place work. Contractor shall promptly report to Port in writing any defect in in-place work that will impede or increase the cost of Contractor’s interface unless corrected. Port will require the Contractor responsible for the Defective Work to make corrections so as to conform to its contract requirements, or, if the defect is the result of an error or omission in the Contract Documents, issue a Change Order. If Contractor fails to measure, inspect and/or report to Port in writing defects that are reasonably discoverable, Contractor shall bear all costs of accomplishing the interface acceptable to Port. This provision shall be included in any and all other contracts or subcontracts for Work to be performed where such a conflict could exist.

C. Port Authority Over Coordination

1. Port will have authority over coordination of the activities of multiple contractors in cases where Port performs work with its own forces or contracts with others for the performance of other work on the Project, or utilities work on the Site. Port may at any time and in its sole discretion, designate a person or entity other than Port to have authority over the coordination of the activities among the various contractors. Port’s authority with respect to coordination of the activities of multiple contractors and utility owners shall not relieve Contractor of its obligation to other contractors and utility owners to coordinate its Work with other contractors and utility owners as specified in this Document 00700. Contractor shall promptly notify Port in writing when another contractor on the Project fails to coordinate its work with the Work of Contract Documents.

2. Contractor shall suspend any part of the Work or carry on the same in such manner as directed by Port when such suspension or prosecution is necessary to facilitate the work of other contractors or workers. No damages or claims by Contractor will be allowed if the suspension or Work change is due in whole or in part to Contractor’s failure to perform its obligation herein to coordinate its Work with other contractors and utility owners. Claims will be allowed only to the extent of fault by Port if the suspension or Work change is due in whole or in part to another contractor’s failure to coordinate its work with Contractor, other contractors, and utility owners.

7. PAYMENT BY PORT



A. Receipt And Processing Of Applications For Payment

As required by Section 01200 (Measurement and Payment), Contractor shall prepare the schedules, submit Applications for Payment and warrant title to all Work covered by each Application for Payment. Port will review Contractor’s Applications for Payment and Port will and make payment thereon, and Contractor shall make payments to Subcontractors, suppliers and others, as required by Section 01200 (Measurement and Payment).

8. CONTROL OF THE WORK

A. Subcontractors.

1. Contractor is fully responsible for Contractor’s own acts and omissions and those of subcontractors and design professionals. Contractor is responsible for all acts and omissions of its Subcontractors, suppliers, and other persons and organizations performing or furnishing any of the Work, labor, materials, or equipment under a direct or indirect contract with Contractor.

B. Supervision Of Work By Contractor

1. Contractor shall supervise, inspect, and direct Work competently and efficiently, devoting the attention and applying such personal skills and expertise as may be required and necessary to perform Work in accordance with Contract Documents. Contractor shall be solely responsible for and have control and charge of construction means, methods, techniques, sequences and procedures, safety precautions and programs in connection with the Work. Contractor shall be responsible to see that the completed Work complies accurately with Contract Documents.

2. Contractor shall designate and keep on the Site at all times during Work progress a competent resident Superintendent or Project Manager, who once designated, shall not be replaced without Port’s express written consent. The Superintendent or Project Manager shall be Contractor’s representative at the Site and shall have complete authority to act on behalf of Contractor. All communications to and from the Superintendent or Project Manager shall be as binding as if given to or by Contractor.

C. Observation Of Work By Port

1. Port Representative(s)

Port Representative(s) will have limited authority to act on behalf of Port as set forth in the Contract Documents. Except as otherwise provided in these Contract Documents or subsequently identified in writing by Port, Port will issue all communications to Contractor through Port Representative, and Contractor shall issue all communications to Port through Port Representative in a written document delivered to Port. Should any direct communications between Contractor and Port’s consultants, architects or engineers not identified in Article 2 of Document 00520 (Agreement) occur during field visits or by telephone, Contractor shall immediately confirm them in a written document copied to Port.

2. Means And Methods Of Construction

Subject to those rights specifically reserved in the Contract Documents, Port will not supervise, or direct, or have control over, or be responsible for, Contractor’s means, methods, techniques, sequences or procedures of construction, or the safety precautions and programs incident thereto, or Contractor’s failure to comply with laws and regulations applicable to the furnishing or performance of Work. Port will not be responsible for Contractor’s failure to perform or furnish the Work in accordance with Contract Documents.

3. In exercising its responsibilities and authorities under the Contract Documents, Port does not

assume any duties or responsibilities to any Subcontractor or supplier and does not assume any



duty of care to Contractor, Contractor’s Subcontractors or suppliers. Except as expressly set forth in the Contract Documents, in exercising their respective responsibilities and authorities under the Contract Documents, neither Architect/Engineer nor any Port Representative assume any duties or responsibilities to any Subcontractor, sub-Subcontractor or supplier nor assume any duty of care to Contractor or any Subcontractor, sub-Subcontractor or suppliers.

4. Work shall be performed under Port’s general observation and administration. Contractor shall comply with Port’s directions and instructions in accordance with the terms of Contract Documents, but nothing contained in these General Conditions shall be taken to relieve Contractor of any obligations or liabilities under the Contract Documents. Port’s failure to review or, upon review, failure to object to any aspect of Work reviewed, shall not be deemed a waiver or approval of any non-conforming aspect of Work.

5. Port may engage an independent consultant or Architect/Engineer (collectively for purposes of this paragraph, “Consultant”) to assist in administering the Work. If so engaged, Consultant will advise and consult with Port, but will have authority to act on behalf of Port only to extent provided in the Contract Documents or as set forth in writing by Port. Consultant will not be responsible for and will not have control or charge of construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with Work. Consultant will not be responsible for or have control over the acts or omissions of Contractor, Subcontractors or their agents or employees, or any other persons performing Work.

6. Consultant may review Contractor’s submittals, such as Shop Drawings, Product Data, and Samples, but only for conformance with design concept of Work and with information given in the Contract Documents.

7. Consultant may visit the Site at intervals appropriate to stage of construction to become familiar generally with the progress and quality of Work and to determine in general if Work is proceeding in accordance with Contract Documents. Based on its observations, Consultant may recommend to Port that it disapprove or reject Work that Consultant believes to be defective or will not produce a complete Project that conforms to Contract Documents or will prejudice the integrity of the design concept of the completed Project as a functioning whole as indicated by Contract Documents. Port will also have authority to require special inspection or testing of Work, whether or not the Work is fabricated, installed or completed.

8. Consultant may conduct inspections to recommend to Port the dates that Contractor has achieved Substantial Completion and Final Acceptance, and will receive and forward to Port for review written warranties and related documents required by Contract Documents.

D. Access To Work

1. During performance of Work, Port and its agents, officers, consultants, and employees may at any time enter upon Work, shops or studios where any part of the Work may be in preparation, or factories where any materials for use in Work are being or are to be manufactured, and Contractor shall provide proper and safe facilities for this purpose, and shall make arrangements with manufacturers to facilitate inspection of their processes and products to such extent as Port’s interests may require. Other contractors performing work for Port may also enter upon Work for all purposes required by their respective contracts. Subject to the rights reserved in the Contract Documents, Contractor shall have sole care, custody, and control of the Site and its Work areas.

2. Port may, at any time, and from time to time, during the performance of the Work, enter the Work Site for the for the purpose of installing any necessary work by Port labor or other contracts, and for any other purpose in connection with the installation of facilities. In doing so, Port shall endeavor not to interfere with Contractor and Contractor shall not interfere with other work being done by or on behalf of Port.



3. If, prior to completion and final acceptance of all the Work, Port takes possession of any structure or facility (whether completed or otherwise) comprising a portion of the Work with the intent to retain possession thereof (as distinguished from temporary possession contemplating return to Contractor), then, while Port is in possession of the same, Contractor shall be relieved of liability for loss or damage to such structure other than that resulting from the Contractor’s fault or negligence. Such taking of possession by Port shall not relieve the Contractor from any provisions of the Contract respecting such structure, other than to the extent specified in the preceding sentence, nor constitute a final acceptance of such structure or facility. See also Section 01100 (Summary of Work).

4. If, following installation of any equipment or facilities furnished by Contractor, defects requiring correction by Contractor are found, Port shall have the right to operate such unsatisfactory equipment or facilities and make reasonable use thereof until the equipment or facilities can be shut down for correction of defects without injury to Port.

9. CONTRACTOR’S WARRANTY, GUARANTY, AND INSPECTION OF WORK

A. Warranty And Guaranty

1. General Representations and Warranties: Contractor represents and warrants that it is and will be at all times fully qualified and capable of performing every Phase of the Work. Contractor warrants that all construction services shall be performed in accordance with generally accepted professional standards of good and sound construction practices and all requirements of Contract Documents. Contractor warrants that Work, including but not limited to each item of materials and equipment incorporated therein, shall be new, of suitable grade of its respective kind for its intended use, and free from defects in design, architecture and/or engineering, materials, construction and workmanship. Contractor warrants that Work shall conform in all respects with all applicable requirements of federal, state and local laws, applicable construction codes and standards, licenses, and permits, Drawings and Specifications and all descriptions set forth therein, and all other requirements of Contract Documents. Contractor shall not be responsible, however, for the negligence of others in the specification of specific equipment, materials, design parameters and means or methods of construction where that is specifically shown and expressly required by Contract Documents.

2. Extended Guaranties: Any guaranty exceeding one year provided by the supplier or manufacturer of any equipment or materials used in the Project shall be extended for such term. Contractor expressly agrees to act as co-guarantor of such equipment and materials and shall supply Port with all warranty and guaranty documents relative to equipment and materials incorporated in the Project and guaranteed by their suppliers or manufacturers.

3. Environmental and Toxics Warranty: The covenants, warranties and representations contained in this paragraph are effective continuously during Contractor’s Work on the Project and following cessation of labor for any reason including, but not limited to, Project completion. Contractor covenants, warrants and represents to Port that:

a. To Contractor’s knowledge after due inquiry, no lead or asbestos-containing materials were installed or discovered in the Project at any time during Contractor’s construction thereof. If any lead or asbestos-containing materials were discovered, Contractor made immediate written disclosure to Port.

b. To Contractor’s knowledge after due inquiry, no electrical transformers, light fixtures with ballasts or other equipment containing PCBs are or were located on the Project at any time during Contractor’s construction thereof.

c. To Contractor’s knowledge after due inquiry, no storage tanks for gasoline or any other toxic substance are or were located on the Project at any time during Contractor’s construction



thereof. If any such materials were discovered, Contractor made immediate written disclosure to Port.

d. Contractor’s operations concerning the Project are and were not in violation of any applicable environmental federal, state, or local statute, law or regulation dealing with hazardous materials substances or toxic substances and no notice from any governmental body has been served upon Contractor claiming any violation of any such law, ordinance, code or regulation, or requiring or calling attention to the need for any work, repairs, construction, alteration, or installation on or in connection with the Project in order to comply with any such laws, ordinances, codes, or regulations, with which Contractor has not complied. If there are any such notices with which Contractor has complied, Contractor shall provide Port with copies thereof.

B. Inspection Of Work

1. All materials, equipment, and workmanship used in Work shall be subject to inspection and testing at all times during construction and/or manufacture in accordance with the terms of Contract Documents. Work and materials, and manufacture and preparation of materials, from beginning of construction until final completion and acceptance of Work, shall be subject to inspection and rejection by Port, its agents, representatives or independent contractors retained by Port to perform inspection services, or governmental agencies with jurisdictional interests. Contractor shall provide them proper and safe conditions for such access and advise them of Contractor’s Site safety procedures and program so that they may comply therewith as applicable. Upon request or where specified, Port shall be afforded access for inspection at the source of supply, manufacture or assembly of any item of material or equipment, with reasonable accommodations supplied for making such inspections.

2. Contractor shall give Port and all inspection personnel timely notice of readiness of Work for all required inspections, tests or approvals, shall schedule and coordinate the same, and shall cooperate with inspection and testing personnel to facilitate required inspections or tests. Contractor shall also coordinate, schedule and give adequate notice to the appropriate inspection personnel of any Work that can only be inspected as it is placed or assembled (for example, concrete or masonry work), to enable the constant presence of such inspection personnel during such Work.

3. In the event that a scheduled inspection is canceled in less than 24 hours notice by Contractor and Port incurs costs associated with the cancellation, Contractor will reimburse Port for the actual costs of the canceled inspections. The amount will be deducted from payment owed Contractor.

4. If applicable laws or regulations of any public body having jurisdiction require any Work (or part thereof) specifically to be inspected, tested or approved by an employee or other representative of such public body, Contractor shall assume full responsibility for arranging and obtaining such inspections, tests or approvals, and furnish Port with the required certificates of inspection, or approval. Contractor will pay the cost of initial testing and Contractor shall pay all costs in connection with any follow-up or additional testing. Contractor shall also be responsible for arranging and obtaining and shall pay all costs in connection with any inspections, tests or approvals required for the acceptance of materials or equipment to be incorporated in the Work, or of materials, mix designs, or equipment submitted for approval prior to Contractor’s purchase thereof for incorporation in the Work.

5. If Contractor covers any Work, or the work of others, prior to any required inspection, test or approval without written approval of Port, Contractor shall uncover the Work at Port’s request. Contractor shall bear the expense of uncovering Work and replacing Work.

6. In any case where Contractor covers Work contrary to Port’s request, Contractor shall uncover Work for Port’s observation or inspection at Port’s request. Contractor shall bear the cost of uncovering Work.



7. Whenever required by Port, Contractor shall furnish tools, labor and materials necessary to make examination of Work that may be completed or in progress, even to extent of uncovering or taking down portions of finished Work. Should Work be found unsatisfactory, cost of making examination and of reconstruction shall be borne by Contractor. If Work is found to be satisfactory, Port, in manner herein prescribed for paying for alterations, modifications, and extra Work, except as otherwise herein specified, will pay for examination.

8. Inspection of the Work by or on behalf of Port, or Port’s failure to do so, shall not under any circumstances be deemed a waiver or approval of any non-conforming aspect of the Work. Rather, in the absence of a written Change Order signed by Port, Contractor’s duty to perform Work in conformance with the Contract Documents shall be absolute.

9. Any inspection, evaluation, or test performed by or on behalf of Port relating to the Work is solely for the benefit of Port, and shall not be relied upon by Contractor. Contractor shall not be relieved of the obligation to perform Work in accordance with the Contract Documents, nor relieved of any guaranty, warranty, or other obligation, as a result of any inspections, evaluations, or tests performed by Port, whether or not such inspections, evaluations, or tests are permitted or required under the Contract Documents. Contractor shall be solely responsible for testing and inspecting Work already performed to determine whether such Work is in proper condition to receive later Work.

C. Correction Of Defective Work

1. If Contractor fails to supply sufficient skilled workers, suitable materials or equipment, or to furnish or perform the Work in such a way that the completed Work will conform to Contract Documents, Port may order Contractor to replace any Defective Work, or stop any portion of Work to permit Port (at Contractor’s expense) to replace such Defective Work. These Port rights are entirely discretionary on the part of Port, and shall not give rise to any duty on the part of Port to exercise the rights for the benefit of Contractor or any other party.

2. Port may direct Contractor to correct any Defective Work or remove it from the Site and replace it with Work that is not defective and satisfactorily correct or remove and replace any damage to other Work or the work of others resulting from the correction or removal. Contractor shall be responsible for any and all claims, costs, losses and damages caused by or resulting from such correction or removal. A Change Order will be issued incorporating the necessary revisions in the Contract Documents with respect to the Work and the Contract Sum. If the parties are unable to agree to the amount of an appropriate decrease in the Contract Sum, Port may decide the proper amount or, in its discretion may elect to leave the Contract Sum unchanged and deduct from moneys due Contractor, all such claims, costs, losses and damages caused by or resulting from the correction or removal. If Contractor disagrees with Port’s calculations, it may make a claim as provided in Article 12 of this Document 00700. (Port exercise of its rights under this paragraph 9 shall be entirely discretionary and, like all other Port rights and remedies under the Contract, in addition to any other rights and remedies it may have under the Contract Documents or by law.)

3. Correction period:

a. With respect to equipment and machinery supplied by Contractor and incorporated into the Work, if within one year after the date of Final Completion of the portion of the Work incorporating the equipment and/or machinery (or, to the extent expressed by Change Order or Certificate of Final Completion, one year after Port’s written acceptance of such equipment), or such longer period as may be prescribed by laws or regulations, or by the terms of the Contract Documents, any equipment or machinery is found to be defective, Contractor shall promptly, without cost to Port and in accordance with Port’s written instructions, correct such Defective Work

b. With respect to structures within the scope of Work, if within one year after the date of Final Acceptance, or such longer period of time as may be prescribed by laws or regulations, or by



the terms of Contract Documents, any Work is found to be defective, Contractor shall promptly, without cost to Port and in accordance with Port’s written instructions, correct such Defective Work.

c. Contractor shall remove any Defective Work rejected by Port and replace it with Work that is not defective, and satisfactorily correct or remove and replace any damage to other Work or the work of others resulting therefrom. If Contractor fails to promptly comply with the terms of such instructions, or in an emergency where delay would cause serious risk of loss or damage, Port may have the Defective Work corrected or the rejected Work removed and replaced.

d. Contractor shall pay for all claims, costs, losses and damages caused by or resulting from such removal and replacement. Where Contractor fails to correct Defective Work, or defects are discovered outside the correction period, Port shall have all rights and remedies granted by law.

4. Additionally, in special circumstances where a part of the Work is occupied or a particular item of equipment is placed in continuous service before Final Acceptance of all the Work, the correction period for that part of Work or that item may start to run from an earlier date if so provided by Change Order or Certificate of Substantial Completion.

5. Where Defective Work or rejected Work (and damage to other Work resulting therefrom) has been removed and replaced under this provision after the commencement of the correction period, the correction period hereunder with respect to such Work shall be extended for an additional period of one year after such removal and replacement has been satisfactorily completed.

6. If following installation of any equipment, machinery, or facilities furnished by Contractor, defects requiring correction by Contractor are found, Port shall have the right to operate such defective equipment or facilities and make reasonable use thereof until the equipment, machinery, or facilities can be shut down for correction of defects without causing injury to Port.

D. Acceptance And Correction Of Defective Work By Port

1. Port may accept Defective Work. Contractor shall pay all claims, costs, losses and damages attributable to Port’s evaluation of and determination to accept such Defective Work. If Port accepts any Defective Work prior to final payment, a Change Order will be issued incorporating the necessary revisions in the Contract Documents with respect to the Work and the Contract Sum. If the parties are unable to agree to the amount of an appropriate decrease in the Contract Sum, Port may deduct from moneys due Contractor, all claims, costs, losses, damages, expenses and liabilities attributable to the Defective Work. If Contractor disagrees with Port’s calculations, Contractor may make a claim as provided in Article 12 of this Document 00700. If Port accepts any Defective Work after final payment, Contractor shall pay to Port, an appropriate amount as determined by Port.

2. Port may correct and remedy deficiency if, after five Days’ written notice to Contractor, Contractor fails to correct Defective Work or to remove and replace rejected Work in accordance with this Article 9; or provide a plan for correction of Defective Work acceptable to Port; or perform Work in accordance with Contract Documents. In connection with such corrective and remedial action, Port may exclude Contractor from all or part of the Site; take possession of all or part of Work and suspend Contractor’s Work related thereto; take possession of all or part of Contractor’s tools, appliances, construction equipment and machinery at the Site; and incorporate in Work any materials and equipment stored at the Site or for which Port has paid Contractor but which are stored elsewhere. Contractor shall allow Port, its representatives, agents, employees, and other contractors and Port’s consultants access to the Site to enable Port to exercise the rights and remedies under this Article 9. Contractor shall be responsible for all claims, costs, losses, damages, expenses and liabilities incurred or sustained by Port in exercising such rights and remedies. A Change Order will be issued incorporating the necessary revisions in the Contract



Documents with respect to Work and the Contract Sum. If the parties are unable to agree to the amount of an appropriate decrease in the Contract Sum, Port may deduct from moneys due Contractor, all claims, costs, losses and damages caused by or resulting from the correction or removal. If Contractor disagrees with Port’s calculations, Contractor may make a claim as provided in Article 12 of this Document 00700.

E. Rights Upon Inspection Or Correction

1. Contractor shall not be allowed an extension of Contract Time because of any delay in the performance of Work attributable to the exercise by Port of its rights and remedies under this Article 9. Where Port exercises its rights under this Article 9, it retains all other rights it has by law or under the Contract Documents including, but not limited to, the right to terminate Contractor’s right to proceed with the Work under the Contract Documents and/or make a claim or back charge where a Change Order cannot be agreed upon.

2. Inspection by Port shall not relieve Contractor of its obligation to have furnished material and workmanship in accordance with Contract Documents. Payment for Work completed through periodic progress payments or otherwise shall not operate to waive Port’s right to require full compliance with Contract Documents and shall in no way be deemed as acceptance of the Work paid therefore. Contractor’s obligation to complete the Work in accordance with Contract Documents shall be absolute, unless Port agrees otherwise in writing.

F. Samples And Tests Of Materials And Work

1. Contractor shall furnish, in such quantities and sizes as may be required for proper examination and tests, samples or test specimens of all materials to be used or offered for use in connection with Work. Contractor shall prepare samples or test specimens at its expense and furnish them to Port. Contractor shall submit all samples in ample time to enable Port to make any necessary tests, examinations, or analyses before the time it is desired to incorporate the material into the Work.

2. Test samples or specimens of material for testing shall be taken by the Architect/Engineer, his or her representative, Project Inspector or representative of the testing agency.

G. Proof Of Compliance Of Contract Provisions

In order that Port may determine whether Contractor has complied or is complying with requirements of Contract Documents not readily enforceable through inspection and tests of Work and materials, Contractor shall at any time, when requested, submit to Port properly authenticated documents or other satisfactory proofs of compliance with all applicable requirements. H. Acceptance

Inspection by Port or its authorized agents or representatives, any order or certificate for the payment of money, any payment, acceptance of the whole or any part of Work by Port, any extension of time, any verbal statements on behalf of Port or its authorized agents or representatives shall not operate as a waiver or modification of any provision of the Contract Documents, or of any power reserved to Port herein or therein or any right to damages provided in the Contract Documents. Any waiver of any breach of the Contract Documents shall not be held to be a waiver of any other subsequent breach. I. Substantial Completion

Without limiting the foregoing, the Work (or specified part thereof) will not be deemed Substantially Complete until all applicable testing, training and commissioning have been completed.

10. CONTRACTOR’S ORGANIZATION AND EQUIPMENT



A. Contractor’s Legal Address

Address and facsimile number given in Contractor’s Bid are hereby designated as Contractor’s legal address and facsimile number. Contractor may change its legal address and facsimile number by notice in writing, delivered to Port, which in conspicuous language advises Port of a change in legal address or facsimile number, and which Port accepts in writing. Delivery to Contractor’s legal address or depositing in any post office or post office box regularly maintained by the United States Postal Service, in a wrapper with postage affixed, directed to Contractor at legal address, or of any drawings, notice, letter or other communication, shall be deemed legal and sufficient service thereof upon Contractor. Facsimile to Contractor’s designated facsimile number of any letter, memorandum, or other communication on standard or legal sized paper, with proof of facsimile transmission, shall be deemed legal and sufficient service thereof upon Contractor. B. Contractor’s Office At The Work Site

Contractor shall maintain an office at the Site, which office shall be headquarters of a Contractor representative authorized to transmit to and receive from Port, communications, instructions or Drawings. Communications, instructions, or Drawings given to Contractor’s representative or delivered at the Site office in representative’s absence shall be deemed to have been given to Contractor. C. Contractor’s Superintendents Or Forepersons

Contractor shall at all times be represented on Site by one or more superintendents, project managers or forepersons authorized and competent to receive and carry out any instructions that Port may give, and shall be liable for faithful observance of instructions delivered to Contractor or to authorized representative or representatives on Site. D. Proficiency In English

Supervisors, security guards, safety personnel and employees who have unescorted access to the Site shall possess proficiency in the English language in order to understand, receive and carry out oral and written communications or instructions relating to their job functions, including safety and security requirements. E. Contractor’s And Subcontractors’ Employees

Contractor shall employ, and shall permit its Subcontractors to employ, only competent and skillful personnel to do Work. If Port notifies Contractor that any of its employees, or any of its Subcontractors’ employees on Work is incompetent, unfaithful, disorderly or profane, or fails to observe customary standards of conduct or refuses to carry out any provision of the Contract Documents, or uses threatening or abusive language to any person on Work representing Port, or violates sanitary rules, or is otherwise unsatisfactory, and if Port requests that such person be discharged from Work, then Contractor or its Subcontractor shall immediately discharge such person from Work and the discharged person shall not be re-employed on the Work except with consent of Port. F. Contractor To List Trades Working

Contractor shall list the trades working on the Site and their scheduled activities on a weekly basis, and provide a copy of that list to Port. G. Contractor’s Use Of The Site

Contractor shall not make any arrangements with any person to permit occupancy or use of any land, structure or building within the limits of the Work, for any purpose whatsoever, either with or without compensation, in conflict with any agreement between Port and any owner, former owner or tenant of such land, structure or buildings. Contractor may not occupy Port-owned property outside the limit of the Work as indicated on the Drawings unless it obtains prior written approval from Port.



11. PROSECUTION AND PROGRESS OF THE WORK

A. Contractor to Submit Required Schedules

1. Contractor shall submit schedules and reports, Shop Drawings and Submittals in the appropriate quantity and within the required time, arrange conferences and meetings and proceed with the Work in accordance with Contract Documents, including Sections 01315 (Project Meetings), 01320 (Progress Schedules and Reports), and 01300 (Contractor Submittals).

2. Contractor shall submit to Port for review and discussion at the Preconstruction Conference described in Section 01315 (Project Meetings), and again prior to the first payment application: the schedule of values submittals described in Section 01200 (Measurement and Payment), progress schedules and reports as required by Sections 01320 (Progress Schedules and Reports), and schedule of submittals described in Section 01300 (Contractor Submittals). No progress payment shall be due or owing to Contractor until such schedules are submitted to and acceptable to Port and/or Architect/Engineer as meeting the requirements of the Contract Documents, including Sections 01200 (Measurement and Payment), 01320 (Progress Schedules and Reports) and 01300 (Contractor Submittals). Port’s acceptance of Contractor’s schedules will not create any duty of care or impose on Port any responsibility for the sequencing, scheduling or progress of Work nor will it interfere with or relieve Contractor from Contractor’s full responsibility therefor.

3. Before commencing any portion of Work, Contractor shall inform Port in writing as to time and place at which Contractor wishes to commence Work, and nature of Work to be done, in order that proper provision for inspection of Work may occur, and to assure measurements necessary for record and payment. Information shall be given to Port a reasonable time in advance of time at which Contractor proposes to begin Work, so that Port may complete necessary preliminary work without inconvenience or delay to Contractor.

B. Contractor to Submit Submittals and Shop Drawings.

1. Contractor shall submit submittals and Shop Drawings to Port (or Architect/Engineer if Port so designates) for review in strict accordance with Section 01300 (Contractor Submittals). Submission of a Shop Drawing shall constitute Contractor’s representation that all requirements of Section 01300 (Contractor Submittals) have been complied with. All submittals will be identified as Port may require and in the number of copies specified in Section 01300 (Contractor Submittals).

2. Contractor shall not perform Work that requires submission of a Shop Drawing or Sample or other submittal prior to submission and favorable review of the Shop Drawing or Sample or submittal. Where a Shop Drawing or Sample or other submittal is required by Contract Documents or the final Schedule of Shop Drawing and Sample Submittals accepted by Port, any related Work performed prior to Port’s approval of the pertinent submittal shall be at the sole expense, responsibility and risk of Contractor.

C. Contractor to Maintain Cost Data

1. Contractor shall maintain full and correct information as to the number of workers employed in connection with each subdivision of Work, the classification and rate of pay of each worker in form of certified payrolls, the cost to Contractor of each class of materials, tools and appliances used by Contractor in Work, and the amount of each class of materials used in each subdivision of Work. Contractor shall provide Port with monthly summaries of this information. If Contractor maintains or is capable of generating summaries or reports comparing actual Project costs with Bid estimates or budgets, Contractor shall provide Port with a copy of such report upon Port’s request and whenever it is generated.

2. Contractor shall maintain daily job reports recording all significant activity on the job, including the number of workers on Site, Work activities, problems encountered and delays. Contractor



shall provide Port with copies for each Day Contractor works on the Project, to be delivered to Port either the same Day or the following morning before starting work at the Site. Contractor shall take monthly progress photographs of all areas of the Work. Contractor shall maintain copies of all correspondence with Subcontractors and records of meetings with Subcontractors.

3. Port shall have the right to audit and copy Contractor’s books and records of any type, nature or description relating to the Project (including but not limited to financial records reflecting in any way costs claimed on the Project), and to inspect the Site, including Contractor’s trailer, or other job Site office, and this requirement shall be contained in the subcontracts of Subcontractors working on Site. By way of example, Port shall have the right to inspect and obtain copies of all Contract Documents, planning and design documents, Bid proposal and negotiation documents, cost records and job cost variance reports, design modification proposals, value engineering or other cost reduction proposals, revisions made to the original design, job progress reports, photographs, and as-built drawings maintained by Contractor. Port and any other applicable governmental entity shall have the right to inspect all information and documents maintained under this Article 11 at any time during the Project and for a period of five years following Final Completion. This right of inspection shall not relieve Contractor of its duties and obligations under the Contract Documents. This right of inspection shall be specifically enforceable in a court of law, either independently or in conjunction with enforcement of any other rights in the Contract Documents.

4. Contractor shall maintain in a safe place at the Site one record copy of all Drawings, Specifications, Addenda, Contract Modifications, Change Orders, Work Directives, Force Account orders, and written interpretations and clarifications in good order and annotated to show all changes made during construction. These Project Record Documents, together with all approved Samples and a counterpart of all approved Shop Drawings, shall be maintained and available to Port for reference. Upon completion of the Work, Contractor shall deliver to Port, the Project Record Documents, Samples and Shop Drawings and as-built drawings.

D. Contractor To Supply Sufficient Workers And Materials

1. Unless otherwise required by Port under the terms of Contract Documents, Contractor shall at all times keep on the Site materials and employ qualified workers sufficient to prosecute Work at a rate and in a sequence and manner necessary to complete Work within the Contract Time. This obligation shall remain in full force and effect notwithstanding disputes or claims of any type.

2. At any time during progress of Work should Contractor directly or indirectly (through Subcontractors) refuse, neglect, or be unable to supply sufficient materials or employ qualified workers to prosecute the Work as required, then Port may require Contractor to accelerate the Work and/or furnish additional qualified workers or materials as Port may consider necessary, at no cost to Port. If Contractor does not comply with the notice within three Business Days of date of service thereof, Port shall have the right (but not a duty) to provide materials and qualified workers to finish the Work or any affected portion of Work, as Port may elect. Port may, at its discretion, exclude Contractor from the Site, or portions of the Site or separate work elements during the time period that Port exercises this right. Port will deduct from moneys due or which may thereafter become due under the Contract Documents, the sums necessary to meet expenses thereby incurred and paid to persons supplying materials and doing Work. Port will deduct from funds or appropriations set aside for purposes of Contract Documents the amount of such payments and charge them to Contractor as if paid to Contractor. Contractor shall remain liable for resulting delay, including liquidated damages and indemnification of Port from claims of others.

3. Exercise by Port of the rights conferred upon Port in this subparagraph is entirely discretionary on the part of Port. Port shall have no duty or obligation to exercise the rights referred to in this subparagraph and its failure to exercise such rights shall not be deemed an approval of existing Work progress or a waiver or limitation of Port’s right to exercise such rights in other concurrent or future similar circumstances. (The rights conferred upon Port under this subparagraph are, like



all other such rights, cumulative to Port’s other rights under any provision of the Contract Documents.)

E. Contractor to Locate Underground Facilities.

1. During construction, Contractor shall comply with Government Code Sections 4216 to 4216.9, and in particular Section 4216.2 which provides, in part: “Except in an emergency, every person planning to conduct any excavation shall contact the appropriate regional notification center at least two working days, but no more than 14 calendar days, prior to commencing that excavation, if the excavation will be conducted in an area which is known, or reasonably should be known, to contain subsurface installations other than the underground facilities owned or operated by the excavator, and, if practical, the excavator shall delineate with white paint or other suitable markings the area to be excavated. The regional notification center shall provide an inquiry identification number to the person who contacts the center and shall notify any member, if known, who has a subsurface installation in the area of the proposed excavation.”

2. Contractor shall contact USA, and schedule the Work to allow ample time for the center to notify its members and, if necessary, for any member to field locate and mark its facilities. Contractor is charged with knowledge of all subsurface conditions reflected in USA records. Prior to commencing excavation or trenching work, Contractor shall provide Port with copies of all USA records secured by Contractor. Contractor shall advise Port of any conflict between information provided in Document 00320 (Geotechnical Data and Existing Conditions), the Drawings and that provided by USA records. Contractor’s excavation shall be subject to and comply with the Contract Documents, including without limitation Articles 2 and 8 of this Document 00700.

3. Contractor shall also investigate the existence of existing service laterals, appurtenances or other types of utilities, indicated by the presence of an underground transmission main or other visible facilities, such as buildings, new asphalt, meters and junction boxes, on or adjacent to the Site, even if not shown or indicated in Document 00320 (Geotechnical Data and Existing Conditions), the Drawings or that provided by USA records. Contractor shall immediately secure all such available information and notify Port and the utility owner, in writing, of its discovery.

F. Contractor’s to Protect Underground Facilities.

1. At all times during construction, all operating Underground Facilities shall remain in operation, unless the Contract Documents expressly indicate otherwise. Contractor shall maintain such Underground Facilities in service where appropriate; shall repair any damage to them caused by the Work; and shall incorporate them into the Work, including reasonable adjustments to the design location (including minor relocations) of the existing or new installations. Contractor shall take immediate action to restore any in service installations damaged by Contractor’s operations.

2. Prior to performing Work at the Site, Contractor shall lay out the locations of Underground Facilities that are to remain in service and other significant known underground installations indicated by the Underground Facilities Data. Contractor shall further locate, by carefully excavating with small equipment, potholing and principally by hand, all such utilities or installations that are to remain and that are subject to damage. If additional utilities whose locations are unknown are discovered, Contractor shall immediately report to Port for disposition of the same. Additional compensation or extension of time on account of utilities not shown or otherwise brought to Contractor’s attention, including reasonable action taken to protect or repair damage, shall be determined as provided in this Document 00700.

3. The cost of all of the following will be included in the Contract Sum and Contractor shall have full responsibility for (a) reviewing and checking all available information and data including, but not limited to, Document 00320 (Geotechnical Data and Existing Conditions) and information on file at USA; (b) locating all Underground Facilities shown or indicated in the Contract Documents, available information, or indicated by visual observation including, but not limited to, and by way of example only, engaging qualified locating services and all necessary backhoeing and potholing;



(c) coordination of the Work with the owners of such Underground Facilities during construction; and (d) the safety and protection of all such Underground Facilities and repairing any damage thereto resulting from the Work.

G. Contractor to Not Disrupt Port Operation.

1. Contractor shall schedule and execute all Work in a manner that does not interfere with or disrupt Port operations, including but not limited to, parking, utilities (electricity, gas, water), noise, access by employees and administration, access by vendors, physicians, patients and any other person or entity using Port facilities or doing business with Port. Contractor shall produce and supply coordination plans and requests to Port, following Port procedures , for all necessary interference of construction with Port, which Port will reasonably cooperate with, as further described in Section 01110 .

12. CLAIMS BY CONTRACTOR / NON-JUDICIAL SETTLEMENT PROCEDURE

A. Scope

1. The claim notice and documentation procedure described in this Article 12 applies to all claims and disputes arising under the Contract Documents, including without limitation any claim or dispute by any Subcontractor or material supplier, and any claims arising under tort law as well as contract law. All Subcontractor and supplier claims of any type shall be brought only through Contractor as provided in this Article 12. Under no circumstances shall any Subcontractor or supplier make any direct claim against Port.

2. “Claim” means a written demand or written assertion by Contractor seeking, as a matter of right, the payment of money, the adjustment or interpretation of Contract Documents terms, or other relief arising under or relating to Contract Documents. In order to qualify as a “claim,” the written demand must state that it is a claim submitted under this Article 12. A voucher, invoice, proposed change, Application for Payment, cost proposal, RFI, change order request, or other routine or authorized form of request for payment is not a claim under the Contract Documents. If such request is disputed as to liability or amount, then the disputed portion of the submission may be converted to a claim under the Contract Documents by submitting a separate notice and claim in compliance with claim submission requirements herein.

3. The provisions of this Article 12 constitute a non-judicial claim settlement procedure, and also step one of a two step claim presentment procedure by agreement under Section 930.2 of the California Government Code. Specifically, step one is compliance with this contract claims procedure and filing/administering timely contract claims in accordance with the Contract Documents. Step two is filing a timely Government Code Section 910 claim in accordance with the California Government Code. Any Government Code Section 910 claims shall be presented in accordance with the Government Code and shall affirmatively indicate Contractor’s prior compliance with the claims procedure herein and previous dispositions under this Article.

4. The provisions of this Article 12 shall survive termination, breach or completion of the Contract Documents. Contractor shall bear all costs incurred in the preparation and submission of a claim.

B. Procedure

1. Disputed Work. Should any clarification, determination, action or inaction by Port or Architect/Engineer, Work, third party, or any other event whatsoever, in the opinion of Contractor, exceed the requirements of or not comply with Contract Documents in any way, or otherwise result in Contractor seeking additional compensation in time or money or damages for any reason (collectively “Disputed Work”), then Contractor shall so notify Port. Contractor and Port shall make good faith attempts to resolve informally any and all such issues, claims and/or disputes.



2. Duty to Work During Disputes. Notwithstanding any dispute or Disputed Work, Contractor shall continue to prosecute the Work and the Disputed Work in accordance with the determinations of Port. Contractor’s sole remedy for Disputed Work is to pursue the remedies in this Article 12 and follow the determinations of Port.

3. Timely Notice of Disputed Work Required. Before commencing any Disputed Work, or within ten (10) Days after Contractor’s first knowledge of the Disputed Work, whichever is earlier, Contractor shall file a written notice and preliminary cost proposal for the Disputed Work with Port stating clearly and in detail its objection and reasons for contending the Disputed Work is outside or in breach of the requirements of Contract Documents. The written notice must identify the subcontractors, vendors, suppliers effected, if any, sufficient for Port to visit the site to inspect the work and/or conduct a telephonic interview of the persons involved, and/or to photograph the work in question; and Contractor is encouraged to supply digital photographs by email if possible. The preliminary cost proposal must provide a good faith preliminary estimate of the labor (workers, crews), equipment and/or materials involved, and a corresponding good faith preliminary estimate of cost. If a written notice and preliminary cost proposal for Disputed Work is not issued within this time period, or if Contractor proceeds with the Disputed Work without first having given the notice of the Disputed Work, Contractor shall waive its rights to further claim on the specific issue.

4. Timely Notice of Potential Claims Required. Port will review Contractor’s timely notice and preliminary cost proposal for Disputed Work and provide a decision. If, after receiving the decision, Contractor disagrees with it or still considers the Work required of it to be outside of the requirements of Contract Documents, then Contractor shall so notify Port, in writing, within ten (10) Days after receiving the decision, by submitting a notice of potential claim, stating that a formal claim will be issued. (If Port should fail to provide a decision on a notice and preliminary cost proposal within thirty (30) days, then Contractor shall submit a notice of potential claim within ten days following the thirtieth (30th) day, i.e., or by the 40th day following the notice and preliminary cost proposal.) Contractor shall continue to prosecute the Disputed Work to completion.

5. Quarterly Claims Required. At the end of each calendar year quarter (March 31, June 30, September 30 and December 31) of each year, for each and every notice of potential claim that Contractor may have submitted in that quarter, Contractor shall submit a formal claim in the form specified herein. Contractor may file a single consolidated claim each quarter, or may file separate claims each quarter, as Contractor sees fit, provided Contractor complies with the requirements below. (Contractor may defer until the next reporting period the filing of a formal claim for any notices of potential claim timely issued within the last 15 days of the prior quarter.) The formal claim(s) shall include all arguments, justification, cost or estimates, schedule analysis, and detailed documentation supporting the Contractor’s position, for each notice of potential claim that Contractor intends to pursue as a formal claim (further described below).

6. Claim Updates Required. If Disputed Work persists longer than a single calendar quarter, then Contractor shall, every quarter until the Disputed Work ceases, submit to Port a document titled “Claim Update” that shall update and quantify all elements of the claim as completely as possible. Contractor’s failure to submit a Claim Update or to quantify costs every quarter shall result in waiver of the claim for that period. Claims or Claim Updates stating that damages, total damages (direct and indirect), schedule impact and/or any time extension will be determined at a later date shall not comply with this subparagraph and shall result in Contractor waiving its claim(s). Contractor shall also maintain a continuing “claims log” that shall list all outstanding claims and their value, and provide such log to Port quarterly.

7. Claim Negotiations required. Upon receipt of Contractor’s formal claim(s) including all arguments, justifications, cost or estimates, schedule analysis, and documentation supporting its position as required herein, Port or its designee will review the issue and render a final determination. Contractor and Port may mutually agree upon a claims resolution protocol, a neutral facilitator or mediator, or other alternative dispute resolution procedures, as appropriate.



Port may in its discretion conduct an administrative hearing on Contractor’s claim, in which case Contractor shall appear, participate, answer questions and inquiries, and present any further document, schedules or analysis requested by Port to evaluate and decide Contractor’s claim.

C. Claim Format

1. Contractor shall submit the formal claim(s) with a cover letter and certification of the accuracy of the formal claim.

2. The formal claim(s) shall list separately each notice of potential claim that Contractor intends to pursue as a formal claim(s), and for each such item separately, Contractor shall provide the following:

a. Summary of the claim, including underlying facts, entitlement, schedule analysis, quantum calculations, contract provisions supporting relief;

b. List of documents relating to claim including Specifications, Drawings, clarifications/requests for information, schedules, notices of delay, and any others;

c. Chronology of events and correspondence;

d. Analysis of claim merit;

e. Analysis of claim cost; and

f. Attach supporting cost and schedule documents as required in this Article and elsewhere in the Contract Documents (e.g., Section 01320).

3. For each notice of potential claim that Contractor intends to pursue as a formal claim, Contractor shall establish in the formal claim a direct causal link between the separate item of cost/time requested, the separate notices of potential claim timely issued, and the specific changed Work asserted. Total cost claims shall not be allowed.

4. Claims shall be calculated in the same manner as Change Orders per Section 01250 (Modification Procedures). EXCEPT WHERE PROVIDED BY LAW, OR ELSEWHERE IN THESE CONTRACT DOCUMENTS (IF APPLICABLE), PORT SHALL NOT BE LIABLE FOR SPECIAL OR CONSEQUENTIAL DAMAGES, AND CONTRACTOR SHALL NOT INCLUDE THEM IN ITS CLAIMS. CONTRACTOR SHALL BE LIMITED IN ITS RECOVERY ON CLAIMS TO THE CHANGE ORDER CALCULATIONS SET FORTH IN SECTION 01250 (MODIFICATION PROCEDURES).

D. Mediation

1. If Contractor’s claims submitted in accordance with this Article 12 at Project completion total less than $375,000, then claims resolution shall first proceed in the manner prescribed by Article 1.5, Chapter 1, Part 3 of Division 2 of the California Public Contract Code, found in Section 01410 (Regulatory Requirements).

2. If Contractor’s claims submitted in accordance with this Article 12 at Project completion exceed $375,000, then, as a condition precedent to litigation (or if otherwise permitted by the Contract Documents, arbitration) thereon, such claims must first be mediated. Mediation shall be non-binding and utilize the services of a mediator mutually acceptable to the parties and, if the parties cannot agree, a mediator selected by the American Arbitration Association from its panel of approved mediators trained in construction industry mediation, having a minimum of twenty (20) years experience in the construction industry. All statutes of limitation shall be tolled from the date of the demand for mediation until a date two weeks following the mediation’s conclusion. All unresolved Contractor claims shall be submitted to the same mediator. The cost of mediation shall be equally shared.



E. Subcontractor Claims

Contractor shall present as its claims all Subcontractor, sub-Subcontractor and supplier claims of any type, and prove them under the terms of the Contract Documents. Port shall not be directly liable to any Subcontractor, any supplier, or any other person or organization, or to any surety for or employee or agent of any of them, for damages or extra costs of any type arising out of or resulting from the Project. F. Waiver.

1. If Contractor fails to comply with this Article 12 as to any claim, then Contractor shall waive its rights to such claim.

2. All claim(s), Disputed Work items or issue(s) not raised in a timely notice, timely notice of potential claim and then timely claim submitted under this Article 12, may not be asserted in any subsequent Government Code section 910 claim, litigation or legal action.

3. Contractor may request an extension of time to comply with the claims procedure herein, but must do so in advance of time periods expiring and Port must give its approval in writing (which approval may be withheld in Port discretion.) As to any other feature of the claim procedure herein (and its claims waiver feature), it may not be waived or altered absent a written change order signed by both parties and approved as to form by their legal counsel.

4. Port shall not be deemed to waive or alter any provision under this Article 12, if at Port’s sole discretion, a claim is administered in a manner not in accord with this Article 12.

13. LEGAL AND MISCELLANEOUS

A. Laws And Regulations

1. Contractor shall keep fully informed of and shall comply with all laws, ordinances, regulations and orders of any properly constituted authority affecting the Contract Documents, Work and persons connected with Work, and shall, to the greatest extent permitted by law, protect and indemnify Port and its officers, employees, consultants and agents against any claim or liability, including attorney’s fees, arising from or based on violation of law, ordinance, regulation or order, whether by Contractor or by Subcontractors, employees or agents. Authorized persons may at any time enter upon any part of Work to ascertain compliance of all applicable laws, ordinances, regulations and orders.

2. Whenever Drawings and Specifications require larger sizes or higher standards than are required by any applicable law, ordinance, regulation or order, Drawings and Specifications shall govern. Whenever Drawings and Specifications require something that will violate such laws, ordinances, regulations or orders, then such laws, ordinances, regulations or orders shall govern.

3. Contractor shall comply with applicable portions of Title 8 (Industrial Relations), Title 19 (Public Safety), Title 22 (Social Security, Division of Health) and Title 24 (California Building Standards Code), California Code of Regulations (Uniform Building Code) (most recent edition) and Public Contract Code. Whenever Contract Documents require larger sizes or higher standards than are required by any applicable law, ordinance, regulation or order, Contract Documents shall govern. Whenever Contract Documents require something that will violate such laws, ordinances, regulations or orders, then such laws, ordinances, regulations or orders shall govern.

4. See also Section 01410 (Regulatory Requirements) regarding these matters.

B. Permits And Taxes

Contractor shall procure all permits and licenses applicable to the Work (including environmental matters to the extent applicable), pay all charges and fees, including fees for street opening permits, comply with, implement and acknowledge effectiveness of all permits, initiate and cooperate in securing all required



notifications or approvals therefore, and give all notices necessary and incident to due and lawful prosecution of Work, unless otherwise provided herein. Port will pay applicable building permits, school, sanitation and water fees, except as otherwise provided in the Contract Documents. Contractor shall pay all sales and/or use taxes levied on materials, supplies, or equipment purchased and used on or incorporated into Work, and all other taxes properly assessed against equipment or other property used in connection with Work, without any increase in the Contract Sum. Contractor shall make necessary arrangements with proper authorities having jurisdiction over roads, streets, pipelines, navigable waterways, railroads, and other works in advance of operations, even where Port may have already obtained permits for the Work. C. Suspension Of Work

1. Port may, without cause, order Contractor in writing to suspend, delay or interrupt Work in whole or in part for such period of time as Port may determine. An adjustment shall be made for increases in cost of performance of Work of the Contract Documents caused by any such suspension, delay or interruption, calculated using the measures set forth in Section 01250 (Modification Procedures). No adjustment shall be made to extent that:

a. Performance is, was or would have been so suspended, delayed or interrupted by another cause for which Contractor is responsible; or

b. An equitable adjustment is made or denied under any other provision of Contract Documents; or

c. The suspension of Work was the direct or indirect result of Contractor’s failure to perform any of its obligations hereunder. Adjustments made in cost of performance may have a mutually agreed fixed or percentage fee; if the parties cannot agree, Contractor may file a claim under Article 12 of this Document 00700.

D. Termination Of Contract For Cause

1. Port may declare Contractor in default of Contract Documents and Port may terminate Contractor’s right to proceed under the Contract Documents for cause:

a. Should Contractor make an assignment for the benefit of creditors; admit in writing its inability to pay its debts as they become due; file a voluntary petition in bankruptcy; be adjudged a bankrupt or insolvent; be the subject of an involuntary petition in bankruptcy which is not dismissed within 60 Days; file a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future statute, law, or regulation; file any answer admitting or not contesting the material allegations of a petition filed against Contractor in any such proceeding; or seek, consent to, or acquiesce in, the appointment of any trustee, receiver, custodian or liquidator of Contractor or of all or any substantial part of its properties or if Contractor, its directors or shareholders, take action to dissolve or liquidate Contractor; or

b. Should Contractor commit a material breach of the Contract Documents. If Port declares Contractor in default due to material breach, however, Port must allow Contractor an opportunity to cure such breach within ten Days of the date of notice from Port to Contractor providing notice of the default; or, if such breach is curable but not curable within such ten-Day period, within such period of time as is reasonably necessary to accomplish such cure. (In order for Contractor to avail itself of a time period in excess of ten Days, Contractor must provide Port within the ten-Day period with a written plan [“cure plan”] acceptable to Port to cure said breach which includes, for example, evidence of necessary resources, actual Subcontractor commitments, actual labor commitments, schedules and recovery schedules meeting Contract Document requirements and showing a realistic and achievable plan to cure the breach. Contractor must then diligently commence and continue such cure according to the written cure plan); or



c. Should Contractor violate or allow (by a Subcontractor or other person or entity for which Contractor is responsible) a violation of any valid law, statute, regulation, rule, ordinance, permit, license or order of any governmental agency applicable to the Project or Work and does not cure (or cause to be cured) such violation within ten Days of the date of the notice from Port to Contractor demanding such cure; or, if such violation is curable but not curable within such ten-Day period, within such period of time as is reasonably necessary to accomplish such cure. (In order for Contractor to avail itself of a time period in excess of ten Days, Contractor shall provide Port within the ten-Day period a written cure plan acceptable to Port, and then diligently commence and continue performance of such cure according to the written cure plan.)

2. If Port at any time reasonably believes that Contractor is or may be in default under the Contract Documents as provided above, then Port may in its sole discretion notify Contractor of this fact and request written assurances from Contractor of performance of Contract Documents and a written plan from Contractor to remedy any default under the terms of Contract Documents which Port may advise Contractor of in writing. Contractor shall, within 10 Days of Port’s request, deliver a written cure plan which meets the requirements of the written cure plan deliverable defined above. Failure of Contractor to provide such written assurances of performance and the required written cure plan, within ten Days of request, will constitute a material breach of Contract Documents sufficient to justify termination for cause.

3. In event of termination for cause, Port will immediately serve written notice thereof upon Surety and Contractor. Surety shall have the rights and obligations set forth in Document 00610 (Construction Performance Bond). Subject to the Surety’s rights under the Performance Bond (which rights are waived upon a default thereunder), Port may take over the Work and prosecute it to completion by contract or by any other methods it may deem advisable.

4. In the event of termination for cause:

a. Port will compensate Contractor for the value of the Work delivered to Port upon termination as determined in accordance with the Contract Documents, subject to all rights of offset and back charges, and provided that Contractor provides Port with updated as-builts and Project Record Documents showing the Work performed up to the date of termination. However, Port will not compensate Contractor for its costs in terminating the Work or any cancellation charges owed to third parties.

b. Contractor shall deliver to Port possession of the Work in its then condition including, but not limited to, all designs, architectural and engineering, Project records, Project Record Documents, cost data of all types, Drawings and Specifications and contracts with vendors and Subcontractors, all other documentation associated with the Project, and all construction supplies and aids dedicated solely to performing the Work which, in the normal course of construction, would be consumed or only have salvage value at the end of the construction period. Contractor shall remain fully liable for the failure of any Work completed and materials and equipment provided through the date of such termination to comply with the provisions of the Contract Documents. The provisions of this subparagraph shall not be interpreted to diminish any right which Port may have to claim and recover damages for any breach of Contract Documents or otherwise, but rather, Contractor shall compensate Port for all loss, cost, damage, expense, and/or liability suffered by Port as a result of such termination and failure to comply with Contract Documents.

c. Port’s rights under this subparagraph shall be specifically enforceable to the greatest extent permitted by law. Port shall, to the extent applicable, have all other rights and remedies set forth in any Bidding Document.

5. Port may terminate portions or parts of the Work for cause, provided these portions or parts (1) have separate geographic areas from parts or portions of the Work not terminated or (2) are limited



to the work of one or more specific trades or Subcontractors. In such case, Contractor shall cooperate with a completing contractor as required under Article 6 of this Document 00700.

6. In the event a termination for cause is later determined to have been made wrongfully or without cause, then Contractor shall have no greater rights than if a termination for convenience had been effected (to include, as appropriate, the recovery rights specified therefore.) Any Contractor claim arising out of a termination for cause, however, shall be made in accordance with Article 12 of this Document 00700. No other loss cost, damage, expense or liability may be claimed, requested or recovered by Contractor.

E. Termination Of Contract For Convenience

1. Port may terminate for convenience the performance of the Work under the Contract Documents in accordance with this clause in whole, or from time to time in part, whenever Port shall determine that termination is in Port’s best interest. Termination for convenience may only be effected by Port delivering to Contractor a written “Notice of Termination for Convenience”, specifying the extent to which performance of the Work under the Contract Documents is terminated and the effective date of the termination.

2. After receiving a notice of termination for convenience under this subparagraph, and except as otherwise directed by Port, Contractor shall:

a. Stop Work under the Contract Documents on date and to extent specified in notice of termination for convenience;

b. Place no further orders or subcontracts for materials, services, or facilities except as necessary to complete portion of Work under the Contract Documents which is not terminated;

c. Terminate all orders and subcontracts to extent that they relate to performance of Work terminated by the notice of termination;

d. Assign to Port in manner, at times, and to extent directed by Port, all right, title, and interest of Contractor under orders and subcontracts so terminated. Port shall have the right, in its sole discretion, to settle or pay any or all claims arising out of termination of orders and subcontracts;

e. Settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts, with approval or ratification of Port to extent Port may require. Port’s approval or ratification shall be final for purposes of this subparagraph;

f. Transfer title to Port, and deliver in the manner, at the times, and to the extent, if any, directed by Port, all fabricated or unfabricated parts, Work in process, completed Work, supplies, and all other material produced as part of, or acquired in connection with performance of, Work terminated by the notice of termination, and completed or partially completed drawings, drawings, specifications, information, and other property which, if the Project had been completed, would have been required to be furnished to Port;

g. Use its best efforts to sell, in manner, at times, to extent, and at price or prices that Port directs or authorizes, any property of types referred to in this subparagraph, but Contractor shall not be required to extend credit to any purchaser, and may acquire any such property under conditions prescribed and at price or prices approved by Port. Proceeds of transfer or disposition shall be applied to reduce payments to be made by Port to Contractor under the Contract Documents or shall otherwise be credited to the price or cost of Work covered by Contract Documents or paid in such other manner as Port may direct;

h. Complete performance of the part of the Work which was not terminated by the notice of termination; and



i. Take such action as may be necessary, or as Port may direct, to protect and preserve all property related to Contract Documents which is in Contractor’s possession and in which Port has or may acquire interest.

3. After receipt of a notice of termination for convenience, Contractor shall submit to Port its termination for convenience claim, in form and with all certifications required by Article 12 of this Document 00700. Contractor’s termination for convenience claim shall be submitted promptly, but in no event later than six months from effective date of the termination. Contractor and Port may agree upon the whole or part of the amount or amounts to be paid to Contractor because of a total or partial termination of Work under this subparagraph. If Contractor and Port fail to agree on the whole amount to be paid to Contractor because of the termination of the Work under this subparagraph, Port’s total liability to Contractor by reason of the termination shall be the total (without duplication of any items) of:

a. The reasonable cost to Contractor, without profit, for all Work performed prior to the effective date of the termination, including Work done to secure the Project for termination. Reasonable cost may not exceed the applicable percentage completion values derived from the progress schedule and the schedule of values. Deductions shall be made for cost of materials to be retained by Contractor, cost of Work defectively performed, amounts realized by sale of materials, and for other appropriate credits against cost of Work. Reasonable cost will include reasonable allowance for Project overhead and general administrative overhead not to exceed a total of ten percent of direct costs of such Work. When, in Port’s opinion, the cost of any item of Work is excessively high due to costs incurred to remedy or replace defective or rejected Work, reasonable cost to be allowed will be the estimated reasonable cost of performing the Work in compliance with requirements of Contract Documents and excessive actual cost shall be disallowed.

b. A reasonable allowance for profit on actual and allowable cost of Work performed as determined in this subparagraph, provided that Contractor establishes to Port’s satisfaction that Contractor would have made a profit had the Project been completed, and provided further that the profit allowed shall not exceed 5 percent of cost.

c. Reasonable costs to Contractor of handling material returned to vendors, delivered to Port or otherwise disposed of as directed by Port.

d. A reasonable allowance for Contractor’s internal administrative costs in preparing termination claim.

e. Except as provided in this subparagraph, Port shall not be liable for costs incurred by Contractor or Subcontractors after receipt of a notice of termination. Such non-recoverable costs include, but are not limited to, anticipated profits on Work not performed as of the date of termination, post-termination employee salaries, post-termination general administrative expenses, post-termination overhead or unabsorbed overhead, costs of preparing and submitting Contractor’s Bid, attorney’s fees of any type, and all costs relating to prosecution of claim or lawsuit.

f. Port shall have no obligation to pay Contractor under this subparagraph unless and until Contractor provides Port with updated and acceptable as-builts and Project Record Documents for Work completed prior to termination.

4. In arriving at the amount due Contractor under this clause, there shall be deducted in whole (or in the appropriate part[s] if the termination is partial):

a. All unliquidated advances or other payments on account previously made to Contractor, including without limitation all payments applicable to the terminated portion of Contract Documents;



b. Any claim which Port may have against Contractor in connection with Contract Documents; and

c. The agreed price for, or proceeds of sale of, any materials, supplies, or other things kept by Contractor or sold under provisions of this subparagraph, and not otherwise recovered by or credited to Port.

F. Contingent Assignment Of Subcontracts

1. Contractor hereby assigns to Port each Subcontract for a portion of the Work, provided that:

a. The assignment is effective only after Port’s termination of Contractor’s right to proceed under the Contract Documents (or portion thereof relating to that Subcontract) pursuant to the termination for cause subparagraphs herein.

b. The Assignment is effective only for the Subcontracts which Port expressly accepts by notifying the Subcontractor in writing;

c. The assignment is subject to the prior rights, if any, of the Surety, obligated by Document 00610 (Construction Performance Bond) provided under the Contract Documents, where the Surety exercises its rights to complete the Contract;

d. After the effectiveness of an assignment, Contractor shall, at its sole cost and expense, sign all instruments and take all actions reasonably requested by Port to evidence and confirm the effectiveness of the assignment in Port; and

e. Nothing in this subparagraph shall modify or limit any of Contractor’s obligations to Port arising from acts or omissions occurring before the effectiveness of any Subcontract assignment, including but not limited to all defense, indemnity and hold-harmless obligations arising from or related to the assigned Subcontract.

G. Remedies and Contract Integration

1. Subject to Contract Documents provisions regarding Contractor claims, claim review, and claim resolution, and subject to the limitations therein, the exclusive jurisdiction and venue for resolving all claims, counter-claims, disputes and other matters in question between Port and Contractor arising out of or relating to Contract Documents, any breach thereof or the Project shall be the Superior Court of the State of California for the County of San Joaquin. All Port remedies provided in the Contract Documents shall be taken and construed as cumulative and not exclusive; that is, in addition to each and every other remedy herein provided; and in all instances Port shall have any and all other equitable and legal rights and remedies which it would have according to law.

2. The Contract Documents, any Contract Modifications and Change Orders shall represent the entire and integrated agreement between Port and Contractor regarding the subject matters hereof and thereof and shall constitute the exclusive statement of the terms of the parties’ agreement. The Contract Documents, and any Contract Modifications and Change Orders, shall supersede any and all prior negotiations, representations or agreements, written or oral, express or implied, that relate in any way to the subject matter of the Contract Documents or written modifications. Port and Contractor represent and agree that, except as otherwise expressly provided in the Contract Documents, they are entering into the Contract Documents and any subsequent written modification in sole reliance upon the information set forth or referenced in the Contract Documents or Contract Modifications and the parties are not and will not rely on any other information.

3. In any proceeding to enforce the Contract Documents, Contractor and Port agree that the finder of fact shall receive detailed instructions on the meaning and operation of the Contract Documents,



including their conditions, limitations of liability, claims and time extension procedures, and any other provisions impacting major defenses and theories of liability of the parties. Detailed findings of fact shall be requested, to verify Contract enforcement.

4. Either party’s waiver of any breach or failure to enforce any of the terms, covenants, conditions or other provisions of the Contract Documents at any time shall not in any way affect, limit, modify or waive that party’s right thereafter to enforce or compel strict compliance with every term, covenant, condition or other provision hereof, any course of dealing or custom of the trade or oral representations notwithstanding.

H. Patents

Fees or claims for any patented invention, article or arrangement that may be used upon or in any manner connected with performance of the Work or any part thereof shall be included in the Bid price for doing the Work. To the greatest extent permitted by law, Contractor shall defend, indemnify and hold harmless Port and each of its officers, employees, consultants and agents, including, but not limited to, the Board, Architect/Engineer and each Port representative, from all damages, claims for damages, costs or expenses in law or equity, including attorney’s fees, arising from or relating to any claim that any article supplied or to be supplied under the Contract Documents infringes on the patent rights, copyright, royalties, trade name, trademark, service mark, trade secret or other intellectual property right of any person or persons or that the person or entity supplying the article does not have a lawful right to sell the same. Such costs or expenses for which Contractor agrees to indemnify and hold harmless the above indemnities include but are not limited to any and all license fees, whether such fees are agreed by any indemnities or ordered by a court or administrative body of any competent jurisdiction. I. Substitution For Patented And Specified Articles

Except as noted specifically in Specifications, whenever in Specifications, material or process is designated by patent or proprietary name or by name of manufacturer, such designation shall be deemed to be used for purpose of facilitating description of material and process desired, and shall be deemed to be followed by the words “or equal” and Contractor may offer any substitute material or process that Contractor considers equal in every respect to that so designated and if material or process offered by Contractor is, in opinion of Port, equal in every respect to that so designated, its use will be approved. However, Contractor may utilize this right only by timely submitting Document 00660 (Substitution Request Form) as provided in Document 00200 (Instructions to Bidders). A substitution will be approved only if it is a true “equal” item in every aspect of its design and quality, including but not limited to its dimensions, weights, service requirements, durability, functioning, impact on contiguous construction elements, overall schedule and design. J. Interest Of Public Officers

No representative, officer, or employee of Port, no member of the governing body of the locality in which the Project is situated, no member of the locality in which Port was activated, and no other public official of such locality or localities who exercises any functions or responsibilities with respect to the Project, during the tenure of the official or for one year thereafter, shall, as principal, agent, attorney or otherwise, be directly or indirectly interested, in the Contract Documents or the proceeds thereof. K. Limit Of Liability

PORT, AND EACH OF ITS OFFICERS, BOARD MEMBERS, EMPLOYEES, CONSULTANTS AND AGENTS INCLUDING, BUT NOT LIMITED TO, ARCHITECT/ENGINEER AND EACH OTHER PORT REPRESENTATIVE, SHALL HAVE NO LIABILITY TO CONTRACTOR FOR SPECIAL, CONSEQUENTIAL, OR INCIDENTAL DAMAGES, EXCEPT TO THE LIMITED EXTENT THAT THESE CONTRACT DOCUMENTS OR APPLICABLE PUBLIC CONTRACTING STATUTES MAY SPECIFY THEIR RECOVERY. L. Severability



Any provisions or portions thereof of Contract Documents that are prohibited by, unlawful, or unenforceable under any applicable law of any jurisdiction shall as to such jurisdiction be ineffective without affecting other provisions or portions thereof in the Contract Documents.

14. MODIFICATIONS OF CONTRACT DOCUMENTS

A. Alterations, Modifications And Force Account Work

1. Port may, without notice to the sureties, make alterations, deviations, additions to, or deletions from Contract Documents; increase or decrease the quantity of any item or portion of the Work; expand, contract or otherwise change the Contract Time; delete any item or portion of the Work; and require extra Work. Contractor shall perform such Work under applicable provisions of the Contract Documents, unless specifically provided otherwise at the time the change is ordered. Port reserves the right to furnish all or portions of associated labor, material, and equipment, which Contractor shall accept and use without payment for costs, markup, profit, or otherwise for such Port-furnished labor, materials, and equipment.

2. Port may make changes to the Work during the course of construction to bring the Work into compliance with environmental requirements or standards established by state and federal statutes and regulations enacted after the Contract has been awarded. Contractor shall be compensated for changes affecting the Contract Time or Contract Sum of the Work as set forth in this Article 14 and in Section 01250 (Modification Procedures).

3. Changes affecting the Contract Time or Contract Sum of the Work shall be set forth in a written Change Order that shall specify:

a. The Work performed in connection with the change to be made;

b. The amount of the adjustment of the Contract Sum, if any, and the basis for compensation for the Work ordered; and

c. The extent of the adjustment in the Contract Time, if any.

4. A Change Order will become effective when signed by Port. If Port exercises its right to decide disputed issues pertaining to changed Work as set forth in Articles 12 and 14 of this Document 00700, then the resulting Change Order shall be effective when signed by Port, notwithstanding that Contractor has not signed it.

5. Changes not affecting the Contract Time or Contract Sum of the Work, in Port’s discretion, may be set forth in a written RFI-Reply executed by Port. Execution of such an RFI-Reply constitutes Contractor’s agreement to make the specified change without change to the Contract Sum or the Contract Time.

6. Changes or deviations from Contract Documents affecting the Contract Time or Contract Sum of the Work shall not be made without the authority of an effective Change Order or Construction Change Directive as provided in Section 01250 (Modification Procedures), except in cases of emergency discussed in Document 00700.

7. If changes ordered in design, workmanship or materials are of such a nature as to increase or decrease the cost of any part of the Work, the price fixed in the Contract Documents shall be increased or decreased by the amount that Contractor and Port may agree upon as a reasonable and proper allowance for the cost increase or decrease. If an agreement cannot be reached, then Port will reach a determination, which shall be final, subject to Contractor’s rights under Article 12 of this Document 00700. In all cases Contractor shall perform the changed Work as directed by Port subject to Contractor’s rights under Article 12 of this Document 00700.



8. Contractor shall, upon Port’s request, permit inspection of the original unaltered Bid estimate, subcontract agreements, purchase orders relating to the change, and documents substantiating all costs associated with its cost proposal or claims arising from changes in the Work.

9. Changes in the Work made pursuant to this Article 14 and extensions of Contract Time necessary by reason thereof shall not in any way release the guaranties and warranties given by Contractor pursuant to provisions of the Contract Documents, nor shall such changes in the Work relieve or release the Sureties of bonds executed pursuant to said provisions. The Sureties, in executing such bonds, shall be deemed to have expressly agreed to any such change in the Work and to any extension of time made by reason thereof.

10. Procedures for Modifications of Contract Documents and for calculating the cost of extra Work are given in Section 01250 (Modification Procedures). Regarding delay and impact costs of any nature, Contractor may not seek delay compensation for on-Site or off-Site costs based on formulas, e.g., “Eichlay” or other formula. Rather, Contractor shall prove actual costs resulting from such delays. If Contractor requests compensation for delay to the construction, then Contractor shall prove and document actual costs plus markup per the cost categories and procedures in Section 01250 (Modification Procedures) in order to request, claim or prove compensation for delay.

B. Time Allowances

1. The Contract Time may only be changed by Change Order or by Contract Modification, and all time limits stated in the Contract Documents are of the essence of Contract Documents.

2. The Contract Time will be adjusted in an amount equal to the time lost due to:

a. Changes in the Work ordered by Port;

b. Acts or neglect by Port, Architect/Engineer, any Port representative, utility owners or other contractors performing other work, provided that Contractor has fully and completely performed its responsibilities under the Contract Documents; or

c. Fires, floods, epidemics, abnormal weather conditions beyond the parameters otherwise set forth in this subparagraph, earthquakes, civil or labor disturbances, strikes or acts of God, provided damages resulting therefrom are not the result of Contractor’s failure to protect the Work as required by Contract Documents.

3. The Contract Time shall not be extended for any cause identified immediately above, however, unless:

a. Contractor actually has been prevented from completing any part of the Work within the Contract Time due to delay that is beyond Contractor’s control and due to reasons for which Contractor is not responsible (delays attributable to and within the control of a Subcontractor, or its subcontractors, or supplier shall be deemed to be delays within the control of Contractor);

b. A claim for delay is made as provided herein; and

c. Contractor submits a Time Impact Evaluation as required under Section 01320 (Progress Schedules and Reports) that demonstrates actual delay to critical Work activities that actually delay the progress of the Work in the amount of time requested.

C. Notice Of Delay

Within seven Days of the beginning of any delay, Contractor shall notify Port in writing, by submitting a notice of delay, that shall describe all anticipated delays resulting from the delay event in question. Any request for extension of time shall include a written schedule document that demonstrates delay to the



critical path using a Time Impact Evaluation as specified in Section 01320 (Progress Schedules and Reports). Port will determine all claims and adjustments in the Contract Time. No claim for an adjustment in the Contract Time will be valid and such claim will be waived if not submitted in accordance with the requirements of this subparagraph. D. Non-Compensable Time Extensions; Adverse Weather Parameters.

1. Where Contractor is prevented from completing any part of the Work within the Contract Time due to delay beyond the control of both Port and Contractor (including, but not limited to, adverse weather conditions exceeding Contract Documents parameters, earthquakes, Acts of God and epidemics, acts of other contractors or utilities), an extension of Contract Time, in an amount equal to the time lost due to such delay (without compensation), shall be Contractor’s sole and exclusive remedy for such delay.

2. Delays due to abnormal or adverse weather conditions will not be allowed for weather conditions that fall within the parameters listed or referenced immediately below in this subparagraph. Adverse weather delays may be allowed only if the number of workdays of adverse weather exceeds these parameters first on a monthly basis and second on a cumulative annual basis Contractor proves that adverse weather actually caused delays to work that is on the critical path. Contractor shall give written notice of intent to claim an adverse weather day within one Day of the adverse weather day occurring. Rain parameters are as follows, pro-rated in the individual month Contractor starts and finishes Work:

January, [6]; February, [5]; March, [5]; April, [3]; May, [1]; June, [0]; July, [0]; August, [0]; September, [1]; October, [2]; November, [4]; and December, [5].

In order to qualify as an adverse weather delay with respect to the foregoing parameters, daily rainfall must exceed .1 of an inch or more at the WSO Stockton,, California station, as measured by the National Oceanic & Atmospheric Administration, and Contractor shall prove that the rain actually caused delay to the Work, following the procedures in this paragraph and the Contract Documents. Notwithstanding the foregoing allowances, Contractor shall at all times employ all available mitigation measures to enable Work to continue. Delays due to abnormal or adverse weather conditions will not be allowed for weather conditions that fall within the parameters listed above.

3. Contractor shall include the foregoing precipitation parameters as a monthly activity in its progress schedule. As Work on the critical path is affected by precipitation, Contractor shall notify Port and request that the days be moved to the affected activities. Any adverse weather days remaining shall be considered Project float.

4. Adverse weather delay for precipitation shall be recognized for the actual period of time Contractor proves it was delayed by precipitation exceeding the specified parameters. For example, and not by way of limitation, if precipitation exceeding the specified parameters does not in fact delay Contractor’s progress on the critical path, then no time extension shall be recognized; and conversely, if Contractor proves to Port’s satisfaction that precipitation exceeding the specified parameters causes delay to Contractor for a period longer than the number of precipitation days incurred (e.g., if it rains or snows during grading work), then Contractor shall be entitled to a time extension equal to the actual period of such delay.

5. Contractor shall take reasonable steps to mitigate potential weather delays, such as dewatering the Site, lime treatment, and covering Work and material that could be affected adversely by weather. Failure to do so shall be cause for Port to not grant a time extension due to adverse weather, where Contractor could have avoided or mitigated the potential delay by exercising reasonable care.

E. Compensable Time Extensions



1. Contractor may receive a time extension and be compensated for delays caused directly and solely by Port. Provided Contractor provides proper notice and documentation under Section 01320, such compensation may include extended field or home office overhead, field supervision, escalation charges, acceleration costs and extended subcontractor costs.

2. Contractor shall not be entitled to any time extension or compensation, however, for any delays caused in whole or in part by Contractor’s failure to perform its obligations under the Contract Documents, or during periods of delay concurrently caused by Contractor and either Port or others.

3. Contractor shall not be entitled to damages for delay to the Work caused by the following reasons:

a. Port’s right to sequence the Work in a manner which would avoid disruption to Port’s tenants and their contractors or other prime contractors and their respective subcontractors, exercised as a result of Contractor’s failure to perform its cooperation and coordination responsibilities required by Contract Documents; Port’s enforcement of any government act or regulation; or the provisions of the Contract Documents; and

b. Extensive requests for clarifications to Contract Documents or Contract Modifications thereto, provided such clarifications or Contract Modifications are processed by Port or its consultants in a reasonable time commensurate with Contract Documents requirements.

F. Liquidated Damages

1. Time is of the essence. Execution of Contract Documents by Contractor shall constitute acknowledgement by Contractor that Contractor understands, has ascertained and agrees that Port will actually sustain damages in the amount fixed in the Contract Documents for each and every Day during which completion of Work required is delayed beyond expiration of time fixed for completion or extensions of time allowed pursuant to provisions hereof. Contractor and Port agree that specified measures of liquidated damages shall be presumed to be the damages actually sustained by Port as defined below, and that because of the nature of the Project, it would be impracticable or extremely difficult to fix the actual damages.

2. Liquidated damages shall be considered not as a penalty but as agreed monetary damage sustained by Port for increased Project administration expenses, including extra inspection, construction management and architectural and engineering expenses related to the Project and Contract Documents because Contractor failed to perform and complete Work within time fixed for completion or extensions of time allowed pursuant to provisions hereof. Liquidated damages shall not be deemed to include within their scope additional damages or administrative costs arising from Defective Work, lost revenues, interest expenses, cost of completion of the Work, claims and fines of regulatory agencies, damages suffered by others or other forms of liability claimed against Port as a result of delay (e.g., delay or delay related claims of other contractors, subcontractors or tenants), and defense costs thereof. Contractor shall be fully responsible for the actual amount of any such damages it causes, in addition to the liquidated damages otherwise due Port.

3. Port may deduct from any money due or to become due to Contractor subsequent to time for completion of entire Work and extensions of time allowed pursuant to provisions hereof, a sum representing then-accrued liquidated damages. Should Contractor fall behind the approved Progress Schedule, Port may deduct liquidated damages based on its estimated period of late completion. Port need not wait until Final Completion to withhold liquidated damages from Contractor’s progress payments. Should money due or to become due to Contractor be insufficient to cover aggregate liquidated damages due, then Contractor forthwith shall pay the remainder of the assessed liquidated damages to Port.

G. Differing Site Conditions.



1. In the event that Contractor encounters underground conditions that exceed the scope of the Work, then Contractor shall promptly give Port written notice of the condition, and shall give such notice before the conditions are disturbed, to include: (1) material that the contractor believes may be material that is hazardous waste, as defined in Section 25117 of the Health and Safety Code, that is required to be removed to a Class I, Class II, or Class III disposal site in accordance with provisions of existing law, and is not within the scope of Work; (2) subsurface or latent physical conditions at the site differing from those indicated by information about the site made available to bidders prior to the deadline for submitting bids, that Contractor did not and could not have known about by performing its required pre-bid investigations; or (3) unknown physical conditions at the site of any unusual nature, different materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for the contract, that Contractor did not and could not have known about by performing its required pre-bid investigations.

a. Port shall promptly investigate the conditions, and if it finds that (i.) the conditions do materially so differ in a manner Contractor did not anticipate and could not have anticipated, or do involve hazardous waste outside the scope of the Work, and (ii.) cause a decrease or increase in the Contractor’s cost of, or the time required for, performance of any part of the Work, then (iii.) Port shall initiate a change order under the procedures described in the contract, including but not limited to, issuing either a Request for Proposal or a Construction Change Directive under the procedures described in the Contract Documents, including without limitation Section 01250 (Modification Procedures).

b. If Port determines that physical conditions at the Site are not Latent or are not materially different from those indicated in Contract Documents or do not involve hazardous waste, or that Contractor should have anticipated the same through its required pre-bid investigations, or for any other reason that that no change in terms of the Contract Documents is justified, Port will so notify Contractor in writing, stating reasons.

In the event that a dispute arises between Port the Contractor whether the conditions do materially so differ, or involve hazardous waste, and cause a decrease or increase in the Contractor’s cost of, or the time required for, performance of any part of the Work, the Contractor shall not be excused from any scheduled completion date provided for by the Contract, but shall proceed with all Work to be performed under the Contract. The Contractor shall retain any and all rights provided either by Contract or by law which pertain to the resolution of disputes and protests between contracting parties.

2. Contractor shall not be entitled to any adjustment in the Contract Sum or Contract Time regarding

claimed hazardous waste or materials, claimed Latent or materially different Site conditions (whether above or below grade) if:

a. Contractor knew of the existence of such conditions at the time Contractor submitted its Bid; or

b. Contractor should have known of the existence of such conditions at the time Contractor submitted its Bid, or should have learned of such conditions and mitigated their impact, as a result of having complied with the requirements of Contract Documents, including without limitation, the investigation requirements herein at Articles 2 and 5 of this Document 00700;

c. The information or conditions claimed by Contractor to be Latent or materially different consist of information, conclusions, opinions or deductions made from underground conditions reports, of the kind that this Document 00700 precludes reliance upon; or,

d. Contractor was required to give written notice and failed to do so within the time required

3. If, because of a differing site condition as defined herein, Contractor does not agree to continue with the Work based on a reasonable belief that it is unsafe, or does not agree to resume Work under special conditions, Port may order the disputed portion of Work deleted from the Work, or



performed by others, or Port may invoke its right to terminate Contractor’s right to proceed under the Contract Documents in whole or in part, for convenience or for cause as the facts may warrant. If Contractor does not agree with Port’s determination of any adjustment in the Contract Sum or Contract Time as a result, Contractor may make a claim as provided in Article 12 of this Document 00700.

H. Change Orders Related to Underground Facilities.

1. If an Underground Facility is uncovered or revealed at or contiguous to the Site which was not shown or indicated in the materials supplied by Port or in information on file at USA or is not otherwise reasonably known to Contractor by performing its obligations in Articles 2 and 5 of this Document 00700, then Contractor shall, promptly after becoming aware thereof and before further disturbing conditions affected thereby (and in no event later than seven Days), and prior to performing any Work in connection therewith (except in an emergency as required by Article 15 of this Document 00700), identify the owner of such Underground Facility and give written notice to that owner and to Port. During such time, Contractor shall be responsible for the safety and protection of such Underground Facility.

2. Contractor shall be allowed an increase in the Contract Sum or an extension of the Contract Time, or both, for Underground Facilities either not shown or inaccurately shown in the Contract Documents, the information supplied pursuant to Document 00320 (Geotechnical Data and Existing Conditions) or in information on file at USA, only where the inaccuracy was (i.) material and outside of the normal experience on projects of this nature, (ii.) was not reasonably inferable from existing information, and (iii.) directly results in a material, justifiable and actual increase in the cost of Contractor’s work. For example, if surface conditions such as pavement repairs, valve covers, or other markings, indicate the presence of an Underground Facility, or if the Underground Facility could be determined or its cost impact mitigated by performing the obligations in Articles 2 and/or 10 of this Document 00700, then an increase in the Contract Price or an extension of the Contract Time will not be due, even if the Underground Facility was not indicated or was shown at a different place or a different elevation in the Contract Documents, in the information supplied to Contractor pursuant to Document 00320 (Geotechnical Data and Existing Conditions), or in information on file at USA.

3. Main Line and Trunk Line Utilities (Government Code Section 4215). Consistent with Government Code Section 4215, as between Port and Contractor, Port will be responsible for the timely removal, relocation, or protection of existing main or trunk line utility facilities located on the Site only if such utilities are not identified in the Contract Documents or Document 00320 (Geotechnical Data and Existing Conditions). Port will compensate for the cost of locating and repairing damage not due to Contractor’s failure to exercise reasonable care, removing and relocating such main or trunk line utility facilities not indicated in the Contract Documents or Document 00320 (Geotechnical Data and Existing Conditions) with reasonable accuracy, and equipment on the Project necessarily idled during such work.

15. WORKING CONDITIONS AND PREVAILING WAGES

A. Use Of Site/Sanitary Rules

1. All portions of the Work shall be maintained at all times in neat, clean and sanitary condition. Contractor shall furnish toilets for use of Contractor’s and Subcontractors’ employees on the Site where needed, and their use shall be strictly enforced. All toilets shall be properly secluded from public observation, and shall be located, constructed and maintained subject to Port’s approval.

2. Contractor shall confine construction equipment, the storage of materials and equipment and the operations of workers to the Site and land areas identified in and permitted by Contract Documents and other land and areas permitted by applicable laws and regulations, rights of way, permits and easements or as designated by Port, and shall not unreasonably encumber the premises with construction equipment or other materials or equipment. Contractor shall assume full



responsibility for any damage to any such land or area, any improvement located thereon, or to the owner or occupant thereof resulting from the performance of Work.

3. During the progress of the Work, Contractor shall keep the Site and the Project free from accumulations of waste materials, rubbish and other debris resulting from the Work. At the completion of the Work, Contractor shall remove all waste materials, rubbish and debris from and about the Site as well as all tools, appliances, construction equipment and machinery and surplus materials. Contractor shall leave the premises clean and ready for occupancy by Port at Substantial Completion of Work. Contractor shall restore to original condition all property not designated for alteration by Contract Documents.

4. Contractor shall not load nor permit any part of any structure or pavement to be loaded in any manner that will endanger the structure or pavement, nor shall Contractor subject any part of Work or adjacent property to stresses or pressures that will endanger it. Contractor shall conduct all necessary existing conditions investigation regarding structural, mechanical, electrical or any other system existing, shall perform Work consistent with such existing conditions, and shall have full responsibility for insufficiencies or damage resulting from insufficiencies of existing systems, equipment or structures to accommodate performing the Work.

B. Protection Of Work, Persons, Property And Operations

1. Contractor shall be responsible for initiating, maintaining and supervising all safety precautions and programs in connection with Work. Contractor shall comply with all safety requirements specified in any safety program established by Port, or required by state, federal or local laws and ordinances. Contractor shall be responsible for all damage to Work, property or structures, all injuries to persons, and all damage and interruptions to Port’s operations, arising from the performance of Work of the Contract Documents. Except as otherwise expressly approved by Port in writing, Contractor shall at all times perform all Work in a manner which does not interrupt, damage or otherwise adversely impact any facilities, operations, or real or personal property of Port, its officers, employees, agents, invitees, licensees, lessees or contractors.

2. Contractor shall comply with all applicable laws and regulations of any public body having jurisdiction for safety of persons or property or to protect them from damage, injury or loss; and shall erect and maintain all necessary safeguards for such safety and protection. Contractor shall notify owners of adjacent property and of Underground Facilities and utility owners when prosecution of the Work may affect them, and shall cooperate with them in the protection, removal, relocation and replacement of their property.

3. Contractor shall remedy all damage, injury, loss or interruption to any property or operations of Port or continuous owners of property interests, caused, directly or indirectly, in whole or in part, by Contractor, any Subcontractor, supplier, or any other person or organization directly or indirectly employed by any of them to perform or furnish any Work or anyone for whose acts any of them may be liable. Contractor’s duties and responsibility for safety and for protection of Work shall continue until such time as all the Work is completed and Final Acceptance of the Work. Port and its agents do not assume any responsibility for collecting any indemnity from any person or persons causing damage to Contractor’s Work. Contractor shall give all notices required by potentially responsible insurance carriers and require that it subcontractors and suppliers do the same.

4. Contractor shall designate a qualified and experienced safety representative at the Site whose duties and responsibilities shall be the prevention of accidents and the maintaining and supervising of safety precautions and programs.

5. Port may, at its option, retain such moneys due under the Contract Documents as Port deems necessary until any and all suits or claims against Contractor for injury to persons, property or operations shall be settled and Port receives satisfactory evidence to that effect.



C. Responsibility For Safety And Health

1. Contractor shall ensure that its and each tier of Subcontractors’ employees, agents and invitees comply with applicable health and safety laws while at the Site. These laws include the Occupational Safety and Health Act of 1970 and rules and regulations issued pursuant thereto, and Port’s safety regulations as amended from time to time. Contractor shall comply with all Port directions regarding protective clothing and gear.

2. Contractor shall be fully responsible for the safety of its and its Subcontractors’ employees, agents and invitees on the Site. Contractor shall notify Port, in writing, of the existence of hazardous conditions, property or equipment at the Site that are not under Contractor’s control. Contractor shall be responsible for taking all the necessary precautions against injury to persons or damage to the property of Contractor, Subcontractors or persons from recognized hazards until the responsible party corrects the hazard.

3. Contractor shall confine all persons acting on its or its Subcontractors’ behalf to that portion of the Site where Work under the Contract Documents is to be performed: Port designated routes for ingress and egress thereto and any other Port designated area. Except those routes for ingress and egress over which Contractor has no right of control, within such areas, Contractor shall provide safe means of access to all places at which persons may at any time have occasion to be present.

D. Emergencies

In emergencies affecting the safety or protection of persons or Work or property at the Site or adjacent thereto, Contractor, without special instruction or authorization from Port, is obligated to act to prevent threat and damage, injury or loss, until directed otherwise by Port. Contractor shall give Port prompt written notice if Contractor believes that any significant changes in Work or variations from Contract Documents have been caused thereby. If Port determines that a change in the Contract Documents is required because of the action taken by Contractor in response to such an emergency, a Change Order or Construction Change Directive will be issued to document the consequences of such action. E. Use Of Roadways And Walkways

Contractor shall not unnecessarily interfere with use of any roadway, walkway or other facility for vehicular or pedestrian traffic. Before beginning any interference and only with Port’s prior concurrence, Contractor may provide detour or temporary bridge for traffic to pass around or over the interference, which Contractor shall maintain in satisfactory condition as long as interference continues. Unless otherwise provided in the Contract Documents, Contractor shall bear the cost of these temporary facilities. F. Nondiscrimination

No person or entity shall discriminate in the employment of persons upon public works because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sexual preference, or gender of such persons, except as provided in Section 12940 of the Government Code. Every contractor for public works violating the provisions of Section 1735 of the Labor Code is subject to all the penalties imposed for a violation of Chapter 1, Part 7, Division 2 of the Labor Code. G. Prevailing Wages

1. Contractor shall pay to persons performing labor in and about Work provided for in the Contract Documents an amount equal to or more than the general prevailing rate of per diem wages for (1) work of a similar character in the locality in which the Work is performed and (2) legal holiday and overtime work in said locality. The per diem wages shall be an amount equal to or more than the stipulated rates contained in a schedule that has been ascertained and determined by the Director of the State Department of Industrial Relations and Port to be the general prevailing rate of per diem wages for each craft or type of workman or mechanic needed to execute this Contract.



Contractor shall also cause a copy of this determination of the prevailing rate of per diem wages to be posted at each Site.

2. Contractor shall forfeit, as a penalty to Port, Fifty Dollars ($50.00) for each laborer, workman, or mechanic employed in performing labor in and about the Work provided for in the Contract Documents for each Day, or portion thereof, that such laborer, workman or mechanic is paid less than the said stipulated rates for any work done under the Contract Documents by him or her or by any Subcontractor under him or her, in violation of Articles 1 and 2 of Chapter 1 of Part 7 of Division II of the California Labor Code. The sums and amounts which shall be forfeited pursuant to this subparagraph and the terms of the Labor Code shall be withheld and retained from payments due to Contractor under the Contract Documents, pursuant to this Document 00700 and the Labor Code, but no sum shall be so withheld, retained or forfeited except from the final payment without a full investigation by either the State Department of Industrial Relations or by Port. The Labor Commissioner pursuant to Labor Code Section 1775 shall determine the final amount of forfeiture.

3. Contractor shall insert in every subcontract or other arrangement which Contractor may make for performance of work or labor on Work provided for in the Contract, provision that Subcontractor shall pay persons performing labor or rendering service under subcontract or other arrangement not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the Work is performed, and not less than the general prevailing rate of per diem wages for holiday and overtime work fixed in the Labor Code.

4. Contractor stipulates that it shall comply with all applicable wage and hour laws, including without limitation Labor Code Section 1813. Failure to so comply, including without limitation Labor Code Section 1776, shall constitute a default under this Contract.

5. Contractor and its Subcontractors shall be responsible for compliance with Labor Code Section 1776.

a. Contractor and Subcontractors must keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each Day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by him or her in connection with the Work of the Contract documents. Each payroll record shall contain or be verified by a written declaration as required by Labor Code Section 1776.

b. The payroll records enumerated above must be certified and shall be available for inspection at all reasonable hours at the principal office of Contractor as required by Labor Code Section 1776.

(X) Contractor shall inform Port of the location of records enumerated above, including the street address, city and county, and shall, within five working Days, provide a notice of a change of location and address. (Y) Contractor or Subcontractor has 10 Days in which to comply subsequent to receipt of a written notice requesting the records enumerated above. In the event that Contractor or Subcontractor fails to comply with the ten-Day period, it shall, as a penalty to Port, forfeit $25.00 for each calendar Day, or portion thereof, for each worker, until strict compliance is effectuated. Upon the request of the Division of Apprenticeship Standards or the Division of Labor Standards Enforcement, these penalties shall be withheld from progress payments then due. Contractor is not subject to a penalty assessment pursuant to this subparagraph due to the failure of a Subcontractor to comply with this subparagraph.

c. Contractor shall also deliver certified payrolls to Port with each Application for Payment as described in Section 001200 (Measurement and Payment).



H. Environmental Controls

Contractor shall comply with all rules, regulations, ordinances, and statutes that apply to any work performed under the Contract Documents including, without limitation, any toxic, water and soil pollution controls and air pollution controls specified in Government Code, Section 11017. Contractor shall be responsible for insuring that Contractor’s employees, Subcontractors and the public are protected from exposure to airborne hazards or contaminated water, soil or other toxic materials used during or generated by activities on the Site or associated with the Project. I. Shoring Safety Plan

1. At least five Days in advance of excavating any trench five feet or more in depth, Contractor shall submit to Port a detailed plan showing the shoring, bracing and sloping design and other provisions to be made for worker protection from the hazard of caving ground during the excavation, as required by Labor Code Section 6705. A civil or structural engineer registered in California shall prepare and sign any plan that varies from the shoring system standards established by the State Construction Safety Orders.

2. During the course of Work, Contractor shall be responsible for determining where sloping, shoring, and/or bracing is necessary and the adequacy of the design, installation, and maintenance of all shoring and bracing for all excavation, including any excavation less than five feet in depth. Contractor will be solely responsible for any damage or injuries that may result from excavating or trenching. Port’s acceptance of any drawings showing the shoring or bracing design or work schedule shall not relieve Contractor of its responsibilities under this subparagraph.

3. Cal/OSHA Permit. The Contractor shall comply with Labor Code 6500 and shall obtain, as applicable, a permit as required by Cal/OSHA for each of the following:

a. Construction of trenches or excavations that are five feet or more in depth and into which a person is required to descend.

b. Construction or demolition of any building, structure, or scaffolding for falsework more than three stories high, or the equivalent height (36 feet).

c. Erection or dismantling of vertical shoring systems more than three stories high, or the equivalent height (36 feet).

d. The underground use of diesel engines in mines or tunnels.

END OF DOCUMENT



DOCUMENT 00800

SUPPLEMENTARY GENERAL CONDITIONS 1. See Attachment I, Federal Requirements, attached hereto and by this reference incorporated herein. 2. See Attachment II, Federal Requirements / Required Documents, Reporting Forms & Instructions, attached

hereto and by this reference incorporated herein 3. Standard Specifications. All Contract Documents references to “Standard Specifications,” “State

Specifications” or “Construction Specifications” shall be to the “State of California, Department of Transportation, Standard Specifications for Construction of Local Streets and Roads,” latest edition in effect (including amendments issued by the California Department of Transportation) at the time that bids are received by the Port, insofar as they apply. All applicable Standard Specifications are incorporated herein by this reference as though set out in full.

4. Special Provisions. All Contract Documents references to “Special Provisions” shall be to the provisions of

Section 01100 (Summary) Attachment A, Special Provisions.

END OF DOCUMENT 00800

00800- 1 Port of Stockton Supplementary General Conditions_v2 Port Police Fusion Center


DOCUMENT 00800 – ATTACHMENT I - FEDERAL REQUIREMENTS Title 2: Grants and Agreements

PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS

Contents

Subpart A—Acronyms and Definitions ACRONYMS §200.0 Acronyms. §200.1 Definitions. §200.2 Acquisition cost. §200.3 Advance payment. §200.4 Allocation. §200.5 Audit finding. §200.6 Auditee. §200.7 Auditor. §200.8 Budget. §200.9 Central service cost allocation plan. §200.10 Catalog of Federal Domestic Assistance (CFDA) number. §200.11 CFDA program title. §200.12 Capital assets. §200.13 Capital expenditures. §200.14 Claim. §200.15 Class of Federal awards. §200.16 Closeout. §200.17 Cluster of programs. §200.18 Cognizant agency for audit. §200.19 Cognizant agency for indirect costs. §200.20 Computing devices. §200.21 Compliance supplement. §200.22 Contract. §200.23 Contractor. §200.24 Cooperative agreement. §200.25 Cooperative audit resolution. §200.26 Corrective action. §200.27 Cost allocation plan. §200.28 Cost objective. §200.29 Cost sharing or matching. §200.30 Cross-cutting audit finding. §200.31 Disallowed costs. §200.32 [Reserved] §200.33 Equipment. §200.34 Expenditures. §200.35 Federal agency. §200.36 Federal Audit Clearinghouse (FAC). §200.37 Federal awarding agency. §200.38 Federal award. §200.39 Federal award date. §200.40 Federal financial assistance. §200.41 Federal interest. §200.42 Federal program. §200.43 Federal share. §200.44 Final cost objective. §200.45 Fixed amount awards. §200.46 Foreign public entity. §200.47 Foreign organization. §200.48 General purpose equipment. §200.49 Generally Accepted Accounting Principles (GAAP). §200.50 Generally Accepted Government Auditing Standards (GAGAS). §200.51 Grant agreement. §200.52 Hospital.

Appendix F {Document 00800 – Att I – Federal Requirements} F-12

Port Police Fusion Center

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sp2.1.200.a

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sg2.1.200.a.sg0

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23se2.1.200_10






















































§200.53 Improper payment. §200.54 Indian tribe (or “federally recognized Indian tribe”). §200.55 Institutions of Higher Education (IHEs). §200.56 Indirect (facilities & administrative (F&A)) costs. §200.57 Indirect cost rate proposal. §200.58 Information technology systems. §200.59 Intangible property. §200.60 Intermediate cost objective. §200.61 Internal controls. §200.62 Internal control over compliance requirements for Federal awards. §200.63 Loan. §200.64 Local government. §200.65 Major program. §200.66 Management decision. §200.67 Micro-purchase. §200.68 Modified Total Direct Cost (MTDC). §200.69 Non-Federal entity. §200.70 Nonprofit organization. §200.71 Obligations. §200.72 Office of Management and Budget (OMB). §200.73 Oversight agency for audit. §200.74 Pass-through entity. §200.75 Participant support costs. §200.76 Performance goal. §200.77 Period of performance. §200.78 Personal property. §200.79 Personally Identifiable Information (PII). §200.80 Program income. §200.81 Property. §200.82 Protected Personally Identifiable Information (Protected PII). §200.83 Project cost. §200.84 Questioned cost. §200.85 Real property. §200.86 Recipient. §200.87 Research and Development (R&D). §200.88 Simplified acquisition threshold. §200.89 Special purpose equipment. §200.90 State. §200.91 Student Financial Aid (SFA). §200.92 Subaward. §200.93 Subrecipient. §200.94 Supplies. §200.95 Termination. §200.96 Third-party in-kind contributions. §200.97 Unliquidated obligations. §200.98 Unobligated balance. §200.99 Voluntary committed cost sharing. Subpart B—General Provisions §200.100 Purpose. §200.101 Applicability. §200.102 Exceptions. §200.103 Authorities. §200.104 Supersession. §200.105 Effect on other issuances. §200.106 Agency implementation. §200.107 OMB responsibilities. §200.108 Inquiries. §200.109 Review date. §200.110 Effective/applicability date. §200.111 English language. §200.112 Conflict of interest. §200.113 Mandatory disclosures. Subpart C—Pre-Federal Award Requirements and Contents of Federal Awards


















































http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sp2.1.200.b















http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sp2.1.200.c


§200.200 Purpose. §200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts. §200.202 Requirement to provide public notice of Federal financial assistance programs. §200.203 Notices of funding opportunities. §200.204 Federal awarding agency review of merit of proposals. §200.205 Federal awarding agency review of risk posed by applicants. §200.206 Standard application requirements. §200.207 Specific conditions. §200.208 Certifications and representations. §200.209 Pre-award costs. §200.210 Information contained in a Federal award. §200.211 Public access to Federal award information. §200.212 Reporting a determination that a non-Federal entity is not qualified for a Federal award. §200.213 Suspension and debarment. Subpart D—Post Federal Award Requirements STANDARDS FOR FINANCIAL AND PROGRAM MANAGEMENT §200.300 Statutory and national policy requirements. §200.301 Performance measurement. §200.302 Financial management. §200.303 Internal controls. §200.304 Bonds. §200.305 Payment. §200.306 Cost sharing or matching. §200.307 Program income. §200.308 Revision of budget and program plans. §200.309 Period of performance. PROPERTY STANDARDS §200.310 Insurance coverage. §200.311 Real property. §200.312 Federally-owned and exempt property. §200.313 Equipment. §200.314 Supplies. §200.315 Intangible property. §200.316 Property trust relationship. PROCUREMENT STANDARDS §200.317 Procurements by states. §200.318 General procurement standards. §200.319 Competition. §200.320 Methods of procurement to be followed. §200.321 Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms. §200.322 Procurement of recovered materials. §200.323 Contract cost and price. §200.324 Federal awarding agency or pass-through entity review. §200.325 Bonding requirements. §200.326 Contract provisions. PERFORMANCE AND FINANCIAL MONITORING AND REPORTING §200.327 Financial reporting. 200.328 Monitoring and reporting program performance. §200.329 Reporting on real property. SUBRECIPIENT MONITORING AND MANAGEMENT §200.330 Subrecipient and contractor determinations. §200.331 Requirements for pass-through entities. §200.332 Fixed amount subawards. RECORD RETENTION AND ACCESS §200.333 Retention requirements for records. §200.334 Requests for transfer of records. §200.335 Methods for collection, transmission and storage of information.

















http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sp2.1.200.d

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sg2.1.200.d.sg1











http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sg2.1.200_1309.sg2
































§200.336 Access to records. §200.337 Restrictions on public access to records. REMEDIES FOR NONCOMPLIANCE §200.338 Remedies for noncompliance. §200.339 Termination. §200.340 Notification of termination requirement. §200.341 Opportunities to object, hearings and appeals. §200.342 Effects of suspension and termination. CLOSEOUT §200.343 Closeout. POST-CLOSEOUT ADJUSTMENTS AND CONTINUING RESPONSIBILITIES §200.344 Post-closeout adjustments and continuing responsibilities. COLLECTION OF AMOUNTS DUE §200.345 Collection of amounts due. Subpart E—Cost Principles GENERAL PROVISIONS §200.400 Policy guide. §200.401 Application. BASIC CONSIDERATIONS §200.402 Composition of costs. §200.403 Factors affecting allowability of costs. §200.404 Reasonable costs. §200.405 Allocable costs. §200.406 Applicable credits. §200.407 Prior written approval (prior approval). §200.408 Limitation on allowance of costs. §200.409 Special considerations. §200.410 Collection of unallowable costs. §200.411 Adjustment of previously negotiated indirect (F&A) cost rates containing unallowable costs. DIRECT AND INDIRECT (F&A) COSTS §200.412 Classification of costs. §200.413 Direct costs. §200.414 Indirect (F&A) costs. §200.415 Required certifications. SPECIAL CONSIDERATIONS FOR STATES, LOCAL GOVERNMENTS AND INDIAN TRIBES §200.416 Cost allocation plans and indirect cost proposals. §200.417 Interagency service. SPECIAL CONSIDERATIONS FOR INSTITUTIONS OF HIGHER EDUCATION §200.418 Costs incurred by states and local governments. §200.419 Cost accounting standards and disclosure statement. GENERAL PROVISIONS FOR SELECTED ITEMS OF COST §200.420 Considerations for selected items of cost. §200.421 Advertising and public relations. §200.422 Advisory councils. §200.423 Alcoholic beverages. §200.424 Alumni/ae activities. §200.425 Audit services. §200.426 Bad debts. §200.427 Bonding costs. §200.428 Collections of improper payments. §200.429 Commencement and convocation costs. §200.430 Compensation—personal services. §200.431 Compensation—fringe benefits.

















http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sp2.1.200.e

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sg2.1.200.e.sg11







































§200.432 Conferences. §200.433 Contingency provisions. §200.434 Contributions and donations. §200.435 Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringements. §200.436 Depreciation. §200.437 Employee health and welfare costs. §200.438 Entertainment costs. §200.439 Equipment and other capital expenditures. §200.440 Exchange rates. §200.441 Fines, penalties, damages and other settlements. §200.442 Fund raising and investment management costs. §200.443 Gains and losses on disposition of depreciable assets. §200.444 General costs of government. §200.445 Goods or services for personal use. §200.446 Idle facilities and idle capacity. §200.447 Insurance and indemnification. §200.448 Intellectual property. §200.449 Interest. §200.450 Lobbying. §200.451 Losses on other awards or contracts. §200.452 Maintenance and repair costs. §200.453 Materials and supplies costs, including costs of computing devices. §200.454 Memberships, subscriptions, and professional activity costs. §200.455 Organization costs. §200.456 Participant support costs. §200.457 Plant and security costs. §200.458 Pre-award costs. §200.459 Professional service costs. §200.460 Proposal costs. §200.461 Publication and printing costs. §200.462 Rearrangement and reconversion costs. §200.463 Recruiting costs. §200.464 Relocation costs of employees. §200.465 Rental costs of real property and equipment. §200.466 Scholarships and student aid costs. §200.467 Selling and marketing costs. §200.468 Specialized service facilities. §200.469 Student activity costs. §200.470 Taxes (including Value Added Tax). §200.471 Termination costs. §200.472 Training and education costs. §200.473 Transportation costs. §200.474 Travel costs. §200.475 Trustees. Subpart F—Audit Requirements GENERAL §200.500 Purpose. AUDITS §200.501 Audit requirements. §200.502 Basis for determining Federal awards expended. §200.503 Relation to other audit requirements. §200.504 Frequency of audits. §200.505 Sanctions. §200.506 Audit costs. §200.507 Program-specific audits. AUDITEES §200.508 Auditee responsibilities. §200.509 Auditor selection. §200.510 Financial statements. §200.511 Audit findings follow-up. §200.512 Report submission.















































http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sp2.1.200.f

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23sg2.1.200.f.sg17

















FEDERAL AGENCIES §200.513 Responsibilities. AUDITORS §200.514 Scope of audit. §200.515 Audit reporting. §200.516 Audit findings. §200.517 Audit documentation. §200.518 Major program determination. §200.519 Criteria for Federal program risk. §200.520 Criteria for a low-risk auditee. MANAGEMENT DECISIONS §200.521 Management decision. Appendix I to Part 200—Full Text of Notice of Funding Opportunity Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs) Appendix IV to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations Appendix V to Part 200—State/Local Governmentwide Central Service Cost Allocation Plans Appendix VI to Part 200—Public Assistance Cost Allocation Plans Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals Appendix VIII to Part 200—Nonprofit Organizations Exempted From Subpart E—Cost Principles of Part 200 Appendix IX to Part 200—Hospital Cost Principles Appendix X to Part 200—Data Collection Form (Form SF-SAC) Appendix XI to Part 200—Compliance Supplement Appendix XII to Part 200—Award Term and Condition for Recipient Integrity and Performance Matters

AUTHORITY: 31 U.S.C. 503 SOURCE: 78 FR 78608, Dec. 26, 2013, unless otherwise noted.

Subpart A—Acronyms and Definitions ACRONYMS §200.0 Acronyms. ACRONYM TERM CAS Cost Accounting Standards CFDA Catalog of Federal Domestic Assistance CFR Code of Federal Regulations CMIA Cash Management Improvement Act COG Councils Of Governments COSO Committee of Sponsoring Organizations of the Treadway Commission EPA Environmental Protection Agency ERISA Employee Retirement Income Security Act of 1974 (29 U.S.C. 1301-1461) EUI Energy Usage Index F&A Facilities and Administration FAC Federal Audit Clearinghouse FAIN Federal Award Identification Number FAPIIS Federal Awardee Performance and Integrity Information System FAR Federal Acquisition Regulation FFATA Federal Funding Accountability and Transparency Act of 2006 or Transparency Act—Public Law 109-282, as

amended by section 6202(a) of Public Law 110-252 (31 U.S.C. 6101) FICA Federal Insurance Contributions Act FOIA Freedom of Information Act FR Federal Register FTE Full-time equivalent GAAP Generally Accepted Accounting Principles GAGAS Generally Accepted Government Auditing Standards GAO Government Accountability Office GOCO Government owned, contractor operated GSA General Services Administration IBS Institutional Base Salary IHE Institutions of Higher Education IRC Internal Revenue Code















http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.i

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.ii

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.iii

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.iii

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.iv

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.iv

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.v

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.vi

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.vii

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.viii

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.ix

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.x

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.xi

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=0971860d2339fcab47e5b8d1b899ac30&mc=true&n=pt2.1.200&r=PART&ty=HTML%23ap2.1.200_1521.xii


ISDEAA Indian Self-Determination and Education and Assistance Act MTC Modified Total Cost MTDC Modified Total Direct Cost OMB Office of Management and Budget PII Personally Identifiable Information PMS Payment Management System PRHP Post-retirement Health Plans PTE Pass-through Entity REUI Relative Energy Usage Index SAM System for Award Management (accessible at https://www.sam.gov) SFA Student Financial Aid SNAP Supplemental Nutrition Assistance Program SPOC Single Point of Contact TANF Temporary Assistance for Needy Families TFM Treasury Financial Manual U.S.C. United States Code VAT Value Added Tax [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014; 80 FR 43308, July 22, 2015] §200.1 Definitions.

These are the definitions for terms used in this part. Different definitions may be found in Federal statutes or regulations that apply more specifically to particular programs or activities. These definitions could be supplemented by additional instructional information provided in governmentwide standard information collections. §200.2 Acquisition cost.

Acquisition cost means the cost of the asset including the cost to ready the asset for its intended use. Acquisition cost for equipment, for example, means the net invoice price of the equipment, including the cost of any modifications, attachments, accessories, or auxiliary apparatus necessary to make it usable for the purpose for which it is acquired. Acquisition costs for software includes those development costs capitalized in accordance with generally accepted accounting principles (GAAP). Ancillary charges, such as taxes, duty, protective in transit insurance, freight, and installation may be included in or excluded from the acquisition cost in accordance with the non-Federal entity's regular accounting practices. §200.3 Advance payment.

Advance payment means a payment that a Federal awarding agency or pass-through entity makes by any appropriate payment mechanism, including a predetermined payment schedule, before the non-Federal entity disburses the funds for program purposes. §200.4 Allocation.

Allocation means the process of assigning a cost, or a group of costs, to one or more cost objective(s), in reasonable proportion to the benefit provided or other equitable relationship. The process may entail assigning a cost(s) directly to a final cost objective or through one or more intermediate cost objectives. §200.5 Audit finding.

Audit finding means deficiencies which the auditor is required by §200.516 Audit findings, paragraph (a) to report in the schedule of findings and questioned costs. §200.6 Auditee.

Auditee means any non-Federal entity that expends Federal awards which must be audited under Subpart F—Audit Requirements of this part. §200.7 Auditor.

Auditor means an auditor who is a public accountant or a Federal, state, local government, or Indian tribe audit organization, which meets the general standards specified for external auditors in generally accepted government auditing standards (GAGAS). The term auditor does not include internal auditors of nonprofit organizations. [79 FR 75880, Dec. 19, 2014] §200.8 Budget.

Budget means the financial plan for the project or program that the Federal awarding agency or pass-through entity approves during the Federal award process or in subsequent amendments to the Federal award. It may include the Federal and non-Federal share or only the Federal share, as determined by the Federal awarding agency or pass-through entity. §200.9 Central service cost allocation plan.

Central service cost allocation plan means the documentation identifying, accumulating, and allocating or developing billing rates based on the allowable costs of services provided by a state, local government, or Indian tribe on a centralized basis to its departments and agencies. The costs of these services may be allocated or billed to users.




§200.10 Catalog of Federal Domestic Assistance (CFDA) number.

CFDA number means the number assigned to a Federal program in the CFDA. §200.11 CFDA program title.

CFDA program title means the title of the program under which the Federal award was funded in the CFDA. §200.12 Capital assets.

Capital assets means tangible or intangible assets used in operations having a useful life of more than one year which are capitalized in accordance with GAAP. Capital assets include:

(a) Land, buildings (facilities), equipment, and intellectual property (including software) whether acquired by purchase, construction, manufacture, lease-purchase, exchange, or through capital leases; and

(b) Additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations or alterations to capital assets that materially increase their value or useful life (not ordinary repairs and maintenance). §200.13 Capital expenditures.

Capital expenditures means expenditures to acquire capital assets or expenditures to make additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations, or alterations to capital assets that materially increase their value or useful life. §200.14 Claim.

Claim means, depending on the context, either: (a) A written demand or written assertion by one of the parties to a Federal award seeking as a matter of right: (1) The payment of money in a sum certain; (2) The adjustment or interpretation of the terms and conditions of the Federal award; or (3) Other relief arising under or relating to a Federal award. (b) A request for payment that is not in dispute when submitted.

§200.15 Class of Federal awards.

Class of Federal awards means a group of Federal awards either awarded under a specific program or group of programs or to a specific type of non-Federal entity or group of non-Federal entities to which specific provisions or exceptions may apply. §200.16 Closeout.

Closeout means the process by which the Federal awarding agency or pass-through entity determines that all applicable administrative actions and all required work of the Federal award have been completed and takes actions as described in §200.343 Closeout. §200.17 Cluster of programs.

Cluster of programs means a grouping of closely related programs that share common compliance requirements. The types of clusters of programs are research and development (R&D), student financial aid (SFA), and other clusters. “Other clusters” are as defined by OMB in the compliance supplement or as designated by a state for Federal awards the state provides to its subrecipients that meet the definition of a cluster of programs. When designating an “other cluster,” a state must identify the Federal awards included in the cluster and advise the subrecipients of compliance requirements applicable to the cluster, consistent with §200.331 Requirements for pass-through entities, paragraph (a). A cluster of programs must be considered as one program for determining major programs, as described in §200.518 Major program determination, and, with the exception of R&D as described in §200.501 Audit requirements, paragraph (c), whether a program-specific audit may be elected. §200.18 Cognizant agency for audit.

Cognizant agency for audit means the Federal agency designated to carry out the responsibilities described in §200.513 Responsibilities, paragraph (a). The cognizant agency for audit is not necessarily the same as the cognizant agency for indirect costs. A list of cognizant agencies for audit may be found at the FAC Web site. §200.19 Cognizant agency for indirect costs.

Cognizant agency for indirect costs means the Federal agency responsible for reviewing, negotiating, and approving cost allocation plans or indirect cost proposals developed under this part on behalf of all Federal agencies. The cognizant agency for indirect cost is not necessarily the same as the cognizant agency for audit. For assignments of cognizant agencies see the following:

(a) For IHEs: Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs), paragraph C.11.

(b) For nonprofit organizations: Appendix IV to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations, paragraph C.2.a.




(c) For state and local governments: Appendix V to Part 200—State/Local Governmentwide Central Service Cost Allocation Plans, paragraph F.1.

(d) For Indian tribes: Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposal, paragraph D.1. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014; 80 FR 54407, Sept. 10, 2015] §200.20 Computing devices.

Computing devices means machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or “peripherals”) for printing, transmitting and receiving, or storing electronic information. See also §§200.94 Supplies and 200.58 Information technology systems. §200.21 Compliance supplement.

Compliance supplement means Appendix XI to Part 200—Compliance Supplement (previously known as the Circular A-133 Compliance Supplement). §200.22 Contract.

Contract means a legal instrument by which a non-Federal entity purchases property or services needed to carry out the project or program under a Federal award. The term as used in this part does not include a legal instrument, even if the non-Federal entity considers it a contract, when the substance of the transaction meets the definition of a Federal award or subaward (see §200.92 Subaward). §200.23 Contractor.

Contractor means an entity that receives a contract as defined in §200.22 Contract. §200.24 Cooperative agreement.

Cooperative agreement means a legal instrument of financial assistance between a Federal awarding agency or pass-through entity and a non-Federal entity that, consistent with 31 U.S.C. 6302-6305:

(a) Is used to enter into a relationship the principal purpose of which is to transfer anything of value from the Federal awarding agency or pass-through entity to the non-Federal entity to carry out a public purpose authorized by a law of the United States (see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal Government or pass-through entity's direct benefit or use;

(b) Is distinguished from a grant in that it provides for substantial involvement between the Federal awarding agency or pass-through entity and the non-Federal entity in carrying out the activity contemplated by the Federal award.

(c) The term does not include: (1) A cooperative research and development agreement as defined in 15 U.S.C. 3710a; or (2) An agreement that provides only: (i) Direct United States Government cash assistance to an individual; (ii) A subsidy; (iii) A loan; (iv) A loan guarantee; or (v) Insurance.

§200.25 Cooperative audit resolution.

Cooperative audit resolution means the use of audit follow-up techniques which promote prompt corrective action by improving communication, fostering collaboration, promoting trust, and developing an understanding between the Federal agency and the non-Federal entity. This approach is based upon:

(a) A strong commitment by Federal agency and non-Federal entity leadership to program integrity; (b) Federal agencies strengthening partnerships and working cooperatively with non-Federal entities and their

auditors; and non-Federal entities and their auditors working cooperatively with Federal agencies; (c) A focus on current conditions and corrective action going forward; (d) Federal agencies offering appropriate relief for past noncompliance when audits show prompt corrective action

has occurred; and (e) Federal agency leadership sending a clear message that continued failure to correct conditions identified by audits

which are likely to cause improper payments, fraud, waste, or abuse is unacceptable and will result in sanctions. §200.26 Corrective action.

Corrective action means action taken by the auditee that: (a) Corrects identified deficiencies; (b) Produces recommended improvements; or (c) Demonstrates that audit findings are either invalid or do not warrant auditee action.

§200.27 Cost allocation plan.

Cost allocation plan means central service cost allocation plan or public assistance cost allocation plan. §200.28 Cost objective.




Cost objective means a program, function, activity, award, organizational subdivision, contract, or work unit for which cost data are desired and for which provision is made to accumulate and measure the cost of processes, products, jobs, capital projects, etc. A cost objective may be a major function of the non-Federal entity, a particular service or project, a Federal award, or an indirect (Facilities & Administrative (F&A)) cost activity, as described in Subpart E—Cost Principles of this Part. See also §§200.44 Final cost objective and 200.60 Intermediate cost objective. §200.29 Cost sharing or matching.

Cost sharing or matching means the portion of project costs not paid by Federal funds (unless otherwise authorized by Federal statute). See also §200.306 Cost sharing or matching. §200.30 Cross-cutting audit finding.

Cross-cutting audit finding means an audit finding where the same underlying condition or issue affects Federal awards of more than one Federal awarding agency or pass-through entity. §200.31 Disallowed costs.

Disallowed costs means those charges to a Federal award that the Federal awarding agency or pass-through entity determines to be unallowable, in accordance with the applicable Federal statutes, regulations, or the terms and conditions of the Federal award. §200.32 [Reserved] §200.33 Equipment.

Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000. See also §§200.12 Capital assets, 200.20 Computing devices, 200.48 General purpose equipment, 200.58 Information technology systems, 200.89 Special purpose equipment, and 200.94 Supplies. §200.34 Expenditures.

Expenditures means charges made by a non-Federal entity to a project or program for which a Federal award was received.

(a) The charges may be reported on a cash or accrual basis, as long as the methodology is disclosed and is consistently applied.

(b) For reports prepared on a cash basis, expenditures are the sum of: (1) Cash disbursements for direct charges for property and services; (2) The amount of indirect expense charged; (3) The value of third-party in-kind contributions applied; and (4) The amount of cash advance payments and payments made to subrecipients. (c) For reports prepared on an accrual basis, expenditures are the sum of: (1) Cash disbursements for direct charges for property and services; (2) The amount of indirect expense incurred; (3) The value of third-party in-kind contributions applied; and (4) The net increase or decrease in the amounts owed by the non-Federal entity for: (i) Goods and other property received; (ii) Services performed by employees, contractors, subrecipients, and other payees; and (iii) Programs for which no current services or performance are required such as annuities, insurance claims, or other

benefit payments. §200.35 Federal agency.

Federal agency means an “agency” as defined at 5 U.S.C. 551(1) and further clarified by 5 U.S.C. 552(f). §200.36 Federal Audit Clearinghouse (FAC).

FAC means the clearinghouse designated by OMB as the repository of record where non-Federal entities are required to transmit the reporting packages required by Subpart F—Audit Requirements of this part. The mailing address of the FAC is Federal Audit Clearinghouse, Bureau of the Census, 1201 E. 10th Street, Jeffersonville, IN 47132 and the web address is: http://harvester.census.gov/sac/. Any future updates to the location of the FAC may be found at the OMB Web site. §200.37 Federal awarding agency.

Federal awarding agency means the Federal agency that provides a Federal award directly to a non-Federal entity. §200.38 Federal award.

Federal award has the meaning, depending on the context, in either paragraph (a) or (b) of this section: (a)(1) The Federal financial assistance that a non-Federal entity receives directly from a Federal awarding agency or

indirectly from a pass-through entity, as described in §200.101 Applicability; or (2) The cost-reimbursement contract under the Federal Acquisition Regulations that a non-Federal entity receives

directly from a Federal awarding agency or indirectly from a pass-through entity, as described in §200.101 Applicability.




(b) The instrument setting forth the terms and conditions. The instrument is the grant agreement, cooperative agreement, other agreement for assistance covered in paragraph (b) of §200.40 Federal financial assistance, or the cost-reimbursement contract awarded under the Federal Acquisition Regulations.

(c) Federal award does not include other contracts that a Federal agency uses to buy goods or services from a contractor or a contract to operate Federal Government owned, contractor operated facilities (GOCOs).

(d) See also definitions of Federal financial assistance, grant agreement, and cooperative agreement. §200.39 Federal award date.

Federal award date means the date when the Federal award is signed by the authorized official of the Federal awarding agency. §200.40 Federal financial assistance.

(a) Federal financial assistance means assistance that non-Federal entities receive or administer in the form of: (1) Grants; (2) Cooperative agreements; (3) Non-cash contributions or donations of property (including donated surplus property); (4) Direct appropriations; (5) Food commodities; and (6) Other financial assistance (except assistance listed in paragraph (b) of this section). (b) For §200.202 Requirement to provide public notice of Federal financial assistance programs and Subpart F—Audit

Requirements of this part, Federal financial assistance also includes assistance that non-Federal entities receive or administer in the form of:

(1) Loans; (2) Loan Guarantees; (3) Interest subsidies; and (4) Insurance. (c) Federal financial assistance does not include amounts received as reimbursement for services rendered to

individuals as described in §200.502 Basis for determining Federal awards expended, paragraph (h) and (i) of this part. [78 FR 78608, Dec. 26, 2013, as amended at 80 FR 54407, Sept. 10, 2015] §200.41 Federal interest.

Federal interest means, for purposes of §200.329 Reporting on real property or when used in connection with the acquisition or improvement of real property, equipment, or supplies under a Federal award, the dollar amount that is the product of the:

(a) Federal share of total project costs; and (b) Current fair market value of the property, improvements, or both, to the extent the costs of acquiring or improving

the property were included as project costs. §200.42 Federal program.

Federal program means: (a) All Federal awards which are assigned a single number in the CFDA. (b) When no CFDA number is assigned, all Federal awards to non-Federal entities from the same agency made for

the same purpose must be combined and considered one program. (c) Notwithstanding paragraphs (a) and (b) of this definition, a cluster of programs. The types of clusters of programs

are: (1) Research and development (R&D); (2) Student financial aid (SFA); and (3) “Other clusters,” as described in the definition of Cluster of Programs.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014] §200.43 Federal share.

Federal share means the portion of the total project costs that are paid by Federal funds. §200.44 Final cost objective.

Final cost objective means a cost objective which has allocated to it both direct and indirect costs and, in the non-Federal entity's accumulation system, is one of the final accumulation points, such as a particular award, internal project, or other direct activity of a non-Federal entity. See also §§200.28 Cost objective and 200.60 Intermediate cost objective. §200.45 Fixed amount awards.

Fixed amount awards means a type of grant agreement under which the Federal awarding agency or pass-through entity provides a specific level of support without regard to actual costs incurred under the Federal award. This type of Federal award reduces some of the administrative burden and record-keeping requirements for both the non-Federal entity and Federal awarding agency or pass-through entity. Accountability is based primarily on performance and results. See §§200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts, paragraph (b) and 200.332 Fixed amount subawards.




§200.46 Foreign public entity. Foreign public entity means: (a) A foreign government or foreign governmental entity; (b) A public international organization, which is an organization entitled to enjoy privileges, exemptions, and

immunities as an international organization under the International Organizations Immunities Act (22 U.S.C. 288-288f); (c) An entity owned (in whole or in part) or controlled by a foreign government; or (d) Any other entity consisting wholly or partially of one or more foreign governments or foreign governmental entities.

§200.47 Foreign organization.

Foreign organization means an entity that is: (a) A public or private organization located in a country other than the United States and its territories that is subject to

the laws of the country in which it is located, irrespective of the citizenship of project staff or place of performance; (b) A private nongovernmental organization located in a country other than the United States that solicits and receives

cash contributions from the general public; (c) A charitable organization located in a country other than the United States that is nonprofit and tax exempt under

the laws of its country of domicile and operation, and is not a university, college, accredited degree-granting institution of education, private foundation, hospital, organization engaged exclusively in research or scientific activities, church, synagogue, mosque or other similar entities organized primarily for religious purposes; or

(d) An organization located in a country other than the United States not recognized as a Foreign Public Entity. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014] §200.48 General purpose equipment.

General purpose equipment means equipment which is not limited to research, medical, scientific or other technical activities. Examples include office equipment and furnishings, modular offices, telephone networks, information technology equipment and systems, air conditioning equipment, reproduction and printing equipment, and motor vehicles. See also Equipment and Special Purpose Equipment. §200.49 Generally Accepted Accounting Principles (GAAP).

GAAP has the meaning specified in accounting standards issued by the Government Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB). §200.50 Generally Accepted Government Auditing Standards (GAGAS).

GAGAS, also known as the Yellow Book, means generally accepted government auditing standards issued by the Comptroller General of the United States, which are applicable to financial audits. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014] §200.51 Grant agreement.

Grant agreement means a legal instrument of financial assistance between a Federal awarding agency or pass-through entity and a non-Federal entity that, consistent with 31 U.S.C. 6302, 6304:

(a) Is used to enter into a relationship the principal purpose of which is to transfer anything of value from the Federal awarding agency or pass-through entity to the non-Federal entity to carry out a public purpose authorized by a law of the United States (see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal awarding agency or pass-through entity's direct benefit or use;

(b) Is distinguished from a cooperative agreement in that it does not provide for substantial involvement between the Federal awarding agency or pass-through entity and the non-Federal entity in carrying out the activity contemplated by the Federal award.

(c) Does not include an agreement that provides only: (1) Direct United States Government cash assistance to an individual; (2) A subsidy; (3) A loan; (4) A loan guarantee; or (5) Insurance.

§200.52 Hospital.

Hospital means a facility licensed as a hospital under the law of any state or a facility operated as a hospital by the United States, a state, or a subdivision of a state. §200.53 Improper payment.

(a) Improper payment means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements; and

(b) Improper payment includes any payment to an ineligible party, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), any payment that does not account for credit for applicable discounts, and any payment where insufficient or lack of documentation prevents a reviewer from discerning whether a payment was proper.




§200.54 Indian tribe (or “federally recognized Indian tribe”). Indian tribe means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native

village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. Chapter 33), which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians (25 U.S.C. 450b(e)). See annually published Bureau of Indian Affairs list of Indian Entities Recognized and Eligible to Receive Services. §200.55 Institutions of Higher Education (IHEs).

IHE is defined at 20 U.S.C. 1001. §200.56 Indirect (facilities & administrative (F&A)) costs.

Indirect (F&A) costs means those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of indirect (F&A) costs. Indirect (F&A) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014] §200.57 Indirect cost rate proposal.

Indirect cost rate proposal means the documentation prepared by a non-Federal entity to substantiate its request for the establishment of an indirect cost rate as described in Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs) through Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals of this part, and Appendix IX to Part 200—Hospital Cost Principles. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014] §200.58 Information technology systems.

Information technology systems means computing devices, ancillary equipment, software, firmware, and similar procedures, services (including support services), and related resources. See also §§200.20 Computing devices and 200.33 Equipment. §200.59 Intangible property.

Intangible property means property having no physical existence, such as trademarks, copyrights, patents and patent applications and property, such as loans, notes and other debt instruments, lease agreements, stock and other instruments of property ownership (whether the property is tangible or intangible). §200.60 Intermediate cost objective.

Intermediate cost objective means a cost objective that is used to accumulate indirect costs or service center costs that are subsequently allocated to one or more indirect cost pools or final cost objectives. See also §200.28 Cost objective and §200.44 Final cost objective. §200.61 Internal controls.

Internal controls means a process, implemented by a non-Federal entity, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

(a) Effectiveness and efficiency of operations; (b) Reliability of reporting for internal and external use; and (c) Compliance with applicable laws and regulations.

§200.62 Internal control over compliance requirements for Federal awards.

Internal control over compliance requirements for Federal awards means a process implemented by a non-Federal entity designed to provide reasonable assurance regarding the achievement of the following objectives for Federal awards:

(a) Transactions are properly recorded and accounted for, in order to: (1) Permit the preparation of reliable financial statements and Federal reports; (2) Maintain accountability over assets; and (3) Demonstrate compliance with Federal statutes, regulations, and the terms and conditions of the Federal award; (b) Transactions are executed in compliance with: (1) Federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and

material effect on a Federal program; and (2) Any other Federal statutes and regulations that are identified in the Compliance Supplement; and (c) Funds, property, and other assets are safeguarded against loss from unauthorized use or disposition.

§200.63 Loan.

Loan means a Federal loan or loan guarantee received or administered by a non-Federal entity, except as used in the definition of §200.80 Program income.

(a) The term “direct loan” means a disbursement of funds by the Federal Government to a non-Federal borrower under a contract that requires the repayment of such funds with or without interest. The term includes the purchase of, or




participation in, a loan made by another lender and financing arrangements that defer payment for more than 90 days, including the sale of a Federal Government asset on credit terms. The term does not include the acquisition of a federally guaranteed loan in satisfaction of default claims or the price support loans of the Commodity Credit Corporation.

(b) The term “direct loan obligation” means a binding agreement by a Federal awarding agency to make a direct loan when specified conditions are fulfilled by the borrower.

(c) The term “loan guarantee” means any Federal Government guarantee, insurance, or other pledge with respect to the payment of all or a part of the principal or interest on any debt obligation of a non-Federal borrower to a non-Federal lender, but does not include the insurance of deposits, shares, or other withdrawable accounts in financial institutions.

(d) The term “loan guarantee commitment” means a binding agreement by a Federal awarding agency to make a loan guarantee when specified conditions are fulfilled by the borrower, the lender, or any other party to the guarantee agreement. §200.64 Local government.

Local government means any unit of government within a state, including a: (a) County; (b) Borough; (c) Municipality; (d) City; (e) Town; (f) Township; (g) Parish; (h) Local public authority, including any public housing agency under the United States Housing Act of 1937; (i) Special district; (j) School district; (k) Intrastate district; (l) Council of governments, whether or not incorporated as a nonprofit corporation under state law; and (m) Any other agency or instrumentality of a multi-, regional, or intra-state or local government.

§200.65 Major program.

Major program means a Federal program determined by the auditor to be a major program in accordance with §200.518 Major program determination or a program identified as a major program by a Federal awarding agency or pass-through entity in accordance with §200.503 Relation to other audit requirements, paragraph (e). §200.66 Management decision.

Management decision means the evaluation by the Federal awarding agency or pass-through entity of the audit findings and corrective action plan and the issuance of a written decision to the auditee as to what corrective action is necessary. §200.67 Micro-purchase.

Micro-purchase means a purchase of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold. Micro-purchase procedures comprise a subset of a non-Federal entity's small purchase procedures. The non-Federal entity uses such procedures in order to expedite the completion of its lowest-dollar small purchase transactions and minimize the associated administrative burden and cost. The micro-purchase threshold is set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 (Definitions). It is $3,000 except as otherwise discussed in Subpart 2.1 of that regulation, but this threshold is periodically adjusted for inflation. §200.68 Modified Total Direct Cost (MTDC).

MTDC means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs. [79 FR 75880, Dec. 19, 2014] §200.69 Non-Federal entity.

Non-Federal entity means a state, local government, Indian tribe, institution of higher education (IHE), or nonprofit organization that carries out a Federal award as a recipient or subrecipient. §200.70 Nonprofit organization.

Nonprofit organization means any corporation, trust, association, cooperative, or other organization, not including IHEs, that:

(a) Is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest; (b) Is not organized primarily for profit; and (c) Uses net proceeds to maintain, improve, or expand the operations of the organization.

§200.71 Obligations.




When used in connection with a non-Federal entity's utilization of funds under a Federal award, obligations means orders placed for property and services, contracts and subawards made, and similar transactions during a given period that require payment by the non-Federal entity during the same or a future period. §200.72 Office of Management and Budget (OMB).

OMB means the Executive Office of the President, Office of Management and Budget. §200.73 Oversight agency for audit.

Oversight agency for audit means the Federal awarding agency that provides the predominant amount of funding directly to a non-Federal entity not assigned a cognizant agency for audit. When there is no direct funding, the Federal awarding agency which is the predominant source of pass-through funding must assume the oversight responsibilities. The duties of the oversight agency for audit and the process for any reassignments are described in §200.513 Responsibilities, paragraph (b). §200.74 Pass-through entity.

Pass-through entity means a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program. §200.75 Participant support costs.

Participant support costs means direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) §200.76 Performance goal.

Performance goal means a target level of performance expressed as a tangible, measurable objective, against which actual achievement can be compared, including a goal expressed as a quantitative standard, value, or rate. In some instances (e.g., discretionary research awards), this may be limited to the requirement to submit technical performance reports (to be evaluated in accordance with agency policy). §200.77 Period of performance.

Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. The Federal awarding agency or pass-through entity must include start and end dates of the period of performance in the Federal award (see §§200.210 Information contained in a Federal award paragraph (a)(5) and 200.331 Requirements for §200.78 Personal property.

Personal property means property other than real property. It may be tangible, having physical existence, or intangible. §200.79 Personally Identifiable Information (PII).

PII means information that can be used to distinguish or trace an individual's identity, either alone or when combined with other personal or identifying information that is linked or linkable to a specific individual. Some information that is considered to be PII is available in public sources such as telephone books, public Web sites, and university listings. This type of information is considered to be Public PII and includes, for example, first and last name, address, work telephone number, email address, home telephone number, and general educational credentials. The definition of PII is not anchored to any single category of information or technology. Rather, it requires a case-by-case assessment of the specific risk that an individual can be identified. Non-PII can become PII whenever additional information is made publicly available, in any medium and from any source, that, when combined with other available information, could be used to identify an individual. §200.80 Program income.

Program income means gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance except as provided in §200.307 paragraph (f). (See §200.77 Period of performance.) Program income includes but is not limited to income from fees for services performed, the use or rental or real or personal property acquired under Federal awards, the sale of commodities or items fabricated under a Federal award, license fees and royalties on patents and copyrights, and principal and interest on loans made with Federal award funds. Interest earned on advances of Federal funds is not program income. Except as otherwise provided in Federal statutes, regulations, or the terms and conditions of the Federal award, program income does not include rebates, credits, discounts, and interest earned on any of them. See also §200.407 Prior written approval (prior approval). See also 35 U.S.C. 200-212 “Disposition of Rights in Educational Awards” applies to inventions made under Federal awards. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014] §200.81 Property. §200.82 Protected Personally Identifiable Information (Protected PII).

Protected PII means an individual's first name or first initial and last name in combination with any one or more of types of information, including, but not limited to, social security number, passport number, credit card numbers, clearances,




bank numbers, biometrics, date and place of birth, mother's maiden name, criminal, medical and financial records, educational transcripts. This does not include PII that is required by law to be disclosed. (See also §200.79 Personally Identifiable Information (PII)). §200.83 Project cost.

Project cost means total allowable costs incurred under a Federal award and all required cost sharing and voluntary committed cost sharing, including third-party contributions. §200.84 Questioned cost.

Questioned cost means a cost that is questioned by the auditor because of an audit finding: (a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a

Federal award, including for funds used to match Federal funds; (b) Where the costs, at the time of the audit, are not supported by adequate documentation; or (c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the

circumstances. §200.85 Real property.

Real property means land, including land improvements, structures and appurtenances thereto, but excludes moveable machinery and equipment. §200.86 Recipient.

Recipient means a non-Federal entity that receives a Federal award directly from a Federal awarding agency to carry out an activity under a Federal program. The term recipient does not include subrecipients. See also §200.69 Non-Federal entity. §200.87 Research and Development (R&D).

R&D means all research activities, both basic and applied, and all development activities that are performed by non-Federal entities. The term research also includes activities involving the training of individuals in research techniques where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function.

“Research” is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. “Development” is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes. §200.88 Simplified acquisition threshold.

Simplified acquisition threshold means the dollar amount below which a non-Federal entity may purchase property or services using small purchase methods. Non-Federal entities adopt small purchase procedures in order to expedite the purchase of items costing less than the simplified acquisition threshold. The simplified acquisition threshold is set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 (Definitions) and in accordance with 41 U.S.C. 1908. As of the publication of this part, the simplified acquisition threshold is $150,000, but this threshold is periodically adjusted for inflation. (Also §200.89 Special purpose equipment.

Special purpose equipment means equipment which is used only for research, medical, scientific, or other technical activities. Examples of special purpose equipment include microscopes, x-ray machines, surgical instruments, and spectrometers. See also §§200.33 Equipment and 200.48 General purpose equipment. §200.90 State.

State means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any agency or instrumentality thereof exclusive of local governments. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014] §200.91 Student Financial Aid (SFA).

SFA means Federal awards under those programs of general student assistance, such as those authorized by Title IV of the Higher Education Act of 1965, as amended, (20 U.S.C. 1070-1099d), which are administered by the U.S. Department of Education, and similar programs provided by other Federal agencies. It does not include Federal awards under programs that provide fellowships or similar Federal awards to students on a competitive basis, or for specified studies or research. §200.92 Subaward.

Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract.




§200.93 Subrecipient. Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program; but does not include an individual that is a beneficiary of such program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. §200.94 Supplies.

Supplies means all tangible personal property other than those described in §200.33 Equipment. A computing device is a supply if the acquisition cost is less than the lesser of the capitalization level established by the non-Federal entity for financial statement purposes or $5,000, regardless of the length of its useful life. See also §§200.20 Computing devices and 200.33 Equipment. §200.95 Termination.

Termination means the ending of a Federal award, in whole or in part at any time prior to the planned end of period of performance. §200.96 Third-party in-kind contributions.

Third-party in-kind contributions means the value of non-cash contributions (i.e., property or services) that— (a) Benefit a federally assisted project or program; and (b) Are contributed by non-Federal third parties, without charge, to a non-Federal entity under a Federal award.

§200.97 Unliquidated obligations.

Unliquidated obligations means, for financial reports prepared on a cash basis, obligations incurred by the non-Federal entity that have not been paid (liquidated). For reports prepared on an accrual expenditure basis, these are obligations incurred by the non-Federal entity for which an expenditure has not been recorded. §200.98 Unobligated balance.

Unobligated balance means the amount of funds under a Federal award that the non-Federal entity has not obligated. The amount is computed by subtracting the cumulative amount of the non-Federal entity's unliquidated obligations and expenditures of funds under the Federal award from the cumulative amount of the funds that the Federal awarding agency or pass-through entity authorized the non-Federal entity to obligate. §200.99 Voluntary committed cost sharing.

Voluntary committed cost sharing means cost sharing specifically pledged on a voluntary basis in the proposal's budget or the Federal award on the part of the non-Federal entity and that becomes a binding requirement of Federal award. Subpart B—General Provisions §200.100 Purpose.

(a)(1) This part establishes uniform administrative requirements, cost principles, and audit requirements for Federal awards to non-Federal entities, as described in §200.101 Applicability. Federal awarding agencies must not impose additional or inconsistent requirements, except as provided in §§200.102 Exceptions and 200.210 Information contained in a Federal award, or unless specifically required by Federal statute, regulation, or Executive Order.

(2) This part provides the basis for a systematic and periodic collection and uniform submission by Federal agencies of information on all Federal financial assistance programs to the Office of Management and Budget (OMB). It also establishes Federal policies related to the delivery of this information to the public, including through the use of electronic media. It prescribes the manner in which General Services Administration (GSA), OMB, and Federal agencies that administer Federal financial assistance programs are to carry out their statutory responsibilities under the Federal Program Information Act (31 U.S.C. 6101-6106).

(b) Administrative requirements. Subparts B through D of this part set forth the uniform administrative requirements for grant and cooperative agreements, including the requirements for Federal awarding agency management of Federal grant programs before the Federal award has been made, and the requirements Federal awarding agencies may impose on non-Federal entities in the Federal award.

(c) Cost Principles. Subpart E—Cost Principles of this part establishes principles for determining the allowable costs incurred by non-Federal entities under Federal awards. The principles are for the purpose of cost determination and are not intended to identify the circumstances or dictate the extent of Federal Government participation in the financing of a particular program or project. The principles are designed to provide that Federal awards bear their fair share of cost recognized under these principles except where restricted or prohibited by statute.

(d) Single Audit Requirements and Audit Follow-up. Subpart F—Audit Requirements of this part is issued pursuant to the Single Audit Act Amendments of 1996, (31 U.S.C. 7501-7507). It sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of non-Federal entities expending Federal awards. These provisions also provide the policies and procedures for Federal awarding agencies and pass-through entities when using the results of these audits.




(e) For OMB guidance to Federal awarding agencies on Challenges and Prizes, please see M-10-11 Guidance on the Use of Challenges and Prizes to Promote Open Government, issued March 8, 2010, or its successor. §200.101 Applicability.

(a) General applicability to Federal agencies. The requirements established in this part apply to Federal agencies that make Federal awards to non-Federal entities. These requirements are applicable to all costs related to Federal awards.

(b)(1) Applicability to different types of Federal awards. The following table describes what portions of this part apply to which types of Federal awards. The terms and conditions of Federal awards (including this part) flow down to subawards to subrecipients unless a particular section of this part or the terms and conditions of the Federal award specifically indicate otherwise. This means that non-Federal entities must comply with requirements in this part regardless of whether the non-Federal entity is a recipient or subrecipient of a Federal award. Pass-through entities must comply with the requirements described in Subpart D—Post Federal Award Requirements of this part, §§200.330 Subrecipient and contractor determinations through 200.332 Fixed amount Subawards, but not any requirements in this part directed towards Federal awarding agencies unless the requirements of this part or the terms and conditions of the Federal award indicate otherwise.

This table must be read along with the other provisions of this section

The following portions of this Part

Are applicable to the following types of Federal Awards and Fixed-Price Contracts and Subcontracts (except as noted in paragraphs (d) and (e) below):

Are NOT applicable to the following types of Federal Awards and Fixed-Price Contracts and Subcontracts:

Subpart A—Acronyms and Definitions —All

Subpart B—General Provisions, except for §§200.111 English Language, 200.112 Conflict of Interest, 200.113 Mandatory Disclosures

—All

§§200.111 English Language, 200.112 Conflict of Interest, 200.113 Mandatory Disclosures

—Grant Agreements and cooperative agreements

—Agreements for loans, loan guarantees, interest subsidies and insurance. —Procurement contracts awarded by Federal Agencies under the Federal Acquisition Regulation and subcontracts under those contracts.

Subparts C-D, except for §§200.202 Requirement to provide public notice of Federal financial assistance programs, 200.303 Internal controls, 200.330-332 Subrecipient Monitoring and Management

—Grant Agreements and cooperative agreements

—Agreements for loans, loan guarantees, interest subsidies and insurance. —Procurement contracts awarded by Federal Agencies under the Federal Acquisition Regulation and subcontracts under those contracts.

§200.202 Requirement to provide public notice of Federal financial assistance programs

—Grant Agreements and cooperative agreements —Agreements for loans, loan guarantees, interest subsidies and insurance

—Procurement contracts awarded by Federal Agencies under the Federal Acquisition Regulation and subcontracts under those contracts.

§§200.303 Internal controls, 200.330-332 Subrecipient Monitoring and Management

—All

Subpart E—Cost Principles —Grant Agreements and cooperative agreements, except those providing food commodities —All procurement contracts under the Federal Acquisition Regulations except those that are not negotiated

—Grant agreements and cooperative agreements providing foods commodities. —Fixed amount awards. —Agreements for loans, loans guarantees, interest subsidies and insurance. —Federal awards to hospitals (see Appendix IX Hospital Cost Principles).

Subpart F—Audit Requirements —Grant Agreements and cooperative agreements —Contracts and subcontracts, except for

—Fixed-price contracts and subcontracts awarded under the Federal Acquisition Regulation.




fixed price contacts and subcontracts, awarded under the Federal Acquisition Regulation —Agreements for loans, loans guarantees, interest subsidies and insurance and other forms of Federal Financial Assistance as defined by the Single Audit Act Amendment of 1996

(2) Federal award of cost-reimbursement contract under the FAR to a non-Federal entity. When a non-Federal entity is awarded a cost-reimbursement contract, only Subpart D—Post Federal Award Requirements of this part, §§200.330 Subrecipient and contractor determinations through 200.332 Fixed amount Subawards (in addition to any FAR related requirements for subaward monitoring), Subpart E—Cost Principles of this part and Subpart F—Audit Requirements of this part are incorporated by reference into the contract. However, when the Cost Accounting Standards (CAS) are applicable to the contract, they take precedence over the requirements of this part except for Subpart F—Audit Requirements of this part when they are in conflict. In addition, costs that are made unallowable under 10 U.S.C. 2324(e) and 41 U.S.C. 4304(a) as described in the FAR subpart 31.2 and subpart 31.603 are always unallowable. For requirements other than those covered in Subpart D—Post Federal Award Requirements of this part, §§200.330 Subrecipient and contractor determinations through 200.332 Fixed amount Subawards, Subpart E—Cost Principles of this part and Subpart F—Audit Requirements of this part, the terms of the contract and the FAR apply.

(3) With the exception of Subpart F—Audit Requirements of this part, which is required by the Single Audit Act, in any circumstances where the provisions of Federal statutes or regulations differ from the provisions of this part, the provision of the Federal statutes or regulations govern. This includes, for agreements with Indian tribes, the provisions of the Indian Self-Determination and Education and Assistance Act (ISDEAA), as amended, 25 U.S.C 450-458ddd-2.

(c) Federal awarding agencies may apply subparts A through E of this part to for-profit entities, foreign public entities, or foreign organizations, except where the Federal awarding agency determines that the application of these subparts would be inconsistent with the international obligations of the United States or the statutes or regulations of a foreign government.

(d) Except for §200.202 Requirement to provide public notice of Federal financial assistance programs and §§200.330 Subrecipient and contractor determinations through 200.332 Fixed amount Subawards of Subpart D—Post Federal Award Requirements of this part, the requirements in Subpart C—Pre-Federal Award Requirements and Contents of Federal Awards, Subpart D—Post Federal Award Requirements of this part, and Subpart E—Cost Principles of this part do not apply to the following programs:

(1) The block grant awards authorized by the Omnibus Budget Reconciliation Act of 1981 (including Community Services), except to the extent that Subpart E—Cost Principles of this Part apply to subrecipients of Community Services Block Grant funds pursuant to 42 U.S.C. 9916(a)(1)(B);

(2) Federal awards to local education agencies under 20 U.S.C. 7702-7703b, (portions of the Impact Aid program); (3) Payments under the Department of Veterans Affairs' State Home Per Diem Program (38 U.S.C. 1741); and (4) Federal awards authorized under the Child Care and Development Block Grant Act of 1990, as amended: (i) Child Care and Development Block Grant (42 U.S.C. 9858) (ii) Child Care Mandatory and Matching Funds of the Child Care and Development Fund (42 U.S.C. 9858) (e) Except for §200.202 Requirement to provide public notice of Federal financial assistance programs the guidance

in Subpart C—Pre-Federal Award Requirements and Contents of Federal Awards of this part does not apply to the following programs:

(1) Entitlement Federal awards to carry out the following programs of the Social Security Act: (i) Temporary Assistance to Needy Families (title IV-A of the Social Security Act, 42 U.S.C. 601-619); (ii) Child Support Enforcement and Establishment of Paternity (title IV-D of the Social Security Act, 42 U.S.C. 651-

669b); (iii) Foster Care and Adoption Assistance (title IV-E of the Act, 42 U.S.C. 670-679c); (iv) Aid to the Aged, Blind, and Disabled (titles I, X, XIV, and XVI-AABD of the Act, as amended); (v) Medical Assistance (Medicaid) (title XIX of the Act, 42 U.S.C. 1396-1396w-5) not including the State Medicaid

Fraud Control program authorized by section 1903(a)(6)(B) of the Social Security Act (42 U.S.C. 1396b(a)(6)(B)); and (vi) Children's Health Insurance Program (title XXI of the Act, 42 U.S.C. 1397aa-1397mm). (2) A Federal award for an experimental, pilot, or demonstration project that is also supported by a Federal award

listed in paragraph (e)(1) of this section; (3) Federal awards under subsection 412(e) of the Immigration and Nationality Act and subsection 501(a) of the

Refugee Education Assistance Act of 1980 (Pub. L. 96-422, 94 Stat. 1809), for cash assistance, medical assistance, and supplemental security income benefits to refugees and entrants and the administrative costs of providing the assistance and benefits (8 U.S.C. 1522(e));

(4) Entitlement awards under the following programs of The National School Lunch Act: (i) National School Lunch Program (section 4 of the Act, 42 U.S.C. 1753), (ii) Commodity Assistance (section 6 of the Act, 42 U.S.C. 1755), (iii) Special Meal Assistance (section 11 of the Act, 42 U.S.C. 1759a), (iv) Summer Food Service Program for Children (section 13 of the Act, 42 U.S.C. 1761), and (v) Child and Adult Care Food Program (section 17 of the Act, 42 U.S.C. 1766). (5) Entitlement awards under the following programs of The Child Nutrition Act of 1966: (i) Special Milk Program (section 3 of the Act, 42 U.S.C. 1772),




(ii) School Breakfast Program (section 4 of the Act, 42 U.S.C. 1773), and (iii) State Administrative Expenses (section 7 of the Act, 42 U.S.C. section 1776). (6) Entitlement awards for State Administrative Expenses under The Food and Nutrition Act of 2008 (section 16 of the

Act, 7 U.S.C. 2025). (7) Non-discretionary Federal awards under the following non-entitlement programs: (i) Special Supplemental Nutrition Program for Women, Infants and Children (section 17 of the Child Nutrition Act of

1966) 42 U.S.C. section 1786; (ii) The Emergency Food Assistance Programs (Emergency Food Assistance Act of 1983) 7 U.S.C. section 7501

note; and (iii) Commodity Supplemental Food Program (section 5 of the Agriculture and Consumer Protection Act of 1973) 7

U.S.C. section 612c note. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014; 80 FR 54407, Sept. 10, 2015] §200.102 Exceptions.

(a) With the exception of Subpart F—Audit Requirements of this part, OMB may allow exceptions for classes of Federal awards or non-Federal entities subject to the requirements of this part when exceptions are not prohibited by statute. However, in the interest of maximum uniformity, exceptions from the requirements of this part will be permitted only in unusual circumstances. Exceptions for classes of Federal awards or non-Federal entities will be published on the OMB Web site at www.whitehouse.gov/omb.

(b) Exceptions on a case-by-case basis for individual non-Federal entities may be authorized by the Federal awarding agency or cognizant agency for indirect costs, except where otherwise required by law or where OMB or other approval is expressly required by this part.

(c) The Federal awarding agency may apply more restrictive requirements to a class of Federal awards or non-Federal entities when approved by OMB, or when, required by Federal statutes or regulations, except for the requirements in Subpart F—Audit Requirements of this part. A Federal awarding agency may apply less restrictive requirements when making fixed amount awards as defined in Subpart A—Acronyms and Definitions of this part, except for those requirements imposed by statute or in Subpart F—Audit Requirements of this part.

(d) On a case-by-case basis, OMB will approve new strategies for Federal awards when proposed by the Federal awarding agency in accordance with OMB guidance (such as M-13-17) to develop additional evidence relevant to addressing important policy challenges or to promote cost-effectiveness in and across Federal programs. Proposals may draw on the innovative program designs discussed in M-13-17 to expand or improve the use of effective practices in delivering Federal financial assistance while also encouraging innovation in service delivery. Proposals submitted to OMB in accordance with M-13-17 may include requests to waive requirements other than those in Subpart F—Audit Requirements of this part. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75881, Dec. 19, 2014] §200.103 Authorities.

This part is issued under the following authorities. (a) Subpart B—General Provisions of this part through Subpart D—Post Federal Award Requirements of this part are

authorized under 31 U.S.C. 503 (the Chief Financial Officers Act, Functions of the Deputy Director for Management), 31 U.S.C. 1111 (Improving Economy and Efficiency of the United States Government), 41 U.S.C. 1101-1131 (the Office of Federal Procurement Policy Act), Reorganization Plan No. 2 of 1970, and Executive Order 11541 (“Prescribing the Duties of the Office of Management and Budget and the Domestic Policy Council in the Executive Office of the President”), the Single Audit Act Amendments of 1996, (31 U.S.C. 7501-7507), as well as The Federal Program Information Act (Public Law 95-220 and Public Law 98-169, as amended, codified at 31 U.S.C. 6101-6106).

(b) Subpart E—Cost Principles of this part is authorized under the Budget and Accounting Act of 1921, as amended; the Budget and Accounting Procedures Act of 1950, as amended (31 U.S.C. 1101-1125); the Chief Financial Officers Act of 1990 (31 U.S.C. 503-504); Reorganization Plan No. 2 of 1970; and Executive Order No. 11541, “Prescribing the Duties of the Office of Management and Budget and the Domestic Policy Council in the Executive Office of the President.”

(c) Subpart F—Audit Requirements of this part is authorized under the Single Audit Act Amendments of 1996, (31 U.S.C. 7501-7507). §200.104 Supersession.

As described in §200.110 Effective/applicability date, this part supersedes the following OMB guidance documents and regulations under Title 2 of the Code of Federal Regulations:

(a) A-21, “Cost Principles for Educational Institutions” (2 CFR part 220); (b) A-87, “Cost Principles for State, Local and Indian Tribal Governments” (2 CFR part 225) and also FEDERAL

REGISTER notice 51 FR 552 (January 6, 1986); (c) A-89, “Federal Domestic Assistance Program Information”; (d) A-102, “Grant Awards and Cooperative Agreements with State and Local Governments”; (e) A-110, “Uniform Administrative Requirements for Awards and Other Agreements with Institutions of Higher

Education, Hospitals, and Other Nonprofit Organizations” (codified at 2 CFR 215); (f) A-122, “Cost Principles for Non-Profit Organizations” (2 CFR part 230); (g) A-133, “Audits of States, Local Governments and Non-Profit Organizations ”; and (h) Those sections of A-50 related to audits performed under Subpart F—Audit Requirements of this part.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75882, Dec. 19, 2014]




§200.105 Effect on other issuances.

For Federal awards subject to this part, all administrative requirements, program manuals, handbooks and other non-regulatory materials that are inconsistent with the requirements of this part must be superseded upon implementation of this part by the Federal agency, except to the extent they are required by statute or authorized in accordance with the provisions in §200.102 Exceptions. §200.106 Agency implementation.

The specific requirements and responsibilities of Federal agencies and non-Federal entities are set forth in this part. Federal agencies making Federal awards to non-Federal entities must implement the language in the Subpart C—Pre-Federal Award Requirements and Contents of Federal Awards of this part through Subpart F—Audit Requirements of this part in codified regulations unless different provisions are required by Federal statute or are approved by OMB. §200.107 OMB responsibilities.

OMB will review Federal agency regulations and implementation of this part, and will provide interpretations of policy requirements and assistance to ensure effective and efficient implementation. Any exceptions will be subject to approval by OMB. Exceptions will only be made in particular cases where adequate justification is presented. §200.108 Inquiries.

Inquiries concerning this part may be directed to the Office of Federal Financial Management Office of Management and Budget, in Washington, DC. Non-Federal entities' inquiries should be addressed to the Federal awarding agency, cognizant agency for indirect costs, cognizant or oversight agency for audit, or pass-through entity as appropriate. §200.109 Review date.

OMB will review this part at least every five years after December 26, 2013. §200.110 Effective/applicability date.

(a) The standards set forth in this part which affect administration of Federal awards issued by Federal awarding agencies become effective once implemented by Federal awarding agencies or when any future amendment to this part becomes final. Federal awarding agencies must implement the policies and procedures applicable to Federal awards by promulgating a regulation to be effective by December 26, 2014 unless different provisions are required by statute or approved by OMB. For the procurement standards in §§200.317-200.326, non-Federal entities may continue to comply with the procurement standards in previous OMB guidance (superseded by this part as described in §200.104) for two additional fiscal years after this part goes into effect. If a non-Federal entity chooses to use the previous procurement standards for an additional two fiscal years before adopting the procurement standards in this part, the non-Federal entity must document this decision in their internal procurement policies.

(b) The standards set forth in Subpart F—Audit Requirements of this part and any other standards which apply directly to Federal agencies will be effective December 26, 2013 and will apply to audits of fiscal years beginning on or after December 26, 2014. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75882, Dec. 19, 2014; 80 FR 54408, Sept. 10, 2015] §200.111 English language.

(a) All Federal financial assistance announcements and Federal award information must be in the English language. Applications must be submitted in the English language and must be in the terms of U.S. dollars. If the Federal awarding agency receives applications in another currency, the Federal awarding agency will evaluate the application by converting the foreign currency to United States currency using the date specified for receipt of the application.

(b) Non-Federal entities may translate the Federal award and other documents into another language. In the event of inconsistency between any terms and conditions of the Federal award and any translation into another language, the English language meaning will control. Where a significant portion of the non-Federal entity's employees who are working on the Federal award are not fluent in English, the non-Federal entity must provide the Federal award in English and the language(s) with which employees are more familiar. §200.112 Conflict of interest.

The Federal awarding agency must establish conflict of interest policies for Federal awards. The non-Federal entity must disclose in writing any potential conflict of interest to the Federal awarding agency or pass-through entity in accordance with applicable Federal awarding agency policy. §200.113 Mandatory disclosures.

The non-Federal entity or applicant for a Federal award must disclose, in a timely manner, in writing to the Federal awarding agency or pass-through entity all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award. Non-Federal entities that have received a Federal award including the term and condition outlined in Appendix XII—Award Term and Condition for Recipient Integrity and Performance Matters are required to report certain civil, criminal, or administrative proceedings to SAM. Failure to make required disclosures can result in any of the remedies described in §200.338 Remedies for noncompliance, including suspension or debarment. (See also 2 CFR part 180, 31 U.S.C. 3321, and 41 U.S.C. 2313.) [80 FR 43308, July 22, 2015]




Subpart C—Pre-Federal Award Requirements and Contents of Federal Awards §200.200 Purpose.

(a) Sections 200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts through 200.208 Certifications and representations prescribe instructions and other pre-award matters to be used in the announcement and application process.

(b) Use of §§200.203 Notices of funding opportunities, 200.204 Federal awarding agency review of merit of proposals, 200.205 Federal awarding agency review of risk posed by applicants, and 200.207 Specific conditions, is required only for competitive Federal awards, but may also be used by the Federal awarding agency for non-competitive awards where appropriate or where required by Federal statute. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75882, Dec. 19, 2014] §200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts.

(a) The Federal awarding agency or pass-through entity must decide on the appropriate instrument for the Federal award (i.e., grant agreement, cooperative agreement, or contract) in accordance with the Federal Grant and Cooperative Agreement Act (31 U.S.C. 6301-08).

(b) Fixed Amount Awards. In addition to the options described in paragraph (a) of this section, Federal awarding agencies, or pass-through entities as permitted in §200.332 Fixed amount subawards, may use fixed amount awards (see §200.45 Fixed amount awards) to which the following conditions apply:

(1) The Federal award amount is negotiated using the cost principles (or other pricing information) as a guide. The Federal awarding agency or pass-through entity may use fixed amount awards if the project scope is specific and if adequate cost, historical, or unit pricing data is available to establish a fixed amount award based on a reasonable estimate of actual cost. Payments are based on meeting specific requirements of the Federal award. Accountability is based on performance and results. Except in the case of termination before completion of the Federal award, there is no governmental review of the actual costs incurred by the non-Federal entity in performance of the award. Some of the ways in which the Federal award may be paid include, but are not limited to:

(i) In several partial payments, the amount of each agreed upon in advance, and the “milestone” or event triggering the payment also agreed upon in advance, and set forth in the Federal award;

(ii) On a unit price basis, for a defined unit or units, at a defined price or prices, agreed to in advance of performance of the Federal award and set forth in the Federal award; or,

(iii) In one payment at Federal award completion. (2) A fixed amount award cannot be used in programs which require mandatory cost sharing or match. (3) The non-Federal entity must certify in writing to the Federal awarding agency or pass-through entity at the end of

the Federal award that the project or activity was completed or the level of effort was expended. If the required level of activity or effort was not carried out, the amount of the Federal award must be adjusted.

(4) Periodic reports may be established for each Federal award. (5) Changes in principal investigator, project leader, project partner, or scope of effort must receive the prior written

approval of the Federal awarding agency or pass-through entity. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75882, Dec. 19, 2014] §200.202 Requirement to provide public notice of Federal financial assistance programs.

(a) The Federal awarding agency must notify the public of Federal programs in the Catalog of Federal Domestic Assistance (CFDA), maintained by the General Services Administration (GSA).

(1) The CFDA, or any OMB-designated replacement, is the single, authoritative, governmentwide comprehensive source of Federal financial assistance program information produced by the executive branch of the Federal Government.

(2) The information that the Federal awarding agency must submit to GSA for approval by OMB is listed in paragraph (b) of this section. GSA must prescribe the format for the submission.

(3) The Federal awarding agency may not award Federal financial assistance without assigning it to a program that has been included in the CFDA as required in this section unless there are exigent circumstances requiring otherwise, such as timing requirements imposed by statute.

(b) For each program that awards discretionary Federal awards, non-discretionary Federal awards, loans, insurance, or any other type of Federal financial assistance, the Federal awarding agency must submit the following information to GSA:

(1) Program Description, Purpose, Goals and Measurement. A brief summary of the statutory or regulatory requirements of the program and its intended outcome. Where appropriate, the Program Description, Purpose, Goals, and Measurement should align with the strategic goals and objectives within the Federal awarding agency's performance plan and should support the Federal awarding agency's performance measurement, management, and reporting as required by Part 6 of OMB Circular A-11;

(2) Identification of whether the program makes Federal awards on a discretionary basis or the Federal awards are prescribed by Federal statute, such as in the case of formula grants.

(3) Projected total amount of funds available for the program. Estimates based on previous year funding are acceptable if current appropriations are not available at the time of the submission;




(4) Anticipated Source of Available Funds: The statutory authority for funding the program and, to the extent possible, agency, sub-agency, or, if known, the specific program unit that will issue the Federal awards, and associated funding identifier (e.g., Treasury Account Symbol(s));

(5) General Eligibility Requirements: The statutory, regulatory or other eligibility factors or considerations that determine the applicant's qualification for Federal awards under the program (e.g., type of non-Federal entity); and

(6) Applicability of Single Audit Requirements as required by Subpart F—Audit Requirements of this part. §200.203 Notices of funding opportunities.

For competitive grants and cooperative agreements, the Federal awarding agency must announce specific funding opportunities by providing the following information in a public notice:

(a) Summary Information in Notices of Funding Opportunities. The Federal awarding agency must display the following information posted on the OMB-designated governmentwide Web site for finding and applying for Federal financial assistance, in a location preceding the full text of the announcement:

(1) Federal Awarding Agency Name; (2) Funding Opportunity Title; (3) Announcement Type (whether the funding opportunity is the initial announcement of this funding opportunity or a

modification of a previously announced opportunity); (4) Funding Opportunity Number (required, if applicable). If the Federal awarding agency has assigned or will assign a

number to the funding opportunity announcement, this number must be provided; (5) Catalog of Federal Domestic Assistance (CFDA) Number(s); (6) Key Dates. Key dates include due dates for applications or Executive Order 12372 submissions, as well as for any

letters of intent or pre-applications. For any announcement issued before a program's application materials are available, key dates also include the date on which those materials will be released; and any other additional information, as deemed applicable by the relevant Federal awarding agency.

(b) The Federal awarding agency must generally make all funding opportunities available for application for at least 60 calendar days. The Federal awarding agency may make a determination to have a less than 60 calendar day availability period but no funding opportunity should be available for less than 30 calendar days unless exigent circumstances require as determined by the Federal awarding agency head or delegate.

(c) Full Text of Funding Opportunities. The Federal awarding agency must include the following information in the full text of each funding opportunity. For specific instructions on the content required in this section, refer to Appendix I to Part 200—Full Text of Notice of Funding Opportunity to this part.

(1) Full programmatic description of the funding opportunity. (2) Federal award information, including sufficient information to help an applicant make an informed decision about

whether to submit an application. (See also §200.414 Indirect (F&A) costs, paragraph (c)(4)). (3) Specific eligibility information, including any factors or priorities that affect an applicant's or its application's

eligibility for selection. (4) Application Preparation and Submission Information, including the applicable submission dates and time. (5) Application Review Information including the criteria and process to be used to evaluate applications. See also

§§200.204 Federal awarding agency review of merit proposals and 200.205 Federal awarding agency review of risk posed by applicants.

(6) Federal Award Administration Information. See also §200.210 Information contained in a Federal award. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75882, Dec. 19, 2014; 80 FR 43308, July 22, 2015; 80 FR 54408, Sept. 10, 2015] §200.204 Federal awarding agency review of merit of proposals.

For competitive grants or cooperative agreements, unless prohibited by Federal statute, the Federal awarding agency must design and execute a merit review process for applications. This process must be described or incorporated by reference in the applicable funding opportunity (see Appendix I to this part, Full text of the Funding Opportunity.) See also §200.203 Notices of funding opportunities. §200.205 Federal awarding agency review of risk posed by applicants.

(a) Review of OMB-designated repositories of governmentwide data. (1) Prior to making a Federal award, the Federal awarding agency is required by 31 U.S.C. 3321 and 41 U.S.C. 2313 note to review information available through any OMB-designated repositories of governmentwide eligibility qualification or financial integrity information as appropriate. See also suspension and debarment requirements at 2 CFR part 180 as well as individual Federal agency suspension and debarment regulations in title 2 of the Code of Federal Regulations.

(2) In accordance 41 U.S.C. 2313, the Federal awarding agency is required to review the non-public segment of the OMB-designated integrity and performance system accessible through SAM (currently the Federal Awardee Performance and Integrity Information System (FAPIIS)) prior to making a Federal award where the Federal share is expected to exceed the simplified acquisition threshold, defined in 41 U.S.C. 134, over the period of performance. At a minimum, the information in the system for a prior Federal award recipient must demonstrate a satisfactory record of executing programs or activities under Federal grants, cooperative agreements, or procurement awards; and integrity and business ethics. The Federal awarding agency may make a Federal award to a recipient who does not fully meet these standards, if it is determined that the information is not relevant to the current Federal award under consideration or there are specific conditions that can appropriately mitigate the effects of the non-Federal entity's risk in accordance with §200.207 Specific conditions.




(b) In addition, for competitive grants or cooperative agreements, the Federal awarding agency must have in place a framework for evaluating the risks posed by applicants before they receive Federal awards. This evaluation may incorporate results of the evaluation of the applicant's eligibility or the quality of its application. If the Federal awarding agency determines that a Federal award will be made, special conditions that correspond to the degree of risk assessed may be applied to the Federal award. Criteria to be evaluated must be described in the announcement of funding opportunity described in §200.203 Notices of funding opportunities.

(c) In evaluating risks posed by applicants, the Federal awarding agency may use a risk-based approach and may consider any items such as the following:

(1) Financial stability; (2) Quality of management systems and ability to meet the management standards prescribed in this part; (3) History of performance. The applicant's record in managing Federal awards, if it is a prior recipient of Federal

awards, including timeliness of compliance with applicable reporting requirements, conformance to the terms and conditions of previous Federal awards, and if applicable, the extent to which any previously awarded amounts will be expended prior to future awards;

(4) Reports and findings from audits performed under Subpart F—Audit Requirements of this part or the reports and findings of any other available audits; and

(5) The applicant's ability to effectively implement statutory, regulatory, or other requirements imposed on non-Federal entities.

(d) In addition to this review, the Federal awarding agency must comply with the guidelines on governmentwide suspension and debarment in 2 CFR part 180, and must require non-Federal entities to comply with these provisions. These provisions restrict Federal awards, subawards and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal programs or activities. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75882, Dec. 19, 2014; 80 FR 43308, July 22, 2015; 80 FR 69111, Nov. 9, 2015] §200.206 Standard application requirements.

(a) Paperwork clearances. The Federal awarding agency may only use application information collections approved by OMB under the Paperwork Reduction Act of 1995 and OMB's implementing regulations in 5 CFR part 1320, Controlling Paperwork Burdens on the Public. Consistent with these requirements, OMB will authorize additional information collections only on a limited basis.

(b) If applicable, the Federal awarding agency may inform applicants and recipients that they do not need to provide certain information otherwise required by the relevant information collection. §200.207 Specific conditions.

(a) The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed, in accordance with paragraphs (b) and (c) of this section, under the following circumstances:

(1) Based on the criteria set forth in §200.205 Federal awarding agency review of risk posed by applicants; (2) When an applicant or recipient has a history of failure to comply with the general or specific terms and conditions

of a Federal award; (3) When an applicant or recipient fails to meet expected performance goals as described in §200.210 Information

contained in a Federal award; or (4) When an applicant or recipient is not otherwise responsible. (b) These additional Federal award conditions may include items such as the following: (1) Requiring payments as reimbursements rather than advance payments; (2) Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a

given period of performance; (3) Requiring additional, more detailed financial reports; (4) Requiring additional project monitoring; (5) Requiring the non-Federal entity to obtain technical or management assistance; or (6) Establishing additional prior approvals. (c) The Federal awarding agency or pass-through entity must notify the applicant or non-Federal entity as to: (1) The nature of the additional requirements; (2) The reason why the additional requirements are being imposed; (3) The nature of the action needed to remove the additional requirement, if applicable; (4) The time allowed for completing the actions if applicable, and (5) The method for requesting reconsideration of the additional requirements imposed. (d) Any specific conditions must be promptly removed once the conditions that prompted them have been corrected.

[79 FR 75882, Dec. 19, 2014] §200.208 Certifications and representations.

Unless prohibited by Federal statutes or regulations, each Federal awarding agency or pass-through entity is authorized to require the non-Federal entity to submit certifications and representations required by Federal statutes, or regulations on an annual basis. Submission may be required more frequently if the non-Federal entity fails to meet a requirement of a Federal award. §200.209 Pre-award costs.




For requirements on costs incurred by the applicant prior to the start date of the period of performance of the Federal award, see §200.458 Pre-award costs. §200.210 Information contained in a Federal award.

A Federal award must include the following information: (a) General Federal Award Information. The Federal awarding agency must include the following general Federal

award information in each Federal award: (1) Recipient name (which must match the name associated with its unique entity identifier as defined at 2 CFR

25.315); (2) Recipient's unique entity identifier; (3) Unique Federal Award Identification Number (FAIN); (4) Federal Award Date (see §200.39 Federal award date); (5) Period of Performance Start and End Date; (6) Amount of Federal Funds Obligated by this action; (7) Total Amount of Federal Funds Obligated; (8) Total Amount of the Federal Award; (9) Budget Approved by the Federal Awarding Agency; (10) Total Approved Cost Sharing or Matching, where applicable; (11) Federal award project description, (to comply with statutory requirements (e.g., FFATA)); (12) Name of Federal awarding agency and contact information for awarding official, (13) CFDA Number and Name; (14) Identification of whether the award is R&D; and (15) Indirect cost rate for the Federal award (including if the de minimis rate is charged per §200.414 Indirect (F&A)

costs). (b) General Terms and Conditions (1) Federal awarding agencies must incorporate the following general terms and

conditions either in the Federal award or by reference, as applicable: (i) Administrative requirements implemented by the Federal awarding agency as specified in this part. (ii) National policy requirements. These include statutory, executive order, other Presidential directive, or regulatory

requirements that apply by specific reference and are not program-specific. See §200.300 Statutory and national policy requirements.

(iii) Recipient integrity and performance matters. If the total Federal share of the Federal award may include more than $500,000 over the period of performance, the Federal awarding agency must include the term and condition available in Appendix XII—Award Term and Condition for Recipient Integrity and Performance Matters. See also §200.113 Mandatory disclosures.

(2) The Federal award must include wording to incorporate, by reference, the applicable set of general terms and conditions. The reference must be to the Web site at which the Federal awarding agency maintains the general terms and conditions.

(3) If a non-Federal entity requests a copy of the full text of the general terms and conditions, the Federal awarding agency must provide it.

(4) Wherever the general terms and conditions are publicly available, the Federal awarding agency must maintain an archive of previous versions of the general terms and conditions, with effective dates, for use by the non-Federal entity, auditors, or others.

(c) Federal Awarding Agency, Program, or Federal Award Specific Terms and Conditions. The Federal awarding agency may include with each Federal award any terms and conditions necessary to communicate requirements that are in addition to the requirements outlined in the Federal awarding agency's general terms and conditions. Whenever practicable, these specific terms and conditions also should be shared on a public Web site and in notices of funding opportunities (as outlined in §200.203 Notices of funding opportunities) in addition to being included in a Federal award. See also §200.206 Standard application requirements.

(d) Federal Award Performance Goals. The Federal awarding agency must include in the Federal award an indication of the timing and scope of expected performance by the non-Federal entity as related to the outcomes intended to be achieved by the program. In some instances (e.g., discretionary research awards), this may be limited to the requirement to submit technical performance reports (to be evaluated in accordance with Federal awarding agency policy). Where appropriate, the Federal award may include specific performance goals, indicators, milestones, or expected outcomes (such as outputs, or services performed or public impacts of any of these) with an expected timeline for accomplishment. Reporting requirements must be clearly articulated such that, where appropriate, performance during the execution of the Federal award has a standard against which non-Federal entity performance can be measured. The Federal awarding agency may include program-specific requirements, as applicable. These requirements should be aligned with agency strategic goals, strategic objectives or performance goals that are relevant to the program. See also OMB Circular A-11, Preparation, Submission and Execution of the Budget Part 6 for definitions of strategic objectives and performance goals.

(e) Any other information required by the Federal awarding agency. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75882, Dec. 19, 2014; 80 FR 43308, July 22, 2015] §200.211 Public access to Federal award information.

(a) In accordance with statutory requirements for Federal spending transparency (e.g., FFATA), except as noted in this section, for applicable Federal awards the Federal awarding agency must announce all Federal awards publicly and




publish the required information on a publicly available OMB-designated governmentwide Web site (at time of publication, www.USAspending.gov).

(b) All information posted in the designated integrity and performance system accessible through SAM (currently FAPIIS) on or after April 15, 2011 will be publicly available after a waiting period of 14 calendar days, except for:

(1) Past performance reviews required by Federal Government contractors in accordance with the Federal Acquisition Regulation (FAR) 42.15;

(2) Information that was entered prior to April 15, 2011; or (3) Information that is withdrawn during the 14-calendar day waiting period by the Federal Government official. (c) Nothing in this section may be construed as requiring the publication of information otherwise exempt under the

Freedom of Information Act (5 U.S.C 552), or controlled unclassified information pursuant to Executive Order 13556. [78 FR 78608, Dec. 26, 2013, as amended at 80 FR 43309, July 22, 2015] §200.212 Reporting a determination that a non-Federal entity is not qualified for a Federal award.

(a) If a Federal awarding agency does not make a Federal award to a non-Federal entity because the official determines that the non-Federal entity does not meet either or both of the minimum qualification standards as described in §200.205, Federal awarding agency review of risk posed by applicants, paragraph (a)(2), the Federal awarding agency must report that determination to the designated integrity and performance system accessible through SAM (currently FAPIIS), only if all of the following apply:

(1) The only basis for the determination described in paragraph (a) of this section is the non-Federal entity's prior record of executing programs or activities under Federal awards or its record of integrity and business ethics, as described in §200.205 Federal awarding agency review of risk posed by applicants, paragraph (a)(2) (i.e., the entity was determined to be qualified based on all factors other than those two standards), and

(2) The total Federal share of the Federal award that otherwise would be made to the non-Federal entity is expected to exceed the simplified acquisition threshold over the period of performance.

(b) The Federal awarding agency is not required to report a determination that a non-Federal entity is not qualified for a Federal award if they make the Federal award to the non-Federal entity and includes specific award terms and conditions, as described in §200.207 Specific conditions.

(c) If a Federal awarding agency reports a determination that a non-Federal entity is not qualified for a Federal award, as described in paragraph (a) of this section, the Federal awarding agency also must notify the non-Federal entity that—

(1) The determination was made and reported to the designated integrity and performance system accessible through SAM, and include with the notification an explanation of the basis for the determination;

(2) The information will be kept in the system for a period of five years from the date of the determination, as required by section 872 of Public Law 110-417, as amended (41 U.S.C. 2313), then archived;

(3) Each Federal awarding agency that considers making a Federal award to the non-Federal entity during that five year period must consider that information in judging whether the non-Federal entity is qualified to receive the Federal award when the total Federal share of the Federal award is expected to include an amount of Federal funding in excess of the simplified acquisition threshold over the period of performance;

(4) The non-Federal entity may go to the awardee integrity and performance portal accessible through SAM (currently the Contractor Performance Assessment Reporting System (CPARS)) and comment on any information the system contains about the non-Federal entity itself; and

(5) Federal awarding agencies will consider that non-Federal entity's comments in determining whether the non-Federal entity is qualified for a future Federal award.

(d) If a Federal awarding agency enters information into the designated integrity and performance system accessible through SAM about a determination that a non-Federal entity is not qualified for a Federal award and subsequently:

(1) Learns that any of that information is erroneous, the Federal awarding agency must correct the information in the system within three business days;

(2) Obtains an update to that information that could be helpful to other Federal awarding agencies, the Federal awarding agency is strongly encouraged to amend the information in the system to incorporate the update in a timely way.

(e) Federal awarding agencies shall not post any information that will be made publicly available in the non-public segment of designated integrity and performance system that is covered by a disclosure exemption under the Freedom of Information Act. If the recipient asserts within seven calendar days to the Federal awarding agency that posted the information that some or all of the information made publicly available is covered by a disclosure exemption under the Freedom of Information Act, the Federal awarding agency that posted the information must remove the posting within seven calendar days of receiving the assertion. Prior to reposting the releasable information, the Federal awarding agency must resolve the issue in accordance with the agency's Freedom of Information Act procedures. [80 FR 43309, July 22, 2015] §200.213 Suspension and debarment.

Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. [80 FR 43309, July 22, 2015] Subpart D—Post Federal Award Requirements STANDARDS FOR FINANCIAL AND PROGRAM MANAGEMENT




§200.300 Statutory and national policy requirements.

(a) The Federal awarding agency must manage and administer the Federal award in a manner so as to ensure that Federal funding is expended and associated programs are implemented in full accordance with U.S. statutory and public policy requirements: including, but not limited to, those protecting public welfare, the environment, and prohibiting discrimination. The Federal awarding agency must communicate to the non-Federal entity all relevant public policy requirements, including those in general appropriations provisions, and incorporate them either directly or by reference in the terms and conditions of the Federal award.

(b) The non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. See also statutory requirements for whistleblower protections at 10 U.S.C. 2409, 41 U.S.C. 4712, and 10 U.S.C. 2324, 41 U.S.C. 4304 and 4310. [78 FR 78608, Dec. 26, 2013, as amended at 80 FR 43309, July 22, 2015] §200.301 Performance measurement.

The Federal awarding agency must require the recipient to use OMB-approved standard information collections when providing financial and performance information. As appropriate and in accordance with above mentioned information collections, the Federal awarding agency must require the recipient to relate financial data to performance accomplishments of the Federal award. Also, in accordance with above mentioned standard information collections, and when applicable, recipients must also provide cost information to demonstrate cost effective practices (e.g., through unit cost data). The recipient's performance should be measured in a way that will help the Federal awarding agency and other non-Federal entities to improve program outcomes, share lessons learned, and spread the adoption of promising practices. The Federal awarding agency should provide recipients with clear performance goals, indicators, and milestones as described in §200.210 Information contained in a Federal award. Performance reporting frequency and content should be established to not only allow the Federal awarding agency to understand the recipient progress but also to facilitate identification of promising practices among recipients and build the evidence upon which the Federal awarding agency's program and performance decisions are made. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75883, Dec. 19, 2014] §200.302 Financial management.

(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. See also §200.450 Lobbying.

(b) The financial management system of each non-Federal entity must provide for the following (see also §§200.333 Retention requirements for records, 200.334 Requests for transfer of records, 200.335 Methods for collection, transmission and storage of information, 200.336 Access to records, and 200.337 Restrictions on public access to records):

(1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the CFDA title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any.

(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§200.327 Financial reporting and 200.328 Monitoring and reporting program performance. If a Federal awarding agency requires reporting on an accrual basis from a recipient that maintains its records on other than an accrual basis, the recipient must not be required to establish an accrual accounting system. This recipient may develop accrual data for its reports on the basis of an analysis of the documentation on hand. Similarly, a pass-through entity must not require a subrecipient to establish an accrual accounting system and must allow the subrecipient to develop accrual data for its reports on the basis of an analysis of the documentation on hand.

(3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.

(4) Effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. See §200.303 Internal controls.

(5) Comparison of expenditures with budget amounts for each Federal award. (6) Written procedures to implement the requirements of §200.305 Payment. (7) Written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this

part and the terms and conditions of the Federal award. §200.303 Internal controls.

The non-Federal entity must:




(a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

(b) Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions

of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit

findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the

Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75883, Dec. 19, 2014] §200.304 Bonds.

The Federal awarding agency may include a provision on bonding, insurance, or both in the following circumstances: (a) Where the Federal Government guarantees or insures the repayment of money borrowed by the recipient, the

Federal awarding agency, at its discretion, may require adequate bonding and insurance if the bonding and insurance requirements of the non-Federal entity are not deemed adequate to protect the interest of the Federal Government.

(b) The Federal awarding agency may require adequate fidelity bond coverage where the non-Federal entity lacks sufficient coverage to protect the Federal Government's interest.

(c) Where bonds are required in the situations described above, the bonds must be obtained from companies holding certificates of authority as acceptable sureties, as prescribed in 31 CFR Part 223, “Surety Companies Doing Business with the United States.” §200.305 Payment.

(a) For states, payments are governed by Treasury-State CMIA agreements and default procedures codified at 31 CFR Part 205 “Rules and Procedures for Efficient Federal-State Funds Transfers” and TFM 4A-2000 Overall Disbursing Rules for All Federal Agencies.

(b) For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. See also §200.302 Financial management paragraph (b)(6). Except as noted elsewhere in this part, Federal agencies must require recipients to use only OMB-approved standard governmentwide information collection requests to request payment.

(1) The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.

(2) Whenever possible, advance payments must be consolidated to cover anticipated cash needs for all Federal awards made by the Federal awarding agency to the recipient.

(i) Advance payment mechanisms include, but are not limited to, Treasury check and electronic funds transfer and must comply with applicable guidance in 31 CFR part 208.

(ii) Non-Federal entities must be authorized to submit requests for advance payments and reimbursements at least monthly when electronic fund transfers are not used, and as often as they like when electronic transfers are used, in accordance with the provisions of the Electronic Fund Transfer Act (15 U.S.C. 1693-1693r).

(3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per §200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. This method may be used on any Federal award for construction, or if the major portion of the construction project is accomplished through private market financing or Federal loans, and the Federal award constitutes a minor portion of the project. When the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper.

(4) If the non-Federal entity cannot meet the criteria for advance payments and the Federal awarding agency or pass-through entity has determined that reimbursement is not feasible because the non-Federal entity lacks sufficient working capital, the Federal awarding agency or pass-through entity may provide cash on a working capital advance basis. Under this procedure, the Federal awarding agency or pass-through entity must advance cash payments to the non-Federal entity to cover its estimated disbursement needs for an initial period generally geared to the non-Federal entity's disbursing cycle. Thereafter, the Federal awarding agency or pass-through entity must reimburse the non-Federal entity for its actual cash disbursements. Use of the working capital advance method of payment requires that the pass-through entity provide timely




advance payments to any subrecipients in order to meet the subrecipient's actual cash disbursements. The working capital advance method of payment must not be used by the pass-through entity if the reason for using this method is the unwillingness or inability of the pass-through entity to provide timely advance payments to the subrecipient to meet the subrecipient's actual cash disbursements.

(5) Use of resources before requesting cash advance payments. To the extent available, the non-Federal entity must disburse funds available from program income (including repayments to a revolving fund), rebates, refunds, contract settlements, audit recoveries, and interest earned on such funds before requesting additional cash payments.

(6) Unless otherwise required by Federal statutes, payments for allowable costs by non-Federal entities must not be withheld at any time during the period of performance unless the conditions of §§200.207 Specific conditions, Subpart D—Post Federal Award Requirements of this part, 200.338 Remedies for Noncompliance, or one or more of the following applies:

(i) The non-Federal entity has failed to comply with the project objectives, Federal statutes, regulations, or the terms and conditions of the Federal award.

(ii) The non-Federal entity is delinquent in a debt to the United States as defined in OMB Guidance A-129, “Policies for Federal Credit Programs and Non-Tax Receivables.” Under such conditions, the Federal awarding agency or pass-through entity may, upon reasonable notice, inform the non-Federal entity that payments must not be made for obligations incurred after a specified date until the conditions are corrected or the indebtedness to the Federal Government is liquidated.

(iii) A payment withheld for failure to comply with Federal award conditions, but without suspension of the Federal award, must be released to the non-Federal entity upon subsequent compliance. When a Federal award is suspended, payment adjustments will be made in accordance with §200.342 Effects of suspension and termination.

(iv) A payment must not be made to a non-Federal entity for amounts that are withheld by the non-Federal entity from payment to contractors to assure satisfactory completion of work. A payment must be made when the non-Federal entity actually disburses the withheld funds to the contractors or to escrow accounts established to assure satisfactory completion of work.

(7) Standards governing the use of banks and other institutions as depositories of advance payments under Federal awards are as follows.

(i) The Federal awarding agency and pass-through entity must not require separate depository accounts for funds provided to a non-Federal entity or establish any eligibility requirements for depositories for funds provided to the non-Federal entity. However, the non-Federal entity must be able to account for the receipt, obligation and expenditure of funds.

(ii) Advance payments of Federal funds must be deposited and maintained in insured accounts whenever possible. (8) The non-Federal entity must maintain advance payments of Federal awards in interest-bearing accounts, unless

the following apply. (i) The non-Federal entity receives less than $120,000 in Federal awards per year. (ii) The best reasonably available interest-bearing account would not be expected to earn interest in excess of $500

per year on Federal cash balances. (iii) The depository would require an average or minimum balance so high that it would not be feasible within the

expected Federal and non-Federal cash resources. (iv) A foreign government or banking system prohibits or precludes interest bearing accounts. (9) Interest earned amounts up to $500 per year may be retained by the non-Federal entity for administrative

expense. Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the Department of Health and Human Services Payment Management System (PMS) through an electronic medium using either Automated Clearing House (ACH) network or a Fedwire Funds Service payment. Remittances must include pertinent information of the payee and nature of payment in the memo area (often referred to as “addenda records” by Financial Institutions) as that will assist in the timely posting of interest earned on federal funds. Pertinent details include the Payee Account Number (PAN) if the payment originated from PMS, or Agency information if the payment originated from ASAP, NSF or another federal agency payment system. The remittance must be submitted as follows:

(i) For ACH Returns: Routing Number: 051036706 Account number: 303000 Bank Name and Location: Credit Gateway—ACH Receiver St. Paul, MN

(ii) For Fedwire Returns*: Routing Number: 021030004 Account number: 75010501 Bank Name and Location: Federal Reserve Bank Treas NYC/Funds Transfer Division New York, NY (* Please note organization initiating payment is likely to incur a charge from your Financial Institution for this type of payment)

(iii) For International ACH Returns: Beneficiary Account: Federal Reserve Bank of New York/ITS (FRBNY/ITS) Bank: Citibank N.A. (New York) Swift Code: CITIUS33 Account Number: 36838868 Bank Address: 388 Greenwich Street, New York, NY 10013 USA Payment Details (Line 70): Agency Name (abbreviated when possible) and ALC Agency POC: Michelle Haney, (301) 492-5065




(iv) For recipients that do not have electronic remittance capability, please make check** payable to: “The Department of Health and Human Services.”

Mail Check to Treasury approved lockbox: HHS Program Support Center, P.O. Box 530231, Atlanta, GA 30353-0231 (** Please allow 4-6 weeks for processing of a payment by check to be applied to the appropriate PMS account)

(v) Any additional information/instructions may be found on the PMS Web site at http://www.dpm.psc.gov/. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75883, Dec. 19, 2014; 80 FR 54408, Sept. 10, 2015] §200.306 Cost sharing or matching.

(a) Under Federal research proposals, voluntary committed cost sharing is not expected. It cannot be used as a factor during the merit review of applications or proposals, but may be considered if it is both in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity. Criteria for considering voluntary committed cost sharing and any other program policy factors that may be used to determine who may receive a Federal award must be explicitly described in the notice of funding opportunity. See also §§200.414 Indirect (F&A) costs, 200.203 Notices of funding opportunities, and Appendix I to Part 200—Full Text of Notice of Funding Opportunity.

(b) For all Federal awards, any shared costs or matching funds and all contributions, including cash and third party in-kind contributions, must be accepted as part of the non-Federal entity's cost sharing or matching when such contributions meet all of the following criteria:

(1) Are verifiable from the non-Federal entity's records; (2) Are not included as contributions for any other Federal award; (3) Are necessary and reasonable for accomplishment of project or program objectives; (4) Are allowable under Subpart E—Cost Principles of this part; (5) Are not paid by the Federal Government under another Federal award, except where the Federal statute

authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs;

(6) Are provided for in the approved budget when required by the Federal awarding agency; and (7) Conform to other provisions of this part, as applicable. (c) Unrecovered indirect costs, including indirect costs on cost sharing or matching may be included as part of cost

sharing or matching only with the prior approval of the Federal awarding agency. Unrecovered indirect cost means the difference between the amount charged to the Federal award and the amount which could have been charged to the Federal award under the non-Federal entity's approved negotiated indirect cost rate.

(d) Values for non-Federal entity contributions of services and property must be established in accordance with the cost principles in Subpart E—Cost Principles. If a Federal awarding agency authorizes the non-Federal entity to donate buildings or land for construction/facilities acquisition projects or long-term use, the value of the donated property for cost sharing or matching must be the lesser of paragraphs (d)(1) or (2) of this section.

(1) The value of the remaining life of the property recorded in the non-Federal entity's accounting records at the time of donation.

(2) The current fair market value. However, when there is sufficient justification, the Federal awarding agency may approve the use of the current fair market value of the donated property, even if it exceeds the value described in (1) above at the time of donation.

(e) Volunteer services furnished by third-party professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part of an approved project or program. Rates for third-party volunteer services must be consistent with those paid for similar work by the non-Federal entity. In those instances in which the required skills are not found in the non-Federal entity, rates must be consistent with those paid for similar work in the labor market in which the non-Federal entity competes for the kind of services involved. In either case, paid fringe benefits that are reasonable, necessary, allocable, and otherwise allowable may be included in the valuation.

(f) When a third-party organization furnishes the services of an employee, these services must be valued at the employee's regular rate of pay plus an amount of fringe benefits that is reasonable, necessary, allocable, and otherwise allowable, and indirect costs at either the third-party organization's approved federally negotiated indirect cost rate or, a rate in accordance with §200.414 Indirect (F&A) costs, paragraph (d), provided these services employ the same skill(s) for which the employee is normally paid. Where donated services are treated as indirect costs, indirect cost rates will separate the value of the donated services so that reimbursement for the donated services will not be made.

(g) Donated property from third parties may include such items as equipment, office supplies, laboratory supplies, or workshop and classroom supplies. Value assessed to donated property included in the cost sharing or matching share must not exceed the fair market value of the property at the time of the donation.

(h) The method used for determining cost sharing or matching for third-party-donated equipment, buildings and land for which title passes to the non-Federal entity may differ according to the purpose of the Federal award, if paragraph (h)(1) or (2) of this section applies.

(1) If the purpose of the Federal award is to assist the non-Federal entity in the acquisition of equipment, buildings or land, the aggregate value of the donated property may be claimed as cost sharing or matching.

(2) If the purpose of the Federal award is to support activities that require the use of equipment, buildings or land, normally only depreciation charges for equipment and buildings may be made. However, the fair market value of equipment or other capital assets and fair rental charges for land may be allowed, provided that the Federal awarding agency has approved the charges. See also §200.420 Considerations for selected items of cost.




(i) The value of donated property must be determined in accordance with the usual accounting policies of the non-Federal entity, with the following qualifications:

(1) The value of donated land and buildings must not exceed its fair market value at the time of donation to the non-Federal entity as established by an independent appraiser (e.g., certified real property appraiser or General Services Administration representative) and certified by a responsible official of the non-Federal entity as required by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, (42 U.S.C. 4601-4655) (Uniform Act) except as provided in the implementing regulations at 49 CFR part 24.

(2) The value of donated equipment must not exceed the fair market value of equipment of the same age and condition at the time of donation.

(3) The value of donated space must not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality.

(4) The value of loaned equipment must not exceed its fair rental value. (j) For third-party in-kind contributions, the fair market value of goods and services must be documented and to the

extent feasible supported by the same methods used internally by the non-Federal entity. (k) For IHEs, see also OMB memorandum M-01-06, dated January 5, 2001, Clarification of OMB A-21 Treatment of

Voluntary Uncommitted Cost Sharing and Tuition Remission Costs. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75883, Dec. 19, 2014] §200.307 Program income.

(a) General. Non-Federal entities are encouraged to earn income to defray program costs where appropriate. (b) Cost of generating program income. If authorized by Federal regulations or the Federal award, costs incidental to

the generation of program income may be deducted from gross income to determine program income, provided these costs have not been charged to the Federal award.

(c) Governmental revenues. Taxes, special assessments, levies, fines, and other such revenues raised by a non-Federal entity are not program income unless the revenues are specifically identified in the Federal award or Federal awarding agency regulations as program income.

(d) Property. Proceeds from the sale of real property, equipment, or supplies are not program income; such proceeds will be handled in accordance with the requirements of Subpart D—Post Federal Award Requirements of this part, Property Standards §§200.311 Real property, 200.313 Equipment, and 200.314 Supplies, or as specifically identified in Federal statutes, regulations, or the terms and conditions of the Federal award.

(e) Use of program income. If the Federal awarding agency does not specify in its regulations or the terms and conditions of the Federal award, or give prior approval for how program income is to be used, paragraph (e)(1) of this section must apply. For Federal awards made to IHEs and nonprofit research institutions, if the Federal awarding agency does not specify in its regulations or the terms and conditions of the Federal award how program income is to be used, paragraph (e)(2) of this section must apply. In specifying alternatives to paragraphs (e)(1) and (2) of this section, the Federal awarding agency may distinguish between income earned by the recipient and income earned by subrecipients and between the sources, kinds, or amounts of income. When the Federal awarding agency authorizes the approaches in paragraphs (e)(2) and (3) of this section, program income in excess of any amounts specified must also be deducted from expenditures.

(1) Deduction. Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project.

(2) Addition. With prior approval of the Federal awarding agency (except for IHEs and nonprofit research institutions, as described in paragraph (e) of this section) program income may be added to the Federal award by the Federal agency and the non-Federal entity. The program income must be used for the purposes and under the conditions of the Federal award.

(3) Cost sharing or matching. With prior approval of the Federal awarding agency, program income may be used to meet the cost sharing or matching requirement of the Federal award. The amount of the Federal award remains the same.

(f) Income after the period of performance. There are no Federal requirements governing the disposition of income earned after the end of the period of performance for the Federal award, unless the Federal awarding agency regulations or the terms and conditions of the Federal award provide otherwise. The Federal awarding agency may negotiate agreements with recipients regarding appropriate uses of income earned after the period of performance as part of the grant closeout process. See also §200.343 Closeout.

(g) Unless the Federal statute, regulations, or terms and conditions for the Federal award provide otherwise, the non-Federal entity has no obligation to the Federal awarding agency with respect to program income earned from license fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions made under a Federal award to which 37 CFR part 401,“Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Awards, Contracts and Cooperative Agreements” is applicable. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75884, Dec. 19, 2014] §200.308 Revision of budget and program plans.

(a) The approved budget for the Federal award summarizes the financial aspects of the project or program as approved during the Federal award process. It may include either the Federal and non-Federal share (see §200.43 Federal share) or only the Federal share, depending upon Federal awarding agency requirements. It must be related to performance for program evaluation purposes whenever appropriate.




(b) Recipients are required to report deviations from budget or project scope or objective, and request prior approvals from Federal awarding agencies for budget and program plan revisions, in accordance with this section.

(c)(1) For non-construction Federal awards, recipients must request prior approvals from Federal awarding agencies for one or more of the following program or budget-related reasons:

(i) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).

(ii) Change in a key person specified in the application or the Federal award. (iii) The disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the

project, by the approved project director or principal investigator. (iv) The inclusion, unless waived by the Federal awarding agency, of costs that require prior approval in accordance

with Subpart E—Cost Principles of this part or 45 CFR part 75 Appendix IX, “Principles for Determining Costs Applicable to Research and Development under Awards and Contracts with Hospitals,” or 48 CFR part 31, “Contract Cost Principles and Procedures,” as applicable.

(v) The transfer of funds budgeted for participant support costs as defined in §200.75 Participant support costs to other categories of expense.

(vi) Unless described in the application and funded in the approved Federal awards, the subawarding, transferring or contracting out of any work under a Federal award, including fixed amount subawards as described in §200.332 Fixed amount subawards. This provision does not apply to the acquisition of supplies, material, equipment or general support services.

(vii) Changes in the approved cost-sharing or matching provided by the non-Federal entity. (viii) The need arises for additional Federal funds to complete the project. (2) No other prior approval requirements for specific items may be imposed unless an exception has been approved

by OMB. See also §§200.102 Exceptions and 200.407 Prior written approval (prior approval). (d) Except for requirements listed in paragraph (c)(1) of this section, the Federal awarding agency is authorized, at its

option, to waive prior written approvals required by paragraph (c) this section. Such waivers may include authorizing recipients to do any one or more of the following:

(1) Incur project costs 90 calendar days before the Federal awarding agency makes the Federal award. Expenses more than 90 calendar days pre-award require prior approval of the Federal awarding agency. All costs incurred before the Federal awarding agency makes the Federal award are at the recipient's risk (i.e., the Federal awarding agency is under no obligation to reimburse such costs if for any reason the recipient does not receive a Federal award or if the Federal award is less than anticipated and inadequate to cover such costs). See also §200.458 Pre-award costs.

(2) Initiate a one-time extension of the period of performance by up to 12 months unless one or more of the conditions outlined in paragraphs (d)(2)(i) through (iii) of this section apply. For one-time extensions, the recipient must notify the Federal awarding agency in writing with the supporting reasons and revised period of performance at least 10 calendar days before the end of the period of performance specified in the Federal award. This one-time extension may not be exercised merely for the purpose of using unobligated balances. Extensions require explicit prior Federal awarding agency approval when:

(i) The terms and conditions of the Federal award prohibit the extension. (ii) The extension requires additional Federal funds. (iii) The extension involves any change in the approved objectives or scope of the project. (3) Carry forward unobligated balances to subsequent periods of performance. (4) For Federal awards that support research, unless the Federal awarding agency provides otherwise in the Federal

award or in the Federal awarding agency's regulations, the prior approval requirements described in paragraph (d) are automatically waived (i.e., recipients need not obtain such prior approvals) unless one of the conditions included in paragraph (d)(2) applies.

(e) The Federal awarding agency may, at its option, restrict the transfer of funds among direct cost categories or programs, functions and activities for Federal awards in which the Federal share of the project exceeds the Simplified Acquisition Threshold and the cumulative amount of such transfers exceeds or is expected to exceed 10 percent of the total budget as last approved by the Federal awarding agency. The Federal awarding agency cannot permit a transfer that would cause any Federal appropriation to be used for purposes other than those consistent with the appropriation.

(f) All other changes to non-construction budgets, except for the changes described in paragraph (c) of this section, do not require prior approval (see also §200.407 Prior written approval (prior approval)).

(g) For construction Federal awards, the recipient must request prior written approval promptly from the Federal awarding agency for budget revisions whenever paragraph (g)(1), (2), or (3) of this section applies.

(1) The revision results from changes in the scope or the objective of the project or program. (2) The need arises for additional Federal funds to complete the project. (3) A revision is desired which involves specific costs for which prior written approval requirements may be imposed

consistent with applicable OMB cost principles listed in Subpart E—Cost Principles of this part. (4) No other prior approval requirements for budget revisions may be imposed unless an exception has been

approved by OMB. (5) When a Federal awarding agency makes a Federal award that provides support for construction and non-

construction work, the Federal awarding agency may require the recipient to obtain prior approval from the Federal awarding agency before making any fund or budget transfers between the two types of work supported.

(h) When requesting approval for budget revisions, the recipient must use the same format for budget information that was used in the application, unless the Federal awarding agency indicates a letter of request suffices.




(i) Within 30 calendar days from the date of receipt of the request for budget revisions, the Federal awarding agency must review the request and notify the recipient whether the budget revisions have been approved. If the revision is still under consideration at the end of 30 calendar days, the Federal awarding agency must inform the recipient in writing of the date when the recipient may expect the decision. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75884, Dec. 19, 2014; 80 FR 54409, Sept. 10, 2015] §200.309 Period of performance.

A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in §200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75884, Dec. 19, 2014] PROPERTY STANDARDS §200.310 Insurance coverage.

The non-Federal entity must, at a minimum, provide the equivalent insurance coverage for real property and equipment acquired or improved with Federal funds as provided to property owned by the non-Federal entity. Federally-owned property need not be insured unless required by the terms and conditions of the Federal award. §200.311 Real property.

(a) Title. Subject to the obligations and conditions set forth in this section, title to real property acquired or improved under a Federal award will vest upon acquisition in the non-Federal entity.

(b) Use. Except as otherwise provided by Federal statutes or by the Federal awarding agency, real property will be used for the originally authorized purpose as long as needed for that purpose, during which time the non-Federal entity must not dispose of or encumber its title or other interests.

(c) Disposition. When real property is no longer needed for the originally authorized purpose, the non-Federal entity must obtain disposition instructions from the Federal awarding agency or pass-through entity. The instructions must provide for one of the following alternatives:

(1) Retain title after compensating the Federal awarding agency. The amount paid to the Federal awarding agency will be computed by applying the Federal awarding agency's percentage of participation in the cost of the original purchase (and costs of any improvements) to the fair market value of the property. However, in those situations where the non-Federal entity is disposing of real property acquired or improved with a Federal award and acquiring replacement real property under the same Federal award, the net proceeds from the disposition may be used as an offset to the cost of the replacement property.

(2) Sell the property and compensate the Federal awarding agency. The amount due to the Federal awarding agency will be calculated by applying the Federal awarding agency's percentage of participation in the cost of the original purchase (and cost of any improvements) to the proceeds of the sale after deduction of any actual and reasonable selling and fixing-up expenses. If the Federal award has not been closed out, the net proceeds from sale may be offset against the original cost of the property. When the non-Federal entity is directed to sell property, sales procedures must be followed that provide for competition to the extent practicable and result in the highest possible return.

(3) Transfer title to the Federal awarding agency or to a third party designated/approved by the Federal awarding agency. The non-Federal entity is entitled to be paid an amount calculated by applying the non-Federal entity's percentage of participation in the purchase of the real property (and cost of any improvements) to the current fair market value of the property. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75884, Dec. 19, 2014] §200.312 Federally-owned and exempt property.

(a) Title to federally-owned property remains vested in the Federal Government. The non-Federal entity must submit annually an inventory listing of federally-owned property in its custody to the Federal awarding agency. Upon completion of the Federal award or when the property is no longer needed, the non-Federal entity must report the property to the Federal awarding agency for further Federal agency utilization.

(b) If the Federal awarding agency has no further need for the property, it must declare the property excess and report it for disposal to the appropriate Federal disposal authority, unless the Federal awarding agency has statutory authority to dispose of the property by alternative methods (e.g., the authority provided by the Federal Technology Transfer Act (15 U.S.C. 3710 (i)) to donate research equipment to educational and non-profit organizations in accordance with Executive Order 12999, “Educational Technology: Ensuring Opportunity for All Children in the Next Century.”). The Federal awarding agency must issue appropriate instructions to the non-Federal entity.

(c) Exempt federally-owned property means property acquired under a Federal award where the Federal awarding agency has chosen to vest title to the property to the non-Federal entity without further obligation to the Federal Government, based upon the explicit terms and conditions of the Federal award. The Federal awarding agency may exercise this option when statutory authority exists. Absent statutory authority and specific terms and conditions of the Federal award, title to exempt federally-owned property acquired under the Federal award remains with the Federal Government. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75884, Dec. 19, 2014] §200.313 Equipment.

See also §200.439 Equipment and other capital expenditures.




(a) Title. Subject to the obligations and conditions set forth in this section, title to equipment acquired under a Federal award will vest upon acquisition in the non-Federal entity. Unless a statute specifically authorizes the Federal agency to vest title in the non-Federal entity without further obligation to the Federal Government, and the Federal agency elects to do so, the title must be a conditional title. Title must vest in the non-Federal entity subject to the following conditions:

(1) Use the equipment for the authorized purposes of the project during the period of performance, or until the property is no longer needed for the purposes of the project.

(2) Not encumber the property without approval of the Federal awarding agency or pass-through entity. (3) Use and dispose of the property in accordance with paragraphs (b), (c) and (e) of this section. (b) A state must use, manage and dispose of equipment acquired under a Federal award by the state in accordance

with state laws and procedures. Other non-Federal entities must follow paragraphs (c) through (e) of this section. (c) Use. (1) Equipment must be used by the non-Federal entity in the program or project for which it was acquired as

long as needed, whether or not the project or program continues to be supported by the Federal award, and the non-Federal entity must not encumber the property without prior approval of the Federal awarding agency. When no longer needed for the original program or project, the equipment may be used in other activities supported by the Federal awarding agency, in the following order of priority:

(i) Activities under a Federal award from the Federal awarding agency which funded the original program or project, then

(ii) Activities under Federal awards from other Federal awarding agencies. This includes consolidated equipment for information technology systems.

(2) During the time that equipment is used on the project or program for which it was acquired, the non-Federal entity must also make equipment available for use on other projects or programs currently or previously supported by the Federal Government, provided that such use will not interfere with the work on the projects or program for which it was originally acquired. First preference for other use must be given to other programs or projects supported by Federal awarding agency that financed the equipment and second preference must be given to programs or projects under Federal awards from other Federal awarding agencies. Use for non-federally-funded programs or projects is also permissible. User fees should be considered if appropriate.

(3) Notwithstanding the encouragement in §200.307 Program income to earn program income, the non-Federal entity must not use equipment acquired with the Federal award to provide services for a fee that is less than private companies charge for equivalent services unless specifically authorized by Federal statute for as long as the Federal Government retains an interest in the equipment.

(4) When acquiring replacement equipment, the non-Federal entity may use the equipment to be replaced as a trade-in or sell the property and use the proceeds to offset the cost of the replacement property.

(d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements:

(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property.

(2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.

(3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated.

(4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established

to ensure the highest possible return. (e) Disposition. When original or replacement equipment acquired under a Federal award is no longer needed for the

original project or program or for other activities currently or previously supported by a Federal awarding agency, except as otherwise provided in Federal statutes, regulations, or Federal awarding agency disposition instructions, the non-Federal entity must request disposition instructions from the Federal awarding agency if required by the terms and conditions of the Federal award. Disposition of the equipment will be made as follows, in accordance with Federal awarding agency disposition instructions:

(1) Items of equipment with a current per unit fair market value of $5,000 or less may be retained, sold or otherwise disposed of with no further obligation to the Federal awarding agency.

(2) Except as provided in §200.312 Federally-owned and exempt property, paragraph (b), or if the Federal awarding agency fails to provide requested disposition instructions within 120 days, items of equipment with a current per-unit fair-market value in excess of $5,000 may be retained by the non-Federal entity or sold. The Federal awarding agency is entitled to an amount calculated by multiplying the current market value or proceeds from sale by the Federal awarding agency's percentage of participation in the cost of the original purchase. If the equipment is sold, the Federal awarding agency may permit the non-Federal entity to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for its selling and handling expenses.

(3) The non-Federal entity may transfer title to the property to the Federal Government or to an eligible third party provided that, in such cases, the non-Federal entity must be entitled to compensation for its attributable percentage of the current fair market value of the property.




(4) In cases where a non-Federal entity fails to take appropriate disposition actions, the Federal awarding agency may direct the non-Federal entity to take disposition actions. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75884, Dec. 19, 2014] §200.314 Supplies.

See also §200.453 Materials and supplies costs, including costs of computing devices. (a) Title to supplies will vest in the non-Federal entity upon acquisition. If there is a residual inventory of unused

supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other Federal award, the non-Federal entity must retain the supplies for use on other activities or sell them, but must, in either case, compensate the Federal Government for its share. The amount of compensation must be computed in the same manner as for equipment. See §200.313 Equipment, paragraph (e)(2) for the calculation methodology.

(b) As long as the Federal Government retains an interest in the supplies, the non-Federal entity must not use supplies acquired under a Federal award to provide services to other organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute. §200.315 Intangible property.

(a) Title to intangible property (see §200.59 Intangible property) acquired under a Federal award vests upon acquisition in the non-Federal entity. The non-Federal entity must use that property for the originally-authorized purpose, and must not encumber the property without approval of the Federal awarding agency. When no longer needed for the originally authorized purpose, disposition of the intangible property must occur in accordance with the provisions in §200.313 Equipment paragraph (e).

(b) The non-Federal entity may copyright any work that is subject to copyright and was developed, or for which ownership was acquired, under a Federal award. The Federal awarding agency reserves a royalty-free, nonexclusive and irrevocable right to reproduce, publish, or otherwise use the work for Federal purposes, and to authorize others to do so.

(c) The non-Federal entity is subject to applicable regulations governing patents and inventions, including governmentwide regulations issued by the Department of Commerce at 37 CFR Part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Awards, Contracts and Cooperative Agreements.”

(d) The Federal Government has the right to: (1) Obtain, reproduce, publish, or otherwise use the data produced under a Federal award; and (2) Authorize others to receive, reproduce, publish, or otherwise use such data for Federal purposes. (e) Freedom of Information Act (FOIA). (1) In response to a Freedom of Information Act (FOIA) request for research data relating to published research

findings produced under a Federal award that were used by the Federal Government in developing an agency action that has the force and effect of law, the Federal awarding agency must request, and the non-Federal entity must provide, within a reasonable time, the research data so that they can be made available to the public through the procedures established under the FOIA. If the Federal awarding agency obtains the research data solely in response to a FOIA request, the Federal awarding agency may charge the requester a reasonable fee equaling the full incremental cost of obtaining the research data. This fee should reflect costs incurred by the Federal agency and the non-Federal entity. This fee is in addition to any fees the Federal awarding agency may assess under the FOIA (5 U.S.C. 552(a)(4)(A)).

(2) Published research findings means when: (i) Research findings are published in a peer-reviewed scientific or technical journal; or (ii) A Federal agency publicly and officially cites the research findings in support of an agency action that has the force

and effect of law. “Used by the Federal Government in developing an agency action that has the force and effect of law” is defined as when an agency publicly and officially cites the research findings in support of an agency action that has the force and effect of law.

(3) Research data means the recorded factual material commonly accepted in the scientific community as necessary to validate research findings, but not any of the following: preliminary analyses, drafts of scientific papers, plans for future research, peer reviews, or communications with colleagues. This “recorded” material excludes physical objects (e.g., laboratory samples). Research data also do not include:

(i) Trade secrets, commercial information, materials necessary to be held confidential by a researcher until they are published, or similar information which is protected under law; and

(ii) Personnel and medical information and similar information the disclosure of which would constitute a clearly unwarranted invasion of personal privacy, such as information that could be used to identify a particular person in a research study. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75884, Dec. 19, 2014] §200.316 Property trust relationship.

Real property, equipment, and intangible property, that are acquired or improved with a Federal award must be held in trust by the non-Federal entity as trustee for the beneficiaries of the project or program under which the property was acquired or improved. The Federal awarding agency may require the non-Federal entity to record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with a Federal award and that use and disposition conditions apply to the property. PROCUREMENT STANDARDS




§200.317 Procurements by states. When procuring property and services under a Federal award, a state must follow the same policies and procedures it

uses for procurements from its non-Federal funds. The state will comply with §200.322 Procurement of recovered materials and ensure that every purchase order or other contract includes any clauses required by section §200.326 Contract provisions. All other non-Federal entities, including subrecipients of a state, will follow §§200.318 General procurement standards through 200.326 Contract provisions. §200.318 General procurement standards.

(a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part.

(b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.

(c)(1) The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the non-Federal entity may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. However, non-Federal entities may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the non-Federal entity.

(2) If the non-Federal entity has a parent, affiliate, or subsidiary organization that is not a state, local government, or Indian tribe, the non-Federal entity must also maintain written standards of conduct covering organizational conflicts of interest. Organizational conflicts of interest means that because of relationships with a parent company, affiliate, or subsidiary organization, the non-Federal entity is unable or appears to be unable to be impartial in conducting a procurement action involving a related organization.

(d) The non-Federal entity's procedures must avoid acquisition of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach.

(e) To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services.

(f) The non-Federal entity is encouraged to use Federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs.

(g) The non-Federal entity is encouraged to use value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost.

(h) The non-Federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. See also §200.213 Suspension and debarment.

(i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.

(j)(1) The non-Federal entity may use a time and materials type contract only after a determination that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk. Time and materials type contract means a contract whose cost to a non-Federal entity is the sum of:

(i) The actual cost of materials; and (ii) Direct labor hours charged at fixed hourly rates that reflect wages, general and administrative expenses, and profit. (2) Since this formula generates an open-ended contract price, a time-and-materials contract provides no positive

profit incentive to the contractor for cost control or labor efficiency. Therefore, each contract must set a ceiling price that the contractor exceeds at its own risk. Further, the non-Federal entity awarding such a contract must assert a high degree of oversight in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls.

(k) The non-Federal entity alone must be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the non-Federal entity of any contractual responsibilities under its contracts. The Federal awarding agency will not substitute its judgment for that of the non-Federal entity unless the matter is primarily a Federal concern. Violations of law will be referred to the local, state, or Federal authority having proper jurisdiction. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 80 FR 43309, July 22, 2015]




§200.319 Competition. (a) All procurement transactions must be conducted in a manner providing full and open competition consistent with

the standards of this section. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Some of the situations considered to be restrictive of competition include but are not limited to:

(1) Placing unreasonable requirements on firms in order for them to qualify to do business; (2) Requiring unnecessary experience and excessive bonding; (3) Noncompetitive pricing practices between firms or between affiliated companies; (4) Noncompetitive contracts to consultants that are on retainer contracts; (5) Organizational conflicts of interest; (6) Specifying only a “brand name” product instead of allowing “an equal” product to be offered and describing the

performance or other relevant requirements of the procurement; and (7) Any arbitrary action in the procurement process. (b) The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or

administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract.

(c) The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations:

(1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equivalent” description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated; and

(2) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals.

(d) The non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] §200.320 Methods of procurement to be followed.

The non-Federal entity must use one of the following methods of procurement. (a) Procurement by micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the

aggregate dollar amount of which does not exceed the micro-purchase threshold (§200.67 Micro-purchase). To the extent practicable, the non-Federal entity must distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable.

(b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.

(c) Procurement by sealed bids (formal advertising). Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bid method is the preferred method for procuring construction, if the conditions in paragraph (c)(1) of this section apply.

(1) In order for sealed bidding to be feasible, the following conditions should be present: (i) A complete, adequate, and realistic specification or purchase description is available; (ii) Two or more responsible bidders are willing and able to compete effectively for the business; and (iii) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made

principally on the basis of price. (2) If sealed bids are used, the following requirements apply: (i) Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior

to the date set for opening the bids, for local, and tribal governments, the invitation for bids must be publicaly advertised; (ii) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or

services in order for the bidder to properly respond; (iii) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal

governments, the bids must be opened publicly; (iv) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where

specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in




determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and

(v) Any or all bids may be rejected if there is a sound documented reason. (d) Procurement by competitive proposals. The technique of competitive proposals is normally conducted with more

than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following requirements apply:

(1) Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals must be considered to the maximum extent practical;

(2) Proposals must be solicited from an adequate number of qualified sources; (3) The non-Federal entity must have a written method for conducting technical evaluations of the proposals received

and for selecting recipients; (4) Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with

price and other factors considered; and (5) The non-Federal entity may use competitive proposal procedures for qualifications-based procurement of

architectural/engineering (A/E) professional services whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potential source to perform the proposed effort.

(e) [Reserved] (f) Procurement by noncompetitive proposals. Procurement by noncompetitive proposals is procurement through

solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply:

(1) The item is available only from a single source; (2) The public exigency or emergency for the requirement will not permit a delay resulting from competitive

solicitation; (3) The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response

to a written request from the non-Federal entity; or (4) After solicitation of a number of sources, competition is determined inadequate.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 80 FR 54409, Sept. 10, 2015] §200.321 Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms.

(a) The non-Federal entity must take all necessary affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible.

(b) Affirmative steps must include: (1) Placing qualified small and minority businesses and women's business enterprises on solicitation lists; (2) Assuring that small and minority businesses, and women's business enterprises are solicited whenever they are

potential sources; (3) Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum

participation by small and minority businesses, and women's business enterprises; (4) Establishing delivery schedules, where the requirement permits, which encourage participation by small and

minority businesses, and women's business enterprises; (5) Using the services and assistance, as appropriate, of such organizations as the Small Business Administration

and the Minority Business Development Agency of the Department of Commerce; and (6) Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in paragraphs (1)

through (5) of this section. §200.322 Procurement of recovered materials.

A non-Federal entity that is a state agency or agency of a political subdivision of a state and its contractors must comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 CFR part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] §200.323 Contract cost and price.

(a) The non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals.

(b) The non-Federal entity must negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration must be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor's




investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work.

(c) Costs or prices based on estimated costs for contracts under the Federal award are allowable only to the extent that costs incurred or cost estimates included in negotiated prices would be allowable for the non-Federal entity under Subpart E—Cost Principles of this part. The non-Federal entity may reference its own cost principles that comply with the Federal cost principles.

(d) The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used. §200.324 Federal awarding agency or pass-through entity review.

(a) The non-Federal entity must make available, upon request of the Federal awarding agency or pass-through entity, technical specifications on proposed procurements where the Federal awarding agency or pass-through entity believes such review is needed to ensure that the item or service specified is the one being proposed for acquisition. This review generally will take place prior to the time the specification is incorporated into a solicitation document. However, if the non-Federal entity desires to have the review accomplished after a solicitation has been developed, the Federal awarding agency or pass-through entity may still review the specifications, with such review usually limited to the technical aspects of the proposed purchase.

(b) The non-Federal entity must make available upon request, for the Federal awarding agency or pass-through entity pre-procurement review, procurement documents, such as requests for proposals or invitations for bids, or independent cost estimates, when:

(1) The non-Federal entity's procurement procedures or operation fails to comply with the procurement standards in this part;

(2) The procurement is expected to exceed the Simplified Acquisition Threshold and is to be awarded without competition or only one bid or offer is received in response to a solicitation;

(3) The procurement, which is expected to exceed the Simplified Acquisition Threshold, specifies a “brand name” product;

(4) The proposed contract is more than the Simplified Acquisition Threshold and is to be awarded to other than the apparent low bidder under a sealed bid procurement; or

(5) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the Simplified Acquisition Threshold.

(c) The non-Federal entity is exempt from the pre-procurement review in paragraph (b) of this section if the Federal awarding agency or pass-through entity determines that its procurement systems comply with the standards of this part.

(1) The non-Federal entity may request that its procurement system be reviewed by the Federal awarding agency or pass-through entity to determine whether its system meets these standards in order for its system to be certified. Generally, these reviews must occur where there is continuous high-dollar funding, and third party contracts are awarded on a regular basis;

(2) The non-Federal entity may self-certify its procurement system. Such self-certification must not limit the Federal awarding agency's right to survey the system. Under a self-certification procedure, the Federal awarding agency may rely on written assurances from the non-Federal entity that it is complying with these standards. The non-Federal entity must cite specific policies, procedures, regulations, or standards as being in compliance with these requirements and have its system available for review. §200.325 Bonding requirements.

For construction or facility improvement contracts or subcontracts exceeding the Simplified Acquisition Threshold, the Federal awarding agency or pass-through entity may accept the bonding policy and requirements of the non-Federal entity provided that the Federal awarding agency or pass-through entity has made a determination that the Federal interest is adequately protected. If such a determination has not been made, the minimum requirements must be as follows:

(a) A bid guarantee from each bidder equivalent to five percent of the bid price. The “bid guarantee” must consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time specified.

(b) A performance bond on the part of the contractor for 100 percent of the contract price. A “performance bond” is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under such contract.

(c) A payment bond on the part of the contractor for 100 percent of the contract price. A “payment bond” is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract. §200.326 Contract provisions.

The non-Federal entity's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for non-Federal Entity Contracts Under Federal Awards. PERFORMANCE AND FINANCIAL MONITORING AND REPORTING §200.327 Financial reporting.

Unless otherwise approved by OMB, the Federal awarding agency may solicit only the standard, OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future collections as may be approved by OMB and listed on the OMB Web site). This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more




frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. 200.328 Monitoring and reporting program performance.

(a) Monitoring by the non-Federal entity. The non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also §200.331 Requirements for pass-through entities.

(b) Non-construction performance reports. The Federal awarding agency must use standard, OMB-approved data elements for collection of performance information (including performance progress reports, Research Performance Progress Report, or such future collections as may be approved by OMB and listed on the OMB Web site).

(1) The non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes. Annual reports must be due 90 calendar days after the reporting period; quarterly or semiannual reports must be due 30 calendar days after the reporting period. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. The final performance report will be due 90 calendar days after the period of performance end date. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report.

(2) The non-Federal entity must submit performance reports using OMB-approved governmentwide standard information collections when providing performance information. As appropriate in accordance with above mentioned information collections, these reports will contain, for each Federal award, brief information on the following unless other collections are approved by OMB:

(i) A comparison of actual accomplishments to the objectives of the Federal award established for the period. Where the accomplishments of the Federal award can be quantified, a computation of the cost (for example, related to units of accomplishment) may be required if that information will be useful. Where performance trend data and analysis would be informative to the Federal awarding agency program, the Federal awarding agency should include this as a performance reporting requirement.

(ii) The reasons why established goals were not met, if appropriate. (iii) Additional pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit

costs. (c) Construction performance reports. For the most part, onsite technical inspections and certified percentage of

completion data are relied on heavily by Federal awarding agencies and pass-through entities to monitor progress under Federal awards and subawards for construction. The Federal awarding agency may require additional performance reports only when considered necessary.

(d) Significant developments. Events may occur between the scheduled performance reporting dates that have significant impact upon the supported activity. In such cases, the non-Federal entity must inform the Federal awarding agency or pass-through entity as soon as the following types of conditions become known:

(1) Problems, delays, or adverse conditions which will materially impair the ability to meet the objective of the Federal award. This disclosure must include a statement of the action taken, or contemplated, and any assistance needed to resolve the situation.

(2) Favorable developments which enable meeting time schedules and objectives sooner or at less cost than anticipated or producing more or different beneficial results than originally planned.

(e) The Federal awarding agency may make site visits as warranted by program needs. (f) The Federal awarding agency may waive any performance report required by this part if not needed.

§200.329 Reporting on real property.

The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest, unless the Federal interest in the real property extends 15 years or longer. In those instances where the Federal interest attached is for a period of 15 years or more, the Federal awarding agency or pass-through entity, at its option, may require the non-Federal entity to report at various multi-year frequencies (e.g., every two years or every three years, not to exceed a five-year reporting period; or a Federal awarding agency or pass-through entity may require annual reporting for the first three years of a Federal award and thereafter require reporting every five years). SUBRECIPIENT MONITORING AND MANAGEMENT §200.330 Subrecipient and contractor determinations.

The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section.




(a) Subrecipients. A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. See §200.92 Subaward. Characteristics which support the classification of the non-Federal entity as a subrecipient include when the non-Federal entity:

(1) Determines who is eligible to receive what Federal assistance; (2) Has its performance measured in relation to whether objectives of a Federal program were met; (3) Has responsibility for programmatic decision making; (4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and (5) In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in

authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity. (b) Contractors. A contract is for the purpose of obtaining goods and services for the non-Federal entity's own use and

creates a procurement relationship with the contractor. See §200.22 Contract. Characteristics indicative of a procurement relationship between the non-Federal entity and a contractor are when the contractor:

(1) Provides the goods and services within normal business operations; (2) Provides similar goods or services to many different purchasers; (3) Normally operates in a competitive environment; (4) Provides goods or services that are ancillary to the operation of the Federal program; and (5) Is not subject to compliance requirements of the Federal program as a result of the agreement, though similar

requirements may apply for other reasons. (c) Use of judgment in making determination. In determining whether an agreement between a pass-through entity

and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important than the form of the agreement. All of the characteristics listed above may not be present in all cases, and the pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract. [78 FR 78608, Dec. 26, 2013, as amended at 80 FR 54409, Sept. 10, 2015] §200.331 Requirements for pass-through entities.

All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following

information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes:

(1) Federal Award Identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see §200.39 Federal award date) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (vii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current

obligation; (viii) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (ix) Federal award project description, as required to be responsive to the Federal Funding Accountability and

Transparency Act (FFATA); (x) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-

through entity; (xi) CFDA Number and Name; the pass-through entity must identify the dollar amount made available under each

Federal award and the CFDA number at time of disbursement; (xii) Identification of whether the award is R&D; and (xiii) Indirect cost rate for the Federal award (including if the de minimis rate is charged per §200.414 Indirect (F&A)

costs). (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in

accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through

entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports;

(4) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government or, if no such rate exists, either a rate negotiated between the pass-through entity and the subrecipient (in compliance with this part), or a de minimis indirect cost rate as defined in §200.414 Indirect (F&A) costs, paragraph (f);

(5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and

(6) Appropriate terms and conditions concerning closeout of the subaward. (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and

conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as:

(1) The subrecipient's prior experience with the same or similar subawards;




(2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F—Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program;

(3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal

awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in §200.207

Specific conditions. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized

purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include:

(1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining

to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.

(3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 Management decision.

(e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals:

(1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in §200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F—Audit Requirements of this part when it is

expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501 Audit requirements.

(g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.

(h) Consider taking enforcement action against noncompliant subrecipients as described in §200.338 Remedies for noncompliance of this part and in program regulations. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 80 FR 54409, Sept. 10, 2015] §200.332 Fixed amount subawards.

With prior written approval from the Federal awarding agency, a pass-through entity may provide subawards based on fixed amounts up to the Simplified Acquisition Threshold, provided that the subawards meet the requirements for fixed amount awards in §200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts. RECORD RETENTION AND ACCESS §200.333 Retention requirements for records.

Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities. The only exceptions are the following:

(a) If any litigation, claim, or audit is started before the expiration of the 3-year period, the records must be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken.

(b) When the non-Federal entity is notified in writing by the Federal awarding agency, cognizant agency for audit, oversight agency for audit, cognizant agency for indirect costs, or pass-through entity to extend the retention period.

(c) Records for real property and equipment acquired with Federal funds must be retained for 3 years after final disposition.

(d) When records are transferred to or maintained by the Federal awarding agency or pass-through entity, the 3-year retention requirement is not applicable to the non-Federal entity.

(e) Records for program income transactions after the period of performance. In some cases recipients must report program income after the period of performance. Where there is such a requirement, the retention period for the records pertaining to the earning of the program income starts from the end of the non-Federal entity's fiscal year in which the program income is earned.

(f) Indirect cost rate proposals and cost allocations plans. This paragraph applies to the following types of documents and their supporting records: indirect cost rate computations or proposals, cost allocation plans, and any similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates).

(1) If submitted for negotiation. If the proposal, plan, or other computation is required to be submitted to the Federal Government (or to the pass-through entity) to form the basis for negotiation of the rate, then the 3-year retention period for its supporting records starts from the date of such submission.




(2) If not submitted for negotiation. If the proposal, plan, or other computation is not required to be submitted to the Federal Government (or to the pass-through entity) for negotiation purposes, then the 3-year retention period for the proposal, plan, or computation and its supporting records starts from the end of the fiscal year (or other accounting period) covered by the proposal, plan, or other computation. §200.334 Requests for transfer of records.

The Federal awarding agency must request transfer of certain records to its custody from the non-Federal entity when it determines that the records possess long-term retention value. However, in order to avoid duplicate recordkeeping, the Federal awarding agency may make arrangements for the non-Federal entity to retain any records that are continuously needed for joint use. §200.335 Methods for collection, transmission and storage of information.

In accordance with the May 2013 Executive Order on Making Open and Machine Readable the New Default for Government Information, the Federal awarding agency and the non-Federal entity should, whenever practicable, collect, transmit, and store Federal award-related information in open and machine readable formats rather than in closed formats or on paper. The Federal awarding agency or pass-through entity must always provide or accept paper versions of Federal award-related information to and from the non-Federal entity upon request. If paper copies are submitted, the Federal awarding agency or pass-through entity must not require more than an original and two copies. When original records are electronic and cannot be altered, there is no need to create and retain paper copies. When original records are paper, electronic versions may be substituted through the use of duplication or other forms of electronic media provided that they are subject to periodic quality control reviews, provide reasonable safeguards against alteration, and remain readable. §200.336 Access to records.

(a) Records of non-Federal entities. The Federal awarding agency, Inspectors General, the Comptroller General of the United States, and the pass-through entity, or any of their authorized representatives, must have the right of access to any documents, papers, or other records of the non-Federal entity which are pertinent to the Federal award, in order to make audits, examinations, excerpts, and transcripts. The right also includes timely and reasonable access to the non-Federal entity's personnel for the purpose of interview and discussion related to such documents.

(b) Only under extraordinary and rare circumstances would such access include review of the true name of victims of a crime. Routine monitoring cannot be considered extraordinary and rare circumstances that would necessitate access to this information. When access to the true name of victims of a crime is necessary, appropriate steps to protect this sensitive information must be taken by both the non-Federal entity and the Federal awarding agency. Any such access, other than under a court order or subpoena pursuant to a bona fide confidential investigation, must be approved by the head of the Federal awarding agency or delegate.

(c) Expiration of right of access. The rights of access in this section are not limited to the required retention period but last as long as the records are retained. Federal awarding agencies and pass-through entities must not impose any other access requirements upon non-Federal entities. §200.337 Restrictions on public access to records.

No Federal awarding agency may place restrictions on the non-Federal entity that limit public access to the records of the non-Federal entity pertinent to a Federal award, except for protected personally identifiable information (PII) or when the Federal awarding agency can demonstrate that such records will be kept confidential and would have been exempted from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) or controlled unclassified information pursuant to Executive Order 13556 if the records had belonged to the Federal awarding agency. The Freedom of Information Act (5 U.S.C. 552) (FOIA) does not apply to those records that remain under a non-Federal entity's control except as required under §200.315 Intangible property. Unless required by Federal, state, local, and tribal statute, non-Federal entities are not required to permit public access to their records. The non-Federal entity's records provided to a Federal agency generally will be subject to FOIA and applicable exemptions. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] REMEDIES FOR NONCOMPLIANCE §200.338 Remedies for noncompliance.

If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in §200.207 Specific conditions. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances:

(a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity.

(b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance.

(c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency

regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency).

(e) Withhold further Federal awards for the project or program.




(f) Take other remedies that may be legally available. §200.339 Termination.

(a) The Federal award may be terminated in whole or in part as follows: (1) By the Federal awarding agency or pass-through entity, if a non-Federal entity fails to comply with the terms and

conditions of a Federal award; (2) By the Federal awarding agency or pass-through entity for cause; (3) By the Federal awarding agency or pass-through entity with the consent of the non-Federal entity, in which case

the two parties must agree upon the termination conditions, including the effective date and, in the case of partial termination, the portion to be terminated; or

(4) By the non-Federal entity upon sending to the Federal awarding agency or pass-through entity written notification setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if the Federal awarding agency or pass-through entity determines in the case of partial termination that the reduced or modified portion of the Federal award or subaward will not accomplish the purposes for which the Federal award was made, the Federal awarding agency or pass-through entity may terminate the Federal award in its entirety.

(b) When a Federal awarding agency terminates a Federal award prior to the end of the period of performance due to the non-Federal entity's material failure to comply with the Federal award terms and conditions, the Federal awarding agency must report the termination to the OMB-designated integrity and performance system accessible through SAM (currently FAPIIS).

(1) The information required under paragraph (b) of this section is not to be reported to designated integrity and performance system until the non-Federal entity either—

(i) Has exhausted its opportunities to object or challenge the decision, see §200.341 Opportunities to object, hearings and appeals; or

(ii) Has not, within 30 calendar days after being notified of the termination, informed the Federal awarding agency that it intends to appeal the Federal awarding agency's decision to terminate.

(2) If a Federal awarding agency, after entering information into the designated integrity and performance system about a termination, subsequently:

(i) Learns that any of that information is erroneous, the Federal awarding agency must correct the information in the system within three business days;

(ii) Obtains an update to that information that could be helpful to other Federal awarding agencies, the Federal awarding agency is strongly encouraged to amend the information in the system to incorporate the update in a timely way.

(3) Federal awarding agencies, shall not post any information that will be made publicly available in the non-public segment of designated integrity and performance system that is covered by a disclosure exemption under the Freedom of Information Act. If the non-Federal entity asserts within seven calendar days to the Federal awarding agency who posted the information, that some of the information made publicly available is covered by a disclosure exemption under the Freedom of Information Act, the Federal awarding agency who posted the information must remove the posting within seven calendar days of receiving the assertion. Prior to reposting the releasable information, the Federal agency must resolve the issue in accordance with the agency's Freedom of Information Act procedures.

(c) When a Federal award is terminated or partially terminated, both the Federal awarding agency or pass-through entity and the non-Federal entity remain responsible for compliance with the requirements in §§200.343 Closeout and 200.344 Post-closeout adjustments and continuing responsibilities. [78 FR 78608, Dec. 26, 2013, as amended at 80 FR 43309, July 22, 2015] §200.340 Notification of termination requirement.

(a) The Federal agency or pass-through entity must provide to the non-Federal entity a notice of termination. (b) If the Federal award is terminated for the non-Federal entity's material failure to comply with the Federal statutes,

regulations, or terms and conditions of the Federal award, the notification must state that— (1) The termination decision will be reported to the OMB-designated integrity and performance system accessible

through SAM (currently FAPIIS); (2) The information will be available in the OMB-designated integrity and performance system for a period of five

years from the date of the termination, then archived; (3) Federal awarding agencies that consider making a Federal award to the non-Federal entity during that five year

period must consider that information in judging whether the non-Federal entity is qualified to receive the Federal award, when the Federal share of the Federal award is expected to exceed the simplified acquisition threshold over the period of performance;

(4) The non-Federal entity may comment on any information the OMB-designated integrity and performance system contains about the non-Federal entity for future consideration by Federal awarding agencies. The non-Federal entity may submit comments to the awardee integrity and performance portal accessible through SAM (currently (CPARS).

(5) Federal awarding agencies will consider non-Federal entity comments when determining whether the non-Federal entity is qualified for a future Federal award.

(c) Upon termination of a Federal award, the Federal awarding agency must provide the information required under FFATA to the Federal Web site established to fulfill the requirements of FFATA, and update or notify any other relevant governmentwide systems or entities of any indications of poor performance as required by 41 U.S.C. 417b and 31 U.S.C. 3321 and implementing guidance at 2 CFR part 77 (forthcoming at time of publication). See also the requirements for Suspension and Debarment at 2 CFR part 180. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 80 FR 43310, July 22, 2015]




§200.341 Opportunities to object, hearings and appeals.

Upon taking any remedy for non-compliance, the Federal awarding agency must provide the non-Federal entity an opportunity to object and provide information and documentation challenging the suspension or termination action, in accordance with written processes and procedures published by the Federal awarding agency. The Federal awarding agency or pass-through entity must comply with any requirements for hearings, appeals or other administrative proceedings to which the non-Federal entity is entitled under any statute or regulation applicable to the action involved. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] §200.342 Effects of suspension and termination.

Costs to the non-Federal entity resulting from obligations incurred by the non-Federal entity during a suspension or after termination of a Federal award or subaward are not allowable unless the Federal awarding agency or pass-through entity expressly authorizes them in the notice of suspension or termination or subsequently. However, costs during suspension or after termination are allowable if:

(a) The costs result from obligations which were properly incurred by the non-Federal entity before the effective date of suspension or termination, are not in anticipation of it; and

(b) The costs would be allowable if the Federal award was not suspended or expired normally at the end of the period of performance in which the termination takes effect. CLOSEOUT §200.343 Closeout.

The Federal awarding agency or pass-through entity will close-out the Federal award when it determines that all applicable administrative actions and all required work of the Federal award have been completed by the non-Federal entity. This section specifies the actions the non-Federal entity and Federal awarding agency or pass-through entity must take to complete this process at the end of the period of performance.

(a) The non-Federal entity must submit, no later than 90 calendar days after the end date of the period of performance, all financial, performance, and other reports as required by the terms and conditions of the Federal award. The Federal awarding agency or pass-through entity may approve extensions when requested by the non-Federal entity.

(b) Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.

(c) The Federal awarding agency or pass-through entity must make prompt payments to the non-Federal entity for allowable reimbursable costs under the Federal award being closed out.

(d) The non-Federal entity must promptly refund any balances of unobligated cash that the Federal awarding agency or pass-through entity paid in advance or paid and that are not authorized to be retained by the non-Federal entity for use in other projects. See OMB Circular A-129 and see §200.345 Collection of amounts due, for requirements regarding unreturned amounts that become delinquent debts.

(e) Consistent with the terms and conditions of the Federal award, the Federal awarding agency or pass-through entity must make a settlement for any upward or downward adjustments to the Federal share of costs after closeout reports are received.

(f) The non-Federal entity must account for any real and personal property acquired with Federal funds or received from the Federal Government in accordance with §§200.310 Insurance coverage through 200.316 Property trust relationship and 200.329 Reporting on real property.

(g) The Federal awarding agency or pass-through entity should complete all closeout actions for Federal awards no later than one year after receipt and acceptance of all required final reports. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] POST-CLOSEOUT ADJUSTMENTS AND CONTINUING RESPONSIBILITIES §200.344 Post-closeout adjustments and continuing responsibilities.

(a) The closeout of a Federal award does not affect any of the following: (1) The right of the Federal awarding agency or pass-through entity to disallow costs and recover funds on the basis

of a later audit or other review. The Federal awarding agency or pass-through entity must make any cost disallowance determination and notify the non-Federal entity within the record retention period.

(2) The obligation of the non-Federal entity to return any funds due as a result of later refunds, corrections, or other transactions including final indirect cost rate adjustments.

(3) Audit requirements in Subpart F—Audit Requirements of this part. (4) Property management and disposition requirements in Subpart D—Post Federal Award Requirements of this part,

§§200.310 Insurance Coverage through 200.316 Property trust relationship. (5) Records retention as required in Subpart D—Post Federal Award Requirements of this part, §§200.333 Retention

requirements for records through 200.337 Restrictions on public access to records. (b) After closeout of the Federal award, a relationship created under the Federal award may be modified or ended in

whole or in part with the consent of the Federal awarding agency or pass-through entity and the non-Federal entity, provided the responsibilities of the non-Federal entity referred to in paragraph (a) of this section, including those for property management as applicable, are considered and provisions made for continuing responsibilities of the non-Federal entity, as appropriate. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014]




COLLECTION OF AMOUNTS DUE §200.345 Collection of amounts due.

(a) Any funds paid to the non-Federal entity in excess of the amount to which the non-Federal entity is finally determined to be entitled under the terms of the Federal award constitute a debt to the Federal Government. If not paid within 90 calendar days after demand, the Federal awarding agency may reduce the debt by:

(1) Making an administrative offset against other requests for reimbursements; (2) Withholding advance payments otherwise due to the non-Federal entity; or (3) Other action permitted by Federal statute. (b) Except where otherwise provided by statutes or regulations, the Federal awarding agency will charge interest on

an overdue debt in accordance with the Federal Claims Collection Standards (31 CFR parts 900 through 999). The date from which interest is computed is not extended by litigation or the filing of any form of appeal. Subpart E—Cost Principles GENERAL PROVISIONS §200.400 Policy guide.

The application of these cost principles is based on the fundamental premises that: (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the

application of sound management practices. (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with

underlying agreements, program objectives, and the terms and conditions of the Federal award. (c) The non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the

primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award.

(d) The application of these cost principles should require no significant changes in the internal accounting policies and practices of the non-Federal entity. However, the accounting practices of the non-Federal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles, and must provide for adequate documentation to support costs charged to the Federal award.

(e) In reviewing, negotiating and approving cost allocation plans or indirect cost proposals, the cognizant agency for indirect costs should generally assure that the non-Federal entity is applying these cost accounting principles on a consistent basis during their review and negotiation of indirect cost proposals. Where wide variations exist in the treatment of a given cost item by the non-Federal entity, the reasonableness and equity of such treatments should be fully considered. See §200.56 Indirect (facilities & administrative (F&A)) costs.

(f) For non-Federal entities that educate and engage students in research, the dual role of students as both trainees and employees (including pre- and post-doctoral staff) contributing to the completion of Federal awards for research must be recognized in the application of these principles.

(g) The non-Federal entity may not earn or keep any profit resulting from Federal financial assistance, unless explicitly authorized by the terms and conditions of the Federal award. See also §200.307 Program income. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] §200.401 Application.

(a) General. These principles must be used in determining the allowable costs of work performed by the non-Federal entity under Federal awards. These principles also must be used by the non-Federal entity as a guide in the pricing of fixed-price contracts and subcontracts where costs are used in determining the appropriate price. The principles do not apply to:

(1) Arrangements under which Federal financing is in the form of loans, scholarships, fellowships, traineeships, or other fixed amounts based on such items as education allowance or published tuition rates and fees.

(2) For IHEs, capitation awards, which are awards based on case counts or number of beneficiaries according to the terms and conditions of the Federal award.

(3) Fixed amount awards. See also Subpart A—Acronyms and Definitions, §§200.45 Fixed amount awards and 200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts.

(4) Federal awards to hospitals (see Appendix IX to Part 200—Hospital Cost Principles). (5) Other awards under which the non-Federal entity is not required to account to the Federal Government for actual

costs incurred. (b) Federal Contract. Where a Federal contract awarded to a non-Federal entity is subject to the Cost Accounting

Standards (CAS), it incorporates the applicable CAS clauses, Standards, and CAS administration requirements per the 48 CFR Chapter 99 and 48 CFR part 30 (FAR Part 30). CAS applies directly to the CAS-covered contract and the Cost Accounting Standards at 48 CFR parts 9904 or 9905 takes precedence over the cost principles in this Subpart E—Cost Principles of this part with respect to the allocation of costs. When a contract with a non-Federal entity is subject to full CAS coverage, the allowability of certain costs under the cost principles will be affected by the allocation provisions of the Cost Accounting Standards (e.g., CAS 414—48 CFR 9904.414, Cost of Money as an Element of the Cost of Facilities Capital, and CAS 417—48 CFR 9904.417, Cost of Money as an Element of the Cost of Capital Assets Under Construction), apply rather the allowability provisions of §200.449 Interest. In complying with those requirements, the non-Federal entity's application of cost accounting practices for estimating, accumulating, and reporting costs for other Federal awards and other cost objectives under the CAS-covered contract still must be consistent with its cost accounting practices for the CAS-covered contracts. In all cases, only one set of accounting records needs to be maintained for the allocation of costs by the non-Federal entity.




(c) Exemptions. Some nonprofit organizations, because of their size and nature of operations, can be considered to be similar to for-profit entities for purpose of applicability of cost principles. Such nonprofit organizations must operate under Federal cost principles applicable to for-profit entities located at 48 CFR 31.2. A listing of these organizations is contained in Appendix VIII to Part 200—Nonprofit Organizations Exempted From Subpart E—Cost Principles of this part. Other organizations, as approved by the cognizant agency for indirect costs, may be added from time to time. BASIC CONSIDERATIONS §200.402 Composition of costs.

Total cost. The total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits. §200.403 Factors affecting allowability of costs.

Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:

(a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.

(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.

(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity.

(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.

(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part.

(f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also §200.306 Cost sharing or matching paragraph (b).

(g) Be adequately documented. See also §§200.300 Statutory and national policy requirements through 200.309 Period of performance of this part. §200.404 Reasonable costs.

A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to:

(a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award.

(b) The restraints or requirements imposed by such factors as: sound business practices; arm's-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award.

(c) Market prices for comparable goods or services for the geographic area. (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to

the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government.

(e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] §200.405 Allocable costs.

(a) A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost:

(1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that

may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in

accordance with the principles in this subpart. (b) All activities which benefit from the non-Federal entity's indirect (F&A) cost, including unallowable activities and

donated services by the non-Federal entity or third parties, will receive an appropriate allocation of indirect costs. (c) Any cost allocable to a particular Federal award under the principles provided for in this part may not be charged to

other Federal awards to overcome fund deficiencies, to avoid restrictions imposed by Federal statutes, regulations, or terms and conditions of the Federal awards, or for other reasons. However, this prohibition would not preclude the non-Federal entity from shifting costs that are allowable under two or more Federal awards in accordance with existing Federal statutes, regulations, or the terms and conditions of the Federal awards.

(d) Direct cost allocation principles. If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then, notwithstanding paragraph (c) of this section, the costs may be allocated or transferred to benefitted




projects on any reasonable documented basis. Where the purchase of equipment or other capital asset is specifically authorized under a Federal award, the costs are assignable to the Federal award regardless of the use that may be made of the equipment or other capital asset involved when no longer needed for the purpose for which it was originally required. See also §§200.310 Insurance coverage through 200.316 Property trust relationship and 200.439 Equipment and other capital expenditures.

(e) If the contract is subject to CAS, costs must be allocated to the contract pursuant to the Cost Accounting Standards. To the extent that CAS is applicable, the allocation of costs in accordance with CAS takes precedence over the allocation provisions in this part. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] §200.406 Applicable credits.

(a) Applicable credits refer to those receipts or reduction-of-expenditure-type transactions that offset or reduce expense items allocable to the Federal award as direct or indirect (F&A) costs. Examples of such transactions are: purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates, and adjustments of overpayments or erroneous charges. To the extent that such credits accruing to or received by the non-Federal entity relate to allowable costs, they must be credited to the Federal award either as a cost reduction or cash refund, as appropriate.

(b) In some instances, the amounts received from the Federal Government to finance activities or service operations of the non-Federal entity should be treated as applicable credits. Specifically, the concept of netting such credit items (including any amounts used to meet cost sharing or matching requirements) must be recognized in determining the rates or amounts to be charged to the Federal award. (See §§200.436 Depreciation and 200.468 Specialized service facilities, for areas of potential application in the matter of Federal financing of activities.) [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] §200.407 Prior written approval (prior approval).

Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or nonallocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless prior approval is specifically required for allowability as described under certain circumstances in the following sections of this part:

(a) §200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts, paragraph (b)(5);

(b) §200.306 Cost sharing or matching; (c) §200.307 Program income; (d) §200.308 Revision of budget and program plans; (e) §200.311 Real property; (f) §200.313 Equipment; (g) §200.332 Fixed amount subawards; (h) §200.413 Direct costs, paragraph (c); (i) §200.430 Compensation—personal services, paragraph (h); (j) §200.431 Compensation—fringe benefits; (k) §200.438 Entertainment costs; (l) §200.439 Equipment and other capital expenditures; (m) §200.440 Exchange rates; (n) §200.441 Fines, penalties, damages and other settlements; (o) §200.442 Fund raising and investment management costs; (p) §200.445 Goods or services for personal use; (q) §200.447 Insurance and indemnification; (r) §200.454 Memberships, subscriptions, and professional activity costs, paragraph (c); (s) §200.455 Organization costs; (t) §200.456 Participant support costs; (u) §200.458 Pre-award costs; (v) §200.462 Rearrangement and reconversion costs; (w) §200.467 Selling and marketing costs; (x) §200.470 Taxes (including Value Added Tax); and (y) §200.474 Travel costs.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] §200.408 Limitation on allowance of costs.

The Federal award may be subject to statutory requirements that limit the allowability of costs. When the maximum amount allowable under a limitation is less than the total amount determined in accordance with the principles in this part, the amount not recoverable under the Federal award may not be charged to the Federal award.




§200.409 Special considerations. In addition to the basic considerations regarding the allowability of costs highlighted in this subtitle, other subtitles in

this part describe special considerations and requirements applicable to states, local governments, Indian tribes, and IHEs. In addition, certain provisions among the items of cost in this subpart, are only applicable to certain types of non-Federal entities, as specified in the following sections:

(a) Direct and Indirect (F&A) Costs (§§200.412 Classification of costs through 200.415 Required certifications) of this subpart;

(b) Special Considerations for States, Local Governments and Indian Tribes (§§200.416 Cost allocation plans and indirect cost proposals and 200.417 Interagency service) of this subpart; and

(c) Special Considerations for Institutions of Higher Education (§§200.418 Costs incurred by states and local governments and 200.419 Cost accounting standards and disclosure statement) of this subpart. §200.410 Collection of unallowable costs.

Payments made for costs determined to be unallowable by either the Federal awarding agency, cognizant agency for indirect costs, or pass-through entity, either as direct or indirect costs, must be refunded (including interest) to the Federal Government in accordance with instructions from the Federal agency that determined the costs are unallowable unless Federal statute or regulation directs otherwise. See also Subpart D—Post Federal Award Requirements of this part, §§200.300 Statutory and national policy requirements through 200.309 Period of performance. §200.411 Adjustment of previously negotiated indirect (F&A) cost rates containing unallowable costs.

(a) Negotiated indirect (F&A) cost rates based on a proposal later found to have included costs that: (1) Are unallowable as specified by Federal statutes, regulations or the terms and conditions of a Federal award; or (2) Are unallowable because they are not allocable to the Federal award(s), must be adjusted, or a refund must be

made, in accordance with the requirements of this section. These adjustments or refunds are designed to correct the proposals used to establish the rates and do not constitute a reopening of the rate negotiation. The adjustments or refunds will be made regardless of the type of rate negotiated (predetermined, final, fixed, or provisional).

(b) For rates covering a future fiscal year of the non-Federal entity, the unallowable costs will be removed from the indirect (F&A) cost pools and the rates appropriately adjusted.

(c) For rates covering a past period, the Federal share of the unallowable costs will be computed for each year involved and a cash refund (including interest chargeable in accordance with applicable regulations) will be made to the Federal Government. If cash refunds are made for past periods covered by provisional or fixed rates, appropriate adjustments will be made when the rates are finalized to avoid duplicate recovery of the unallowable costs by the Federal Government.

(d) For rates covering the current period, either a rate adjustment or a refund, as described in paragraphs (b) and (c) of this section, must be required by the cognizant agency for indirect costs. The choice of method must be at the discretion of the cognizant agency for indirect costs, based on its judgment as to which method would be most practical.

(e) The amount or proportion of unallowable costs included in each year's rate will be assumed to be the same as the amount or proportion of unallowable costs included in the base year proposal used to establish the rate. DIRECT AND INDIRECT (F&A) COSTS §200.412 Classification of costs.

There is no universal rule for classifying certain costs as either direct or indirect (F&A) under every accounting system. A cost may be direct with respect to some specific service or function, but indirect with respect to the Federal award or other final cost objective. Therefore, it is essential that each item of cost incurred for the same purpose be treated consistently in like circumstances either as a direct or an indirect (F&A) cost in order to avoid possible double-charging of Federal awards. Guidelines for determining direct and indirect (F&A) costs charged to Federal awards are provided in this subpart. §200.413 Direct costs.

(a) General. Direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect (F&A) costs. See also §200.405 Allocable costs.

(b) Application to Federal awards. Identification with the Federal award rather than the nature of the goods and services involved is the determining factor in distinguishing direct from indirect (F&A) costs of Federal awards. Typical costs charged directly to a Federal award are the compensation of employees who work on that award, their related fringe benefit costs, the costs of materials and other items of expense incurred for the Federal award. If directly related to a specific award, certain costs that otherwise would be treated as indirect costs may also include extraordinary utility consumption, the cost of materials supplied from stock or services rendered by specialized facilities or other institutional service operations.

(c) The salaries of administrative and clerical staff should normally be treated as indirect (F&A) costs. Direct charging of these costs may be appropriate only if all of the following conditions are met:

(1) Administrative or clerical services are integral to a project or activity; (2) Individuals involved can be specifically identified with the project or activity; (3) Such costs are explicitly included in the budget or have the prior written approval of the Federal awarding agency;

and (4) The costs are not also recovered as indirect costs.




(d) Minor items. Any direct cost of minor amount may be treated as an indirect (F&A) cost for reasons of practicality where such accounting treatment for that item of cost is consistently applied to all Federal and non-Federal cost objectives.

(e) The costs of certain activities are not allowable as charges to Federal awards. However, even though these costs are unallowable for purposes of computing charges to Federal awards, they nonetheless must be treated as direct costs for purposes of determining indirect (F&A) cost rates and be allocated their equitable share of the non-Federal entity's indirect costs if they represent activities which:

(1) Include the salaries of personnel, (2) Occupy space, and (3) Benefit from the non-Federal entity's indirect (F&A) costs. (f) For nonprofit organizations, the costs of activities performed by the non-Federal entity primarily as a service to

members, clients, or the general public when significant and necessary to the non-Federal entity's mission must be treated as direct costs whether or not allowable, and be allocated an equitable share of indirect (F&A) costs. Some examples of these types of activities include:

(1) Maintenance of membership rolls, subscriptions, publications, and related functions. See also §200.454 Memberships, subscriptions, and professional activity costs.

(2) Providing services and information to members, legislative or administrative bodies, or the public. See also §§200.454 Memberships, subscriptions, and professional activity costs and 200.450 Lobbying.

(3) Promotion, lobbying, and other forms of public relations. See also §§200.421 Advertising and public relations and 200.450 Lobbying.

(4) Conferences except those held to conduct the general administration of the non-Federal entity. See also §200.432 Conferences.

(5) Maintenance, protection, and investment of special funds not used in operation of the non-Federal entity. See also §200.442 Fund raising and investment management costs.

(6) Administration of group benefits on behalf of members or clients, including life and hospital insurance, annuity or retirement plans, and financial aid. See also §200.431 Compensation—fringe benefits. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] §200.414 Indirect (F&A) costs.

(a) Facilities and Administration Classification. For major IHEs and major nonprofit organizations, indirect (F&A) costs must be classified within two broad categories: “Facilities” and “Administration.” “Facilities” is defined as depreciation on buildings, equipment and capital improvement, interest on debt associated with certain buildings, equipment and capital improvements, and operations and maintenance expenses. “Administration” is defined as general administration and general expenses such as the director's office, accounting, personnel and all other types of expenditures not listed specifically under one of the subcategories of “Facilities” (including cross allocations from other pools, where applicable). For nonprofit organizations, library expenses are included in the “Administration” category; for institutions of higher education, they are included in the “Facilities” category. Major IHEs are defined as those required to use the Standard Format for Submission as noted in Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs) paragraph C. 11. Major nonprofit organizations are those which receive more than $10 million dollars in direct Federal funding.

(b) Diversity of nonprofit organizations. Because of the diverse characteristics and accounting practices of nonprofit organizations, it is not possible to specify the types of cost which may be classified as indirect (F&A) cost in all situations. Identification with a Federal award rather than the nature of the goods and services involved is the determining factor in distinguishing direct from indirect (F&A) costs of Federal awards. However, typical examples of indirect (F&A) cost for many nonprofit organizations may include depreciation on buildings and equipment, the costs of operating and maintaining facilities, and general administration and general expenses, such as the salaries and expenses of executive officers, personnel administration, and accounting.

(c) Federal Agency Acceptance of Negotiated Indirect Cost Rates. (See also §200.306 Cost sharing or matching.) (1) The negotiated rates must be accepted by all Federal awarding agencies. A Federal awarding agency may use a

rate different from the negotiated rate for a class of Federal awards or a single Federal award only when required by Federal statute or regulation, or when approved by a Federal awarding agency head or delegate based on documented justification as described in paragraph (c)(3) of this section.

(2) The Federal awarding agency head or delegate must notify OMB of any approved deviations. (3) The Federal awarding agency must implement, and make publicly available, the policies, procedures and general

decision making criteria that their programs will follow to seek and justify deviations from negotiated rates. (4) As required under §200.203 Notices of funding opportunities, the Federal awarding agency must include in the

notice of funding opportunity the policies relating to indirect cost rate reimbursement, matching, or cost share as approved under paragraph (e)(1) of this section. As appropriate, the Federal agency should incorporate discussion of these policies into Federal awarding agency outreach activities with non-Federal entities prior to the posting of a notice of funding opportunity.

(d) Pass-through entities are subject to the requirements in §200.331 Requirements for pass-through entities, paragraph (a)(4).

(e) Requirements for development and submission of indirect (F&A) cost rate proposals and cost allocation plans are contained in Appendices III-VII and Appendix IX as follows:

(1) Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs);




(2) Appendix IV to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations;

(3) Appendix V to Part 200—State/Local Governmentwide Central Service Cost Allocation Plans; (4) Appendix VI to Part 200—Public Assistance Cost Allocation Plans; (5) Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals; and (6) Appendix IX to Part 200—Hospital Cost Principles. (f) In addition to the procedures outlined in the appendices in paragraph (e) of this section, any non-Federal entity that

has never received a negotiated indirect cost rate, except for those non-Federal entities described in Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals, paragraph D.1.b, may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely. As described in §200.403 Factors affecting allowability of costs, costs must be consistently charged as either indirect or direct costs, but may not be double charged or inconsistently charged as both. If chosen, this methodology once elected must be used consistently for all Federal awards until such time as a non-Federal entity chooses to negotiate for a rate, which the non-Federal entity may apply to do at any time.

(g) Any non-Federal entity that has a current federally negotiated indirect cost rate may apply for a one-time extension of the rates in that agreement for a period of up to four years. This extension will be subject to the review and approval of the cognizant agency for indirect costs. If an extension is granted the non-Federal entity may not request a rate review until the extension period ends. At the end of the 4-year extension, the non-Federal entity must re-apply to negotiate a rate. Subsequent one-time extensions (up to four years) are permitted if a renegotiation is completed between each extension request. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] §200.415 Required certifications.

Required certifications include: (a) To assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and

approved project budgets, the annual and final fiscal reports or vouchers requesting payment under the agreements must include a certification, signed by an official who is authorized to legally bind the non-Federal entity, which reads as follows: “By signing this report, I certify to the best of my knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the Federal award. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise. (U.S. Code Title 18, Section 1001 and Title 31, Sections 3729-3730 and 3801-3812).”

(b) Certification of cost allocation plan or indirect (F&A) cost rate proposal. Each cost allocation plan or indirect (F&A) cost rate proposal must comply with the following:

(1) A proposal to establish a cost allocation plan or an indirect (F&A) cost rate, whether submitted to a Federal cognizant agency for indirect costs or maintained on file by the non-Federal entity, must be certified by the non-Federal entity using the Certificate of Cost Allocation Plan or Certificate of Indirect Costs as set forth in Appendices III through VII, and Appendix IX. The certificate must be signed on behalf of the non-Federal entity by an individual at a level no lower than vice president or chief financial officer of the non-Federal entity that submits the proposal.

(2) Unless the non-Federal entity has elected the option under §200.414 Indirect (F&A) costs, paragraph (f), the Federal Government may either disallow all indirect (F&A) costs or unilaterally establish such a plan or rate when the non-Federal entity fails to submit a certified proposal for establishing such a plan or rate in accordance with the requirements. Such a plan or rate may be based upon audited historical data or such other data that have been furnished to the cognizant agency for indirect costs and for which it can be demonstrated that all unallowable costs have been excluded. When a cost allocation plan or indirect cost rate is unilaterally established by the Federal Government because the non-Federal entity failed to submit a certified proposal, the plan or rate established will be set to ensure that potentially unallowable costs will not be reimbursed.

(c) Certifications by non-profit organizations as appropriate that they did not meet the definition of a major nonprofit organization as defined in §200.414 Indirect (F&A) costs, paragraph (a).

(d) See also §200.450 Lobbying for another required certification. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] SPECIAL CONSIDERATIONS FOR STATES, LOCAL GOVERNMENTS AND INDIAN TRIBES §200.416 Cost allocation plans and indirect cost proposals.

(a) For states, local governments and Indian tribes, certain services, such as motor pools, computer centers, purchasing, accounting, etc., are provided to operating agencies on a centralized basis. Since Federal awards are performed within the individual operating agencies, there needs to be a process whereby these central service costs can be identified and assigned to benefitted activities on a reasonable and consistent basis. The central service cost allocation plan provides that process.

(b) Individual operating agencies (governmental department or agency), normally charge Federal awards for indirect costs through an indirect cost rate. A separate indirect cost rate(s) proposal for each operating agency is usually necessary to claim indirect costs under Federal awards. Indirect costs include:

(1) The indirect costs originating in each department or agency of the governmental unit carrying out Federal awards and

(2) The costs of central governmental services distributed through the central service cost allocation plan and not otherwise treated as direct costs.




(c) The requirements for development and submission of cost allocation plans (for central service costs and public assistance programs) and indirect cost rate proposals are contained in appendices IV, V and VI to this part. §200.417 Interagency service.

The cost of services provided by one agency to another within the governmental unit may include allowable direct costs of the service plus a pro-rated share of indirect costs. A standard indirect cost allowance equal to ten percent of the direct salary and wage cost of providing the service (excluding overtime, shift premiums, and fringe benefits) may be used in lieu of determining the actual indirect costs of the service. These services do not include centralized services included in central service cost allocation plans as described in Appendix V to Part 200—State/Local Government and Indian Tribe-Wide Central Service Cost Allocation Plans. SPECIAL CONSIDERATIONS FOR INSTITUTIONS OF HIGHER EDUCATION §200.418 Costs incurred by states and local governments.

Costs incurred or paid by a state or local government on behalf of its IHEs for fringe benefit programs, such as pension costs and FICA and any other costs specifically incurred on behalf of, and in direct benefit to, the IHEs, are allowable costs of such IHEs whether or not these costs are recorded in the accounting records of the institutions, subject to the following:

(a) The costs meet the requirements of §§200.402 Composition of costs through 200.411 Adjustment of previously negotiated indirect (F&A) cost rates containing unallowable costs, of this subpart;

(b) The costs are properly supported by approved cost allocation plans in accordance with applicable Federal cost accounting principles in this part; and

(c) The costs are not otherwise borne directly or indirectly by the Federal Government. §200.419 Cost accounting standards and disclosure statement.

(a) An IHE that receives aggregate Federal awards totaling $50 million or more in Federal awards subject to this part in its most recently completed fiscal year must comply with the Cost Accounting Standards Board's cost accounting standards located at 48 CFR 9905.501, 9905.502, 9905.505, and 9905.506. CAS-covered contracts awarded to the IHEs are subject to the CAS requirements at 48 CFR 9900 through 9999 and 48 CFR part 30 (FAR Part 30).

(b) Disclosure statement. An IHE that receives aggregate Federal awards totaling $50 million or more subject to this part during its most recently completed fiscal year must disclose their cost accounting practices by filing a Disclosure Statement (DS-2), which is reproduced in Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs). With the approval of the cognizant agency for indirect costs, an IHE may meet the DS-2 submission by submitting the DS-2 for each business unit that received $50 million or more in Federal awards.

(1) The DS-2 must be submitted to the cognizant agency for indirect costs with a copy to the IHE's cognizant agency for audit.

(2) An IHE is responsible for maintaining an accurate DS-2 and complying with disclosed cost accounting practices. An IHE must file amendments to the DS-2 to the cognizant agency for indirect costs six months in advance of a disclosed practice being changed to comply with a new or modified standard, or when a practice is changed for other reasons. An IHE may proceed with implementing the change only if it has not been notified by the Federal cognizant agency for indirect costs that either a longer period will be needed for review or there are concerns with the potential change within the six months period. Amendments of a DS-2 may be submitted at any time. Resubmission of a complete, updated DS-2 is discouraged except when there are extensive changes to disclosed practices.

(3) Cost and funding adjustments. Cost adjustments must be made by the cognizant agency for indirect costs if an IHE fails to comply with the cost policies in this part or fails to consistently follow its established or disclosed cost accounting practices when estimating, accumulating or reporting the costs of Federal awards, and the aggregate cost impact on Federal awards is material. The cost adjustment must normally be made on an aggregate basis for all affected Federal awards through an adjustment of the IHE's future F&A costs rates or other means considered appropriate by the cognizant agency for indirect costs. Under the terms of CAS covered contracts, adjustments in the amount of funding provided may also be required when the estimated proposal costs were not determined in accordance with established cost accounting practices.

(4) Overpayments. Excess amounts paid in the aggregate by the Federal Government under Federal awards due to a noncompliant cost accounting practice used to estimate, accumulate, or report costs must be credited or refunded, as deemed appropriate by the cognizant agency for indirect costs. Interest applicable to the excess amounts paid in the aggregate during the period of noncompliance must also be determined and collected in accordance with applicable Federal agency regulations.

(5) Compliant cost accounting practice changes. Changes from one compliant cost accounting practice to another compliant practice that are approved by the cognizant agency for indirect costs may require cost adjustments if the change has a material effect on Federal awards and the changes are deemed appropriate by the cognizant agency for indirect costs.

(6) Responsibilities. The cognizant agency for indirect cost must: (i) Determine cost adjustments for all Federal awards in the aggregate on behalf of the Federal Government. Actions

of the cognizant agency for indirect cost in making cost adjustment determinations must be coordinated with all affected Federal awarding agencies to the extent necessary.

(ii) Prescribe guidelines and establish internal procedures to promptly determine on behalf of the Federal Government that a DS-2 adequately discloses the IHE's cost accounting practices and that the disclosed practices are compliant with applicable CAS and the requirements of this part.




(iii) Distribute to all affected Federal awarding agencies any DS-2 determination of adequacy or noncompliance. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] GENERAL PROVISIONS FOR SELECTED ITEMS OF COST §200.420 Considerations for selected items of cost.

This section provides principles to be applied in establishing the allowability of certain items involved in determining cost, in addition to the requirements of Subtitle II. Basic Considerations of this subpart. These principles apply whether or not a particular item of cost is properly treated as direct cost or indirect (F&A) cost. Failure to mention a particular item of cost is not intended to imply that it is either allowable or unallowable; rather, determination as to allowability in each case should be based on the treatment provided for similar or related items of cost, and based on the principles described in §§200.402 Composition of costs through 200.411 Adjustment of previously negotiated indirect (F&A) cost rates containing unallowable costs. In case of a discrepancy between the provisions of a specific Federal award and the provisions below, the Federal award governs. Criteria outlined in §200.403 Factors affecting allowability of costs must be applied in determining allowability. See also §200.102 Exceptions. §200.421 Advertising and public relations.

(a) The term advertising costs means the costs of advertising media and corollary administrative costs. Advertising media include magazines, newspapers, radio and television, direct mail, exhibits, electronic or computer transmittals, and the like.

(b) The only allowable advertising costs are those which are solely for: (1) The recruitment of personnel required by the non-Federal entity for performance of a Federal award (See also

§200.463 Recruiting costs); (2) The procurement of goods and services for the performance of a Federal award; (3) The disposal of scrap or surplus materials acquired in the performance of a Federal award except when non-

Federal entities are reimbursed for disposal costs at a predetermined amount; or (4) Program outreach and other specific purposes necessary to meet the requirements of the Federal award. (c) The term “public relations” includes community relations and means those activities dedicated to maintaining the

image of the non-Federal entity or maintaining or promoting understanding and favorable relations with the community or public at large or any segment of the public.

(d) The only allowable public relations costs are: (1) Costs specifically required by the Federal award; (2) Costs of communicating with the public and press pertaining to specific activities or accomplishments which result

from performance of the Federal award (these costs are considered necessary as part of the outreach effort for the Federal award); or

(3) Costs of conducting general liaison with news media and government public relations officers, to the extent that such activities are limited to communication and liaison necessary to keep the public informed on matters of public concern, such as notices of funding opportunities, financial matters, etc.

(e) Unallowable advertising and public relations costs include the following: (1) All advertising and public relations costs other than as specified in paragraphs (b) and (d) of this section; (2) Costs of meetings, conventions, convocations, or other events related to other activities of the entity (see also

§200.432 Conferences), including: (i) Costs of displays, demonstrations, and exhibits; (ii) Costs of meeting rooms, hospitality suites, and other special facilities used in conjunction with shows and other

special events; and (iii) Salaries and wages of employees engaged in setting up and displaying exhibits, making demonstrations, and

providing briefings; (3) Costs of promotional items and memorabilia, including models, gifts, and souvenirs; (4) Costs of advertising and public relations designed solely to promote the non-Federal entity.

§200.422 Advisory councils.

Costs incurred by advisory councils or committees are unallowable unless authorized by statute, the Federal awarding agency or as an indirect cost where allocable to Federal awards. See §200.444 General costs of government, applicable to states, local governments and Indian tribes. §200.423 Alcoholic beverages.

Costs of alcoholic beverages are unallowable. §200.424 Alumni/ae activities.

Costs incurred by IHEs for, or in support of, alumni/ae activities are unallowable. §200.425 Audit services.

(a) A reasonably proportionate share of the costs of audits required by, and performed in accordance with, the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507), as implemented by requirements of this part, are allowable. However, the following audit costs are unallowable:

(1) Any costs when audits required by the Single Audit Act and Subpart F—Audit Requirements of this part have not been conducted or have been conducted but not in accordance therewith; and




(2) Any costs of auditing a non-Federal entity that is exempted from having an audit conducted under the Single Audit Act and Subpart F—Audit Requirements of this part because its expenditures under Federal awards are less than $750,000 during the non-Federal entity's fiscal year.

(b) The costs of a financial statement audit of a non-Federal entity that does not currently have a Federal award may be included in the indirect cost pool for a cost allocation plan or indirect cost proposal.

(c) Pass-through entities may charge Federal awards for the cost of agreed-upon-procedures engagements to monitor subrecipients (in accordance with Subpart D—Post Federal Award Requirements of this part, §§200.330 Subrecipient and contractor determinations through 200.332 Fixed Amount Subawards) who are exempted from the requirements of the Single Audit Act and Subpart F—Audit Requirements of this part. This cost is allowable only if the agreed-upon-procedures engagements are:

(1) Conducted in accordance with GAGAS attestation standards; (2) Paid for and arranged by the pass-through entity; and (3) Limited in scope to one or more of the following types of compliance requirements: activities allowed or unallowed;

allowable costs/cost principles; eligibility; and reporting. §200.426 Bad debts.

Bad debts (debts which have been determined to be uncollectable), including losses (whether actual or estimated) arising from uncollectable accounts and other claims, are unallowable. Related collection costs, and related legal costs, arising from such debts after they have been determined to be uncollectable are also unallowable. See also §200.428 Collections of improper payments. §200.427 Bonding costs.

(a) Bonding costs arise when the Federal awarding agency requires assurance against financial loss to itself or others by reason of the act or default of the non-Federal entity. They arise also in instances where the non-Federal entity requires similar assurance, including: bonds as bid, performance, payment, advance payment, infringement, and fidelity bonds for employees and officials.

(b) Costs of bonding required pursuant to the terms and conditions of the Federal award are allowable. (c) Costs of bonding required by the non-Federal entity in the general conduct of its operations are allowable as an

indirect cost to the extent that such bonding is in accordance with sound business practice and the rates and premiums are reasonable under the circumstances. §200.428 Collections of improper payments.

The costs incurred by a non-Federal entity to recover improper payments are allowable as either direct or indirect costs, as appropriate. Amounts collected may be used by the non-Federal entity in accordance with cash management standards set forth in §200.305 Payment. §200.429 Commencement and convocation costs.

For IHEs, costs incurred for commencements and convocations are unallowable, except as provided for in Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs), paragraph (B)(9) Student Administration and Services, as student activity costs. §200.430 Compensation—personal services.

(a) General. Compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation—fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees:

(1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities;

(2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and

(3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.

(b) Reasonableness. Compensation for employees engaged in work on Federal awards will be considered reasonable to the extent that it is consistent with that paid for similar work in other activities of the non-Federal entity. In cases where the kinds of employees required for Federal awards are not found in the other activities of the non-Federal entity, compensation will be considered reasonable to the extent that it is comparable to that paid for similar work in the labor market in which the non-Federal entity competes for the kind of employees involved.

(c) Professional activities outside the non-Federal entity. Unless an arrangement is specifically authorized by a Federal awarding agency, a non-Federal entity must follow its written non-Federal entity-wide policies and practices concerning the permissible extent of professional services that can be provided outside the non-Federal entity for non-organizational compensation. Where such non-Federal entity-wide written policies do not exist or do not adequately define the permissible extent of consulting or other non-organizational activities undertaken for extra outside pay, the Federal Government may require that the effort of professional staff working on Federal awards be allocated between:

(1) Non-Federal entity activities, and




(2) Non-organizational professional activities. If the Federal awarding agency considers the extent of non-organizational professional effort excessive or inconsistent with the conflicts-of-interest terms and conditions of the Federal award, appropriate arrangements governing compensation will be negotiated on a case-by-case basis.

(d) Unallowable costs. (1) Costs which are unallowable under other sections of these principles must not be allowable under this section solely on the basis that they constitute personnel compensation.

(2) The allowable compensation for certain employees is subject to a ceiling in accordance with statute. For the amount of the ceiling for cost-reimbursement contracts, the covered compensation subject to the ceiling, the covered employees, and other relevant provisions, see 10 U.S.C. 2324(e)(1)(P), and 41 U.S.C. 1127 and 4304(a)(16). For other types of Federal awards, other statutory ceilings may apply.

(e) Special considerations. Special considerations in determining allowability of compensation will be given to any change in a non-Federal entity's compensation policy resulting in a substantial increase in its employees' level of compensation (particularly when the change was concurrent with an increase in the ratio of Federal awards to other activities) or any change in the treatment of allowability of specific types of compensation due to changes in Federal policy.

(f) Incentive compensation. Incentive compensation to employees based on cost reduction, or efficient performance, suggestion awards, safety awards, etc., is allowable to the extent that the overall compensation is determined to be reasonable and such costs are paid or accrued pursuant to an agreement entered into in good faith between the non-Federal entity and the employees before the services were rendered, or pursuant to an established plan followed by the non-Federal entity so consistently as to imply, in effect, an agreement to make such payment.

(g) Nonprofit organizations. For compensation to members of nonprofit organizations, trustees, directors, associates, officers, or the immediate families thereof, determination must be made that such compensation is reasonable for the actual personal services rendered rather than a distribution of earnings in excess of costs. This may include director's and executive committee member's fees, incentive awards, allowances for off-site pay, incentive pay, location allowances, hardship pay, and cost-of-living differentials.

(h) Institutions of higher education (IHEs). (1) Certain conditions require special consideration and possible limitations in determining allowable personnel compensation costs under Federal awards. Among such conditions are the following:

(i) Allowable activities. Charges to Federal awards may include reasonable amounts for activities contributing and directly related to work under an agreement, such as delivering special lectures about specific aspects of the ongoing activity, writing reports and articles, developing and maintaining protocols (human, animals, etc.), managing substances/chemicals, managing and securing project-specific data, coordinating research subjects, participating in appropriate seminars, consulting with colleagues and graduate students, and attending meetings and conferences.

(ii) Incidental activities. Incidental activities for which supplemental compensation is allowable under written institutional policy (at a rate not to exceed institutional base salary) need not be included in the records described in paragraph (i) of this section to directly charge payments of incidental activities, such activities must either be specifically provided for in the Federal award budget or receive prior written approval by the Federal awarding agency.

(2) Salary basis. Charges for work performed on Federal awards by faculty members during the academic year are allowable at the IBS rate. Except as noted in paragraph (h)(1)(ii) of this section, in no event will charges to Federal awards, irrespective of the basis of computation, exceed the proportionate share of the IBS for that period. This principle applies to all members of faculty at an institution. IBS is defined as the annual compensation paid by an IHE for an individual's appointment, whether that individual's time is spent on research, instruction, administration, or other activities. IBS excludes any income that an individual earns outside of duties performed for the IHE. Unless there is prior approval by the Federal awarding agency, charges of a faculty member's salary to a Federal award must not exceed the proportionate share of the IBS for the period during which the faculty member worked on the award.

(3) Intra-Institution of Higher Education (IHE) consulting. Intra-IHE consulting by faculty is assumed to be undertaken as an IHE obligation requiring no compensation in addition to IBS. However, in unusual cases where consultation is across departmental lines or involves a separate or remote operation, and the work performed by the faculty member is in addition to his or her regular responsibilities, any charges for such work representing additional compensation above IBS are allowable provided that such consulting arrangements are specifically provided for in the Federal award or approved in writing by the Federal awarding agency.

(4) Extra Service Pay normally represents overload compensation, subject to institutional compensation policies for services above and beyond IBS. Where extra service pay is a result of Intra-IHE consulting, it is subject to the same requirements of paragraph (b) above. It is allowable if all of the following conditions are met:

(i) The non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards.

(ii) The non-Federal entity establishes a consistent written definition of work covered by IBS which is specific enough to determine conclusively when work beyond that level has occurred. This may be described in appointment letters or other documentations.

(iii) The supplementation amount paid is commensurate with the IBS rate of pay and the amount of additional work performed. See paragraph (h)(2) of this section.

(iv) The salaries, as supplemented, fall within the salary structure and pay ranges established by and documented in writing or otherwise applicable to the non-Federal entity.

(v) The total salaries charged to Federal awards including extra service pay are subject to the Standards of Documentation as described in paragraph (i) of this section.

(5) Periods outside the academic year. (i) Except as specified for teaching activity in paragraph (h)(5)(ii) of this section, charges for work performed by faculty members on Federal awards during periods not included in the base salary period will be at a rate not in excess of the IBS.




(ii) Charges for teaching activities performed by faculty members on Federal awards during periods not included in IBS period will be based on the normal written policy of the IHE governing compensation to faculty members for teaching assignments during such periods.

(6) Part-time faculty. Charges for work performed on Federal awards by faculty members having only part-time appointments will be determined at a rate not in excess of that regularly paid for part-time assignments.

(7) Sabbatical leave costs. Rules for sabbatical leave are as follow: (i) Costs of leaves of absence by employees for performance of graduate work or sabbatical study, travel, or research

are allowable provided the IHE has a uniform written policy on sabbatical leave for persons engaged in instruction and persons engaged in research. Such costs will be allocated on an equitable basis among all related activities of the IHE.

(ii) Where sabbatical leave is included in fringe benefits for which a cost is determined for assessment as a direct charge, the aggregate amount of such assessments applicable to all work of the institution during the base period must be reasonable in relation to the IHE's actual experience under its sabbatical leave policy.

(8) Salary rates for non-faculty members. Non-faculty full-time professional personnel may also earn “extra service pay” in accordance with the non-Federal entity's written policy and consistent with paragraph (h)(1)(i) of this section.

(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:

(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;

(ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not

exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated

basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii)

above for treatment of incidental work for IHEs.); and (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the

employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.

(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:

(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are

identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and

(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.

(ix) Because practices vary as to the activity constituting a full workload (for IHEs, IBS), records may reflect categories of activities expressed as a percentage distribution of total activities.

(x) It is recognized that teaching, research, service, and administration are often inextricably intermingled in an academic setting. When recording salaries and wages charged to Federal awards for IHEs, a precise assessment of factors that contribute to costs is therefore not always feasible, nor is it expected.

(2) For records which meet the standards required in paragraph (i)(1) of this section, the non-Federal entity will not be required to provide additional support or documentation for the work performed, other than that referenced in paragraph (i)(3) of this section.

(3) In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt employees, in addition to the supporting documentation described in this section, must also be supported by records indicating the total number of hours worked each day.

(4) Salaries and wages of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner as salaries and wages claimed for reimbursement from Federal awards.

(5) For states, local governments and Indian tribes, substitute processes or systems for allocating salaries and wages to Federal awards may be used in place of or in addition to the records described in paragraph (1) if approved by the cognizant agency for indirect cost. Such systems may include, but are not limited to, random moment sampling, “rolling” time studies, case counts, or other quantifiable measures of work performed.

(i) Substitute systems which use sampling methods (primarily for Temporary Assistance for Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP), Medicaid, and other public assistance programs) must meet acceptable statistical sampling standards including:

(A) The sampling universe must include all of the employees whose salaries and wages are to be allocated based on sample results except as provided in paragraph (i)(5)(iii) of this section;

(B) The entire time period involved must be covered by the sample; and (C) The results must be statistically valid and applied to the period being sampled. (ii) Allocating charges for the sampled employees' supervisors, clerical and support staffs, based on the results of the

sampled employees, will be acceptable.




(iii) Less than full compliance with the statistical sampling standards noted in subsection (5)(i) may be accepted by the cognizant agency for indirect costs if it concludes that the amounts to be allocated to Federal awards will be minimal, or if it concludes that the system proposed by the non-Federal entity will result in lower costs to Federal awards than a system which complies with the standards.

(6) Cognizant agencies for indirect costs are encouraged to approve alternative proposals based on outcomes and milestones for program performance where these are clearly documented. Where approved by the Federal cognizant agency for indirect costs, these plans are acceptable as an alternative to the requirements of paragraph (i)(1) of this section.

(7) For Federal awards of similar purpose activity or instances of approved blended funding, a non-Federal entity may submit performance plans that incorporate funds from multiple Federal awards and account for their combined use based on performance-oriented metrics, provided that such plans are approved in advance by all involved Federal awarding agencies. In these instances, the non-Federal entity must submit a request for waiver of the requirements based on documentation that describes the method of charging costs, relates the charging of costs to the specific activity that is applicable to all fund sources, and is based on quantifiable measures of the activity in relation to time charged.

(8) For a non-Federal entity where the records do not meet the standards described in this section, the Federal Government may require personnel activity reports, including prescribed certifications, or equivalent documentation that support the records as required in this section. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] §200.431 Compensation—fringe benefits.

(a) Fringe benefits are allowances and services provided by employers to their employees as compensation in addition to regular salaries and wages. Fringe benefits include, but are not limited to, the costs of leave (vacation, family-related, sick or military), employee insurance, pensions, and unemployment benefit plans. Except as provided elsewhere in these principles, the costs of fringe benefits are allowable provided that the benefits are reasonable and are required by law, non-Federal entity-employee agreement, or an established policy of the non-Federal entity.

(b) Leave. The cost of fringe benefits in the form of regular compensation paid to employees during periods of authorized absences from the job, such as for annual leave, family-related leave, sick leave, holidays, court leave, military leave, administrative leave, and other similar benefits, are allowable if all of the following criteria are met:

(1) They are provided under established written leave policies; (2) The costs are equitably allocated to all related activities, including Federal awards; and, (3) The accounting basis (cash or accrual) selected for costing each type of leave is consistently followed by the non-

Federal entity or specified grouping of employees. (i) When a non-Federal entity uses the cash basis of accounting, the cost of leave is recognized in the period that the

leave is taken and paid for. Payments for unused leave when an employee retires or terminates employment are allowable in the year of payment.

(ii) The accrual basis may be only used for those types of leave for which a liability as defined by GAAP exists when the leave is earned. When a non-Federal entity uses the accrual basis of accounting, allowable leave costs are the lesser of the amount accrued or funded.

(c) The cost of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker's compensation insurance (except as indicated in §200.447 Insurance and indemnification); pension plan costs (see paragraph (i) of this section); and other similar benefits are allowable, provided such benefits are granted under established written policies. Such benefits, must be allocated to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities, and charged as direct or indirect costs in accordance with the non-Federal entity's accounting practices.

(d) Fringe benefits may be assigned to cost objectives by identifying specific benefits to specific individual employees or by allocating on the basis of entity-wide salaries and wages of the employees receiving the benefits. When the allocation method is used, separate allocations must be made to selective groupings of employees, unless the non-Federal entity demonstrates that costs in relationship to salaries and wages do not differ significantly for different groups of employees.

(e) Insurance. See also §200.447 Insurance and indemnification, paragraphs (d)(1) and (2). (1) Provisions for a reserve under a self-insurance program for unemployment compensation or workers'

compensation are allowable to the extent that the provisions represent reasonable estimates of the liabilities for such compensation, and the types of coverage, extent of coverage, and rates and premiums would have been allowable had insurance been purchased to cover the risks. However, provisions for self-insured liabilities which do not become payable for more than one year after the provision is made must not exceed the present value of the liability.

(2) Costs of insurance on the lives of trustees, officers, or other employees holding positions of similar responsibility are allowable only to the extent that the insurance represents additional compensation. The costs of such insurance when the non-Federal entity is named as beneficiary are unallowable.

(3) Actual claims paid to or on behalf of employees or former employees for workers' compensation, unemployment compensation, severance pay, and similar employee benefits (e.g., post-retirement health benefits), are allowable in the year of payment provided that the non-Federal entity follows a consistent costing policy.

(f) Automobiles. That portion of automobile costs furnished by the entity that relates to personal use by employees (including transportation to and from work) is unallowable as fringe benefit or indirect (F&A) costs regardless of whether the cost is reported as taxable income to the employees.

(g) Pension Plan Costs. Pension plan costs which are incurred in accordance with the established policies of the non-Federal entity are allowable, provided that:

(1) Such policies meet the test of reasonableness.




(2) The methods of cost allocation are not discriminatory. (3) For entities using accrual based accounting, the cost assigned to each fiscal year is determined in accordance

with GAAP. (4) The costs assigned to a given fiscal year are funded for all plan participants within six months after the end of that

year. However, increases to normal and past service pension costs caused by a delay in funding the actuarial liability beyond 30 calendar days after each quarter of the year to which such costs are assignable are unallowable. Non-Federal entity may elect to follow the “Cost Accounting Standard for Composition and Measurement of Pension Costs” (48 CFR 9904.412).

(5) Pension plan termination insurance premiums paid pursuant to the Employee Retirement Income Security Act (ERISA) of 1974 (29 U.S.C. 1301-1461) are allowable. Late payment charges on such premiums are unallowable. Excise taxes on accumulated funding deficiencies and other penalties imposed under ERISA are unallowable.

(6) Pension plan costs may be computed using a pay-as-you-go method or an acceptable actuarial cost method in accordance with established written policies of the non-Federal entity.

(i) For pension plans financed on a pay-as-you-go method, allowable costs will be limited to those representing actual payments to retirees or their beneficiaries.

(ii) Pension costs calculated using an actuarial cost-based method recognized by GAAP are allowable for a given fiscal year if they are funded for that year within six months after the end of that year. Costs funded after the six month period (or a later period agreed to by the cognizant agency for indirect costs) are allowable in the year funded. The cognizant agency for indirect costs may agree to an extension of the six month period if an appropriate adjustment is made to compensate for the timing of the charges to the Federal Government and related Federal reimbursement and the non-Federal entity's contribution to the pension fund. Adjustments may be made by cash refund or other equitable procedures to compensate the Federal Government for the time value of Federal reimbursements in excess of contributions to the pension fund.

(iii) Amounts funded by the non-Federal entity in excess of the actuarially determined amount for a fiscal year may be used as the non-Federal entity's contribution in future periods.

(iv) When a non-Federal entity converts to an acceptable actuarial cost method, as defined by GAAP, and funds pension costs in accordance with this method, the unfunded liability at the time of conversion is allowable if amortized over a period of years in accordance with GAAP.

(v) The Federal Government must receive an equitable share of any previously allowed pension costs (including earnings thereon) which revert or inure to the non-Federal entity in the form of a refund, withdrawal, or other credit.

(h) Post-Retirement Health. Post-retirement health plans (PRHP) refers to costs of health insurance or health services not included in a pension plan covered by paragraph (g) of this section for retirees and their spouses, dependents, and survivors. PRHP costs may be computed using a pay-as-you-go method or an acceptable actuarial cost method in accordance with established written policies of the non-Federal entity.

(1) For PRHP financed on a pay-as-you-go method, allowable costs will be limited to those representing actual payments to retirees or their beneficiaries.

(2) PRHP costs calculated using an actuarial cost method recognized by GAAP are allowable if they are funded for that year within six months after the end of that year. Costs funded after the six month period (or a later period agreed to by the cognizant agency) are allowable in the year funded. The Federal cognizant agency for indirect costs may agree to an extension of the six month period if an appropriate adjustment is made to compensate for the timing of the charges to the Federal Government and related Federal reimbursements and the non-Federal entity's contributions to the PRHP fund. Adjustments may be made by cash refund, reduction in current year's PRHP costs, or other equitable procedures to compensate the Federal Government for the time value of Federal reimbursements in excess of contributions to the PRHP fund.

(3) Amounts funded in excess of the actuarially determined amount for a fiscal year may be used as the non-Federal entity contribution in a future period.

(4) When a non-Federal entity converts to an acceptable actuarial cost method and funds PRHP costs in accordance with this method, the initial unfunded liability attributable to prior years is allowable if amortized over a period of years in accordance with GAAP, or, if no such GAAP period exists, over a period negotiated with the cognizant agency for indirect costs.

(5) To be allowable in the current year, the PRHP costs must be paid either to: (i) An insurer or other benefit provider as current year costs or premiums, or (ii) An insurer or trustee to maintain a trust fund or reserve for the sole purpose of providing post-retirement benefits to

retirees and other beneficiaries. (6) The Federal Government must receive an equitable share of any amounts of previously allowed post-retirement

benefit costs (including earnings thereon) which revert or inure to the non-Federal entity in the form of a refund, withdrawal, or other credit.

(i) Severance Pay. (1) Severance pay, also commonly referred to as dismissal wages, is a payment in addition to regular salaries and wages, by non-Federal entities to workers whose employment is being terminated. Costs of severance pay are allowable only to the extent that in each case, it is required by (a) law, (b) employer-employee agreement, (c) established policy that constitutes, in effect, an implied agreement on the non-Federal entity's part, or (d) circumstances of the particular employment.

(2) Costs of severance payments are divided into two categories as follows: (i) Actual normal turnover severance payments must be allocated to all activities; or, where the non-Federal entity

provides for a reserve for normal severances, such method will be acceptable if the charge to current operations is




reasonable in light of payments actually made for normal severances over a representative past period, and if amounts charged are allocated to all activities of the non-Federal entity.

(ii) Measurement of costs of abnormal or mass severance pay by means of an accrual will not achieve equity to both parties. Thus, accruals for this purpose are not allowable. However, the Federal Government recognizes its obligation to participate, to the extent of its fair share, in any specific payment. Prior approval by the Federal awarding agency or cognizant agency for indirect cost, as appropriate, is required.

(3) Costs incurred in certain severance pay packages which are in an amount in excess of the normal severance pay paid by the non-Federal entity to an employee upon termination of employment and are paid to the employee contingent upon a change in management control over, or ownership of, the non-Federal entity's assets, are unallowable.

(4) Severance payments to foreign nationals employed by the non-Federal entity outside the United States, to the extent that the amount exceeds the customary or prevailing practices for the non-Federal entity in the United States, are unallowable, unless they are necessary for the performance of Federal programs and approved by the Federal awarding agency.

(5) Severance payments to foreign nationals employed by the non-Federal entity outside the United States due to the termination of the foreign national as a result of the closing of, or curtailment of activities by, the non-Federal entity in that country, are unallowable, unless they are necessary for the performance of Federal programs and approved by the Federal awarding agency.

(j)(1) For IHEs only. Fringe benefits in the form of undergraduate and graduate tuition or remission of tuition for individual employees are allowable, provided such benefits are granted in accordance with established non-Federal entity policies, and are distributed to all non-Federal entity activities on an equitable basis. Tuition benefits for family members other than the employee are unallowable.

(2) Fringe benefits in the form of tuition or remission of tuition for individual employees not employed by IHEs are limited to the tax-free amount allowed per section 127 of the Internal Revenue Code as amended.

(3) IHEs may offer employees tuition waivers or tuition reductions, provided that the benefit does not discriminate in favor of highly compensated employees. Employees can exercise these benefits at other institutions according to institutional policy. See §200.466 Scholarships and student aid costs, for treatment of tuition remission provided to students.

(k) For IHEs whose costs are paid by state or local governments, fringe benefit programs (such as pension costs and FICA) and any other benefits costs specifically incurred on behalf of, and in direct benefit to, the non-Federal entity, are allowable costs of such non-Federal entities whether or not these costs are recorded in the accounting records of the non-Federal entities, subject to the following:

(1) The costs meet the requirements of Basic Considerations in §§200.402 Composition of costs through 200.411 Adjustment of previously negotiated indirect (F&A) cost rates containing unallowable costs of this subpart;

(2) The costs are properly supported by approved cost allocation plans in accordance with applicable Federal cost accounting principles; and

(3) The costs are not otherwise borne directly or indirectly by the Federal Government. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 80 FR 54409, Sept. 10, 2015] §200.432 Conferences.

A conference is defined as a meeting, retreat, seminar, symposium, workshop or event whose primary purpose is the dissemination of technical information beyond the non-Federal entity and is necessary and reasonable for successful performance under the Federal award. Allowable conference costs paid by the non-Federal entity as a sponsor or host of the conference may include rental of facilities, speakers' fees, costs of meals and refreshments, local transportation, and other items incidental to such conferences unless further restricted by the terms and conditions of the Federal award. As needed, the costs of identifying, but not providing, locally available dependent-care resources are allowable. Conference hosts/sponsors must exercise discretion and judgment in ensuring that conference costs are appropriate, necessary and managed in a manner that minimizes costs to the Federal award. The Federal awarding agency may authorize exceptions where appropriate for programs including Indian tribes, children, and the elderly. See also §§200.438 Entertainment costs, 200.456 Participant support costs, 200.474 Travel costs, and 200.475 Trustees. §200.433 Contingency provisions.

(a) Contingency is that part of a budget estimate of future costs (typically of large construction projects, IT systems, or other items as approved by the Federal awarding agency) which is associated with possible events or conditions arising from causes the precise outcome of which is indeterminable at the time of estimate, and that experience shows will likely result, in aggregate, in additional costs for the approved activity or project. Amounts for major project scope changes, unforeseen risks, or extraordinary events may not be included.

(b) It is permissible for contingency amounts other than those excluded in paragraph (a) of this section to be explicitly included in budget estimates, to the extent they are necessary to improve the precision of those estimates. Amounts must be estimated using broadly-accepted cost estimating methodologies, specified in the budget documentation of the Federal award, and accepted by the Federal awarding agency. As such, contingency amounts are to be included in the Federal award. In order for actual costs incurred to be allowable, they must comply with the cost principles and other requirements in this part (see also §§200.300 Statutory and national policy requirements through 200.309 Period of performance of Subpart D of this part and 200.403 Factors affecting allowability of costs); be necessary and reasonable for proper and efficient accomplishment of project or program objectives, and be verifiable from the non-Federal entity's records.

(c) Payments made by the Federal awarding agency to the non-Federal entity's “contingency reserve” or any similar payment made for events the occurrence of which cannot be foretold with certainty as to the time or intensity, or with an




assurance of their happening, are unallowable, except as noted in §§200.431 Compensation—fringe benefits regarding self-insurance, pensions, severance and post-retirement health costs and 200.447 Insurance and indemnification. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] §200.434 Contributions and donations.

(a) Costs of contributions and donations, including cash, property, and services, from the non-Federal entity to other entities, are unallowable.

(b) The value of services and property donated to the non-Federal entity may not be charged to the Federal award either as a direct or indirect (F&A) cost. The value of donated services and property may be used to meet cost sharing or matching requirements (see §200.306 Cost sharing or matching). Depreciation on donated assets is permitted in accordance with §200.436 Depreciation, as long as the donated property is not counted towards cost sharing or matching requirements.

(c) Services donated or volunteered to the non-Federal entity may be furnished to a non-Federal entity by professional and technical personnel, consultants, and other skilled and unskilled labor. The value of these services may not be charged to the Federal award either as a direct or indirect cost. However, the value of donated services may be used to meet cost sharing or matching requirements in accordance with the provisions of §200.306 Cost sharing or matching.

(d) To the extent feasible, services donated to the non-Federal entity will be supported by the same methods used to support the allocability of regular personnel services.

(e) The following provisions apply to nonprofit organizations. The value of services donated to the nonprofit organization utilized in the performance of a direct cost activity must be considered in the determination of the non-Federal entity's indirect cost rate(s) and, accordingly, must be allocated a proportionate share of applicable indirect costs when the following circumstances exist:

(1) The aggregate value of the services is material; (2) The services are supported by a significant amount of the indirect costs incurred by the non-Federal entity; (i) In those instances where there is no basis for determining the fair market value of the services rendered, the non-

Federal entity and the cognizant agency for indirect costs must negotiate an appropriate allocation of indirect cost to the services.

(ii) Where donated services directly benefit a project supported by the Federal award, the indirect costs allocated to the services will be considered as a part of the total costs of the project. Such indirect costs may be reimbursed under the Federal award or used to meet cost sharing or matching requirements.

(f) Fair market value of donated services must be computed as described in §200.306 Cost sharing or matching. (g) Personal Property and Use of Space. (1) Donated personal property and use of space may be furnished to a non-Federal entity. The value of the personal

property and space may not be charged to the Federal award either as a direct or indirect cost. (2) The value of the donations may be used to meet cost sharing or matching share requirements under the

conditions described in §§200.300 Statutory and national policy requirements through 200.309 Period of performance of subpart D of this part. The value of the donations must be determined in accordance with §§200.300 Statutory and national policy requirements through 200.309 Period of performance. Where donations are treated as indirect costs, indirect cost rates will separate the value of the donations so that reimbursement will not be made. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] §200.435 Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringements.

(a) Definitions for the purposes of this section. (1) Conviction means a judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon verdict or a plea, including a conviction due to a plea of nolo contendere.

(2) Costs include the services of in-house or private counsel, accountants, consultants, or others engaged to assist the non-Federal entity before, during, and after commencement of a judicial or administrative proceeding, that bear a direct relationship to the proceeding.

(3) Fraud means: (i) Acts of fraud or corruption or attempts to defraud the Federal Government or to corrupt its agents, (ii) Acts that constitute a cause for debarment or suspension (as specified in agency regulations), and (iii) Acts which violate the False Claims Act (31 U.S.C. 3729-3732) or the Anti-kickback Act (41 U.S.C. 1320a-7b(b)). (4) Penalty does not include restitution, reimbursement, or compensatory damages. (5) Proceeding includes an investigation. (b) Costs. (1) Except as otherwise described herein, costs incurred in connection with any criminal, civil or

administrative proceeding (including filing of a false certification) commenced by the Federal Government, a state, local government, or foreign government, or joined by the Federal Government (including a proceeding under the False Claims Act), against the non-Federal entity, (or commenced by third parties or a current or former employee of the non-Federal entity who submits a whistleblower complaint of reprisal in accordance with 10 U.S.C. 2409 or 41 U.S.C. 4712), are not allowable if the proceeding:

(i) Relates to a violation of, or failure to comply with, a Federal, state, local or foreign statute, regulation or the terms and conditions of the Federal award, by the non-Federal entity (including its agents and employees); and

(ii) Results in any of the following dispositions: (A) In a criminal proceeding, a conviction. (B) In a civil or administrative proceeding involving an allegation of fraud or similar misconduct, a determination of

non-Federal entity liability.




(C) In the case of any civil or administrative proceeding, the disallowance of costs or the imposition of a monetary penalty, or an order issued by the Federal awarding agency head or delegate to the non-Federal entity to take corrective action under 10 U.S.C. 2409 or 41 U.S.C. 4712.

(D) A final decision by an appropriate Federal official to debar or suspend the non-Federal entity, to rescind or void a Federal award, or to terminate a Federal award by reason of a violation or failure to comply with a statute, regulation, or the terms and conditions of the Federal award.

(E) A disposition by consent or compromise, if the action could have resulted in any of the dispositions described in paragraphs (b)(1)(ii)(A) through (D) of this section.

(2) If more than one proceeding involves the same alleged misconduct, the costs of all such proceedings are unallowable if any results in one of the dispositions shown in paragraph (b) of this section.

(c) If a proceeding referred to in paragraph (b) of this section is commenced by the Federal Government and is resolved by consent or compromise pursuant to an agreement by the non-Federal entity and the Federal Government, then the costs incurred may be allowed to the extent specifically provided in such agreement.

(d) If a proceeding referred to in paragraph (b) of this section is commenced by a state, local or foreign government, the authorized Federal official may allow the costs incurred if such authorized official determines that the costs were incurred as a result of:

(1) A specific term or condition of the Federal award, or (2) Specific written direction of an authorized official of the Federal awarding agency. (e) Costs incurred in connection with proceedings described in paragraph (b) of this section, which are not made

unallowable by that subsection, may be allowed but only to the extent that: (1) The costs are reasonable and necessary in relation to the administration of the Federal award and activities

required to deal with the proceeding and the underlying cause of action; (2) Payment of the reasonable, necessary, allocable and otherwise allowable costs incurred is not prohibited by any

other provision(s) of the Federal award; (3) The costs are not recovered from the Federal Government or a third party, either directly as a result of the

proceeding or otherwise; and, (4) An authorized Federal official must determine the percentage of costs allowed considering the complexity of

litigation, generally accepted principles governing the award of legal fees in civil actions involving the United States, and such other factors as may be appropriate. Such percentage must not exceed 80 percent. However, if an agreement reached under paragraph (c) of this section has explicitly considered this 80 percent limitation and permitted a higher percentage, then the full amount of costs resulting from that agreement are allowable.

(f) Costs incurred by the non-Federal entity in connection with the defense of suits brought by its employees or ex-employees under section 2 of the Major Fraud Act of 1988 (18 U.S.C. 1031), including the cost of all relief necessary to make such employee whole, where the non-Federal entity was found liable or settled, are unallowable.

(g) Costs of prosecution of claims against the Federal Government, including appeals of final Federal agency decisions, are unallowable.

(h) Costs of legal, accounting, and consultant services, and related costs, incurred in connection with patent infringement litigation, are unallowable unless otherwise provided for in the Federal award.

(i) Costs which may be unallowable under this section, including directly associated costs, must be segregated and accounted for separately. During the pendency of any proceeding covered by paragraphs (b) and (f) of this section, the Federal Government must generally withhold payment of such costs. However, if in its best interests, the Federal Government may provide for conditional payment upon provision of adequate security, or other adequate assurance, and agreement to repay all unallowable costs, plus interest, if the costs are subsequently determined to be unallowable. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] §200.436 Depreciation.

(a) Depreciation is the method for allocating the cost of fixed assets to periods benefitting from asset use. The non-Federal entity may be compensated for the use of its buildings, capital improvements, equipment, and software projects capitalized in accordance with GAAP, provided that they are used, needed in the non-Federal entity's activities, and properly allocated to Federal awards. Such compensation must be made by computing depreciation.

(b) The allocation for depreciation must be made in accordance with Appendices III through IX. (c) Depreciation is computed applying the following rules. The computation of depreciation must be based on the

acquisition cost of the assets involved. For an asset donated to the non-Federal entity by a third party, its fair market value at the time of the donation must be considered as the acquisition cost. Such assets may be depreciated or claimed as matching but not both. For the purpose of computing depreciation, the acquisition cost will exclude:

(1) The cost of land; (2) Any portion of the cost of buildings and equipment borne by or donated by the Federal Government, irrespective of

where title was originally vested or where it is presently located; (3) Any portion of the cost of buildings and equipment contributed by or for the non-Federal entity where law or

agreement prohibits recovery; and (4) Any asset acquired solely for the performance of a non-Federal award. (d) When computing depreciation charges, the following must be observed: (1) The period of useful service or useful life established in each case for usable capital assets must take into

consideration such factors as type of construction, nature of the equipment, technological developments in the particular area, historical data, and the renewal and replacement policies followed for the individual items or classes of assets involved.




(2) The depreciation method used to charge the cost of an asset (or group of assets) to accounting periods must reflect the pattern of consumption of the asset during its useful life. In the absence of clear evidence indicating that the expected consumption of the asset will be significantly greater in the early portions than in the later portions of its useful life, the straight-line method must be presumed to be the appropriate method. Depreciation methods once used may not be changed unless approved in advance by the cognizant agency. The depreciation methods used to calculate the depreciation amounts for indirect (F&A) rate purposes must be the same methods used by the non-Federal entity for its financial statements.

(3) The entire building, including the shell and all components, may be treated as a single asset and depreciated over a single useful life. A building may also be divided into multiple components. Each component item may then be depreciated over its estimated useful life. The building components must be grouped into three general components of a building: building shell (including construction and design costs), building services systems (e.g., elevators, HVAC, plumbing system and heating and air-conditioning system) and fixed equipment (e.g., sterilizers, casework, fume hoods, cold rooms and glassware/washers). In exceptional cases, a cognizant agency may authorize a non-Federal entity to use more than these three groupings. When a non-Federal entity elects to depreciate its buildings by its components, the same depreciation methods must be used for indirect (F&A) purposes and financial statements purposes, as described in paragraphs (d)(1) and (2) of this section.

(4) No depreciation may be allowed on any assets that have outlived their depreciable lives. (5) Where the depreciation method is introduced to replace the use allowance method, depreciation must be

computed as if the asset had been depreciated over its entire life (i.e., from the date the asset was acquired and ready for use to the date of disposal or withdrawal from service). The total amount of use allowance and depreciation for an asset (including imputed depreciation applicable to periods prior to the conversion from the use allowance method as well as depreciation after the conversion) may not exceed the total acquisition cost of the asset.

(e) Charges for depreciation must be supported by adequate property records, and physical inventories must be taken at least once every two years to ensure that the assets exist and are usable, used, and needed. Statistical sampling techniques may be used in taking these inventories. In addition, adequate depreciation records showing the amount of depreciation taken each period must also be maintained. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] §200.437 Employee health and welfare costs.

(a) Costs incurred in accordance with the non-Federal entity's documented policies for the improvement of working conditions, employer-employee relations, employee health, and employee performance are allowable.

(b) Such costs will be equitably apportioned to all activities of the non-Federal entity. Income generated from any of these activities will be credited to the cost thereof unless such income has been irrevocably sent to employee welfare organizations.

(c) Losses resulting from operating food services are allowable only if the non-Federal entity's objective is to operate such services on a break-even basis. Losses sustained because of operating objectives other than the above are allowable only:

(1) Where the non-Federal entity can demonstrate unusual circumstances; and (2) With the approval of the cognizant agency for indirect costs.

§200.438 Entertainment costs.

Costs of entertainment, including amusement, diversion, and social activities and any associated costs are unallowable, except where specific costs that might otherwise be considered entertainment have a programmatic purpose and are authorized either in the approved budget for the Federal award or with prior written approval of the Federal awarding agency. §200.439 Equipment and other capital expenditures.

(a) See §§200.13 Capital expenditures, 200.33 Equipment, 200.89 Special purpose equipment, 200.48 General purpose equipment, 200.2 Acquisition cost, and 200.12 Capital assets.

(b) The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except

with the prior written approval of the Federal awarding agency or pass-through entity. (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit

cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity. (3) Capital expenditures for improvements to land, buildings, or equipment which materially increase their value or

useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency, or pass-through entity. See §200.436 Depreciation, for rules on the allowability of depreciation on buildings, capital improvements, and equipment. See also §200.465 Rental costs of real property and equipment.

(4) When approved as a direct charge pursuant to paragraphs (b)(1) through (3) of this section, capital expenditures will be charged in the period in which the expenditure is incurred, or as otherwise determined appropriate and negotiated with the Federal awarding agency.

(5) The unamortized portion of any equipment written off as a result of a change in capitalization levels may be recovered by continuing to claim the otherwise allowable depreciation on the equipment, or by amortizing the amount to be written off over a period of years negotiated with the Federal cognizant agency for indirect cost.

(6) Cost of equipment disposal. If the non-Federal entity is instructed by the Federal awarding agency to otherwise dispose of or transfer the equipment the costs of such disposal or transfer are allowable.




(7) Equipment and other capital expenditures are unallowable as indirect costs. See §200.436 Depreciation. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] §200.440 Exchange rates.

(a) Cost increases for fluctuations in exchange rates are allowable costs subject to the availability of funding. Prior approval of exchange rate fluctuations is required only when the change results in the need for additional Federal funding, or the increased costs result in the need to significantly reduce the scope of the project. The Federal awarding agency must however ensure that adequate funds are available to cover currency fluctuations in order to avoid a violation of the Anti-Deficiency Act.

(b) The non-Federal entity is required to make reviews of local currency gains to determine the need for additional federal funding before the expiration date of the Federal award. Subsequent adjustments for currency increases may be allowable only when the non-Federal entity provides the Federal awarding agency with adequate source documentation from a commonly used source in effect at the time the expense was made, and to the extent that sufficient Federal funds are available. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] §200.441 Fines, penalties, damages and other settlements.

Costs resulting from non-Federal entity violations of, alleged violations of, or failure to comply with, Federal, state, tribal, local or foreign laws and regulations are unallowable, except when incurred as a result of compliance with specific provisions of the Federal award, or with prior written approval of the Federal awarding agency. See also §200.435 Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringements. §200.442 Fund raising and investment management costs.

(a) Costs of organized fund raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred to raise capital or obtain contributions are unallowable. Fund raising costs for the purposes of meeting the Federal program objectives are allowable with prior written approval from the Federal awarding agency. Proposal costs are covered in §200.460 Proposal costs.

(b) Costs of investment counsel and staff and similar expenses incurred to enhance income from investments are unallowable except when associated with investments covering pension, self-insurance, or other funds which include Federal participation allowed by this part.

(c) Costs related to the physical custody and control of monies and securities are allowable. (d) Both allowable and unallowable fund raising and investment activities must be allocated as an appropriate share of

indirect costs under the conditions described in §200.413 Direct costs. §200.443 Gains and losses on disposition of depreciable assets.

(a) Gains and losses on the sale, retirement, or other disposition of depreciable property must be included in the year in which they occur as credits or charges to the asset cost grouping(s) in which the property was included. The amount of the gain or loss to be included as a credit or charge to the appropriate asset cost grouping(s) is the difference between the amount realized on the property and the undepreciated basis of the property.

(b) Gains and losses from the disposition of depreciable property must not be recognized as a separate credit or charge under the following conditions:

(1) The gain or loss is processed through a depreciation account and is reflected in the depreciation allowable under §§200.436 Depreciation and 200.439 Equipment and other capital expenditures.

(2) The property is given in exchange as part of the purchase price of a similar item and the gain or loss is taken into account in determining the depreciation cost basis of the new item.

(3) A loss results from the failure to maintain permissible insurance, except as otherwise provided in §200.447 Insurance and indemnification.

(4) Compensation for the use of the property was provided through use allowances in lieu of depreciation. (5) Gains and losses arising from mass or extraordinary sales, retirements, or other dispositions must be considered

on a case-by-case basis. (c) Gains or losses of any nature arising from the sale or exchange of property other than the property covered in

paragraph (a) of this section, e.g., land, must be excluded in computing Federal award costs. (d) When assets acquired with Federal funds, in part or wholly, are disposed of, the distribution of the proceeds must

be made in accordance with §§200.310 Insurance Coverage through 200.316 Property trust relationship. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] §200.444 General costs of government.

(a) For states, local governments, and Indian Tribes, the general costs of government are unallowable (except as provided in §200.474 Travel costs). Unallowable costs include:

(1) Salaries and expenses of the Office of the Governor of a state or the chief executive of a local government or the chief executive of an Indian tribe;

(2) Salaries and other expenses of a state legislature, tribal council, or similar local governmental body, such as a county supervisor, city council, school board, etc., whether incurred for purposes of legislation or executive direction;

(3) Costs of the judicial branch of a government;




(4) Costs of prosecutorial activities unless treated as a direct cost to a specific program if authorized by statute or regulation (however, this does not preclude the allowability of other legal activities of the Attorney General as described in §200.435 Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringements); and

(5) Costs of other general types of government services normally provided to the general public, such as fire and police, unless provided for as a direct cost under a program statute or regulation.

(b) For Indian tribes and Councils of Governments (COGs) (see §200.64 Local government), up to 50% of salaries and expenses directly attributable to managing and operating Federal programs by the chief executive and his or her staff can be included in the indirect cost calculation without documentation. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014] §200.445 Goods or services for personal use.

(a) Costs of goods or services for personal use of the non-Federal entity's employees are unallowable regardless of whether the cost is reported as taxable income to the employees.

(b) Costs of housing (e.g., depreciation, maintenance, utilities, furnishings, rent), housing allowances and personal living expenses are only allowable as direct costs regardless of whether reported as taxable income to the employees. In addition, to be allowable direct costs must be approved in advance by a Federal awarding agency. §200.446 Idle facilities and idle capacity.

(a) As used in this section the following terms have the meanings set forth in this section: (1) Facilities means land and buildings or any portion thereof, equipment individually or collectively, or any other

tangible capital asset, wherever located, and whether owned or leased by the non-Federal entity. (2) Idle facilities means completely unused facilities that are excess to the non-Federal entity's current needs. (3) Idle capacity means the unused capacity of partially used facilities. It is the difference between: (i) That which a facility could achieve under 100 percent operating time on a one-shift basis less operating

interruptions resulting from time lost for repairs, setups, unsatisfactory materials, and other normal delays and; (ii) The extent to which the facility was actually used to meet demands during the accounting period. A multi-shift

basis should be used if it can be shown that this amount of usage would normally be expected for the type of facility involved.

(4) Cost of idle facilities or idle capacity means costs such as maintenance, repair, housing, rent, and other related costs, e.g., insurance, interest, and depreciation. These costs could include the costs of idle public safety emergency facilities, telecommunications, or information technology system capacity that is built to withstand major fluctuations in load, e.g., consolidated data centers.

(b) The costs of idle facilities are unallowable except to the extent that: (1) They are necessary to meet workload requirements which may fluctuate and are allocated appropriately to all

benefiting programs; or (2) Although not necessary to meet fluctuations in workload, they were necessary when acquired and are now idle

because of changes in program requirements, efforts to achieve more economical operations, reorganization, termination, or other causes which could not have been reasonably foreseen. Under the exception stated in this subsection, costs of idle facilities are allowable for a reasonable period of time, ordinarily not to exceed one year, depending on the initiative taken to use, lease, or dispose of such facilities.

(c) The costs of idle capacity are normal costs of doing business and are a factor in the normal fluctuations of usage or indirect cost rates from period to period. Such costs are allowable, provided that the capacity is reasonably anticipated to be necessary to carry out the purpose of the Federal award or was originally reasonable and is not subject to reduction or elimination by use on other Federal awards, subletting, renting, or sale, in accordance with sound business, economic, or security practices. Widespread idle capacity throughout an entire facility or among a group of assets having substantially the same function may be considered idle facilities. §200.447 Insurance and indemnification.

(a) Costs of insurance required or approved and maintained, pursuant to the Federal award, are allowable. (b) Costs of other insurance in connection with the general conduct of activities are allowable subject to the following

limitations: (1) Types and extent and cost of coverage are in accordance with the non-Federal entity's policy and sound business

practice. (2) Costs of insurance or of contributions to any reserve covering the risk of loss of, or damage to, Federal

Government property are unallowable except to the extent that the Federal awarding agency has specifically required or approved such costs.

(3) Costs allowed for business interruption or other similar insurance must exclude coverage of management fees. (4) Costs of insurance on the lives of trustees, officers, or other employees holding positions of similar responsibilities

are allowable only to the extent that the insurance represents additional compensation (see §200.431 Compensation—fringe benefits). The cost of such insurance when the non-Federal entity is identified as the beneficiary is unallowable.

(5) Insurance against defects. Costs of insurance with respect to any costs incurred to correct defects in the non-Federal entity's materials or workmanship are unallowable.

(6) Medical liability (malpractice) insurance. Medical liability insurance is an allowable cost of Federal research programs only to the extent that the Federal research programs involve human subjects or training of participants in research techniques. Medical liability insurance costs must be treated as a direct cost and must be assigned to individual projects based on the manner in which the insurer allocates the risk to the population covered by the insurance.




(c) Actual losses which could have been covered by permissible insurance (through a self-insurance program or otherwise) are unallowable, unless expressly provided for in the Federal award. However, costs incurred because of losses not covered under nominal deductible insurance coverage provided in keeping with sound management practice, and minor losses not covered by insurance, such as spoilage, breakage, and disappearance of small hand tools, which occur in the ordinary course of operations, are allowable.

(d) Contributions to a reserve for certain self-insurance programs including workers' compensation, unemployment compensation, and severance pay are allowable subject to the following provisions:

(1) The type of coverage and the extent of coverage and the rates and premiums would have been allowed had insurance (including reinsurance) been purchased to cover the risks. However, provision for known or reasonably estimated self-insured liabilities, which do not become payable for more than one year after the provision is made, must not exceed the discounted present value of the liability. The rate used for discounting the liability must be determined by giving consideration to such factors as the non-Federal entity's settlement rate for those liabilities and its investment rate of return.

(2) Earnings or investment income on reserves must be credited to those reserves. (3)(i) Contributions to reserves must be based on sound actuarial principles using historical experience and

reasonable assumptions. Reserve levels must be analyzed and updated at least biennially for each major risk being insured and take into account any reinsurance, coinsurance, etc. Reserve levels related to employee-related coverages will normally be limited to the value of claims:

(A) Submitted and adjudicated but not paid; (B) Submitted but not adjudicated; and (C) Incurred but not submitted. (ii) Reserve levels in excess of the amounts based on the above must be identified and justified in the cost allocation

plan or indirect cost rate proposal. (4) Accounting records, actuarial studies, and cost allocations (or billings) must recognize any significant differences

due to types of insured risk and losses generated by the various insured activities or agencies of the non-Federal entity. If individual departments or agencies of the non-Federal entity experience significantly different levels of claims for a particular risk, those differences are to be recognized by the use of separate allocations or other techniques resulting in an equitable allocation.

(5) Whenever funds are transferred from a self-insurance reserve to other accounts (e.g., general fund or unrestricted account), refunds must be made to the Federal Government for its share of funds transferred, including earned or imputed interest from the date of transfer and debt interest, if applicable, chargeable in accordance with applicable Federal cognizant agency for indirect cost, claims collection regulations.

(e) Insurance refunds must be credited against insurance costs in the year the refund is received. (f) Indemnification includes securing the non-Federal entity against liabilities to third persons and other losses not

compensated by insurance or otherwise. The Federal Government is obligated to indemnify the non-Federal entity only to the extent expressly provided for in the Federal award, except as provided in paragraph (c) of this section. §200.448 Intellectual property.

(a) Patent costs. (1) The following costs related to securing patents and copyrights are allowable: (i) Costs of preparing disclosures, reports, and other documents required by the Federal award, and of searching the

art to the extent necessary to make such disclosures; (ii) Costs of preparing documents and any other patent costs in connection with the filing and prosecution of a United

States patent application where title or royalty-free license is required by the Federal Government to be conveyed to the Federal Government; and

(iii) General counseling services relating to patent and copyright matters, such as advice on patent and copyright laws, regulations, clauses, and employee intellectual property agreements (See also §200.459 Professional service costs).

(2) The following costs related to securing patents and copyrights are unallowable: (i) Costs of preparing disclosures, reports, and other documents, and of searching the art to make disclosures not

required by the Federal award; (ii) Costs in connection with filing and prosecuting any foreign patent application, or any United States patent

application, where the Federal award does not require conveying title or a royalty-free license to the Federal Government. (b) Royalties and other costs for use of patents and copyrights. (1) Royalties on a patent or copyright or amortization

of the cost of acquiring by purchase a copyright, patent, or rights thereto, necessary for the proper performance of the Federal award are allowable unless:

(i) The Federal Government already has a license or the right to free use of the patent or copyright. (ii) The patent or copyright has been adjudicated to be invalid, or has been administratively determined to be invalid. (iii) The patent or copyright is considered to be unenforceable. (iv) The patent or copyright is expired. (2) Special care should be exercised in determining reasonableness where the royalties may have been arrived at as

a result of less-than-arm's-length bargaining, such as: (i) Royalties paid to persons, including corporations, affiliated with the non-Federal entity. (ii) Royalties paid to unaffiliated parties, including corporations, under an agreement entered into in contemplation that

a Federal award would be made. (iii) Royalties paid under an agreement entered into after a Federal award is made to a non-Federal entity. (3) In any case involving a patent or copyright formerly owned by the non-Federal entity, the amount of royalty allowed

must not exceed the cost which would have been allowed had the non-Federal entity retained title thereto. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014]




§200.449 Interest. (a) General. Costs incurred for interest on borrowed capital, temporary use of endowment funds, or the use of the

non-Federal entity's own funds, however represented, are unallowable. Financing costs (including interest) to acquire, construct, or replace capital assets are allowable, subject to the conditions in this section.

(b)(1) Capital assets is defined as noted in §200.12 Capital assets. An asset cost includes (as applicable) acquisition costs, construction costs, and other costs capitalized in accordance with GAAP.

(2) For non-Federal entity fiscal years beginning on or after January 1, 2016, intangible assets include patents and computer software. For software development projects, only interest attributable to the portion of the project costs capitalized in accordance with GAAP is allowable.

(c) Conditions for all non-Federal entities. (1) The non-Federal entity uses the capital assets in support of Federal awards;

(2) The allowable asset costs to acquire facilities and equipment are limited to a fair market value available to the non-Federal entity from an unrelated (arm's length) third party.

(3) The non-Federal entity obtains the financing via an arm's-length transaction (that is, a transaction with an unrelated third party); or claims reimbursement of actual interest cost at a rate available via such a transaction.

(4) The non-Federal entity limits claims for Federal reimbursement of interest costs to the least expensive alternative. For example, a capital lease may be determined less costly than purchasing through debt financing, in which case reimbursement must be limited to the amount of interest determined if leasing had been used.

(5) The non-Federal entity expenses or capitalizes allowable interest cost in accordance with GAAP. (6) Earnings generated by the investment of borrowed funds pending their disbursement for the asset costs are used

to offset the current period's allowable interest cost, whether that cost is expensed or capitalized. Earnings subject to being reported to the Federal Internal Revenue Service under arbitrage requirements are excludable.

(7) The following conditions must apply to debt arrangements over $1 million to purchase or construct facilities, unless the non-Federal entity makes an initial equity contribution to the purchase of 25 percent or more. For this purpose, “initial equity contribution” means the amount or value of contributions made by the non-Federal entity for the acquisition of facilities prior to occupancy.

(i) The non-Federal entity must reduce claims for reimbursement of interest cost by an amount equal to imputed interest earnings on excess cash flow attributable to the portion of the facility used for Federal awards.

(ii) The non-Federal entity must impute interest on excess cash flow as follows: (A) Annually, the non-Federal entity must prepare a cumulative (from the inception of the project) report of monthly

cash inflows and outflows, regardless of the funding source. For this purpose, inflows consist of Federal reimbursement for depreciation, amortization of capitalized construction interest, and annual interest cost. Outflows consist of initial equity contributions, debt principal payments (less the pro-rata share attributable to the cost of land), and interest payments.

(B) To compute monthly cash inflows and outflows, the non-Federal entity must divide the annual amounts determined in step (i) by the number of months in the year (usually 12) that the building is in service.

(C) For any month in which cumulative cash inflows exceed cumulative outflows, interest must be calculated on the excess inflows for that month and be treated as a reduction to allowable interest cost. The rate of interest to be used must be the three-month Treasury bill closing rate as of the last business day of that month.

(8) Interest attributable to a fully depreciated asset is unallowable. (d) Additional conditions for states, local governments and Indian tribes. For costs to be allowable, the non-Federal

entity must have incurred the interest costs for buildings after October 1, 1980, or for land and equipment after September 1, 1995.

(1) The requirement to offset interest earned on borrowed funds against current allowable interest cost (paragraph (c)(5), above) also applies to earnings on debt service reserve funds.

(2) The non-Federal entity will negotiate the amount of allowable interest cost related to the acquisition of facilities with asset costs of $1 million or more, as outlined in paragraph (c)(7) of this section. For this purpose, a non-Federal entity must consider only cash inflows and outflows attributable to that portion of the real property used for Federal awards.

(e) Additional conditions for IHEs. For costs to be allowable, the IHE must have incurred the interest costs after July 1, 1982, in connection with acquisitions of capital assets that occurred after that date.

(f) Additional condition for nonprofit organizations. For costs to be allowable, the nonprofit organization incurred the interest costs after September 29, 1995, in connection with acquisitions of capital assets that occurred after that date.

(g) The interest allowability provisions of this section do not apply to a nonprofit organization subject to “full coverage” under the Cost Accounting Standards (CAS), as defined at 48 CFR 9903.201-2(a). The non-Federal entity's Federal awards are instead subject to CAS 414 (48 CFR 9904.414), “Cost of Money as an Element of the Cost of Facilities Capital”, and CAS 417 (48 CFR 9904.417), “Cost of Money as an Element of the Cost of Capital Assets Under Construction”. [78 FR 78608, Dec. 26, 2013, as amended at 80 FR 54409, Sept. 10, 2015] §200.450 Lobbying.

(a) The cost of certain influencing activities associated with obtaining grants, contracts, cooperative agreements, or loans is an unallowable cost. Lobbying with respect to certain grants, contracts, cooperative agreements, and loans is governed by relevant statutes, including among others, the provisions of 31 U.S.C. 1352, as well as the common rule, “New Restrictions on Lobbying” published at 55 FR 6736 (February 26, 1990), including definitions, and the Office of Management and Budget “Governmentwide Guidance for New Restrictions on Lobbying” and notices published at 54 FR 52306 (December 20, 1989), 55 FR 24540 (June 15, 1990), 57 FR 1772 (January 15, 1992), and 61 FR 1412 (January 19, 1996).

(b) Executive lobbying costs. Costs incurred in attempting to improperly influence either directly or indirectly, an employee or officer of the executive branch of the Federal Government to give consideration or to act regarding a Federal




award or a regulatory matter are unallowable. Improper influence means any influence that induces or tends to induce a Federal employee or officer to give consideration or to act regarding a Federal award or regulatory matter on any basis other than the merits of the matter.

(c) In addition to the above, the following restrictions are applicable to nonprofit organizations and IHEs: (1) Costs associated with the following activities are unallowable: (i) Attempts to influence the outcomes of any Federal, state, or local election, referendum, initiative, or similar

procedure, through in-kind or cash contributions, endorsements, publicity, or similar activity; (ii) Establishing, administering, contributing to, or paying the expenses of a political party, campaign, political action

committee, or other organization established for the purpose of influencing the outcomes of elections in the United States; (iii) Any attempt to influence: (A)The introduction of Federal or state legislation; (B) The enactment or modification of any pending Federal or state legislation through communication with any

member or employee of the Congress or state legislature (including efforts to influence state or local officials to engage in similar lobbying activity);

(C) The enactment or modification of any pending Federal or state legislation by preparing, distributing, or using publicity or propaganda, or by urging members of the general public, or any segment thereof, to contribute to or participate in any mass demonstration, march, rally, fund raising drive, lobbying campaign or letter writing or telephone campaign; or

(D) Any government official or employee in connection with a decision to sign or veto enrolled legislation; (iv) Legislative liaison activities, including attendance at legislative sessions or committee hearings, gathering

information regarding legislation, and analyzing the effect of legislation, when such activities are carried on in support of or in knowing preparation for an effort to engage in unallowable lobbying.

(2) The following activities are excepted from the coverage of paragraph (c)(1) of this section: (i) Technical and factual presentations on topics directly related to the performance of a grant, contract, or other

agreement (through hearing testimony, statements, or letters to the Congress or a state legislature, or subdivision, member, or cognizant staff member thereof), in response to a documented request (including a Congressional Record notice requesting testimony or statements for the record at a regularly scheduled hearing) made by the non-Federal entity's member of congress, legislative body or a subdivision, or a cognizant staff member thereof, provided such information is readily obtainable and can be readily put in deliverable form, and further provided that costs under this section for travel, lodging or meals are unallowable unless incurred to offer testimony at a regularly scheduled Congressional hearing pursuant to a written request for such presentation made by the Chairman or Ranking Minority Member of the Committee or Subcommittee conducting such hearings;

(ii) Any lobbying made unallowable by paragraph (c)(1)(iii) of this section to influence state legislation in order to directly reduce the cost, or to avoid material impairment of the non-Federal entity's authority to perform the grant, contract, or other agreement; or

(iii) Any activity specifically authorized by statute to be undertaken with funds from the Federal award. (iv) Any activity excepted from the definitions of “lobbying” or “influencing legislation” by the Internal Revenue Code

provisions that require nonprofit organizations to limit their participation in direct and “grass roots” lobbying activities in order to retain their charitable deduction status and avoid punitive excise taxes, I.R.C. §§501(c)(3), 501(h), 4911(a), including:

(A) Nonpartisan analysis, study, or research reports; (B) Examinations and discussions of broad social, economic, and similar problems; and (C) Information provided upon request by a legislator for technical advice and assistance, as defined by I.R.C.

§4911(d)(2) and 26 CFR 56.4911-2(c)(1)-(c)(3). (v) When a non-Federal entity seeks reimbursement for indirect (F&A) costs, total lobbying costs must be separately

identified in the indirect (F&A) cost rate proposal, and thereafter treated as other unallowable activity costs in accordance with the procedures of §200.413 Direct costs.

(vi) The non-Federal entity must submit as part of its annual indirect (F&A) cost rate proposal a certification that the requirements and standards of this section have been complied with. (See also §200.415 Required certifications.)

(vii)(A) Time logs, calendars, or similar records are not required to be created for purposes of complying with the record keeping requirements in §200.302 Financial management with respect to lobbying costs during any particular calendar month when:

(1) The employee engages in lobbying (as defined in paragraphs (c)(1) and (c)(2) of this section) 25 percent or less of the employee's compensated hours of employment during that calendar month; and

(2) Within the preceding five-year period, the non-Federal entity has not materially misstated allowable or unallowable costs of any nature, including legislative lobbying costs.

(B) When conditions in paragraph (c)(2)(vii)(A)(1) and (2) of this section are met, non-Federal entities are not required to establish records to support the allowability of claimed costs in addition to records already required or maintained. Also, when conditions in paragraphs (c)(2)(vii)(A)(1) and (2) of this section are met, the absence of time logs, calendars, or similar records will not serve as a basis for disallowing costs by contesting estimates of lobbying time spent by employees during a calendar month.

(viii) The Federal awarding agency must establish procedures for resolving in advance, in consultation with OMB, any significant questions or disagreements concerning the interpretation or application of this section. Any such advance resolutions must be binding in any subsequent settlements, audits, or investigations with respect to that grant or contract for purposes of interpretation of this part, provided, however, that this must not be construed to prevent a contractor or non-Federal entity from contesting the lawfulness of such a determination.




§200.451 Losses on other awards or contracts. Any excess of costs over income under any other award or contract of any nature is unallowable. This includes, but is

not limited to, the non-Federal entity's contributed portion by reason of cost-sharing agreements or any under-recoveries through negotiation of flat amounts for indirect (F&A) costs. Also, any excess of costs over authorized funding levels transferred from any award or contract to another award or contract is unallowable. All losses are not allowable indirect (F&A) costs and are required to be included in the appropriate indirect cost rate base for allocation of indirect costs. §200.452 Maintenance and repair costs.

Costs incurred for utilities, insurance, security, necessary maintenance, janitorial services, repair, or upkeep of buildings and equipment (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life must be treated as capital expenditures (see §200.439 Equipment and other capital expenditures). These costs are only allowable to the extent not paid through rental or other agreements. §200.453 Materials and supplies costs, including costs of computing devices.

(a) Costs incurred for materials, supplies, and fabricated parts necessary to carry out a Federal award are allowable. (b) Purchased materials and supplies must be charged at their actual prices, net of applicable credits. Withdrawals

from general stores or stockrooms must be charged at their actual net cost under any recognized method of pricing inventory withdrawals, consistently applied. Incoming transportation charges are a proper part of materials and supplies costs.

(c) Materials and supplies used for the performance of a Federal award may be charged as direct costs. In the specific case of computing devices, charging as direct costs is allowable for devices that are essential and allocable, but not solely dedicated, to the performance of a Federal award.

(d) Where federally-donated or furnished materials are used in performing the Federal award, such materials will be used without charge. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] §200.454 Memberships, subscriptions, and professional activity costs.

(a) Costs of the non-Federal entity's membership in business, technical, and professional organizations are allowable. (b) Costs of the non-Federal entity's subscriptions to business, professional, and technical periodicals are allowable. (c) Costs of membership in any civic or community organization are allowable with prior approval by the Federal

awarding agency or pass-through entity. (d) Costs of membership in any country club or social or dining club or organization are unallowable. (e) Costs of membership in organizations whose primary purpose is lobbying are unallowable. See also §200.450

Lobbying. §200.455 Organization costs.

Costs such as incorporation fees, brokers' fees, fees to promoters, organizers or management consultants, attorneys, accountants, or investment counselor, whether or not employees of the non-Federal entity in connection with establishment or reorganization of an organization, are unallowable except with prior approval of the Federal awarding agency. §200.456 Participant support costs.

Participant support costs as defined in §200.75 Participant support costs are allowable with the prior approval of the Federal awarding agency. §200.457 Plant and security costs.

Necessary and reasonable expenses incurred for protection and security of facilities, personnel, and work products are allowable. Such costs include, but are not limited to, wages and uniforms of personnel engaged in security activities; equipment; barriers; protective (non-military) gear, devices, and equipment; contractual security services; and consultants. Capital expenditures for plant security purposes are subject to §200.439 Equipment and other capital expenditures. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] §200.458 Pre-award costs.

Pre-award costs are those incurred prior to the effective date of the Federal award directly pursuant to the negotiation and in anticipation of the Federal award where such costs are necessary for efficient and timely performance of the scope of work. Such costs are allowable only to the extent that they would have been allowable if incurred after the date of the Federal award and only with the written approval of the Federal awarding agency. §200.459 Professional service costs.

(a) Costs of professional and consultant services rendered by persons who are members of a particular profession or possess a special skill, and who are not officers or employees of the non-Federal entity, are allowable, subject to paragraphs (b) and (c) when reasonable in relation to the services rendered and when not contingent upon recovery of the costs from the Federal Government. In addition, legal and related services are limited under §200.435 Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringements.




(b) In determining the allowability of costs in a particular case, no single factor or any special combination of factors is necessarily determinative. However, the following factors are relevant:

(1) The nature and scope of the service rendered in relation to the service required. (2) The necessity of contracting for the service, considering the non-Federal entity's capability in the particular area. (3) The past pattern of such costs, particularly in the years prior to Federal awards. (4) The impact of Federal awards on the non-Federal entity's business (i.e., what new problems have arisen). (5) Whether the proportion of Federal work to the non-Federal entity's total business is such as to influence the non-

Federal entity in favor of incurring the cost, particularly where the services rendered are not of a continuing nature and have little relationship to work under Federal awards.

(6) Whether the service can be performed more economically by direct employment rather than contracting. (7) The qualifications of the individual or concern rendering the service and the customary fees charged, especially on

non-federally funded activities. (8) Adequacy of the contractual agreement for the service (e.g., description of the service, estimate of time required,

rate of compensation, and termination provisions). (c) In addition to the factors in paragraph (b) of this section, to be allowable, retainer fees must be supported by

evidence of bona fide services available or rendered. §200.460 Proposal costs.

Proposal costs are the costs of preparing bids, proposals, or applications on potential Federal and non-Federal awards or projects, including the development of data necessary to support the non-Federal entity's bids or proposals. Proposal costs of the current accounting period of both successful and unsuccessful bids and proposals normally should be treated as indirect (F&A) costs and allocated currently to all activities of the non-Federal entity. No proposal costs of past accounting periods will be allocable to the current period. §200.461 Publication and printing costs.

(a) Publication costs for electronic and print media, including distribution, promotion, and general handling are allowable. If these costs are not identifiable with a particular cost objective, they should be allocated as indirect costs to all benefiting activities of the non-Federal entity.

(b) Page charges for professional journal publications are allowable where: (1) The publications report work supported by the Federal Government; and (2) The charges are levied impartially on all items published by the journal, whether or not under a Federal award. (3) The non-Federal entity may charge the Federal award before closeout for the costs of publication or sharing of

research results if the costs are not incurred during the period of performance of the Federal award. §200.462 Rearrangement and reconversion costs.

(a) Costs incurred for ordinary and normal rearrangement and alteration of facilities are allowable as indirect costs. Special arrangements and alterations costs incurred specifically for a Federal award are allowable as a direct cost with the prior approval of the Federal awarding agency or pass-through entity.

(b) Costs incurred in the restoration or rehabilitation of the non-Federal entity's facilities to approximately the same condition existing immediately prior to commencement of Federal awards, less costs related to normal wear and tear, are allowable. §200.463 Recruiting costs.

(a) Subject to paragraphs (b) and (c) of this section, and provided that the size of the staff recruited and maintained is in keeping with workload requirements, costs of “help wanted” advertising, operating costs of an employment office necessary to secure and maintain an adequate staff, costs of operating an aptitude and educational testing program, travel costs of employees while engaged in recruiting personnel, travel costs of applicants for interviews for prospective employment, and relocation costs incurred incident to recruitment of new employees, are allowable to the extent that such costs are incurred pursuant to the non-Federal entity's standard recruitment program. Where the non-Federal entity uses employment agencies, costs not in excess of standard commercial rates for such services are allowable.

(b) Special emoluments, fringe benefits, and salary allowances incurred to attract professional personnel that do not meet the test of reasonableness or do not conform with the established practices of the non-Federal entity, are unallowable.

(c) Where relocation costs incurred incident to recruitment of a new employee have been funded in whole or in part to a Federal award, and the newly hired employee resigns for reasons within the employee's control within 12 months after hire, the non-Federal entity will be required to refund or credit the Federal share of such relocation costs to the Federal Government. See also §200.464 Relocation costs of employees.

(d) Short-term, travel visa costs (as opposed to longer-term, immigration visas) are generally allowable expenses that may be proposed as a direct cost. Since short-term visas are issued for a specific period and purpose, they can be clearly identified as directly connected to work performed on a Federal award. For these costs to be directly charged to a Federal award, they must:

(1) Be critical and necessary for the conduct of the project; (2) Be allowable under the applicable cost principles; (3) Be consistent with the non-Federal entity's cost accounting practices and non-Federal entity policy; and (4) Meet the definition of “direct cost” as described in the applicable cost principles.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014]




§200.464 Relocation costs of employees. (a) Relocation costs are costs incident to the permanent change of duty assignment (for an indefinite period or for a

stated period of not less than 12 months) of an existing employee or upon recruitment of a new employee. Relocation costs are allowable, subject to the limitations described in paragraphs (b), (c), and (d) of this section, provided that:

(1) The move is for the benefit of the employer. (2) Reimbursement to the employee is in accordance with an established written policy consistently followed by the

employer. (3) The reimbursement does not exceed the employee's actual (or reasonably estimated) expenses. (b) Allowable relocation costs for current employees are limited to the following: (1) The costs of transportation of the employee, members of his or her immediate family and his household, and

personal effects to the new location. (2) The costs of finding a new home, such as advance trips by employees and spouses to locate living quarters and

temporary lodging during the transition period, up to maximum period of 30 calendar days. (3) Closing costs, such as brokerage, legal, and appraisal fees, incident to the disposition of the employee's former

home. These costs, together with those described in (4), are limited to 8 per cent of the sales price of the employee's former home.

(4) The continuing costs of ownership (for up to six months) of the vacant former home after the settlement or lease date of the employee's new permanent home, such as maintenance of buildings and grounds (exclusive of fixing-up expenses), utilities, taxes, and property insurance.

(5) Other necessary and reasonable expenses normally incident to relocation, such as the costs of canceling an unexpired lease, transportation of personal property, and purchasing insurance against loss of or damages to personal property. The cost of canceling an unexpired lease is limited to three times the monthly rental.

(c) Allowable relocation costs for new employees are limited to those described in paragraphs (b)(1) and (2) of this section. When relocation costs incurred incident to the recruitment of new employees have been charged to a Federal award and the employee resigns for reasons within the employee's control within 12 months after hire, the non-Federal entity must refund or credit the Federal Government for its share of the cost. However, the costs of travel to an overseas location must be considered travel costs in accordance with §200.474 Travel costs, and not this §200.464 Relocation costs of employees, for the purpose of this paragraph if dependents are not permitted at the location for any reason and the costs do not include costs of transporting household goods.

(d) The following costs related to relocation are unallowable: (1) Fees and other costs associated with acquiring a new home. (2) A loss on the sale of a former home. (3) Continuing mortgage principal and interest payments on a home being sold. (4) Income taxes paid by an employee related to reimbursed relocation costs.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] §200.465 Rental costs of real property and equipment.

(a) Subject to the limitations described in paragraphs (b) through (d) of this section, rental costs are allowable to the extent that the rates are reasonable in light of such factors as: rental costs of comparable property, if any; market conditions in the area; alternatives available; and the type, life expectancy, condition, and value of the property leased. Rental arrangements should be reviewed periodically to determine if circumstances have changed and other options are available.

(b) Rental costs under “sale and lease back” arrangements are allowable only up to the amount that would be allowed had the non-Federal entity continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance.

(c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount (as explained in paragraph (b) of this section). For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement is able to control or substantially influence the actions of the other. Such leases include, but are not limited to those between:

(1) Divisions of the non-Federal entity; (2) The non-Federal entity under common control through common officers, directors, or members; and (3) The non-Federal entity and a director, trustee, officer, or key employee of the non-Federal entity or an immediate

family member, either directly or through corporations, trusts, or similar arrangements in which they hold a controlling interest. For example, the non-Federal entity may establish a separate corporation for the sole purpose of owning property and leasing it back to the non-Federal entity.

(4) Family members include one party with any of the following relationships to another party: (i) Spouse, and parents thereof; (ii) Children, and spouses thereof; (iii) Parents, and spouses thereof; (iv) Siblings, and spouses thereof; (v) Grandparents and grandchildren, and spouses thereof; (vi) Domestic partner and parents thereof, including domestic partners of any individual in 2 through 5 of this

definition; and (vii) Any individual related by blood or affinity whose close association with the employee is the equivalent of a family

relationship. (5) Rental costs under leases which are required to be treated as capital leases under GAAP are allowable only up to

the amount (as explained in paragraph (b) of this section) that would be allowed had the non-Federal entity purchased the property on the date the lease agreement was executed. The provisions of GAAP must be used to determine whether a




lease is a capital lease. Interest costs related to capital leases are allowable to the extent they meet the criteria in §200.449 Interest. Unallowable costs include amounts paid for profit, management fees, and taxes that would not have been incurred had the non-Federal entity purchased the property.

(6) The rental of any property owned by any individuals or entities affiliated with the non-Federal entity, to include commercial or residential real estate, for purposes such as the home office workspace is unallowable. §200.466 Scholarships and student aid costs.

(a) Costs of scholarships, fellowships, and other programs of student aid at IHEs are allowable only when the purpose of the Federal award is to provide training to selected participants and the charge is approved by the Federal awarding agency. However, tuition remission and other forms of compensation paid as, or in lieu of, wages to students performing necessary work are allowable provided that:

(1) The individual is conducting activities necessary to the Federal award; (2) Tuition remission and other support are provided in accordance with established policy of the IHE and consistently

provided in a like manner to students in return for similar activities conducted under Federal awards as well as other activities; and

(3) During the academic period, the student is enrolled in an advanced degree program at a non-Federal entity or affiliated institution and the activities of the student in relation to the Federal award are related to the degree program;

(4) The tuition or other payments are reasonable compensation for the work performed and are conditioned explicitly upon the performance of necessary work; and

(5) It is the IHE's practice to similarly compensate students under Federal awards as well as other activities. (b) Charges for tuition remission and other forms of compensation paid to students as, or in lieu of, salaries and

wages must be subject to the reporting requirements in §200.430 Compensation—personal services, and must be treated as direct or indirect cost in accordance with the actual work being performed. Tuition remission may be charged on an average rate basis. See also §200.431 Compensation—fringe benefits. §200.467 Selling and marketing costs.

Costs of selling and marketing any products or services of the non-Federal entity (unless allowed under §200.421 Advertising and public relations.) are unallowable, except as direct costs, with prior approval by the Federal awarding agency when necessary for the performance of the Federal award. §200.468 Specialized service facilities.

(a) The costs of services provided by highly complex or specialized facilities operated by the non-Federal entity, such as computing facilities, wind tunnels, and reactors are allowable, provided the charges for the services meet the conditions of either paragraphs (b) or (c) of this section, and, in addition, take into account any items of income or Federal financing that qualify as applicable credits under §200.406 Applicable credits.

(b) The costs of such services, when material, must be charged directly to applicable awards based on actual usage of the services on the basis of a schedule of rates or established methodology that:

(1) Does not discriminate between activities under Federal awards and other activities of the non-Federal entity, including usage by the non-Federal entity for internal purposes, and

(2) Is designed to recover only the aggregate costs of the services. The costs of each service must consist normally of both its direct costs and its allocable share of all indirect (F&A) costs. Rates must be adjusted at least biennially, and must take into consideration over/under applied costs of the previous period(s).

(c) Where the costs incurred for a service are not material, they may be allocated as indirect (F&A) costs. (d) Under some extraordinary circumstances, where it is in the best interest of the Federal Government and the non-

Federal entity to establish alternative costing arrangements, such arrangements may be worked out with the Federal cognizant agency for indirect costs. §200.469 Student activity costs.

Costs incurred for intramural activities, student publications, student clubs, and other student activities, are unallowable, unless specifically provided for in the Federal award. §200.470 Taxes (including Value Added Tax).

(a) For states, local governments and Indian tribes: (1) Taxes that a governmental unit is legally required to pay are allowable, except for self-assessed taxes that

disproportionately affect Federal programs or changes in tax policies that disproportionately affect Federal programs. (2) Gasoline taxes, motor vehicle fees, and other taxes that are in effect user fees for benefits provided to the Federal

Government are allowable. (3) This provision does not restrict the authority of the Federal awarding agency to identify taxes where Federal

participation is inappropriate. Where the identification of the amount of unallowable taxes would require an inordinate amount of effort, the cognizant agency for indirect costs may accept a reasonable approximation thereof.

(b) For nonprofit organizations and IHEs: (1) In general, taxes which the non-Federal entity is required to pay and which are paid or accrued in accordance with

GAAP, and payments made to local governments in lieu of taxes which are commensurate with the local government services received are allowable, except for:




(i) Taxes from which exemptions are available to the non-Federal entity directly or which are available to the non-Federal entity based on an exemption afforded the Federal Government and, in the latter case, when the Federal awarding agency makes available the necessary exemption certificates,

(ii) Special assessments on land which represent capital improvements, and (iii) Federal income taxes. (2) Any refund of taxes, and any payment to the non-Federal entity of interest thereon, which were allowed as Federal

award costs, will be credited either as a cost reduction or cash refund, as appropriate, to the Federal Government. However, any interest actually paid or credited to an non-Federal entity incident to a refund of tax, interest, and penalty will be paid or credited to the Federal Government only to the extent that such interest accrued over the period during which the non-Federal entity has been reimbursed by the Federal Government for the taxes, interest, and penalties.

(c) Value Added Tax (VAT) Foreign taxes charged for the purchase of goods or services that a non-Federal entity is legally required to pay in country is an allowable expense under Federal awards. Foreign tax refunds or applicable credits under Federal awards refer to receipts, or reduction of expenditures, which operate to offset or reduce expense items that are allocable to Federal awards as direct or indirect costs. To the extent that such credits accrued or received by the non-Federal entity relate to allowable cost, these costs must be credited to the Federal awarding agency either as costs or cash refunds. If the costs are credited back to the Federal award, the non-Federal entity may reduce the Federal share of costs by the amount of the foreign tax reimbursement, or where Federal award has not expired, use the foreign government tax refund for approved activities under the Federal award with prior approval of the Federal awarding agency. §200.471 Termination costs.

Termination of a Federal award generally gives rise to the incurrence of costs, or the need for special treatment of costs, which would not have arisen had the Federal award not been terminated. Cost principles covering these items are set forth in this section. They are to be used in conjunction with the other provisions of this part in termination situations.

(a) The cost of items reasonably usable on the non-Federal entity's other work must not be allowable unless the non-Federal entity submits evidence that it would not retain such items at cost without sustaining a loss. In deciding whether such items are reasonably usable on other work of the non-Federal entity, the Federal awarding agency should consider the non-Federal entity's plans and orders for current and scheduled activity. Contemporaneous purchases of common items by the non-Federal entity must be regarded as evidence that such items are reasonably usable on the non-Federal entity's other work. Any acceptance of common items as allocable to the terminated portion of the Federal award must be limited to the extent that the quantities of such items on hand, in transit, and on order are in excess of the reasonable quantitative requirements of other work.

(b) If in a particular case, despite all reasonable efforts by the non-Federal entity, certain costs cannot be discontinued immediately after the effective date of termination, such costs are generally allowable within the limitations set forth in this part, except that any such costs continuing after termination due to the negligent or willful failure of the non-Federal entity to discontinue such costs must be unallowable.

(c) Loss of useful value of special tooling, machinery, and equipment is generally allowable if: (1) Such special tooling, special machinery, or equipment is not reasonably capable of use in the other work of the

non-Federal entity, (2) The interest of the Federal Government is protected by transfer of title or by other means deemed appropriate by

the Federal awarding agency (see also §200.313 Equipment, paragraph (d), and (3) The loss of useful value for any one terminated Federal award is limited to that portion of the acquisition cost

which bears the same ratio to the total acquisition cost as the terminated portion of the Federal award bears to the entire terminated Federal award and other Federal awards for which the special tooling, machinery, or equipment was acquired.

(d) Rental costs under unexpired leases are generally allowable where clearly shown to have been reasonably necessary for the performance of the terminated Federal award less the residual value of such leases, if:

(1) The amount of such rental claimed does not exceed the reasonable use value of the property leased for the period of the Federal award and such further period as may be reasonable, and

(2) The non-Federal entity makes all reasonable efforts to terminate, assign, settle, or otherwise reduce the cost of such lease. There also may be included the cost of alterations of such leased property, provided such alterations were necessary for the performance of the Federal award, and of reasonable restoration required by the provisions of the lease.

(e) Settlement expenses including the following are generally allowable: (1) Accounting, legal, clerical, and similar costs reasonably necessary for: (i) The preparation and presentation to the Federal awarding agency of settlement claims and supporting data with

respect to the terminated portion of the Federal award, unless the termination is for cause (see Subpart D—Post Federal Award Requirements of this part, §§200.338 Remedies for Noncompliance through 200.342 Effects of Suspension and termination); and

(ii) The termination and settlement of subawards. (2) Reasonable costs for the storage, transportation, protection, and disposition of property provided by the Federal

Government or acquired or produced for the Federal award. (f) Claims under subawards, including the allocable portion of claims which are common to the Federal award and to

other work of the non-Federal entity, are generally allowable. An appropriate share of the non-Federal entity's indirect costs may be allocated to the amount of settlements with contractors and/or subrecipients, provided that the amount allocated is otherwise consistent with the basic guidelines contained in §200.414 Indirect (F&A) costs. The indirect costs so allocated must exclude the same and similar costs claimed directly or indirectly as settlement expenses.




§200.472 Training and education costs. The cost of training and education provided for employee development is allowable.

§200.473 Transportation costs.

Costs incurred for freight, express, cartage, postage, and other transportation services relating either to goods purchased, in process, or delivered, are allowable. When such costs can readily be identified with the items involved, they may be charged directly as transportation costs or added to the cost of such items. Where identification with the materials received cannot readily be made, inbound transportation cost may be charged to the appropriate indirect (F&A) cost accounts if the non-Federal entity follows a consistent, equitable procedure in this respect. Outbound freight, if reimbursable under the terms and conditions of the Federal award, should be treated as a direct cost. §200.474 Travel costs.

(a) General. Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the non-Federal entity. Such costs may be charged on an actual cost basis, on a per diem or mileage basis in lieu of actual costs incurred, or on a combination of the two, provided the method used is applied to an entire trip and not to selected days of the trip, and results in charges consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. Notwithstanding the provisions of §200.444 General costs of government, travel costs of officials covered by that section are allowable with the prior written approval of the Federal awarding agency or pass-through entity when they are specifically related to the Federal award.

(b) Lodging and subsistence. Costs incurred by employees and officers for travel, including costs of lodging, other subsistence, and incidental expenses, must be considered reasonable and otherwise allowable only to the extent such costs do not exceed charges normally allowed by the non-Federal entity in its regular operations as the result of the non-Federal entity's written travel policy. In addition, if these costs are charged directly to the Federal award documentation must justify that:

(1) Participation of the individual is necessary to the Federal award; and (2) The costs are reasonable and consistent with non-Federal entity's established travel policy. (c)(1) Temporary dependent care costs (as dependent is defined in 26 U.S.C. 152) above and beyond regular

dependent care that directly results from travel to conferences is allowable provided that: (i) The costs are a direct result of the individual's travel for the Federal award; (ii) The costs are consistent with the non-Federal entity's documented travel policy for all entity travel; and (iii) Are only temporary during the travel period. (2) Travel costs for dependents are unallowable, except for travel of duration of six months or more with prior approval

of the Federal awarding agency. See also §200.432 Conferences. (d) In the absence of an acceptable, written non-Federal entity policy regarding travel costs, the rates and amounts

established under 5 U.S.C. 5701-11, (“Travel and Subsistence Expenses; Mileage Allowances”), or by the Administrator of General Services, or by the President (or his or her designee) pursuant to any provisions of such subchapter must apply to travel under Federal awards (48 CFR 31.205-46(a)).

(e) Commercial air travel. (1) Airfare costs in excess of the basic least expensive unrestricted accommodations class offered by commercial airlines are unallowable except when such accommodations would:

(i) Require circuitous routing; (ii) Require travel during unreasonable hours; (iii) Excessively prolong travel; (iv) Result in additional costs that would offset the transportation savings; or (v) Offer accommodations not reasonably adequate for the traveler's medical needs. The non-Federal entity must

justify and document these conditions on a case-by-case basis in order for the use of first-class or business-class airfare to be allowable in such cases.

(2) Unless a pattern of avoidance is detected, the Federal Government will generally not question a non-Federal entity's determinations that customary standard airfare or other discount airfare is unavailable for specific trips if the non-Federal entity can demonstrate that such airfare was not available in the specific case.

(f) Air travel by other than commercial carrier. Costs of travel by non-Federal entity-owned, -leased, or -chartered aircraft include the cost of lease, charter, operation (including personnel costs), maintenance, depreciation, insurance, and other related costs. The portion of such costs that exceeds the cost of airfare as provided for in paragraph (d) of this section, is unallowable. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] §200.475 Trustees.

Travel and subsistence costs of trustees (or directors) at IHEs and nonprofit organizations are allowable. See also §200.474 Travel costs. Subpart F—Audit Requirements GENERAL §200.500 Purpose.

This part sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of non-Federal entities expending Federal awards.




AUDITS §200.501 Audit requirements.

(a) Audit required. A non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part.

(b) Single audit. A non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with §200.514 Scope of audit except when it elects to have a program-specific audit conducted in accordance with paragraph (c) of this section.

(c) Program-specific audit election. When an auditee expends Federal awards under only one Federal program (excluding R&D) and the Federal program's statutes, regulations, or the terms and conditions of the Federal award do not require a financial statement audit of the auditee, the auditee may elect to have a program-specific audit conducted in accordance with §200.507 Program-specific audits. A program-specific audit may not be elected for R&D unless all of the Federal awards expended were received from the same Federal agency, or the same Federal agency and the same pass-through entity, and that Federal agency, or pass-through entity in the case of a subrecipient, approves in advance a program-specific audit.

(d) Exemption when Federal awards expended are less than $750,000. A non-Federal entity that expends less than $750,000 during the non-Federal entity's fiscal year in Federal awards is exempt from Federal audit requirements for that year, except as noted in §200.503 Relation to other audit requirements, but records must be available for review or audit by appropriate officials of the Federal agency, pass-through entity, and Government Accountability Office (GAO).

(e) Federally Funded Research and Development Centers (FFRDC). Management of an auditee that owns or operates a FFRDC may elect to treat the FFRDC as a separate entity for purposes of this part.

(f) Subrecipients and Contractors. An auditee may simultaneously be a recipient, a subrecipient, and a contractor. Federal awards expended as a recipient or a subrecipient are subject to audit under this part. The payments received for goods or services provided as a contractor are not Federal awards. Section §200.330 Subrecipient and contractor determinations sets forth the considerations in determining whether payments constitute a Federal award or a payment for goods or services provided as a contractor.

(g) Compliance responsibility for contractors. In most cases, the auditee's compliance responsibility for contractors is only to ensure that the procurement, receipt, and payment for goods and services comply with Federal statutes, regulations, and the terms and conditions of Federal awards. Federal award compliance requirements normally do not pass through to contractors. However, the auditee is responsible for ensuring compliance for procurement transactions which are structured such that the contractor is responsible for program compliance or the contractor's records must be reviewed to determine program compliance. Also, when these procurement transactions relate to a major program, the scope of the audit must include determining whether these transactions are in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards.

(h) For-profit subrecipient. Since this part does not apply to for-profit subrecipients, the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient's compliance responsibility. Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. See also §200.331 Requirements for pass-through entities. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] §200.502 Basis for determining Federal awards expended.

(a) Determining Federal awards expended. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force.

(b) Loan and loan guarantees (loans). Since the Federal Government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section:

(1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes

continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. (c) Loan and loan guarantees (loans) at IHEs. When loans are made to students of an IHE but the IHE does not make

the loans, then only the value of loans made during the audit period must be considered Federal awards expended in that audit period. The balance of loans for previous audit periods is not included as Federal awards expended because the lender accounts for the prior balances.

(d) Prior loan and loan guarantees (loans). Loans, the proceeds of which were received and expended in prior years, are not considered Federal awards expended under this part when the Federal statutes, regulations, and the terms and conditions of Federal awards pertaining to such loans impose no continuing compliance requirements other than to repay the loans.




(e) Endowment funds. The cumulative balance of Federal awards for endowment funds that are federally restricted are considered Federal awards expended in each audit period in which the funds are still restricted.

(f) Free rent. Free rent received by itself is not considered a Federal award expended under this part. However, free rent received as part of a Federal award to carry out a Federal program must be included in determining Federal awards expended and subject to audit under this part.

(g) Valuing non-cash assistance. Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency.

(h) Medicare. Medicare payments to a non-Federal entity for providing patient care services to Medicare-eligible individuals are not considered Federal awards expended under this part.

(i) Medicaid. Medicaid payments to a subrecipient for providing patient care services to Medicaid-eligible individuals are not considered Federal awards expended under this part unless a state requires the funds to be treated as Federal awards expended because reimbursement is on a cost-reimbursement basis.

(j) Certain loans provided by the National Credit Union Administration. For purposes of this part, loans made from the National Credit Union Share Insurance Fund and the Central Liquidity Facility that are funded by contributions from insured non-Federal entities are not considered Federal awards expended. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] §200.503 Relation to other audit requirements.

(a) An audit conducted in accordance with this part must be in lieu of any financial audit of Federal awards which a non-Federal entity is required to undergo under any other Federal statute or regulation. To the extent that such audit provides a Federal agency with the information it requires to carry out its responsibilities under Federal statute or regulation, a Federal agency must rely upon and use that information.

(b) Notwithstanding subsection (a), a Federal agency, Inspectors General, or GAO may conduct or arrange for additional audits which are necessary to carry out its responsibilities under Federal statute or regulation. The provisions of this part do not authorize any non-Federal entity to constrain, in any manner, such Federal agency from carrying out or arranging for such additional audits, except that the Federal agency must plan such audits to not be duplicative of other audits of Federal awards. Prior to commencing such an audit, the Federal agency or pass-through entity must review the FAC for recent audits submitted by the non-Federal entity, and to the extent such audits meet a Federal agency or pass-through entity's needs, the Federal agency or pass-through entity must rely upon and use such audits. Any additional audits must be planned and performed in such a way as to build upon work performed, including the audit documentation, sampling, and testing already performed, by other auditors.

(c) The provisions of this part do not limit the authority of Federal agencies to conduct, or arrange for the conduct of, audits and evaluations of Federal awards, nor limit the authority of any Federal agency Inspector General or other Federal official. For example, requirements that may be applicable under the FAR or CAS and the terms and conditions of a cost-reimbursement contract may include additional applicable audits to be conducted or arranged for by Federal agencies.

(d) Federal agency to pay for additional audits. A Federal agency that conducts or arranges for additional audits must, consistent with other applicable Federal statutes and regulations, arrange for funding the full cost of such additional audits.

(e) Request for a program to be audited as a major program. A Federal awarding agency may request that an auditee have a particular Federal program audited as a major program in lieu of the Federal awarding agency conducting or arranging for the additional audits. To allow for planning, such requests should be made at least 180 calendar days prior to the end of the fiscal year to be audited. The auditee, after consultation with its auditor, should promptly respond to such a request by informing the Federal awarding agency whether the program would otherwise be audited as a major program using the risk-based audit approach described in §200.518 Major program determination and, if not, the estimated incremental cost. The Federal awarding agency must then promptly confirm to the auditee whether it wants the program audited as a major program. If the program is to be audited as a major program based upon this Federal awarding agency request, and the Federal awarding agency agrees to pay the full incremental costs, then the auditee must have the program audited as a major program. A pass-through entity may use the provisions of this paragraph for a subrecipient. §200.504 Frequency of audits.

Except for the provisions for biennial audits provided in paragraphs (a) and (b) of this section, audits required by this part must be performed annually. Any biennial audit must cover both years within the biennial period.

(a) A state, local government, or Indian tribe that is required by constitution or statute, in effect on January 1, 1987, to undergo its audits less frequently than annually, is permitted to undergo its audits pursuant to this part biennially. This requirement must still be in effect for the biennial period.

(b) Any nonprofit organization that had biennial audits for all biennial periods ending between July 1, 1992, and January 1, 1995, is permitted to undergo its audits pursuant to this part biennially. §200.505 Sanctions.

In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities must take appropriate action as provided in §200.338 Remedies for noncompliance. §200.506 Audit costs.

See §200.425 Audit services.




§200.507 Program-specific audits. (a) Program-specific audit guide available. In many cases, a program-specific audit guide will be available to provide

specific guidance to the auditor with respect to internal controls, compliance requirements, suggested audit procedures, and audit reporting requirements. A listing of current program-specific audit guides can be found in the compliance supplement beginning with the 2014 supplement including Federal awarding agency contact information and a Web site where a copy of the guide can be obtained. When a current program-specific audit guide is available, the auditor must follow GAGAS and the guide when performing a program-specific audit.

(b) Program-specific audit guide not available. (1) When a current program-specific audit guide is not available, the auditee and auditor must have basically the same responsibilities for the Federal program as they would have for an audit of a major program in a single audit.

(2) The auditee must prepare the financial statement(s) for the Federal program that includes, at a minimum, a schedule of expenditures of Federal awards for the program and notes that describe the significant accounting policies used in preparing the schedule, a summary schedule of prior audit findings consistent with the requirements of §200.511 Audit findings follow-up, paragraph (b), and a corrective action plan consistent with the requirements of §200.511 Audit findings follow-up, paragraph (c).

(3) The auditor must: (i) Perform an audit of the financial statement(s) for the Federal program in accordance with GAGAS; (ii) Obtain an understanding of internal controls and perform tests of internal controls over the Federal program

consistent with the requirements of §200.514 Scope of audit, paragraph (c) for a major program; (iii) Perform procedures to determine whether the auditee has complied with Federal statutes, regulations, and the

terms and conditions of Federal awards that could have a direct and material effect on the Federal program consistent with the requirements of §200.514 Scope of audit, paragraph (d) for a major program;

(iv) Follow up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with the requirements of §200.511 Audit findings follow-up, and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding; and

(v) Report any audit findings consistent with the requirements of §200.516 Audit findings. (4) The auditor's report(s) may be in the form of either combined or separate reports and may be organized differently

from the manner presented in this section. The auditor's report(s) must state that the audit was conducted in accordance with this part and include the following:

(i) An opinion (or disclaimer of opinion) as to whether the financial statement(s) of the Federal program is presented fairly in all material respects in accordance with the stated accounting policies;

(ii) A report on internal control related to the Federal program, which must describe the scope of testing of internal control and the results of the tests;

(iii) A report on compliance which includes an opinion (or disclaimer of opinion) as to whether the auditee complied with laws, regulations, and the terms and conditions of Federal awards which could have a direct and material effect on the Federal program; and

(iv) A schedule of findings and questioned costs for the Federal program that includes a summary of the auditor's results relative to the Federal program in a format consistent with §200.515 Audit reporting, paragraph (d)(1) and findings and questioned costs consistent with the requirements of §200.515 Audit reporting, paragraph (d)(3).

(c) Report submission for program-specific audits. (1) The audit must be completed and the reporting required by paragraph (c)(2) or (c)(3) of this section submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a different period is specified in a program-specific audit guide. Unless restricted by Federal law or regulation, the auditee must make report copies available for public inspection. Auditees and auditors must ensure that their respective parts of the reporting package do not include protected personally identifiable information.

(2) When a program-specific audit guide is available, the auditee must electronically submit to the FAC the data collection form prepared in accordance with §200.512 Report submission, paragraph (b), as applicable to a program-specific audit, and the reporting required by the program-specific audit guide.

(3) When a program-specific audit guide is not available, the reporting package for a program-specific audit must consist of the financial statement(s) of the Federal program, a summary schedule of prior audit findings, and a corrective action plan as described in paragraph (b)(2) of this section, and the auditor's report(s) described in paragraph (b)(4) of this section. The data collection form prepared in accordance with §200.512 Report submission, paragraph (b), as applicable to a program-specific audit, and one copy of this reporting package must be electronically submitted to the FAC.

(d) Other sections of this part may apply. Program-specific audits are subject to: (1) 200.500 Purpose through 200.503 Relation to other audit requirements, paragraph (d); (2) 200.504 Frequency of audits through 200.506 Audit costs; (3) 200.508 Auditee responsibilities through 200.509 Auditor selection; (4) 200.511 Audit findings follow-up; (5) 200.512 Report submission, paragraphs (e) through (h); (6) 200.513 Responsibilities; (7) 200.516 Audit findings through 200.517 Audit documentation; (8) 200.521 Management decision, and (9) Other referenced provisions of this part unless contrary to the provisions of this section, a program-specific audit

guide, or program statutes and regulations. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014]




AUDITEES §200.508 Auditee responsibilities.

The auditee must: (a) Procure or otherwise arrange for the audit required by this part in accordance with §200.509 Auditor selection, and

ensure it is properly performed and submitted when due in accordance with §200.512 Report submission. (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance

with §200.510 Financial statements. (c) Promptly follow up and take corrective action on audit findings, including preparation of a summary schedule of

prior audit findings and a corrective action plan in accordance with §200.511 Audit findings follow-up, paragraph (b) and §200.511 Audit findings follow-up, paragraph (c), respectively.

(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part. §200.509 Auditor selection.

(a) Auditor procurement. In procuring audit services, the auditee must follow the procurement standards prescribed by the Procurement Standards in §§200.317 Procurement by states through 20.326 Contract provisions of Subpart D- Post Federal Award Requirements of this part or the FAR (48 CFR part 42), as applicable. When procuring audit services, the objective is to obtain high-quality audits. In requesting proposals for audit services, the objectives and scope of the audit must be made clear and the non-Federal entity must request a copy of the audit organization's peer review report which the auditor is required to provide under GAGAS. Factors to be considered in evaluating each proposal for audit services include the responsiveness to the request for proposal, relevant experience, availability of staff with professional qualifications and technical abilities, the results of peer and external quality control reviews, and price. Whenever possible, the auditee must make positive efforts to utilize small businesses, minority-owned firms, and women's business enterprises, in procuring audit services as stated in §200.321 Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms, or the FAR (48 CFR part 42), as applicable.

(b) Restriction on auditor preparing indirect cost proposals. An auditor who prepares the indirect cost proposal or cost allocation plan may not also be selected to perform the audit required by this part when the indirect costs recovered by the auditee during the prior year exceeded $1 million. This restriction applies to the base year used in the preparation of the indirect cost proposal or cost allocation plan and any subsequent years in which the resulting indirect cost agreement or cost allocation plan is used to recover costs.

(c) Use of Federal auditors. Federal auditors may perform all or part of the work required under this part if they comply fully with the requirements of this part. §200.510 Financial statements.

(a) Financial statements. The auditee must prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The financial statements must be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. However, non-Federal entity-wide financial statements may also include departments, agencies, and other organizational units that have separate audits in accordance with §200.514 Scope of audit, paragraph (a) and prepare separate financial statements.

(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must:

(1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. For example, the National Institutes of Health is a major subdivision in the Department of Health and Human Services.

(2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included.

(3) Provide total Federal awards expended for each individual Federal program and the CFDA number or other identifying number when the CFDA information is not available. For a cluster of programs also provide the total for the cluster.

(4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in §200.502 Basis for determining Federal awards expended,

paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule.

(6) Include notes that describe that significant accounting policies used in preparing the schedule, and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] §200.511 Audit findings follow-up.

(a) General. The auditee is responsible for follow-up and corrective action on all audit findings. As part of this responsibility, the auditee must prepare a summary schedule of prior audit findings. The auditee must also prepare a




corrective action plan for current year audit findings. The summary schedule of prior audit findings and the corrective action plan must include the reference numbers the auditor assigns to audit findings under §200.516 Audit findings, paragraph (c). Since the summary schedule may include audit findings from multiple years, it must include the fiscal year in which the finding initially occurred. The corrective action plan and summary schedule of prior audit findings must include findings relating to the financial statements which are required to be reported in accordance with GAGAS.

(b) Summary schedule of prior audit findings. The summary schedule of prior audit findings must report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. The summary schedule must also include audit findings reported in the prior audit's summary schedule of prior audit findings except audit findings listed as corrected in accordance with paragraph (b)(1) of this section, or no longer valid or not warranting further action in accordance with paragraph (b)(3) of this section.

(1) When audit findings were fully corrected, the summary schedule need only list the audit findings and state that corrective action was taken.

(2) When audit findings were not corrected or were only partially corrected, the summary schedule must describe the reasons for the finding's recurrence and planned corrective action, and any partial corrective action taken. When corrective action taken is significantly different from corrective action previously reported in a corrective action plan or in the Federal agency's or pass-through entity's management decision, the summary schedule must provide an explanation.

(3) When the auditee believes the audit findings are no longer valid or do not warrant further action, the reasons for this position must be described in the summary schedule. A valid reason for considering an audit finding as not warranting further action is that all of the following have occurred:

(i) Two years have passed since the audit report in which the finding occurred was submitted to the FAC; (ii) The Federal agency or pass-through entity is not currently following up with the auditee on the audit finding; and (iii) A management decision was not issued. (c) Corrective action plan. At the completion of the audit, the auditee must prepare, in a document separate from the

auditor's findings described in §200.516 Audit findings, a corrective action plan to address each audit finding included in the current year auditor's reports. The corrective action plan must provide the name(s) of the contact person(s) responsible for corrective action, the corrective action planned, and the anticipated completion date. If the auditee does not agree with the audit findings or believes corrective action is not required, then the corrective action plan must include an explanation and specific reasons. §200.512 Report submission.

(a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day.

(2) Unless restricted by Federal statutes or regulations, the auditee must make copies available for public inspection. Auditees and auditors must ensure that their respective parts of the reporting package do not include protected personally identifiable information.

(b) Data Collection. The FAC is the repository of record for Subpart F—Audit Requirements of this part reporting packages and the data collection form. All Federal agencies, pass-through entities and others interested in a reporting package and data collection form must obtain it by accessing the FAC.

(1) The auditee must submit required data elements described in Appendix X to Part 200—Data Collection Form (Form SF-SAC), which state whether the audit was completed in accordance with this part and provides information about the auditee, its Federal programs, and the results of the audit. The data must include information available from the audit required by this part that is necessary for Federal agencies to use the audit to ensure integrity for Federal programs. The data elements and format must be approved by OMB, available from the FAC, and include collections of information from the reporting package described in paragraph (c) of this section. A senior level representative of the auditee (e.g., state controller, director of finance, chief executive officer, or chief financial officer) must sign a statement to be included as part of the data collection that says that the auditee complied with the requirements of this part, the data were prepared in accordance with this part (and the instructions accompanying the form), the reporting package does not include protected personally identifiable information, the information included in its entirety is accurate and complete, and that the FAC is authorized to make the reporting package and the form publicly available on a Web site.

(2) Exception for Indian Tribes and Tribal Organizations. An auditee that is an Indian tribe or a tribal organization (as defined in the Indian Self-Determination, Education and Assistance Act (ISDEAA), 25 U.S.C. 450b(l)) may opt not to authorize the FAC to make the reporting package publicly available on a Web site, by excluding the authorization for the FAC publication in the statement described in paragraph (b)(1) of this section. If this option is exercised, the auditee becomes responsible for submitting the reporting package directly to any pass-through entities through which it has received a Federal award and to pass-through entities for which the summary schedule of prior audit findings reported the status of any findings related to Federal awards that the pass-through entity provided. Unless restricted by Federal statute or regulation, if the auditee opts not to authorize publication, it must make copies of the reporting package available for public inspection.

(3) Using the information included in the reporting package described in paragraph (c) of this section, the auditor must complete the applicable data elements of the data collection form. The auditor must sign a statement to be included as part of the data collection form that indicates, at a minimum, the source of the information included in the form, the auditor's responsibility for the information, that the form is not a substitute for the reporting package described in paragraph (c) of this section, and that the content of the form is limited to the collection of information prescribed by OMB.

(c) Reporting package. The reporting package must include the:




(1) Financial statements and schedule of expenditures of Federal awards discussed in §200.510 Financial statements, paragraphs (a) and (b), respectively;

(2) Summary schedule of prior audit findings discussed in §200.511 Audit findings follow-up, paragraph (b); (3) Auditor's report(s) discussed in §200.515 Audit reporting; and (4) Corrective action plan discussed in §200.511 Audit findings follow-up, paragraph (c). (d) Submission to FAC. The auditee must electronically submit to the FAC the data collection form described in

paragraph (b) of this section and the reporting package described in paragraph (c) of this section. (e) Requests for management letters issued by the auditor. In response to requests by a Federal agency or pass-

through entity, auditees must submit a copy of any management letters issued by the auditor. (f) Report retention requirements. Auditees must keep one copy of the data collection form described in paragraph (b)

of this section and one copy of the reporting package described in paragraph (c) of this section on file for three years from the date of submission to the FAC.

(g) FAC responsibilities. The FAC must make available the reporting packages received in accordance with paragraph (c) of this section and §200.507 Program-specific audits, paragraph (c) to the public, except for Indian tribes exercising the option in (b)(2) of this section, and maintain a data base of completed audits, provide appropriate information to Federal agencies, and follow up with known auditees that have not submitted the required data collection forms and reporting packages.

(h) Electronic filing. Nothing in this part must preclude electronic submissions to the FAC in such manner as may be approved by OMB. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] FEDERAL AGENCIES §200.513 Responsibilities.

(a)(1) Cognizant agency for audit responsibilities. A non-Federal entity expending more than $50 million a year in Federal awards must have a cognizant agency for audit. The designated cognizant agency for audit must be the Federal awarding agency that provides the predominant amount of direct funding to a non-Federal entity unless OMB designates a specific cognizant agency for audit.

(2) To provide for continuity of cognizance, the determination of the predominant amount of direct funding must be based upon direct Federal awards expended in the non-Federal entity's fiscal years ending in 2009, 2014, 2019 and every fifth year thereafter. For example, audit cognizance for periods ending in 2011 through 2015 will be determined based on Federal awards expended in 2009.

(3) Notwithstanding the manner in which audit cognizance is determined, a Federal awarding agency with cognizance for an auditee may reassign cognizance to another Federal awarding agency that provides substantial funding and agrees to be the cognizant agency for audit. Within 30 calendar days after any reassignment, both the old and the new cognizant agency for audit must provide notice of the change to the FAC, the auditee, and, if known, the auditor. The cognizant agency for audit must:

(i) Provide technical audit advice and liaison assistance to auditees and auditors. (ii) Obtain or conduct quality control reviews on selected audits made by non-Federal auditors, and provide the results

to other interested organizations. Cooperate and provide support to the Federal agency designated by OMB to lead a governmentwide project to determine the quality of single audits by providing a statistically reliable estimate of the extent that single audits conform to applicable requirements, standards, and procedures; and to make recommendations to address noted audit quality issues, including recommendations for any changes to applicable requirements, standards and procedures indicated by the results of the project. This governmentwide audit quality project must be performed once every 6 years beginning in 2018 or at such other interval as determined by OMB, and the results must be public.

(iii) Promptly inform other affected Federal agencies and appropriate Federal law enforcement officials of any direct reporting by the auditee or its auditor required by GAGAS or statutes and regulations.

(iv) Advise the community of independent auditors of any noteworthy or important factual trends related to the quality of audits stemming from quality control reviews. Significant problems or quality issues consistently identified through quality control reviews of audit reports must be referred to appropriate state licensing agencies and professional bodies.

(v) Advise the auditor, Federal awarding agencies, and, where appropriate, the auditee of any deficiencies found in the audits when the deficiencies require corrective action by the auditor. When advised of deficiencies, the auditee must work with the auditor to take corrective action. If corrective action is not taken, the cognizant agency for audit must notify the auditor, the auditee, and applicable Federal awarding agencies and pass-through entities of the facts and make recommendations for follow-up action. Major inadequacies or repetitive substandard performance by auditors must be referred to appropriate state licensing agencies and professional bodies for disciplinary action.

(vi) Coordinate, to the extent practical, audits or reviews made by or for Federal agencies that are in addition to the audits made pursuant to this part, so that the additional audits or reviews build upon rather than duplicate audits performed in accordance with this part.

(vii) Coordinate a management decision for cross-cutting audit findings (as defined in §200.30 Cross-cutting audit finding) that affect the Federal programs of more than one agency when requested by any Federal awarding agency whose awards are included in the audit finding of the auditee.

(viii) Coordinate the audit work and reporting responsibilities among auditors to achieve the most cost-effective audit. (ix) Provide advice to auditees as to how to handle changes in fiscal years. (b) Oversight agency for audit responsibilities. An auditee who does not have a designated cognizant agency for audit

will be under the general oversight of the Federal agency determined in accordance with §200.73 Oversight agency for audit. A Federal agency with oversight for an auditee may reassign oversight to another Federal agency that agrees to be




the oversight agency for audit. Within 30 calendar days after any reassignment, both the old and the new oversight agency for audit must provide notice of the change to the FAC, the auditee, and, if known, the auditor. The oversight agency for audit:

(1) Must provide technical advice to auditees and auditors as requested. (2) May assume all or some of the responsibilities normally performed by a cognizant agency for audit. (c) Federal awarding agency responsibilities. The Federal awarding agency must perform the following for the Federal

awards it makes (See also the requirements of §200.210 Information contained in a Federal award): (1) Ensure that audits are completed and reports are received in a timely manner and in accordance with the

requirements of this part. (2) Provide technical advice and counsel to auditees and auditors as requested. (3) Follow-up on audit findings to ensure that the recipient takes appropriate and timely corrective action. As part of

audit follow-up, the Federal awarding agency must: (i) Issue a management decision as prescribed in §200.521 Management decision; (ii) Monitor the recipient taking appropriate and timely corrective action; (iii) Use cooperative audit resolution mechanisms (see §200.25 Cooperative audit resolution) to improve Federal

program outcomes through better audit resolution, follow-up, and corrective action; and (iv) Develop a baseline, metrics, and targets to track, over time, the effectiveness of the Federal agency's process to

follow-up on audit findings and on the effectiveness of Single Audits in improving non-Federal entity accountability and their use by Federal awarding agencies in making award decisions.

(4) Provide OMB annual updates to the compliance supplement and work with OMB to ensure that the compliance supplement focuses the auditor to test the compliance requirements most likely to cause improper payments, fraud, waste, abuse or generate audit finding for which the Federal awarding agency will take sanctions.

(5) Provide OMB with the name of a single audit accountable official from among the senior policy officials of the Federal awarding agency who must be:

(i) Responsible for ensuring that the agency fulfills all the requirements of paragraph (c) of this section and effectively uses the single audit process to reduce improper payments and improve Federal program outcomes.

(ii) Held accountable to improve the effectiveness of the single audit process based upon metrics as described in paragraph (c)(3)(iv) of this section.

(iii) Responsible for designating the Federal agency's key management single audit liaison. (6) Provide OMB with the name of a key management single audit liaison who must: (i) Serve as the Federal awarding agency's management point of contact for the single audit process both within and

outside the Federal Government. (ii) Promote interagency coordination, consistency, and sharing in areas such as coordinating audit follow-up;

identifying higher-risk non-Federal entities; providing input on single audit and follow-up policy; enhancing the utility of the FAC; and studying ways to use single audit results to improve Federal award accountability and best practices.

(iii) Oversee training for the Federal awarding agency's program management personnel related to the single audit process.

(iv) Promote the Federal awarding agency's use of cooperative audit resolution mechanisms. (v) Coordinate the Federal awarding agency's activities to ensure appropriate and timely follow-up and corrective

action on audit findings. (vi) Organize the Federal cognizant agency for audit's follow-up on cross-cutting audit findings that affect the Federal

programs of more than one Federal awarding agency. (vii) Ensure the Federal awarding agency provides annual updates of the compliance supplement to OMB. (viii) Support the Federal awarding agency's single audit accountable official's mission.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] AUDITORS §200.514 Scope of audit.

(a) General. The audit must be conducted in accordance with GAGAS. The audit must cover the entire operations of the auditee, or, at the option of the auditee, such audit must include a series of audits that cover departments, agencies, and other organizational units that expended or otherwise administered Federal awards during such audit period, provided that each such audit must encompass the financial statements and schedule of expenditures of Federal awards for each such department, agency, and other organizational unit, which must be considered to be a non-Federal entity. The financial statements and schedule of expenditures of Federal awards must be for the same audit period.

(b) Financial statements. The auditor must determine whether the financial statements of the auditee are presented fairly in all material respects in accordance with generally accepted accounting principles. The auditor must also determine whether the schedule of expenditures of Federal awards is stated fairly in all material respects in relation to the auditee's financial statements as a whole.

(c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

(2) In addition to the requirements of GAGAS, the auditor must perform procedures to obtain an understanding of internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs.

(3) Except as provided in paragraph (c)(4) of this section, the auditor must:




(i) Plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program; and

(ii) Perform testing of internal control as planned in paragraph (c)(3)(i) of this section. (4) When internal control over some or all of the compliance requirements for a major program are likely to be

ineffective in preventing or detecting noncompliance, the planning and performing of testing described in paragraph (c)(3) of this section are not required for those compliance requirements. However, the auditor must report a significant deficiency or material weakness in accordance with §200.516 Audit findings, assess the related control risk at the maximum, and consider whether additional compliance tests are required because of ineffective internal control.

(d) Compliance. (1) In addition to the requirements of GAGAS, the auditor must determine whether the auditee has complied with Federal statutes, regulations, and the terms and conditions of Federal awards that may have a direct and material effect on each of its major programs.

(2) The principal compliance requirements applicable to most Federal programs and the compliance requirements of the largest Federal programs are included in the compliance supplement.

(3) For the compliance requirements related to Federal programs contained in the compliance supplement, an audit of these compliance requirements will meet the requirements of this part. Where there have been changes to the compliance requirements and the changes are not reflected in the compliance supplement, the auditor must determine the current compliance requirements and modify the audit procedures accordingly. For those Federal programs not covered in the compliance supplement, the auditor must follow the compliance supplement's guidance for programs not included in the supplement.

(4) The compliance testing must include tests of transactions and such other auditing procedures necessary to provide the auditor sufficient appropriate audit evidence to support an opinion on compliance.

(e) Audit follow-up. The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with §200.511 Audit findings follow-up paragraph (b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding. The auditor must perform audit follow-up procedures regardless of whether a prior audit finding relates to a major program in the current year.

(f) Data Collection Form. As required in §200.512 Report submission paragraph (b)(3), the auditor must complete and sign specified sections of the data collection form. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] §200.515 Audit reporting.

The auditor's report(s) may be in the form of either combined or separate reports and may be organized differently from the manner presented in this section. The auditor's report(s) must state that the audit was conducted in accordance with this part and include the following:

(a) An opinion (or disclaimer of opinion) as to whether the financial statements are presented fairly in all material respects in accordance with generally accepted accounting principles and an opinion (or disclaimer of opinion) as to whether the schedule of expenditures of Federal awards is fairly stated in all material respects in relation to the financial statements as a whole.

(b) A report on internal control over financial reporting and compliance with provisions of laws, regulations, contracts, and award agreements, noncompliance with which could have a material effect on the financial statements. This report must describe the scope of testing of internal control and compliance and the results of the tests, and, where applicable, it will refer to the separate schedule of findings and questioned costs described in paragraph (d) of this section.

(c) A report on compliance for each major program and a report on internal control over compliance. This report must describe the scope of testing of internal control over compliance, include an opinion or disclaimer of opinion as to whether the auditee complied with Federal statutes, regulations, and the terms and conditions of Federal awards which could have a direct and material effect on each major program and refer to the separate schedule of findings and questioned costs described in paragraph (d) of this section.

(d) A schedule of findings and questioned costs which must include the following three components: (1) A summary of the auditor's results, which must include: (i) The type of report the auditor issued on whether the financial statements audited were prepared in accordance with

GAAP (i.e., unmodified opinion, qualified opinion, adverse opinion, or disclaimer of opinion); (ii) Where applicable, a statement about whether significant deficiencies or material weaknesses in internal control

were disclosed by the audit of the financial statements; (iii) A statement as to whether the audit disclosed any noncompliance that is material to the financial statements of the

auditee; (iv) Where applicable, a statement about whether significant deficiencies or material weaknesses in internal control

over major programs were disclosed by the audit; (v) The type of report the auditor issued on compliance for major programs (i.e., unmodified opinion, qualified opinion,

adverse opinion, or disclaimer of opinion); (vi) A statement as to whether the audit disclosed any audit findings that the auditor is required to report under

§200.516 Audit findings paragraph (a); (vii) An identification of major programs by listing each individual major program; however in the case of a cluster of

programs only the cluster name as shown on the Schedule of Expenditures of Federal Awards is required; (viii) The dollar threshold used to distinguish between Type A and Type B programs, as described in §200.518 Major

program determination paragraph (b)(1), or (b)(3) when a recalculation of the Type A threshold is required for large loan or loan guarantees; and




(ix) A statement as to whether the auditee qualified as a low-risk auditee under §200.520 Criteria for a low-risk auditee.

(2) Findings relating to the financial statements which are required to be reported in accordance with GAGAS. (3) Findings and questioned costs for Federal awards which must include audit findings as defined in §200.516 Audit

findings, paragraph (a). (i) Audit findings (e.g., internal control findings, compliance findings, questioned costs, or fraud) that relate to the

same issue must be presented as a single audit finding. Where practical, audit findings should be organized by Federal agency or pass-through entity.

(ii) Audit findings that relate to both the financial statements and Federal awards, as reported under paragraphs (d)(2) and (d)(3) of this section, respectively, must be reported in both sections of the schedule. However, the reporting in one section of the schedule may be in summary form with a reference to a detailed reporting in the other section of the schedule.

(e) Nothing in this part precludes combining of the audit reporting required by this section with the reporting required by §200.512 Report submission, paragraph (b) Data Collection when allowed by GAGAS and Appendix X to Part 200—Data Collection Form (Form SF-SAC). [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] §200.516 Audit findings.

(a) Audit findings reported. The auditor must report the following as audit findings in a schedule of findings and questioned costs:

(1) Significant deficiencies and material weaknesses in internal control over major programs and significant instances of abuse relating to major programs. The auditor's determination of whether a deficiency in internal control is a significant deficiency or material weakness for the purpose of reporting an audit finding is in relation to a type of compliance requirement for a major program identified in the Compliance Supplement.

(2) Material noncompliance with the provisions of Federal statutes, regulations, or the terms and conditions of Federal awards related to a major program. The auditor's determination of whether a noncompliance with the provisions of Federal statutes, regulations, or the terms and conditions of Federal awards is material for the purpose of reporting an audit finding is in relation to a type of compliance requirement for a major program identified in the compliance supplement.

(3) Known questioned costs that are greater than $25,000 for a type of compliance requirement for a major program. Known questioned costs are those specifically identified by the auditor. In evaluating the effect of questioned costs on the opinion on compliance, the auditor considers the best estimate of total costs questioned (likely questioned costs), not just the questioned costs specifically identified (known questioned costs). The auditor must also report known questioned costs when likely questioned costs are greater than $25,000 for a type of compliance requirement for a major program. In reporting questioned costs, the auditor must include information to provide proper perspective for judging the prevalence and consequences of the questioned costs.

(4) Known questioned costs that are greater than $25,000 for a Federal program which is not audited as a major program. Except for audit follow-up, the auditor is not required under this part to perform audit procedures for such a Federal program; therefore, the auditor will normally not find questioned costs for a program that is not audited as a major program. However, if the auditor does become aware of questioned costs for a Federal program that is not audited as a major program (e.g., as part of audit follow-up or other audit procedures) and the known questioned costs are greater than $25,000, then the auditor must report this as an audit finding.

(5) The circumstances concerning why the auditor's report on compliance for each major program is other than an unmodified opinion, unless such circumstances are otherwise reported as audit findings in the schedule of findings and questioned costs for Federal awards.

(6) Known or likely fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards. This paragraph does not require the auditor to report publicly information which could compromise investigative or legal proceedings or to make an additional reporting when the auditor confirms that the fraud was reported outside the auditor's reports under the direct reporting requirements of GAGAS.

(7) Instances where the results of audit follow-up procedures disclosed that the summary schedule of prior audit findings prepared by the auditee in accordance with §200.511 Audit findings follow-up, paragraph (b) materially misrepresents the status of any prior audit finding.

(b) Audit finding detail and clarity. Audit findings must be presented in sufficient detail and clarity for the auditee to prepare a corrective action plan and take corrective action, and for Federal agencies and pass-through entities to arrive at a management decision. The following specific information must be included, as applicable, in audit findings:

(1) Federal program and specific Federal award identification including the CFDA title and number, Federal award identification number and year, name of Federal agency, and name of the applicable pass-through entity. When information, such as the CFDA title and number or Federal award identification number, is not available, the auditor must provide the best information available to describe the Federal award.

(2) The criteria or specific requirement upon which the audit finding is based, including the Federal statutes, regulations, or the terms and conditions of the Federal awards. Criteria generally identify the required or desired state or expectation with respect to the program or operation. Criteria provide a context for evaluating evidence and understanding findings.

(3) The condition found, including facts that support the deficiency identified in the audit finding. (4) A statement of cause that identifies the reason or explanation for the condition or the factors responsible for the

difference between the situation that exists (condition) and the required or desired state (criteria), which may also serve as a basis for recommendations for corrective action.




(5) The possible asserted effect to provide sufficient information to the auditee and Federal agency, or pass-through entity in the case of a subrecipient, to permit them to determine the cause and effect to facilitate prompt and proper corrective action. A statement of the effect or potential effect should provide a clear, logical link to establish the impact or potential impact of the difference between the condition and the criteria.

(6) Identification of questioned costs and how they were computed. Known questioned costs must be identified by applicable CFDA number(s) and applicable Federal award identification number(s).

(7) Information to provide proper perspective for judging the prevalence and consequences of the audit findings, such as whether the audit findings represent an isolated instance or a systemic problem. Where appropriate, instances identified must be related to the universe and the number of cases examined and be quantified in terms of dollar value. The auditor should report whether the sampling was a statistically valid sample.

(8) Identification of whether the audit finding was a repeat of a finding in the immediately prior audit and if so any applicable prior year audit finding numbers.

(9) Recommendations to prevent future occurrences of the deficiency identified in the audit finding. (10) Views of responsible officials of the auditee. (c) Reference numbers. Each audit finding in the schedule of findings and questioned costs must include a reference

number in the format meeting the requirements of the data collection form submission required by §200.512 Report submission, paragraph (b) to allow for easy referencing of the audit findings during follow-up. §200.517 Audit documentation.

(a) Retention of audit documentation. The auditor must retain audit documentation and reports for a minimum of three years after the date of issuance of the auditor's report(s) to the auditee, unless the auditor is notified in writing by the cognizant agency for audit, oversight agency for audit, cognizant agency for indirect costs, or pass-through entity to extend the retention period. When the auditor is aware that the Federal agency, pass-through entity, or auditee is contesting an audit finding, the auditor must contact the parties contesting the audit finding for guidance prior to destruction of the audit documentation and reports.

(b) Access to audit documentation. Audit documentation must be made available upon request to the cognizant or oversight agency for audit or its designee, cognizant agency for indirect cost, a Federal agency, or GAO at the completion of the audit, as part of a quality review, to resolve audit findings, or to carry out oversight responsibilities consistent with the purposes of this part. Access to audit documentation includes the right of Federal agencies to obtain copies of audit documentation, as is reasonable and necessary. §200.518 Major program determination.

(a) General. The auditor must use a risk-based approach to determine which Federal programs are major programs. This risk-based approach must include consideration of: current and prior audit experience, oversight by Federal agencies and pass-through entities, and the inherent risk of the Federal program. The process in paragraphs (b) through (h) of this section must be followed.

(b) Step one. (1) The auditor must identify the larger Federal programs, which must be labeled Type A programs. Type A programs are defined as Federal programs with Federal awards expended during the audit period exceeding the levels outlined in the table in this paragraph (b)(1):

Total Federal awards expended Type A/B threshold

Equal to or exceed $750,000 but less than or equal to $25 million $750,000.

Exceed $25 million but less than or equal to $100 million Total Federal awards expended times .03.

Exceed $100 million but less than or equal to $1 billion $3 million.

Exceed $1 billion but less than or equal to $10 billion Total Federal awards expended times .003.

Exceed $10 billion but less than or equal to $20 billion $30 million.

Exceed $20 billion Total Federal awards expended times .0015. (2) Federal programs not labeled Type A under paragraph (b)(1) of this section must be labeled Type B programs. (3) The inclusion of large loan and loan guarantees (loans) must not result in the exclusion of other programs as Type

A programs. When a Federal program providing loans exceeds four times the largest non-loan program it is considered a large loan program, and the auditor must consider this Federal program as a Type A program and exclude its values in determining other Type A programs. This recalculation of the Type A program is performed after removing the total of all large loan programs. For the purposes of this paragraph a program is only considered to be a Federal program providing loans if the value of Federal awards expended for loans within the program comprises fifty percent or more of the total Federal awards expended for the program. A cluster of programs is treated as one program and the value of Federal awards expended under a loan program is determined as described in §200.502 Basis for determining Federal awards expended.

(4) For biennial audits permitted under §200.504 Frequency of audits, the determination of Type A and Type B programs must be based upon the Federal awards expended during the two-year period.

(c) Step two. (1) The auditor must identify Type A programs which are low-risk. In making this determination, the auditor must consider whether the requirements in §200.519 Criteria for Federal program risk paragraph (c), the results of audit follow-up, or any changes in personnel or systems affecting the program indicate significantly increased risk and




preclude the program from being low risk. For a Type A program to be considered low-risk, it must have been audited as a major program in at least one of the two most recent audit periods (in the most recent audit period in the case of a biennial audit), and, in the most recent audit period, the program must have not had:

(i) Internal control deficiencies which were identified as material weaknesses in the auditor's report on internal control for major programs as required under §200.515 Audit reporting, paragraph (c);

(ii) A modified opinion on the program in the auditor's report on major programs as required under §200.515 Audit reporting, paragraph (c); or

(iii) Known or likely questioned costs that exceed five percent of the total Federal awards expended for the program. (2) Notwithstanding paragraph (c)(1) of this section, OMB may approve a Federal awarding agency's request that a

Type A program may not be considered low risk for a certain recipient. For example, it may be necessary for a large Type A program to be audited as a major program each year at a particular recipient to allow the Federal awarding agency to comply with 31 U.S.C. 3515. The Federal awarding agency must notify the recipient and, if known, the auditor of OMB's approval at least 180 calendar days prior to the end of the fiscal year to be audited.

(d) Step three. (1) The auditor must identify Type B programs which are high-risk using professional judgment and the criteria in §200.519 Criteria for Federal program risk. However, the auditor is not required to identify more high-risk Type B programs than at least one fourth the number of low-risk Type A programs identified as low-risk under Step 2 (paragraph (c) of this section). Except for known material weakness in internal control or compliance problems as discussed in §200.519 Criteria for Federal program risk paragraphs (b)(1), (b)(2), and (c)(1), a single criteria in risk would seldom cause a Type B program to be considered high-risk. When identifying which Type B programs to risk assess, the auditor is encouraged to use an approach which provides an opportunity for different high-risk Type B programs to be audited as major over a period of time.

(2) The auditor is not expected to perform risk assessments on relatively small Federal programs. Therefore, the auditor is only required to perform risk assessments on Type B programs that exceed twenty-five percent (0.25) of the Type A threshold determined in Step 1 (paragraph (b) of this section).

(e) Step four. At a minimum, the auditor must audit all of the following as major programs: (1) All Type A programs not identified as low risk under step two (paragraph (c)(1) of this section). (2) All Type B programs identified as high-risk under step three (paragraph (d) of this section). (3) Such additional programs as may be necessary to comply with the percentage of coverage rule discussed in

paragraph (f) of this section. This may require the auditor to audit more programs as major programs than the number of Type A programs.

(f) Percentage of coverage rule. If the auditee meets the criteria in §200.520 Criteria for a low-risk auditee, the auditor need only audit the major programs identified in Step 4 (paragraph (e)(1) and (2) of this section) and such additional Federal programs with Federal awards expended that, in aggregate, all major programs encompass at least 20 percent (0.20) of total Federal awards expended. Otherwise, the auditor must audit the major programs identified in Step 4 (paragraphs (e)(1) and (2) of this section) and such additional Federal programs with Federal awards expended that, in aggregate, all major programs encompass at least 40 percent (0.40) of total Federal awards expended.

(g) Documentation of risk. The auditor must include in the audit documentation the risk analysis process used in determining major programs.

(h) Auditor's judgment. When the major program determination was performed and documented in accordance with this Subpart, the auditor's judgment in applying the risk-based approach to determine major programs must be presumed correct. Challenges by Federal agencies and pass-through entities must only be for clearly improper use of the requirements in this part. However, Federal agencies and pass-through entities may provide auditors guidance about the risk of a particular Federal program and the auditor must consider this guidance in determining major programs in audits not yet completed. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] §200.519 Criteria for Federal program risk.

(a) General. The auditor's determination should be based on an overall evaluation of the risk of noncompliance occurring that could be material to the Federal program. The auditor must consider criteria, such as described in paragraphs (b), (c), and (d) of this section, to identify risk in Federal programs. Also, as part of the risk analysis, the auditor may wish to discuss a particular Federal program with auditee management and the Federal agency or pass-through entity.

(b) Current and prior audit experience. (1) Weaknesses in internal control over Federal programs would indicate higher risk. Consideration should be given to the control environment over Federal programs and such factors as the expectation of management's adherence to Federal statutes, regulations, and the terms and conditions of Federal awards and the competence and experience of personnel who administer the Federal programs.

(i) A Federal program administered under multiple internal control structures may have higher risk. When assessing risk in a large single audit, the auditor must consider whether weaknesses are isolated in a single operating unit (e.g., one college campus) or pervasive throughout the entity.

(ii) When significant parts of a Federal program are passed through to subrecipients, a weak system for monitoring subrecipients would indicate higher risk.

(2) Prior audit findings would indicate higher risk, particularly when the situations identified in the audit findings could have a significant impact on a Federal program or have not been corrected.

(3) Federal programs not recently audited as major programs may be of higher risk than Federal programs recently audited as major programs without audit findings.

(c) Oversight exercised by Federal agencies and pass-through entities. (1) Oversight exercised by Federal agencies or pass-through entities could be used to assess risk. For example, recent monitoring or other reviews performed by an




oversight entity that disclosed no significant problems would indicate lower risk, whereas monitoring that disclosed significant problems would indicate higher risk.

(2) Federal agencies, with the concurrence of OMB, may identify Federal programs that are higher risk. OMB will provide this identification in the compliance supplement.

(d) Inherent risk of the Federal program. (1) The nature of a Federal program may indicate risk. Consideration should be given to the complexity of the program and the extent to which the Federal program contracts for goods and services. For example, Federal programs that disburse funds through third party contracts or have eligibility criteria may be of higher risk. Federal programs primarily involving staff payroll costs may have high risk for noncompliance with requirements of §200.430 Compensation—personal services, but otherwise be at low risk.

(2) The phase of a Federal program in its life cycle at the Federal agency may indicate risk. For example, a new Federal program with new or interim regulations may have higher risk than an established program with time-tested regulations. Also, significant changes in Federal programs, statutes, regulations, or the terms and conditions of Federal awards may increase risk.

(3) The phase of a Federal program in its life cycle at the auditee may indicate risk. For example, during the first and last years that an auditee participates in a Federal program, the risk may be higher due to start-up or closeout of program activities and staff.

(4) Type B programs with larger Federal awards expended would be of higher risk than programs with substantially smaller Federal awards expended. §200.520 Criteria for a low-risk auditee.

An auditee that meets all of the following conditions for each of the preceding two audit periods must qualify as a low-risk auditee and be eligible for reduced audit coverage in accordance with §200.518 Major program determination.

(a) Single audits were performed on an annual basis in accordance with the provisions of this Subpart, including submitting the data collection form and the reporting package to the FAC within the timeframe specified in §200.512 Report submission. A non-Federal entity that has biennial audits does not qualify as a low-risk auditee.

(b) The auditor's opinion on whether the financial statements were prepared in accordance with GAAP, or a basis of accounting required by state law, and the auditor's in relation to opinion on the schedule of expenditures of Federal awards were unmodified.

(c) There were no deficiencies in internal control which were identified as material weaknesses under the requirements of GAGAS.

(d) The auditor did not report a substantial doubt about the auditee's ability to continue as a going concern. (e) None of the Federal programs had audit findings from any of the following in either of the preceding two audit

periods in which they were classified as Type A programs: (1) Internal control deficiencies that were identified as material weaknesses in the auditor's report on internal control

for major programs as required under §200.515 Audit reporting, paragraph (c); (2) A modified opinion on a major program in the auditor's report on major programs as required under §200.515 Audit

reporting, paragraph (c); or (3) Known or likely questioned costs that exceeded five percent of the total Federal awards expended for a Type A

program during the audit period. MANAGEMENT DECISIONS §200.521 Management decision.

(a) General. The management decision must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. If the auditee has not completed corrective action, a timetable for follow-up should be given. Prior to issuing the management decision, the Federal agency or pass-through entity may request additional information or documentation from the auditee, including a request for auditor assurance related to the documentation, as a way of mitigating disallowed costs. The management decision should describe any appeal process available to the auditee. While not required, the Federal agency or pass-through entity may also issue a management decision on findings relating to the financial statements which are required to be reported in accordance with GAGAS.

(b) Federal agency. As provided in §200.513 Responsibilities, paragraph (a)(7), the cognizant agency for audit must be responsible for coordinating a management decision for audit findings that affect the programs of more than one Federal agency. As provided in §200.513 Responsibilities, paragraph (c)(3), a Federal awarding agency is responsible for issuing a management decision for findings that relate to Federal awards it makes to non-Federal entities.

(c) Pass-through entity. As provided in §200.331 Requirements for pass-through entities, paragraph (d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients.

(d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report.

(e) Reference numbers. Management decisions must include the reference numbers the auditor assigned to each audit finding in accordance with §200.516 Audit findings paragraph (c). Appendix I to Part 200—Full Text of Notice of Funding Opportunity

The full text of the notice of funding opportunity is organized in sections. The required format outlined in this appendix indicates immediately following the title of each section whether that section is required in every announcement or is a




Federal awarding agency option. The format is designed so that similar types of information will appear in the same sections in announcements of different Federal funding opportunities. Toward that end, there is text in each of the following sections to describe the types of information that a Federal awarding agency would include in that section of an actual announcement.

A Federal awarding agency that wishes to include information that the format does not specifically discuss may address that subject in whatever section(s) is most appropriate. For example, if a Federal awarding agency chooses to address performance goals in the announcement, it might do so in the funding opportunity description, the application content, or the reporting requirements.

Similarly, when this format calls for a type of information to be in a particular section, a Federal awarding agency wishing to address that subject in other sections may elect to repeat the information in those sections or use cross references between the sections (there should be hyperlinks for cross-references in any electronic versions of the announcement). For example, a Federal awarding agency may want to include Section A information about the types of non-Federal entities who are eligible to apply. The format specifies a standard location for that information in Section C.1 but does not preclude repeating the information in Section A or creating a cross reference between Section A and C.1, as long as a potential applicant can find the information quickly and easily from the standard location.

The sections of the full text of the announcement are described in the following paragraphs. A. PROGRAM DESCRIPTION—REQUIRED

This section contains the full program description of the funding opportunity. It may be as long as needed to adequately communicate to potential applicants the areas in which funding may be provided. It describes the Federal awarding agency's funding priorities or the technical or focus areas in which the Federal awarding agency intends to provide assistance. As appropriate, it may include any program history (e.g., whether this is a new program or a new or changed area of program emphasis). This section may communicate indicators of successful projects (e.g., if the program encourages collaborative efforts) and may include examples of projects that have been funded previously. This section also may include other information the Federal awarding agency deems necessary, and must at a minimum include citations for authorizing statutes and regulations for the funding opportunity. B. FEDERAL AWARD INFORMATION—REQUIRED

This section provides sufficient information to help an applicant make an informed decision about whether to submit a proposal. Relevant information could include the total amount of funding that the Federal awarding agency expects to award through the announcement; the anticipated number of Federal awards; the expected amounts of individual Federal awards (which may be a range); the amount of funding per Federal award, on average, experienced in previous years; and the anticipated start dates and periods of performance for new Federal awards. This section also should address whether applications for renewal or supplementation of existing projects are eligible to compete with applications for new Federal awards.

This section also must indicate the type(s) of assistance instrument (e.g., grant, cooperative agreement) that may be awarded if applications are successful. If cooperative agreements may be awarded, this section either should describe the “substantial involvement” that the Federal awarding agency expects to have or should reference where the potential applicant can find that information (e.g., in the funding opportunity description in A. Program Description—Required or Federal award administration information in Section D. Application and Submission Information). If procurement contracts also may be awarded, this must be stated. C. ELIGIBILITY INFORMATION

This section addresses the considerations or factors that determine applicant or application eligibility. This includes the eligibility of particular types of applicant organizations, any factors affecting the eligibility of the principal investigator or project director, and any criteria that make particular projects ineligible. Federal agencies should make clear whether an applicant's failure to meet an eligibility criterion by the time of an application deadline will result in the Federal awarding agency returning the application without review or, even though an application may be reviewed, will preclude the Federal awarding agency from making a Federal award. Key elements to be addressed are:

1. Eligible Applicants—Required. Announcements must clearly identify the types of entities that are eligible to apply. If there are no restrictions on eligibility, this section may simply indicate that all potential applicants are eligible. If there are restrictions on eligibility, it is important to be clear about the specific types of entities that are eligible, not just the types that are ineligible. For example, if the program is limited to nonprofit organizations subject to 26 U.S.C. 501(c)(3) of the tax code (26 U.S.C. 501(c)(3)), the announcement should say so. Similarly, it is better to state explicitly that Native American tribal organizations are eligible than to assume that they can unambiguously infer that from a statement that nonprofit organizations may apply. Eligibility also can be expressed by exception, (e.g., open to all types of domestic applicants other than individuals). This section should refer to any portion of Section D specifying documentation that must be submitted to support an eligibility determination (e.g., proof of 501(c)(3) status as determined by the Internal Revenue Service or an authorizing tribal resolution). To the extent that any funding restriction in Section D.6 could affect the eligibility of an applicant or project, the announcement must either restate that restriction in this section or provide a cross-reference to its description in Section D.6.

2. Cost Sharing or Matching—Required. Announcements must state whether there is required cost sharing, matching, or cost participation without which an application would be ineligible (if cost sharing is not required, the announcement must explicitly say so). Required cost sharing may be a certain percentage or amount, or may be in the form of contributions of specified items or activities (e.g., provision of equipment). It is important that the announcement be clear about any restrictions on the types of cost (e.g., in-kind contributions) that are acceptable as cost sharing. Cost sharing as an eligibility criterion includes requirements based in statute or regulation, as described in §200.306 Cost sharing or matching of this Part. This section should refer to the appropriate portion(s) of section D. Application and Submission Information stating any




pre-award requirements for submission of letters or other documentation to verify commitments to meet cost-sharing requirements if a Federal award is made.

3. Other—Required, if applicable. If there are other eligibility criteria (i.e., criteria that have the effect of making an application or project ineligible for Federal awards, whether referred to as “responsiveness” criteria, “go-no go” criteria, “threshold” criteria, or in other ways), must be clearly stated and must include a reference to the regulation of requirement that describes the restriction, as applicable. For example, if entities that have been found to be in violation of a particular Federal statute are ineligible, it is important to say so. This section must also state any limit on the number of applications an applicant may submit under the announcement and make clear whether the limitation is on the submitting organization, individual investigator/program director, or both. This section should also address any eligibility criteria for beneficiaries or for program participants other than Federal award recipients. D. APPLICATION AND SUBMISSION INFORMATION

1. Address to Request Application Package—Required. Potential applicants must be told how to get application forms, kits, or other materials needed to apply (if this announcement contains everything needed, this section need only say so). An Internet address where the materials can be accessed is acceptable. However, since high-speed Internet access is not yet universally available for downloading documents, and applicants may have additional accessibility requirements, there also should be a way for potential applicants to request paper copies of materials, such as a U.S. Postal Service mailing address, telephone or FAX number, Telephone Device for the Deaf (TDD), Text Telephone (TTY) number, and/or Federal Information Relay Service (FIRS) number.

2. Content and Form of Application Submission—Required. This section must identify the required content of an application and the forms or formats that an applicant must use to submit it. If any requirements are stated elsewhere because they are general requirements that apply to multiple programs or funding opportunities, this section should refer to where those requirements may be found. This section also should include required forms or formats as part of the announcement or state where the applicant may obtain them.

This section should specifically address content and form or format requirements for: i. Pre-applications, letters of intent, or white papers required or encouraged (see Section D.4), including any

limitations on the number of pages or other formatting requirements similar to those for full applications. ii. The application as a whole. For all submissions, this would include any limitations on the number of pages, font size

and typeface, margins, paper size, number of copies, and sequence or assembly requirements. If electronic submission is permitted or required, this could include special requirements for formatting or signatures.

iii. Component pieces of the application (e.g., if all copies of the application must bear original signatures on the face page or the program narrative may not exceed 10 pages). This includes any pieces that may be submitted separately by third parties (e.g., references or letters confirming commitments from third parties that will be contributing a portion of any required cost sharing).

iv. Information that successful applicants must submit after notification of intent to make a Federal award, but prior to a Federal award. This could include evidence of compliance with requirements relating to human subjects or information needed to comply with the National Environmental Policy Act (NEPA) (42 U.S.C. 4321-4370h).

3. Unique entity identifier and System for Award Management (SAM)—Required. This paragraph must state clearly that each applicant (unless the applicant is an individual or Federal awarding

agency that is excepted from those requirements under 2 CFR §25.110(b) or (c), or has an exception approved by the Federal awarding agency under 2 CFR §25.110(d)) is required to: (i) Be registered in SAM before submitting its application; (ii) provide a a valid unique entity identifier in its application; and (iii) continue to maintain an active SAM registration with current information at all times during which it has an active Federal award or an application or plan under consideration by a Federal awarding agency. It also must state that the Federal awarding agency may not make a Federal award to an applicant until the applicant has complied with all applicable unique entity identifier and SAM requirements and, if an applicant has not fully complied with the requirements by the time the Federal awarding agency is ready to make a Federal award, the Federal awarding agency may determine that the applicant is not qualified to receive a Federal award and use that determination as a basis for making a Federal award to another applicant.

4. Submission Dates and Times—Required. Announcements must identify due dates and times for all submissions. This includes not only the full applications but also any preliminary submissions (e.g., letters of intent, white papers, or pre-applications). It also includes any other submissions of information before Federal award that are separate from the full application. If the funding opportunity is a general announcement that is open for a period of time with no specific due dates for applications, this section should say so. Note that the information on dates that is included in this section also must appear with other overview information in a location preceding the full text of the announcement (see §200.203 Notices of funding opportunities of this Part).

Each type of submission should be designated as encouraged or required and, if required, any deadline date (or dates, if the Federal awarding agency plans more than one cycle of application submission, review, and Federal award under the announcement) should be specified. The announcement must state (or provide a reference to another document that states):

i. Any deadline in terms of a date and local time. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day.

ii. What the deadline means (e.g., whether it is the date and time by which the Federal awarding agency must receive the application, the date by which the application must be postmarked, or something else) and how that depends, if at all, on the submission method (e.g., mail, electronic, or personal/courier delivery).

iii. The effect of missing a deadline (e.g., whether late applications are neither reviewed nor considered or are reviewed and considered under some circumstances).




iv. How the receiving Federal office determines whether an application or pre-application has been submitted before the deadline. This includes the form of acceptable proof of mailing or system-generated documentation of receipt date and time.

This section also may indicate whether, when, and in what form the applicant will receive an acknowledgement of receipt. This information should be displayed in ways that will be easy to understand and use. It can be difficult to extract all needed information from narrative paragraphs, even when they are well written. A tabular form for providing a summary of the information may help applicants for some programs and give them what effectively could be a checklist to verify the completeness of their application package before submission.

5. Intergovernmental Review—Required, if applicable. If the funding opportunity is subject to Executive Order 12372, “Intergovernmental Review of Federal Programs,” the notice must say so. In alerting applicants that they must contact their state's Single Point of Contact (SPOC) to find out about and comply with the state's process under Executive Order 12372, it may be useful to inform potential applicants that the names and addresses of the SPOCs are listed in the Office of Management and Budget's Web site. www.whitehouse.gov/omb/grants/spoc.html.

6. Funding Restrictions—Required. Notices must include information on funding restrictions in order to allow an applicant to develop an application and budget consistent with program requirements. Examples are whether construction is an allowable activity, if there are any limitations on direct costs such as foreign travel or equipment purchases, and if there are any limits on indirect costs (or facilities and administrative costs). Applicants must be advised if Federal awards will not allow reimbursement of pre-Federal award costs.

7. Other Submission Requirements— Required. This section must address any other submission requirements not included in the other paragraphs of this section. This might include the format of submission, i.e., paper or electronic, for each type of required submission. Applicants should not be required to submit in more than one format and this section should indicate whether they may choose whether to submit applications in hard copy or electronically, may submit only in hard copy, or may submit only electronically.

This section also must indicate where applications (and any pre-applications) must be submitted if sent by postal mail, electronic means, or hand-delivery. For postal mail submission, this must include the name of an office, official, individual or function (e.g., application receipt center) and a complete mailing address. For electronic submission, this must include the URL or email address; whether a password(s) is required; whether particular software or other electronic capabilities are required; what to do in the event of system problems and a point of contact who will be available in the event the applicant experiences technical difficulties.1

1With respect to electronic methods for providing information about funding opportunities or accepting applicants' submissions of information, each Federal awarding agency is responsible for compliance with Section 508 of the Rehabilitation Act of 1973 (29 U.S.C. 794d). E. APPLICATION REVIEW INFORMATION

1. Criteria—Required. This section must address the criteria that the Federal awarding agency will use to evaluate applications. This includes the merit and other review criteria that evaluators will use to judge applications, including any statutory, regulatory, or other preferences (e.g., minority status or Native American tribal preferences) that will be applied in the review process. These criteria are distinct from eligibility criteria that are addressed before an application is accepted for review and any program policy or other factors that are applied during the selection process, after the review process is completed. The intent is to make the application process transparent so applicants can make informed decisions when preparing their applications to maximize fairness of the process. The announcement should clearly describe all criteria, including any sub-criteria. If criteria vary in importance, the announcement should specify the relative percentages, weights, or other means used to distinguish among them. For statutory, regulatory, or other preferences, the announcement should provide a detailed explanation of those preferences with an explicit indication of their effect (e.g., whether they result in additional points being assigned).

If an applicant's proposed cost sharing will be considered in the review process (as opposed to being an eligibility criterion described in Section C.2), the announcement must specifically address how it will be considered (e.g., to assign a certain number of additional points to applicants who offer cost sharing, or to break ties among applications with equivalent scores after evaluation against all other factors). If cost sharing will not be considered in the evaluation, the announcement should say so, so that there is no ambiguity for potential applicants. Vague statements that cost sharing is encouraged, without clarification as to what that means, are unhelpful to applicants. It also is important that the announcement be clear about any restrictions on the types of cost (e.g., in-kind contributions) that are acceptable as cost sharing.

2. Review and Selection Process—Required. This section may vary in the level of detail provided. The announcement must list any program policy or other factors or elements, other than merit criteria, that the selecting official may use in selecting applications for Federal award (e.g., geographical dispersion, program balance, or diversity). The Federal awarding agency may also include other appropriate details. For example, this section may indicate who is responsible for evaluation against the merit criteria (e.g., peers external to the Federal awarding agency or Federal awarding agency personnel) and/or who makes the final selections for Federal awards. If there is a multi-phase review process (e.g., an external panel advising internal Federal awarding agency personnel who make final recommendations to the deciding official), the announcement may describe the phases. It also may include: the number of people on an evaluation panel and how it operates, the way reviewers are selected, reviewer qualifications, and the way that conflicts of interest are avoided. With respect to electronic methods for providing information about funding opportunities or accepting applicants' submissions of information, each Federal awarding agency is responsible for compliance with Section 508 of the Rehabilitation Act of 1973 (29 U.S.C. 794d).

In addition, if the Federal awarding agency permits applicants to nominate suggested reviewers of their applications or suggest those they feel may be inappropriate due to a conflict of interest, that information should be included in this section.




3. For any Federal award under a notice of funding opportunity, if the Federal awarding agency anticipates that the total Federal share will be greater than the simplified acquisition threshold on any Federal award under a notice of funding opportunity may include, over the period of performance (see §200.88 Simplified Acquisition Threshold), this section must also inform applicants:

i. That the Federal awarding agency, prior to making a Federal award with a total amount of Federal share greater than the simplified acquisition threshold, is required to review and consider any information about the applicant that is in the designated integrity and performance system accessible through SAM (currently FAPIIS) (see 41 U.S.C. 2313);

ii. That an applicant, at its option, may review information in the designated integrity and performance systems accessible through SAM and comment on any information about itself that a Federal awarding agency previously entered and is currently in the designated integrity and performance system accessible through SAM;

iii. That the Federal awarding agency will consider any comments by the applicant, in addition to the other information in the designated integrity and performance system, in making a judgment about the applicant's integrity, business ethics, and record of performance under Federal awards when completing the review of risk posed by applicants as described in §200.205 Federal awarding agency review of risk posed by applicants.

4. Anticipated Announcement and Federal Award Dates—Optional. This section is intended to provide applicants with information they can use for planning purposes. If there is a single application deadline followed by the simultaneous review of all applications, the Federal awarding agency can include in this section information about the anticipated dates for announcing or notifying successful and unsuccessful applicants and for having Federal awards in place. If applications are received and evaluated on a “rolling” basis at different times during an extended period, it may be appropriate to give applicants an estimate of the time needed to process an application and notify the applicant of the Federal awarding agency's decision. F. FEDERAL AWARD ADMINISTRATION INFORMATION

1. Federal Award Notices—Required. This section must address what a successful applicant can expect to receive following selection. If the Federal awarding agency's practice is to provide a separate notice stating that an application has been selected before it actually makes the Federal award, this section would be the place to indicate that the letter is not an authorization to begin performance (to the extent that it allows charging to Federal awards of pre-award costs at the non-Federal entity's own risk). This section should indicate that the notice of Federal award signed by the grants officer (or equivalent) is the authorizing document, and whether it is provided through postal mail or by electronic means and to whom. It also may address the timing, form, and content of notifications to unsuccessful applicants. See also §200.210 Information contained in a Federal award.

2. Administrative and National Policy Requirements—Required. This section must identify the usual administrative and national policy requirements the Federal awarding agency's Federal awards may include. Providing this information lets a potential applicant identify any requirements with which it would have difficulty complying if its application is successful. In those cases, early notification about the requirements allows the potential applicant to decide not to apply or to take needed actions before receiving the Federal award. The announcement need not include all of the terms and conditions of the Federal award, but may refer to a document (with information about how to obtain it) or Internet site where applicants can see the terms and conditions. If this funding opportunity will lead to Federal awards with some special terms and conditions that differ from the Federal awarding agency's usual (sometimes called “general”) terms and conditions, this section should highlight those special terms and conditions. Doing so will alert applicants that have received Federal awards from the Federal awarding agency previously and might not otherwise expect different terms and conditions. For the same reason, the announcement should inform potential applicants about special requirements that could apply to particular Federal awards after the review of applications and other information, based on the particular circumstances of the effort to be supported (e.g., if human subjects were to be involved or if some situations may justify special terms on intellectual property, data sharing or security requirements).

3. Reporting—Required. This section must include general information about the type (e.g., financial or performance), frequency, and means of submission (paper or electronic) of post-Federal award reporting requirements. Highlight any special reporting requirements for Federal awards under this funding opportunity that differ (e.g., by report type, frequency, form/format, or circumstances for use) from what the Federal awarding agency's Federal awards usually require. Federal awarding agencies must also describe in this section all relevant requirements such as those at 2 CFR 180.335 and 2 CFR 180.350.

If the Federal share of any Federal award may include more than $500,000 over the period of performance, this section must inform potential applicants about the post award reporting requirements reflected in Appendix XII—Award Term and Condition for Recipient Integrity and Performance Matters. G. FEDERAL AWARDING AGENCY CONTACT(S)—REQUIRED

The announcement must give potential applicants a point(s) of contact for answering questions or helping with problems while the funding opportunity is open. The intent of this requirement is to be as helpful as possible to potential applicants, so the Federal awarding agency should consider approaches such as giving:

i. Points of contact who may be reached in multiple ways (e.g., by telephone, FAX, and/or email, as well as regular mail).

ii. A fax or email address that multiple people access, so that someone will respond even if others are unexpectedly absent during critical periods.

iii. Different contacts for distinct kinds of help (e.g., one for questions of programmatic content and a second for administrative questions). H. OTHER INFORMATION—OPTIONAL

This section may include any additional information that will assist a potential applicant. For example, the section might:




i. Indicate whether this is a new program or a one-time initiative. ii. Mention related programs or other upcoming or ongoing Federal awarding agency funding opportunities for similar

activities. iii. Include current Internet addresses for Federal awarding agency Web sites that may be useful to an applicant in

understanding the program. iv. Alert applicants to the need to identify proprietary information and inform them about the way the Federal awarding

agency will handle it. v. Include certain routine notices to applicants (e.g., that the Federal Government is not obligated to make any

Federal award as a result of the announcement or that only grants officers can bind the Federal Government to the expenditure of funds). [78 FR 78608, Dec. 26, 2013, as amended at 80 FR 43310, July 22, 2015] Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards

In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable.

(A) Contracts for more than the simplified acquisition threshold currently set at $150,000, which is the inflation adjusted amount determined by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) as authorized by 41 U.S.C. 1908, must address administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as appropriate.

(B) All contracts in excess of $10,000 must address termination for cause and for convenience by the non-Federal entity including the manner by which it will be effected and the basis for settlement.

(C) Equal Employment Opportunity. Except as otherwise provided under 41 CFR Part 60, all contracts that meet the definition of “federally assisted construction contract” in 41 CFR Part 60-1.3 must include the equal opportunity clause provided under 41 CFR 60-1.4(b), in accordance with Executive Order 11246, “Equal Employment Opportunity” (30 FR 12319, 12935, 3 CFR Part, 1964-1965 Comp., p. 339), as amended by Executive Order 11375, “Amending Executive Order 11246 Relating to Equal Employment Opportunity,” and implementing regulations at 41 CFR part 60, “Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor.”

(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland “Anti-Kickback” Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, “Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States”). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency.

(E) Contract Work Hours and Safety Standards Act (40 U.S.C. 3701-3708). Where applicable, all contracts awarded by the non-Federal entity in excess of $100,000 that involve the employment of mechanics or laborers must include a provision for compliance with 40 U.S.C. 3702 and 3704, as supplemented by Department of Labor regulations (29 CFR Part 5). Under 40 U.S.C. 3702 of the Act, each contractor must be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week. The requirements of 40 U.S.C. 3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.

(F) Rights to Inventions Made Under a Contract or Agreement. If the Federal award meets the definition of “funding agreement” under 37 CFR §401.2 (a) and the recipient or subrecipient wishes to enter into a contract with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that “funding agreement,” the recipient or subrecipient must comply with the requirements of 37 CFR Part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,” and any implementing regulations issued by the awarding agency.

(G) Clean Air Act (42 U.S.C. 7401-7671q.) and the Federal Water Pollution Control Act (33 U.S.C. 1251-1387), as amended—Contracts and subgrants of amounts in excess of $150,000 must contain a provision that requires the non-Federal award to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251-1387). Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).




(H) Debarment and Suspension (Executive Orders 12549 and 12689)—A contract award (see 2 CFR 180.220) must not be made to parties listed on the governmentwide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.” SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549.

(I) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)—Contractors that apply or bid for an award exceeding $100,000 must file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the non-Federal award.

(J) See §200.322 Procurement of recovered materials. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75888, Dec. 19, 2014] Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs) A. GENERAL

This appendix provides criteria for identifying and computing indirect (or indirect (F&A)) rates at IHEs (institutions). Indirect (F&A) costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. See subsection B.1, Definition of Facilities and Administration, for a discussion of the components of indirect (F&A) costs. 1. Major Functions of an Institution

Refers to instruction, organized research, other sponsored activities and other institutional activities as defined in this section:

a. Instruction means the teaching and training activities of an institution. Except for research training as provided in subsection b, this term includes all teaching and training activities, whether they are offered for credits toward a degree or certificate or on a non-credit basis, and whether they are offered through regular academic departments or separate divisions, such as a summer school division or an extension division. Also considered part of this major function are departmental research, and, where agreed to, university research.

(1) Sponsored instruction and training means specific instructional or training activity established by grant, contract, or cooperative agreement. For purposes of the cost principles, this activity may be considered a major function even though an institution's accounting treatment may include it in the instruction function.

(2) Departmental research means research, development and scholarly activities that are not organized research and, consequently, are not separately budgeted and accounted for. Departmental research, for purposes of this document, is not considered as a major function, but as a part of the instruction function of the institution.

(3) Only mandatory cost sharing or cost sharing specifically committed in the project budget must be included in the organized research base for computing the indirect (F&A) cost rate or reflected in any allocation of indirect costs. Salary costs above statutory limits are not considered cost sharing.

b. Organized research means all research and development activities of an institution that are separately budgeted and accounted for. It includes:

(1) Sponsored research means all research and development activities that are sponsored by Federal and non-Federal agencies and organizations. This term includes activities involving the training of individuals in research techniques (commonly called research training) where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function.

(2) University research means all research and development activities that are separately budgeted and accounted for by the institution under an internal application of institutional funds. University research, for purposes of this document, must be combined with sponsored research under the function of organized research.

c. Other sponsored activities means programs and projects financed by Federal and non-Federal agencies and organizations which involve the performance of work other than instruction and organized research. Examples of such programs and projects are health service projects and community service programs. However, when any of these activities are undertaken by the institution without outside support, they may be classified as other institutional activities.

d. Other institutional activities means all activities of an institution except for instruction, departmental research, organized research, and other sponsored activities, as defined in this section; indirect (F&A) cost activities identified in this Appendix paragraph B, Identification and assignment of indirect (F&A) costs; and specialized services facilities described in §200.468 Specialized service facilities of this Part.

Examples of other institutional activities include operation of residence halls, dining halls, hospitals and clinics, student unions, intercollegiate athletics, bookstores, faculty housing, student apartments, guest houses, chapels, theaters, public museums, and other similar auxiliary enterprises. This definition also includes any other categories of activities, costs of which are “unallowable” to Federal awards, unless otherwise indicated in an award. 2. Criteria for Distribution

a. Base period. A base period for distribution of indirect (F&A) costs is the period during which the costs are incurred. The base period normally should coincide with the fiscal year established by the institution, but in any event the base period should be so selected as to avoid inequities in the distribution of costs.




b. Need for cost groupings. The overall objective of the indirect (F&A) cost allocation process is to distribute the indirect (F&A) costs described in Section B, Identification and assignment of indirect (F&A) costs, to the major functions of the institution in proportions reasonably consistent with the nature and extent of their use of the institution's resources. In order to achieve this objective, it may be necessary to provide for selective distribution by establishing separate groupings of cost within one or more of the indirect (F&A) cost categories referred to in subsection B.1, Definition of Facilities and Administration. In general, the cost groupings established within a category should constitute, in each case, a pool of those items of expense that are considered to be of like nature in terms of their relative contribution to (or degree of remoteness from) the particular cost objectives to which distribution is appropriate. Cost groupings should be established considering the general guides provided in subsection c of this section. Each such pool or cost grouping should then be distributed individually to the related cost objectives, using the distribution base or method most appropriate in light of the guidelines set forth in subsection d of this section.

c. General considerations on cost groupings. The extent to which separate cost groupings and selective distribution would be appropriate at an institution is a matter of judgment to be determined on a case-by-case basis. Typical situations which may warrant the establishment of two or more separate cost groupings (based on account classification or analysis) within an indirect (F&A) cost category include but are not limited to the following:

(1) If certain items or categories of expense relate solely to one of the major functions of the institution or to less than all functions, such expenses should be set aside as a separate cost grouping for direct assignment or selective allocation in accordance with the guides provided in subsections b and d.

(2) If any types of expense ordinarily treated as general administration or departmental administration are charged to Federal awards as direct costs, expenses applicable to other activities of the institution when incurred for the same purposes in like circumstances must, through separate cost groupings, be excluded from the indirect (F&A) costs allocable to those Federal awards and included in the direct cost of other activities for cost allocation purposes.

(3) If it is determined that certain expenses are for the support of a service unit or facility whose output is susceptible of measurement on a workload or other quantitative basis, such expenses should be set aside as a separate cost grouping for distribution on such basis to organized research, instructional, and other activities at the institution or within the department.

(4) If activities provide their own purchasing, personnel administration, building maintenance or similar service, the distribution of general administration and general expenses, or operation and maintenance expenses to such activities should be accomplished through cost groupings which include only that portion of central indirect (F&A) costs (such as for overall management) which are properly allocable to such activities.

(5) If the institution elects to treat fringe benefits as indirect (F&A) charges, such costs should be set aside as a separate cost grouping for selective distribution to related cost objectives.

(6) The number of separate cost groupings within a category should be held within practical limits, after taking into consideration the materiality of the amounts involved and the degree of precision attainable through less selective methods of distribution.

d. Selection of distribution method. (1) Actual conditions must be taken into account in selecting the method or base to be used in distributing individual

cost groupings. The essential consideration in selecting a base is that it be the one best suited for assigning the pool of costs to cost objectives in accordance with benefits derived; with a traceable cause-and-effect relationship; or with logic and reason, where neither benefit nor a cause-and-effect relationship is determinable.

(2) If a cost grouping can be identified directly with the cost objective benefitted, it should be assigned to that cost objective.

(3) If the expenses in a cost grouping are more general in nature, the distribution may be based on a cost analysis study which results in an equitable distribution of the costs. Such cost analysis studies may take into consideration weighting factors, population, or space occupied if appropriate. Cost analysis studies, however, must (a) be appropriately documented in sufficient detail for subsequent review by the cognizant agency for indirect costs, (b) distribute the costs to the related cost objectives in accordance with the relative benefits derived, (c) be statistically sound, (d) be performed specifically at the institution at which the results are to be used, and (e) be reviewed periodically, but not less frequently than rate negotiations, updated if necessary, and used consistently. Any assumptions made in the study must be stated and explained. The use of cost analysis studies and periodic changes in the method of cost distribution must be fully justified.

(4) If a cost analysis study is not performed, or if the study does not result in an equitable distribution of the costs, the distribution must be made in accordance with the appropriate base cited in Section B, Identification and assignment of indirect (F&A) costs, unless one of the following conditions is met:

(a) It can be demonstrated that the use of a different base would result in a more equitable allocation of the costs, or that a more readily available base would not increase the costs charged to Federal awards, or

(b) The institution qualifies for, and elects to use, the simplified method for computing indirect (F&A) cost rates described in Section D, Simplified method for small institutions.

(5) Notwithstanding subsection (3), effective July 1, 1998, a cost analysis or base other than that in Section B must not be used to distribute utility or student services costs. Instead, subsections B.4.c Operation and maintenance expenses, may be used in the recovery of utility costs.

e. Order of distribution. (1) Indirect (F&A) costs are the broad categories of costs discussed in Section B.1, Definitions of Facilities and

Administration (2) Depreciation, interest expenses, operation and maintenance expenses, and general administrative and general

expenses should be allocated in that order to the remaining indirect (F&A) cost categories as well as to the major functions and specialized service facilities of the institution. Other cost categories may be allocated in the order determined to be most




appropriate by the institutions. When cross allocation of costs is made as provided in subsection (3), this order of allocation does not apply.

(3) Normally an indirect (F&A) cost category will be considered closed once it has been allocated to other cost objectives, and costs may not be subsequently allocated to it. However, a cross allocation of costs between two or more indirect (F&A) cost categories may be used if such allocation will result in a more equitable allocation of costs. If a cross allocation is used, an appropriate modification to the composition of the indirect (F&A) cost categories described in Section B is required. B. IDENTIFICATION AND ASSIGNMENT OF INDIRECT (F&A) COSTS 1. Definition of Facilities and Administration

See §200.414 Indirect (F&A) costs which provides the basis for these indirect cost requirements. 2. Depreciation

a. The expenses under this heading are the portion of the costs of the institution's buildings, capital improvements to land and buildings, and equipment which are computed in accordance with §200.436 Depreciation.

b. In the absence of the alternatives provided for in Section A.2.d, Selection of distribution method, the expenses included in this category must be allocated in the following manner:

(1) Depreciation on buildings used exclusively in the conduct of a single function, and on capital improvements and equipment used in such buildings, must be assigned to that function.

(2) Depreciation on buildings used for more than one function, and on capital improvements and equipment used in such buildings, must be allocated to the individual functions performed in each building on the basis of usable square feet of space, excluding common areas such as hallways, stairwells, and rest rooms.

(3) Depreciation on buildings, capital improvements and equipment related to space (e.g., individual rooms, laboratories) used jointly by more than one function (as determined by the users of the space) must be treated as follows. The cost of each jointly used unit of space must be allocated to benefitting functions on the basis of:

(a) The employee full-time equivalents (FTEs) or salaries and wages of those individual functions benefitting from the use of that space; or

(b) Institution-wide employee FTEs or salaries and wages applicable to the benefitting major functions (see Section A.1) of the institution.

(4) Depreciation on certain capital improvements to land, such as paved parking areas, fences, sidewalks, and the like, not included in the cost of buildings, must be allocated to user categories of students and employees on a full-time equivalent basis. The amount allocated to the student category must be assigned to the instruction function of the institution. The amount allocated to the employee category must be further allocated to the major functions of the institution in proportion to the salaries and wages of all employees applicable to those functions. 3. Interest

Interest on debt associated with certain buildings, equipment and capital improvements, as defined in §200.449 Interest, must be classified as an expenditure under the category Facilities. These costs must be allocated in the same manner as the depreciation on the buildings, equipment and capital improvements to which the interest relates. 4. Operation and Maintenance Expenses

a. The expenses under this heading are those that have been incurred for the administration, supervision, operation, maintenance, preservation, and protection of the institution's physical plant. They include expenses normally incurred for such items as janitorial and utility services; repairs and ordinary or normal alterations of buildings, furniture and equipment; care of grounds; maintenance and operation of buildings and other plant facilities; security; earthquake and disaster preparedness; environmental safety; hazardous waste disposal; property, liability and all other insurance relating to property; space and capital leasing; facility planning and management; and central receiving. The operation and maintenance expense category should also include its allocable share of fringe benefit costs, depreciation, and interest costs.

b. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be allocated in the same manner as described in subsection 2.b for depreciation.

c. A utility cost adjustment of up to 1.3 percentage points may be included in the negotiated indirect cost rate of the IHE for organized research, per the computation alternatives in paragraphs (c)(1) and (2) of this section:

(1) Where space is devoted to a single function and metering allows unambiguous measurement of usage related to that space, costs must be assigned to the function located in that space.

(2) Where space is allocated to different functions and metering does not allow unambiguous measurement of usage by function, costs must be allocated as follows:

(i) Utilities costs should be apportioned to functions in the same manner as depreciation, based on the calculated difference between the site or building actual square footage for monitored research laboratory space (site, building, floor, or room), and a separate calculation prepared by the IHE using the “effective square footage” described in subsection (c)(2)(ii) of this section.

(ii) “Effective square footage” allocated to research laboratory space must be calculated as the actual square footage times the relative energy utilization index (REUI) posted on the OMB Web site at the time of a rate determination.

A. This index is the ratio of a laboratory energy use index (lab EUI) to the corresponding index for overall average college or university space (college EUI).

B. In July 2012, values for these two indices (taken respectively from the Lawrence Berkeley Laboratory “Labs for the 21st Century” benchmarking tool http://labs21benchmarking.lbl.gov/CompareData.php and the US Department of Energy “Buildings Energy Databook” and http://buildingsdatabook.eren.doe.gov/CBECS.aspx) were 310 kBtu/sq ft-yr. and 155 kBtu/sq ft-yr., so that the adjustment ratio is 2.0 by this methodology. To retain currency, OMB will adjust the EUI numbers from time to time (no more often than annually nor less often than every 5 years), using reliable and publicly disclosed data. Current values of both the EUIs and the REUI will be posted on the OMB Web site.




5. General Administration and General Expenses a. The expenses under this heading are those that have been incurred for the general executive and administrative

offices of educational institutions and other expenses of a general character which do not relate solely to any major function of the institution; i.e., solely to (1) instruction, (2) organized research, (3) other sponsored activities, or (4) other institutional activities. The general administration and general expense category should also include its allocable share of fringe benefit costs, operation and maintenance expense, depreciation, and interest costs. Examples of general administration and general expenses include: those expenses incurred by administrative offices that serve the entire university system of which the institution is a part; central offices of the institution such as the President's or Chancellor's office, the offices for institution-wide financial management, business services, budget and planning, personnel management, and safety and risk management; the office of the General Counsel; and the operations of the central administrative management information systems. General administration and general expenses must not include expenses incurred within non-university-wide deans' offices, academic departments, organized research units, or similar organizational units. (See subsection 6, Departmental administration expenses.)

b. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be grouped first according to common major functions of the institution to which they render services or provide benefits. The aggregate expenses of each group must then be allocated to serviced or benefitted functions on the modified total cost basis. Modified total costs consist of the same elements as those in Section C.2. When an activity included in this indirect (F&A) cost category provides a service or product to another institution or organization, an appropriate adjustment must be made to either the expenses or the basis of allocation or both, to assure a proper allocation of costs. 6. Departmental Administration Expenses

a. The expenses under this heading are those that have been incurred for administrative and supporting services that benefit common or joint departmental activities or objectives in academic deans' offices, academic departments and divisions, and organized research units. Organized research units include such units as institutes, study centers, and research centers. Departmental administration expenses are subject to the following limitations.

(1) Academic deans' offices. Salaries and operating expenses are limited to those attributable to administrative functions.

(2) Academic departments: (a) Salaries and fringe benefits attributable to the administrative work (including bid and proposal preparation) of

faculty (including department heads) and other professional personnel conducting research and/or instruction, must be allowed at a rate of 3.6 percent of modified total direct costs. This category does not include professional business or professional administrative officers. This allowance must be added to the computation of the indirect (F&A) cost rate for major functions in Section C, Determination and application of indirect (F&A) cost rate or rates; the expenses covered by the allowance must be excluded from the departmental administration cost pool. No documentation is required to support this allowance.

(b) Other administrative and supporting expenses incurred within academic departments are allowable provided they are treated consistently in like circumstances. This would include expenses such as the salaries of secretarial and clerical staffs, the salaries of administrative officers and assistants, travel, office supplies, stockrooms, and the like.

(3) Other fringe benefit costs applicable to the salaries and wages included in subsections (1) and (2) are allowable, as well as an appropriate share of general administration and general expenses, operation and maintenance expenses, and depreciation.

(4) Federal agencies may authorize reimbursement of additional costs for department heads and faculty only in exceptional cases where an institution can demonstrate undue hardship or detriment to project performance.

b. The following guidelines apply to the determination of departmental administrative costs as direct or indirect (F&A) costs.

(1) In developing the departmental administration cost pool, special care should be exercised to ensure that costs incurred for the same purpose in like circumstances are treated consistently as either direct or indirect (F&A) costs. For example, salaries of technical staff, laboratory supplies (e.g., chemicals), telephone toll charges, animals, animal care costs, computer costs, travel costs, and specialized shop costs must be treated as direct costs wherever identifiable to a particular cost objective. Direct charging of these costs may be accomplished through specific identification of individual costs to benefitting cost objectives, or through recharge centers or specialized service facilities, as appropriate under the circumstances. See §§200.413 Direct costs, paragraph (c) and 200.468 Specialized service facilities.

(2) Items such as office supplies, postage, local telephone costs, and memberships must normally be treated as indirect (F&A) costs.

c. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be allocated as follows:

(1) The administrative expenses of the dean's office of each college and school must be allocated to the academic departments within that college or school on the modified total cost basis.

(2) The administrative expenses of each academic department, and the department's share of the expenses allocated in subsection (1) must be allocated to the appropriate functions of the department on the modified total cost basis. 7. Sponsored Projects Administration

a. The expenses under this heading are limited to those incurred by a separate organization(s) established primarily to administer sponsored projects, including such functions as grant and contract administration (Federal and non-Federal), special security, purchasing, personnel, administration, and editing and publishing of research and other reports. They include the salaries and expenses of the head of such organization, assistants, and immediate staff, together with the salaries and expenses of personnel engaged in supporting activities maintained by the organization, such as stock rooms, print shops, and the like. This category also includes an allocable share of fringe benefit costs, general administration and




general expenses, operation and maintenance expenses, and depreciation. Appropriate adjustments will be made for services provided to other functions or organizations.

b. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be allocated to the major functions of the institution under which the sponsored projects are conducted on the basis of the modified total cost of sponsored projects.

c. An appropriate adjustment must be made to eliminate any duplicate charges to Federal awards when this category includes similar or identical activities as those included in the general administration and general expense category or other indirect (F&A) cost items, such as accounting, procurement, or personnel administration. 8. Library Expenses

a. The expenses under this heading are those that have been incurred for the operation of the library, including the cost of books and library materials purchased for the library, less any items of library income that qualify as applicable credits under §200.406 Applicable credits. The library expense category should also include the fringe benefits applicable to the salaries and wages included therein, an appropriate share of general administration and general expense, operation and maintenance expense, and depreciation. Costs incurred in the purchases of rare books (museum-type books) with no value to Federal awards should not be allocated to them.

b. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be allocated first on the basis of primary categories of users, including students, professional employees, and other users.

(1) The student category must consist of full-time equivalent students enrolled at the institution, regardless of whether they earn credits toward a degree or certificate.

(2) The professional employee category must consist of all faculty members and other professional employees of the institution, on a full-time equivalent basis. This category may also include post-doctorate fellows and graduate students.

(3) The other users category must consist of a reasonable factor as determined by institutional records to account for all other users of library facilities.

c. Amount allocated in paragraph b of this section must be assigned further as follows: (1) The amount in the student category must be assigned to the instruction function of the institution. (2) The amount in the professional employee category must be assigned to the major functions of the institution in

proportion to the salaries and wages of all faculty members and other professional employees applicable to those functions. (3) The amount in the other users category must be assigned to the other institutional activities function of the

institution. 9. Student Administration and Services

a. The expenses under this heading are those that have been incurred for the administration of student affairs and for services to students, including expenses of such activities as deans of students, admissions, registrar, counseling and placement services, student advisers, student health and infirmary services, catalogs, and commencements and convocations. The salaries of members of the academic staff whose responsibilities to the institution require administrative work that benefits sponsored projects may also be included to the extent that the portion charged to student administration is determined in accordance with Subpart E—Cost Principles of this Part. This expense category also includes the fringe benefit costs applicable to the salaries and wages included therein, an appropriate share of general administration and general expenses, operation and maintenance, interest expense, and depreciation.

b. In the absence of the alternatives provided for in Section A.2.d, the expenses in this category must be allocated to the instruction function, and subsequently to Federal awards in that function. 10. Offset for Indirect (F&A) Expenses Otherwise Provided for by the Federal Government

a. The items to be accumulated under this heading are the reimbursements and other payments from the Federal Government which are made to the institution to support solely, specifically, and directly, in whole or in part, any of the administrative or service activities described in subsections 2 through 9.

b. The items in this group must be treated as a credit to the affected individual indirect (F&A) cost category before that category is allocated to benefitting functions. C. DETERMINATION AND APPLICATION OF INDIRECT (F&A) COST RATE OR RATES 1. Indirect (F&A) Cost Pools

a. (1) Subject to subsection b, the separate categories of indirect (F&A) costs allocated to each major function of the institution as prescribed in paragraph B of this paragraph C.1 Identification and assignment of indirect (F&A) costs, must be aggregated and treated as a common pool for that function. The amount in each pool must be divided by the distribution base described in subsection 2 to arrive at a single indirect (F&A) cost rate for each function.

(2) The rate for each function is used to distribute indirect (F&A) costs to individual Federal awards of that function. Since a common pool is established for each major function of the institution, a separate indirect (F&A) cost rate would be established for each of the major functions described in Section A.1 under which Federal awards are carried out.

(3) Each institution's indirect (F&A) cost rate process must be appropriately designed to ensure that Federal sponsors do not in any way subsidize the indirect (F&A) costs of other sponsors, specifically activities sponsored by industry and foreign governments. Accordingly, each allocation method used to identify and allocate the indirect (F&A) cost pools, as described in Sections A.2, Criteria for distribution, and B.2 through B.9, must contain the full amount of the institution's modified total costs or other appropriate units of measurement used to make the computations. In addition, the final rate distribution base (as defined in subsection 2) for each major function (organized research, instruction, etc., as described in Section A.1, Major functions of an institution) must contain all the programs or activities which utilize the indirect (F&A) costs allocated to that major function. At the time an indirect (F&A) cost proposal is submitted to a cognizant agency for indirect costs, each institution must describe the process it uses to ensure that Federal funds are not used to subsidize industry and foreign government funded programs.




b. In some instances a single rate basis for use across the board on all work within a major function at an institution may not be appropriate. A single rate for research, for example, might not take into account those different environmental factors and other conditions which may affect substantially the indirect (F&A) costs applicable to a particular segment of research at the institution. A particular segment of research may be that performed under a single sponsored agreement or it may consist of research under a group of Federal awards performed in a common environment. The environmental factors are not limited to the physical location of the work. Other important factors are the level of the administrative support required, the nature of the facilities or other resources employed, the scientific disciplines or technical skills involved, the organizational arrangements used, or any combination thereof. If a particular segment of a sponsored agreement is performed within an environment which appears to generate a significantly different level of indirect (F&A) costs, provisions should be made for a separate indirect (F&A) cost pool applicable to such work. The separate indirect (F&A) cost pool should be developed during the regular course of the rate determination process and the separate indirect (F&A) cost rate resulting therefrom should be utilized; provided it is determined that (1) such indirect (F&A) cost rate differs significantly from that which would have been obtained under subsection a, and (2) the volume of work to which such rate would apply is material in relation to other Federal awards at the institution. 2. The Distribution Basis

Indirect (F&A) costs must be distributed to applicable Federal awards and other benefitting activities within each major function (see section A.1, Major functions of an institution) on the basis of modified total direct costs (MTDC), consisting of all salaries and wages, fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period covered by the subaward). MTDC is defined in §200.68 Modified Total Direct Cost (MTDC). For this purpose, an indirect (F&A) cost rate should be determined for each of the separate indirect (F&A) cost pools developed pursuant to subsection 1. The rate in each case should be stated as the percentage which the amount of the particular indirect (F&A) cost pool is of the modified total direct costs identified with such pool. 3. Negotiated Lump Sum for Indirect (F&A) Costs

A negotiated fixed amount in lieu of indirect (F&A) costs may be appropriate for self-contained, off-campus, or primarily subcontracted activities where the benefits derived from an institution's indirect (F&A) services cannot be readily determined. Such negotiated indirect (F&A) costs will be treated as an offset before allocation to instruction, organized research, other sponsored activities, and other institutional activities. The base on which such remaining expenses are allocated should be appropriately adjusted. 4. Predetermined Rates for Indirect (F&A) Costs

Public Law 87-638 (76 Stat. 437) as amended (41 U.S.C. 4708) authorizes the use of predetermined rates in determining the “indirect costs” (indirect (F&A) costs) applicable under research agreements with educational institutions. The stated objectives of the law are to simplify the administration of cost-type research and development contracts (including grants) with educational institutions, to facilitate the preparation of their budgets, and to permit more expeditious closeout of such contracts when the work is completed. In view of the potential advantages offered by this procedure, negotiation of predetermined rates for indirect (F&A) costs for a period of two to four years should be the norm in those situations where the cost experience and other pertinent facts available are deemed sufficient to enable the parties involved to reach an informed judgment as to the probable level of indirect (F&A) costs during the ensuing accounting periods. 5. Negotiated Fixed Rates and Carry-Forward Provisions

When a fixed rate is negotiated in advance for a fiscal year (or other time period), the over- or under-recovery for that year may be included as an adjustment to the indirect (F&A) cost for the next rate negotiation. When the rate is negotiated before the carry-forward adjustment is determined, the carry-forward amount may be applied to the next subsequent rate negotiation. When such adjustments are to be made, each fixed rate negotiated in advance for a given period will be computed by applying the expected indirect (F&A) costs allocable to Federal awards for the forecast period plus or minus the carry-forward adjustment (over- or under-recovery) from the prior period, to the forecast distribution base. Unrecovered amounts under lump-sum agreements or cost-sharing provisions of prior years must not be carried forward for consideration in the new rate negotiation. There must, however, be an advance understanding in each case between the institution and the cognizant agency for indirect costs as to whether these differences will be considered in the rate negotiation rather than making the determination after the differences are known. Further, institutions electing to use this carry-forward provision may not subsequently change without prior approval of the cognizant agency for indirect costs. In the event that an institution returns to a post-determined rate, any over- or under-recovery during the period in which negotiated fixed rates and carry-forward provisions were followed will be included in the subsequent post-determined rates. Where multiple rates are used, the same procedure will be applicable for determining each rate. 6. Provisional and Final Rates for Indirect (F&A) Costs

Where the cognizant agency for indirect costs determines that cost experience and other pertinent facts do not justify the use of predetermined rates, or a fixed rate with a carry-forward, or if the parties cannot agree on an equitable rate, a provisional rate must be established. To prevent substantial overpayment or underpayment, the provisional rate may be adjusted by the cognizant agency for indirect costs during the institution's fiscal year. Predetermined or fixed rates may replace provisional rates at any time prior to the close of the institution's fiscal year. If a provisional rate is not replaced by a predetermined or fixed rate prior to the end of the institution's fiscal year, a final rate will be established and upward or downward adjustments will be made based on the actual allowable costs incurred for the period involved. 7. Fixed Rates for the Life of the Sponsored Agreement

7. Except as provided in paragraph (c)(1) of §200.414 Indirect (F&A) costs, Federal agencies must use the negotiated rates in effect at the time of the initial award throughout the life of the Federal award. Award levels for Federal awards may not be adjusted in future years as a result of changes in negotiated rates. “Negotiated rates” per the rate agreement include final, fixed, and predetermined rates and exclude provisional rates. “Life” for the purpose of this subsection means each competitive segment of a project. A competitive segment is a period of years approved by the Federal awarding agency at




the time of the Federal award. If negotiated rate agreements do not extend through the life of the Federal award at the time of the initial award, then the negotiated rate for the last year of the Federal award must be extended through the end of the life of the Federal award.

b. Except as provided in §200.414 Indirect (F&A) costs, when an educational institution does not have a negotiated rate with the Federal Government at the time of an award (because the educational institution is a new recipient or the parties cannot reach agreement on a rate), the provisional rate used at the time of the award must be adjusted once a rate is negotiated and approved by the cognizant agency for indirect costs. 8. Limitation on Reimbursement of Administrative Costs

a. Notwithstanding the provisions of subsection C.1.a, the administrative costs charged to Federal awards awarded or amended (including continuation and renewal awards) with effective dates beginning on or after the start of the institution's first fiscal year which begins on or after October 1, 1991, must be limited to 26% of modified total direct costs (as defined in subsection 2) for the total of General Administration and General Expenses, Departmental Administration, Sponsored Projects Administration, and Student Administration and Services (including their allocable share of depreciation, interest costs, operation and maintenance expenses, and fringe benefits costs, as provided by Section B, Identification and assignment of indirect (F&A) costs, and all other types of expenditures not listed specifically under one of the subcategories of facilities in Section B.

b. Institutions should not change their accounting or cost allocation methods if the effect is to change the charging of a particular type of cost from F&A to direct, or to reclassify costs, or increase allocations from the administrative pools identified in paragraph B.1 of this Appendix to the other F&A cost pools or fringe benefits. Cognizant agencies for indirect cost are authorized to allow changes where an institution's charging practices are at variance with acceptable practices followed by a substantial majority of other institutions. 9. Alternative Method for Administrative Costs

a. Notwithstanding the provisions of subsection C.1.a, an institution may elect to claim a fixed allowance for the “Administration” portion of indirect (F&A) costs. The allowance could be either 24% of modified total direct costs or a percentage equal to 95% of the most recently negotiated fixed or predetermined rate for the cost pools included under “Administration” as defined in Section B.1, whichever is less. Under this alternative, no cost proposal need be prepared for the “Administration” portion of the indirect (F&A) cost rate nor is further identification or documentation of these costs required (see subsection c). Where a negotiated indirect (F&A) cost agreement includes this alternative, an institution must make no further charges for the expenditure categories described in Section B.5, General administration and general expenses, Section B.6, Departmental administration expenses, Section B.7, Sponsored projects administration, and Section B.9, Student administration and services.

b. In negotiations of rates for subsequent periods, an institution that has elected the option of subsection a may continue to exercise it at the same rate without further identification or documentation of costs.

c. If an institution elects to accept a threshold rate as defined in subsection a of this section, it is not required to perform a detailed analysis of its administrative costs. However, in order to compute the facilities components of its indirect (F&A) cost rate, the institution must reconcile its indirect (F&A) cost proposal to its financial statements and make appropriate adjustments and reclassifications to identify the costs of each major function as defined in Section A.1, as well as to identify and allocate the facilities components. Administrative costs that are not identified as such by the institution's accounting system (such as those incurred in academic departments) will be classified as instructional costs for purposes of reconciling indirect (F&A) cost proposals to financial statements and allocating facilities costs. 10. Individual Rate Components

In order to provide mutually agreed-upon information for management purposes, each indirect (F&A) cost rate negotiation or determination must include development of a rate for each indirect (F&A) cost pool as well as the overall indirect (F&A) cost rate. 11. Negotiation and Approval of Indirect (F&A) Rate

a. Cognizant agency for indirect costs is defined in Subpart A—Acronyms and Definitions. (1) Cost negotiation cognizance is assigned to the Department of Health and Human Services (HHS) or the

Department of Defense's Office of Naval Research (DOD), normally depending on which of the two agencies (HHS or DOD) provides more funds to the educational institution for the most recent three years. Information on funding must be derived from relevant data gathered by the National Science Foundation. In cases where neither HHS nor DOD provides Federal funding to an educational institution, the cognizant agency for indirect costs assignment must default to HHS. Notwithstanding the method for cognizance determination described in this section, other arrangements for cognizance of a particular educational institution may also be based in part on the types of research performed at the educational institution and must be decided based on mutual agreement between HHS and DOD. Where a non-Federal entity only receives funds as a subrecipient, see §200.331 Requirements for pass-through entities.

(2) After cognizance is established, it must continue for a five-year period. b. Acceptance of rates. See §200.414 Indirect (F&A) costs. c. Correcting deficiencies. The cognizant agency for indirect costs must negotiate changes needed to correct systems

deficiencies relating to accountability for Federal awards. Cognizant agencies for indirect costs must address the concerns of other affected agencies, as appropriate, and must negotiate special rates for Federal agencies that are required to limit recovery of indirect costs by statute.

d. Resolving questioned costs. The cognizant agency for indirect costs must conduct any necessary negotiations with an educational institution regarding amounts questioned by audit that are due the Federal Government related to costs covered by a negotiated agreement.

e. Reimbursement. Reimbursement to cognizant agencies for indirect costs for work performed under this Part may be made by reimbursement billing under the Economy Act, 31 U.S.C. 1535.




f. Procedure for establishing facilities and administrative rates must be established by one of the following methods: (1) Formal negotiation. The cognizant agency for indirect costs is responsible for negotiating and approving rates for

an educational institution on behalf of all Federal agencies. Federal awarding agencies that do not have cognizance for indirect costs must notify the cognizant agency for indirect costs of specific concerns (i.e., a need to establish special cost rates) which could affect the negotiation process. The cognizant agency for indirect costs must address the concerns of all interested agencies, as appropriate. A pre-negotiation conference may be scheduled among all interested agencies, if necessary. The cognizant agency for indirect costs must then arrange a negotiation conference with the educational institution.

(2) Other than formal negotiation. The cognizant agency for indirect costs and educational institution may reach an agreement on rates without a formal negotiation conference; for example, through correspondence or use of the simplified method described in this section D of this Appendix.

g. Formalizing determinations and agreements. The cognizant agency for indirect costs must formalize all determinations or agreements reached with an educational institution and provide copies to other agencies having an interest. Determinations should include a description of any adjustments, the actual amount, both dollar and percentage adjusted, and the reason for making adjustments.

h. Disputes and disagreements. Where the cognizant agency for indirect costs is unable to reach agreement with an educational institution with regard to rates or audit resolution, the appeal system of the cognizant agency for indirect costs must be followed for resolution of the disagreement. 12. Standard Format for Submission

For facilities and administrative (indirect (F&A)) rate proposals, educational institutions must use the standard format, shown in section E of this appendix, to submit their indirect (F&A) rate proposal to the cognizant agency for indirect costs. The cognizant agency for indirect costs may, on an institution-by-institution basis, grant exceptions from all or portions of Part II of the standard format requirement. This requirement does not apply to educational institutions that use the simplified method for calculating indirect (F&A) rates, as described in Section D of this Appendix.

As provided in section C.10 of this appendix, each F&A cost rate negotiation or determination must include development of a rate for each F&A cost pool as well as the overall F&A rate. D. SIMPLIFIED METHOD FOR SMALL INSTITUTIONS 1. General

a. Where the total direct cost of work covered by this Part at an institution does not exceed $10 million in a fiscal year, the simplified procedure described in subsections 2 or 3 may be used in determining allowable indirect (F&A) costs. Under this simplified procedure, the institution's most recent annual financial report and immediately available supporting information must be utilized as a basis for determining the indirect (F&A) cost rate applicable to all Federal awards. The institution may use either the salaries and wages (see subsection 2) or modified total direct costs (see subsection 3) as the distribution basis.

b. The simplified procedure should not be used where it produces results which appear inequitable to the Federal Government or the institution. In any such case, indirect (F&A) costs should be determined through use of the regular procedure. 2. Simplified Procedure—Salaries and Wages Base

a. Establish the total amount of salaries and wages paid to all employees of the institution. b. Establish an indirect (F&A) cost pool consisting of the expenditures (exclusive of capital items and other costs

specifically identified as unallowable) which customarily are classified under the following titles or their equivalents: (1) General administration and general expenses (exclusive of costs of student administration and services, student

activities, student aid, and scholarships). (2) Operation and maintenance of physical plant and depreciation (after appropriate adjustment for costs applicable to

other institutional activities). (3) Library. (4) Department administration expenses, which will be computed as 20 percent of the salaries and expenses of deans

and heads of departments. In those cases where expenditures classified under subsection (1) have previously been allocated to other institutional

activities, they may be included in the indirect (F&A) cost pool. The total amount of salaries and wages included in the indirect (F&A) cost pool must be separately identified.

c. Establish a salary and wage distribution base, determined by deducting from the total of salaries and wages as established in subsection a from the amount of salaries and wages included under subsection b.

d. Establish the indirect (F&A) cost rate, determined by dividing the amount in the indirect (F&A) cost pool, subsection b, by the amount of the distribution base, subsection c.

e. Apply the indirect (F&A) cost rate to direct salaries and wages for individual agreements to determine the amount of indirect (F&A) costs allocable to such agreements. 3. Simplified Procedure—Modified Total Direct Cost Base

a. Establish the total costs incurred by the institution for the base period. b. Establish an indirect (F&A) cost pool consisting of the expenditures (exclusive of capital items and other costs

specifically identified as unallowable) which customarily are classified under the following titles or their equivalents: (1) General administration and general expenses (exclusive of costs of student administration and services, student

activities, student aid, and scholarships). (2) Operation and maintenance of physical plant and depreciation (after appropriate adjustment for costs applicable to

other institutional activities). (3) Library.




(4) Department administration expenses, which will be computed as 20 percent of the salaries and expenses of deans and heads of departments. In those cases where expenditures classified under subsection (1) have previously been allocated to other institutional activities, they may be included in the indirect (F&A) cost pool. The modified total direct costs amount included in the indirect (F&A) cost pool must be separately identified.

c. Establish a modified total direct cost distribution base, as defined in Section C.2, The distribution basis, that consists of all institution's direct functions.

d. Establish the indirect (F&A) cost rate, determined by dividing the amount in the indirect (F&A) cost pool, subsection b, by the amount of the distribution base, subsection c.

e. Apply the indirect (F&A) cost rate to the modified total direct costs for individual agreements to determine the amount of indirect (F&A) costs allocable to such agreements. E. DOCUMENTATION REQUIREMENTS

The standard format for documentation requirements for indirect (indirect (F&A)) rate proposals for claiming costs under the regular method is available on the OMB Web site here: http://www.whitehouse.gov/omb/grants_forms. F. CERTIFICATION 1. Certification of Charges

To assure that expenditures for Federal awards are proper and in accordance with the agreement documents and approved project budgets, the annual and/or final fiscal reports or vouchers requesting payment under the agreements will include a certification, signed by an authorized official of the university, which reads “By signing this report, I certify to the best of my knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and intent set forth in the award documents. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise. (U.S. Code, Title 18, Section 1001 and Title 31, Sections 3729-3733 and 3801-3812)”. 2. Certification of Indirect (F&A) Costs

a. Policy. Cognizant agencies must not accept a proposed indirect cost rate unless such costs have been certified by the educational institution using the Certificate of indirect (F&A) Costs set forth in subsection F.2.c

b. The certificate must be signed on behalf of the institution by the chief financial officer or an individual designated by an individual at a level no lower than vice president or chief financial officer.

An indirect (F&A) cost rate is not binding upon the Federal Government if the most recent required proposal from the institution has not been certified. Where it is necessary to establish indirect (F&A) cost rates, and the institution has not submitted a certified proposal for establishing such rates in accordance with the requirements of this section, the Federal Government must unilaterally establish such rates. Such rates may be based upon audited historical data or such other data that have been furnished to the cognizant agency for indirect costs and for which it can be demonstrated that all unallowable costs have been excluded. When indirect (F&A) cost rates are unilaterally established by the Federal Government because of failure of the institution to submit a certified proposal for establishing such rates in accordance with this section, the rates established will be set at a level low enough to ensure that potentially unallowable costs will not be reimbursed.

c. Certificate. The certificate required by this section must be in the following form: CERTIFICATE OF INDIRECT (F&A) COSTS

This is to certify that to the best of my knowledge and belief: (1) I have reviewed the indirect (F&A) cost proposal submitted herewith; (2) All costs included in this proposal [identify date] to establish billing or final indirect (F&A) costs rate for [identify

period covered by rate] are allowable in accordance with the requirements of the Federal agreement(s) to which they apply and with the cost principles applicable to those agreements.

(3) This proposal does not include any costs which are unallowable under applicable cost principles such as (without limitation): public relations costs, contributions and donations, entertainment costs, fines and penalties, lobbying costs, and defense of fraud proceedings; and

(4) All costs included in this proposal are properly allocable to Federal agreements on the basis of a beneficial or causal relationship between the expenses incurred and the agreements to which they are allocated in accordance with applicable requirements. I declare that the foregoing is true and correct. Institution of Higher Education: Signature: Name of Official: Title: Date of Execution: [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75888, Dec. 19, 2014; 80 FR 54409, Sept. 10, 2015] Appendix IV to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations A. GENERAL

1. Indirect costs are those that have been incurred for common or joint objectives and cannot be readily identified with a particular final cost objective. Direct cost of minor amounts may be treated as indirect costs under the conditions described in §200.413 Direct costs paragraph (d) of this Part. After direct costs have been determined and assigned directly to awards or other work as appropriate, indirect costs are those remaining to be allocated to benefitting cost objectives. A cost may not be allocated to a Federal award as an indirect cost if any other cost incurred for the same purpose, in like circumstances, has been assigned to a Federal award as a direct cost.




2. “Major nonprofit organizations” are defined in paragraph (a) of §200.414 Indirect (F&A) costs. See indirect cost rate reporting requirements in sections B.2.e and B.3.g of this Appendix. B. ALLOCATION OF INDIRECT COSTS AND DETERMINATION OF INDIRECT COST RATES 1. General

a. If a nonprofit organization has only one major function, or where all its major functions benefit from its indirect costs to approximately the same degree, the allocation of indirect costs and the computation of an indirect cost rate may be accomplished through simplified allocation procedures, as described in section B.2 of this Appendix.

b. If an organization has several major functions which benefit from its indirect costs in varying degrees, allocation of indirect costs may require the accumulation of such costs into separate cost groupings which then are allocated individually to benefitting functions by means of a base which best measures the relative degree of benefit. The indirect costs allocated to each function are then distributed to individual Federal awards and other activities included in that function by means of an indirect cost rate(s).

c. The determination of what constitutes an organization's major functions will depend on its purpose in being; the types of services it renders to the public, its clients, and its members; and the amount of effort it devotes to such activities as fundraising, public information and membership activities.

d. Specific methods for allocating indirect costs and computing indirect cost rates along with the conditions under which each method should be used are described in section B.2 through B.5 of this Appendix.

e. The base period for the allocation of indirect costs is the period in which such costs are incurred and accumulated for allocation to work performed in that period. The base period normally should coincide with the organization's fiscal year but, in any event, must be so selected as to avoid inequities in the allocation of the costs. 2. Simplified Allocation Method

a. Where an organization's major functions benefit from its indirect costs to approximately the same degree, the allocation of indirect costs may be accomplished by (i) separating the organization's total costs for the base period as either direct or indirect, and (ii) dividing the total allowable indirect costs (net of applicable credits) by an equitable distribution base. The result of this process is an indirect cost rate which is used to distribute indirect costs to individual Federal awards. The rate should be expressed as the percentage which the total amount of allowable indirect costs bears to the base selected. This method should also be used where an organization has only one major function encompassing a number of individual projects or activities, and may be used where the level of Federal awards to an organization is relatively small.

b. Both the direct costs and the indirect costs must exclude capital expenditures and unallowable costs. However, unallowable costs which represent activities must be included in the direct costs under the conditions described in §200.413 Direct costs, paragraph (e) of this Part.

c. The distribution base may be total direct costs (excluding capital expenditures and other distorting items, such as subawards for $25,000 or more), direct salaries and wages, or other base which results in an equitable distribution. The distribution base must exclude participant support costs as defined in §200.75 Participant support costs.

d. Except where a special rate(s) is required in accordance with section B.5 of this Appendix, the indirect cost rate developed under the above principles is applicable to all Federal awards of the organization. If a special rate(s) is required, appropriate modifications must be made in order to develop the special rate(s).

e. For an organization that receives more than $10 million in direct Federal funding in a fiscal year, a breakout of the indirect cost component into two broad categories, Facilities and Administration as defined in paragraph (a) of §200.414 Indirect (F&A) costs, is required. The rate in each case must be stated as the percentage which the amount of the particular indirect cost category (i.e., Facilities or Administration) is of the distribution base identified with that category. 3. Multiple Allocation Base Method

a. General. Where an organization's indirect costs benefit its major functions in varying degrees, indirect costs must be accumulated into separate cost groupings, as described in subparagraph b. Each grouping must then be allocated individually to benefitting functions by means of a base which best measures the relative benefits. The default allocation bases by cost pool are described in section B.3.c of this Appendix.

b. Identification of indirect costs. Cost groupings must be established so as to permit the allocation of each grouping on the basis of benefits provided to the major functions. Each grouping must constitute a pool of expenses that are of like character in terms of functions they benefit and in terms of the allocation base which best measures the relative benefits provided to each function. The groupings are classified within the two broad categories: “Facilities” and “Administration,” as described in section A.3 of this Appendix. The indirect cost pools are defined as follows:

(1) Depreciation. The expenses under this heading are the portion of the costs of the organization's buildings, capital improvements to land and buildings, and equipment which are computed in accordance with §200.436 Depreciation.

(2) Interest. Interest on debt associated with certain buildings, equipment and capital improvements are computed in accordance with §200.449 Interest.

(3) Operation and maintenance expenses. The expenses under this heading are those that have been incurred for the administration, operation, maintenance, preservation, and protection of the organization's physical plant. They include expenses normally incurred for such items as: janitorial and utility services; repairs and ordinary or normal alterations of buildings, furniture and equipment; care of grounds; maintenance and operation of buildings and other plant facilities; security; earthquake and disaster preparedness; environmental safety; hazardous waste disposal; property, liability and other insurance relating to property; space and capital leasing; facility planning and management; and central receiving. The operation and maintenance expenses category must also include its allocable share of fringe benefit costs, depreciation, and interest costs.

(4) General administration and general expenses. The expenses under this heading are those that have been incurred for the overall general executive and administrative offices of the organization and other expenses of a general nature which do not relate solely to any major function of the organization. This category must also include its allocable




share of fringe benefit costs, operation and maintenance expense, depreciation, and interest costs. Examples of this category include central offices, such as the director's office, the office of finance, business services, budget and planning, personnel, safety and risk management, general counsel, management information systems, and library costs.

In developing this cost pool, special care should be exercised to ensure that costs incurred for the same purpose in like circumstances are treated consistently as either direct or indirect costs. For example, salaries of technical staff, project supplies, project publication, telephone toll charges, computer costs, travel costs, and specialized services costs must be treated as direct costs wherever identifiable to a particular program. The salaries and wages of administrative and pooled clerical staff should normally be treated as indirect costs. Direct charging of these costs may be appropriate as described in §200.413 Direct Costs. Items such as office supplies, postage, local telephone costs, periodicals and memberships should normally be treated as indirect costs.

c. Allocation bases. Actual conditions must be taken into account in selecting the base to be used in allocating the expenses in each grouping to benefitting functions. The essential consideration in selecting a method or a base is that it is the one best suited for assigning the pool of costs to cost objectives in accordance with benefits derived; a traceable cause and effect relationship; or logic and reason, where neither the cause nor the effect of the relationship is determinable. When an allocation can be made by assignment of a cost grouping directly to the function benefitted, the allocation must be made in that manner. When the expenses in a cost grouping are more general in nature, the allocation must be made through the use of a selected base which produces results that are equitable to both the Federal Government and the organization. The distribution must be made in accordance with the bases described herein unless it can be demonstrated that the use of a different base would result in a more equitable allocation of the costs, or that a more readily available base would not increase the costs charged to Federal awards. The results of special cost studies (such as an engineering utility study) must not be used to determine and allocate the indirect costs to Federal awards.

(1) Depreciation. Depreciation expenses must be allocated in the following manner: (a) Depreciation on buildings used exclusively in the conduct of a single function, and on capital improvements and

equipment used in such buildings, must be assigned to that function. (b) Depreciation on buildings used for more than one function, and on capital improvements and equipment used in

such buildings, must be allocated to the individual functions performed in each building on the basis of usable square feet of space, excluding common areas, such as hallways, stairwells, and restrooms.

(c) Depreciation on buildings, capital improvements and equipment related space (e.g., individual rooms, and laboratories) used jointly by more than one function (as determined by the users of the space) must be treated as follows. The cost of each jointly used unit of space must be allocated to the benefitting functions on the basis of:

(i) the employees and other users on a full-time equivalent (FTE) basis or salaries and wages of those individual functions benefitting from the use of that space; or

(ii) organization-wide employee FTEs or salaries and wages applicable to the benefitting functions of the organization. (d) Depreciation on certain capital improvements to land, such as paved parking areas, fences, sidewalks, and the

like, not included in the cost of buildings, must be allocated to user categories on a FTE basis and distributed to major functions in proportion to the salaries and wages of all employees applicable to the functions.

(2) Interest. Interest costs must be allocated in the same manner as the depreciation on the buildings, equipment and capital equipment to which the interest relates.

(3) Operation and maintenance expenses. Operation and maintenance expenses must be allocated in the same manner as the depreciation.

(4) General administration and general expenses. General administration and general expenses must be allocated to benefitting functions based on modified total costs (MTC). The MTC is the modified total direct costs (MTDC), as described in Subpart A—Acronyms and Definitions of Part 200, plus the allocated indirect cost proportion. The expenses included in this category could be grouped first according to major functions of the organization to which they render services or provide benefits. The aggregate expenses of each group must then be allocated to benefitting functions based on MTC.

d. Order of distribution. (1) Indirect cost categories consisting of depreciation, interest, operation and maintenance, and general administration

and general expenses must be allocated in that order to the remaining indirect cost categories as well as to the major functions of the organization. Other cost categories should be allocated in the order determined to be most appropriate by the organization. This order of allocation does not apply if cross allocation of costs is made as provided in section B.3.d.2 of this Appendix.

(2) Normally, an indirect cost category will be considered closed once it has been allocated to other cost objectives, and costs must not be subsequently allocated to it. However, a cross allocation of costs between two or more indirect costs categories could be used if such allocation will result in a more equitable allocation of costs. If a cross allocation is used, an appropriate modification to the composition of the indirect cost categories is required.

e. Application of indirect cost rate or rates. Except where a special indirect cost rate(s) is required in accordance with section B.5 of this Appendix, the separate groupings of indirect costs allocated to each major function must be aggregated and treated as a common pool for that function. The costs in the common pool must then be distributed to individual Federal awards included in that function by use of a single indirect cost rate.

f. Distribution basis. Indirect costs must be distributed to applicable Federal awards and other benefitting activities within each major function on the basis of MTDC (see definition in §200.68 Modified Total Direct Cost (MTDC) of Part 200.

g. Individual Rate Components. An indirect cost rate must be determined for each separate indirect cost pool developed. The rate in each case must be stated as the percentage which the amount of the particular indirect cost pool is of the distribution base identified with that pool. Each indirect cost rate negotiation or determination agreement must include development of the rate for each indirect cost pool as well as the overall indirect cost rate. The indirect cost pools must be




classified within two broad categories: “Facilities” and “Administration,” as described paragraph (a) of §200.414 Indirect (F&) costs. 4. Direct Allocation Method

a. Some nonprofit organizations treat all costs as direct costs except general administration and general expenses. These organizations generally separate their costs into three basic categories: (i) General administration and general expenses, (ii) fundraising, and (iii) other direct functions (including projects performed under Federal awards). Joint costs, such as depreciation, rental costs, operation and maintenance of facilities, telephone expenses, and the like are prorated individually as direct costs to each category and to each Federal award or other activity using a base most appropriate to the particular cost being prorated.

b. This method is acceptable, provided each joint cost is prorated using a base which accurately measures the benefits provided to each Federal award or other activity. The bases must be established in accordance with reasonable criteria, and be supported by current data. This method is compatible with the Standards of Accounting and Financial Reporting for Voluntary Health and Welfare Organizations issued jointly by the National Health Council, Inc., the National Assembly of Voluntary Health and Social Welfare Organizations, and the United Way of America.

c. Under this method, indirect costs consist exclusively of general administration and general expenses. In all other respects, the organization's indirect cost rates must be computed in the same manner as that described in section B.2 Simplified allocation method of this Appendix. 5. Special Indirect Cost Rates

In some instances, a single indirect cost rate for all activities of an organization or for each major function of the organization may not be appropriate, since it would not take into account those different factors which may substantially affect the indirect costs applicable to a particular segment of work. For this purpose, a particular segment of work may be that performed under a single Federal award or it may consist of work under a group of Federal awards performed in a common environment. These factors may include the physical location of the work, the level of administrative support required, the nature of the facilities or other resources employed, the scientific disciplines or technical skills involved, the organizational arrangements used, or any combination thereof. When a particular segment of work is performed in an environment which appears to generate a significantly different level of indirect costs, provisions should be made for a separate indirect cost pool applicable to such work. The separate indirect cost pool should be developed during the course of the regular allocation process, and the separate indirect cost rate resulting therefrom should be used, provided it is determined that (i) the rate differs significantly from that which would have been obtained under sections B.2, B.3, and B.4 of this Appendix, and (ii) the volume of work to which the rate would apply is material. C. NEGOTIATION AND APPROVAL OF INDIRECT COST RATES 1. Definitions

As used in this section, the following terms have the meanings set forth in this section: a. Cognizant agency for indirect costs means the Federal agency responsible for negotiating and approving indirect

cost rates for a nonprofit organization on behalf of all Federal agencies. b. Predetermined rate means an indirect cost rate, applicable to a specified current or future period, usually the

organization's fiscal year. The rate is based on an estimate of the costs to be incurred during the period. A predetermined rate is not subject to adjustment.

c. Fixed rate means an indirect cost rate which has the same characteristics as a predetermined rate, except that the difference between the estimated costs and the actual costs of the period covered by the rate is carried forward as an adjustment to the rate computation of a subsequent period.

d. Final rate means an indirect cost rate applicable to a specified past period which is based on the actual costs of the period. A final rate is not subject to adjustment.

e. Provisional rate or billing rate means a temporary indirect cost rate applicable to a specified period which is used for funding, interim reimbursement, and reporting indirect costs on Federal awards pending the establishment of a final rate for the period.

f. Indirect cost proposal means the documentation prepared by an organization to substantiate its claim for the reimbursement of indirect costs. This proposal provides the basis for the review and negotiation leading to the establishment of an organization's indirect cost rate.

g. Cost objective means a function, organizational subdivision, contract, Federal award, or other work unit for which cost data are desired and for which provision is made to accumulate and measure the cost of processes, projects, jobs and capitalized projects. 2. Negotiation and Approval of Rates

a. Unless different arrangements are agreed to by the Federal agencies concerned, the Federal agency with the largest dollar value of Federal awards with an organization will be designated as the cognizant agency for indirect costs for the negotiation and approval of the indirect cost rates and, where necessary, other rates such as fringe benefit and computer charge-out rates. Once an agency is assigned cognizance for a particular nonprofit organization, the assignment will not be changed unless there is a shift in the dollar volume of the Federal awards to the organization for at least three years. All concerned Federal agencies must be given the opportunity to participate in the negotiation process but, after a rate has been agreed upon, it will be accepted by all Federal agencies. When a Federal agency has reason to believe that special operating factors affecting its Federal awards necessitate special indirect cost rates in accordance with section B.5 of this Appendix, it will, prior to the time the rates are negotiated, notify the cognizant agency for indirect costs. (See also §200.414 Indirect (F&A) costs of Part 200.) Where a non-Federal entity only receives funds as a subrecipient, see the requirements of §200.331 Requirements for pass-through entities.

b. Except as otherwise provided in §200.414 Indirect (F&A) costs paragraph (f) of this Part, a nonprofit organization which has not previously established an indirect cost rate with a Federal agency must submit its initial indirect cost proposal




immediately after the organization is advised that a Federal award will be made and, in no event, later than three months after the effective date of the Federal award.

c. Unless approved by the cognizant agency for indirect costs in accordance with §200.414 Indirect (F&A) costs paragraph (g) of this Part, organizations that have previously established indirect cost rates must submit a new indirect cost proposal to the cognizant agency for indirect costs within six months after the close of each fiscal year.

d. A predetermined rate may be negotiated for use on Federal awards where there is reasonable assurance, based on past experience and reliable projection of the organization's costs, that the rate is not likely to exceed a rate based on the organization's actual costs.

e. Fixed rates may be negotiated where predetermined rates are not considered appropriate. A fixed rate, however, must not be negotiated if (i) all or a substantial portion of the organization's Federal awards are expected to expire before the carry-forward adjustment can be made; (ii) the mix of Federal and non-Federal work at the organization is too erratic to permit an equitable carry-forward adjustment; or (iii) the organization's operations fluctuate significantly from year to year.

f. Provisional and final rates must be negotiated where neither predetermined nor fixed rates are appropriate. Predetermined or fixed rates may replace provisional rates at any time prior to the close of the organization's fiscal year. If that event does not occur, a final rate will be established and upward or downward adjustments will be made based on the actual allowable costs incurred for the period involved.

g. The results of each negotiation must be formalized in a written agreement between the cognizant agency for indirect costs and the nonprofit organization. The cognizant agency for indirect costs must make available copies of the agreement to all concerned Federal agencies.

h. If a dispute arises in a negotiation of an indirect cost rate between the cognizant agency for indirect costs and the nonprofit organization, the dispute must be resolved in accordance with the appeals procedures of the cognizant agency for indirect costs.

i. To the extent that problems are encountered among the Federal agencies in connection with the negotiation and approval process, OMB will lend assistance as required to resolve such problems in a timely manner. D. Certification of Indirect (F&A) Costs

(1) Required Certification. No proposal to establish indirect (F&A) cost rates must be acceptable unless such costs have been certified by the non-profit organization using the Certificate of Indirect (F&A) Costs set forth in section j. of this appendix. The certificate must be signed on behalf of the organization by an individual at a level no lower than vice president or chief financial officer for the organization.

(2) Each indirect cost rate proposal must be accompanied by a certification in the following form: Certificate of Indirect (F&A) Costs

This is to certify that to the best of my knowledge and belief: (1) I have reviewed the indirect (F&A) cost proposal submitted herewith; (2) All costs included in this proposal [identify date] to establish billing or final indirect (F&A) costs rate for [identify

period covered by rate] are allowable in accordance with the requirements of the Federal awards to which they apply and with Subpart E—Cost Principles of Part 200.

(3) This proposal does not include any costs which are unallowable under Subpart E—Cost Principles of Part 200 such as (without limitation): public relations costs, contributions and donations, entertainment costs, fines and penalties, lobbying costs, and defense of fraud proceedings; and

(4) All costs included in this proposal are properly allocable to Federal awards on the basis of a beneficial or causal relationship between the expenses incurred and the Federal awards to which they are allocated in accordance with applicable requirements.

I declare that the foregoing is true and correct. Nonprofit Organization: Signature: Name of Official: Title: Date of Execution: [78 FR 78608, Dec. 26, 2013, as amended at 80 FR 54410, Sept. 10, 2015] Appendix V to Part 200—State/Local Governmentwide Central Service Cost Allocation Plans A. GENERAL

1. Most governmental units provide certain services, such as motor pools, computer centers, purchasing, accounting, etc., to operating agencies on a centralized basis. Since federally-supported awards are performed within the individual operating agencies, there needs to be a process whereby these central service costs can be identified and assigned to benefitted activities on a reasonable and consistent basis. The central service cost allocation plan provides that process. All costs and other data used to distribute the costs included in the plan should be supported by formal accounting and other records that will support the propriety of the costs assigned to Federal awards.

2. Guidelines and illustrations of central service cost allocation plans are provided in a brochure published by the Department of Health and Human Services entitled “A Guide for State, Local and Indian Tribal Governments: Cost Principles and Procedures for Developing Cost Allocation Plans and Indirect Cost Rates for Agreements with the Federal Government.” A copy of this brochure may be obtained from the HHS Cost Allocation Services or at their Web site at https://rates.psc.gov. B. DEFINITIONS

1. Agency or operating agency means an organizational unit or sub-division within a governmental unit that is responsible for the performance or administration of Federal awards or activities of the governmental unit.




2. Allocated central services means central services that benefit operating agencies but are not billed to the agencies on a fee-for-service or similar basis. These costs are allocated to benefitted agencies on some reasonable basis. Examples of such services might include general accounting, personnel administration, purchasing, etc.

3. Billed central services means central services that are billed to benefitted agencies or programs on an individual fee-for-service or similar basis. Typical examples of billed central services include computer services, transportation services, insurance, and fringe benefits.

4. Cognizant agency for indirect costs is defined in §200.19 Cognizant agency for indirect costs of this Part. The determination of cognizant agency for indirect costs for states and local governments is described in section F.1, Negotiation and Approval of Central Service Plans.

5. Major local government means local government that receives more than $100 million in direct Federal awards subject to this Part. C. SCOPE OF THE CENTRAL SERVICE COST ALLOCATION PLANS

The central service cost allocation plan will include all central service costs that will be claimed (either as a billed or an allocated cost) under Federal awards and will be documented as described in section E. Costs of central services omitted from the plan will not be reimbursed. D. SUBMISSION REQUIREMENTS

1. Each state will submit a plan to the Department of Health and Human Services for each year in which it claims central service costs under Federal awards. The plan should include (a) a projection of the next year's allocated central service cost (based either on actual costs for the most recently completed year or the budget projection for the coming year), and (b) a reconciliation of actual allocated central service costs to the estimated costs used for either the most recently completed year or the year immediately preceding the most recently completed year.

2. Each major local government is also required to submit a plan to its cognizant agency for indirect costs annually. 3. All other local governments claiming central service costs must develop a plan in accordance with the requirements

described in this Part and maintain the plan and related supporting documentation for audit. These local governments are not required to submit their plans for Federal approval unless they are specifically requested to do so by the cognizant agency for indirect costs. Where a local government only receives funds as a subrecipient, the pass-through entity will be responsible for monitoring the subrecipient's plan.

4. All central service cost allocation plans will be prepared and, when required, submitted within six months prior to the beginning of each of the governmental unit's fiscal years in which it proposes to claim central service costs. Extensions may be granted by the cognizant agency for indirect costs on a case-by-case basis. E. DOCUMENTATION REQUIREMENTS FOR SUBMITTED PLANS

The documentation requirements described in this section may be modified, expanded, or reduced by the cognizant agency for indirect costs on a case-by-case basis. For example, the requirements may be reduced for those central services which have little or no impact on Federal awards. Conversely, if a review of a plan indicates that certain additional information is needed, and will likely be needed in future years, it may be routinely requested in future plan submissions. Items marked with an asterisk (*) should be submitted only once; subsequent plans should merely indicate any changes since the last plan. 1. General

All proposed plans must be accompanied by the following: an organization chart sufficiently detailed to show operations including the central service activities of the state/local government whether or not they are shown as benefitting from central service functions; a copy of the Comprehensive Annual Financial Report (or a copy of the Executive Budget if budgeted costs are being proposed) to support the allowable costs of each central service activity included in the plan; and, a certification (see subsection 4.) that the plan was prepared in accordance with this Part, contains only allowable costs, and was prepared in a manner that treated similar costs consistently among the various Federal awards and between Federal and non-Federal awards/activities. 2. Allocated Central Services

For each allocated central service*, the plan must also include the following: a brief description of the service, an identification of the unit rendering the service and the operating agencies receiving the service, the items of expense included in the cost of the service, the method used to distribute the cost of the service to benefitted agencies, and a summary schedule showing the allocation of each service to the specific benefitted agencies. If any self-insurance funds or fringe benefits costs are treated as allocated (rather than billed) central services, documentation discussed in subsections 3.b. and c. must also be included. 3. Billed Services

a. General. The information described in this section must be provided for all billed central services, including internal service funds, self-insurance funds, and fringe benefit funds.

b. Internal service funds. (1) For each internal service fund or similar activity with an operating budget of $5 million or more, the plan must

include: a brief description of each service; a balance sheet for each fund based on individual accounts contained in the governmental unit's accounting system; a revenue/expenses statement, with revenues broken out by source, e.g., regular billings, interest earned, etc.; a listing of all non-operating transfers (as defined by Generally Accepted Accounting Principles (GAAP)) into and out of the fund; a description of the procedures (methodology) used to charge the costs of each service to users, including how billing rates are determined; a schedule of current rates; and, a schedule comparing total revenues (including imputed revenues) generated by the service to the allowable costs of the service, as determined under this Part, with an explanation of how variances will be handled.

(2) Revenues must consist of all revenues generated by the service, including unbilled and uncollected revenues. If some users were not billed for the services (or were not billed at the full rate for that class of users), a schedule showing the




full imputed revenues associated with these users must be provided. Expenses must be broken out by object cost categories (e.g., salaries, supplies, etc.).

c. Self-insurance funds. For each self-insurance fund, the plan must include: the fund balance sheet; a statement of revenue and expenses including a summary of billings and claims paid by agency; a listing of all non-operating transfers into and out of the fund; the type(s) of risk(s) covered by the fund (e.g., automobile liability, workers' compensation, etc.); an explanation of how the level of fund contributions are determined, including a copy of the current actuarial report (with the actuarial assumptions used) if the contributions are determined on an actuarial basis; and, a description of the procedures used to charge or allocate fund contributions to benefitted activities. Reserve levels in excess of claims (1) submitted and adjudicated but not paid, (2) submitted but not adjudicated, and (3) incurred but not submitted must be identified and explained.

d. Fringe benefits. For fringe benefit costs, the plan must include: a listing of fringe benefits provided to covered employees, and the overall annual cost of each type of benefit; current fringe benefit policies; and procedures used to charge or allocate the costs of the benefits to benefitted activities. In addition, for pension and post-retirement health insurance plans, the following information must be provided: the governmental unit's funding policies, e.g., legislative bills, trust agreements, or state-mandated contribution rules, if different from actuarially determined rates; the pension plan's costs accrued for the year; the amount funded, and date(s) of funding; a copy of the current actuarial report (including the actuarial assumptions); the plan trustee's report; and, a schedule from the activity showing the value of the interest cost associated with late funding. 4. Required Certification

Each central service cost allocation plan will be accompanied by a certification in the following form: CERTIFICATE OF COST ALLOCATION PLAN

This is to certify that I have reviewed the cost allocation plan submitted herewith and to the best of my knowledge and belief:

(1) All costs included in this proposal [identify date] to establish cost allocations or billings for [identify period covered by plan] are allowable in accordance with the requirements of this Part and the Federal award(s) to which they apply. Unallowable costs have been adjusted for in allocating costs as indicated in the cost allocation plan.

(2) All costs included in this proposal are properly allocable to Federal awards on the basis of a beneficial or causal relationship between the expenses incurred and the Federal awards to which they are allocated in accordance with applicable requirements. Further, the same costs that have been treated as indirect costs have not been claimed as direct costs. Similar types of costs have been accounted for consistently. I declare that the foregoing is true and correct. Governmental Unit: Signature: Name of Official: Title: Date of Execution: F. NEGOTIATION AND APPROVAL OF CENTRAL SERVICE PLANS 1. Federal Cognizant Agency for Indirect Costs Assignments for Cost Negotiation

In general, unless different arrangements are agreed to by the concerned Federal agencies, for central service cost allocation plans, the cognizant agency responsible for review and approval is the Federal agency with the largest dollar value of total Federal awards with a governmental unit. For indirect cost rates and departmental indirect cost allocation plans, the cognizant agency is the Federal agency with the largest dollar value of direct Federal awards with a governmental unit or component, as appropriate. Once designated as the cognizant agency for indirect costs, the Federal agency must remain so for a period of five years. In addition, the following Federal agencies continue to be responsible for the indicated governmental entities:

Department of Health and Human Services—Public assistance and state-wide cost allocation plans for all states (including the District of Columbia and Puerto Rico), state and local hospitals, libraries and health districts.

Department of the Interior—Indian tribal governments, territorial governments, and state and local park and recreational districts.

Department of Labor—State and local labor departments. Department of Education—School districts and state and local education agencies. Department of Agriculture—State and local agriculture departments. Department of Transportation—State and local airport and port authorities and transit districts. Department of Commerce—State and local economic development districts. Department of Housing and Urban Development—State and local housing and development districts. Environmental Protection Agency—State and local water and sewer districts.

2. Review All proposed central service cost allocation plans that are required to be submitted will be reviewed, negotiated, and

approved by the cognizant agency for indirect costs on a timely basis. The cognizant agency for indirect costs will review the proposal within six months of receipt of the proposal and either negotiate/approve the proposal or advise the governmental unit of the additional documentation needed to support/evaluate the proposed plan or the changes required to make the proposal acceptable. Once an agreement with the governmental unit has been reached, the agreement will be accepted and used by all Federal agencies, unless prohibited or limited by statute. Where a Federal awarding agency has reason to believe that special operating factors affecting its Federal awards necessitate special consideration, the funding agency will, prior to the time the plans are negotiated, notify the cognizant agency for indirect costs. 3. Agreement




The results of each negotiation must be formalized in a written agreement between the cognizant agency for indirect costs and the governmental unit. This agreement will be subject to re-opening if the agreement is subsequently found to violate a statute or the information upon which the plan was negotiated is later found to be materially incomplete or inaccurate. The results of the negotiation must be made available to all Federal agencies for their use. 4. Adjustments

Negotiated cost allocation plans based on a proposal later found to have included costs that: (a) are unallowable (i) as specified by law or regulation, (ii) as identified in subpart F, General Provisions for selected Items of Cost of this Part, or (iii) by the terms and conditions of Federal awards, or (b) are unallowable because they are clearly not allocable to Federal awards, must be adjusted, or a refund must be made at the option of the cognizant agency for indirect costs, including earned or imputed interest from the date of transfer and debt interest, if applicable, chargeable in accordance with applicable Federal cognizant agency for indirect costs regulations. Adjustments or cash refunds may include, at the option of the cognizant agency for indirect costs, earned or imputed interest from the date of expenditure and delinquent debt interest, if applicable, chargeable in accordance with applicable cognizant agency claims collection regulations. These adjustments or refunds are designed to correct the plans and do not constitute a reopening of the negotiation. G. OTHER POLICIES 1. Billed Central Service Activities

Each billed central service activity must separately account for all revenues (including imputed revenues) generated by the service, expenses incurred to furnish the service, and profit/loss. 2. Working Capital Reserves

Internal service funds are dependent upon a reasonable level of working capital reserve to operate from one billing cycle to the next. Charges by an internal service activity to provide for the establishment and maintenance of a reasonable level of working capital reserve, in addition to the full recovery of costs, are allowable. A working capital reserve as part of retained earnings of up to 60 calendar days cash expenses for normal operating purposes is considered reasonable. A working capital reserve exceeding 60 calendar days may be approved by the cognizant agency for indirect costs in exceptional cases. 3. Carry-Forward Adjustments of Allocated Central Service Costs

Allocated central service costs are usually negotiated and approved for a future fiscal year on a “fixed with carry-forward” basis. Under this procedure, the fixed amounts for the future year covered by agreement are not subject to adjustment for that year. However, when the actual costs of the year involved become known, the differences between the fixed amounts previously approved and the actual costs will be carried forward and used as an adjustment to the fixed amounts established for a later year. This “carry-forward” procedure applies to all central services whose costs were fixed in the approved plan. However, a carry-forward adjustment is not permitted, for a central service activity that was not included in the approved plan, or for unallowable costs that must be reimbursed immediately. 4. Adjustments of Billed Central Services

Billing rates used to charge Federal awards must be based on the estimated costs of providing the services, including an estimate of the allocable central service costs. A comparison of the revenue generated by each billed service (including total revenues whether or not billed or collected) to the actual allowable costs of the service will be made at least annually, and an adjustment will be made for the difference between the revenue and the allowable costs. These adjustments will be made through one of the following adjustment methods: (a) a cash refund including earned or imputed interest from the date of transfer and debt interest, if applicable, chargeable in accordance with applicable Federal cognizant agency for indirect costs regulations to the Federal Government for the Federal share of the adjustment, (b) credits to the amounts charged to the individual programs, (c) adjustments to future billing rates, or (d) adjustments to allocated central service costs. Adjustments to allocated central services will not be permitted where the total amount of the adjustment for a particular service (Federal share and non-Federal) share exceeds $500,000. Adjustment methods may include, at the option of the cognizant agency, earned or imputed interest from the date of expenditure and delinquent debt interest, if applicable, chargeable in accordance with applicable cognizant agency claims collection regulations. 5. Records Retention

All central service cost allocation plans and related documentation used as a basis for claiming costs under Federal awards must be retained for audit in accordance with the records retention requirements contained in Subpart D—Post Federal Award Requirements, of Part 200. 6. Appeals

If a dispute arises in the negotiation of a plan between the cognizant agency for indirect costs and the governmental unit, the dispute must be resolved in accordance with the appeals procedures of the cognizant agency for indirect costs. 7. OMB Assistance

To the extent that problems are encountered among the Federal agencies or governmental units in connection with the negotiation and approval process, OMB will lend assistance, as required, to resolve such problems in a timely manner. [78 FR 78608, Dec. 26, 2013, as amended at 80 FR 54410, Sept. 10, 2015] Appendix VI to Part 200—Public Assistance Cost Allocation Plans A. GENERAL

Federally-financed programs administered by state public assistance agencies are funded predominately by the Department of Health and Human Services (HHS). In support of its stewardship requirements, HHS has published requirements for the development, documentation, submission, negotiation, and approval of public assistance cost allocation plans in Subpart E of 45 CFR Part 95. All administrative costs (direct and indirect) are normally charged to Federal awards by implementing the public assistance cost allocation plan. This Appendix extends these requirements to all Federal awarding agencies whose programs are administered by a state public assistance agency. Major federally-financed




programs typically administered by state public assistance agencies include: Temporary Aid to Needy Families (TANF), Medicaid, Food Stamps, Child Support Enforcement, Adoption Assistance and Foster Care, and Social Services Block Grant. B. DEFINITIONS

1. State public assistance agency means a state agency administering or supervising the administration of one or more public assistance programs operated by the state as identified in Subpart E of 45 CFR Part 95. For the purpose of this Appendix, these programs include all programs administered by the state public assistance agency.

2. State public assistance agency costs means all costs incurred by, or allocable to, the state public assistance agency, except expenditures for financial assistance, medical contractor payments, food stamps, and payments for services and goods provided directly to program recipients. C. POLICY

State public assistance agencies will develop, document and implement, and the Federal Government will review, negotiate, and approve, public assistance cost allocation plans in accordance with Subpart E of 45 CFR Part 95. The plan will include all programs administered by the state public assistance agency. Where a letter of approval or disapproval is transmitted to a state public assistance agency in accordance with Subpart E, the letter will apply to all Federal agencies and programs. The remaining sections of this Appendix (except for the requirement for certification) summarize the provisions of Subpart E of 45 CFR Part 95. D. SUBMISSION, DOCUMENTATION, AND APPROVAL OF PUBLIC ASSISTANCE COST ALLOCATION PLANS

1. State public assistance agencies are required to promptly submit amendments to the cost allocation plan to HHS for review and approval.

2. Under the coordination process outlined in section E, Review of Implementation of Approved Plans, affected Federal agencies will review all new plans and plan amendments and provide comments, as appropriate, to HHS. The effective date of the plan or plan amendment will be the first day of the calendar quarter following the event that required the amendment, unless another date is specifically approved by HHS. HHS, as the cognizant agency for indirect costs acting on behalf of all affected Federal agencies, will, as necessary, conduct negotiations with the state public assistance agency and will inform the state agency of the action taken on the plan or plan amendment. E. REVIEW OF IMPLEMENTATION OF APPROVED PLANS

1. Since public assistance cost allocation plans are of a narrative nature, the review during the plan approval process consists of evaluating the appropriateness of the proposed groupings of costs (cost centers) and the related allocation bases. As such, the Federal Government needs some assurance that the cost allocation plan has been implemented as approved. This is accomplished by reviews by the Federal awarding agencies, single audits, or audits conducted by the cognizant agency for indirect costs.

2. Where inappropriate charges affecting more than one Federal awarding agency are identified, the cognizant HHS cost negotiation office will be advised and will take the lead in resolving the issue(s) as provided for in Subpart E of 45 CFR Part 95.

3. If a dispute arises in the negotiation of a plan or from a disallowance involving two or more Federal awarding agencies, the dispute must be resolved in accordance with the appeals procedures set out in 45 CFR Part 16. Disputes involving only one Federal awarding agency will be resolved in accordance with the Federal awarding agency's appeal process.

4. To the extent that problems are encountered among the Federal awarding agencies or governmental units in connection with the negotiation and approval process, the Office of Management and Budget will lend assistance, as required, to resolve such problems in a timely manner. F. UNALLOWABLE COSTS

Claims developed under approved cost allocation plans will be based on allowable costs as identified in this Part. Where unallowable costs have been claimed and reimbursed, they will be refunded to the program that reimbursed the unallowable cost using one of the following methods: (a) a cash refund, (b) offset to a subsequent claim, or (c) credits to the amounts charged to individual Federal awards. Cash refunds, offsets, and credits may include at the option of the cognizant agency for indirect cost, earned or imputed interest from the date of expenditure and delinquent debt interest, if applicable, chargeable in accordance with applicable cognizant agency for indirect cost claims collection regulations. Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals A. GENERAL

1. Indirect costs are those that have been incurred for common or joint purposes. These costs benefit more than one cost objective and cannot be readily identified with a particular final cost objective without effort disproportionate to the results achieved. After direct costs have been determined and assigned directly to Federal awards and other activities as appropriate, indirect costs are those remaining to be allocated to benefitted cost objectives. A cost may not be allocated to a Federal award as an indirect cost if any other cost incurred for the same purpose, in like circumstances, has been assigned to a Federal award as a direct cost.

2. Indirect costs include (a) the indirect costs originating in each department or agency of the governmental unit carrying out Federal awards and (b) the costs of central governmental services distributed through the central service cost allocation plan (as described in Appendix V to Part 200—State/Local Government and Indian Tribe-Wide Central Service Cost Allocation Plans) and not otherwise treated as direct costs.

3. Indirect costs are normally charged to Federal awards by the use of an indirect cost rate. A separate indirect cost rate(s) is usually necessary for each department or agency of the governmental unit claiming indirect costs under Federal awards. Guidelines and illustrations of indirect cost proposals are provided in a brochure published by the Department of Health and Human Services entitled “A Guide for States and Local Government Agencies: Cost Principles and Procedures




for Establishing Cost Allocation Plans and Indirect Cost Rates for Grants and Contracts with the Federal Government.” A copy of this brochure may be obtained from HHS Cost Allocation Services or at their Web site at https://rates.psc.gov.

4. Because of the diverse characteristics and accounting practices of governmental units, the types of costs which may be classified as indirect costs cannot be specified in all situations. However, typical examples of indirect costs may include certain state/local-wide central service costs, general administration of the non-Federal entity accounting and personnel services performed within the non-Federal entity, depreciation on buildings and equipment, the costs of operating and maintaining facilities.

5. This Appendix does not apply to state public assistance agencies. These agencies should refer instead to Appendix VI to Part 200—Public Assistance Cost Allocation Plans. B. DEFINITIONS

1. Base means the accumulated direct costs (normally either total direct salaries and wages or total direct costs exclusive of any extraordinary or distorting expenditures) used to distribute indirect costs to individual Federal awards. The direct cost base selected should result in each Federal award bearing a fair share of the indirect costs in reasonable relation to the benefits received from the costs.

2. Base period for the allocation of indirect costs is the period in which such costs are incurred and accumulated for allocation to activities performed in that period. The base period normally should coincide with the governmental unit's fiscal year, but in any event, must be so selected as to avoid inequities in the allocation of costs.

3. Cognizant agency for indirect costs means the Federal agency responsible for reviewing and approving the governmental unit's indirect cost rate(s) on the behalf of the Federal Government. The cognizant agency for indirect costs assignment is described in Appendix V, section F, Negotiation and Approval of Central Service Plans.

4. Final rate means an indirect cost rate applicable to a specified past period which is based on the actual allowable costs of the period. A final audited rate is not subject to adjustment.

5. Fixed rate means an indirect cost rate which has the same characteristics as a predetermined rate, except that the difference between the estimated costs and the actual, allowable costs of the period covered by the rate is carried forward as an adjustment to the rate computation of a subsequent period.

6. Indirect cost pool is the accumulated costs that jointly benefit two or more programs or other cost objectives. 7. Indirect cost rate is a device for determining in a reasonable manner the proportion of indirect costs each program

should bear. It is the ratio (expressed as a percentage) of the indirect costs to a direct cost base. 8. Indirect cost rate proposal means the documentation prepared by a governmental unit or subdivision thereof to

substantiate its request for the establishment of an indirect cost rate. 9. Predetermined rate means an indirect cost rate, applicable to a specified current or future period, usually the

governmental unit's fiscal year. This rate is based on an estimate of the costs to be incurred during the period. Except under very unusual circumstances, a predetermined rate is not subject to adjustment. (Because of legal constraints, predetermined rates are not permitted for Federal contracts; they may, however, be used for grants or cooperative agreements.) Predetermined rates may not be used by governmental units that have not submitted and negotiated the rate with the cognizant agency for indirect costs. In view of the potential advantages offered by this procedure, negotiation of predetermined rates for indirect costs for a period of two to four years should be the norm in those situations where the cost experience and other pertinent facts available are deemed sufficient to enable the parties involved to reach an informed judgment as to the probable level of indirect costs during the ensuing accounting periods.

10. Provisional rate means a temporary indirect cost rate applicable to a specified period which is used for funding, interim reimbursement, and reporting indirect costs on Federal awards pending the establishment of a “final” rate for that period. C. ALLOCATION OF INDIRECT COSTS AND DETERMINATION OF INDIRECT COST RATES 1. General

a. Where a governmental unit's department or agency has only one major function, or where all its major functions benefit from the indirect costs to approximately the same degree, the allocation of indirect costs and the computation of an indirect cost rate may be accomplished through simplified allocation procedures as described in subsection 2.

b. Where a governmental unit's department or agency has several major functions which benefit from its indirect costs in varying degrees, the allocation of indirect costs may require the accumulation of such costs into separate cost groupings which then are allocated individually to benefitted functions by means of a base which best measures the relative degree of benefit. The indirect costs allocated to each function are then distributed to individual Federal awards and other activities included in that function by means of an indirect cost rate(s).

c. Specific methods for allocating indirect costs and computing indirect cost rates along with the conditions under which each method should be used are described in subsections 2, 3 and 4. 2. Simplified Method

a. Where a non-Federal entity's major functions benefit from its indirect costs to approximately the same degree, the allocation of indirect costs may be accomplished by (1) classifying the non-Federal entity's total costs for the base period as either direct or indirect, and (2) dividing the total allowable indirect costs (net of applicable credits) by an equitable distribution base. The result of this process is an indirect cost rate which is used to distribute indirect costs to individual Federal awards. The rate should be expressed as the percentage which the total amount of allowable indirect costs bears to the base selected. This method should also be used where a governmental unit's department or agency has only one major function encompassing a number of individual projects or activities, and may be used where the level of Federal awards to that department or agency is relatively small.

b. Both the direct costs and the indirect costs must exclude capital expenditures and unallowable costs. However, unallowable costs must be included in the direct costs if they represent activities to which indirect costs are properly allocable.




c. The distribution base may be (1) total direct costs (excluding capital expenditures and other distorting items, such as pass-through funds, subcontracts in excess of $25,000, participant support costs, etc.), (2) direct salaries and wages, or (3) another base which results in an equitable distribution. 3. Multiple Allocation Base Method

a. Where a non-Federal entity's indirect costs benefit its major functions in varying degrees, such costs must be accumulated into separate cost groupings. Each grouping must then be allocated individually to benefitted functions by means of a base which best measures the relative benefits.

b. The cost groupings should be established so as to permit the allocation of each grouping on the basis of benefits provided to the major functions. Each grouping should constitute a pool of expenses that are of like character in terms of the functions they benefit and in terms of the allocation base which best measures the relative benefits provided to each function. The number of separate groupings should be held within practical limits, taking into consideration the materiality of the amounts involved and the degree of precision needed.

c. Actual conditions must be taken into account in selecting the base to be used in allocating the expenses in each grouping to benefitted functions. When an allocation can be made by assignment of a cost grouping directly to the function benefitted, the allocation must be made in that manner. When the expenses in a grouping are more general in nature, the allocation should be made through the use of a selected base which produces results that are equitable to both the Federal Government and the governmental unit. In general, any cost element or related factor associated with the governmental unit's activities is potentially adaptable for use as an allocation base provided that: (1) it can readily be expressed in terms of dollars or other quantitative measures (total direct costs, direct salaries and wages, staff hours applied, square feet used, hours of usage, number of documents processed, population served, and the like), and (2) it is common to the benefitted functions during the base period.

d. Except where a special indirect cost rate(s) is required in accordance with paragraph (C)(4) of this Appendix, the separate groupings of indirect costs allocated to each major function must be aggregated and treated as a common pool for that function. The costs in the common pool must then be distributed to individual Federal awards included in that function by use of a single indirect cost rate.

e. The distribution base used in computing the indirect cost rate for each function may be (1) total direct costs (excluding capital expenditures and other distorting items such as pass-through funds, subawards in excess of $25,000, participant support costs, etc.), (2) direct salaries and wages, or (3) another base which results in an equitable distribution. An indirect cost rate should be developed for each separate indirect cost pool developed. The rate in each case should be stated as the percentage relationship between the particular indirect cost pool and the distribution base identified with that pool. 4. Special Indirect Cost Rates

a. In some instances, a single indirect cost rate for all activities of a non-Federal entity or for each major function of the agency may not be appropriate. It may not take into account those different factors which may substantially affect the indirect costs applicable to a particular program or group of programs. The factors may include the physical location of the work, the level of administrative support required, the nature of the facilities or other resources employed, the organizational arrangements used, or any combination thereof. When a particular Federal award is carried out in an environment which appears to generate a significantly different level of indirect costs, provisions should be made for a separate indirect cost pool applicable to that Federal award. The separate indirect cost pool should be developed during the course of the regular allocation process, and the separate indirect cost rate resulting therefrom should be used, provided that: (1) The rate differs significantly from the rate which would have been developed under paragraphs (C)(2) and (C)(3) of this Appendix, and (2) the Federal award to which the rate would apply is material in amount.

b. Where Federal statutes restrict the reimbursement of certain indirect costs, it may be necessary to develop a special rate for the affected Federal award. Where a “restricted rate” is required, the same procedure for developing a non-restricted rate will be used except for the additional step of the elimination from the indirect cost pool those costs for which the law prohibits reimbursement. D. SUBMISSION AND DOCUMENTATION OF PROPOSALS 1. Submission of Indirect Cost Rate Proposals

a. All departments or agencies of the governmental unit desiring to claim indirect costs under Federal awards must prepare an indirect cost rate proposal and related documentation to support those costs. The proposal and related documentation must be retained for audit in accordance with the records retention requirements contained in §200.333 Retention Requirements for Records.

b. A governmental department or agency unit that receives more than $35 million in direct Federal funding must submit its indirect cost rate proposal to its cognizant agency for indirect costs. Other governmental department or agency must develop an indirect cost proposal in accordance with the requirements of this Part and maintain the proposal and related supporting documentation for audit. These governmental departments or agencies are not required to submit their proposals unless they are specifically requested to do so by the cognizant agency for indirect costs. Where a non-Federal entity only receives funds as a subrecipient, the pass-through entity will be responsible for negotiating and/or monitoring the subrecipient's indirect costs.

c. Each Indian tribal government desiring reimbursement of indirect costs must submit its indirect cost proposal to the Department of the Interior (its cognizant agency for indirect costs).

d. Indirect cost proposals must be developed (and, when required, submitted) within six months after the close of the governmental unit's fiscal year, unless an exception is approved by the cognizant agency for indirect costs. If the proposed central service cost allocation plan for the same period has not been approved by that time, the indirect cost proposal may be prepared including an amount for central services that is based on the latest federally-approved central service cost




allocation plan. The difference between these central service amounts and the amounts ultimately approved will be compensated for by an adjustment in a subsequent period. 2. Documentation of Proposals

The following must be included with each indirect cost proposal: a. The rates proposed, including subsidiary work sheets and other relevant data, cross referenced and reconciled to

the financial data noted in subsection b. Allocated central service costs will be supported by the summary table included in the approved central service cost allocation plan. This summary table is not required to be submitted with the indirect cost proposal if the central service cost allocation plan for the same fiscal year has been approved by the cognizant agency for indirect costs and is available to the funding agency.

b. A copy of the financial data (financial statements, comprehensive annual financial report, executive budgets, accounting reports, etc.) upon which the rate is based. Adjustments resulting from the use of unaudited data will be recognized, where appropriate, by the Federal cognizant agency for indirect costs in a subsequent proposal.

c. The approximate amount of direct base costs incurred under Federal awards. These costs should be broken out between salaries and wages and other direct costs.

d. A chart showing the organizational structure of the agency during the period for which the proposal applies, along with a functional statement(s) noting the duties and/or responsibilities of all units that comprise the agency. (Once this is submitted, only revisions need be submitted with subsequent proposals.) 3. Required certification.

Each indirect cost rate proposal must be accompanied by a certification in the following form: CERTIFICATE OF INDIRECT COSTS

This is to certify that I have reviewed the indirect cost rate proposal submitted herewith and to the best of my knowledge and belief:

(1) All costs included in this proposal [identify date] to establish billing or final indirect costs rates for [identify period covered by rate] are allowable in accordance with the requirements of the Federal award(s) to which they apply and the provisions of this Part. Unallowable costs have been adjusted for in allocating costs as indicated in the indirect cost proposal

(2) All costs included in this proposal are properly allocable to Federal awards on the basis of a beneficial or causal relationship between the expenses incurred and the agreements to which they are allocated in accordance with applicable requirements. Further, the same costs that have been treated as indirect costs have not been claimed as direct costs. Similar types of costs have been accounted for consistently and the Federal Government will be notified of any accounting changes that would affect the predetermined rate. I declare that the foregoing is true and correct. Governmental Unit: Signature: Name of Official: Title: Date of Execution: E. NEGOTIATION AND APPROVAL OF RATES.

1. Indirect cost rates will be reviewed, negotiated, and approved by the cognizant agency on a timely basis. Once a rate has been agreed upon, it will be accepted and used by all Federal agencies unless prohibited or limited by statute. Where a Federal awarding agency has reason to believe that special operating factors affecting its Federal awards necessitate special indirect cost rates, the funding agency will, prior to the time the rates are negotiated, notify the cognizant agency for indirect costs.

2. The use of predetermined rates, if allowed, is encouraged where the cognizant agency for indirect costs has reasonable assurance based on past experience and reliable projection of the non-Federal entity's costs, that the rate is not likely to exceed a rate based on actual costs. Long-term agreements utilizing predetermined rates extending over two or more years are encouraged, where appropriate.

3. The results of each negotiation must be formalized in a written agreement between the cognizant agency for indirect costs and the governmental unit. This agreement will be subject to re-opening if the agreement is subsequently found to violate a statute, or the information upon which the plan was negotiated is later found to be materially incomplete or inaccurate. The agreed upon rates must be made available to all Federal agencies for their use.

4. Refunds must be made if proposals are later found to have included costs that (a) are unallowable (i) as specified by law or regulation, (ii) as identified in §200.420 Considerations for selected items of cost, of this Part, or (iii) by the terms and conditions of Federal awards, or (b) are unallowable because they are clearly not allocable to Federal awards. These adjustments or refunds will be made regardless of the type of rate negotiated (predetermined, final, fixed, or provisional). F. OTHER POLICIES 1. Fringe Benefit Rates

If overall fringe benefit rates are not approved for the governmental unit as part of the central service cost allocation plan, these rates will be reviewed, negotiated and approved for individual recipient agencies during the indirect cost negotiation process. In these cases, a proposed fringe benefit rate computation should accompany the indirect cost proposal. If fringe benefit rates are not used at the recipient agency level (i.e., the agency specifically identifies fringe benefit costs to individual employees), the governmental unit should so advise the cognizant agency for indirect costs. 2. Billed Services Provided by the Recipient Agency

In some cases, governmental departments or agencies (components of the governmental unit) provide and bill for services similar to those covered by central service cost allocation plans (e.g., computer centers). Where this occurs, the governmental departments or agencies (components of the governmental unit)should be guided by the requirements in Appendix V relating to the development of billing rates and documentation requirements, and should advise the cognizant




agency for indirect costs of any billed services. Reviews of these types of services (including reviews of costing/billing methodology, profits or losses, etc.) will be made on a case-by-case basis as warranted by the circumstances involved. 3. Indirect Cost Allocations Not Using Rates

In certain situations, governmental departments or agencies (components of the governmental unit), because of the nature of their Federal awards, may be required to develop a cost allocation plan that distributes indirect (and, in some cases, direct) costs to the specific funding sources. In these cases, a narrative cost allocation methodology should be developed, documented, maintained for audit, or submitted, as appropriate, to the cognizant agency for indirect costs for review, negotiation, and approval. 4. Appeals

If a dispute arises in a negotiation of an indirect cost rate (or other rate) between the cognizant agency for indirect costs and the governmental unit, the dispute must be resolved in accordance with the appeals procedures of the cognizant agency for indirect costs. 5. Collection of Unallowable Costs and Erroneous Payments

Costs specifically identified as unallowable and charged to Federal awards either directly or indirectly will be refunded (including interest chargeable in accordance with applicable Federal cognizant agency for indirect costs regulations). 6. OMB Assistance

To the extent that problems are encountered among the Federal agencies or governmental units in connection with the negotiation and approval process, OMB will lend assistance, as required, to resolve such problems in a timely manner. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75889, Dec. 19, 2014] Appendix VIII to Part 200—Nonprofit Organizations Exempted From Subpart E—Cost Principles of Part 200 1. Advance Technology Institute (ATI), Charleston, South Carolina 2. Aerospace Corporation, El Segundo, California 3. American Institutes of Research (AIR), Washington, DC 4. Argonne National Laboratory, Chicago, Illinois 5. Atomic Casualty Commission, Washington, DC 6. Battelle Memorial Institute, Headquartered in Columbus, Ohio 7. Brookhaven National Laboratory, Upton, New York 8. Charles Stark Draper Laboratory, Incorporated, Cambridge, Massachusetts 9. CNA Corporation (CNAC), Alexandria, Virginia 10. Environmental Institute of Michigan, Ann Arbor, Michigan 11. Georgia Institute of Technology/Georgia Tech Applied Research Corporation/Georgia Tech Research Institute, Atlanta,

Georgia 12. Hanford Environmental Health Foundation, Richland, Washington 13. IIT Research Institute, Chicago, Illinois 14. Institute of Gas Technology, Chicago, Illinois 15. Institute for Defense Analysis, Alexandria, Virginia 16. LMI, McLean, Virginia 17. Mitre Corporation, Bedford, Massachusetts 18. Noblis, Inc., Falls Church, Virginia 19. National Radiological Astronomy Observatory, Green Bank, West Virginia 20. National Renewable Energy Laboratory, Golden, Colorado 21. Oak Ridge Associated Universities, Oak Ridge, Tennessee 22. Rand Corporation, Santa Monica, California 23. Research Triangle Institute, Research Triangle Park, North Carolina 24. Riverside Research Institute, New York, New York 25. South Carolina Research Authority (SCRA), Charleston, South Carolina 26. Southern Research Institute, Birmingham, Alabama 27. Southwest Research Institute, San Antonio, Texas 28. SRI International, Menlo Park, California 29. Syracuse Research Corporation, Syracuse, New York 30. Universities Research Association, Incorporated (National Acceleration Lab), Argonne, Illinois 31. Urban Institute, Washington DC 32. Non-profit insurance companies, such as Blue Cross and Blue Shield Organizations 33. Other non-profit organizations as negotiated with Federal awarding agencies Appendix IX to Part 200—Hospital Cost Principles

Based on initial feedback, OMB proposes to establish a review process to consider existing hospital cost determine how best to update and align them with this Part. Until such time as revised guidance is proposed and implemented for hospitals, the existing principles located at 45 CFR Part 75 Appendix E, entitled “Principles for Determining Cost Applicable to Research and Development Under Grants and Contracts with Hospitals,” remain in effect. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75889, Dec. 19, 2014] Appendix X to Part 200—Data Collection Form (Form SF-SAC)

The Data Collection Form SF-SAC is available on the FAC Web site.




Appendix XI to Part 200—Compliance Supplement The compliance supplement is available on the OMB Web site: (e.g. for 2013 here

http://www.whitehouse.gov/omb/circulars/) Appendix XII to Part 200—Award Term and Condition for Recipient Integrity and Performance Matters A. REPORTING OF MATTERS RELATED TO RECIPIENT INTEGRITY AND PERFORMANCE 1. General Reporting Requirement

If the total value of your currently active grants, cooperative agreements, and procurement contracts from all Federal awarding agencies exceeds $10,000,000 for any period of time during the period of performance of this Federal award, then you as the recipient during that period of time must maintain the currency of information reported to the System for Award Management (SAM) that is made available in the designated integrity and performance system (currently the Federal Awardee Performance and Integrity Information System (FAPIIS)) about civil, criminal, or administrative proceedings described in paragraph 2 of this award term and condition. This is a statutory requirement under section 872 of Public Law 110-417, as amended (41 U.S.C. 2313). As required by section 3010 of Public Law 111-212, all information posted in the designated integrity and performance system on or after April 15, 2011, except past performance reviews required for Federal procurement contracts, will be publicly available. 2. Proceedings About Which You Must Report

Submit the information required about each proceeding that: a. Is in connection with the award or performance of a grant, cooperative agreement, or procurement contract from

the Federal Government; b. Reached its final disposition during the most recent five year period; and c. Is one of the following: (1) A criminal proceeding that resulted in a conviction, as defined in paragraph 5 of this award term and condition; (2) A civil proceeding that resulted in a finding of fault and liability and payment of a monetary fine, penalty,

reimbursement, restitution, or damages of $5,000 or more; (3) An administrative proceeding, as defined in paragraph 5. of this award term and condition, that resulted in a finding

of fault and liability and your payment of either a monetary fine or penalty of $5,000 or more or reimbursement, restitution, or damages in excess of $100,000; or

(4) Any other criminal, civil, or administrative proceeding if: (i) It could have led to an outcome described in paragraph 2.c.(1), (2), or (3) of this award term and condition; (ii) It had a different disposition arrived at by consent or compromise with an acknowledgment of fault on your part;

and (iii) The requirement in this award term and condition to disclose information about the proceeding does not conflict

with applicable laws and regulations. 3. Reporting Procedures

Enter in the SAM Entity Management area the information that SAM requires about each proceeding described in paragraph 2 of this award term and condition. You do not need to submit the information a second time under assistance awards that you received if you already provided the information through SAM because you were required to do so under Federal procurement contracts that you were awarded. 4. Reporting Frequency

During any period of time when you are subject to the requirement in paragraph 1 of this award term and condition, you must report proceedings information through SAM for the most recent five year period, either to report new information about any proceeding(s) that you have not reported previously or affirm that there is no new information to report. Recipients that have Federal contract, grant, and cooperative agreement awards with a cumulative total value greater than $10,000,000 must disclose semiannually any information about the criminal, civil, and administrative proceedings. 5. Definitions

For purposes of this award term and condition: a. Administrative proceeding means a non-judicial process that is adjudicatory in nature in order to make a

determination of fault or liability (e.g., Securities and Exchange Commission Administrative proceedings, Civilian Board of Contract Appeals proceedings, and Armed Services Board of Contract Appeals proceedings). This includes proceedings at the Federal and State level but only in connection with performance of a Federal contract or grant. It does not include audits, site visits, corrective plans, or inspection of deliverables.

b. Conviction, for purposes of this award term and condition, means a judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, and includes a conviction entered upon a plea of nolo contendere.

c. Total value of currently active grants, cooperative agreements, and procurement contracts includes— (1) Only the Federal share of the funding under any Federal award with a recipient cost share or match; and (2) The value of all expected funding increments under a Federal award and options, even if not yet exercised. B. [Reserved]

[80 FR 43310, July 22, 2015]




DOCUMENT 00800

SUPPLEMENTARY GENERAL CONDITIONS

ATTACHMENT II

FEDERAL REQUIREMENTS / REQUIRED DOCUMENTS – REPORTING FORMS AND INSTRUCTIONS

I. SUMMARY This Attachment includes:

1. Non-Discrimination/Equal Employment Opportunity 2. Contract Award 3. Cost Principles 4. Compliance With Executive Order No. 11246 5. Elimination of Segregated Facilities 6. Federal and State Lobbying Activities Certification 7. Drug-Free Workplace Certification 8. Further Requirements Regarding Sureties 9. Debarment Certifications

Supplementary General Conditions, Attachment II 00800-II - 1

Port of Stockton Added in Addendum 1 Port Police Fusion Center


II. NON-DISCRIMINATION/EQUAL EMPLOYMENT OPPORTUNITY a. Contractor shall not, during the performance of this Contract or in selection or retention of

Subcontractors, including procurement of materials and leases of equipment, unlawfully discriminate, harass or allow harassment against any employee or applicant for employment because of sex, race, color, ancestry, religion creed, national origin, physical disability (including HIV and AIDS), medical condition (cancer), age, marital status, denial of family and medical care leave, or denial of pregnancy disability leave.

Contractor shall ensure, and shall require that its Subcontractor(s) ensure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment.

Contractor shall comply and ensure that its Subcontractor(s) comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12990 (a-f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations, are incorporated into this Contract by reference and made a part hereof as if set forth in full. Contractor and its Subcontractor(s) shall give written notice of its obligations under this clause to labor organizations with which they have collective bargaining or other labor agreements.

b. Contractor and its Subcontractor(s) shall comply with Title VI of the Civil Rights Act of 1964, as amended, and with the regulations relative to Title VI, (nondiscrimination in federally-assisted programs of the United States Department of Transportation, 49 C.F.R Part 21 and 23 C.F.R. Part 200; hereinafter referred to as “DOT regulations,”) and 49 C.F.R Part 26, which are herein incorporated by reference and made a part of this Contract. Wherever the term “Contractor” appears therein, it shall mean Contractor.

c. Contractor shall permit and shall require its Subcontractors to permit access to all records of employment, employment advertisements, application forms, and other pertinent data and records by the State Fair Employment Practices and Housing Commission or any other agency of the State of California designated by the State to investigate compliance with this Section.

d. Solicitations for Subcontractors, Including Procurement of Materials and Equipment: In all solicitations either by competitive bidding or negotiations made by the Contractor for work to be performed under a subcontract, including procurement of materials or leases of equipment, each potential Subcontractor or supplier shall be notified by the Contractor of the Contractor’s obligations under this Contract and the DOT regulations relative to nondiscrimination.

e. Sanctions for Noncompliance: Failure by the Contractor to carry out the requirements above is a material breach of this Contract, which may result in sanctions as Port may determine to be appropriate, including, but not limited to:

(1) Withholding of payments to the Contractor under this Contract until the Contractor complies,

and/or (2) Cancellation, termination or suspension of the Contract, in whole or in part.

f. Incorporation of Provisions: Any subcontract entered into as a result of this Contract shall contain all of

the provisions of a. through e. of this section. The Contractor shall take such action with respect to any subcontract or procurement as Port may direct as a means of enforcing such provisions including sanctions for noncompliance.




THE UNDERSIGNED CERTIFIES THAT THE CONTRACTOR WILL COMPLY WITH THE ABOVE REQUIREMENTS. CONTRACTOR OR SUBCONTRACTOR NAME: CERTIFIED BY: NAME: TITLE: SIGNATURE: DATE:




III. CONTRACT AWARD

In accordance with Title 49 CFR 18, Section 18.37 and state law and procedures, all Subcontractor contracts containing funds provided under this Contract are required to be competitively bid and awarded consistent with Local Program Procedures 00-05 (Pre-award Audit Requirements and Contractor Procurement) or successors thereto.




IV. COST PRINCIPLES a. Contractor agrees to comply with the following:

(i) the Contract Cost Principles and Procedures, 48 Code of Federal Regulations, Federal Acquisition Regulations System, Chapter 1, Part 31, et seq. (Office of Management and Budget Circular A-87, “Cost Principles for State, Local, and Indian Tribal Governments),” shall be used to determine the allowability of individual project cost items, and

(ii) the Federal administrative procedures in accordance with 49 Code of Federal Regulations, Part 18, “Uniform Administrative Requirements for Grants and Cooperative Contracts to State and Local Governments.”

b. Any costs for which Contractor receives payment or credit that is determined by a subsequent audit or other review by either Port or other State or Federal authorities to be unallowable under, but not limited to, OMB Circular A-87; 48 CFR, Chapter 1, Part 31; or 49 CFR, Part 18, are to be repaid by Contractor within thirty (30) days of Contractor receiving notice of audit findings. Should Contractor fail to reimburse moneys due Port within thirty (30) days of demand, or within such other period as may be agreed between both parties hereto, Port is authorized to withhold future payments due Contractor.

c. Contractor agrees to furnish documentation to Port to support this requirement that all of its agreements with Subcontractors contain provisions requiring adherence to this section in its entirety.




V. COMPLIANCE WITH EXECUTIVE ORDER NO. 11246 During the performance of this Contract Contractor agrees as follows:

(1) The contractor will not discriminate against any employee or applicant for employment because of race,

color, religion, sex, or national origin. The contractor will take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to the following: Employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training including apprenticeship. The contractor agrees to post, in conspicuous places available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause.

(2) The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive considerations for employment without regard to race, color, religion, sex, or national origin.

(3) The contractor will send, to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers representatives of the contractor’s commitments under this section, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

(4) The contractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.

(5) The contractor will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

(6) In the event of the contractor’s noncompliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, this contract may be canceled, terminated, or suspended in whole or in part, and the contractor may be ineligible for further Government contracts or federally assisted construction contracts in accordance with procedures authorized in Executive Order 11246 or September 24, 1965, and such other sanctions may be imposed and remedies invoked a s provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or orders of the Secretary of Labor, or as otherwise provided by law.

(7) The contractor will include the sentence immediately preceding paragraph (1) and the provisions of paragraphs (1) through (7) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the administering agency may direct as a means of enforcing such provisions including sanctions for noncompliance: Provided however, That in the event a contractor becomes involved in, or is threatened with litigation with a subcontractor or vendor, as a result of such direction by the administering agency, the contractor may request the United States to enter into such litigation to protect the interests of the United States.




VI. ELIMINATION OF SEGREGATED FACILITIES

(a) A Certification of Non-Segregated Facilities, as required by the May 9, 1967 Order (32 F.R. 7439, May 19, 1967) on Elimination of Segregated Facilities, by the Secretary of Labor, must be submitted prior to the award of a Federally-assisted construction contract exceeding $10,000 which is not exempt from the provisions of the Equal Opportunity Clause.

(b) Contractors receiving Federally-assisted construction contract awards exceeding $10,000 which, are not exempt from the provisions of the Equal Opportunity Clause, will be required to provide for the forwarding of the following notice to prospective subcontractors for supply and construction contracts where the subcontracts exceed $10,000 and are not exempt from the provisions of the Equal Opportunity Clause.

NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT FOR CERTIFICATION OF NON-SEGREGATED FACILITIES

(a) A Certification of Non-Segregated Facilities, as required by the May 9, 1967 Order (32 F.R. 7439,

May 19, 1967) on Elimination of Segregated Facilities, by the Secretary of Labor, must be submitted prior to the award of a subcontract exceeding $10,000 which is not exempt from the provisions of the Equal Opportunity Clause.

(b) Contractors receiving subcontract awards exceeding $10,000 which are not exempt from the provisions of the Equal Opportunity Clause will be required to provide for the forwarding of this notice to prospective subcontractors for supply and construction contracts where the subcontracts exceed $10,000 and are not exempt from the provisions of the Equal Opportunity Clause.

CERTIFICATION OF NON-SEGREGATED FACILITIES (Applicable to federally assisted construction contracts and related subcontracts exceeding $10,000 which are not exempt from the Equal Opportunity Clause.)

The federally assisted construction contractor certifies that he does not maintain or provide for his employees any segregated facilities at any of his establishments, and that he does not permit his employees to perform their services at any location, under his control, where segregated facilities are maintained. The federally assisted construction contractor certifies further that he will not maintain or provide for his employees any segregated facilities at any of his establishments, and that he will not permit his employees to perform their services at any location, under his control, where segregated facilities are maintained. The federally assisted construction contractor agrees that a breach of this certification is a violation of the Equal Opportunity Clause in this contract. As used in this certification, the term “segregated facilities” means any waiting rooms, work areas, restrooms and wash rooms, restaurants and other eating areas, time clocks, locker rooms and other storage or dressing areas, transportation, and housing facilities provided for employees which are segregated by explicit directive or are in fact segregated on the basis of race, creed, color, or national origin, because of habit, local custom, or otherwise. The federally assisted construction contractor agrees that (except where he has obtained identical certifications from proposed subcontractors for specified time period) he will obtain identical certifications from proposed subcontractors prior to the award of subcontracts exceeding $10,000 which are not exempt form the provisions of the Equal Opportunity Clause, and that he will retain such certifications in his files.

____________________________________________________________________

Signature Date

____________________________________________________________________

Name and Title of Signer (Please Type) Note: The penalty for making false statements in offers is prescribed in 18 U.S.C. 1001.




VII. FEDERAL AND STATE LOBBYING ACTIVITIES CERTIFICATION

a. By signing this Contract, the Contractor certifies, to the best of its knowledge and belief, that no State or

Federal funds have been paid or will be paid, by or on behalf of Port, to any person for influencing or attempting to influence an officer or employee of any State or Federal agency, a Member of the State Legislature or United States Congress, an officer or employee of the Legislature or Congress, or any employee of a Member of the Legislature or Congress in connection with the awarding of any State or Federal contract, the making of any State or Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, or the extension, continuation, renewal, amendment, or modification of any State or Federal contract, grant, loan, or cooperative agreement.

b. If any funds other than State or Federal funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the Contractor shall complete and submit Federal Standard Form-LL, “Disclosure Form to Report Lobbying,” in accordance with those form instructions.

c. This certification is a material representation of fact, upon which reliance was placed when this Contract was entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S.C.

The Contractor also agrees by signing this Contract that it will require that the language of this certification be included in all subcontracts funded wholly or in part by any funds provided herein and which exceed $100,000 and that all such Subcontractors shall certify and disclose accordingly.




VIII. DRUG-FREE WORKPLACE CERTIFICATION CONTRACTOR/APPLICANT: The contractor or applicant named above hereby certifies compliance with Government Code Section 8355 in matters relating to providing a drug-free workplace. The above named contractor or applicant will: 1. Publish a statement notifying employees that unlawful manufacture, distribution, dispensation, possession, or

use of a controlled substance is prohibited and specifying actions to be taken against employees for violations, as required by Government Code Section 8355(a).

2. Establish a Drug-Free Awareness Program as required by Government Code Section 8355(b), to inform

employees about all of the following:

(a) The dangers of drug abuse in the workplace,

(b) The person’s or organization’s policy of maintaining a drug-free workplace, (c) Any available counseling, rehabilitation and employee assistance programs, and

(d) Penalties that may be imposed upon employees for drug abuse violations. 3. Provide as required by Government Code Section 8355(c), that every employee who works on the proposed

contract or loan:

(a) Will receive a copy of the company’s drug-free policy statement, and

(b) Will agree to abide by the terms of the company’s statement as a condition of employment on the contract or loan.

CERTIFICATION

I, the official named below, hereby swear that I am duly authorized legally to bind the contractor or loan recipient to the above described certification. I am fully aware that this certification, executed on the date and in the county below, is made under penalty of perjury under the laws of the State of California. OFFICIAL’S NAME: DATE EXECUTED: EXECUTED IN COUNTY OF: CONTRACTOR/APPLICANT SIGNATURE: TITLE:




IX. FURTHER REQUIREMENTS REGARDING SURETIES

Surety companies executing bid bonds, payment and performance bonds must be listed in United State Treasury Circular 570, as amended, and must be authorized to transact surety business in the State of California.

X. DEBARMENT CERTIFICATIONS

A. Appendix A to Part 32--Certification Regarding Debarment, Suspension, and Other Responsibility Matters--Primary Covered Transactions

Instructions for Certification

1. By signing and submitting this proposal, the prospective primary participant is providing the certification

set out below.

2. The inability of a person to provide the certification required below will not necessarily result in denial of participation in this covered transaction. The prospective participant shall submit an explanation of why it cannot provide the certification set out below. The certification or explanation will be considered in connection with the department or agency’s determination whether to enter into this transaction. However, failure of the prospective primary participant to furnish a certification or an explanation shall disqualify such person from participation in this transaction.

3. The certification in this clause is a material representation of fact upon which reliance was placed when the department or agency determined to enter into this transaction. If it is later determined that the prospective primary participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default.

4. The prospective primary participant shall provide immediate written notice to the department or agency to which this proposal is submitted if at any time the prospective primary participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances.

5. The terms covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, proposal, and voluntarily excluded, as used in this clause, have the meanings set out in the Definitions and Coverage sections of the rules implementing Executive Order 12549. You may contact the department or agency to which this proposal is being submitted for assistance in obtaining a copy of those regulations.

6. The prospective primary participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency entering into this transaction.

7. The prospective primary participant further agrees by submitting this proposal that it will include the clause titled “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transaction,” provided by the department or agency entering into this covered transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions.

8. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each




participant may, but is not required to, check the List of Parties Excluded from Federal Procurement and Non-procurement Programs.

9. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

10. Except for transactions authorized under paragraph 6 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default.

Certification Regarding Debarment, Suspension, and Other Responsibility Matters--Primary Covered Transactions

(1) The prospective primary participant certifies to the best of its knowledge and belief, that it and its

principals:

(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any Federal department or agency;

(b) Have not within a three-year period preceding this proposal been convicted of or had a civil judgment

rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property;

(c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity

(Federal, State or local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and

(d) Have not within a three-year period preceding this application/proposal had one or more public

transactions (Federal, State or local) terminated for cause or default.

(2) Where the prospective primary participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.

B. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion--Lower Tier Covered Transactions

Instructions for Certification

1. By signing and submitting this proposal, the prospective lower tier participant is providing the certification

set out below.

2. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment.




3. The prospective lower tier participant shall provide immediate written notice to the person to which this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or had become erroneous by reason of changed circumstances.

4. The terms covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, proposal, and voluntarily excluded, as used in this clause, have the meaning set out in the Definitions and Coverage sections of rules implementing Executive Order 12549. You may contact the person to which this proposal is submitted for assistance in obtaining a copy of those regulations.

5. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated.

6. The prospective lower tier participant further agrees by submitting this proposal that it will include this clause titled “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transaction,” without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions.

7. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from covered transactions, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the List of Parties Excluded from Federal Procurement and Nonprocurement Programs.

8. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

9. Except for transactions authorized under paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment.

Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion--Lower Tier Covered Transactions

(1) The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its

principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency.

(2) Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.

END OF DOCUMENT 00800-1




DOCUMENT 00821

INSURANCE AND INDEMNIFICATION PORT POLICE FUSION CENTER

1. INSURANCE REQUIREMENTS

At or before the date specified in Document 00200 (Instructions to Bidders), Contractor shall furnish to Port satisfactory proof that Contractor has in force continuously for the entire period covered by the Contract the following classes of insurance in the form and with limits and deductibles specified below:

A. Comprehensive or Commercial General Liability Insurance covering claims for personal injury, bodily injury and property damage arising out of the Work and in a form providing coverage not less than that of a standard Commercial General Liability Insurance policy (“Occurrence Form”). Such insurance shall provide for all operations and include independent contractors, products liability, completed operations for one year after Final Completion of the last Phase to be completed and acceptance of the final payment for the Work, contractual liability, and coverage for, collapse. The limits of such insurance shall not be coverage of less than [$1,000,000] each occurrence, [$2,000,000] general aggregate limit, and [$2,000,000] aggregate for products and completed operations. Any deductible or self-insured retention should not exceed $25,000. The policies shall be endorsed to provide Broad Form Property Damage Coverage.

B. Comprehensive Automobile Liability Insurance covering all owned, non-owned, and hired vehicles. Such insurance shall provide coverage not less than the standard Comprehensive Automobile Liability policy with limits not less than [$1,000,000] each person Bodily Injury, [$1,000,000] each occurrence Bodily Injury and [$1,000,000] each occurrence Property Damage (or [$1,000,000] combined single limit, each accident).

C. All-Risk Course of Construction Insurance for physical loss or damage to the Work, temporary buildings, falsework, and materials and equipment in transit, and shall insure against debris removal and demolition occasioned by enforcement of Laws, and provide all risk coverage including earthquake and flood in the amount of 100 percent of the completed value of the Work to be performed under this Contract. Deductible shall not exceed [$25,000]. Each loss shall be borne by Contractor.

D. Workers’ Compensation for all persons whom the Contractor may employ or subcontract in carrying out Work contemplated under Contract Documents, in accordance with the Act of Legislature of State of California, known as “Workers’ Compensation Insurance and Safety Act,” approved May 26, 1913, and all acts amendatory or supplemental thereto, in the statutory amount.

E. Workers’ Compensation including coverage under United States Longshoreman’s and Harbor Worker Act, for all persons whom the Contractor may employ or subcontract in carrying out Work contemplated under Contract Documents, in accordance with the Act of Legislature of State of California, known as “Workers’ Compensation Insurance and Safety Act,” approved May 26, 1913, and all acts amendatory or supplemental thereto, in the statutory amount.

F. Employer’s Liability with limits no less than $1,000,000 Bodily Injury by Accident and $1,000,000 Bodily Injury by Disease.

G. Umbrella or Excess Liability insurance with limits of not less than $5,000,000 per occurrence and annual aggregate, except per occurrence only for Automobile Liability. Coverage is to be excess of Commercial General Liability, Automobile Liability and Employers Liability.

H. Railroad Protective Insurance with coverage of at least $3,000,000 per occurrence and $6,000,000 annual aggregate for work pursuant to this Agreement. The coverage under this policy shall be in effect during the construction. The policy shall be issued on a standard ISO form CG 00 35 or equivalent.

Port of Stockton Insurance and Indemnification Port Police Fusion Center 00821- 1


I. Professional Liability insurance for licensed professionals performing work pursuant to this Agreement in an amount of at least $3,500,000 per claim and per policy aggregate covering the licensed professionals’ errors and omissions. Any deductible or self-insured retention should not exceed $25,000.

J. Pollution Legal Liability – providing bodily injury and property damage with limits of not less than $5,000,000 per occurrence. Such insurance shall include coverage for any environmental damage and related remediation and cleanup costs. Any deductible or self-insured retention should not exceed $25,000. The coverage shall be in effect for the duration of the Project and for not less than 2 years following Final Completion of the Project.

K. All policies of insurance shall be placed with insurers acceptable to Port. The insurance underwriter(s) must be duly licensed to do business in the State of California and (other than for workers’ compensation) must have an A. M. Best Company rating of A-, VII or better. Required minimum amounts of insurance may be increased should conditions of Work, in opinion of Port, warrant such increase. Contractor shall increase required insurance amounts upon direction by Port.

L. Required Endorsements: The policies required under paragraphs 1.A, 1.B, 1.C, 1.D. 1.F and 1.J of this Document 00821 shall be endorsed, in a form and manner acceptable to Port, as follows:

1. Name Port of Stockton, its Board of Commissioners and their employees, representatives, consultants (including without limitation Architect/Engineer and Project Manager), and agents, as additional insured’s, but only with respect to liability arising out of the activities of the named insured.

2. Each such policy shall apply separately to each insured against whom claim is made or suit is brought.

3. Insurance shall be primary and no other insurance or self-insured retention carried or held by Port shall be called upon to contribute to a loss covered by insurance for the named insured.

4. Insurance shall contain a provision requiring the insurance carriers to waive their rights of subrogation against Port and all additional insured’s, as well as other insurance carriers for the Work

5. Declarations Pages Required. Contractor or its insurance broker shall submit a copy of the Declarations page for each policy under Sections 1.A thru 1. J above. The page shall include the name of the carrier, the policy number, the types of coverage and limits, the effective dates of the policy, and the broker’s name and license number.

M. Declarations Page and endorsements shall have clearly typed thereon Port Contract Number and title of Contract Documents. Written notice of cancellation, non-renewal, or reduction in coverage of any policy shall be mailed to Port (Attention: Cheryl Taylor) at the address listed in Document 00520 (Agreement), 30 Days in advance of the effective date of the cancellation, non-renewal, or reduction in coverage. Contractor shall maintain insurance in full force and effect during entire period of performance of Contract Documents. Contractor shall keep insurance in force during warranty and guarantee periods, except that Contractor may discontinue All-Risk Course of Construction Insurance after Final Payment, completion of project and sign off by the Port of Stockton. At time of making application for extension of time, and during all periods exceeding the Contract Time resulting from any cause, Contractor shall submit evidence that insurance policies will be in effect during requested additional period of time. Upon Port’s request, Contractor shall submit to Port, within 30 Days, copies of the actual insurance policies or renewals or replacements.

N. Contractor shall pay all insurance premiums, including any charges for required waivers of subrogation or the endorsement of additional insured’s. If Contractor fails to maintain insurance, Port may take out comparable insurance, and deduct and retain amount of premium from any sums due Contractor under Contract Documents.

O. If injury occurs to any employee of Contractor , Subcontractor or sub-subcontractor for which the employee, or the employee’s dependents in the event of employee’s death, is entitled to compensation from Port under provisions of the Workers’ Compensation Insurance and Safety Act, as amended, or for which compensation of any kind is claimed from Port, Port may retain out of sums due Contractor under Contract Documents,



amount sufficient to cover such compensation, as fixed by the Act, as amended, until such compensation is paid, or until it is determined that no compensation is due. If Port is compelled to pay compensation, Port may, in its discretion, either deduct and retain from the Contract Sum the amount so paid, or require Contractor to reimburse Port.

P. Nothing in this Document 00821 shall be construed as limiting in any way the extent to which Contractor or any Subcontractor may be held responsible for payment of damages resulting from their operations.

Q. All Subcontractors shall maintain the same insurance required in 1.A, 1.B, 1.D, 1.E (if applicable) and 1.I (if applicable) to be maintained by Contractor with respect to their portions of the Work, and Contractor shall cause the Subcontractors to furnish proof thereof to Port within ten Days of Port’s request.

R. The following provisions apply to each Principal Designer, and any other licensed professional engaged by Contractor to perform portions of the Work (“Professional”).

1. Each Professional shall maintain the following insurance at its sole cost and expense:

a. Provided such insurance is customarily required by Port when professionals engaged in the profession practiced by Professional directly contract with Port, Professional Liability Insurance, insuring against professional errors and omissions arising from Professional’s work on the Project, in an amount not less than $3,500,000 combined single limit for each occurrence. Any deductible or self-insured retention should not exceed $25,000. If Professional cannot provide an occurrence policy, Professional shall provide insurance covering claims made as a result of performance of Work on this Project and shall maintain such insurance in effect for not less than three years following Final Completion of the Project.

b. All insurance required by paragraphs 1.A, 1.B, 1.D, 1.E (if applicable), and 1.F of this Document 00821. Professional shall satisfy all other provisions of this Document 00821 relating to that insurance, including without limitation providing required insurance certificates (containing the required endorsements) and declarations pages before commencing its Work on the Project.

2. RESPONSIBILITY OF CONTRACTOR AND INDEMNIFICATION

A. Contractor’s Responsibility for the Work.

1. Except for damage caused by the sole negligence, willful misconduct or active negligence of Port or its agents, Contractor shall be solely responsible for any loss or damage that may happen to any part of the Work, materials or other things used in performing the work, injury, sickness, disease, or death of any person as a result of the Work, or resulting damage to property.

2. Port and each of its officers, employees, consultants and agents including, but not limited to the Board, Architect/Engineer and each Port Representative, shall not be liable or accountable in any manner for loss or damage that may happen to any part of the Work; loss or damage to materials or other things used or employed in performing the Work; injury, sickness, disease, or death of any person as a result of the Work; or damage to property resulting from any cause whatsoever except their sole negligence, willful misconduct or active negligence, and Contractor releases all of the foregoing persons and entities from any and all such claims.

3. With respect to third-party claims against Contractor, Contractor waives any and all rights to any type of express or implied indemnity against Port and each of its officers, employees, consultants and agents including, but not limited to Port, the Board, Architect/Engineer and each Port representative.

4. Contractor also waives subrogation rights under applicable insurance policies, to the greatest extent permitted by law, and will require this same waiver of subrogation by its subcontractors, in all policies of insurance, against all other project participants, to include Contractor, Subcontractors, Port, Architect Engineer, each Port representative, government agencies and inspectors.



B. Claims Arising From the Work

1. To the furthest extent permitted by law (including without limitation California Civil Code Section 2782 and, if and to the extent applicable, California Civil Code Section 2782.8), Contractor shall assume defense of, and indemnify and hold harmless, Port and each of its officers, employees, consultants and agents, including but not limited to the Board, Architect/Engineer and each Port representative, from claims, suits, actions, losses and liability of every kind, nature and description, including but not limited to claims and fines of regulatory agencies and attorney’s fees and consultant’s fees, directly or indirectly arising out of, connected with or resulting from performance of the Work, failure to perform the Work, or condition of the Work which is caused in whole or part by any act or omission of Contractor, Subcontractors, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable.

2. Contractor’s indemnity obligation shall not apply to any indemnified party to the extent of its sole negligence or willful misconduct; nor shall it apply to Port or other indemnified party to the extent of its active negligence.

C. Scope of Indemnification Obligation.

Approval or purchase of any insurance contracts or policies shall in no way relieve from liability nor limit the liability of Contractor, its Subcontractors of any tier, or the officers or agents of any of them. In the event of loss, however, Contractor shall give all required notices to all insurance carriers, and shall require its subcontractors to do the same. Port may, in its discretion, request evidence of such notices form Contractor.

D. Scope of Contract Limitations of Liability.

To the furthest extent permitted by law (including, without limitation, Civil Code Section 2782 and, if and to the extent applicable, Civil Code section 2782.8), the indemnities, releases of liability and limitations of liability, claims procedures, and limitations of remedy expressed throughout Contract Documents shall apply even in the event of breach of contract, negligence (active or passive), fault or strict liability of the party(is) indemnified, released, or limited in liability, and shall survive the termination, rescission, breach, abandonment, or completion of the Work or the terms of the Contract Documents.

END OF DOCUMENT



DOCUMENT 00822 APPRENTICESHIP PROGRAM


1. COMPLIANCE REQUIRED

A. Contractor and Subcontractors shall comply with the requirements of California Labor Code §§1776, 1777.5, and 1777.6 concerning the employment of apprentices by Contractor or Subcontractors. Willful failure to comply may result in penalties, including loss of the right to Bid on or receive public works contracts.

2. CERTIFICATION OF APPROVAL

A. California Labor Code §1777.5, as amended, requires a Contractor or Subcontractor employing tradespersons in any apprenticeable occupation to apply to the joint apprenticeship committee nearest the site of a public works project and which administers the apprenticeship program in that trade for a certification of approval. The certificate shall also fix the ratio of apprentices to journeypersons that will be used in performance of the Contract. The ratio of work performed by apprentices to journeypersons in such cases shall not be less than one hour of apprentices work for every five hours of labor performed by journeypersons (the minimum ratio for the land surveyor classification shall not be less than one apprentice for each five journeypersons), except:

1. When unemployment for the previous three month period in the area exceeds an average

of 15 percent; 2. When the number of apprentices in training in the area exceeds a ratio of one to five;

3. When a trade can show that it is replacing at least 1/30 of its membership through apprenticeship training on an annual basis state-wide or locally; or

4. Assignment of an apprentice to any work performed under a public works contract would

create a condition which would jeopardize his or her life or the life, safety, or property of fellow employees or the public at large or if the specific task to which the apprentice is to be assigned is of such a nature that training cannot be provided by a journeyperson.

3. FUND CONTRIBUTIONS

A. Contractor is required to make contributions to funds established for administration of apprenticeship programs if Contractor employs registered apprentices or journeypersons in any apprenticeable trade on such contracts and if other contractors on the public works site are making such contributions.

4. APPRENTICESHIP STANDARDS

A. Information relative to apprenticeship standards, wage schedules, and other requirements may be

obtained from the Director of the California Department of Industrial Relations, or from the Division of Apprenticeship Standards and its branch offices.

END OF DOCUMENT

Port of Stockton Apprenticeship Program Port Police Fusion Center

00822- 1


DOCUMENT 00910

ADDENDA

CONTRACT NUMBER 5-19-1 PORT OF STOCKTON


ADDENDUM NO. ____

_______________, 2019

This Addendum No. ______ (“Addendum”) is dated the date set forth above and modifies certain Bidding Documents issued by the Port of Stockton (“Port”) in connection with the Port’s PORT POLICE FUSION CENTER Contract No. 5-19-1. All capitalized terms not otherwise defined herein shall have the meanings provided in the Bidding Documents. There are no other amendments to the Bidding Documents other than those which are expressly contained in this Addendum. ACKNOWLEDGMENT OF RECEIPT OF ADDENDUM NO. _____ FOR THE PORT OF STOCKTON’S PORT POLICE FUSION CENTER PROJECT – Contract No. 5-19-1

ACKNOWLEDGMENT OF RECEIPT OF ADDENDUM NO. ___ FOR THE PORT OF STOCKTON’S PORT POLICE FUSION CENTER, CONTRACT NO. 5-19-1

Please sign and return this page only via email to [email protected] to acknowledge receipt of

Addendum No. ____ for this Project consisting of _____ pages.

x___________________________________________ _________________________________________ Signature Date ___________________________________________ Printed Name ___________________________________________ Company Name

END OF DOCUMENT

Port of Stockton Addendum No. ___ Port Police Fusion Center

00910- 1

mailto:[email protected]


SECTION 01100

SUMMARY PART 1 GENERAL 1.1 SUMMARY

A. Section includes:

1. Summary of Work and Work Restrictions including: • Work Covered By Contract Documents • Bid Item, Allowances, and Alternates • Compliance References • Compliance standards • Work Under Other Contracts • Future Work • Work Sequence • Work Days and Hours • Shutdown for Discovery of Cultural Resources • Cooperation of Contractor and Coordination with Other Work • Contractor Use of Site • Air Quality Standards • SWPPP, NPDES Permit • Construction Staking and Monument Protection • Protection of Existing Structures and Underground Facilities • Permits • Port-Furnished Products

1.2 WORK COVERED BY CONTRACT DOCUMENTS

A. Scope Of Work

The FUSION CENTER Project is a Technology and Security grant project, to provide the necessary infrastructure to satisfy Maritime Transportation Security Act requirements and implementation according to the Department of Homeland Security (DHS), Transportation Security Administration (TSA), and the US Coast Guard (USCG). Thus the scheduling and completion of this project is critical to the Port to succeed in achieving their objectives and commitments with respect to government grant funding.

This project consists of the construction of the new Port Fusion Center, Building 17A; a multi-departmental workspace with offices for the Port Police Department, USCG, DHS, and TSA TWIC offices. The new building will represent the original building that was demolished at the same location.

Scope of work includes the construction of a new efficient 1601 square foot, single-story, wood framed office structure on a new concrete pad foundation, and 6’ x 56’-6” covered walkway. The roof structure includes a combination of prefabricated / pre-engineered wood trusses and conventional wood framed construction, with a roof envelope of 50-year asphalt shingles over 30# felt, roof deck plywood, and roof insulation. The exterior wall envelope is a 3-coat plaster system over insulated wood framed walls, energy efficient dual paned windows, and hollow metal doors and frames.


Port Police 01100- 1 Summary Fusion Center


The mechanical, electrical, and plumbing systems will meet and exceed the California mandatory energy conservations requirements set forth in California Title 24, and the California Green Building Code. The electrical system will be energy efficient LED lighting and will include power connections to an Electric Vehicle charger.

The data communications systems for the building are a protected resource with port secure communications for the port office and externally protected resources for the TWIC facility. The building will be pre-wired to support multiple fixed workstations, mobile assets brought to the facility, and data devices, including infrastructure and pre-wiring to support the future installation of multi-source AV, secure video management and access control technologies. To ensure “continued operations” in the event of a disaster, the facility is designed to be powered by a mobile backup generator provided by the Port.

B. The Work of this Contract comprises construction of all the Work indicated, described in the

Specifications, Drawings, or otherwise required by the Contract Documents.

C. If Contractor requires additional fill, it shall obtain the fill from Port as provided in Part 2 below. Port shall charge Contractor $2.00 per cubic yard for fill. If possible, Contractor will pay for imported fill by deduction from next payment application; otherwise, amounts will be due within 30 days of receiving Port invoice.

D. Unless provided otherwise in the Contract Documents, all risk of loss to Work covered by

Contract Documents shall rest with Contractor until Final Acceptance of the Work.

E. Cost of maintenance of systems and equipment prior to Final Acceptance will be considered as included in Bid price and no direct or additional payment will be made therefore.

1.3 BID ITEMS, ALLOWANCES AND ALTERNATES

A. Any Bid item may be deleted from the Work and Contract Sum, in total or in part, prior to or after award of Contract without compensation in any form or adjustment of other Bid items or prices therefore.

B. Payment of all items is subject to provisions of Contract Documents

C. For all Bid items, furnish and install all Work, including connections to existing systems, indicated

and described in Specifications, Drawings, and all other Contract Documents. Work and requirements applicable to each individual Bid item, or unit of Work, shall be deemed incorporated into the description of each Bid item (whether Lump Sum or Unit Price).

D. Description of Bid \item is detailed in engineering plans. E. In order to mitigate the threat to Port Security and/or Port Operations, all existing equipment and

systems shall remain operational during all phases of the project, unless the Bidder is performing specific work as stated in the Contract Documents. Bidder shall obtain written authorization from the Port’s authorized Representative(s) at least five (5) business days prior to the; (i) removal of existing equipment/system(s) (ii) disabling of equipment/system(s) (iii) disruption of existing communications between existing equipment/system(s) (iv) maintenance of existing equipment/system(s).

F. Allowances: (N/A)

G. Alternates: (N/A)


FEMA Grant 2016-PU-00450 Contract No. 5-19-1 1.4 WORK UNDER OTHER CONTRACTS

A. None expected 1.5 FUTURE WORK A. None expected 1.6 WORK SEQUENCE

A. Construct Work in stages and at times to accommodate Port operation requirements during the construction period; coordinate construction schedule and operations with Port.

1.7 WORK DAYS AND HOURS

A. Work Days and hours: Monday-Friday inclusive, 7:00 a.m.-5:00 p.m. local time.

B. Work at the Site on weekends or holidays is permitted with prior approval.

C. Contractor will not be permitted to schedule utility shutdowns on Fridays. 1.8 SHUTDOWN FOR DISCOVERY OF CULTURAL RESOURCES

A. If discovery is made of items of historical archaeological or paleontological interest, immediately cease all Work in the area of discovery. Archaeological indicators may include, but are not limited to, dwelling sites, locally darkened soils, stone implements or other artifacts, fragments of glass or ceramics, animal bones, human bones, and fossils. After cessation of excavation, immediately contact Port. Do not resume Work until authorization is received from Port. When resumed, excavation or other activities shall be as directed by Port.

1.9 COOPERATION OF CONTRACTOR AND COORDINATION WITH OTHER WORK

A. Coordinate and cooperate with Port and any Port forces, or other contractors and forces, as required by Document 00700 (General Conditions), Paragraphs 6.B and 6.C.

1.10 PARTIAL OCCUPANCY/UTILIZATION REQUIREMENTS [N/A] 1.11 CONTRACTOR USE OF SITE

A. Confine operations at Site to areas permitted by Contract Documents, permits, ordinances, and laws.

B. Do not unreasonably encumber Site with materials or equipment.

C. Assume full responsibility for protection and safekeeping of products stored on premises.

D. Move any stored products that interfere with operations of Port or other contractor.

E. Coordinate parking, storage, staging, and Work areas with Port.

F. Port will provide a storage area for Contractor's equipment and materials.

G. Do not store construction materials in the Dripline of any tree.

H. Prior to commencement of Work or excavation, Contractor and the Port shall jointly survey the

area adjacent to the Project area making permanent note and record of such existing damage such



as cracks, sags or other similar damage. This record shall serve as a basis for determination of subsequent damage to structures, conditions or other existing improvements due to Contractor’s operations. All parties making the survey shall sign the official record of existing damage. Cracks, sags or damage of any nature to the adjacent Project area, not noted in the original survey but subsequently noted, shall be reported immediately to the Port.

I. Contractor shall follow all City ordinances in force during the duration of this Contract.

J. It is essential that the Contractor perform the Work with as little interference and disturbance as

possible to the surrounding neighborhood.

K. When suspect materials, outside the scope of Work, are encountered during the Work or restoration process, the Contractor shall immediately contact the Project Manager for evaluation and approval of the methods for dealing with the material.

1.12 AIR QUALITY STANDARDS

A. Ensure that idling time for all heavy equipment is minimized to reduce on-Site emissions.

B. Maintain equipment in good mechanical condition.

C. Cover trucks hauling dirt.

D. Limit dust emissions during periods of high winds (greater than 15 miles per hour).

E. Replace ground cover in disturbed areas as soon as possible.

F. Enclose, cover, water, or apply soil binders to exposed stockpiles.

G. Remove earth tracked onto neighboring paved roads at least once daily.

H. Limit equipment speed to 10 miles per hour in unpaved areas. I. Control dust and water at Site, during all phases of construction and on non-working days, until

Final Completion, per Section 10 and 7 of the Standard Specifications and this Section 01100. J. Without limiting the foregoing, at least fifty percent (50%) of off-road diesel-powered

construction equipment greater than 50 horsepower used by Contractor at the East Complex must be equipped with Tier 1 or cleaner engines, as defined in the U.S. EPA Nonroad Diesel Engine Rule (2204). Equipment not designed Tier 1 by the manufacturer may achieve the emissions requirement d4scribed herein by retrofitting the equipment with the highest level of CARB-Verified Diesel Emission Control System (VDECS) that is available.

1.13 SWPPP, NPDES Permit

A. Requirements for Storm Water Pollution Prevention Plan (SWPPP) and Compliance with State General Construction Activity Storm Water NPDES Permit are contained in Section 01340 (Safety Submittals).

Port’s normal approval time for the Fact Sheet is fourteen (14) days. (For further information or assistance, contact Environmental Manager, Jason Cashman at the Port

of Stockton.) When the area of land to be disturbed is one (1) or more acres the contractor must complete and

submit a “Notice of Intent” to the State Water Resources Control Board (SWRCB) and complete



any and all other requirements of the SWRCB. When the contractor receives approval from the SWRCB, he shall immediately notify the Port and submit in writing a copy of the Notice of Intent and Storm Water Pollution Prevention Plan.

(For further guidance, please refer to website: www.swrcb.ca.gov)

1.14 CONSTRUCTION STAKING AND MONUMENT PROTECTION

A. Notify Port 3 Business Days prior to the need for initial staking. Port will provide engineering surveys to establish construction stakes that in Port’s judgment are necessary to enable Contractor to proceed with the Work.

B. If Contractor finds any additional staking necessary, notify Port in writing 2 Business Days in

advance. Port shall have no liability for any inadequacy unless Contractor notifies Port and Port fails to cure within 3 Business Days of such notice.

C. Contractor shall be responsible for laying out the Work, shall protect and preserve the established

construction stakes and property monuments, and shall make no changes or relocations without the prior written approval of Port. Whenever Contractor knows or reasonably should know that any Work activity is likely to damage or destroy any construction stakes or property monuments, or require relocation because of necessary changes in grades or locations, provide at least 2 Business Days advance notice to Port. In any event, notify Port whenever any construction stakes or property monuments are lost or destroyed or require relocation because of necessary changes in grades or locations. Port shall replace or repair construction stakes or property monuments at Contractor’s expense.

D. Perform brush clearing and traffic control, as necessary, in Port’s sole judgment.

E. Illegible survey requests or requests for surveys without proper (at least 3 Business Days)

notification may result in delayed surveys. No extension of Contract Time will be allowed due to such delays.

F. If Port’s survey crews are not available to perform the survey staking following proper

notification, Contractor shall provide its own survey staking. Provide Port with Contractor’s survey staking information in writing within 3 Business Days after it becomes available to Contractor.

1.15 PROTECTION OF EXISTING STRUCTURES AND UNDERGROUND FACILITIES

A. The Drawings may indicate existing above- and below-grade structures, drainage lines, storm drains, sewers, water lines, gas lines, electrical lines, hot water lines, and other similar items and Underground Facilities that are known to Port.

B. Where overhead service to a structure, known to receive service, does not exist, then underground

service shall be assumed to exist. C. Attention is also directed to the existence of overhead power and telephone lines.

D. Perform pot-holing by hand within 24 inches (in any direction) of the Underground Facilities.

This may be done on an area-by-area basis, but shall be accomplished at least 7 Days in advance of the date of construction within such area.

E. In addition to reporting, if a utility is damaged, Contractor must take appropriate action as

provided in Document 00700 (General Conditions).


http://www.swrcb.ca.gov/


F. Additional compensation or extension of time on account of utilities not indicated or otherwise brought to Contractor’s attention including reasonable action taken to protect or repair damage shall be determined as provided in Document 00700 (General Conditions).

1.16 PERMITS

A. Permits that may be required, such as electrical, mechanical, rail road clearance, fire prevention, irrigation, grading, slope protection, tree cutting, etc., shall be obtained by Contractor.

PART 2 PRODUCTS 2.1 PORT-FURNISHED PRODUCTS

A. Port-Furnished Products:

1. Fill material will be made available at Roberts Island (a Port owned dredge placement reuse site approximately 7 miles one way).

2. Contractor shall notify Port at least three (3) weeks prior to obtaining fill material at Roberts

Island. Once Port receives the request for fill material Port will submit, on behalf of Contractor, a Notice of Intent for re-use of dredged material (NOI) to the Regional Water Quality Control Board, Central Valley Region. The Regional Water Quality Control Board, Central Valley Region, after review and approval of the NOI, will issue to Contractor a Notice of Applicability (NOA) for re-use of the dredged material. The cost of the NOI submittal shall be borne by Contractor and will not exceed five thousand dollars ($5,000.00).

3. Contractor shall make prior arrangements with Port for obtaining fill material from Roberts

Island (i.e., time, location on Roberts Island for obtaining fill material, etc.). 4. Contractor shall document the number of trucks and amount of material, in cubic yards,

placed in each truck for use at the job site and provide Port with a total volume of material removed from Roberts Island and used at the job site.

5. Contractor shall restore the Roberts Island site to its original condition or to a condition

suitable to Port for a dredge placement and reuse site.

C. Port's Responsibilities:

D. Contractor's Responsibilities: (N/A)

PART 3 EXECUTION – NOT USED

END OF DOCUMENT



DOCUMENT 01100

ATTACHMENT A SPECIAL PROVISIONS


Port Police Fusion Center FEMA Grant 2016-PU-00450 Contract No. 5-19-1

SPECIAL PROVISIONS – ATTACHMENT A

DESCRIPTION OF WORK The FUSION CENTER Project is a Technology and Security grant project, to provide the necessary infrastructure to satisfy Maritime Transportation Security Act requirements and implementation according to the Department of Homeland Security (DHS), Transportation Security Administration (TSA), and the US Coast Guard (USCG). Thus the scheduling and completion of this project is critical to the Port to succeed in achieving their objectives and commitments with respect to government grant funding.

1. FUSION CENTER

This project consists of the construction of the new Port Fusion Center, Building 17A; a multi-departmental workspace with offices for the Port Police Department, USCG, DHS, and TSA TWIC offices. The new building will represent the original building that was demolished at the same location.

Scope of work includes the construction of a new efficient 1601 square foot, single-story, wood framed office structure on a new concrete pad foundation, and 6’ x 56’-6” covered walkway. The roof structure includes a combination of prefabricated / pre-engineered wood trusses and conventional wood framed construction, with a roof envelope of 50-year asphalt shingles over 30# felt, roof deck plywood, and roof insulation. The exterior wall envelope is a 3-coat plaster system over insulated wood framed walls, energy efficient dual paned windows, and hollow metal doors and frames.


The mechanical, electrical, and plumbing systems will meet and exceed the California mandatory energy conservations requirements set forth in California Title 24, and the California Green Building Code. The electrical system will be energy efficient LED lighting and will include power connections to an Electric Vehicle charger.

The data communications systems for the building are a protected resource with port secure communications for the port office and externally protected resources for the TWIC facility. The building will be pre-wired to support multiple fixed workstations, mobile assets brought to the facility, and data devices, including infrastructure and pre-wiring to support the future installation of multi-source AV, secure video management and access control technologies.

To ensure “continued operations” in the event of a disaster, the facility is designed to be powered by a mobile backup generator provided by the Port.

The work to be done is shown on the following Plans:

Improvement Plans: CIVIL Package 1 Port of Stockton Fusion Building Sheet 1 – Topographic Sheet ARCHITECTURAL Package 2 Port of Stockton Fusion Center Sheet T1.1 – TITLE SHEET Sheet T2.1 – OCCUPANY PLAN / SYMBOLS / ABBREVIATIONS Sheet T2.2 – CODE COMPLIANCE / CALGREEN

Special Provisions 01100 A - 1 Attachment A


Sheet T3.2 – POSETD SIGNAGE – BUILDING ACCESSIBILITY Sheet A2.1 – DIMENSION / NOTATION FLOOR PLAN Sheet A2.3 – FOUNDATION PLAN Sheet A3.1 – EXTERIOR ELEVATIONS Sheet A4.1 – SECTIONS Sheet A5.1 – WALL SECTION Sheet A6.1 – DETAILS Sheet A7.1 – ROOF PLAN Sheet A8.1 – DOOR / WINDOW SCHEDULE Sheet A9.1 – REFLECTED CEILING PLAN Sheet A10.1 – FINISH SCHEDULE / INTERIOR ELEVATIONS

ELECTRICAL Package 3 Port of Stockton Fusion Building

Sheet E0.1– GENERAL NOTES Sheet E1.1 – EXISTING ELECTRICAL SITE PLAN & ELECTRICAL SITE PLAN Sheet E2.1 – LIGHTING FLOOR PLAN Sheet E3.1 – POWER FLOOR PLAN Sheet E4.1 – PANEL SCHEDULES, ELECTRICAL DETAILS, ONE LINE DIAGRAM & LEGEND Sheet ET24A – COMPLIANCE Sheet ET24B – COMPLIANCE Sheet ET24C – COMPLIANCE Sheet ET24D – COMPLIANCE

MECHANICAL Package 4 Port of Stockton Fusion Center

Sheet P2.1 – PLUMBING FLOOR PLAN Sheet P8.1 – PLUMBING SCHEDULES & DETAILS Sheet P8.2 – PLUMBING SPECIFICATIONS Sheet M2.1 – MECHANICAL FLOOR PLAN Sheet M8.1 – MECHANICAL SCHEDULES & DETAILS Sheet M8.2 – MECHANICAL DETAILS Sheet M8.3 – MECHANICAL SPECIFICATIONS Sheet M8.4 – MECHANICAL SPECIFICATIONS Sheet T24.1 – ENERGY CALCULATIONS Sheet T24.2 – ENERGY CALCULATIONS Sheet T24.3 – ENERGY CALCULATIONS

QUANTITIES The preliminary estimate of the quantities of work to be done and materials to be furnished as shown in the proposal are approximate only, being given as a basis for the comparison of bids. The Port of Stockton does not expressly or by implication agree that the actual amount of work will correspond therewith but reserves the right to increase or decrease the amount of any class or portion of the work or to omit portions of the work that may be deemed necessary or expedient by the Engineer. Additions or deletions in the quantity of work, as set forth in these specifications and accompanying drawings for lump sum items may be ordered by the Engineer after the contract price has been adjusted accordingly to the satisfaction of both the Contractor and the Port of Stockton and they have been accepted in writing by the Engineer.



MATERIALS The Contractor shall furnish for use under these special provisions all materials required to complete the project. Whenever any material is specified by name and/or number thereof, such reference shall be deemed to be used for the purpose of facilitating a description of the materials and establishing quality and shall be deemed and construed to be followed by the words, "or approved equal." No substitution will be permitted which has not been submitted ten (10) days prior to installation for approval by the Engineer. Sufficient description literature and/or samples must be furnished for any materials submitted as "equal" substitutes. All materials shall be guaranteed for a period of one (1) year against material defects and workmanship. SCHEDULING PROJECT WORK Prior to any work, the Contractor shall furnish the Engineer with a work progress schedule in writing delineating the anticipated work procedure. This schedule shall be kept current and the Engineer shall be notified in writing 48 hours in advance of any variation thereof. The Contractor shall also supply the Engineer with a telephone number or numbers where a duly authorized representative of the Contractor may be reached at any time. Prior to construction, a conference with the Contractor and Engineer concerning the schedule, storm water pollution plan, traffic control, shipping access requirements and job safety shall be held. CONSTRUCTION RIGHT-OF-WAY The Port of Stockton has acquired the necessary permits and agreements to perform the work within the area in which the improvements and appurtenances shall be located. The Contractor shall make his own arrangements, and pay all expenses for additional area required by him outside of the limits of the project, unless otherwise provided in the Special Provisions. CONSTRUCTION DETAILS: EXISTING FACILITIES Protection of existing facilities shall conform to all the applicable provisions in Section 15 of the Standard Specifications and these Technical Specifications. All known obstructions to the work are indicated on the attached plans. However, the Port cannot guarantee the accuracy of this information. The Contractor will be held responsible for the maintenance and protection of or damage of existing facilities, structures, obstructions, and all underground facilities shown on the plans or brought to the Contractor’s attention during the contract. The Contractor shall notify owner agencies for locations of utilities or facilities prior to excavation. Any damage, which is caused by the operations of the Contractor to any facility, utility, or structure, shall be immediately repaired by him to the satisfaction of the owning agency and the Engineer and no extra work or additional payment will be allowed or made for any repair of utilities, facilities, or structures damaged by the Contractor. SUSPENSION OF WORK AND SHUT DOWNS If contractor’s forces are shut down due to Port shipping operations without 48 hours of notification of the needed shutdown, the contractor’s crew and on site equipment in use at the time of the shutdown will be paid on force account. A filled-out force account work ticket must be signed by a Port representative or no compensation we be granted. If the shut down causes a loss of work day on the critical path, contractor will provide updated CPM monthly to be reviewed and



approved to grant additional working days. SAFETY OFFICER The Contractor will provide a full time, on site, safety officer, while work is completed on site at the Port. The safety officer will facilitate shutdowns and schedule work to reduce the impacts to the Port Operations & Tenants Safety officer will need to have an accepted résumé and interview with the Port of Stockton. Minimum 5 years’ experience being a safety officer is required. DUST CONTROL AND WATERING Dust control and watering shall conform to the provisions in Section 10 and 17 of the Standard Specifications and these Technical Specifications. At the request of the contractor, water for dust control and project construction will be furnished by the Port of Stockton without cost to the Contractor. Water is available from fire hydrants within the project area. Necessary precautions to prevent dust nuisance shall be taken during all phases of construction, on non-working days, and to final acceptance of the work. Full compensation for furnishing watering equipment and applying water shall be considered as included in the price paid for the various contract items of work, and no additional compensation will be allowed therefor ADJUSTING FRAMES AND COVERS TO GRADE Upon completion of placing the asphalt concrete, the Contractor shall be required to adjust all existing manhole frames, water valve frames, and miscellaneous facilities to within 1/8 inch of finished grade using new materials similar in character to those in the original structure. Raising devices may not be used without approval of the Engineer. Frames and covers broken or lost as a result of the Contractor's operations shall be replaced with new frames and covers conforming to the appropriate Standard Plan. Payment for adjusting manhole frames, water valve frames, and other miscellaneous facilities to grade shall be included in the contract price paid per the appropriate contract item and shall include full compensation for furnishing all labor, materials, adjusting facilities to grade, as shown on the plans and as specified under these Technical Specifications, and no additional compensation will be allowed therefore. AGGREGATE BASE Aggregate base shall be class 2 and shall conform to the provisions in Section 26, "Aggregate Bases" of the Standards Specifications and these special provisions. The aggregate shall be a maximum 3/4" size and graded per 26-1.02A of Standard Specifications and placed on a prepared subgrade at a specified depth as shown on the plans. Aggregate bases shall be delivered in uniform mixtures and free from pockets of coarse or fine material. Where required thickness is 0.50 foot or less, the base may be spread and compacted in one layer. In areas where the thickness is more than 0.50 feet, the base material shall be spread and compacted in two (2) layers of approximately equal thickness. Each layer shall be spread and compacted in a similar manner. The finish surface of the base shall not vary more than 0.05 foot above or below the established grade. The contract price paid per ton of aggregate base shall include full compensation for furnishing all labor, materials, tools, and equipment for doing all work involved in placing and compacting the aggregate base as shown on the plans and as specified under the Standard Specifications and these special provisions, and no additional compensation will be allowed.



EARTHWORK Earthwork shall conform to the applicable provisions in Section 19 of the Standard Specifications and these special provisions. Excess material shall be removed from the site. CONCRETE Concrete shall conform to Sections 40 and 90 of the standard specifications and the project plans. REINFORCING Rebar to be grade 60 type A615 in all location unless noted higher grade. Laps to be 48bd unless noted otherwise.

MOBILIZATION Mobilization shall conform to the provisions in Section 11 of the Standard Specifications.

CLEARING AND GRUBBING Clearing and grubbing shall conform to the provisions in Section 16 of the Standard Specifications

STEEL STRUCTURES Steel erection shall be performed in a professional workman like manner. Field cutting and welding will be required. Measure will be required to prevent falling debris from falling into the water. All steel work shall conform to section 55 of the Standard Specifications.

PAVEMENT MARKERS Pavement Markers shall conform to the provisions in Section 85 of the Standard Specifications.

WATER POLLUTION CONTROL Water Pollution control shall conform to the provisions in Section 7-7-1.01G of the Standard Specification and these special provisions. The Contractor shall be responsible for the preparation and implementation of a Storm Water Pollution Prevention Plan (SWPPP) and the filing of any required notices to the State of California. The SWPPP shall be in conformance with the requirements of the State’s Storm Water Pollution Prevention Plan and Water Pollution Control Program Preparation Manual, and the Construction Site Best Management Practices Manual. WATER PIPE Water pipe will be schedule 80 with solvent weld connections unless otherwise specified. Suspended pipe to be in compliance with manufactures recommendation for strapping and bracing. Anticipate supports at 5’ on center with additional support at bends. Water lines to be pressurized at 200 psi for 2 hours without substantial pressure drop. Water line to super chlorinated to 50 ppm flushed and then have bacteriological test. Paint water pipe with approved PVC coating with 2 coats for conduit not in conduit bay. Color Blue ELECTRICAL CONDUIT Conduit will be schedule 80 with solvent weld connection unless otherwise specified. Installation shall be in a professional manner. Suspended conduit to be in compliance with manufactures recommendation for strapping and bracing. Anticipate supports at 5’ on center with additional support at each bends. Paint conduit with approved PVC coating with 2 coats for conduit not in conduit bay. Electrical conduit to be white. Data conduit to be white. TRAFFIC CONTROL Traffic control shall conform to the applicable provisions in Section 12 of the Standard Specifications, the MUTCD California Supplement, and these Technical Specifications. The Contractor will be required to keep all residents and businesses notified of the work schedule as it affects their access. The roads shall remain open at all times. If the contractor anticipates a necessary road closure, he shall inform the Port of such 7 days in advance, receive Port permission and prepare a detour plan acceptable to the Port. The Contractor shall be responsible for supplying, installing and maintaining such fences, barriers, lights, signs and flagging personnel as are necessary to give adequate warning to the public at all times that the road or street is under construction and of any dangerous conditions to be encountered as a result thereof.



All barricades to be used at night shall be reflectorized with "reflective sheeting" a minimum of fifty (50) square inches of reflective sheeting shall be used on each side of the barricade. Reflective-type paint will not be acceptable. All flagging personnel shall wear brilliant fluorescent red or orange jackets while flagging traffic. ASPHALT CONCRETE Asphalt Concrete shall conform to the requirements in Section 39, "Asphalt Concrete," of the Standard Specifications and these Technical Specifications.

PAVEMENT REINFORCING FABRIC Paving Fabric shall conform to Section 96 of the Standard Specifications. SURVEYING The Port will provide one set of survey stakes for the required work. It is the Contractor's responsibility to protect said survey markers. Additional survey work and re-staking of lost or destroyed survey markers will be done by the Port at the Contractor's expense. CLEANUP This work shall consist of cleaning up of the site and facility. Upon completion of the work, the Contractor shall clean the site of all debris and waste materials. All concrete edges of the walkways shall be backed with dirt and tamped in place. Disturbed or displaced plantings or other landscape elements shall be put back in place or replaced accordingly. No measurement for separate payment shall be made for any of the work specified in this section, and all costs in accordance therewith shall be considered as included in the contract price for the item to which the work is pertinent. FINISHING ROADWAY Finishing roadway shall conform to the provisions in Section 22 of the Standard Specifications and these Technical Specifications. Upon completion of the work, and prior to requesting final inspection, the work area shall be thoroughly cleaned of all rubbish, construction forms, stakes, excess material, and equipment, and all portions of the work shall be left in a neat and orderly condition. The final inspection will not be made until this has been accomplished. Full compensation for finishing roadway shall be considered as included in the price paid for the various contract items of work requiring finishing, and no additional compensation will be allowed therefore. TRAFFIC STRIPES AND PAVEMENT MARKINGS Materials for traffic stripes and pavement markings shall conform to the provisions in Section 84 of the Standard Specifications and shall be thermoplastic. In the case where only a portion of a pavement marking is disrupted, the entire pavement marking element shall be replaced, including removal of existing markings if necessary. The contract price paid for traffic stripes and pavement markings shall include full compensation for furnishing all labor, materials, tools, and equipment and for doing all the work involved in placing the stripes and markings as shown on the plans and as specified under these Technical Specifications.

END OF SECTION Special Provisions 01100 A - 6 Attachment A


DOCUMENT 01100

ATTACHMENT B CONSTRUCTION MANAGEMENT FACT SHEET


Port of Stockton Construction Management Fact Sheet

CMFS Page 1 Rev. 06/01/2015

NOTE: This fact sheet is required to be completed and signed by the construction project owner/operator who plans to conduct construction activities on Port property. This form must be submitted to the Port of Stockton’s Environmental Department prior to the commencement of soil disturbing activities. For sites:

Less than one acre: Submit Sections 1, 2, 4, and 5 at least 3 business days prior to the startof soil disturbing activities. Applies to CGP Waiver projects.

One acre or greater: Submit Sections 1, 2, 3, and 5 at least 5 business days prior to start ofsoil disturbing activities

A Notice to Proceed is required before any construction activities commence and will be issued once all required documentation and documents have been approved.

Section 1: Contact Information

PROJECT OWNER’S NAME:

Address:

PROJECT MANAGER:

Company Name:

Telephone #:

Email Address:

ON-SITE RESPONSIBLE PERSON:

Company Name:

Telephone #:

Email Address:

Section 2: General Project Information

Project Name:

Location

Start Date: Est. Completion Date:

Project Size: Acres or Sq. Feet

Only complete Section 3 if the project has soil disturbance equal to 1 acre or greater or is part of a larger common plan and it is not a “waiver” site as described by the Construction General Permit:

Section 3: Construction General Permit Information

Risk Level / LUP Type (circle one): Risk Level 1 Risk Level 2 LUP Type 1 LUP Type 2

WDID #:

QSD (Name and Company):

Telephone #:

Email Address:

QSP (Name and Company):

Telephone #:

Email Address:


CASQA BMP Fact Sheets can be obtained at: www.casqa.org

Section 4: Small Site Water Pollution Control Plan

Waste Management BMPS: indicates mandated BMP

CASQA Fact

Sheet

BMP Name Meets a

Minimum

Requirement

BMP used If not used, state reason:

YES NO

WM‐01 Material Delivery and Storage

WM‐02 Material Use

WM‐03 Stockpile Management

WM‐04 Spill Prevention and Control

WM‐05 Solid Waste Management

WM‐06 Hazardous Waste Management

WM‐07 Contaminated Soil Management

WM‐08 Concrete Waste Management

WM‐09 Sanitary‐Septic Waste Management

WM‐10 Liquid Waste Management

Alternate BMPs Used: If used, state reason:

Erosion Control BMPS: indicates mandated BMP; Must use at least one BMP indicated with *.

CASQA Fact

Sheet

BMP Name Meets a

Minimum

Requirement

BMP used If not used, state reason:

YES NO

EC‐1 Scheduling

EC‐2 Preservation of Existing Vegetation

EC‐3 Hydraulic Mulch *

EC‐4 Hydroseed *

EC‐5 Soil Binders *

EC‐6 Straw Mulch *

EC‐7 Geotextiles and Mats *

EC‐8 Wood Mulching *

EC‐9 Earth Dike and Drainage Swales

EC‐10 Velocity Dissipation Devices

EC‐11 Slope Drains

EC‐12 Stream Bank Stabilization

EC‐14 Compost Blankets *

EC‐15 Soil Preparation‐Roughening

EC‐16 Non‐Vegetated Stabilization *

WE‐1 Wind Erosion Control



Sediment Control BMPS: indicates mandated BMP; Must use at least one BMP indicated with *.

CASQA Fact

Sheet BMP Name

Meets a

Minimum

Requirement

BMP used If not used, state reason

YES NO

SE‐1 Silt Fence *

SE‐2 Sediment Basin

SE‐3 Sediment Trap

SE‐4 Check Dams

SE‐5 Fiber Rolls *

SE‐6 Gravel Bag Berm *

SE‐7 Street Sweeping

SE‐8 Sandbag Barrier *

SE‐10 Storm Drain Inlet Protection

TC‐1 Stabilized Construction Entrance and

Exit

TC‐2 Stabilized Construction Roadway


Non‐storm Water Control BMPS: indicates mandated BMP; Must use at least one BMP indicated with *.

CASQA

Fact Sheet BMP Name

Meets a

Minimum

Requirement

BMP used If not used, state reason

YES NO

NS‐2 Dewatering Operation

NS‐3 Paving and Grinding Operation

NS‐8 Vehicle and Equipment Cleaning

NS‐9 Vehicle and Equipment Fueling

NS‐10 Vehicle and Equipment Maintenance

NS‐11 Pile Driving Operation

NS‐12 Concrete Curing

NS‐13 Concrete Finishing

NS‐14 Material and Equipment Use Over Water

NS‐15 Demolition Removal Adjacent to Water

NS‐16 Temporary Batch Plants



Section 5: Storm Water Development Standards Plan

The Port of Stockton has State‐mandated requirements for the management of storm water runoff from new development and redevelopment. These requirements are described in the Port’s Storm Water Development Standards Plan (DSP) and include storm water pollution mitigation measures that are required to be incorporated into the design of development or redevelopment projects. They are called post‐construction control measures, because they are the features of your project which will be left in place (after the silt fence and straw wattle have been removed) to reduce the quantity of storm water runoff and to improve the quality of the runoff that does occur.

“Significant Redevelopment” is defined as the creation or addition of at least 5,000 sq. ft. of impervious surfaces on an already developed site. It includes, but is not limited to: expansion of a building footprint; replacement of a structure; replacement of an impervious surface; and land‐disturbing activities related to structural or impervious surfaces.

Is my proposed project a new development or significant redevelopment of at least 5,000 sq. ft of impervious surface on a developed site?

Yes Call the Port's Environmental Department for a copy of the DSP. No

The Port has three different drainage zones. Each zone has additional development standards to protect water quality and to manage storm water. These zone‐specific standards must be met in addition to the minimum standards for all sites at the Port.

Where is my project located?

Authorization

___________________________________ _____________________________________ Project Owner/Operator or Authorized Agent Port Representative

__________________________________ _______________________________________ Company Title

________________________________ ________________________________ Date Date

Questions? Call the Port of Stockton Environmental Dept. (209) 946‐0246


DIVISION 1 GENERAL REQUIREMENTS

SECTION 01200

MEASUREMENT AND PAYMENT PORT POLICE FUSION CENTER

PART 1 GENERAL

1.1 SUMMARY

A. Section includes description of requirements and procedures for determining amount of Work performed and for obtaining payment for Work performed.

1.2 REFERENCES

A. California Public Contract Code B. Code of Civil Procedure C. Government Code D. Office of Homeland Security (OHS) - www.homeland.ca.gov

1.3 SCOPE OF WORK

Work under Contract Documents, or under any Bid Item, allowance, or alternate, shall include all labor, materials, taxes, transport, handling, storage, supervision, administration, and all other items necessary for the satisfactory completion of Work, whether or not expressly specified or indicated.

1.4 DETERMINATION OF QUANTITIES

Quantity of work to be paid for under any item for which a unit price is fixed in Contract Documents shall be number, as determined by Port, of units of work satisfactorily completed in accordance with Contract Documents or as directed by Port. Unless otherwise provided, determination of number of units of work so completed will be based, so far as practicable, on actual measurement or count within prescribed or ordered limits, and no payment will be made for work done outside of limits. Measurements and computations will be made by methods set forth in Contract Documents, including without limitation this Section 01200. If methods are not so set forth, measurements shall be made in any manner which Port considers appropriate for class of Work measured (e.g., pre-assigned values, percentage completion, units completed or incremental milestones). Contractor must immediately inform Port of any disputes regarding quantity measurements and shall immediately supply Port with any documentation supporting the disputed measurements.

1.5 SCOPE OF PAYMENT

A. Except as otherwise expressly stated in Section 01100 (Summary of Work), payment to Contractor at the unit price or other price fixed in Contract Documents for performing Work required under any item, or (if the Contract is on a single lump sum price basis) at the lump sum price fixed in the Contract Documents for performing all Work required under Contract Documents, and as either may be adjusted pursuant to any approved Change Order or Construction Change Directive, shall be full compensation for completing, in accordance with Contract Documents, all Work required under the item or under Contract Documents, and for all expense incurred by Contractor for any purpose in connection with the performance and completion of said Work, including all incidental work necessary for completion of the Work.

B. The Contract Sum, whether lump sum, unit price or otherwise, shall be deemed to include all costs necessary to complete required Work, all costs (if any) for loss or damage arising from nature of Work or prosecution of the Work, and from action of elements. Unless Contract Documents expressly provide otherwise, the Contract Sum shall be deemed to include: 1. Any and all costs arising from any unforeseen difficulties which may be encountered during, and all risks

of any description connected with, prosecution of Work or prosecution of Bid Item (whether lump sum or unit price) until acceptance by Port;

Port of Stockton Measurement and Payment Port Police Fusion Center 01200- 1


2. All expenses incurred due to suspension, or discontinuance of Work or discontinuance of Bid Item (whether lump sum or unit price) as provided in Contract Documents;

3. Escalation to allow for cost increases between time of Contract Award and completion of Work or completion of Bid Item (whether lump sum or unit price).

C. Whenever it is specified herein that Contractor is to do work or furnish materials of any class for which no price is fixed in Contract Documents, it shall be understood that Contractor is to do such work or furnish such materials without extra charge or allowance or direct payment of any sort, and that cost of doing work or furnishing materials is to be included in price Bid, unless it is expressly specified herein, in particular cases, that work or material is to be paid for as extra work.

D. Unit Prices shall apply to work covered by unit prices so long as actual quantities performed on the Project are not less than 75 percent or greater than 125 percent of the estimated quantities contained in Document 00400 (Bid Form) or otherwise referenced in Document 00100 (Summary of Work). If actual quantities exceed these parameters, then the unit price shall be adjusted by an amount to reflect Contractor’s incremental cost differential resulting from increased or decreased economies of scale.

E. No payment shall be made for materials or equipment not yet incorporated into the Work, except as specified in Section 01100 (Summary).

F. Port may, in its discretion, where Contractor requests payment on the basis of materials and equipment not incorporated in the Work, Contractor must satisfy the following conditions: 1. The materials and/or equipment shall be delivered and suitably stored at the Site or at another local location

agreed to in writing, for example, a mutually acceptable warehouse; 2. Full title to the materials and/or equipment shall vest in Port at the time of delivery to the Site, warehouse

or other storage location; 3. Obtain a negotiable warehouse receipt, endorsed over to Port for materials and/or equipment stored in an

off-site warehouse. No payment will be made until such endorsed receipts are delivered to Port; 4. Stockpiled materials and/or equipment shall be available for Port inspection, but Port shall have no

obligation to inspect them and its inspection or failure to inspect shall not relieve Contractor of any obligations under the Contract Documents. Materials and/or equipment shall be segregated and labeled or tagged to identify these specific Contract Documents;

5. After delivery of materials and/or equipment, if any inherent or acquired defects are discovered, defective materials and/or equipment shall be removed and replaced with suitable materials and/or equipment at Contractor’s expense;

6. At Contractor’s expense, insure the materials and/or equipment against theft, fire, flood, vandalism, and malicious mischief, as well as any other coverages required under the Contract Documents;

7. Contractor’s Application for Payment shall be accompanied by a bill of sale, invoice or other documentation warranting that Port has received the materials and equipment free and clear of all liens and evidence that the materials and equipment are covered by appropriate property insurance and other arrangements to protect Port’s interest therein, all of which must be satisfactory to Port. This documentation shall include, but not be limited to, conditional releases of mechanics’ liens and stop notices from all those providing materials and equipment as to which the Application for Payment relates, as well as unconditional releases of the same from the same as to the previous Application for Payment for which they have not already been provided.

G. Amounts previously paid for materials and equipment prior to incorporation into the Work shall be deducted from amounts otherwise due Contractor as they are incorporated.

1.6 BASIS OF PAYMENT

A. Unit Price Quantities: When estimated quantity for specific portions of Work is listed in Bid Form, quantity of Work to be paid for shall be actual number of units satisfactorily completed, as determined by Port and certified by Contractor, in accordance with Contract Documents.

B. Lump Sum: When estimated quantity for specific portion of Work is not indicated and unit is designated as lump sum, payment will be on a lump sum basis for Work satisfactorily completed in accordance with Contract Documents.

C. Allowances: Allowance items (if any) will be paid for as provided in Section 01100 (Summary). Funds authorized for Allowance work will not be released for Contract payments unless Port has authorized Allowance work in writing.



D. Port does not expressly, or by implication, agree, warrant, or represent in any manner, that actual amount of Work will correspond with amount shown or estimated and reserves right to increase or decrease amount of any class or portion of Work, to leave out entire Bid Item or Items, or to add work not originally included in Bid or Contract Documents, when in its judgment such change is in best interest of Port. No change in Work shall be considered a waiver of any other condition of Contract Documents. No claim shall be made for anticipated profit, for loss of profit, for damages, or for extra payment whatever, except as otherwise expressly provided for in Contract Documents, because of any differences between amount of work actually done and estimated amount as set forth herein, or for elimination of Bid Items.

1.7 PROGRESS PAYMENTS

A. If requested by Contractor, progress payments will be made monthly. B. Schedule of Values:

1. Within twenty Days from issuance of Notice of Award and prior to Contractor’s first Application for Payment, submit a detailed breakdown of its Bid by scheduled Work items and/or activities, including coordination responsibilities and Project Record Documents responsibilities. Where more than one Subcontractor comprises the work of a Work item or activity, the Schedule of Values shall show a separate line item for each subcontract. Furnish such breakdown of the total Contract Sum by assigning dollar values (cost estimates) to each applicable Progress Schedule network activity, which cumulative sum equals the total Contract Sum. The format and detail of the breakdown shall be as directed by Port to facilitate and clarify future progress payments to Contractor for direct Work under Contract Documents. This breakdown shall be referred to as the Schedule of Values.

2. Contractor’s overhead, profit, insurance, cost of bonds (except to the extent expressly identified in a Bid Item) and/or other financing, as well as “general conditions costs,” (e.g., Site cleanup and maintenance, temporary roads and access, off-Site access roads, temporary power and lighting, security, and the like), shall be prorated through all activities so that the sum of all the Schedule of Values line items equals Contractor’s total Contract Sum, less any allowances designated by Port. Scheduling, record documents and quality assurance control shall be separate line items.

3. Port will review the breakdown in conjunction with the Progress Schedule to ensure that the dollar amounts of this Schedule of Values are, in fact, fair market cost allocations for the Work items listed. Upon favorable review by Port, Port will accept this Schedule of Values for use. Port shall be the sole judge of fair market cost allocations.

4. Port will reject any attempt to increase the cost of early activities, i.e., “front loading,” resulting in an inaccurate reallocation of moneys until such “front loading” is corrected. Repeated attempts at “front loading” may result in suspension or termination of the Work for default, or refusal to process progress payments until such time as the Schedule of Values is acceptable to Port.

C. Applications for Payment: Contractor shall establish and maintain records of cost of the Work in accordance with generally accepted accounting practices. In addition: 1. On or before the 20th Day of each month (but after receipt of Port’s approval of the updated Schedule as

required by Section 01320 (Progress Schedules and Reports)), Contractor shall submit to Port five copies of an Application for Payment for the cost of the Work put in place during the period from the 15th Day of the previous month to the 15th Day of the current month. Such Applications for Payment shall be for the total value of activities completed or partially completed, including approved activity costs, based upon Schedule of Values prices (or Bid item prices if unit price) of all labor and materials incorporated in the Work up until midnight of the last Day of that one month period, less the aggregate of previous payments. Accumulated retainage shall be shown as separate item in payment summary. Contractor shall submit in a form acceptable to Port an itemized cost breakdown of Contractor’s record of Cost of the Work together with supporting data and any certification required by Port. If Contractor is late submitting its Application for Payment, that Application may be processed at any time during the succeeding one-month period, resulting in processing of Contractor’s Application for Payment being delayed for more than a Day for Day basis.

2. Applications for Payment may include, but are not necessarily limited to the following: a. Material, equipment, and labor incorporated into the Work, less any previous payments for the same; b. Up to 75 percent of the cost of equipment identified in paragraph 1.5F of this Section 01200 (if any), if

purchased and delivered to the Site or stored off Site, as may be approved by Port.



c. Up to 50 percent of the cost of materials identified in paragraph 1.5F of this Section 01200 (if any), specifically fabricated for the Project that are not yet incorporated into the Work.

3. At the time any Application for Payment is submitted, certify in writing the accuracy of the Application and that Contractor has fulfilled all scheduling requirements of Document 00700 (General Conditions) and Section 01320 (Progress Schedules and Reports), including updates and revisions. A responsible officer of Contractor shall execute the certification.

4. No progress payment will be processed prior to Port receiving all requested, acceptable schedule update information. Failure to submit a schedule update complying with Section 01320 justifies denying the entire Application for Payment.

5. Each Application for Payment shall list the Project Name, Contract No., Grant No. (if applicable), and the Capitol Project No. (if applicable) provided in this Document and/or available by the Port. Submitted invoices that do not properly identify this information will be returned and may cause delays in reimbursement.

6. Each Application for Payment shall list each Change Order and Construction Change Directive (“CCD”) executed prior to date of submission, including the Change Order/CCD Number, and a description of the work activities, consistent with the descriptions of original work activities. Submit a monthly Change Order/CCD status log to Port.

7. If Port requires substantiating data, submit information requested by Port, with cover letter identifying Project, Application for Payment number and date, and detailed list of enclosures. Submit one copy of substantiating data and cover letter for each copy of Application for Payment submitted.

8. If Contractor fails or refuses to participate in work reconciliations or other construction progress evaluation with Port, Contractor shall not receive current payment until Contractor has participated fully in providing construction progress information and schedule update information to Port.

D. Progress Payments 1. Port will review Contractor’s Application for Payment following receipt. If adjustments need to be made to

percent of completion of each activity, Port will make appropriate notations and return to Contractor. Contractor shall revise and resubmit. All parties shall update percentage of completion values in the same manner, i.e., express value of an accumulated percentage of completion to date.

2. Each Application for Payment may be reviewed by Port and/or inspectors to determine whether the Application for Payment is proper, and shall be rejected, revised, or approved by Port pursuant to the Schedule of Values prepared in accordance with paragraph 1.7B of this Section 01200.

3. If it is determined that the Application for Payment is not proper and suitable for payment, Port will return it to Contractor as soon as practicable, but no later than seven Days after receipt, together with a document setting forth in writing the reasons why the Application for Payment is not proper. If Port determines that portions of the Application for Payment are not proper or not due under the Contract Documents, then Port may approve the other portions of the Application for Payment, and in the case of disputed items or defective Work not remedied, may withhold up to 150 percent of the disputed amount from the progress payment.

4. Pursuant to Public Contract Code Section 20104.50, if Port fails to make any progress payment within 30 Days after receipt of an undisputed and properly submitted Application for Payment from Contractor, Port shall pay interest to Contractor equivalent to the legal rates set forth in subdivision (a) of Section 685.010 of the Code of Civil Procedure. The 30-Day period shall be reduced by the number of Days by which Port exceeds the seven-Day return requirement set forth herein.

5. As soon as practicable after approval of each Application for Payment for progress payments, Port will pay to Contractor in manner provided by law, an amount equal to 90 percent of the amounts otherwise due as provided in the Contract Documents, or a lesser amount if so provided in Contract Documents, provided that payments may at any time be withheld if, in judgment of Port, Work is not proceeding in accordance with Contract, or Contractor is not complying with requirements of Contract, or to comply with stop notices or to offset liquidated damages accruing or expected.

6. Before any progress payment or final payment is due or made, Contractor shall submit satisfactory evidence that Contractor is not delinquent in payments to employees, Subcontractors, suppliers, or creditors for labor and materials incorporated into Work. This specifically includes, without limitation, conditional lien release forms for the current progress payment and unconditional release forms for past progress payments. Port also may elect in its sole discretion to pay progress payments by joint check to Contractor and each Subcontractor having an interest in that progress payment in such amount.



7. Port reserves and shall have the right to withhold payment for any equipment and/or specifically fabricated materials that, in the sole judgment of Port, are not adequately and properly protected against weather and/or damage prior to or following incorporation into the Work.

8. Granting of progress payment or payments by Port, or receipt thereof by Contractor, shall not be understood as constituting in any sense acceptance of Work or of any portion thereof, and shall in no way lessen liability of Contractor to replace unsatisfactory work or material, though unsatisfactory character of work or material may have been apparent or detected at time payment was made.

9. When Port shall charge sum of money against Contractor under any provision of Contract Documents, amount of charge shall be deducted and retained by Port from amount of next succeeding progress payment or from any other moneys due or that may become due Contractor under Contract. If, on completion or termination of Contract, such moneys due Contractor are found insufficient to cover Port’s charges against it, Port shall have right to recover balance from Contractor or Sureties.

E. Retention Changes 1. Following satisfactory and timely completion of at least 50% of the total Work of the Contract Documents,

following Contractor’s request, Port may, in its sole discretion, elect to do one or more of the following: a. Notwithstanding paragraph 1.7.D.5 above, pay any or all subsequent Applications for Payment for

progress payments at the rate of 95 percent of the amounts otherwise due. b. Release to Contractor any retention otherwise held by Port.

2. Port reserves the right to revoke any election under paragraph 1.7.E.1 at any time. 3. Nothing in this paragraph 1.7.E shall lessen or diminish any Port right or remedy, including without

limitation Port’s right to require Contractor to perform all Work within the time otherwise required in the Contract Documents.

1.8 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION

A. In accordance with the provisions of Public Contract Code Section 22300, substitution of securities for any moneys withheld under Contract Documents to ensure performance is permitted under following conditions: 1. At request and expense of Contractor, securities listed in Section 16430 of the Government Code, bank or

savings and loan certificates of deposit, interest bearing demand deposit accounts, standby letters of credit, or any other security mutually agreed to by Contractor and Port which are equivalent to the amount withheld under retention provisions of Contract shall be deposited with Controller or with a state or federally chartered bank in California, as the escrow agent, who shall then pay such moneys to Contractor. Upon satisfactory completion of Contract, securities shall be returned to Contractor.

2. Alternatively, Contractor may request and Port shall make payment of retentions earned directly to the escrow agent at the expense of Contractor. At the expense of Contractor, Contractor may direct the investment of the payments into securities and receive the interest earned on the investments upon the same terms provided for in this Section 01200 for securities deposited by Contractor. Upon satisfactory completion of Contract Documents, Contractor shall receive from escrow agent all securities, interest, and payments received by the escrow agent from Port, pursuant to the terms of this Section 01200. Pay to each Subcontractor, not later than 20 Days after receipt of the payment, the respective amount of interest earned, net of costs attributed to retention withheld from each Subcontractor, on the amount of retention withheld to insure the performance of Contractor.

3. Contractor shall be beneficial owner of securities substituted for moneys withheld and shall receive any interest thereon.

4. Enter into escrow agreement with Controller according to Document 00680 (Escrow Agreement for Security Deposits in Lieu of Retention), as authorized under Public Contract Code Section 22300, specifying amount of securities to be deposited, terms and conditions of conversion to cash in case of default of Contractor, and termination of escrow upon completion of Contract Documents.

5. Public Contract Code Section 22300 is hereby incorporated in full by this reference.

1.9 FINAL PAYMENT

A. As soon as practicable after all required Work is completed in accordance with Contract Documents, including punchlist, testing, record documents and Contractor maintenance after Final Acceptance, Port will pay to Contractor, in manner provided by law, unpaid balance of Contract Sum of Work (including without limitation retentions), or whole Contract Sum of Work if no progress payment has been made, determined in accordance



with terms of Contract Documents, less sums as may be lawfully retained under any provisions of Contract Documents or by law.

B. Prior progress payments shall be subject to correction in the final payment. Port’s determination of amount due as final payment shall be final and conclusive evidence of amount of Work performed by Contractor under Contract Documents and shall be full measure of compensation to be received by Contractor.

C. Contractor and each assignee under an assignment in effect at time of final payment shall execute and deliver at time of final payment, and as a condition precedent to Port’s obligation to make final payment, Document 00650 (Agreement and Release of Any and All Claims) discharging Port, its officers, agents, employees, and consultants of and from liabilities, obligations, and claims arising under Contract Documents.

1.10 EFFECT OF PAYMENT

A. Payment will be made by Port, based on Port’s observations at the Site and the data comprising the Application for Payment. Payment will not be a representation that Port has: 1. Made exhaustive or continuous on-Site inspections to check the quality or quantity of Work; 2. Reviewed construction means, methods, techniques, sequences, or procedures; 3. Reviewed copies of requisitions received from Subcontractors and material suppliers and other data

requested by Port to substantiate Contractor’s right to payment; or 4. Made examination to ascertain how or for what purpose Contractor has used money previously paid on

account of the Contract Sum.

PART 2 PRODUCTS – NOT USED


END OF SECTION



SECTION 01250

MODIFICATION PROCEDURES PORT POLICE FUSION CENTER

PART 1 GENERAL 1.1 GENERAL `

A. Only Contractor or Port may initiate changes in scope of Work or deviation from Contract Documents.

1. Contractor may initiate changes by submitting a Request for Information (“RFI”), Notice

of Concealed or Unknown Conditions, or Notice of Hazardous Waste Conditions.

a. RFIs shall be submitted to seek clarification of or request changes in the Contract Documents.

b. Notices of Concealed or Unknown Conditions shall be submitted in accordance

with Document 00700 (General Conditions).

c. Notices of Hazardous Waste Conditions shall be submitted in accordance with Document 00700 (General Conditions).

2. Port may initiate changes by issuing a Supplemental Instruction, which may revise, add

to or subtract from the Work. 3. Port may initiate changes in the Work or Contract Time by issuing RFPs to Contractor.

Such RFPs will detail all proposed changes in the Work and request a quotation of changes in Contract Sum and Contract Time from Contractor.

4. Port may also, by Construction Change Directive (“CCD”), order changes in the Work

within the general scope of the Contract consisting of additions, deletions, or other revisions, the Contract Sum and Contract Time being adjusted accordingly. A CCD shall be used in the absence of total agreement on the terms of a Change Order and may, upon notice, consist of a Change Order executed by Port only.

1.2 PROCEDURES

A. Cost Proposal and Procedures: Whenever Contractor is required in this Section 01250 to prepare a Cost Proposal, and whenever Contractor is entitled to submit a Cost Proposal and elects to do so, Contractor shall prepare and submit to Port for consideration a Cost Proposal using the form attached to this Section 01250. All Cost Proposals must contain a complete breakdown of actual, current costs of credits, deducts, and extras; and itemizing materials, labor, taxes, overhead and profit. All Subcontractor Work shall be so indicated. Individual entries on the Cost Proposal form shall be determined as provided in this Section 01250. After receipt of a Cost Proposal with a detailed breakdown, Port will act promptly thereon.

1. If Port accepts a Cost Proposal, Port will prepare Change Order for Port and Contractor

signatures.

Port of Stockton Modification Procedure Port Police Fusion Center 01250- 1


2. If Cost Proposal is not acceptable to Port because it does not agree with cost and/or time

included in Cost Proposal, Port will submit in a response what it believes to be a reasonable cost and/or adjustment, if any. Except as otherwise provided in this Section 01250, Contractor shall have seven Days in which to respond to Port with a revised Cost Proposal.

3. When necessity to proceed with a change does not allow the Port sufficient time to

conduct a proper check of a Cost Proposal (or revised Cost Proposal), Port may order Contractor to proceed on basis to be determined at earliest practical date. In this event, value of change, with corresponding equitable adjustment to Contract, shall not be more than increase or less than decrease proposed.

B. Request for Information: Whenever Contractor requires information regarding the Project or

Contract Documents, or receives a request for information from a Subcontractor, Contractor may prepare and deliver an RFI to Port. Contractor shall use RFI format provided by Port. Contractor must submit time critical RFIs at least 30 Days before scheduled start date of the affected Work activity. Contractor shall reference each RFI to an activity of Progress Schedule and shall note time criticality of the RFI, indicating time within which a response is required. Contractor’s failure to reference RFI to an activity on the Progress Schedule and note time criticality on the RFI shall constitute Contractor’s waiver of any claim for time delay or interruption to the Work resulting from any delay in responding to the RFI.

1. Port will respond within seven Days from receipt of RFI with a written response to

Contractor. Contractor shall distribute response to all appropriate Subcontractors.

2. If Contractor is satisfied with the response and does not request a change in Contract Sum or Contract Time, then the response shall be executed without a change.

3. If Contractor believes the response is incomplete, Contractor shall issue another RFI

(with the same RFI number with the letter “A” indicating if it is a follow-up RFI) to Port clarifying original RFI. Additionally, Port may return RFI requesting additional information should original RFI be inadequate in describing condition.

4. If Contractor believes that the response results in change in Contract Sum or Contract

Time, Contractor shall notify Port in writing within seven Days after receiving the response. If Port disagrees with Contractor, then Contractor may give notice of intent to submit a Claim as described in Article 12 of Document 00700 (General Conditions), and submit its Claim within 30 Days. If Port agrees with Contractor, then Contractor must submit a Cost Proposal within 21 Days of receiving the response to the RFI. Contractor’s failure to deliver either the foregoing notice and Claim or Cost Proposal by the respective deadlines stated in the foregoing sentences shall result in waiver of the right to file a Cost Proposal or Claim.

C. Supplemental Instruction: Port may issue Supplemental Instruction to Contractor.

1. If Contractor is satisfied with Supplemental Instruction and does not request a change in Contract Sum or Contract Time, then Supplemental Instruction shall be executed without a Change Order.

2. If Contractor believes that Supplemental Instruction results in a change in Contract Sum

or Contract Time, then Contractor must submit a Cost Proposal to Port within 21 Days of receiving the Supplemental Instruction.



D. Construction Change Directives: If at any time Port believes in good faith that a timely Change

Order will not be agreed upon using the foregoing procedures, Port may issue a CCD with its recommended cost and/or time adjustment. Upon receipt of CCD, Contractor shall promptly proceed with the change of Work involved and concurrently respond to Port’s CCD within 10 Days.

1. Contractor’s response must be any one of following:

a. Return CCD signed, thereby accepting Port’s response, time, and cost. b. Submit a (revised if applicable) Cost Proposal with supporting documentation (if

applicable, reference original Cost Proposal number followed by letter A, B, etc. for each revision), if Port so requests.

c. Give notice of intent to submit a Claim as described in Article 12 of Document

00700 (General Conditions), and submit its Claim within 30 Days.

2. If the CCD provides for an adjustment to the Contract Sum, the adjustment shall be based on one of the following methods:

a. Mutual acceptance of a lump sum properly itemized and supported by sufficient

substantiating data to permit evaluation.

b. Unit prices stated in the Contract Documents or subsequently agreed upon.

c. Cost to be determined in a manner agreed. 3. CCD signed by Contractor indicates the agreement of Contractor therewith, including

adjustment in Contract Sum and Contract Time or the method for determining them. Such agreement shall be effective immediately and shall be recorded as a Change Order.

4. If Contractor does not respond promptly or disagrees with the method for adjustment in

the Contract Sum, the method and the adjustment shall be determined by Port on the basis of reasonable expenditures and savings of those performing the Work attributable to the change including, in case of an increase in the Contract Sum, a reasonable allowance for overhead and profit. If the parties still do not agree on the price for a CCD, Contractor may file a Claim per Article 12 of Document 00700 (General Conditions). Contractor shall keep and present, in such form as Port may prescribe, an itemized accounting together with appropriate supporting data. Unless otherwise provided in the Contract Documents, costs for the purposes of this paragraph shall be limited to those provided in this Section 01250.

5. Pending final determination of cost to Port, amounts not in dispute may be included in

Applications for Payment. The amount of credit to be allowed by Contractor to Port for a deletion or change that results in a net decrease in the Contract Sum shall be actual net cost as confirmed by Port. When both additions and credits covering related Work or substitutions are involved in a change, the allowance for overhead and profit shall be figured on the basis of net increase, if any, with respect to that change.

E. Port Requested RFP: Contractor shall furnish a Cost Proposal within 21 Business Days of Port’s

RFP. Upon approval of RFP, Port will issue a Change Order directing Contractor to proceed with extra Work. If the parties do not agree on the price for an RFP, Port may either issue a CCD or



decide the issue per Article 12 of Document 00700 (General Conditions). Contractor shall perform the changed Work notwithstanding any claims or disagreements of any nature.

F. Differing Site Conditions: Contractor shall submit Notices of Differing Site Conditions to

resolve problems regarding differing underground Site conditions encountered in the execution of the Work pursuant to Paragraph 13.4 of Document 00700 (General Conditions), which shall govern. If Port determines that a change in Contract Sum or Contract Time is justified, Port will issue RFP or CCD.

G. Hazardous Waste Conditions: Contractor shall submit Notices of Hazardous Waste Conditions to resolve problems regarding hazardous materials encountered in the execution of the Work pursuant to Paragraph 13.5 of Document 00700 (General Conditions), which shall govern. If Port determines that a change in Contract Sum or Contract Time is justified, Port will issue RFP or CCD.

1.3 COST DETERMINATION

A. Total cost of extra Work or of Work omitted shall be the sum of labor costs, material costs, equipment rental costs, and specialist costs as defined herein plus overhead and profit as allowed herein. This limit applies in all cases of claims for extra Work, whether calculating Cost Proposals, Change Orders or CCDs, or calculating claims of all types, and applies even in the event of fault, negligence, strict liability, or tort claims of all kinds, including strict liability or negligence. Contractor may recover no other costs arising out of or connected with the performance of extra Work, of any nature. No special, incidental or consequential damages may be claimed or recovered against Port, its representatives or agents, whether arising from breach of Contract, negligence, or strict liability, unless specifically authorized in the Contract Documents.

B. Overhead and Profit: (Overhead shall be as defined in this Section 01250)

1. On proposals covering both increases and decreases in Contract Sum, overhead, profit,

and commission shall be allowed on the net increase only as determined in this Section 01250. When the net difference is a deletion, no percentage for overhead profit and commission shall be allowed, but rather a deduction shall apply.

2. The markup shall include profit, small tools, cleanup, engineering, supervision,

warranties, cost of preparing the cost proposal, jobsite overhead, and home office overhead. No markup will be allowed on taxes, insurance, and bonds.

C. Taxes:

1. All State sales tax, use tax, and Sam Joaquin County and applicable City sales taxes shall

be included. 2. Federal and Excise tax shall not be included.

D. Port-Operated Equipment: When owner-operated equipment is used to perform extra Work,

Contractor will be paid for operator as follows:

1. Payment for equipment will be made in accordance with this Section 01250.



2. Payment for cost of labor will be made at no more than rates of such labor established by collective bargaining agreements for type of worker and location of Work, whether or not owner-operator is actually covered by such an agreement.

E. Accord and Satisfaction: Every Change Order and accepted CCD shall constitute a full accord

and satisfaction, and release, of all Contractor (and if applicable, Subcontractor) claims for additional time, money or other relief arising from or relating to the subject matter of the change including, without limitation, impacts of all types, cumulative impacts, inefficiency, overtime, delay, and any other type of claim. Contractor may elect to reserve its rights to disputed claims arising from or relating to the changed Work at the time it signs a Change Order or approves a CCD, but must do so expressly in a writing delivered concurrently with the executed Change Order or approved CCD, and must also submit a Claim for the reserved disputed items pursuant to Article 12 of Document 00700 (General Conditions) no later than 30 Days of Contractor’s first written notice of its intent to reserve rights.

1.4 COST BREAKDOWN

A. Labor: Contractor will be paid cost of labor for workers (including forepersons when authorized by Port) used in actual and direct performance of extra Work. Labor rate, whether employer is Contractor, Subcontractor or other forces, will be sum of following:

1. Actual Wages: Actual wages paid shall include any employer payments to or on behalf

of workers for health and welfare, pension, vacation, and similar purposes.

2. Labor Surcharge: Payments imposed by local, Port, state, and federal laws and ordinances, and other payments made to, or on behalf of, workers, other than actual wages as defined in Paragraph 1.4(A)(1) of this Section 01250, such as taxes and insurance. Labor surcharge shall be and shall not exceed that set forth in California Department of Transportation official labor surcharges schedule which is in effect on date upon which extra Work is accomplished and which schedule is incorporated herein by reference as though fully set forth herein.

B. Material: Only materials furnished by Contractor and necessarily used in performance of extra

Work will be paid for. Cost of such materials will be cost, including sales tax, to purchaser (Contractor, Subcontractor or other forces) from supplier thereof, except as the following are applicable:

1. If cash or trade discount by actual supplier is offered or available to purchaser, it shall be

credited to Port notwithstanding fact that such discount may not have been taken.

2. For materials salvaged upon completion of extra Work, salvage value of materials shall be deducted from cost, less discounts, of materials.

3. If cost of a material is, in opinion of Port, excessive, then cost of material shall be

deemed to be lowest current wholesale price at which material is available in quantities concerned delivered to Site, less any discounts as provided in this Section 01250.

C. Equipment Rental: For Contractor- or Subcontractor-owned equipment, payment will be made at

rental rates listed for equipment in California Department of Transportation official equipment rental rate schedule which is in effect on date upon which extra Work is accomplished and which schedule is incorporated herein by reference as though fully set forth herein. If there is no applicable rate for an item of equipment, then payment shall be made for Contractor- or Subcontractor-owned equipment at rental rate listed in the most recent edition of the Association



of Equipment Distributors (AED) book. For rented equipment, payment will be made based on actual rental invoices. Equipment used on extra Work shall be of proper size and type. If, however, equipment of unwarranted size or type and cost is used, cost of use of equipment shall be calculated at rental rate for equipment of proper size and type, as determined by Port. Rental rates paid shall be deemed to cover cost of fuel, oil, lubrication, supplies, small tools, necessary attachments, repairs and maintenance of any kind, depreciation, storage, insurance, and all incidentals. Unless otherwise specified, manufacturer’s ratings, and manufacturer-approved modifications, shall be used to classify equipment for determination of applicable rental rates. Individual pieces of equipment or tools not listed in said publication and having a replacement value of $100 or less, whether or not consumed by use, shall be considered to be small tools and no payment will be made therefor as payment is included in payment for labor. Rental time will not be allowed while equipment is inoperative due to breakdowns.

1. For equipment on Site, rental time to be paid for equipment shall be time equipment is in

operation on extra Work being performed or on standby as approved by Port. The following shall be used in computing rental time of equipment:

a. When hourly rates are listed, less than 30 minutes of operation shall be

considered to be ½ hour of operation.

b. When daily rates are listed, less than four hours of operation shall be considered to be ½ Day of operation.

2. For equipment that must be brought to Site to be used exclusively on extra Work, cost of

transporting equipment to Site and its return to its original location shall be determined as follows:

a. Port will pay for costs of loading and unloading equipment.

b. Cost of transporting equipment in low bed trailers shall not exceed hourly rates

charged by established haulers.

c. Cost of transporting equipment shall not exceed applicable minimum established rates of California Public Utilities Commission.

d. Port will not make any payment for transporting and loading and unloading

equipment if equipment is used on Work in any other way than upon extra Work.

3. Rental period may begin at time equipment is unloaded at Site of extra Work and

terminate at end of the performance of the extra Work or Day on which Port directs Contractor to discontinue use of equipment, whichever first occurs. Excluding Saturdays, Sundays, and Port’s legal holidays, unless equipment is used to perform extra Work on such Days, rental time to be paid per Day shall be four hours for zero hours of operation, six hours for four hours of operation and eight hours for eight hours of operation, time being prorated between these parameters. Hours to be paid for equipment that is operated less than eight hours due to breakdowns, shall not exceed eight less number of hours equipment is inoperative due to breakdowns.

D. Work Performed by Special Forces or Other Special Services: When Port and Contractor, by

agreement, determine that special service or item of extra Work cannot be performed by forces of Contractor or those of any Subcontractors, service or extra Work item may be performed by specialist. Invoices for service or item of extra Work on basis of current market price thereof may



be accepted without complete itemization of labor, material, and equipment rental costs when it is impracticable and not in accordance with established practice of special service industry to provide complete itemization. In those instances wherein Contractor is required to perform extra Work necessitating a fabrication or machining process in a fabrication or machine shop facility away from Site, charges for that portion of extra Work performed in such facility may, by agreement, be accepted as a specialist billing. Port must be notified in advance of all off-Site Work. In lieu of overhead and profit provided in Paragraph 1.3B of this Section 01250, 15 percent will be added to specialist invoice price, after deduction of any cash or trade discount offered or available, whether or not such discount may have been taken.

1.5 FORCE-ACCOUNT WORK

A. If it is impracticable because of nature of Work, or for any other reason, to fix an increase or decrease in price definitely in advance, the Contractor may be directed to proceed at a not-to-exceed (NTE) maximum price which shall not under any circumstances be exceeded. Subject to such limitation, such extra Work shall be paid for at actual necessary cost for Force-Account Work or at the negotiated cost, as determined by Port. The cost for Force-Account Work shall be determined pursuant to this Section 01250.

B. Force-Account Work shall be used when it is not possible or practical to price out the changed

Work prior to the start of that Work. In these cases, Force-Account Work will be utilized during the pricing and negotiation phase of the change. Once negotiations have been concluded and a bilateral agreement has been reached, the tracking of the Work under Force-Account is no longer necessary. Force-Account Work shall also be used when negotiations between Port and Contractor have broken apart and a bilateral agreement on the value of the changed Work cannot be reached. Port may approve other uses of Force-Account Work.

C. Whenever any Force-Account Work is in progress, definite price for which has not been agreed on

in advance, Contractor shall report to Port each Business Day in writing in detail amount and cost of labor and material used, and any other expense incurred in Force-Account Work on preceding Day, by using the Cost Proposal form attached hereto. No claim for compensation for Force-Account Work will be allowed unless report shall have been made.

D. Whenever Force-Account Work is in progress, definite price for which has not been agreed on in

advance, Contractor shall report to Port when 75 percent of the NTE amount has been expended.

E. Force-Account Work shall be paid as extra Work under this Section 01250. Methods of determining payment for Work and materials provided in this Paragraph 1.5 shall not apply to performance of Work or furnishings of material that, in judgment of Port, may properly be classified under items for which prices are otherwise established in Contract Documents.

1.6 PORT-FURNISHED MATERIALS

A. Port reserves right to furnish materials as it deems advisable, and Contractor shall have no claims for costs and overhead and profit on such materials.

1.7 OVERHEAD DEFINED

A. The following constitutes charges that are deemed included in overhead for all Contract Modifications, including Force-Account Work or CCD Work, whether incurred by Contractor, Subcontractors, or suppliers, and Contractor shall not invoice or receive payment for these costs separately:



1. Drawings: field drawings, Shop Drawings, etc., including submissions of drawings 2. Routine field inspection of Work proposed 3. General Superintendence 4. General administration and preparation of cost proposals, schedule analysis, Change

Orders, and other supporting documentation as necessary 5. Computer services

6. Reproduction services

7. Salaries of project engineer, superintendent, timekeeper, storekeeper, and secretaries

8. Janitorial services

9. Temporary on-Site facilities:

a. Offices b. Telephones c. Plumbing d. Electrical: Power, lighting e. Platforms f. Fencing, etc. g. Water

10. Home Office Overhead

11. Insurance and Bond premiums

12. Procurement and use of vehicles and fuel used coincidentally in Work otherwise included

in the Contract Documents 13. Surveying

14. Estimating

15. Protection of Work

16. Handling and disposal fees

17. Final cleanup

18. Other incidental Work

1.8 RECORDS AND CERTIFICATION

A. Force-Account (cost reimbursement) charges shall be recorded daily and summarized in Cost Proposal form attached hereto. Contractor or authorized representative shall complete and sign form each Day. Contractor shall also provide with the form: the names and classifications of



workers and hours worked by each; an itemization of all materials used; a list by size, type, and identification number of equipment and hours operated; and an indication of all Work performed by specialists.

B. No payment for Force-Account Work shall be made until Contractor submits original invoices

substantiating materials and specialists charges.

C. Port shall have the right to audit all records in possession of Contractor relating to activities covered by Contractor’s claims for Modification of Contract, including Force-Account Work and CCD Work.

D. Further, Port will have right to audit, inspect, or copy all records maintained in connection with

this Contract, including financial records, bidding records, in possession of Contractor relating to any transaction or activity occurring or arising out of, or by virtue of, the Contract. If Contractor is a joint venture, right of Port shall apply collaterally to same extent to records of joint venture sponsor, and of each individual joint venture member. This right shall be specifically enforceable, and any failure of Contractor to voluntarily comply shall be deemed an irrevocable waiver and release of all claims then pending that were or could have been subject to the Article 12 of Document 00700 (General Conditions).

PART 2 PRODUCTS – NOT USED PART 3 EXECUTION – NOT USED

COST PROPOSAL FORM FOLLOWS ON NEXT PAGE

END OF SECTION



COST PROPOSAL (CP) Port Of Stockton, Port Police Fusion Center CP Number: Contract Number 5-19-1 Date: In Response To RFP #, etc. To: Port of Stockton Attention: Juan G. Villanueva 2201 West Washington Street, Stockton, CA 95203 Subject Ref. No: P.O. Box 2089, Stockton, CA 95201 (for Project Manager use only) Phone: (209) 946-0246 Fax: (____) ___-_____

From: [Insert Contractor’s Name/Address]

This Cost Proposal is in response to the above-referenced ________ [insert RFP, etc. as applicable]. Brief description of change(s):

ITEM DESCRIPTION

PRIME CONTRACTOR

SUB 1

SUB 2

SUB 3

SUB 4

TOTAL

MATERIAL

Direct Labor Cost

EQUIPMENT

Other (Specify) Extended Overhead

TOTAL COST

Subcontractor’s Overhead & Profit ____%

Contractor’s Overhead & Profit __________________%

Overhead & Profit to Contractor for Subcontractor’s Work ___________________%

(percent of Total Cost above not including any Overhead & Profit)

GRAND TOTAL

REQUESTED CHANGE IN CONTRACT TIME (DAYS)

By Contractor:

Signature: Date:



SECTION 01315

PROJECT MEETINGS PORT POLICE FUSION CENTER

PART 1 GENERAL 1.1 PRECONSTRUCTION CONFERENCE

A. Port will call for and administer Preconstruction Conference at time and place to be announced (usually the

week prior to start of Work at the Site).

B. Contractor, all major Subcontractors, and major suppliers shall attend Preconstruction Conference.

C. Agenda will include, but not be limited to, the following items.

1. Schedules 2. Personnel and vehicle permit procedures 3. Use of premises 4. Location of the Contractor’s on-Site facilities 5. Security 6. Housekeeping 7. Submittal and RFI procedures 8. Inspection and testing procedures, on-Site and off-Site 9. Utility shutdown procedures 10. Control and reference point survey procedures 11. Injury and Illness Prevention Program 12. Contractor’s Initial Schedule 13. Contractor’s Schedule of Values 14. Contractor’s Schedule of Submittals 15. Jurisdictional agency requirements

D. Port will distribute copies of minutes to attendees. Attendees shall have 7 Days to submit comments or

additions to minutes. Minutes will constitute final memorialization of results of Preconstruction Conference.

1.2 WEEKLY PROGRESS MEETINGS

A. Port will schedule and administer weekly progress meetings throughout duration of Work. Progress

meetings will be held weekly unless otherwise directed by Port.

1. Meetings shall be held at Job Site. 2. A Port Representative will prepare agenda and distribute it 4 Days in advance of meeting to

Contractor. 3. Participants with agenda items shall present them. 4. Port Staff and representatives shall preside at the meetings. 5. The Port shall record and distribute the meeting minutes. Minutes shall be distributed by the Port

to the Contractor within 3 business days after the meeting. Contractor shall distribute the minutes Port of Stockton Project Meetings Port Police Fusion Center 01315- 1


to those affected by decisions made at meeting. Attendees shall have five business days to submit comments or additions to the minutes. Minutes shall constitute final memorialization of results of meeting.

B. Progress meetings shall be attended by Contractor’s job superintendent, major Subcontractors and

suppliers, Port, and others as appropriate to agenda topics for each meeting.

C. Agenda will contain the following items, as appropriate:

1. Review, revise as necessary, and approve previous meeting minutes 2. Review of Work progress since last meeting 3. Status of Construction Work Schedule, delivery schedules, adjustments 4. Submittal, RFI, and Change Order status 5. Review of the Contractor’s safety program activities and results, including report on all serious

injury and/or damage accidents 6. Other items affecting progress of Work

1.3 PROGRESS SCHEDULE AND BILLING MEETINGS A. A meeting will be held on approximately the 20th of each month to review the schedule update submittal

and progress payment application.

1. At this meeting, at a minimum, the following items will be reviewed: a. Percent complete of each activity; b. Time impact evaluations for Change Orders and Time Extension Request; c. Actual and anticipated activity sequence changes; d. Actual and anticipated duration changes; and e. Actual and anticipated Contractor delays.

2. These meetings are considered a critical component of overall monthly schedule update submittal

and Contractor shall have appropriate personnel attend. At a minimum, Contractor’s General Superintendent and Scheduler shall attend these meetings.

3. Contractor shall plan on the meeting taking no less than four hours.

1.4 SAFETY MEETINGS A. Conduct monthly Contractor Safety Committee meetings. B. Conduct weekly toolbox safety talks.


END OF SECTION

Port of Stockton Project Meetings Port Police Fusion Center 01315- 2


SECTION 01320

PROGRESS SCHEDULES AND REPORTS PORT POLICE FUSION CENTER

PART 1 GENERAL

1.1 GENERAL

A. Progress Schedule shall be based on and incorporate Milestone and completion dates specified in Contract Documents.

B. Overall time of completion and time of completion for each Milestone shown on Progress Schedule shall adhere

to times in Document 00520 (Agreement), unless an earlier (advanced) time of completion is requested by Contractor and agreed to by Port. A Change Order shall formalize any such agreement. 1. Port is not required to accept an earlier (advanced) schedule, i.e., one that shows early completion date(s)

for the Contract Time. 2. Contractor is not entitled to extra compensation in the event agreement is reached on an earlier (advanced)

schedule and Contractor completes its Work, for whatever reason, beyond completion date shown in earlier (advanced) schedule but within the Contract Time.

C. Failure of Progress Schedule to include any element of the Work or any inaccuracy in Progress Schedule will

not relieve Contractor from responsibility for accomplishing the Work in accordance with the Contract. Port’s acceptance of Schedule shall be for its use in monitoring and evaluating job progress, payment requests, and time extension requests, and shall not, in any manner, impose a duty of care upon Port, or act to relieve Contractor of its responsibility for means and methods of construction.

1.2 INITIAL AND ORIGINAL PROGRESS SCHEDULE

A. Initial Schedule submitted for review at the Preconstruction Conference shall serve as Contractor’s schedule for up to 30 Days after the Notice to Proceed.

B. Initial Schedule must indicate detailed plan for the Work to be completed in first 30 Days of the Contract;

details of planned mobilization of plant and equipment; sequence of early operations; and procurement of materials and equipment. Show Work beyond 30 Days in summary form.

C. Contractor shall submit its Original Schedule for review no later than 15 days prior to submittal of the first

progress payment application. Original Schedule and all updates shall comply with all standards herein.

1.3 SCHEDULE FORMAT AND LEVEL OF DETAIL

A. Each Schedule (Initial, Original, and updates) shall indicate all separate fabrication, procurement and field construction activities required for completion of the Work, including but not limited to the following: 1. All Contractor, Subcontractor, and assigned Contractor Work shall be shown in a logical Work sequence

that demonstrates a coordinated plan of Work for all contractors. The intent is to provide a common basis of acceptance, understanding, and communication, as well as interface with other contractors.

2. Activities related to the delivery of Contractor- and Port -furnished equipment to be Contractor-installed

per Contract shall be shown. 3. All activities shall be identified through codes or other identification to indicate the building (i.e. buildings,

Site Work) and Contractor/Subcontractor responsibility to which they pertain.

Port of Stockton Progress Schedules and Reports Port Police Fusion Center 01320- 1


4. Break up the Work schedule into activities of durations of approximately 21 Days or less each, except for

non-field construction activities or as otherwise deemed acceptable by Port. 5. Show the critical path in red. For each activity, show early start, late start, early finish, late finish,

durations measured in Days, Project Float, resources, predecessor and successor activities, planned workday/week for the activity, manpower loading, and scheduled/actual progress payments.

B. Seasonal weather conditions (which do not constitute a delay as defined herein) shall be considered in the

planning and scheduling of all potential Work influenced by high or low ambient temperatures or presence of high moisture for the completion of the Work within the allotted Contract Time.

C. Failure by Contractor to include any element of Work required for performance of the Work on the detailed

construction schedule shall not excuse Contractor from completing all Work required within the Contract Time. D. A two-week “look ahead,” detailed daily bar chart schedule shall be updated and issued weekly. E. Utilize computer-scheduling software, such as Microsoft Project software or approved equivalent, for all

scheduling including schedule updates.

1.4 MONTHLY SCHEDULE UPDATE SUBMITTALS

A. Following acceptance of Contractor’s Initial Schedule, contractor shall monitor progress of Work and adjust its Schedule each month to reflect actual progress in blue and any anticipated changes to planned activities. 1. Each Schedule update submitted shall be complete, including all information requested for the Initial

Schedule and Original Schedule submittal. 2. Each update shall continue to show all Work activities including those already completed. 3. Completed activities (shown in blue) shall accurately reflect “as built” information by indicating when

activities were actually started and completed, and Contractor warrants the accuracy of as-built information as shown.

B. Updating, changing or revising of any report, curve, schedule or narrative submitted to Port by Contractor under

this Contract, nor Port’s review or acceptance of any such report, curve, schedule or narrative shall not have the effect of amending or modifying, in any way, the Contract Substantial Completion date or Milestone dates or of modifying or limiting, in any way, Contractor’s obligations under this Contract.

1.5 RECOVERY SCHEDULE

A. If a Schedule update shows a Substantial Completion date 21 Days beyond any Contract Substantial Completion date, or individual Milestone completion dates, submit to Port within seven Days the proposed revisions to recover the lost time. As part of this submittal, provide a written narrative for each revision made to recapture the lost time. If the revisions include sequence changes, provide a schedule diagram comparing the original sequence to the revised sequence of Work. If Port reasonably requests, show the intended critical path; secure appropriate Subcontractor and supplier consent to the recovery Schedule; submit a narrative explaining trade flow and construction flow changes, duration changes, added/deleted activities, critical path changes and identify all near critical paths and man-hour loading assumptions for major Subcontractors.

1.6 TIME IMPACT EVALUATION (“TIE”) FOR CHANGE ORDERS, TIME EXTENSIONS AND DELAYS

A. When Contractor requests a time extension for any reason, Contractor shall submit a TIE that includes both a written narrative and a schedule diagram depicting how the changed Work or other impact affects other schedule activities. The schedule diagram shall show how Contractor proposes to incorporate the changed Work or other impact in the schedule, and how it impacts the current Schedule update critical path or otherwise.



Contractor is also responsible for requesting time extensions based on the TIE’s impact on the critical path. The diagram shall be tied to the main sequence of scheduled activities to enable Port to evaluate the impact of changed Work to the scheduled critical path.

B. Contractor shall comply with the requirements of paragraph 1.6A of this Section 01320 for all types of delays

such as, but not limited to, Contractor/Subcontractor delays, adverse weather delays, strikes, procurement delays, fabrication delays, etc.

C. Contractor is responsible for all costs associated with the preparation of TIEs, and the process of incorporating

TIEs into the current schedule update. Provide Port with four copies of each TIE.

1.7 DAILY REPORTS

A. Contractor shall provide daily construction reports showing personnel, trades, equipment and supervision on site; weather; work started, completed and any impediments, problems or delays, for the work day. Submit to Port the following morning.

1.8 COST DATA

A. Contractor shall provide Port with copies for each Day Contractor works on the Project, to be delivered to Port either the same Day or the following morning before starting Work at the Site. Contractor shall take monthly progress photographs of all areas of the Work. Contractor shall maintain copies of all correspondence with Subcontractors and records of meetings with Subcontractors.



END OF SECTION



SECTION 01330

SUBMITTAL PROCEDURES PORT POLICE FUSION CENTER

PART 1 GENERAL

1.1 SUMMARY

A. Section Includes: 1. Description of general requirements for Submittals for the Work:

a. Procedures b. Quality Assurance Control Submittals

1) Design Data 2) Test Reports 3) Certificates 4) Manufacturers’ Instructions 5) Material Safety Data Sheets

1.2 PROCEDURES

A. Submit at Contractor’s expense, all required Submittals in triplicate, including but not limited to, Schedule of Shop Drawing and Sample Submittals, Safety Plans, Progress Schedule, Product Data, Shop Drawings, Samples, Quality Assurance Control Data, and Project Record Documents required by the Contract Documents to Port for review and approval in accordance with accepted Schedule of Shop Drawings and Samples Submittals. If no such schedule is agreed upon, then all Shop Drawings, Samples, and product data Submittals shall be submitted within twenty-one (21) Days after receipt of Notice of Award from Port.

B. Transmit each item with the appropriate Submittal transmittal form (attached to this Section 01330 as Exhibit

A). Where manufacturer’s standard drawings or data sheets are used, they shall be marked clearly to show those portions of the data that are applicable to this Project. Inapplicable portions shall be marked out. Organize Submittals by Specification Section. Submittals containing information about more than one Specification Section will be returned for resubmittal. Submittals shall include all information requested by each Specification Section. Incomplete Submittals will be returned not reviewed by Port.

C. The data shown on the Submittals shall be complete with respect to quantities, dimensions, specified

performance and design criteria, materials, and similar data to show Port the materials and equipment Contractor proposes to provide and to enable Port to review the information for the limited purposes specified in this Section 01330. Submittals shall be identified clearly as to material, supplier, pertinent data such as catalog numbers and the use for which it is intended and otherwise as Port may require to enable Port to review the Submittal.

D. At the time of each submission, give Port specific written notice of all variations, if any, that the Submittal may

have from the requirements of the Contract Documents, and the reasons therefore. This written notice shall be in a written communication attached to the Submittal transmittal form. In addition, cause a specific notation to be made on each Submittal submitted to Port for review and approval of each such variation. If Port accepts deviation, Port will note its acceptance on the returned Submittal transmittal form and, if necessary, issue appropriate Contract Modification.

E. Submittal coordination and verification is the responsibility of Contractor; this responsibility shall not be

delegated in whole or in part to Subcontractors or suppliers. Before submitting each Submittal, review and

Port of Stockton Submittal Procedures Port Police Fusion Center 01330- 1


coordinate each Submittal with other Submittals and with the requirements of the Work and the Contract Documents, and determine and verify: 1. All field measurements, quantities, dimensions, specified performance criteria, installation requirements,

materials, catalog numbers, and similar information with respect thereto; 2. All materials with respect to intended use, fabrication, shipping, handling, storage, assembly, and

installation pertaining to the performance of the Work; and 3. All information relative to Contractor’s sole responsibility for means, methods, techniques, sequences, and

procedures of construction and safety precautions and programs incident thereto. F. Contractor’s submission to Port of a Submittal shall constitute Contractor’s representation that it has satisfied its

obligations under the Contract Documents, and as set forth immediately above in this Paragraph 1.2 of this Section 01330, with respect to Contractor’s review and approval of that Submittal.

G. Designation of Work “by others,” if shown in Submittals, shall mean that Work will be responsibility of

Contractor rather than Subcontractor or supplier who has prepared Submittals. H. After review by Port of each Submittal, material will be returned to Contractor with actions defined as follows:

1. NO EXCEPTIONS TAKEN - Accepted subject to its compatibility with future Submittals and additional

partial Submittals for portions of the Work not covered in this Submittal. Does not constitute approval or deletion of specified or required items not shown on the Submittal.

2. MAKE CORRECTIONS NOTED (NO RESUBMISSIONS REQUIRED) - Same as item 1 above, except

that minor corrections as noted shall be made by Contractor. 3. REVISE AS NOTED AND RESUBMIT - Rejected because of major inconsistencies or errors that shall be

resolved or corrected by Contractor prior to subsequent review by Port. 4. REJECTED - RESUBMIT - Submitted material does not conform to Drawings and/or Specifications in

major respect, i.e.: wrong size, model, capacity, or material. I. Contractor shall make a complete and acceptable Submittal at least by second submission. Port reserves the

right to deduct monies from payments due Contractor to cover additional costs of review beyond the second submission. Illegible Submittals will be rejected and returned to Contractor for resubmission. Contractor shall be in breach of the Contract if Contractor’s first resubmittal, following a Submittal which Port determines falls within categories 3 or 4 above, does not fall within categories 1 or 2 above.

J. Favorable review will not constitute acceptance by Port of any responsibility for the accuracy, coordination, or

completeness of the Submittals. Accuracy, coordination, and completeness of Submittals shall be sole responsibility of Contractor, including responsibility to back-check comments, corrections, and modifications from Port’s review before fabrication. Contractor, Subcontractors, or suppliers may prepare Submittals, but Contractor shall ascertain that Submittals meet requirements of Contract Documents, while conforming to structural space and access conditions at point of installation. Port’s review will be only to assess if the items covered by the Submittals will, after installation or incorporation in the Work, conform to the information given in the Contract Documents and be compatible with the design concept of the completed Project as indicated by the Contract Documents. Favorable review of Submittal, method of Work, or information regarding materials and equipment Contractor proposes to furnish shall not relieve Contractor of responsibility for errors therein and shall not be regarded as assumption of risks or liability by Port, or any officer or employee thereof, and Contractor shall have no claim under Contract Documents on account of failure or partial failure or inefficiency or insufficiency of any plan or method of Work or material and equipment so accepted. Favorable review shall be considered to mean merely that Port has no objection to Contractor using, upon Contractor’s own full responsibility, plan or method of Work proposed, or furnishing materials and equipment proposed.



K. Unless otherwise specified, Port’s review will not extend to the means, methods, techniques, sequences, or

procedures of construction or to safety precautions or programs incident thereto. The review and approval of a separate item as such will not indicate approval of the assembly in which the item functions.

L. Contractor shall submit complete initial Submittal for those items where required by individual Specification

Sections. Complete Submittal shall contain sufficient data to demonstrate that items comply with Specifications, shall meet minimum requirements for submissions cited in Specification Sections, shall include motor data and seismic anchorage certifications, where required, and shall include necessary revisions required for equipment other than first named. If Contractor submits incomplete initial Submittal when complete Submittal is required, Submittal may be returned to Contractor without review.

M. Contractor shall copy, conform, and distribute reviewed Submittals in sufficient numbers for Contractor’s files,

Subcontractors, and vendors. N. After Port’s review of Submittal, Contractor shall revise as noted and resubmit as required. Contractor shall

identify changes made since previous Submittal. 1. Contractor shall begin no fabrication or Work that requires Submittals until return of Submittals not

requiring resubmittal. Do not extrapolate from Submittals covering similar Work. 2. Normally, Submittals will be processed and returned to Contractor within 21 Days of receipt.

O. Contractor shall distribute copies of reviewed Submittals to concerned persons. Contractor shall instruct

recipients to promptly report any inability to comply with provisions. P. All Submittals shall be number-identified by Contractor, prior to submission to Port, in accordance with the

following: 1. Sequentially number each Submittal (i.e., “1”, “2”, “3”, etc.) as the basis for number identification of

Submittals. 2. Affix the Submittal number under which each Submittal is made on every copy of each Shop Drawing,

Product Data, Sample, certification, etc. 3. Number Installation, Operation, and Maintenance Manual with original root number of the favorably

reviewed Submittal for the item. 4. If the Submittal is a resubmittal (including without limitation after an initial Submittal is rejected, returned

without review, or marked ‘Revise as Noted and Resubmit’), add the suffix designation “A” (i.e., a resubmittal of Submittal 1 would be numbered 1A). Subsequent resubmittals would be identified by the Submittal number and sequential letters (i.e., “B”, “C”, “D”, etc.).

5. All Submittals shall include all information requested by each Specification Section. No partial Submittals

will be accepted unless previously authorized by Port. In the event a partial Submittal is authorized, each subsequent different Submittal (as opposed to resubmittal) shall be given a new number.

Q. Submission Requirements:

1. Deliver Submittals to Port at least 30 Days before dates reviewed Submittals will be needed. 1.3 PROJECT RECORD DOCUMENTS

A. Submit Project Record Documents as required by Section 01780 (Project Record Documents).


FEMA Grant 2016-PU-00450 Contract No. 5-19-1 1.4 SAFETY PLAN AND ACCESS PLAN

A. Submit two (2) copies of Safety Plan and Access Plan specific to this Contract to the Port within five (5) calendar days after the Notice to Proceed. The access plan will show the contractor's proposal for limiting site access. The fencing plan will show where fencing and other access inhibitors will be located in order to protect open trenches and other hazardous areas.

B. (1) copy of accepted Section 1.04.A Plans will be returned to the Contractor.

C. No on-site work shall be started until Section 1.04.A Plans have been reviewed and accepted by Port.

Acceptance of Section 1.04.A Plans shall not affect the Contractor’s responsibility for maintaining a safe working place and instituting safety programs in connection with project.


TRANSMITTAL FORM FOLLOWS THIS PAGE

END OF SECTION



SUBMITTAL

EXHIBIT A TRANSMITTAL NO. _______

Project Name: Port of Stockton, Port Police Fusion Center Date Received: Port: Port of Stockton

Attn: Project Manager 2201 West Washington Street, Stockton, CA 95203

P.O. Box 2089, Stockton, CA 95201

Checked By:

Contractor: Log Page: Address: Address:

Specification Section Number:

Attention: Attention:

1st Submittal

Resubmittal

Date Transmitted:

Previous Transmittal Date:

No. Copies

Description Manufacturer Dwg. or Data No.

Action Taken*

Remarks:

* The action designated above is in accordance with the following legend: A – No Exceptions Taken D – Rejected – Resubmit

1. Not enough information for review 2. No reproducibles submitted 3. Copies illegible 4. Not enough copies submitted 5. Wrong sequence number 6. Wrong resubmittal number 7. Wrong Specification section number 8. Wrong form used 9. See comments

B – Make Corrections Noted (No Resubmission Required) C. – Revise as Noted and Resubmit

Comments

By Date Distribution: Contractor File Field Port Other

Port of Stockton Submittal Procedures Port Police Fusion Center 01330- A



SECTION 01340

SAFETY SUBMITTALS PORT POLICE FUSION CENTER

PART 1 GENERAL 1.1 SCOPE

Contractor shall prepare and submit written safety Plans and Programs as specified herein prior to start of the Work. All written safety Plans and Programs required to be submitted herein must be favorably reviewed by Port prior to the Contractor starting Work.

1.2 PORT’S REVIEW OF SUBMITTALS

Neither Port's review of, nor comments on, any of the submittals shall constitute a representation of warranty as to compliance with any legal requirements. Port reserves the right to reject all or portions of a submittal as inadequate to protect health, or safety. If conditions change, Contractor shall promptly update the Plans and Programs, as appropriate, and submit the revised Plans and Programs to Port at no additional charge to Port.

1.3 PLANS AND PROGRAMS

A. Submit the following site-specific, checked items prior to commencing Work at the Site or within any other time period established in Contract Documents: 1. Health and Safety Plan:

a. For Non-Hazardous Waste Operations: Describe the health and safety hazards anticipated in performing the work, measures to be taken to reduce those hazards and to protect employees and the public. Include procedures for identifying and reporting unforeseen hazards.

b. For Potential Hazardous Waste Operations: Describe the health and safety hazards anticipated in performing the work, measures to be taken to reduce those hazards and to protect employees and the public. Include procedures for identifying and reporting unforeseen hazards. Identify an individual(s), either an employee or subcontractor, who is trained in accordance with CCR Title 8, Section 5192 (Cal/OSHA), Hazardous Waste Operations and Emergency Response (HAZWOPER), and who is qualified to identify potentially hazardous wastes or contaminated soils which might be encountered on the jobsite. Describe methods of identifying these materials and communicating the findings to Port. The Plan does not need to comply with CCR Title 8, Section 5192 (Cal/OSHA).

c. For Identified Hazardous Waste Operations: All aspects of the Health and Safety Plan shall comply with CCR, Title 8, Section 5192

(Cal/OSHA), Hazardous Waste Operations and Emergency Response. The Plan shall be signed by an individual Certified in the Comprehensive Practice of Industrial Hygiene (CIH) by the American Board of Industrial Hygiene and trained in hazardous waste site operations as required by Section 5192. If hazard conditions change, promptly update the Plan and resubmit to Port, at no additional charge to Port. Include the following items: 1) Training, medical, and respirator approval documentation for all employees who will

work at the site. 2) The names and addresses of the waste hauler and the landfill for hazardous waste.

2. Asbestos Abatement Program in accordance with CCR Title 8, Section 1529 (Cal/OSHA): Include the following items:

Port of Stockton Safety Submittals Port Police Fusion Center 1340- 1


a. Registration with Cal/OSHA as an Asbestos Abatement Contractor, (required for removing more than 100 square feet of materials containing greater than 0.1 percent asbestos).

b. Notifications for asbestos work, including Cal/OSHA, the San Joaquin Valley Air Quality Management District, and, where appropriate, EPA Region IX.

c. Training, medical, and respirator approval documentation for all employees who will work at the site.

d. The identity of the Competent Person, as defined by Cal/OSHA. A work plan to prevent asbestos fibers and debris being dispersed from the work area into the building or the environment, including diagrams showing: 1) Staging of the project. 2) Placement and number of negative air machines and exhausts. 3) Staging of waste containers.

e. Weekly progress reports as the project progresses. f. At project completion, documentation, including daily reports or logs, air monitoring results,

waste manifests, and other similar pertinent information. g. Material Safety Data Sheets for hazardous materials brought onto the site. h. Procedures for identifying and reporting unforeseen hazards. i. The names and addresses of the waste hauler and the landfill for asbestos waste.

3. Lead Compliance Program in accordance with CCR Title 8, Section 1532.1 (Cal/OSHA): Include the following checked items:

a. Training, medical, and respirator approval documentation for all employees who will work at the site.

b. The identity of the Competent Person, as defined by Cal/OSHA. c. Material Safety Data Sheets for hazardous materials brought onto the site. d. The Contractor's procedures for identifying and reporting unforeseen hazards. e. The names and addresses of the waste hauler and the landfill for hazardous and non-

hazardous wastes. 4. Storm Water Pollution Prevention Plan (SWPPP) including:

a. A site map identifying storm drain inlets. b. Identification of potential sources of pollution. c. A plan to eliminate non-storm water discharges such as wastewater, spills, and others. d. Best Management Practices (BMPs) to minimize discharges of pollutants in storm water runoff. e. How agencies and Port will be notified in case of spills.

5. Compliance with State General Construction Activity Storm Water NPDES Permit, including: a. Development of a Storm Water Pollution Prevention Plan that complies with all requirements of

the General Construction Activity Storm Water Permit. b. Development of a color coded site map showing:

1) Areas of soil disturbance that have been stabilized. 2) Areas to be graded, in addition to a time schedule. 3) Areas of potential soil erosion where control practices will be implemented (Indicate the

control practices and time schedule for implementation). 4) Locations of post-construction projects (i.e., ponds, grassy swales, detention basins).

c. Development of a Site Inspection Checklist. d. Submittal of the Site Inspection Checklist on a weekly basis.

6. Disposal of Fluorescent Lights and/or Ballasts Plan, as applicable. 7. Soil and Groundwater Management Plan:

Describe how any disturbed soil or collected water will be handled, including temporary storage, testing and/or treatment, and disposal. Identify all activity where potential exists for waste to be generated, including materials associated with the destruction of monitoring wells. Where feasible, excavated soil from utility trenching may be placed back within the utility corridor near the original excavation. Soil that cannot be placed back in the utility trench, and waste generated from other activities shall be tested by the Contractor as per General Conditions, Article 14.1, Alterations, Modifications and Force Account Work. The Contractor shall provide the name of an analytical laboratory and contact name for coordinating environmental testing.



8. Debris Containment Program: Describe the control of debris generated by the performance of the work and how the work area

will be maintained unencumbered by the debris confined inside the work area. 9. Soil and Air Pollution Management Plan:

Describe measures to be taken to control dust and prevent pollution of soil, and air resulting from the performance of the work. Describe in detail how dust, air emissions, and/or soil pollutants generated during the performance of the work will be minimized, controlled, contained, treated, and/or disposed. The Plan shall include development of a Site Inspection Checklist to be completed and submitted on a weekly basis. The Plan must also incorporate air pollution controls described in these specifications.

10. Dust Control Plan from the San Joaquin County Air District.

B. The following Plans and Programs must be made available within 10 calendar days only after being requested by Port. Do not submit unless and until requested:

1. Injury and Illness Prevention Program, in accordance with CCR Title 8, Section 3203 (Cal/OSHA). 2. Hazard Communication Program, in accordance with CCR Title 8, Section 5194 (Cal/OSHA) 3. Respiratory Protection Program, in accordance with CCR Title 8, Section 5144 (Cal/OSHA). 4. Confined Space Entry Program, in accordance with CCR Title 8, Article 108. (Cal/OSHA). 5. Lockout/Tagout Program, in accordance with CCR Title 8, Sections 3314 and 2320 (Cal/OSHA). 6. Name of individual(s) having current Red Cross-equivalent first aid and CPR training. 7. Trenching and Shoring Plan, in accordance with CCR Title 8, Article 6 (Cal/OSHA).



END OF SECTION



SECTION 01410

REGULATORY REQUIREMENTS PORT POLICE FUSION CENTER

PART 1 GENERAL 1.1 SUMMARY

A. Section includes: regulatory requirements applicable to Contract Documents. B. Specific reference in the Specifications to codes and regulations or requirements of regulatory agencies shall

mean the latest printed edition of each adopted by the regulatory agency in effect at the time of the opening of Bids, except as may be otherwise specifically stated in the Contract Documents.

C. Should any conditions develop not covered by the Contract Documents wherein the finished Work will not

comply with current codes, a Change Order detailing and specifying the required Work shall be submitted to and approved by Port before proceeding with the Work.

1.2 REFERENCES TO REGULATORY REQUIREMENTS

A. Contractor shall comply with all codes, laws, ordinances, rules and regulations applicable to the Work, which

shall have full force and effect as though printed in full in these Specifications. Code, laws, ordinances, rules and regulations are not furnished to Contractor, because Contractor is assumed to be familiar with these requirements. 1. Work shall be accomplished in conformance with all applicable laws, ordinances, rules and regulations of

federal, state, and local governmental agencies and jurisdictions having authority over the Project. 2. Work shall be accomplished in conformance with all rules and regulations of public utilities and utility

districts. 3. Where such laws, ordinances rules, and regulations require more care or greater time to accomplish Work,

or require better quality, higher standards or greater size of products, Work shall be accomplished in conformance to such requirements with no change to the Contract Time and Contract Sum, except where changes in laws, ordinances, rules, and regulations occur subsequent to the time of opening of the Bids.

B. Change Orders and Claims. The California Public Contract Code (including but not limited to Section 7105

(d)(2)) and the California Government Code (Section 930.2 et. seq.) apply to all contract procedures for changes, time extensions, change orders (time and money), and claims. Any change, alteration, Modifications, waiver, or omission to implement these procedures, shall have no legal effect unless approved in advance in a fully executed Change Order approved in writing by Port’s legal counsel.

1.3 PRECEDENCE

A. Where Drawings or Specifications require or describe products or execution of better quality, higher standard or

greater size than required by applicable codes, ordinances and standards, Drawings and Specifications shall take precedence so long as such increase is legal.

B. Where no requirements are identified on Drawings or in Specifications, comply with all requirements of

applicable codes, ordinances and standards of governing authorities having jurisdiction.

Port of Stockton Regulatory Requirements Port Police Fusion Center 01410- 1


C. Conflicts between referenced regulatory requirements: Comply with the one establishing the more stringent requirement.

D. Conflicts between referenced regulatory requirements and Contract Documents: Comply with the one

establishing the more stringent requirement. 1.4 REQUIRED PROVISIONS ON CONTRACT CLAIM RESOLUTION

A. The California Public Contract Code specifies required provisions on resolving contract claims less than

$375,000, which are set forth below, and constitute a part of this Contract. 1. For the purposes of this section, “Claim” means a separate demand by Contractor of $375,000 or less for

(1) a time extension, (2) payment or money or damages arising from Work done by or on behalf of Contractor arising under the Contract Documents and payment of which is not otherwise expressly provided for or the Claimant is not otherwise entitled to, or (3) an amount the payment of which is disputed by Port. In order to qualify as a Claim, the written demand must state that it is a Claim submitted under paragraph 12 of Document 00700 (General Conditions) and be submitted in compliance with all requirements of Document 00700 (General Conditions), paragraph 12.

2. A voucher, invoice, payment application, or other routine or authorized form of request for payment is not

a Claim for purposes of this section. If such request is disputed as to liability or amount, then the disputed portion of the submission may be converted to a Claim under this section by submitting a separate claim in compliance with Contract Documents claim submission requirements.

3. Caution: This section does not apply to tort claims and nothing in this section is intended nor shall be

construed to change the time periods for filing tort claims or actions specified by Chapter 1 and Chapter 2 of Part 3 of Division 3.6 of Title 1 of the California Government Code.

B. Procedure:

1. The Claim must be in writing, submitted in compliance with all requirements of Document 00700 (General

Conditions), paragraph 12, including, but not limited to, the time prescribed by and including the documents necessary to substantiate the Claim, pursuant to Document 00700 (General Conditions). Claims must be filed on or before the day of final payment. Nothing in this section is intended to extend the time limit or supersede notice requirements for the filing of claims as set forth in Document 00700 (General Conditions), paragraph 12 or elsewhere in the Contract Documents.

2. For Claims of fifty thousand dollars ($50,000) or less

a. Port shall respond in writing within 45 days of receipt of the Claim, or b. Port may request in writing within 30 days of receipt of the Claim, any additional documentation

supporting the Claim or relating to any defenses or claims Port may have against Claimant. 1) If additional information is thereafter required, it shall be requested and provided in accordance

with this section, upon mutual agreement of Port and Claimant. 2) Port’s written response to the Claim, as further documented, shall be submitted to Claimant within

15 days after receipt of further documentation or within a period of time no greater than taken by Claimant in producing the additional information, whichever is greater.

3. For Claims over Fifty Thousand Dollars ($50,000) and less than or equal to $375,000:

a. Port shall respond in writing within 60 days of receipt of the Claim, or



b. Port may request in writing within 30 days of receipt of the Claim, any additional documentation supporting the Claim or relating to any defenses or claims Port may have against Claimant. 1) If additional information is thereafter required, it shall be requested and provided in accordance

with this section, upon mutual agreement of Port and Claimant; 2) Port’s written response to the Claim, as further documented, shall be submitted to Claimant within

30 days after receipt of further documentation or within a period of time no greater than taken by Claimant in producing the additional information, whichever is greater.

4. Meet and Confer:

a. If Claimant disputes Port’s written response, or Port fails to respond within the time prescribed above,

Claimant shall notify Port, in writing, either within 15 days of receipt of Port’s response or within 15 days of Port’s failure to timely respond, and demand an informal conference to meet and confer for settlement of the issues in dispute. Upon demand Port will schedule a meet and confer conference within 30 days for settlement of the dispute.

b. Following the meet and confer conference, if the Claim or any portion remains in dispute, Claimant

may file a claim as provided in Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of Division 3.6 of Title 1 of the California Government Code. For purposes of those provisions, the running of the period of time within which a claim must be filed shall be tolled from the time Claimant submits its written claim under Paragraph 1.4.B hereunder, until the time that Claim is denied as a result of the meet and confer process, including any period of time utilized by the meet and confer process.

1.5 COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT

A. Contractor acknowledges that, pursuant to the Americans with Disabilities Act (ADA), programs, services, and

other activities provided by a public entity to the public, whether directly or through a contractor, must be accessible to the disabled public. Contractor shall provide the services specified in the Contract Documents in a manner that complies with the ADA and any and all other applicable federal, state, and local disability rights legislation. Contractor agrees not to discriminate against disabled persons in the provision of services, benefits, or activities provided under this Agreement and further agrees that any violation of this prohibition on the part of Contractor, its employees, agents, or assigns shall constitute a material breach of the Contract Documents.

1.6 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION

A. In accordance with the provisions of California Public Contract Code Section 22300, substitution of securities

for any moneys withheld under Contract Documents to ensure performance is permitted under following conditions: 1. At request and expense of Contractor, securities listed in Section 16430 of the California Government

Code, bank or savings and loan certificates of deposit, interest bearing demand deposit accounts, standby letters of credit, or any other security mutually agreed to by Contractor and Port which are equivalent to the amount withheld under retention provisions of Contract shall be deposited with Controller or with a state or federally chartered bank in California, as the escrow agent, who shall then pay such moneys to Contractor. Upon satisfactory completion of Contract, securities shall be returned to Contractor.

2. Alternatively, Contractor may request and Port shall make payment of retentions earned directly to the

escrow agent at the expense of Contractor. At the expense of Contractor, Contractor may direct the investment of the payments into securities and receive the interest earned on the investments upon the same terms provided for in this Section 01200 for securities deposited by Contractor. Upon satisfactory completion of Contract Documents, Contractor shall receive from escrow agent all securities, interest, and payments received by the escrow agent from Port, pursuant to the terms of this Section 01200. Pay to each



Subcontractor, not later than 20 Days after receipt of the payment, the respective amount of interest earned, net of costs attributed to retention withheld from each Subcontractor, on the amount of retention withheld to insure the performance of Contractor.

3. Contractor shall be beneficial owner of securities substituted for moneys withheld and shall receive any

interest thereon. 4. Enter into escrow agreement with Controller according to Document 00680 (Escrow Agreement for

Security Deposits in Lieu of Retention), as authorized under California Public Contract Code Section 22300, specifying amount of securities to be deposited, terms and conditions of conversion to cash in case of default of Contractor, and termination of escrow upon completion of Contract Documents.

5. California Public Contract Code Section 22300 is hereby incorporated in full by this reference.

1.7 CONSTRUCTION EQUIPMENT REQUIREMENT AT THE WEST COMPLEX

A. Tenant agrees that at least fifty percent (50%) of off-road diesel-powered construction equipment greater than

50 horsepower used at the West Complex must be equipped with Tier 1 or cleaner engines, as defined in the U.S. EPA Non-road Diesel Engine Rule (2004). Equipment not designed Tier 1 by the manufacturer may achieve the emissions requirement described herein by retrofitting the equipment with the highest level of CARB-Verified Diesel Emission Control System (VDECS) that is available.


END OF SECTION



SECTION 01420

REFERENCES AND DEFINITIONS PORT POLICE FUSION CENTER

PART 1 GENERAL

1.1 DEFINITIONS

A. Wherever any of the words or phrases defined below, or a pronoun used in place thereof, is used in any part of the Contract Documents, it shall have the meaning here set forth. In the Contract Documents, the neuter gender includes the feminine and masculine, and the singular number includes the plural.

B. While Port has made an effort to identify all defined terms with initial caps, the following definitions shall

apply regardless of case unless the context otherwise requires: 1. Addenda: Written or graphic instruments issued prior to the opening of Bids, which clarify,

correct, or change the bidding requirements or the Contract Documents. Addenda shall not include the minutes of the Pre-Bid Conference and/or Site Visit.

2. Agreement (Document 00520): Agreement is the basic Contract Document that binds the parties

to construction Work. Agreement defines relationships and obligations between Port and Contractor and by reference incorporates Conditions of Contract, Drawings, and Specifications and contains Addenda and all Modifications subsequent to execution of Contract Documents.

3. Alternate: Work added to or deducted from the base Bid, if accepted by Port. 4. Application for Payment: Written application for monthly or periodic progress or final payment

made by Contractor complying with the Contract Documents. 5. Approved Equal: Approved in writing by Port as being of equivalent quality, utility and

appearance. 6. Architect/Engineer: If used elsewhere in the Contract Documents, “Architect/Engineer” shall

mean a person holding a valid California State Architect’s or Engineer’s license representing the Port in the administration of the Contract Documents. Architect/Engineer may be an employee of or an independent consultant to Port. When Architect/Engineer is referred to within the Contract Documents and no Architect/Engineer shall be construed to include employees of Architect/Engineer and/or employees that Architect/Engineer supervises. When the designated Architect/Engineer is an employee of Port, his or her authorized representatives on the Project will be included under the term Architect/Engineer. If Architect/Engineer is an employee of Port, Architect/Engineer is the beneficiary of all Contractor obligations to Port, including without limitation, all releases and indemnities.

7. Asbestos: Any material that contains more than one percent asbestos and is friable or is releasing

asbestos fibers into the air above current action levels established by OSHA or Cal/OSHA. 8. Bid: The offer or proposal of the Bidder submitted on the prescribed form(s) setting forth the

prices for the Work to be performed.

Port of Stockton References and Definitions Port Police Fusion Center 01420- 1


9. Bidder: One who submits a Bid. 10. Bidding Documents: All documents comprising the Project Manual (including all documents

and Specification Sections listed in Document 00010 [Table of Contents]), including documents supplied for bidding purposes only and Contract Documents.

11. Board: The Board of Commissioners of the Port.

12. Business Day: Any Day other than Saturday, Sunday, and the following days that have been

designated as holidays by Port. If a holiday falls on a Saturday, the preceding Friday will be the holiday. If a holiday falls on a Sunday, the following Monday will be the holiday.

a. New Year’s Day, January 1; b. Martin Luther King Jr.’s Birthday, third Monday in January;

c. Lincoln’s Birthday, February 12; d. Presidents’ Day, third Monday in February;

e. Memorial Day, last Monday in May;

f. Independence Day, July 4;

g. Labor Day, first Monday in September;

h. Veterans’ Day, November 11;

i. Thanksgiving Day, as designated by the President;

j. The Day following Thanksgiving Day;

k. Christmas Day, December 25; and

l. Each day appointed by the Governor of California and formally recognized by the Port Board of

Supervisors as a day of mourning, thanksgiving, or special observance. 13. Change Order: A written instrument prepared by Port and signed by Port and Contractor,

stating their agreement upon all of the following:

a. a change in the Work;

b. the amount of the adjustment in the Contract Sum, if any; and

c. the amount of the adjustment in the Contract Time, if any. 14. Code Inspector: A local or state agency responsible for the enforcement of applicable codes and

regulations. 15. Construction Change Directive (“CCD”): A written order prepared and signed by Port,

directing a change in the Work and stating a proposed basis for adjustment, if any, in the Contract Sum or Contract Time, or both.



16. Contract Conditions or Conditions of the Contract: Consists of two parts: General Conditions

and Supplementary Conditions.

a. General Conditions are general clauses that are common to the Port Contracts, including Document 00700 (General Conditions).

b. Supplementary Conditions modify or supplement General Conditions to meet specific requirements for

these Contract Documents, including Document 00821 (Supplementary Conditions - Insurance). 17. Contract Documents and Contract: Contract Documents and Contract shall consist of the

documents identified as the Contract Documents in Document 00520 (Agreement), plus all changes, Addenda, and Modifications thereto.

18. Contract Modification: Either:

a. a written amendment to Contract signed by Contractor and Port; or b. a Change Order; or c. a Construction Change Directive; or d. a written directive for a minor change in the Work issued by Port.

19. Contract Sum: The sum stated in the Agreement and, including authorized adjustments, the total amount payable by Port to Contractor for performance of the Work and the Contract Documents. The Contract Sum is also sometimes referred to as the Contract Price or the Contract Amount.

20. Contract Time: The number or numbers of Days or the dates stated in the Agreement to achieve

Substantial Completion of the Work or designated Milestones; and/or to complete the Work so that it is ready for final payment and is accepted.

21. Contractor: The person or entity identified as such in the Agreement and referred to throughout

the Contract Documents as if singular in number and neutral in gender. The term “Contractor” means the Contractor or its authorized representative.

22. Contractor’s Employees: Persons engaged in execution of Work under Contract as direct

employees of Contractor, as Subcontractors, or as employees of Subcontractors. 23. Day: One calendar day of 24 hours measured from midnight to the next midnight, unless the

word “day” is specifically modified to the contrary. 24. Defective: An adjective which, when modifying the word “Work,” refers to Work that is

unsatisfactory or unsuited for the use intended, faulty, or deficient, that does not conform to the Contract Documents, or does not meet the requirements of any inspection, reference standard, test or approval referred to in the Contract Documents (including but not limited to approval of Samples and “or equal” items), or has been damaged prior to final payment (unless responsibility for the protection thereof has been assumed by Port). Port is the judge of whether Work is Defective.



25. Drawings: The graphic and pictorial portions of Contract Documents, wherever located and whenever issued, showing the design, location and dimensions of the Work, generally including plans, elevations, sections, details, schedules, and diagrams.

26. Equal: Equal in opinion of Port. Burden of proof of equality is responsibility of Contractor. 27. Final Acceptance or Final Completion: Port’s acceptance of the Work as satisfactorily completed

in accordance with Contract Documents. Requirements for Final Acceptance/Final Completion include, but are not limited to:

a. All systems having been tested and accepted as having met requirements of Contract Documents.

b. All required instructions and training sessions having been given by Contractor.

c. All Project Record Documents having been submitted by Contractor, reviewed by Port, and accepted

by Port.

d. All punch list Work, as directed by Port, having been completed by Contractor.

e. Generally all Work, except Contractor maintenance after Final Acceptance/Final Completion, having been completed to satisfaction of Port.

28. Force Account: Work directed to be performed without prior agreement as to lump sum or unit

price cost thereof, and which is to be billed at cost for labor, materials, equipment, taxes, and other costs, plus a specified percentage for overhead and profit.

29. Home Office Overhead: Home office overhead shall not be included as part of the cost of the

Work, but shall be part of Contractor’s profit and shall include, but is not limited to, the following: accounting functions of Contractor’s main office; general expenses of Contractor’s main office; interest on capital; and salaries of any home office estimators and administration.

30. Milestone: A principal event specified in Contract Documents relating to an intermediate

completion date or time prior to Substantial Completion of all Work. 31. Modification: Same as Contract Modification. 32. Not in Contract: Work that is outside the scope of Work to be performed by Contractor under

Contract Documents. 33. Notice of Completion: Shall have the meaning provided in California Civil Code §3093, and any

successor statute. 34. Off Site: Outside geographical location of the Project. 35. Overhead: All on-site payroll costs, and fringe benefits of same, for supervising, estimating,

expediting, drafting and clerical services where directly affecting the cost of the Work; small tools (less than Five Hundred Dollars ($500.00) capital cost per item); equipment maintenance and repairs; temporary construction, utilities, and safety requirements, other than falsework, forming and necessary scaffolding; transportation of materials other than direct identifiable cost of specific deliveries, or as included in the price of material; parking fees for workmen; permit fees; cost of reproduction; and General Insurance and Bonds.



36. Partial Utilization: Use by Port of a substantially completed part of the Work for the purpose for which it is intended (or a related purpose) prior to Substantial Completion of all of the Work.

37. PCBs: Polyclorinated byphenyls. 38. Phase: A specified portion of the Work (if any) specifically identified as a Phase in Document

00520 (Agreement) or Document 01100 (Summary). 39. Port: The Port of Stockton. 40. Port-Furnished, Contractor-Installed: Items furnished by Port at its cost for installation by

Contractor at its cost under Contract Documents. 41. Port’s Representative(s): See Document 00520 (Agreement). 42. Product Data: That information (brochures, catalog sheets, manufacturer’s cut sheets, etc.)

supplied by vendors having technical and commercial characteristics of the supplied equipment or materials and accompanying commercial terms such as warranties, instructions, and manuals.

43. Progress Report: A periodic report submitted by Contractor to Port with progress payment

invoices accompanying progress schedule. See Document 00700 (General Conditions). 44. Project: Total construction of which Work performed under Contract Documents may be whole

or part. 45. Project Manager: If used elsewhere in the Contract Documents, “Project Manager” shall mean a

person holding a valid California State Architect’s or Engineer’s license representing the Port in the administration of the Contract Documents. Project Manager may be an employee of or an independent consultant to Port. When Project Manager is referred to within the Contract Documents and no Project Manager has in fact been designated, then the matter shall be referred to Port. The term Project Manager shall be construed to include employees of Project Manager and/or employees that Project Manager supervises. When the designated Project Manager is an employee of Port, his or her authorized representatives on the Project will be included under the term Project Manager. If Project Manager is an employee of Port Project Manager is the beneficiary of all Contractor obligations to Port, including without limitation, all releases and indemnities.

46. Project Manual: Project Manual consists of Bidding Requirements, Agreement, Bonds,

Certificates, Contract Conditions, Drawings, and Specifications. 47. Project Record Documents: All Project deliverables required under Sections 01700 et seq.,

including without limitation, as-built drawings; Installation, Operation, and Maintenance Manuals; and Machine Inventory Sheets.

48. Request for Information (“RFI”): A document prepared by Contractor requesting information

regarding the Project or Contract Documents. The RFI system is also a means for Port to submit Contract Document clarifications or supplements to Contractor.

49. Request for Proposals (“RFP”): A document issued by Port to Contractor whereby Port may

initiate changes in the Work or Contract Time as provided in Contract Documents.



50. Request for Substitution (“RFS”): A document prepared by Contractor requesting substitution of materials as permitted and to the extent permitted in Contract Documents.

51. RFI-Reply: A document consisting of supplementary details, instructions, or information issued

by Port that clarifies or supplements Contract Documents, and with which Contractor shall comply. RFI-Replies do not constitute changes in Contract Sum or Contract Time except as otherwise agreed in writing by Port. RFI-Replies will be issued through the RFI administrative system.

52. Samples: Physical examples of materials, equipment, or workmanship that are representative of

some portion of the Work and which establish the standards by which such portion of the Work will be judged.

53. Shop Drawings: All drawings, diagrams, illustrations, schedules, and other data or information

which are specifically prepared or assembled by or for Contractor and submitted by Contractor to illustrate some portion of the Work.

54. Site: The particular geographical location of Work performed pursuant to Contract Documents. 55. Specifications: The written portion of the Contract Documents consisting of requirements for

materials, equipment, construction systems, standards, and workmanship for the Work; performance of related services; and are contained in Divisions 1 through 16 (or 17 if used.)

56. State Specifications (or Standard Specifications): State of California, Department of

Transportation, Standard Specifications for Construction of Local Streets and Roads,” latest edition in effect (including amendments issued by the California Department of Transportation) at the time that bids are received by the Port.

57. Subcontractor: A person or entity that has a direct contract with Contractor to perform a portion

of the Work at the Site. The term “Subcontractor” is referred to throughout the Contract Documents as if singular in number and neutral in gender and means a Subcontractor or an authorized representative of the Subcontractor. The term “Subcontractor” does not include a separate contractor or subcontractors of a separate contractor.

58. Substantial Completion: The Work (or a specified part thereof) has progressed to the point

where, in the opinion of Port as evidenced by a Certificate of Substantial Completion, the Work is sufficiently complete, in accordance with Contract Documents, so that the Work (or specified part) can be utilized for the purposes for which it is intended; or if no such certificate is issued, when the Work (or specified part) is complete and ready for final payment as evidenced by written recommendation of Port for final payment. The terms “Substantially Complete” and “Substantially Completed” as applied to all or part of the Work refer to Substantial Completion thereof.

59. Supplemental Instruction: A written directive from Port to Contractor ordering alterations or

Modifications that do not result in change in Contract Sum or Contract Time, and do not substantially change Drawings or Specifications.

60. Underground Facilities: All pipelines, conduits, ducts, cables, wires, manholes, vaults, tanks,

tunnels or other such facilities or attachments, and any encasements containing such facilities that have been installed underground to furnish any of the following services or materials: Electricity, gases, chemicals, steam, liquid petroleum products, telephone or other



communications, cable television, sewage and drainage removal, traffic or other control systems, or water.

61. Unit Price Work: Shall be the portions of the Work for which a unit price is provided in

Document 00520 (Agreement) or Section 01100 (Summary). 62. Work: The entire completed construction, or the various separately identifiable parts thereof,

required to be furnished under the Contract Documents within the Contract Time. Work includes and is the result of performing or furnishing labor and furnishing and incorporating materials and equipment into the construction, and performing or furnishing services and furnishing documents, all as required by the Contract Documents including everything shown in the Drawings and set forth in the Specifications. Wherever the word “work” is used, rather than the word “Work,” it shall be understood to have its ordinary and customary meaning.

C. The following terms are not necessarily identified with initial caps; however they shall have the meaning set

forth below: 1. Wherever words “as directed,” “as required,” “as permitted,” or words of like effect are used, it

shall be understood that direction, requirements, or permission of Port is intended. Words “sufficient,” “necessary,” “proper,” and the like shall mean sufficient, necessary, or proper in judgment of Port. Words “approved,” “acceptable,” “satisfactory,” “favorably reviewed,” or words of like import, shall mean approved by, or acceptable to, or satisfactory to, or favorably reviewed by Port.

2. Wherever the word “may” or “ought” is used, the action to which it refers is discretionary.

Wherever the word “shall” or “will” is used, the action to which it refers is mandatory. 3. By Port: Work that will be performed by Port or its agents at the Port’s expense. 4. By Others: Work that is outside scope of Work to be performed by Contractor under this

Contract, which will be performed by Port, other contractors, or other means. 5. Concealed: Work not exposed to view in the finished Work, including within or behind various

construction elements. 6. Exposed: Work exposed to view in the finished Work, including behind louvers, grilles, registers

and various other construction elements. 7. Furnish: Supply only, do not install. 8. Indicated: Shown or noted on the Drawings. 9. Install: Install or apply only, do not furnish. 10. Latent: Not apparent by reasonable inspection, including but not limited to, the inspections and

research required as a condition to bidding under Document 00700 (General Conditions). 11. Law: Unless otherwise limited, all applicable laws including without limitation all federal, state,

and local laws, statutes, standards, rules, regulations, ordinances, and judicial and administrative decisions.



12. Material: This word shall be construed to embrace machinery, manufactured articles, materials of construction (fabricated or otherwise), and any other classes of material to be furnished in connection with Contract, except where a more limited meaning is indicated by context.

13. Provide: Furnish and install. 14. Shown: As indicated on Drawings. 15. Specified: As written in Specifications. 16. Testing and special inspection agency: An independent entity engaged by Port to inspect

and/or test the workmanship, materials, or manner of construction of buildings or portions of buildings, to determine if such construction complies with the Contract Documents and applicable codes.


END OF SECTION



DIVISION 1 GENERAL REQUIREMENTS SECTION 01500

TEMPORARY FACILITIES AND CONTROLS PORT POLICE FUSION CENTER

PART 1 GENERAL

1.1 SUMMARY

A. Section Includes: 1. Temporary Electricity 2. Temporary Communications. 3. Temporary Water 4. Fences 5. Protection of Public and Private Property 6. Temporary Sanitary Facilities 7. Temporary Barriers and Enclosures 8. Water Control 9. Pollution Control 10. Construction Aids 11. Erosion Control 12. Noise Control 13. Traffic Control 14. Removal of Temporary Facilities and Controls

1.2 TEMPORARY ELECTRICITY

Contractor shall provide, maintain, and pay for electrical power at the Site for construction purposes and for Contractor’s and Project Manager’s trailers. Power may be obtained from Port, but Contractor must provide all necessary wiring and appurtenances for connection to Port’s system.

1.3 TEMPORARY COMMUNICATIONS

Contractor shall provide, maintain, and pay for all applicable communications and data services (including without limitation telephone, facsimile, e-mail and internet) to field office commencing at time of Project mobilization, including all installation and connection charges. In addition, the Contractor shall provide, maintain and pay for a high speed internet service (such as DSL) at the Site.

1.4 TEMPORARY WATER

A. Contractor shall provide, maintain, and pay for suitable quality water service required for construction operations.

B. All water required for and in connection with the Work, including without limitation for dust control, shall be furnished by and at the expense of Contractor. Contractor shall furnish necessary pipe, hose, nozzles, meter, and tools and perform all necessary labor. Unnecessary waste of water will not be permitted. Special hydrant wrenches shall be used for opening and closing fire hydrants; in no case shall pipe wrenches be used for this purpose. Contractor must verify location and line sizing prior to usage.

1.5 FENCES

A. All existing fences affected by the Work shall be maintained by Contractor until Final Completion. Fences which interfere with construction operations shall not be relocated or dismantled until Port gives written permission to do so, and the period the fence may be left relocated or dismantled has been agreed upon. Where fences must be maintained across the construction easement, adequate gates shall be installed. Gates shall be kept closed and locked at all times when not in use.

B. On completion of the Work across any tract of land, Contractor shall restore all fences to their original or to a better condition and to their original locations.

Port of Stockton Temporary Facilities and Controls Port Police Fusion Center 01500 - 1


1.6 PROTECTION OF PUBLIC AND PRIVATE PROPERTY

A. Contractor shall protect, shore, brace, support, and maintain all underground pipes, conduits, drains, and other underground construction uncovered or otherwise affected by its construction operations. All pavement, surfacing, driveways, curbs, walks, buildings, utility poles, guy wires, fences, and other surface structures affected by construction operations, together with all sod and shrubs in yards, parkways, and medians, shall be restored to their original condition, whether within or outside the easement. All replacements shall be made with new materials.

B. Contractor shall be responsible for all damage to streets, roads, highways, shoulders, ditches, embankments, culverts, bridges, and other public or private property, regardless of location or character, which may be caused by transporting equipment, materials, or workers to or from the Work, Site or any part thereof, whether by Contractor or Subcontractors. Contractor shall make satisfactory and acceptable arrangements with Port, or the agency or authority having jurisdiction over the damaged property, concerning its repair or replacement or payment of costs incurred in connection with the damage.

C. All fire hydrants and water control valves shall be kept free from obstruction and available for use at all times.

1.7 TEMPORARY SANITARY FACILITIES

A. Contractor shall provide and maintain required temporary buildings with sanitary toilets for use of all workers. At a minimum, sanitary facilities shall be located at trailer site, staging area, and adjacent to work area.

B. Sanitary facilities shall be of reasonable capacity, properly maintained throughout the construction period, and obscured from public view to the greatest practical extent. If toilets of the chemically treated type are used, at least one toilet will be furnished for each 20 persons. Contractor shall enforce the use of such sanitary facilities by all personnel at the Site.

C. Contractor shall comply with all minimum requirements of the Health Department or other public agency having jurisdiction; maintain in a sanitary condition at all times.

1.8 TEMPORARY BARRIERS AND ENCLOSURES

Contractor shall: A. Provide barriers to prevent unauthorized entry to construction areas to allow for Port's use of Site, and to

protect existing facilities and adjacent properties from damage from construction operations. B. Provide barricades required by governing authorities for public access to existing buildings. C. Protect vehicular traffic, stored materials, Site, and structures from damage.

1.9 WATER CONTROL

Contractor shall: A. Grade Site to drain. B. Maintain excavations free of water. C. Protect Site from puddling or running water. D. Provide water barriers as required to protect Site from soil erosion. E. Provide for drainage of storm water and such water as may be applied or discharged on the Site in performance

of the Work. Drainage facilities shall be adequate to prevent damage to the Work, the Site, and adjacent property.

F. Clean, enlarge and/or supplement existing drainage channels and conduit as necessary to carry all increased runoff attributable to Contractor’s operations. Construct dikes as necessary to divert increased runoff from entering adjacent property (except in natural channels), to protect Port’s facilities and the Work, and to direct water to drainage channels or conduits. Provide ponding as necessary to prevent downstream flooding.

1.10 POLLUTION CONTROL

A. Contractor shall prevent the pollution of drains and watercourses by sanitary wastes, sediment, debris, and other substances resulting from construction activities. No sanitary wastes shall be permitted to enter any drain or watercourse other than sanitary sewers. No sediment, debris, or other substance shall be permitted to enter sanitary sewers without authorization of the receiving sanitary sewer service, and all possible Best Management Practices (BMPs) shall be taken to prevent such materials from entering any drain to watercourse.



B. The Contractor shall implement BMPs during construction activities as specified in the California Storm Water Best Management Practices Handbook (Stormwater Quality Task Force, 1993) and/or the Manual of Standards for Erosion and Sediment Control Measures (ABAG, 1995). Erosion and sedimentation control practices shall include installation of silt fences, straw wattle, soil stabilization, revegetation, and runoff control to limit increases in sediment in stormwater runoff, including but not limited to, detention basins, straw bales, silt fences, check dams, geofabrics, drainage swales, and sand bag dikes.

C. In the event that dewatering of excavations is required, Contractor shall obtain all necessary approvals and permits for discharge of the dewatering effluent from the local jurisdiction. Contractor shall be responsible for assuring that water quality of such discharge meets the appropriate permit requirements prior to any discharge.

1.11 CONSTRUCTION AIDS

Contractor shall furnish, install, maintain, and operate all construction aids required by it and its Subcontractors in the performance of the Work, except as otherwise provided herein. Such construction aids shall include elevators and hoists, cranes, temporary enclosures, swing staging, scaffolding and temporary stairs. Construction aids shall be furnished without charge to the Subcontractors, and all necessary erection, maintenance, and operating personnel shall be included. In the event of conflict, the contractor furnishing the equipment shall determine priorities in the best interest of the Project.

1.12 EROSION CONTROL

A. Contractor shall prevent soil erosion on the Site and adjacent property resulting from its construction activities to the maximum extent practical, including implementation of Best Management Practices. Effective measures shall be initiated prior to the commencement of clearing, grading, excavation, or other operations that will disturb the natural protection.

B. Work shall be scheduled to expose areas subject to erosion for the shortest possible time, and natural vegetation shall be preserved to the greatest extent practicable. Temporary storage and construction buildings shall be located, and construction traffic routed, to minimize erosion. Temporary fast-growing vegetation or other suitable ground cover shall be provided as necessary to control runoff.

1.13 NOISE CONTROL

A. When required by OSHA Standards, construction workers shall be provided with ear protection to operate equipment.

B. Contractor shall take reasonable measures to avoid unnecessary noise. Such measures shall be appropriate for the normal ambient sound levels in the area during working hours. All construction machinery and vehicles shall be equipped with practical sound-muffling devices, and operated in a manner to cause the least noise consistent with efficient performance of the Work. During construction activities on or adjacent to occupied buildings, and when appropriate, Contractor shall erect screens or barriers effective in reducing noise in the building and shall conduct its operations to avoid unnecessary noise which might interfere with the activities of building occupants.

C. Contractor shall ensure and provide certification to Port that all construction equipment and vehicles used for the Work are: 1. Maintained in good mechanical condition 2. Equipped with properly installed engine mufflers

1.14 TRAFFIC CONTROL

All traffic associated with the construction, including without limitation delivery and mail trucks, shall enter the Contractor’s access gate and road. Contractor shall provide signs directing construction and delivery traffic to this gate. Construction truck traffic shall be limited to off-peak traffic hours, between the hours of 10:00 a.m. and 4:00 p.m., Monday through Friday.

1.15 REMOVAL OF TEMPORARY FACILITIES AND CONTROLS

Contractor shall: A. Remove temporary utilities, equipment, facilities, and materials prior to final inspection. B. Remove underground installations. C. Clean and repair damage caused by installation or use of temporary work.



D. Restore existing facilities used during construction to original condition. Restore permanent facilities used during construction to specified condition.


END OF SECTION




SITE SECURITY AND SAFETY

PORT POLICE FUSION CENTER PART 1 GENERAL

1.1 SUBMITTALS

A. See Section 01330 (Submittal Procedures). B. Site Security C. Safety Program. D. Fire Protection Plan

1.2 PROTECTION

Contractor shall: A. Continuously maintain protection as necessary to protect the Work, as a whole and in part, and adjacent

property and improvements from accidents, injuries or damage. B. Properly protect the Work:

1. With lights, guard rails, temporary covers and barricades. 2. Enclose excavations with proper barricades. 3. Brace and secure all parts of the Work against storm and accident. 4. Provide such additional forms of protection that may be necessary under existing circumstances.

C. Provide and maintain in good condition all protective measures required to adequately protect the public from hazards resulting from the Work and to exclude unauthorized persons from the Work. When regulated by Building Code, Cal OSHA, or other authority, such legal requirements for protection shall be considered as minimum requirements. Be responsible for the protection in excess of such minimum requirements as required.

1.3 CONTROL OF SITE

Contractor shall ensure that no alcohol, firearms, weapons, or controlled substance enters or is used at the Site. Immediately remove from the Site and terminate the employment of any employee found in violation of this provision.

1.4 SITE SECURITY

A. As part of the Work included within the Contract Price, Contractor shall take and be fully responsible for all reasonably required measures to protect and maintain the security of persons, existing facilities and property at the Site, including without limitation preventing theft, loss, vandalism and improper concealment of personal property of Port and all persons lawfully present on the Site, and including times where workers are not present on the Site. Contractor’s measures shall include, at a minimum, maintaining a log of all persons entering and leaving the Site and who they represent, what they are delivering and to whom.

B. No claim shall be made against Port by reason of any act of an employee or trespasser, and Contractor shall repair all damage to Port’s property resulting from Contractor’s failure to provide adequate security measures.

C. Contractor shall supply additional security fencing, barricades, lighting, and other security measures as required to protect and control the Site.

1.5 SAFETY PROGRAM

A. Within 15 days after Notice to Proceed, Contractor shall submit a Safety Program that has been reviewed and approved by an Industrial Hygienist certified by the American Board of Industrial Hygiene or a Certified Safety Professional. The Safety Program shall include the name, certification number, and certification seal of the Industrial Hygienist or Certified Safety Professional. Contractor shall comply with the Safety Program and all applicable federal, state, and local regulation codes, rules, law and ordinances.

Port of Stockton Site Security and Safety Port Police Fusion Center 01540 - 1


B. Receipt and/or review of the Safety Program by Port, Project Manager or Port’s representative shall not relieve Contractor of any responsibility for complying with all applicable safety regulations.

C. It is essential that Contractor and each Subcontractor implement an effective and vigorous Safety and Health Program to cover their respective portions of the Work. Subject to Contractor’s overall responsibility for Project safety, it shall be understood that the full responsibility for providing a safe place to work with respect to their respective portions of the Work rests with each individual Contractor and Subcontractor.

D. Safety Program components: 1. Injury and Illness Prevention Program (IIPP): Conforming to the General Industrial Safety Orders

(CCR Title 8, Division 1, Chapter 4, Subchapter 7, Section 3203), and the California Labor Code (Section 6401.7).

2. Site-Specific Safety and Health Plan (SSHP): Describing health and safety procedures that shall be implemented during the Work in order to ensure safety of the public and those performing the Work. Follow the guidelines for a SSHP listed in CCR Title 8, Division 1, Chapter 4, Subchapter 7, Section 5192, Item (b)(4) f.

E. The wearing of hard hats shall be mandatory at all times for personnel on Site. Contractor shall supply sufficient hard hats to equip properly all employees and visitors.

F. Whenever an exposure exists, appropriate personal protective equipment (PPE) shall be used by all affected personnel. Contractor shall supply PPE to all personnel under Contractor’s direction.

1.6 SAFETY REQUIREMENTS

A. Standards: Contractor shall maintain the Project in accordance with state and local safety and insurance standards.

B. Hazards Control. Contractor shall: 1. Store volatile wastes in covered metal containers and remove from premises daily. 2. Prevent accumulation of wastes that create hazardous conditions. 3. Provide adequate ventilation during use of volatile or noxious substances.

C. Contractor shall conduct cleaning and disposal operations to comply with local ordinances and anti-pollution laws, and: 1. Not burn or bury rubbish or waste material on the Site. 2. Not dispose of volatile wastes such as mineral spirits, oil, or paint thinner in storm or sanitary drains. 3. Not dispose of wastes into streams or waterways.

D. Contractor shall provide accident information on the forms provided by Contractor. This information shall be provided on the same day as the occurrence of said incident.

1.7 SITE SAFETY OFFICER

A. Contractor shall designate one of Contractor’s staff as “Site Safety Officer” whose duties shall include the responsibility for enforcing the environmental protection provisions of the Contract Documents including safety and health, the requirements of the Occupational Safety and Health Act, and other applicable federal, state and local standards. Contractor shall submit for review by Port Contractor’s intended traffic flow plan, security plan, program for temporary structures, housecleaning plan, demolition program, and environmental safety and health plan. After review by Port, the implementation and enforcement of these plans shall become the responsibility of the Site Safety Officer. Any changes in the plans shall be requested by Contractor through the Site Safety Officer for written concurrence by Port.

B. Port’s risk management representative(s) shall be allowed access to accident/injury and illness reports, inspection reports, scheduling and construction meetings, and safety meetings.

PART 2 PRODUCTS - NOT USED PART 3 EXECUTION - NOT USED

END OF SECTION

Port of Stockton Site Security and Safety Port Police Fusion Center 01540 - 2



SECTION 01600

PRODUCT REQUIREMENTS PORT POLICE FUSION CENTER

PART 1 GENERAL

1.1 SECTION INCLUDES

A. Products B. Product Options and Substitutions C. Product Delivery Requirements D. Shipping Requirements

1.2 PRODUCTS AND PRODUCT LIST

A. Products: Term includes new material, machinery, components, equipment, fixtures, and systems forming the Work. Term does not include machinery and equipment used for preparation, fabrication, conveying and erection of the Work. Products may also include existing materials or components required for reuse.

B. Contractor shall not use materials and equipment removed from existing premises, except as specifically permitted by the Contract Documents. For similar components, Contractor shall provide interchangeable components of the same manufacturer.

C. Tabulate products by Specification Section number and title. D. For products specified only by reference standards, list each such product:

1. Name and address of manufacturer. 2. Trade name. 3. Model or catalog designation. 4. Manufacturer’s data:

a. Reference standards. b. Performance test data.

1.3 PRODUCT OPTIONS AND SUBSTITUTIONS

A. Summary: This paragraph 1.3 describes procedures for selecting products and requesting substitutions of unlisted materials in lieu of materials named in the Specifications or approved for use in Addenda that were not already the subject of a Document 00660 (Substitution Request Form) submittal as provided in Document 00200 (Instructions to Bidders). Time periods provided in Document 00200 are mandatory. All substitution requests must be made by using Document 00660 (Substitution Request Form), regardless of when requested.

B. Contractor’s Options: 1. For products specified only by reference standard: Select any product meeting that standard. 2. For products specified by naming one or more products or manufacturers:

a. Select products of any named manufacturer meeting specifications. b. If product becomes unavailable due to no fault of Contractor, submit Request for Substitution (RFS),

including all information contained in this Section 01600 and a fully executed Document 00660 (Request for Substitution), but using the term ”Contractor” each place the term ”Bidder” appears in that form.

C. Substitutions: 1. Except as provided in Document 00200 (Instructions to Bidders) with respect to “or equal” items, Port will

consider Contractor’s substitution requests only when product becomes unavailable due to no fault of Contractor, or if the product specified no longer complies with local regulations or laws. Requests for review of proposed substitute items will not be accepted from anyone other than Contractor. The RFS shall state the extent, if any, to which the evaluation and acceptance of the proposed substitute will prejudice Contractor’s achievement of Substantial Completion on time, and whether or not acceptance of the

Port of Stockton Product Requirements Port Police Fusion Center 01600 - 1


substitute for use in the Work will require a change in any of the Contract Documents (or in the provisions of any other direct contract with Port for work on the Project).

2. Contractor shall submit separate RFS (and four copies) for each product and support each request with: a. Product identification. b. Manufacturer’s literature. c. Samples, as applicable. d. Name and address of similar projects on which product has been used, and dates of installation. e. Name, address, and telephone number of manufacturer’s representative or sales engineer. f. For construction methods: Detailed description of proposed method; drawings illustrating methods.

3. Where required, Contractor shall itemize a comparison of the proposed substitution with product specified and list significant variations including, but not limited to dimensions, weights, service requirements, and functional differences. If variation from product specified is not pointed out in submittal, variation will be rejected even though submittal was favorably reviewed. Identify all variations of the proposed substitute from that specified in the RFS and indicate available maintenance, repair, and replacement service.

4. Contractor shall state whether the substitute will require a change in any of the Contract Documents (or provisions of any other direct contract with Port for work on the Project) to adapt the design of the proposed substitute, and whether or not incorporation or use of the substitute in connection with Work is subject to payment of any license fee or royalty. Submit data relating to changes in construction schedule.

5. Contractor shall include accurate cost data comparing proposed substitution with product and amount of net change in Contract Sum including, but not limited to, an itemized estimate of all costs or credits that will result directly or indirectly from acceptance of such substitute, including costs of redesign and claims of other contractors affected by the resulting change, all of which will be considered by Port in evaluating the proposed substitute. Port may require Contractor to furnish additional data about the proposed substitute.

6. Port will not consider substitutions for acceptance (or, in Port’s sole discretion, Port may make Contractor solely responsible for all resulting costs, expenses and other consequences) when a substitution: a. Results in delay meeting construction Milestones or completion dates. b. Is indicated or implied on submittals without formal request from Contractor. c. Is requested directly by Subcontractor or supplier. d. Acceptance will require substantial revision of Contract Documents. e. Disrupts Contractor’s job rhythm or ability to perform efficiently.

7. Substitute products shall not be ordered without written acceptance of Port. 8. Port will determine acceptability of proposed substitutions and reserve right to reject proposals due to

insufficient information. 9. Accepted substitutions will be evidenced by a Change Order. All Contract Documents requirements apply

to Work involving substitutions. D. Contractor’s Representation and Warranty:

1. Contractor’s RFS constitute a representation and warranty that Contractor: a. Has investigated proposed product and determined that it meets or exceeds, in all respects, specified

product. b. Will provide the same warranty for substitution as for specified product. c. Will coordinate installation and make other changes that may be required for Work to be complete in

all respects. d. Waives claims for additional costs which may subsequently become apparent. e. Will compensate Port for additional redesign costs associated with substitution. f. Will be responsible for Construction Schedule slippage due to substitution. g. Will be responsible for Construction Schedule delay due to late ordering of available specified

products caused by requests for substitution that are subsequently rejected by Port. h. Will compensate Port for all costs; including extra costs of performing Work under Contract

Documents, extra cost to other contractors, and any claims brought against Port, caused by late requests for substitutions or late ordering of products.

E. Port’s Duties. Port will: 1. Review Contractor’s RFS with reasonable promptness. 2. Notify Contractor in writing of decision to accept or reject requested substitution.

F. Administrative Requirements:



1. Specified products, materials, or systems for Project may include Architectural or Engineering or on-file standards required by the regulatory agency. Contractor’s substitution of products, materials or systems may require additional Architectural or Engineering, testing, reviews, approvals, assurances, or other information for compliance with regulatory agency requirements or both. Contractor shall provide all agency approvals or other additional information required and pay additional costs for required Port services made necessary by the substitution at no increase in Contract Sum or Contract Time, and as a part of substitution proposal.

1.4 PRODUCT DELIVERY REQUIREMENTS

Contractor shall: A. Deliver products in accordance with manufacturer's instructions. B. Promptly inspect shipments to assure that products comply with requirements, quantities are correct, and

products are undamaged.

1.5 SHIPPING REQUIREMENTS

A. Preparation for Shipment. All equipment shall be suitably packaged to facilitate handling and to protect against damage during transit and storage. All equipment shall be boxed, crated, or otherwise completely enclosed and protected during shipment, handling, and storage. All equipment shall be protected from exposure to the elements and shall be kept dry at all times. 1. Painted and coated surfaces shall be protected against impact, abrasion, discoloration, and other damage.

Painted and coated surfaces which are damaged prior to acceptance of equipment shall be repainted to the satisfaction of Port.

2. Grease and lubricating oil shall be applied to all bearings and similar items. B. Shipping. Before shipping each item of equipment shall be tagged or marked as identified in the delivery

schedule or on the Shop Drawings. Complete packing lists and bills of material shall be included with each shipment.

C. Contractor shall store products only in staging area per provisions of Section 01100 (Summary). D. Handle, store, and protect products in accordance with manufacturer's instructions, with seals and labels intact

and legible. Store sensitive products in weather-tight, climate-controlled enclosures. E. For exterior storage of fabricated products, place on appropriate supports, above ground. F. Cover products subject to deterioration with impervious sheet covering. Provide ventilation to avoid

condensation. G. Store loose granular materials on solid flat surfaces in a well-drained area. H. Provide equipment and personnel to store products by methods to prevent soiling, disfigurement, or damage. I. Arrange storage of products to permit access for inspection. Periodically inspect to assure products are

undamaged and are maintained under specified conditions. J. Without limiting the foregoing:

1. Contractor shall bear the responsibility for delivery of equipment, spare parts, special tools, and materials to the Site and shall comply with the requirements specified herein and provide required information concerning the shipment and delivery of the materials specified in Contract Documents. These requirements also apply to any subsuppliers making direct shipments to the Site. Acceptance of the equipment shall be made only after it is installed, tested, placed in operation and found to comply with all the specified requirements.

2. All items shall be checked against packing lists immediately on delivery to the Site for damage and for shortages. Damage and shortages shall be remedied with the minimum of delay.

3. No metalwork (miscellaneous steel shapes and reinforcing steel) shall be stored directly on the ground. Masonry products shall be handled and stored in a manner to hold breakage, chipping, cracking, and spalling to a minimum. Cement, lime, and similar products shall be stored off the ground on pallets and shall be covered and kept completely dry at all times. Pipe fittings and valves may be stored out of doors, but must be placed on wooden blocking. PVC pipe, geomembranes, plastic liner, and other plastic materials shall be stored off the ground on pallets and protected from direct sunlight.

4. Electrical equipment, and all equipment with antifriction or sleeve bearings shall be stored in weathertight structures maintained at a temperature above 60°F. Electrical equipment, controls, and insulation shall be protected against moisture and water damage. All space heaters furnished in equipment shall be connected and operated continuously.



5. Equipment having moving parts such as gears, bearings, and seals, shall be stored fully lubricated with oil, grease, etc., unless otherwise instructed by the manufacturer. Manufacturer’s storage instructions shall be carefully followed by Contractor.

6. When required by the equipment manufacturer, moving parts shall be rotated a minimum of twice a month to ensure proper lubrication and to avoid metal to metal “welding”. Upon installation of the equipment, Contractor shall, at the discretion of Port, start the equipment at one-half load for an adequate period of time to ensure that the equipment does not deteriorate from lack of use.

7. When required by the equipment manufacturer, lubricant shall be changed upon completion of installation and as frequently as required thereafter during the period between installation and acceptance. New lubricants shall be put into the equipment by Contractor at the time of acceptance.

8. Equipment and materials shall not show any pitting, rust, decay, or other deleterious effects of storage when installed in the Work.

9. In addition to the protection specified for prolonged storage, the packaging of spare units and spare parts shall be for export packing and shall be suitable for long-term storage in a damp location. Each spare item shall be packed separately and shall be completely identified on the outside of the container.

10. Handling. Stored items shall be laid out to facilitate their retrieval for use in the Work. Care shall be taken when removing the equipment for use to ensure the precise piece of equipment is removed and that it is handled in a manner than does not damage the equipment.

PART 2 PRODUCTS - NOT USED.

PART 3 EXECUTION - NOT USED.

END OF SECTION




CLEANING


PART 1 GENERAL 1.1 SECTION INCLUDES

A. Progress Cleaning B. Final Cleaning

1.2 PROGRESS CLEANING

A. Contractor shall perform periodic cleaning to ensure that any streets and other Port and public properties are maintained free from accumulation of waste materials, dust, mud, and debris.

B. Where required, Contractor shall wet down surfaces to lay dust and prevent the blowing of dust to nearby residences or public properties.

C. Contractor shall keep all paved roads clean and free of dust, mud, and debris resulting from Contractor’s operations. Daily cleanup throughout the job will be necessary as Contractor progresses with its Work, but extra attention to cleanup shall be made prior to weekends and holidays. Without limiting the foregoing, Contractor shall remove trench spoil along traveled ways daily; grade and vacuum broom surfaces initially where applicable and later water flush with high-pressure sprays, being careful to avoid downstream contamination.

D. All dust, mud, spoils, and construction debris shall be removed daily from all roadways, ditches, shoulders, and private property (fills or spoils placed on private property at private property owner's written request excepted).

E. Disposal of Materials: 1. As part of the scope of Work included within the Contract Sum, Contractor shall be fully responsible for

disposing of all construction debris, dirt and spoils resulting from the Work. 2. All waste materials, debris, dirt and rubbish shall be disposed of at sites to be chosen by Contractor in

accordance with applicable local, state, and federal regulations. 3. Contractor shall become familiarized with the requirements of the agency having jurisdiction over any

contemplated disposal site and shall comply with all such requirements. 4. Contractor will estimate and report to Port, an estimate of quantities (e.g. tonnage) of waste materials

disposed of for compliance with AB75. Reporting requirements include the nature of materials, destination, volume and tonnage.

F. All excess soil from performance of Work shall be disposed at sites to be chosen by Contractor in accordance with applicable local, state, and federal regulations. If Contractor elects to dispose of soil on any private property, prior to any dumping, a letter allowing such dumping shall be obtained from the property owner and presented to Port. Contractor is advised that the property owner is required to obtain a fill permit from the applicable government agency(ies). In addition, placement of fill in wetland areas is subject to permit procedures of the US Army Corps of Engineers. At the completion of Work, a letter from each affected property owner will be required releasing Contractor, Port and any Port consultant from future liability.

G. If Contractor does not properly clean the Site, in the opinion of Port, then Port shall have the option of using outside equipment to perform the cleanup and such cost will be withheld from the Contract Sum.

1.3 FINAL CLEANING

A. Contractor shall execute final cleaning prior to final inspection, using only properly skilled workers. B. Remove grease, dust, dirt, stains, labels, fingerprints, and other foreign materials from exposed interior and

exterior finished surfaces. C. Repair, patch, and touch up marred surfaces to match adjacent finishes. D. Clean interior and exterior surfaces exposed to view; remove temporary labels, stains and foreign substances,

polish transparent and glossy surfaces, vacuum carpeted and soft surfaces. Port of Stockton Cleaning Port Police Fusion Center 01740 - 1


E. Clean equipment and fixtures to a sanitary condition, clean or replace filters of mechanical equipment operated during construction, clean ducts, blowers and coils of units operated without filters during construction.

F. Clean Site; mechanically sweep paved areas. G. Remove waste and surplus materials, rubbish, and construction facilities from Site.


END OF SECTION

Port of Stockton Cleaning Port Police Fusion Center 01740 - 2


SECTION 01770

CONTRACT CLOSEOUT

PORT POLICE FUSION CENTER PART 1 GENERAL 1.1 SUMMARY

A. Section Includes:

1. Description of Contract closeout procedures including:

a. Removal of Temporary Construction Facilities b. Substantial Completion c. Final Completion d. Project Record Documents e. Project Guarantee f. Warranties g. Turn-In h. Release of Claims i. Fire Inspection Coordination j. Building Inspection Coordination

1.2 REMOVAL OF TEMPORARY CONSTRUCTION FACILITIES

A. Remove temporary materials, equipment, services, and construction prior to Substantial Completion inspection. B. Clean and repair damage caused by installation or use of temporary facilities. C. Restore permanent facilities used during construction to specified condition.

1.3 SUBSTANTIAL COMPLETION

A. When Contractor considers Work or designated portion of the Work as Substantially Complete, submit written notice to Port, with list of items remaining to be completed or corrected.

B. Within reasonable time, Port will inspect to determine status of completion. C. Should Port determine that Work is not Substantially Complete, Port will promptly notify Contractor in writing,

listing all defects and omissions. D. Remedy deficiencies and send a second written notice of Substantial Completion. Port will reinspect the Work.

If deficiencies previously noted are not corrected on reinspection, then pay the cost of the reinspection. E. When Port concurs that Work is Substantially Complete, Port will issue a Certificate of Substantial Completion,

accompanied by Contractor’s list of items to be completed or corrected as verified by Port. F. Manufactured units, equipment and systems that require startup must have been started up and run for periods

prescribed by Port before a Certificate of Substantial Completion will be issued. G. A punch list examination will be performed upon Substantial Completion. One follow-up review of punch list

items for each discipline will be provided. If further Site visits are required to review punch list items due to incompleteness of the Work by Contractor, Contractor will reimburse Port for costs associated with these visits.

Port of Stockton Contract Closeout Port Police Fusion Center 01770- 1


1.4 FINAL COMPLETION

A. Final Completion occurs when Work meets requirements for Port’s Final Acceptance. When Contractor considers Work is Finally Complete, submit written certification that: 1. Contractor has inspected Work for compliance with Contract Documents, and all requirements for Final

Acceptance have been met. 2. Except for Contractor maintenance after Final Acceptance, Work has been completed in accordance with

Contract Documents and deficiencies listed with Certificate of Substantial Completion have been corrected. Equipment and systems have been tested in the presence of Port, and are operative.

3. Work is complete and ready for final inspection.

B. In addition to submittals required by Contract Documents, provide submittals required by governing authorities

and submit final statement of accounting giving total adjusted Contract Sum, previous payments, and sum remaining due.

C. When Port finds Work is acceptable and final closeout submittals are complete, Port will issue final Change

Order reflecting approved adjustments to Contract Sum not previously made by Change Order. Should Port determine that Work is incomplete or Defective: 1. Port promptly will so notify Contractor, in writing, listing the incomplete or Defective items. 2. Promptly remedy the deficiencies and notify the Port when it is ready for reinspection.

3. When Port determines that the Work is acceptable under the Contract Documents, Port will request

Contractor to make closeout submittals. D. Final adjustments of accounts:

1. Submit a final statement of accounting to Port, showing all adjustments to the Contract Sum and complete

and execute Document 00650 (Agreement and Release of Any and All Claims). 2. If so required, Port shall prepare a final Change Order for submittal to Contractor, showing adjustments to

the Contract Sum that were not previously made into a Contract Modification. 1.5 PROJECT RECORD DOCUMENTS

A. Contract Documents will not be closed out and final payment will not be made until completion and submittal of Project Record Documents described in Section 01780 (Project Record Documents).

1.6 PROJECT GUARANTEE

A. Requirements for Contractor’s guarantee of completed Work are included in Article 9 of Document 00700 (General Conditions). Guarantee Work done under Contract against failures, leaks, or breaks or other unsatisfactory conditions due to defective equipment, materials, or workmanship, and perform repair work or replacement required, at Contractor’s sole expense, for period of one year from date of Final Acceptance.

B. Neither recordation of Final Acceptance nor final certificate for payment nor provision of the Contract nor

partial or entire use or occupancy of premises by Port shall constitute acceptance of Work not done in accordance with Contract Documents nor relieve Contractor of liability in respect to express warranties or responsibility for faulty materials or workmanship.

C. Port may make repairs to Defective Work as set forth in Document 00700 (General Conditions), Paragraph 9.3.



D. If, after installation, operation, or use of materials or equipment to be provided under Contract proves to be unsatisfactory to Port, Port shall have right to operate and use materials or equipment until said materials and equipment can, without damage to Port, be taken out of service for correction or replacement. Period of use of Defective materials or equipment pending correction or replacement shall in no way decrease guarantee period required for acceptable corrected or replaced items of materials or equipment.

E. Nothing in this Section 01770 shall be construed to limit, relieve, or release Contractor’s, Subcontractors’, and

equipment suppliers’ liability to Port for damages sustained as result of latent defects in equipment caused by negligence of suppliers’ agents, employees, or Subcontractors. Stated in another manner, warranty contained in the Contract Documents shall not amount to, nor shall it be deemed to be, waiver by Port of any rights or remedies (or time limits in which to enforce such rights or remedies) it may have for Defective workmanship or Defective materials under laws of this State pertaining to acts of negligence.

1.7 WARRANTIES

A. Execute Contractor’s Submittals and assemble warranty documents, and Installation, Operation, and Maintenance Manuals described in Section 01330 (Submittal Procedures), executed or supplied by Subcontractors, suppliers, and manufacturers. 1. Provide table of contents and assemble in 8½ inches by 11 inches three-ring binder with durable plastic

cover, appropriately separated and organized. 2. Assemble in Specification Section order.

B. Submit material prior to final Application for Payment.

1. For equipment put into use with Port’s permission during construction, submit within 14 Days after first

operation. 2. For items of Work delayed materially beyond Date of Substantial Completion, provide updated Submittal

within 14 Days after acceptance, listing date of acceptance as start of warranty period. C. Warranties are intended to protect Port against failure of Work and against deficient, Defective, and faulty

materials and workmanship, regardless of sources. D. Limitations: Warranties are not intended to cover failures that result from the following:

1. Unusual or abnormal phenomena of the elements. 2. Vandalism after Substantial Completion. 3. Insurrection or acts of aggression including war.

E. Related Damages and Losses: Remove and replace Work which is damaged as result of Defective Work, or

which must be removed and replaced to provide access for correction of warranted Work. F. Warranty Reinstatement: After correction of warranted Work, reinstate warranty for corrected Work to date of

original warranty expiration or to a date not less than one year after corrected Work was done, whichever is later.

G. Replacement Cost: Replace or restore failing warranted items without regard to anticipated useful service lives. H. Warranty Forms: Submit drafts to Port for approval prior to execution. Forms shall not detract from or confuse

requirements or interpretations of Contract Documents.



1. Warranty shall be countersigned by manufacturers. 2. Where specified, warranty shall be countersigned by Subcontractors and installers.

I. Rejection of Warranties: Port reserves right to reject unsolicited and coincidental product warranties that

detract from or confuse requirements or interpretations of Contract Documents. J. Term of Warranties: For materials, equipment, systems, and workmanship, warranty period shall be one year

minimum from date of Final Completion of entire Work except where: 1. Detailed Specifications for certain materials, equipment or systems require longer warranty periods. 2. Materials, equipment or systems are put into beneficial use of Port prior to Final Completion as agreed to in

writing by Port.

K. Warranty of Title: No material, supplies, or equipment for Work under Contract shall be purchased subject to any chattel mortgage, security agreement, or under a conditional sale or other agreement by which an interest therein or any part thereof is retained by seller or supplier. Contractor warrants good title to all material, supplies, and equipment installed or incorporated in Work and agrees upon completion of all Work to deliver premises, together with improvements and appurtenances constructed or placed thereon by Contractor, to Port free from any claim, liens, security interest, or charges, and further agrees that neither Contractor nor any person, firm, or corporation furnishing any materials or labor for any Work covered by Contract shall have right to lien upon premises or improvement or appurtenances thereon. Nothing contained in this paragraph, however, shall defeat or impair right of persons furnishing materials or labor under bond given by Contractor for their protection or any rights under law permitting persons to look to funds due Contractor in hands of Port.

1.8 TURN-IN

A. Contract Documents will not be closed out and final payment will not be made until all keys issued to Contractor during prosecution of Work and letters from property owners are turned in to Port.

1.9 RELEASE OF CLAIMS

A. Contract Documents will not be closed out and final payment will not be made until Document 00650 (Agreement and Release of Any and All Claims) is completed and executed by Contractor and Port.

1.10 FIRE INSPECTION COORDINATION

A. Coordinate fire inspection and secure sufficient notice to Port to permit convenient scheduling (if applicable).

1.11 BUILDING INSPECTION COORDINATION

A. Coordinate with Port a final inspection for the purpose of obtaining an occupancy certificate (if applicable).


END OF SECTION



SECTION 01780

PROJECT RECORD DOCUMENTS


PART 1 GENERAL

1.1 SUMMARY

A. Section Includes: 1. Administrative and procedural requirements for the following Project Record Documents:

a. Project Record Drawings, Shop Drawings b. Project Record Specifications c. Project Record Product Data d. Miscellaneous Project Record Submittals

B. Specific Project Record Documents requirements that expand requirements of this Section may be included in

the individual Sections of Divisions 2 through 16.

1.2 SUBMITTAL

A. At completion of Project, Contractor shall deliver Project Record Documents to Port. Project Record Documents required include: 1. Marked-up copies of Drawings 2. Marked-up copies of Shop Drawings 3. Marked-up copies of Specifications, Addenda, Change Orders, and CCDs 4. Marked-up Product Data submittals 5. Final set of Project Record Drawings, including electronic version 6. Final set of Project Record Specifications 7. Final set of Project Record Product Data 8. Record Samples 9. Field records for variable and concealed conditions 10. Record information on Work that is recorded only schematically

B. Contractor shall accompany submittal with transmittal letter containing:

1. Date 2. Project title and Port’s Contract number 3. Contractor’s name and address 4. Number and title of each Project Record Document 5. Certification that each document as submitted is complete and accurate, and signature of Contractor or

Contractor’s authorized representative.

1.3 GENERAL

A. Port will provide one full size blueline set of Drawings and one copy of the Project Manual for Contractor’s use for recording as-built conditions.

Port of Stockton Project Record Documents Port Police Fusion Center 01780- 1


B. Contractor shall post changes and Modifications to the Contract Documents as they occur. Do not wait until the end of the Project. Port may periodically review Project Record Documents to assure compliance with this requirement.

C. Contractor shall refer instances of uncertainty to Port for resolution. D. Maintenance of Documents and Samples:

1. Contractor shall store Project Record Documents and Samples in the field office apart from Contract

Documents used for construction. 2. Do not permit Project Record Documents to be used for construction purposes.

3. Contractor shall maintain Project Record Documents in good order and in a clean, dry, legible condition.

4. Contractor shall make Project Record Documents and Samples available at all times for inspection by Port.

1.4 PROJECT RECORD DRAWINGS, SHOP DRAWINGS, AND SAMPLES

A. Quality Draftsmanship: All Work on Project Record Drawings and Project Record Shop Drawings shall be performed by competent drafters and shall be clear and fully legible. Port shall be the sole judge of the acceptability of the Project Record Drawings and Project Record Shop Drawings.

B. Mark-up Procedure: During the construction period, Contractor shall maintain a set of blueline or blackline

prints of Drawings and Shop Drawings for Project Record Documents purposes (“Field Set”). Contractor shall stamp each document (on each sheet or page) “PROJECT RECORD” in 2-inch high letters. Contractor shall also maintain a set of Samples for Project Record Documents purposes. Contractor shall keep record documents current. Note: A reference by number to a Change Order, CCD, RFI, RFQ, RFP, Field Order or other such document is not acceptable as sufficient record information on any record document. Do not permanently conceal any Work until required information has been recorded. 1. Mark Drawings and Shop Drawings to indicate the actual installation where the installation varies

appreciably from the installation shown originally. Give particular attention to information on concealed elements that would be difficult to identify or measure and record later. Items required to be marked include but are not limited to:

a. Dimensional changes to the Drawings and Shop Drawings b. Revisions to details shown on the Drawings and Shop Drawings c. Depths of various elements of foundation in relation to main floor level or survey datum d. Horizontal and vertical location of underground utilities and appurtenances referenced to permanent

surface improvements e. Location of internal utilities and appurtenances concealed in construction referenced to visible and

accessible features of structure f. Locations of underground Work, points of connection with existing utilities, changes in direction,

valves, manholes, catch basins, capped stub outs, invert elevations, and similar items g. Actual numbering and set points of each electrical circuit h. Field changes of dimension and detail



i. Revisions to routing of piping and conduits j. Revisions to electrical circuitry k. Actual equipment locations l. Duct, conduit, and cable size and routing m. Changes made by Change Order or CCD n. Details not on original Drawings or Shop Drawings

2. Mark completely and accurately Drawings or Shop Drawings, whichever is the most capable of showing actual physical conditions. Where Shop Drawings are marked, show cross-reference on Drawings location.

3. Mark important additional information that was either shown schematically or omitted from original

Drawings. 4. Note CCD numbers; Alternate numbers, Change Order numbers, and similar identification.

5. Mark Drawing and Shop Drawing sets with red, erasable colored pencil.

6. Mark Samples to record changes made after review.

7. Responsibility for Mark-up: Where feasible, the individual or entity who obtained Project Record Drawing

or Shop Drawing data, whether the individual or entity is the installer, Subcontractor, or similar entity, is required to prepare the mark-up on Project Record Drawings or Shop Drawings.

a. Accurately record information in an understandable and legible drawing technique.

b. Record data as soon as possible after it has been obtained. In the case of concealed installations,

record and check the mark-up prior to concealment. C. Preparation of Project Record Drawings and Project Record Shop Drawings: Immediately prior to inspection

for Certification of Substantial Completion, review completed marked-up Project Record Drawings and Project Record Shop Drawings with Port. When authorized, prepare final Project Record Drawings and Project Record Shop Drawings.

1.5 PROJECT RECORD SPECIFICATIONS

A. During the construction period, Contractor shall maintain one copy of the Specifications, including Addenda and Modifications issued, for Project Record Documents purposes.

B. Mark the Project Record Specifications to indicate the actual installation where the installation varies

substantially from that indicated in Specifications and Modifications issued. Note related Project Record Drawing information, where applicable. Give particular attention to substitutions, selection of product options, Change Order and CCD Work, and information on concealed installation that would be difficult to identify or measure and record later. 1. In each Specification Section where products, materials or units of equipment are specified or scheduled,

mark the copy with the proprietary name and model number of the product furnished.



2. Record the name of the manufacturer, catalog number, supplier and installer, and other information necessary to provide a record of selections made and to document coordination with Project Record Product Data submittals and Installation, Operation, and Maintenance Manuals.

3. Note related Project Record Product Data, where applicable, for each principal product specified, indicate

whether Project Record Product Data has been submitted in Installation, Operation, and Maintenance Manuals instead of submitted as Project Record Product Data.

C. Preparation of Project Record Specifications: Immediately prior to inspection for Certification of Substantial

Completion, review completed Field Set Project Record Specifications with Port. When authorized, prepare final Project Record Specifications. 1. After Substantial Completion and before Final Completion, carefully transfer all data shown on the Field

Set to a separate clean set of Specifications provided by Port. Include the printed designation “PROJECT RECORD SPECIFICATION” in a prominent location on the Specifications.

1.6 PROJECT RECORD PRODUCT DATA

A. During the construction period, maintain one copy of each Product Data submittal for Project Record Document purposes. 1. Mark Project Record Product Data to indicate the actual product installation where the installation varies

substantially from that indicated in Project Record Product Data submitted. Include significant changes in the product delivered to the Site, and changes in manufacturer’s instructions and recommendations for installation.

2. Give particular attention to information on concealed products and installations that cannot be readily

identified and recorded later. 3. Note related Change Orders and mark-up of Project Record Drawings, where applicable. 4. Upon completion of mark-up, submit a complete set of Project Record Product Data to Port for Port’s

records. 5. Where Project Record Product Data is required as part of maintenance manuals, submit marked-up Project

Record Product Data as an insert in the manual, instead of submittal as Project Record Product Data. 6. The Contractor is responsible for mark-up and submittal of Project Record Product Data for the Work.

B. Material, Equipment, and Finish Data:

1. Provide data for primary materials, equipment, and finishes as required under each Specification Section. 2. Submit two sets prior to final inspection, bound in 8-1/2 inches by 11 inches three-ring binders with

durable plastic covers; provide typewritten table of contents for each volume.

3. Arrange by Specification Section number and give names, addresses, and telephone numbers of Subcontractors and suppliers. List:

a. Trade names b. Model or type numbers c. Assembly diagrams



d. Operating instructions e. Cleaning instructions f. Maintenance instructions g. Recommended spare parts h. Product data

1.7 MISCELLANEOUS PROJECT RECORD SUBMITTALS

A. Refer to other Specification Sections for miscellaneous record keeping requirements and submittals in connection with various construction activities. Immediately prior to Substantial Completion, complete miscellaneous records and place in good order, properly identified and bound or filed, ready for use and reference. Submit to the Port for Port’s records. Categories of requirements resulting in miscellaneous records include, but are not limited to, the following: 1. Field records on excavations and foundations 2. Field records on underground construction and similar Work 3. Survey showing locations and elevations of underground lines 4. Invert elevations of drainage piping 5. Surveys establishing building lines and levels 6. Authorized measurements utilizing unit prices or allowances 7. Records of plant treatment 8. Ambient and substrate condition tests 9. Certifications received in lieu of labels on bulk products 10. Batch mixing and bulk delivery records 11. Testing and qualification of tradespersons 12. Documented qualification of installation firms 13. Load and performance testing 14. Inspections and certifications by governing authorities 15. Leakage and water-penetration tests 16. Fire resistance and flame spread test results 17. Final inspection and correction procedures


END OF SECTION
