[Federal Register Volume 64, Number 22 (Wednesday, February 3, 1999)]
[Rules and Regulations]
[Pages 5348-5486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-1983]
[[Page 5347]]
_______________________________________________________________________
Part II
Department of Commerce
_______________________________________________________________________
Economic Development Administration
_______________________________________________________________________
13 CFR Chapter III
Economic Development Administration Regulations; Revision To Implement
the Economic Development Reform Act of 1998; Interim Rule
Federal Register / Vol. 64, No. 22 / Wednesday, February 3, 1999 /
Rules and Regulations
[[Page 5348]]
DEPARTMENT OF COMMERCE
Economic Development Administration
13 CFR Chapter III
[Docket No. 990106003-9003-01]
RIN 0610-AA56
Economic Development Administration Regulations; Revision To
Implement the Economic Development Reform Act of 1998
AGENCY: Economic Development Administration (EDA), Department of
Commerce (DoC).
ACTION: Interim rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: The purpose of this interim-final rule is to revise
regulations of the Economic Development Administration (EDA) to
implement the comprehensive amendment to the Public Works and Economic
Development Act of 1965, as amended, by the Economic Development
Administration Reform Act of 1998 (Pub. L.105-393).
DATES: Effective date: February 11, 1999.
Comment date: Comments are due on or before April 5, 1999.
ADDRESSES: Send comments to Edward M. Levin, Chief Counsel, Economic
Development Administration, U.S. Department of Commerce, Herbert C.
Hoover Building, 1401 Constitution Avenue, NW, Room 7005, Washington,
DC 20230
FOR FURTHER INFORMATION CONTACT: Edward M. Levin, Chief Counsel,
Telephone Number 202-482-4687, fax 202-482-5671, and e-mail
ELevin@doc.gov.
SUPPLEMENTARY INFORMATION:
Background
The Economic Development Administration (EDA) was reauthorized for
a five-year period by legislation enacted on November 13, 1998.
Congress had not authorized the agency since 1982. This legislative
accomplishment will create stability and opportunities for EDA to
better serve economically distressed communities across the country.
EDA continues to take steps toward improving its program delivery,
policies and procedures, and to be more responsive to those whom it
serves. In step with the National Performance Review and Paperwork
Reduction Act, EDA had completely revised its regulations, thereby
creating fewer burdens on and making them more accessible to the
public. This interim-final rule continues EDA's efforts in this regard.
Description of Major Changes
This interim-final rule removes, adds, redesignates and revises
parts and sections of EDA's regulations at 13 CFR Chapter III to
implement Pub. L. 105-393 and to continue the streamlining and plain
language initiatives of this administration. Significant changes are
described below.
Removals of Parts and Sections
Certain parts and sections have been removed because the programs
to which these regulations apply were deleted by Pub. L. 105-393 as
follows: Part 302 Economic Development Districts, Subpart B--Standards
for Designation, Modification, and Termination of Economic Development
Centers and Subpart C, Financial and Other Assistance to Economic
Development Centers and Districts; part 312, Supplemental and Basic
Assistance Under Section 304 of the Act; references to and requirements
under the Public Works Impact Program in parts 301 and 305 and
Sec. 316.3; Sec. 305.10 Construction cost increases; Sec. 316.2
Certification as to waste treatment, and Sec. 316.5 Electric and gas
facilities.
Other parts and sections were removed to streamline and simplify
the rules such as: Sec. 302.1 Authorization of Economic Development
Districts, and Sec. 305.12 Variance in cost of grant projects.
New Parts and Sections
New parts and sections have been added to implement Pub. L. 105-393
as follows: Pursuant to sec. 302 of Pub. L. 105-393, new language has
been added in Secs. 301.3, 305.3 and 308.5 on requirements for
strategies for public works and economic adjustment projects (except
for planning); pursuant to sec. 601 of Pub. L. 105-393, with EDA's
prior written approval EDA may release its grant related property
interests 20 years after the grant award, and Sec. 314.11(b) releases
all real and personal property in projects funded under Pub. L. 94-369,
as amended by Pub. L. 95-28. Other sections have been added in light of
new provisions in Pub. L. 105-393, such as Sec. 316.13 Economic
development information clearinghouse, Sec. 316.17 Acceptance of
certifications by applicants, and Sec. 316.18 Reports by recipients,
and part 318 Evaluations of Economic Development Districts and
University Centers.
New parts of sections have been added for other reasons, for
example, Sec. 314.3(c) defines ``adequate consideration'' to
distinguish it from fair market value; and Sec. 314.7(c) provides
exceptions to the title requirement when for example, a railroad or
state or local highway is part of the EDA funded project.
Significant Revisions
Part 301--Designation of Areas has been substantially rewritten
because under Pub. L. 105-393 areas designated by EDA prior to the
effective date of Pub. L. 105-393 will no longer be so designated and
areas thereafter will be determined on a project by project basis (for
public works and economic adjustment projects, except for planning
activities); and Sec. 316.2 has been redesignated and substantially
changed to more accurately reflect statutory intent and practices and
procedures for determining if a project would result in excess
capacity.
Other significant changes--Grant rates have been modified at
Sec. 301.4 to cover all EDA grants (not just public works awards) and
to reflect changed unemployment conditions; and Sec. 308.3 has been
changed to revise area criteria for economic adjustment projects to
emphasize unique economic adjustment tools.
Note
EDA has recently established a task force to examine
its Revolving Loan Fund (RLF) program as described in part 308 of
these rules. The results of this task force may lead to changes in
EDA's RLF program.
An interest rate buy down program (see Sec. 308.3), is
being considered under EDA's Economic Adjustment program.
Suggestions on structuring and implementing such a program are
welcome.
As part of the economic development clearinghouse
described in Sec. 316.14, EDA's Office of Economic Development
Information is accessible on the internet web sites at http://
www.doc.gov/eda and http://netsite.esa.doc.gov/oeci.
Table of Changes
------------------------------------------------------------------------
Description of
Old section New section change
------------------------------------------------------------------------
Sec. 300.1................. Sec. 300.1......... Renamed and changed
for Plain Language
purposes.
[[Page 5349]]
Part 301--Designation of Part 301--General Renamed.
areas. eligibility and
grant rate
requirements.
Secs. 301.1-301.16......... .................... Removed since under
Pub. L. 105-393
there is no longer
area designation
except on a project-
by-project basis.
Secs. 301.1-301.4.. New Secs. include
information and
requirements about
applicants, area
eligibility,
strategy required
and grant rates.
Sec. 302.1................. .................... Removed.
Sec. 302.2................. Sec. 302.1......... Redesignated and
modified for Plain
Language purposes.
Sec. 302.3................. Sec. 302.2......... Redesignated and
modified for Plain
Language purposes.
Sec. 302.4................. Sec. 302.3......... Redesignated and
modified for Plain
Language purposes.
Sec. 302.5................. Sec. 302.4......... Redesignated and
modified for Plain
Language purposes.
Sec. 302.6................. Sec. 302.4......... Made part of this
new section.
Sec. 302.7................. Sec. 302.5......... Redesignated and
streamlined.
Sec. 302.8................. Sec. 302.6......... Redesignated,
modified and
streamlined.
Sec. 302.9................. Sec. 301.4(d)...... Redesignated,
terminology
modified, and
portions removed
since Economic
Development Centers
are no longer part
of PWEDA
Sec. 302.7......... New under Pub. L.
105-393.
Secs. 302.10-302.19........ .................... Removed since
Economic
Development Centers
are no longer part
of PWEDA.
Part 303--Overall Economic Part 303--Planning Renamed.
Development Program. Process and
Strategies for
District and Other
Planning
Organizations
Supported by EDA.
Sec. 303.1................. Sec. 303.1......... Renamed and modified
to add definitions
and streamlined.
Secs. 303.2, 303.3......... .................... Removed.
Secs. 303.4, 303.5, 303.6.. Secs. 303.2, 303.3. Renamed and revised
for Plain Language
purposes and
consistent with
Pub. L. 105-393.
Sec. 304.1................. Secs. 304.1, 304.2. Renamed and revised
to make more
accessible to
reader.
Sec. 304.2................. Secs. 307.11, Renamed and
307.14. redesignated to
implement Pub. L.
105-393.
Part 305--Public Works and .................... Part 305--Grants for
Development Facilities Public Works and
Program. Development
Facilities Renamed.
Sec. 305.2................. Sec. 300.2......... Renamed and
applicable to all
programs.
Sec. 305.3......... Application
requirements.
Secs. 305.3, 305.4......... Sec. 305.2......... Renamed, merged and
modified to
implement Pub. L.
105-393.
Secs. 305.5, 305.6......... Sec. 305.4......... Renamed, combined
and modified to
implement Pub. L.
105-393.
Sec. 305.7................. .................... Removed.
Secs. 305.8, 305.9......... Sec. 301.4......... Renamed and
applicable to all
programs.
Sec. 305.10................ .................... Removed.
Sec. 305.11................ Sec. 305.5......... Redesignated and
revised to make
more accessible to
reader.
Sec. 305.12................ .................... Removed.
Sec. 305.13................ Sec. 305.6......... Redesignated.
Sec. 305.7......... Added for guidelines
and reports.
Part 306 [Reserved]; Part Part 306--Planning Renamed and revised
307--Local Technical Assistance. under Pub. L. 105-
Assistance, University 393 and for Plain
Center Technical Language purposes.
Assistance, National
Technical Assistance,
Research and Evaluation and
Planning--Subpart E--
Economic Development
Districts American Indian
Tribes and Redevelopment
Areas Economic Development
Planning Grants and Subpart
F--State and Urban
Development Planning Grants.
Part 307--Local Technical Part 307--Local Renamed consistent
Assistance, University Technical with Pub. L. 105-
Center Technical Assistance, 393.
Assistance, National University Center
Technical Assistance, Technical
Research and Evaluation and Assistance,
Planning. National Technical
Assistance,
Training, Research
and Evaluation.
Sec. 307.2................. Sec. 300.2......... Redesignated to
apply to all
programs and this
program in
particular.
Secs. 307.3, 307.4......... Sec. 307.2......... Renamed, merged and
revised to make
more accessible to
reader.
[[Page 5350]]
Sec. 307.5................. Sec. 307.3......... Renamed,
redesignated and
revised to make
more accessible to
reader and in
accordance with
Pub. L. 105-393.
Sec. 307.6................. Sec. 307.4......... Redesignated.
Sec. 307.7................. Sec. 300.2......... Redesignated to
apply to all
programs and this
program in
particular.
Secs. 307.8, 307.9......... Sec. 307.5......... Renamed, merged and
revised to make
more accessible to
reader.
Sec. 307.10................ Sec. 307.6......... Renamed,
redesignated and
revised to make
more accessible to
reader and in
accordance with
Pub. L. 105-393.
Subpart C--National Subpart C--National Renamed, merged and
Technical Assistance, Technical redesignated to be
Subpart D--Research and Assistance, consistent with
Evaluation. Training, Research, Pub. L. 105-393.
and Evaluation.
Secs. 307.11, 307.16....... Sec. 307.7......... Redesignated, merged
and revised to make
more accessible to
reader.
Secs. 307.12, 307.17....... Sec. 300.2......... Renamed and merged
as applicable to
all programs and to
this program in
particular.
Secs. 307.13, 307.14, Sec. 307.8......... Renamed, merged and
307.18, 307.19. revised to make
more accessible to
reader.
Secs. 307.15, 307.21....... Sec. 307.9......... Renamed, revised and
modified for Plain
Language purposes.
Sec. 307.20................ .................... Removed--will be in
Notice(s) of
Funding
Availability--Reque
st for Proposals.
Secs. 307.22............... Sec. 306.1......... Redesignated, merged
and revised
consistent with
Pub. L. 105-393.
Sec. 307.23................ .................... Removed.
Secs. 307.24, 307.30....... Sec. 300.2......... Applicable to all
programs.
Secs. 307.25, 307.26, Sec. 306.2......... Renamed, merged,
307.31, 307.32. streamlined and
modified for Plain
Language purposes.
Secs. 307.27, 307.33....... Secs. 306.3, 306.4. Redesignated and
made consistent
with Pub. L. 105-
393.
Sec. 307.28................ Sec. 302.3......... Part of new
provision on
District
Organizations.
Part 308--Requirements for Part 308-- Renamed consistent
Grants Under the Title IX Requirements for with Pub. L. 105-
Economic Adjustment Program. Economic Adjustment 393.
Grants.
Sec. 308.2................. Sec. 308.3......... Renamed and revised
to make more
accessible to
reader.
Sec. 308.3................. Secs. 308.5, 300.2. Renamed and revised
to be more
accessible to
readers and
applicable to all
programs.
Sec. 308.4................. Sec. 308.2......... Renamed and revised
for consistency
with Pub. L. 105-
393.
Secs. 308.5, 308.6......... Sec. 308.4......... Renamed, merged and
modified to
implement Pub. L.
105-393 and to be
more accessible to
readers.
Sec. 308.7................. Sec. 308.6......... Renamed and
streamlined.
Part 312--Supplemental and Section 304 of the Removed as no longer
Basic Assistance Under. Act. in effect.
Part 314--Property.......... Part 314--Property Renamed.
Management
Standards.
Sec. 314.9................. Sec. 314.9......... Renamed and expanded
to refer to title
requirements.
Subpart D--Release Added to implement
of EDA's Property provision of Pub.
Interest. L. 105-393 and to
clarify EDA's
property release
requirements.
Sec. 316.2................. .................... Removed as no longer
in effect.
Sec. 316.3................. Sec. 316.2......... Redesignated and
clarified.
Sec. 316.4................. Sec. 316.3......... Redesignated.
Sec. 316.5................. .................... Removed as no longer
in effect.
Sec. 316.6................. Sec. 316.4......... Redesignated.
Sec. 316.7................. Sec. 316.5......... Redesignated.
Sec. 316.8................. Sec. 316.6......... Redesignated.
Sec. 316.9................. Sec. 316.7......... Redesignated.
Sec. 316.10................ Sec. 316.8......... Redesignated and
clarified.
Sec. 316.11................ Sec. 316.9......... Redesignated.
Sec. 316.12................ .................... Removed as included
in Sec. 316.8.
Sec. 316.13................ Sec. 316.10........ Renamed and
modified.
Secs. 316.11-316.18 Added to implement
provisions of Pub.
L. 105-393.
Sec. 316.19........ Added to replace
current procedures
and requirements.
Part 318-- Added to implement
Evaluations of provisions of Pub.
Economic L. 105-393.
Development
Districts and
University Centers.
------------------------------------------------------------------------
[[Page 5351]]
Savings Clause
The rights, duties, and obligations of all the parties pursuant to
parts, sections and portions thereof of the Code of Federal Regulations
removed by this rule shall continue in effect, except that EDA may
waive administrative or procedural requirements of provisions removed
by this rule.
Executive Orders 12866 and 12875
This rule has been determined to be significant for the purposes of
E.O. 12866, Regulatory Planning and Review. In addition, it has been
determined that, consistent with the requirements of E.O. 12875,
Enhancing Intergovernmental Partnership, this interim final rule will
not impose any unfunded mandates upon State, local, and tribal
governments.
Notice and Comment
This rule is not subject to the rulemaking requirements of 5 U.S.C.
553 because it relates to public property, loans, grants, benefits, and
contracts, 5 U.S.C. 553(c)(2), including the provision of prior notice
and an opportunity for public comment and delayed effective date.
No other law requires that notice and opportunity for comments be
given for this rule.
However, because the Department is interested in receiving comments
from those who will benefit from the amendments, this rule is being
issued as interim final. Public comments on the interim final rule are
invited and should be sent to the address or numbers listed in the
ADDRESSES and FOR FURTHER INFORMATION CONTACT sections above. Comments
received by April 5, 1999 will be considered in promulgating a final
rule.
Note: EDA is particularly interested in comments relating to its
use of Plain Language in order to make these requirements more
readily accessible to the public.
Regulatory Flexibility Act
Since notice and an opportunity for comment are not required to be
given for the rule under 5 U.S.C. 553 or any other law, under sections
603(a) and 604(a) of the Regulatory Flexibility Act (5 U.S.C. 601-612)
no initial or final Regulatory Flexibility Analysis is required, and
none has been prepared.
Paperwork Reduction Act
This regulation imposes new information collection or recordkeeping
requirements under the Paperwork Reduction Act of 1980 (44 U.S.C.
3501), as amended, but has been cleared under OMB's Emergency
Clearances process under OMB approval numbers: 0610-0093; 0610-0094;
0610-0095; 0610-0096 and will expire on July 31, 1999. To remain
effective after such expiration date, EDA must receive OMB's final
clearance and display a currently valid OMB control number. If such
final clearance is not obtained after the expiration date of the
Emergency Clearance so that a currently valid OMB control number is not
displayed, applicants and recipients will not thereafter be required to
submit information requested pursuant to this rule.
The information is needed to determine eligibility of those
applicants and projects and to monitor projects for compliance with
EDA's construction or Revolving Loan Fund requirements, as applicable.
EDA then uses information obtained in these collections to help carry
out its mission to aid economically distressed areas of the Nation.
Responses to requests for information are necessary under Pub. Law 105-
393 for obtaining and for keeping benefits. The reporting burden for
this collection is estimated to be approximately 7 burden hours for the
Proposal; approximately 50 burden hours for the Application;
approximately 18 burden hours for Requirements for Approved
Construction Projects; approximately 240 burden hours for the CED
Strategy Guidelines; and approximately 76 burden hours for the series
of Guidelines for the Revolving Loan program, including the time for
gathering and maintaining the data needed for completing and reviewing
the collection of information. Comments are invited on: (a) whether the
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information shall
have practical utility; (b) the accuracy of the agency's estimate of
the burden of the proposed collection of information; (c) ways to
enhance the quality, utility, and clarity of the information to be
collected; and (d) ways to minimize the burden of the collection of
information on respondents, including through the use of automated
collection techniques or other forms of information technology.
Comments regarding these burden estimates or any other aspects of the
collection of information, including suggestions for reducing the
burdens, should be forwarded to Edward M. Levin, Chief Counsel,
Economic Development Administration, U.S. Department of Commerce,
Herbert C. Hoover Building, 1401 Constitution Avenue, NW, Room 7005,
Washington, DC 20230 and to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, DC 20503
(Attention EDA Desk Officer).
Administrative Procedure Act and Regulatory Flexibility Act
Executive Order 12612 (Federalism Assessment)
This action has been reviewed in accordance with the principles and
criteria contained in E.O. 12612. It has been determined that this
interim final rule does not have significant Federalism implications to
warrant a full Federalism Assessment under the principles and criteria
contained in E.O. 12612.
List of Subjects
13 CFR Part 300
Reporting and recordkeeping requirements; Non-profit organizations;
American Indians.
13 CFR Part 301
Grant Programs; Community Development; American Indians.
13 CFR Part 302
Community Development; Grant programs-community development;
Technical assistance.
13 CFR Part 303
Community Development; Grant programs-community development.
13 CFR Part 304
Selection and evaluation.
13 CFR Part 305
Community development; Community facilities; Grant programs-
community development.
13 CFR Part 306
Community development; Grant programs-community development.
13 CFR Part 307
Business and industry; Community development; Community facilities;
Grant programs-business; Grant programs-community development;
Research; Technical Assistance.
13 CFR Part 308
Business and industry; Community development; Community facilities;
Grant programs-business; Grant programs-community development; American
Indians; Manpower training programs; Mortgages; Research; Technical
assistance.
[[Page 5352]]
13 CFR Part 314
Community development; Grant programs-community development.
13 CFR Part 315
Administrative practice and procedure; Community development; Grant
programs-business; Technical assistance; Trade adjustment assistance.
13 CFR Part 316
Community development; Grant programs-community development;
Freedom of Information; Uniform Relocation Act; Loan programs-business;
Loan programs-community development; Environmental protection; Record
retention; Records.
13 CFR Part 317
Civil rights; sex discrimination.
13 CFR Part 318
Colleges and universities.
For the reasons set forth in the preamble, 13 CFR Chapter III is
revised to read as follows:
CHAPTER III--DEPARTMENT OF COMMERCE, ECONOMIC DEVELOPMENT
ADMINISTRATION
Part
300 General Information.
301 General Eligibility and Grant Rate Requirements.
302 Economic Development Districts; standards for designation,
modification and termination.
303 Planning Process and Strategies for District and Other Planning
Organizations Supported by EDA.
304 General Selection Process and Evaluation Criteria.
305 Grants for Public Works and Development Facilities.
306 Planning Assistance.
307 Local Technical Assistance, University Center Technical
Assistance, National Technical Assistance, Training, Research, and
Evaluation.
308 Requirements for Economic Adjustment Grants.
309-313 [Reserved].
314 Property.
315 Certification and Adjustment Assistance for Firms.
316 General Requirements for Financial Assistance.
317 Civil Rights.
318 Evaluations of University Centers and Economic Development
Districts.
PART 300--GENERAL INFORMATION
Sec.
300.1 Introduction and purpose.
300.2 Definitions.
300.3 OMB control numbers.
300.4 Economic Development Administration--Washington, DC, Regional
and Economic Development Representatives.
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Sec. 300.1 Introduction and Purpose.
(a) Introduction. Is your community suffering from severe economic
distress (e.g., high unemployment, low income, sudden economic changes,
etc.)? Are you a representative of a State or local unit of government,
Indian tribe, public or private nonprofit organization, educational
institution, or community development corporation looking for grant
assistance to enhance your opportunities for economic development? If
so, these regulations of the Economic Development Administration (EDA)
of the U.S. Department of Commerce may be of help. These regulations
tell you the purpose of EDA and outline the program requirements,
project selection process, project evaluation criteria, and other
relevant matters. The information in these regulations covers grant
programs of EDA that provide financial awards for the following:
Public Works and Development Facilities;
Planning;
Research, Evaluation, Training and Technical
Assistance;
Trade Adjustment Assistance; and
Economic Adjustment Assistance.
(b) What is the Purpose of the Economic Development Administration?
(1) Many communities lag behind and suffer economic distress in one
form or another, such as:
High unemployment;
Low income;
Underemployment;
Outmigration;
Sudden economic changes due to the restructuring or
relocation of industrial firms;
Closing or realignment of defense bases or cutbacks in
defense procurement;
Economic impact of natural disasters or other
emergencies;
Actions of the Federal government (such as
environmental requirements) that curtail or remove economic
activities; and
Impacts of foreign trade.
(2) The purpose of the Economic Development Administration is to
address economic problems affecting economically distressed rural and
urban communities; by helping them:
(i) Develop and strengthen their economic development planning and
institutional capacity to design and implement business outreach and
development programs; and
(ii) Develop or expand public works and other facilities, financing
tools, and resources that will create new job opportunities, save
existing jobs, retain existing businesses, and support the development
of new businesses.
(3) To promote a strong and growing economy throughout the United
States, EDA works in partnership with State and local governments,
Indian tribes and local, regional, and State public and private
nonprofit organizations. With them EDA develops and carries out
comprehensive economic development strategies that address the economic
problems of distressed communities. EDA helps such communities increase
their economic development capacities so that they can take advantage
of existing resources and development opportunities.
Sec. 300.2 Definitions.
Unless otherwise defined in other parts or sections of this
Chapter, the terms listed are defined as follows:
Comprehensive Economic Development Strategy, CED Strategy, or
strategy means a strategy approved by EDA under Sec. 301.3 of these
regulations.
Department means the Department of Commerce.
Economic Development District or district:
(1) Means any area in the United States that has been designated by
EDA as an Economic Development District under Sec. 302.1 of these
regulations; and
(2) Includes any Economic Development District designated by EDA
under sec. 403 of the Public Works and Economic Development Act of
1965, as amended, as in effect on the day before the effective date of
Public Law 105-393.
EDA means the Economic Development Administration in the U.S.
Department of Commerce when a place or agency is intended, and refers
to the headquarters office in Washington, D.C., or a regional office,
as appropriate; or it means the Assistant Secretary of Commerce for
Economic Development or his/her designee when a person is intended. The
locations of EDA's offices are listed each year in a Notice of Funding
Availability (NOFA). The general information telephone number for EDA
is (202) 482-2309.
Eligible applicant means:
(1) In general,--
(i) An entity qualified to be an eligible recipient, or
(ii) Its authorized representative.
(2) Except in the case of Research, Evaluation, Training, or
Technical Assistance grants under part 307, a private individual or
for-profit organization cannot be an eligible applicant.
Eligible recipient means
(1) In general,--
(i) An area described in Sec. 301.2 of these regulations;
(ii) An Economic Development District;
(iii) An Indian tribe or a consortium of Indian tribes;
[[Page 5353]]
(iv) A State;
(v) A city or other political subdivision of a State or a
consortium of political subdivisions;
(vi) An institution of higher education or a consortium of
institutions of higher education; or
(vii) A public or private nonprofit organization or association
acting in cooperation with officials of a political subdivision of a
State.
(2) In the case of Research, Evaluation, Training, and Technical
Assistance grants under part 307, eligible recipient also includes
private individuals and for-profit organizations.
Federal agency means a department, agency, or instrumentality of
the United States.
Financial assistance means grant.
Grant means the non-procurement award of EDA funds to an eligible
recipient under PWEDA or the Trade Act, as applicable. The term
includes a cooperative agreement, within the meaning of chapter 63 of
title 31, United States Code.
Indian tribe means any Indian tribe, band, nation, pueblo, or other
organized group or community, including any Alaska Native Village or
Regional Corporation (as defined in or established under the Alaska
Native Claims Settlement Act (43 U.S.C. 1601 et seq.)), that is
recognized as eligible for the special programs and services provided
by the United States to Indians because of their status as Indians. The
term includes: The governing body of a tribe, nonprofit Indian
corporation (restricted to Indians), Indian authority, or other
nonprofit tribal organization or entity, provided that the tribal
organization or entity is wholly owned by, and established for the
benefit of, the tribe or Alaska Native Village.
Local share, matching share or local share match are used
interchangeably to mean non-Federal funds or goods and services
provided by recipients or third parties that are required as a
condition of a grant, and includes funds from other Federal agencies
only if there is statutory authority allowing such use.
Notice of Funding Availability or NOFA, refers to the notice or
notices EDA publishes each year in the Federal Register and on EDA's
internet web site, http://www.doc.gov/eda, describing the available
amounts, particular procedures, priorities, and special circumstances
for the EDA grant programs for that year.
OEDP (Overall Economic Development Program), as the term is used in
part 317 (Civil Rights) of this chapter, means CED Strategy developed
in accordance with part 303 of this chapter.
PWEDA means the Public Works and Economic Development Act of 1965,
as amended (Pub. L. 89-136, 42 U.S.C. 3121 et seq.), including the
comprehensive amendments by the Economic Development Administration
Reform Act of 1998 (Pub. L. 105-393). (The term ``PWEDA'' was used to
refer to EDA's authorizing legislation as it was in effect before the
effective date of Public Law 105-393, signed into law on November 13,
1998. In these regulations, the term ``PWEDA'' refers to the
legislation as currently amended by the 1998 law.)
Project means the activity or activities the purpose of which
fulfills EDA program requirements and that EDA funds in whole or in
part.
Proposed District means a geographic entity composed of one or more
eligible areas proposed for designation as an Economic Development
District.
Recipient and grantee are used interchangeably to mean an entity
receiving funds from EDA under PWEDA or the Trade Act, as applicable,
and includes any EDA approved successor to such recipient.
State means a State, the District of Columbia, the Commonwealth of
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands, the Republic of the
Marshall Islands, the Federated States of Micronesia, and the Republic
of Palau.
The Trade Act means Title II, Chapters 3 and 5, of the Trade Act of
1974, as amended (19 U.S.C. 2341, et seq.).
United States means all of the States.
Sec. 300.3 OMB Control Numbers.
(a) This table displays control numbers assigned to EDA's
information collection requirements by the Office of Management and
Budget (``OMB'') pursuant to the Paperwork Reduction Act of 1980, Pub.
L. 96-511. EDA intends that this table comply with Section 3507(f) of
the Paperwork Reduction Act, requiring agencies to display a current
control number assigned by the Director of OMB for each agency
information collection requirement.
(b) Control Number Table:
------------------------------------------------------------------------
13 CFR part or section where identified
and described Current OMB control No.
------------------------------------------------------------------------
301....................................... 0610-0094.
302....................................... 0610-0094.
303....................................... 0610-0093.
304....................................... 0610-0094.
305....................................... 0610-0094 and 0610-0096.
306....................................... 0610-0094.
307....................................... 0610-0094.
308....................................... 0610-0094 and 0610-0095.
314....................................... 0610-0094.
315....................................... 0610-0094.
316....................................... 0610-0094.
------------------------------------------------------------------------
Sec. 300.4 Economic Development Administration-Washington, D.C.,
Regional and Economic Development Representatives.
For addresses and phone numbers of the Economic Development
Administration in Washington, D.C., Regional and Field Offices and
Economic Development Representatives, refer to EDA's annual Fiscal Year
(FY) Notice of Funding Availability (NOFA).
PART 301--GENERAL ELIGIBILITY AND GRANT RATE REQUIREMENTS
Sec.
301.1 Applicants.
301.2 Area eligibility.
301.3 Strategy required.
301.4 Grant rates.
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Sec. 301.1 Applicants.
(a) Eligible applicants are defined in Sec. 300.2 of this chapter.
(b) Except as otherwise provided in part 307, a public or private
nonprofit organization applicant must include in its application for
assistance, a resolution passed by, or a letter signed by an authorized
representative of, a political subdivision of a State or an Indian
tribe, acknowledging that the applicant is acting in cooperation with
officials of the political subdivision or Indian tribe, as applicable.
Sec. 301.2 Area eligibility.
(a) EDA awards public works and development facilities grants under
part 305 and economic adjustment grants under part 308 for projects to
enhance economic development in economically distressed areas.
(b) An area is eligible for a project grant under part 305 or 308
if it has one of the following:
(1) An unemployment rate that is, for the most recent 24-month
period for which data are available, at least one percent greater than
the national average unemployment rate. For example, if the national
average unemployment rate is 6 percent, an area is eligible under this
provision if it has an unemployment rate of 7 percent.
(2) Per capita income that is, for the most recent period for which
data are
[[Page 5354]]
available, 80 percent or less of the national average per capita
income.
(3) A special need, as determined by EDA, arising from actual or
threatened severe unemployment or economic adjustment problems
resulting from severe short-term or long-term changes in economic
conditions, for example:
(i) Substantial outmigration or population loss;
(ii) Underemployment, that is, employment of workers at less than
full time or at less skilled tasks than their training or abilities
permit;
(iii) Military base closures or realignments, defense contractor
reductions-in-force, or Department of Energy defense-related funding
reductions;
(iv) Natural or other major disasters or emergencies;
(v) Extraordinary depletion of natural resources;
(vi) Closure or restructuring of industrial firms, essential to
area economies; or
(vii) Destructive impacts of foreign trade.
(c) A non-distressed area [i.e., an area that does not meet the
criteria of paragraph (b) of this section] within an Economic
Development District is also eligible, provided the project will be of
a substantial direct benefit to an area that meets at least one of the
criteria of paragraph (b) of this section. A project provides
substantial direct benefit if it provides significant employment
opportunities for unemployed, underemployed or low income residents.
(d) Normally an area is defined by geographical/political
boundaries, e.g., city, county, Indian reservation. However, a smaller
area (without regard to political boundaries) is also eligible even
though it may be part of a larger community that overall is
experiencing low distress. When the boundaries of the project area
differ from established political boundaries, the project area must be
of sufficient size appropriate to the proposed project, and the
applicant must justify the proposed boundaries in relation to the
project's benefits to the area.
(e) Eligibility is determined at the time that EDA receives an
application and is based on the most recent Federal data available for
the area where the project will be located or where the substantial
direct benefits will be received. If no Federal data are available to
determine eligibility, an applicant must submit to EDA the most recent
data available through the government of the State in which the area is
located.
(f) EDA may reject any documentation of eligibility that it
determines is inaccurate.
(g) There is no area eligibility requirement for a project grant
under part 306 or 307.
(h) EDA will describe special needs criteria under paragraph (b)(3)
of this section in a NOFA.
Sec. 301.3 Strategy Required.
(a) To be eligible for a project grant under part 305 or 308, the
application for assistance must include a CED Strategy acceptable to
EDA. The applicant may, however, incorporate by reference a current
strategy previously approved by EDA, as an alternative to including the
strategy in the application. (Exception: A strategy is not required
when a funding request is for planning assistance, i.e., a strategy
grant, under part 308.) The strategy must:
(1) Be the result of a continuing economic development planning
process;
(2) Identify the economic development problems to be addressed
using the assistance;
(3) Identify past, present, and projected future economic
development investments in the area receiving the assistance;
(4) Identify the public and private participants in the investments
and the sources of the funding for them;
(5) Describe how the problems identified under paragraph (a) (2) of
this section will be addressed, in a manner that promotes economic
development and opportunity, fosters effective transportation access,
enhances and protects the environment, and balances resources through
sound management of development; and
(6) Describe how the activities described under paragraph (a) (5)
of this section will contribute to the solution of the problems.
(b) EDA will approve as acceptable a strategy that it determines
meets the requirements of paragraph (a) of this section. The strategy
may be one developed:
(1) With EDA assistance,
(2) Under another Federally supported program, or
(3) Through a local, regional, or State process.
(c) In determining acceptability of a strategy, EDA will take into
consideration the circumstances of the application, so that for
instance a strategy accompanying an application for assistance
immediately following a natural disaster will require less depth and
detail than would be the case in other circumstances.
(d) To be acceptable, a strategy must be approved by the
applicant's governing body within one year prior to the date of
application.
Sec. 301.4 Grant Rates.
(a) Except as otherwise provided for in this chapter, the amount of
the EDA grant may not exceed 50 percent of the cost of the project.
Cash or in-kind contributions, fairly evaluated by EDA, including
contributions of space, equipment, and services, may provide the non-
Federal share of the project cost. In-kind contributions must be
eligible project costs and meet applicable Federal cost principles and
uniform administrative requirements.
(b) EDA may supplement the Federal share of a grant project where
the applicant is able to demonstrate that the non-Federal share that
would otherwise be required cannot be provided because of the overall
economic situation. It is not necessary for an applicant to prove that
it would be impossible to provide a full 50 percent non-Federal share,
but it must show circumstances warranting any reduction. In determining
whether to provide a Federal share greater than 50 percent for a
project, EDA will give due consideration to the applicant's economic
situation and the relative needs of the area. In the case of Indian
tribes, EDA may reduce or waive the non-Federal share, and in other
cases EDA may reduce the non-Federal share of the cost of the project
below 50 percent, in accordance with the following table, showing the
maximum Federal grant rate, including the supplement:
------------------------------------------------------------------------
Maximum grant
Projects rates
(percentage)
------------------------------------------------------------------------
Projects of Indian tribes where EDA has made a
determination to waive the non-Federal share of the
cost of the project.................................... 100
Projects located in Federally-declared disaster areas
for which EDA receives an application for assistance
within one year of the date of declaration, and for
which the President established a rate of Federal
participation, based on the public assistance grant
rate of the Federal Emergency Management Agency (FEMA)
for the disaster, of greater than 80 percent........... 100
Projects of Indian tribes where EDA has made a
determination to reduce the non-Federal share of the
cost of the project.................................... (1)
[[Page 5355]]
Projects of States or political subdivisions of States
that have exhausted their effective taxing and/or
borrowing capacity, or nonprofit organizations that
have exhausted their borrowing capacity................ (1)
Projects located in Federally-declared disaster areas
for which EDA receives an application for assistance
within one year of the date of declaration, unless the
applicant or the area is otherwise eligible for a
higher rate of Federal participation under another
provision of this section.............................. 80
Projects located in eligible areas where: (1) the 24-
month unemployment rate is at least 11 percent and is
at least 225% of the national average or (2) the per
capita income (PCI) is not more than 50% of the
national average....................................... 80
Projects located in eligible areas that are not eligible
for a higher rate, where: (1) the 24-month unemployment
rate is at least 9 percent and is at least 180% of the
national average or (2) the PCI is not more than 60% of
the national average................................... 70
Projects located in eligible areas that are not eligible
for a higher rate, where: (1) the 24-month unemployment
rate is at least 7.5 percent and is at least 150% of
the national average or (2) the PCI is not more than
70% of the national average............................ 60
Projects in all other eligible areas.................... 50
------------------------------------------------------------------------
\1\ Less than 100.
(c) Projects under part 306 or 307 are eligible for maximum grant
rates as provided in those parts.
(d) Projects located in designated Economic Development Districts
are eligible for an amount of additional Federal grant assistance not
to exceed 10 percent of the estimated cost of the project, provided
(1) The project applicant is actively participating in the economic
development activities of the district;
(2) The project is consistent with the strategy of the district;
and
(3) The non-Federal share of the project is not less than 20
percent.
(e) EDA may make grants to supplement grants awarded in other
Federal grant programs.
(1) Supplemental grants under paragraph (e) of this section are
only available for projects:
(i) Under Federal grant programs that
(A) Provide assistance in the construction or equipping of public
works, public service, or development facilities, and
(B) Are designated by EDA as eligible for supplemental EDA grants,
and
(ii) Are consistent with a strategy.
(2) EDA's funds combined with funds from another Federal grant
program may be at the maximum EDA grant rate, as set forth above, even
if the other Federal program has a lower grant rate. If the other
Federal program has a grant rate higher than the maximum EDA grant rate
as set forth above, the combination of funds may exceed the EDA rate
provided the EDA share does not exceed the EDA rate.
(f) An applicant is eligible for the highest applicable maximum
grant rate, as set forth above, in effect between the time EDA invites
the application and the time the project is approved. The Federal share
of a project receiving EDA grant assistance may be (and often is) less
than the maximum grant rate for which the recipient is eligible.
(g) EDA's NOFA will provide additional criteria to ensure that the
level of economic distress of an area, rather than a preference for a
geographic area or a specific type of economic distress, is the primary
factor in allocating assistance.
PART 302--ECONOMIC DEVELOPMENT DISTRICTS; STANDARDS FOR
DESIGNATION, MODIFICATION AND TERMINATION
Sec.
302.1 Designation of economic development districts.
302.2 Designation of nonfunded districts.
302.3 District organizations.
302.4 District organization functions and responsibilities.
302.5 Modification of district boundaries.
302.6 Termination and suspension of district designation.
302.7 Eligibility of non-distressed areas.
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Sec. 302.1 Designation of Economic Development Districts.
EDA will designate a proposed district as an Economic Development
District with the concurrence of the State or States in which the
District will be wholly or partially located, when the proposed
district meets the following requirements:
(a) It is of sufficient size or population, and contains sufficient
resources, to foster economic development on a scale involving more
than a single eligible area;
(b) It has an EDA approved strategy which:
(1) Contains a specific program for intra-district cooperation,
self-help, and public investment;
(2) Is approved by each affected State;
(3) Identifies problems, and conditions underlying economic
distress in the district; and
(4) Promotes economic development opportunities, plans for
transportation access, enhancement and protection of the environment
and balances resources through sound management of development;
(c) It contains at least one area, eligible for assistance under
Sec. 301.2, that has been identified in an approved strategy;
(d) At least a majority of the counties, or other areas as
determined by EDA, within the proposed district boundaries have
submitted documentation of their commitment to support the economic
development activities of the district;
(e) A district organization has been established in the proposed
district which meets the requirements of Sec. 302.4; and
(f) The proposed district organization requests such designation.
Sec. 302.2 Designation of nonfunded districts.
The continuing designation of any Economic Development District is
subject to the criteria and organization requirements of this part
whether or not the Economic Development District organization receives
any EDA financial assistance.
Sec. 302.3 District organizations.
(a) The district shall be organized in one of the following ways:
(1) As a public organization through an intergovernmental agreement
for the joint exercise of local government powers; or
(2) As a public organization established under State enabling
legislation for the creation of multi-jurisdictional area wide planning
organizations; or
(3) As a non-profit organization incorporated under the laws of the
State in which it is located.
(b) Each district organization must meet EDA requirements
concerning membership composition [Sec. 302.3(c)], the maintenance of
adequate staff support to perform its economic development functions
[Sec. 302.3(d)], and its authorities and responsibilities for
[[Page 5356]]
carrying out economic development functions [Sec. 302.4]. Such
requirements must also be met by the board of directors (or other
governing body of the organization) as a whole.
(c) The district organization shall demonstrate that its governing
body meets all of the following requirements:
(1) It is broadly representative of the principal economic
interests of the district area including the interests of its minority
and low-income populations;
(2) There is at least a simple majority of its membership who are
elected officials and/or employees of a general purpose unit of local
government who have been appointed to represent the government; and
(3) At least 20 percent of its membership who are private citizens,
i.e., neither elected officials of a general purpose unit of local
government nor employees of such a government who have been appointed
to represent that government.
(d) The district organization shall be assisted by a professional
staff drawn from qualified persons in economic development, planning or
related disciplines. EDA may provide planning grants to Economic
Development Districts to employ professional staff in accordance with
part 306 of this chapter.
(e) The governing bodies of district organizations shall provide
access for persons who are not members to make their views known
concerning ongoing and proposed district activities in accordance with
the following requirements:
(1) The economic development district organization must hold
meetings open to the public at least once a year and shall also publish
the date and agenda of the meeting enough in advance to allow the
public a reasonable time to prepare to participate effectively.
(2) The district organization shall adopt a system of parliamentary
procedures to assure that board members and others have access to and
an effective opportunity to participate in the affairs of the district.
(3) Information should be provided sufficiently in advance of
public decisions to give the public adequate opportunity to review and
react to proposals. District organizations should seek to relate
technical data and other material to the public so they may understand
the impact of public programs, available options and alternative
decisions.
Sec. 302.4 District organization functions and responsibilities.
(a) All Economic Development District organizations are responsible
for seeing that the following are provided on a continuing basis,
consistent with the requirements of Sec. 302.3:
(1) Organizational actions, including:
(i) Arranging the legal form of organization which will be used;
(ii) Arranging for the membership of the governing body to meet
Sec. 302.3 requirements;
(iii) Recruiting staff to carry out the economic development
functions;
(iv) Establishing a management system;
(v) Contracting for services to carry out district functions;
(vi) Establishing and directing activities of economic development
subcommittees; and
(vii) Submitting reports as determined by EDA to comply with civil
rights requirements under part 317 of this chapter.
(2) Actions to develop and maintain the required district strategy,
and any subsequent supplements or revisions, including:
(i) Preparing the analytic, strategic and implementation components
of the strategy;
(ii) Adopting the strategy by formal action of the Economic
Development District governing board;
(iii) Submitting the strategy, any supplements or revisions and
annual reports for reviews by appropriate governmental bodies and
interested organized groups, and attaching dissenting opinions and
comments received; and
(iv) Submitting to EDA an approvable strategy.
(b) Organizations receiving EDA financial assistance for the
development and implementation of Comprehensive Economic Development
Strategies must also:
(1) Coordinate and implement economic development activities in the
district, including:
(i) Assisting other eligible units within the district to apply for
grant assistance for economic development purposes;
(ii) Carrying out economic development related research, planning,
implementation and advisory functions as are necessary to the
development and implementation of the strategy;
(2) Coordinate the development and implementation of the strategy
with other local, State, Federal and private organizations (including
minority organizations);
(3) Carry out the annual strategy for implementation; and
(4) Comply with the requirement of part 303.
Sec. 302.5 Modification of district boundaries.
EDA, at the request of a district and with concurrence of the State
or States affected (unless such concurrence is waived by the Assistant
Secretary), may modify the boundaries of a district, if it determines
that such modification will contribute to a more effective program for
economic development.
Sec. 302.6 Termination and suspension of district designation.
EDA may, upon 30 days prior written notice, terminate the
designation status of an Economic Development District:
(a) When the district no longer meets the standards for designation
as set forth above;
(b) When a district has not maintained a currently approved
strategy in accordance with part 303 of this chapter; or
(c) When a district has requested termination (with the approval of
the State or States affected).
Sec. 302.7 Eligibility of non-distressed areas.
Areas in districts which are not themselves eligible for assistance
under parts 305 or 308 may be eligible, as provided in Sec. 301.2(c).
PART 303--PLANNING PROCESS AND STRATEGIES FOR DISTRICT AND OTHER
PLANNING ORGANIZATIONS SUPPORTED BY EDA
Sec.
303.1 Definitions, purpose and scope.
303.2 Planning process.
303.3 Requirements for a strategy.
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Sec. 303.1 Definitions, Purpose and Scope.
(a) As used in this part 303.
(1) Planning organization means an Economic Development District
organization, Indian tribe, or other recipient of an EDA grant under
part 306 which grant is awarded in whole or in part to develop, update,
or replace a CED Strategy, and
(2) Strategy committee means that committee or other entity
identified by the planning organization as responsible for developing,
updating, or replacing a strategy.
(b) This part describes the planning process of and requirements
for strategies developed and implemented by planning organizations
supported by EDA. The requirements for a strategy in this part 303
exceed the requirements of Sec. 301.3.
[[Page 5357]]
Sec. 303.2 Planning Process.
(a) The strategy committee must be inclusive and representative of
the main economic interests of the area covered by the strategy. Such
interests include public officials, community leaders, private
individuals, business leaders, labor groups, minorities, and others who
can contribute to and benefit from improved economic development in the
area covered.
(b) The planning organization must support the strategy committee
with a staff skilled in economic planning or related fields.
(c) The planning organization must conduct an initial and
continuous study and analysis of the opportunities for economic
development and of problems contributing to economic and related
distress in the area covered, such as, for example, unemployment,
underemployment, outmigration, or low per capita income, and possible
solutions to such problems.
(d) Planning organizations covered by this part 303 must submit an
initial strategy to EDA in compliance with the requirements of
Sec. 303.3, as determined by EDA. Each year thereafter, the planning
organization must submit an annual strategy report, acceptable to EDA.
(e) A new or revised strategy is required at least every five
years, or sooner if EDA or the planning organization determines that
the strategy is inadequate due to changed circumstances. Each strategy
must be available for review and comment by appropriate government
bodies and interest groups in the area covered. Strategies submitted by
Districts require concurrence by the State or States in which they are
located, prior to EDA approval. If EDA identifies any deficiencies, it
will notify the organization in writing and provide the organization a
reasonable opportunity to remedy such deficiencies.
Sec. 303.3 Requirements for a strategy.
A strategy must contain the following:
(a) An analysis of economic and community development problems and
opportunities including incorporation of any relevant material or
suggestions from other government sponsored or supported plans;
(b) Background and history of the economic development situation of
the area covered, with a discussion of the economy, including
geography, population, labor force, resources, and the environment;
(c) A discussion of community participation in the planning
efforts;
(d) A section setting forth goals and objectives for taking
advantage of the opportunities of and solving the economic development
problems of the area serviced;
(e) A plan of action, including suggested projects to implement
objectives and goals set forth in the strategy; and
(f) Performance measures that will be used to evaluate whether and
to what extent goals and objectives have been or are being met.
PART 304--GENERAL SELECTION PROCESS AND EVALUATION CRITERIA
Sec.
304.1 Project proposal, application, selection and evaluation for
programs under PWEDA.
304.2 How EDA evaluates proposals and applications for projects
funded under PWEDA.
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Sec. 304.1 Project proposal, application, selection and evaluation for
programs under PWEDA.
(a) Local projects. Parties eligible as applicants who are
interested in a public works, economic adjustment, planning, local
technical assistance or university center project grant should contact
the appropriate Economic Development Representative (EDR) (or EDA
Regional or headquarters office), identified in the NOFA. The EDR or
other EDA official is available to provide program information,
including the current published NOFA; provide a proposal form approved
by the U.S. Office of Management and Budget (OMB), and provide
assistance as needed in filling out the proposal form.
(1) After submission of the proposal to the appropriate EDR or
Regional Office of EDA, the appropriate Regional Office Project Review
Committee (PRC), consisting of at least three EDA officials, will
review the proposal. The EDR or other appropriate EDA official will
evaluate the proposal under Sec. 304.2, program specific sections of
this rule, and the NOFA, if applicable, before submitting it to the EDA
Regional Office for its review.
(2) After review by the PRC, EDA will send a letter in a timely
manner to each submitter advising either that:
(i) EDA invites the submitter to prepare and present a formal
application on a standard application form, with attachments for the
type of grant being requested; or
(ii) EDA returns the proposal because of specified deficiencies and
suggests resubmission when the deficiencies are cured; or
(iii) EDA denies the proposal for specifically stated reasons.
(b) National Technical Assistance Research, Evaluation, or Training
Projects. Parties eligible as applicants who are interested in a
national technical assistance, research, evaluation, or training
project under PWEDA, should make initial contact with EDA in
Washington, D.C., at locations identified in the NOFA, for information
and assistance concerning proposals and to obtain program information,
including a copy of the current NOFA, and OMB approved proposal form.
After submission of the proposal to the appropriate EDA Washington,
D.C. office, generally, three or more technically knowledgeable EDA
officials will review the proposal for relevance and quality.
(1) If EDA determines that the proposal is acceptable under
Sec. 304.2, program specific sections of this rule, and the NOFA, if
applicable, EDA may by letter invite the submitter to provide an
application with a more detailed and comprehensive project narrative.
EDA expects that applications will generally be submitted within 30
days after receipt of an invitation letter.
(2) If EDA determines that the proposal is not acceptable because
of specified deficiencies, EDA will so notify the submitter in writing
in a timely manner.
(c) EDA expects that applications will generally be submitted
within 30 days after receipt of an invitation letter. EDA's invitation
to submit an application does not assure EDA funding.
Sec. 304.2 How EDA evaluates proposals and applications for projects
funded under PWEDA.
(a) General proposal and application evaluation criteria for
projects funded under PWEDA are as follows: EDA will screen all
proposals/applications for:
(1) Conformance to statutory and regulatory requirements,
(2) The relative severity of the economic problem of the area,
(3) The quality of the scope of work proposed to address the
problem,
(4) The merits of the activity(ies) for which funding is requested,
and
(5) The ability of the prospective applicant to carry out the
proposed activity(ies) successfully.
(b) EDA will also review applications for conformance with any
additional program specific evaluation criteria as stated in applicable
sections of these rules or the NOFA.
(c) The NOFA may identify special areas of interest or priority
consideration for the period of such NOFA.
[[Page 5358]]
PART 305--GRANTS FOR PUBLIC WORKS AND DEVELOPMENT FACILITIES
Subpart A--General
Sec.
305.1 Purpose and scope.
305.2 Criteria.
305.3 Application requirements.
305.4 Selection and evaluation.
Subpart B--Other Requirements
305.5 Disbursements of funds for grants.
305.6 Final inspection.
305.7 Requirements for approved projects.
Appendix A to Part 305--Requirements for Approved Construction
Projects.
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Subpart A--General
Sec. 305.1 Purpose and scope.
The purpose of Public Works and Development Facilities grants is to
help the Nation's distressed communities revitalize and expand their
physical and economic infrastructure and thereby provide support for
the creation or retention of jobs for area residents by helping
eligible recipients with their efforts to promote the economic
development of distressed areas. The primary focus is on the creation
of new, or the retention of existing, long-term private sector job
opportunities in communities experiencing significant economic distress
as evidenced by high unemployment, low income, or a special need
arising from actual or threatened severe unemployment or severe changes
in local economic conditions. These grants are intended to help
communities achieve sustainable economic development by developing and
expanding new and existing public works and other infrastructure
facilities that will help generate long-term jobs and economic growth,
improve economic conditions or otherwise enhance and promote the
economic recovery of the area.
Sec. 305.2 Criteria.
(a) A grant may be made under part 305 for the following purposes:
(1) For the acquisition or development of land and improvements for
use for a public works, public service or other type of development
facility; or
(2) For the acquisition, design and engineering, construction,
rehabilitation, alteration, expansion, or improvement of such a
facility, including related machinery and equipment.
(b) A grant may be made under part 305 only when:
(1) The project for which the grant is applied for will, directly
or indirectly--
(i) Improve the opportunities, in the area where the project is or
will be located, for the successful establishment or expansion of
industrial or commercial plants or facilities;
(ii) Assist in the creation of additional long-term employment
opportunities in the area; or
(iii) Primarily benefit the long-term unemployed and members of
low-income families;
(2) The project for which the grant is applied for will fulfill a
pressing need of the area, or a part of the area, in which the project
is or will be located; and
(3) The area for which the project is to be carried out has a
strategy and the project is consistent with the strategy.
(c) Additional criteria, or priority consideration factors for
assistance, may be set forth in a NOFA.
(d) Maximum assistance for each State. Not more than 15 percent of
the annual appropriations available to carry out this part may be
expended in any one State.
Sec. 305.3 Application requirements.
Each application for a grant under part 305 must:
(a) Include evidence of area and applicant eligibility;
(b) Include, or incorporate by reference, a strategy, as provided
in Sec. 301.3;
(c) Identify the sources of the other funds, both eligible Federal
and non-Federal, that will make up the balance of the proposed
project's financing, including any private sources of financing. The
application must show that such other funds are committed to the
project and will be available as needed. The local share must not be
encumbered in any way that would preclude its use consistent with the
requirements of the grant; and
(d) Explain how the proposed project meets the criteria of
Sec. 305.2.
Sec. 305.4 Selection and Evaluation.
(a) Projects will be selected in accordance with the application
evaluation criteria set forth in Sec. 304.2 of this chapter.
(b) In addition to the evaluation criteria set forth in part 304 of
this chapter, project selection and evaluation will be made on the
basis of whether, and to what extent, the proposed project will:
(1) Assist in creating new or retaining existing private sector
jobs and assist in the creation of additional long-term employment
opportunities rather than merely transferring jobs from one area of the
country to another;
(2) Be supported by significant private sector investment;
(3) Leverage or be a catalyst for the effective use of private,
local government, State or other Federal funding that is available;
(4) Likely be started and completed in a timely fashion; and
(5) If the project is located in an area with a stable economy and
low distress, provide employment opportunities for residents of nearby
areas of high distress.
Subpart B--Other Requirements
Sec. 305.5 Disbursements of funds for grants.
(a) Disbursements of funds for construction grants are generally
made on a reimbursable basis on request of the recipient for
reimbursement. Disbursements may be made only:
(1) After execution of all contracts required for the completion of
the project. This condition may be waived by EDA if the grantee can
demonstrate that enforcement of the condition would place an undue
burden on it;
(2) For itemized and certified eligible costs incurred, as
substantiated by such documentary evidence as EDA may require;
(3) On the basis of the work accomplished and the percentage of EDA
participation, but in no event for more than the total sum stated in
the financial assistance award accepted by the grantee;
(4) Upon such evidence as EDA may require that grantee's
proportionate share of funds is on deposit;
(5) After a determination by EDA that all applicable terms and
conditions of the grant have been met; and
(6) After meeting such other requirements as EDA may establish in
accordance with other Federal laws, rules and regulations.
(b) Disbursements are generally made in installments, based upon
grantee's actual rate of disbursement in accordance with the grant
rate.
(c) Advances of funds are allowable when disbursement on a
reimbursable basis would impose an undue burden, as determined by EDA,
upon the recipient.
Sec. 305.6 Final inspection.
A final inspection will be scheduled by the recipient and
appropriate notification given to EDA, when the project has been
completed and all deficiencies have been corrected. EDA personnel may
attend and participate in the final inspection and, in any event, EDA
must be advised of the outcome of such final inspection and the
recipient's acceptance of the work.
[[Page 5359]]
Sec. 305.7 Requirements for Approved Projects.
(a) The requirements for approved projects are set forth in this
part and the EDA publication, Requirements for Approved Construction
Projects, Appendix A to this part displayed at EDA's web site, http://
www.doc.gov/eda. A copy of this publication is available from EDA and a
copy will be furnished to an award recipient with the Offer of
Financial Assistance.
(b) Financial, performance, and progress reports will be specified
in the Special Award Conditions of the grant.
Appendix A to Part 305--Requirements For Approved Construction
Projects
OMB Approval No. 0610-0096
Approval Expires 07/31/99
Burden Statement for REQUIREMENTS FOR APPROVED CONSTRUCTION
PROJECTS INTERIM NINTH EDITION, OCTOBER 1998:
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to
the requirements of the Paperwork Reduction Act, unless that
collection of information displays a currently valid OMB Control
Number.
The information is required to obtain or retain benefits from
the Economic Development Administration pursuant to Economic
Development Administration Reform Act, Public Law 105-393. The
reason for collecting this information is to enable the Economic
Development Administration to monitor construction projects for
compliance with Federal and other requirements. No confidentiality
for the information submitted is promised or provided except that
which is exempt under 5 U.S.C. 552(b)(4) as confidential business
information.
The public reporting burden for this collection is estimated to
average 18 hours per response including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. Send comments regarding this burden
estimate or any other aspect of this collection of information,
including suggestions for reducing this burden to: Economic
Development Administration, Herbert C. Hoover Building, Washington,
DC, 20230, and to the Office of Information and Regulatory Affairs,
Office of Management and Budget, Washington, DC 20503.
Requirements for Approved Construction Projects
Table of Contents
Section I. General and Pre-Construction Requirements
1. Basis for Economic Development Administration Requirements
A. Applicable OMB Circulars & Code of Federal Regulations
B. Purpose of this publication
C. Changes to policies and procedures
D. Variances to these requirements
2. The EDA Grant Award
A. Project description
B. Standard terms and conditions
C. Special conditions
D. Grant expiration date
E. EDA approved budget
F. Performance measures
3. Initial Actions
A. Initial EDA Regional Office actions
B. Pre-award construction
C. Davis-Bacon requirement for pre-award construction
4. Project Management Conference
5. Selection of the Architect/Engineer
A. Pre-award selection of the A/E
B. Acceptable forms of contracts
6. The Architect/Engineer Contract for Services
A. Suggested forms for contract format
B. Acceptable types of cost reimbursement for A/E services
C. Prohibited forms of compensation
D. Basic and special services
E. Construction inspection
F. A/E record keeping and access to records
G. Required provisions of the A/E contract
7. Multiple Contracts and Phasing
A. Project phasing
B. Disbursement of the grant for phased projects
8. Recipient Furnished Equipment and/or Materials
9. Services Performed by the Recipient's Own Forces
A. Use of in-house forces
B. Use of force-account forces
10. Construction Management Services
A. Definition of construction management services
B. Cost threshold
C. EDA approval for cost reimbursement
D. Compensation
E. Assigning responsibility
11. Certification of Acquisition of Land, Easements and Rights-of-
Way
A. Title, easements, rights-of-way, etc.
B. Title opinions
C. Amount and cost of land, etc.
D. Changes in amount and cost of land
E. Federally owned/controlled airfield restriction
12. Relocation Assistance
13. Certification of Adequacy of Treatment of sewage and other waste
A. Certification of adequacy
B. Exceptions
C. Certification Requirements
14. Project Financing
15. Safeguarding Funds
A. Documentation of project costs
B. Use of minority banks
C. Separate bank accounts
D. Bonding of project fund custodian
16. Department of Commerce Metric Program
17. Seasonality
18. Design for the Handicapped
A. Source of requirement
B. Requirements for buildings
C. Exceptions
D. Waivers
19. Reporting of Project Progress
A. Recipient review of project progress
B. The project performance report
C. Project performance report due dates
D. Reporting non-routine performance items
E. Project performance report format
F. Grant advances
G. Delinquent performance reports
20. Environmental Requirements
A. Policy statement
B. Applicable directives
C. Hazardous substances requirements
21. Project Revisions
Section II: Contracting for Project Construction
1. Contracting Standards
A. State recipients
B. Recipients other than states
C. The contract administration system
D. Standards of conduct
E. State and local agreements
F. Use of surplus property
G. Value engineering
H. Awards to responsible contractors
I. Maintenance of records
J. Use of time and material contracts
K. Settlement of contractual issues
L. Protest procedures
2. Competition in Procurement
A. Full and open competition
B. Prohibition of use of state or local geographical preferences
C. Requirements for procurement actions
D. Use of prequalification lists
3. Acceptable Methods of Procurement
A. Small purchase procedures
B. Procurement by sealed bids
C. Requirements for sealed bids
D. Procurement by competitive proposals
E. Procurement by noncompetitive proposals
4. Unacceptable Method of Procurement
5. Contracting with Disadvantaged Firms
A. Affirmative steps for use of disadvantaged firms
6. Contract Cost and Price Analysis
A. The price analysis
B. The profit line item
C. Federal cost principles
D. Prohibited methods of contracting
7. Advertising for Bids
A. Frequency of advertisement for bids
B. Requirements for projects over $1,000,000
C. Additional circulation of invitation for bids
D. Thirty day limit
8. Bonding and Insurance Requirements
A. Minimum bond amounts
B. Insurance requirements
9. Bid Schedules for Alternative Materials
A. Use of bid schedules
B. Method of award
C. Exceptions and deviations
10. Non-EDA Work
A. Requirements for adding non-EDA work
B. Restrictions on award of contract
11. EDA Review of Proposed Procurement Documents
A. Procurement sytem certification
B. EDA aproval of contract documents
C. EDA prebid review
D. EDA preaward review
E. Use of standardized documents and checklists
F. Proceeding at recipient's risk
12. Construction and Services Contract Provisions
A. Required contract documents
[[Page 5360]]
B. Cost documentation
C. Required contract provisions
13. Wage Rates
A. Applicable act
B. Wage rate coverage
C. Different types of coverage
D. Period of wage rate validity
E. Application and exception for wage rates
F. Exceptions for railroads and public utilities
G. EDA or Department of Labor investigations
H. Record retention
I. Retroactivity of wage rates
14. The Bid Opening
A. EDA representation at the bid opening
15. Overrun at Bid Opening
A. When lowest bid exceeds funds available
B. When lowest bid less deductive alternates exceeds funds
available
16. Underrun at Bid Opening
A. EDA notification
17. EDA Approval of the Contract Award
A. EDA approval
B. Requirements for EDA approval
C. Checking debarred ineligible or suspended contractors
18. Executed Bid Award
A. Contents of executed contract documents to be furnished to
EDA
19. Preconstruction Conference
Section III: Construction Procedures
1. Recipient Responsibilities
A. Recipient responsibilities for project monitoring
B. Recipient responsibilities for project documents
2. Employment of Local Labor
A. Anticipated labor requirements
B. Inclusion in contracts and subcontracts
3. Construction Progress Schedule
A. Construction progress chart
B. Monthly update
C. Acceptable formats
4. Construction Sign
A. Contractor responsibility
B. Location of sign
C. Local agency coordination
D. Modification of sign specifications
E. Bilingual signs
5. Inspection of Construction
6. Occupancy Prior to Completion
A. Recipient responsibilities
B. Role of EDA
7. Contractor Payrolls
A. Payroll retention requirements
B. Applicable Executive Order and form
8. Civil Rights Requirements
9. Contract Change Orders
A. Notification to and approval from EDA
B. Cost and price analysis
C. Required copies
D. Prohibited change of scope
E. Change order requirements
F. EDA approval
G. Substantial variations
10. Inspection for Final Acceptance
A. Final inspection
B. Interested parties
11. Specific Requirements for Subcontractors
12. Safety
Section IV: Financial Administration
1. Standards for Financial Management Systems
A. Requirements for State recipients
B. Requirements for other recipients
C. EDA review
2. Grant Disbursements
A. The reimbursement method
B. Effect of program income
C. Withholding payments
D. Cash depositories
E. Interest earned on advances
3. Allowable Costs
A. Limitation on use of funds
B. Applicable cost principles
4. Period of Availability of Funds
A. General
B. Liquidation of obligations
5. Matching or Cost Sharing
A. Basic rule
B. Qualification and exceptions
C. Valuation of donated services
D. Valuation of 3rd party donated supplies and loaned equipment
or space
E. Valuation of 3rd party donated equipment, buildings and land
F. Valuation of Recipient donated real property for
construction/acquisition
G. Appraisal of real property
6. Program Income
A. General
B. Definition of program income
C. Cost of generating program income
D. Governmental revenues
E. Royalties
F. Sale of real property
G. Use of program income
H. Income after the award period
7. Non-Federal Audit
Section V: Amendments to Grant Agreements
1. General Requirements
A. Unforeseen problems
B. Types of project amendments
C. Change of scope determination
2. Changes to the Project Scope
A. Definition of project scope
B. Approval by EDA
C. Types of project modifications
D. EDA review of proposed modifications
3. Time Extensions
A. Recipient responsibilities
B. Suspension of disbursements
C. EDA right to suspend or terminate the grant
4. Budget Line Item Revisions
A. Requirements for approval by EDA
B. Transfers between budget line items
C. Transfer from contingencies line item
D. Use of underrun funds
E. Notification of budget line item changes
5. Additional EDA Funding
A. Request for additional EDA funds
B. Proceeding before EDA approval
6. Termination of the EDA Grant
A. Termination for cause
B. Termination for convenience
Section VI: Project Closeout Procedures
1. Audit Requirements
A. Securing Single Audit Act audit
B. Specific audits
C. Department of Commerce audits
D. Audit standards
2. Closeout Procedures
A. Beginning the closeout process
B. Final grant reports
C. Liquidation of obligations
D. The final grant disbursement
E. Eligible and ineligible costs
F. After closeout requirements
Section VII: Post Construction Grant Requirements
1. Real Property
A. Grantee ownership
B. EDA's reversionary interest
C. Successor grantees
D. Applicability of requirements
2. Definitions
3. Use of Property
A. Use only for authorized purposes
B. Property no longer needed for grant purpose
C. Property for lease or sale
D. Property substitutions
4. Unauthorized use
A. Disposal without EDA approval
B. EDA actions for disposal without approval
5. Federal Share
A. Calculation of federal share
B. Leasehold depreciation
C. Transfer to another eligible grantee
D. EDA interest after compensation
6. Encumbrances
A. Restrictions on encumbrances
B. Compensation for encumbrances
C. Waivers
D. Water and sewer exceptions
7. Civil Rights Restriction
8. Performance Reports
9. Record Retention
10. Program Income Earned After the Award Period
Section VIII: Exhibits
Section I--General and Pre-Construction Requirements
1. Basis for Economic Development Administration (EDA) Requirements
A. These Requirements for Approved Projects apply to all awards
for construction projects and they are based on Office of Management
and Budget (OMB) administrative requirements for Federal grants as
set forth in OMB Circulars and on regulations set forth in the Code
of Federal Regulations (CFR) Section 13 Chapter III, Section 15 Part
24 and Section 15 Part 14 as they may be amended.
B. These Requirements for Approved Projects are intended to
organize and explain the various requirements that apply to
Federally-assisted construction programs. They are not intended to
derogate, replace, or negate the above cited Federal requirements.
Conflicts between these Requirements for Approved Projects and the
documents referred to above should be brought to the attention of
EDA immediately. Any inconsistences or conflicts shall be resolved
in favor of such Federal requirements.
C. EDA, as a Federal agency, is obligated to promulgate policies
and procedures applicable to Recipients of EDA grants to insure
compliance with Federal requirements, to safeguard the public's
interest in the grant assets, and to promote the effective use of
grant funds in accomplishing the purpose for which they
[[Page 5361]]
were granted. Pursuant to this obligation, grant terms and
conditions require Recipients to comply with changes in regulations
and other requirements and policies EDA may issue from time to time.
Such changes apply to actions taken by all Recipients of EDA grants,
existing and prospective, after the effective date of the changes.
D. EDA's policy is to administer grants uniformly, but it is
understood that there may be situations warranting a variance. To
accommodate these situations and to encourage innovative and
creative ways to address economic development problems, requests for
variances to the requirements of this Requirements for Approved
Projects will be considered if they are consistent with the goals of
EDA programs, make sound and financial sense, and do not conflict
with applicable Federal and regulatory requirements.
2. The EDA Grant Award
The EDA grant award contains mandatory requirements and
information vital to the accomplishment of the project. It should be
read carefully with particular attention paid to:
A. The description of the project. This description and the
corresponding scope of work must be adhered to. Proposed changes to
EDA approved projects will be permitted by EDA only if they are
necessary to the proper functioning of the project. Enhancements to
the project that were not envisioned in the grant award will not be
approved for EDA participation.
B. The Standard Terms and Conditions for Title I Public Works
and Development Facilities and Title IX Economic Adjustment
Construction Projects. The Standard Terms and Conditions contain, by
reference or substance, a summary of the pertinent statutes,
regulations published in the Federal Register or Code of Federal
Regulations, Executive Orders or OMB Circulars.
C. The Special Conditions of the grant award. The Special
Conditions generally contain two types of information. The first
type relates specifically to the grant being awarded. The second
type relates to all approved grants and are of recent origin and
therefore have not yet been incorporated into the Standard Terms and
Conditions. Special attention should be paid to the Project
Development Time Schedule. The time schedule can only be extended as
a result of a written request from the Recipient and a written
approval by EDA. Failure to meet the time schedule is considered a
violation of the grant award and may result in action by EDA to
suspend and/or terminate the grant. No disbursement of EDA grant
funds is permitted when a project has exceeded the time schedule in
the grant award unless EDA has given written approval to a time
schedule extension.
D. Please note that, unless otherwise stated, EDA funds are
available for a period beginning at the time the project is approved
and ending five years after the end of the fiscal year in which the
project was approved. Any funds not disbursed to the Recipient
before the end of that period are automatically canceled and will be
deobligated and will no longer be available for payment of costs
incurred by the Recipient.
E. Combination construction and nonconstruction grants. If the
EDA grant award is for both construction and nonconstruction, the
Recipient must obtain prior written approval from EDA before making
any fund or budget transfer from nonconstruction to construction or
vice versa.
F. Performance Measures. The Standard Terms and Conditions of
the EDA grant award make reference to ``Core Performance Measures''
that require post-construction reports to be submitted to EDA. The
first report will be due at the completion of construction of the
project. The due dates for the submission of the second and third
reports are 3 years and six years after the completion of
construction. Questions regarding the content or submission of these
reports should be directed to EDA.
3. Initial Actions
A. After the Grant Award has been affirmed, the EDA Regional
Office will mail a pre-construction package to the Recipient that
includes a copy of ``Requirements for Approved Projects'', and a
list of items that need special attention (such as the project
development time schedule), and a list of any unresolved problems
identified during the preapproval review process. The EDA Project
Manager will then contact the Recipient to offer assistance and
guidance, to arrange for an updated schedule of the Recipient's
proposed activities and to arrange a Project Management Conference.
B. Because it is the policy of EDA to discourage the undertaking
of any construction prior to the submission of an application for
financial assistance, special consideration and judgment must be
executed if it becomes necessary for a project to proceed prior to
award of the EDA grant. Commencement of a project prior to approval
of the application for assistance is not prohibited, but it may
jeopardize the favorable consideration of such application since,
among other things, it raises a rebuttable presumption that funds
necessary for the accomplishment of the project are otherwise
available and that proper contracting procedures and labor standards
may not have been followed.
C. If construction of the project was begun before affirmation
of the grant award, the Recipient will be required to document to
EDA's satisfaction that it has complied with all EDA requirements,
including but not limited to the payment of Davis-Bacon wages from
the start of construction and environmental requirements, in order
to qualify for EDA reimbursement of costs incurred, if agreed to in
the grant award.
4. Project Management Conference
Whenever practical, the Project Management Conference will be
held at the Recipient's location; however, if necessary and required
for appropriate EDA personnel to be present, it may be held at
another location including in the Regional Office. The Recipient's
Authorized Representative, Architect/Engineer, attorney and possibly
the Recipient's financial representative should be in attendance.
Reasonable costs for transportation, meals and lodging for these
individuals are an authorized cost under the administrative line
item in the project budget. Per diem costs eligible for EDA
reimbursement may not exceed the current Federal per diem rate.
5. Selection of the Architect/Engineer
A. If an Architect/Engineer has been selected by the Recipient
prior to EDA approval of the grant award and the contract between
the Recipient and the Architect/Engineer has not been previously
submitted to EDA, it should be submitted as soon after the grant
award as possible. If the selection has not been made at the time of
grant award the contract should be sent to the EDA Regional Office
as soon as possible after its execution by both parties.
B. For EDA to participate in the cost for architect/engineer
services the Architect/Engineer must be selected competitively by
sealed bids (formal advertising) or by competitive proposals. If the
selection is made by competitive proposal the following requirements
apply:
(1) Requests for proposals shall be publicized and shall
identify all evaluation factors and their relative importance. Any
response to publicized requests for proposals shall be honored to
the maximum extent practical;
(2) Proposals will be solicited from an adequate number of
qualified sources (normally sufficient to secure at least three
proposals from qualified proposers);
(3) The Recipient will have a method for conducting technical
evaluations of proposals received and for selecting the best
proposal, price and other factors considered;
(4) The Recipient will determine the responsible firm whose
proposal is most advantageous to the program, with price and other
factors considered. Competitor's qualifications will be evaluated
and the most qualified competitor will be selected, subject to
negotiation of fair and reasonable compensation.
6. The Architect/Engineer Contract for Services
A. The architect/engineer agreement shall provide for all
services required by the Recipient for the planning, design and
construction phase of the proposed project. Appropriate standards or
guides developed by such professional organizations as the American
Consulting Engineers Council (ACEC), American Society of Civil
Engineers (ASCE), National Society of Professional Engineers (NSPE),
and/or the American Institute of Architects (AIA) may be used where
the Recipient does not have standard procurement documents.
B. The Architect/Engineer's fee for basic services must be
either a fixed price or a cost reimbursement with an agreed maximum
to be eligible for EDA participation. The amount of EDA
participation will be based on a determination, subject to audit,
that the compensation is reasonable.
C. The use of the cost-plus-a-percentage-of-cost and percentage
of construction cost forms of compensation are specifically
prohibited.
[[Page 5362]]
D. The Architect/Engineer's fee shall cover all services
necessary for the successful execution of the project, including
consultations, surveys, soil investigations, supervision, travel,
``as-built'' or record drawings, arrow diagram (CPM/PERT) where
applicable, and incidental costs. The basic fee shall not exceed
that prevailing for comparable services in the project area. If the
total fee is in excess of the prevailing rate because of special
services to be performed, these services shall be identified in the
agreement. Such additional charges may be approved for grant
participation by EDA if they:
(1) Do not duplicate a charge for services provided for in the
basic fee and are within the normal scope of the Architect/
Engineer's responsibilities;
(2) Are a proper charge against the project cost; and
(3) Are reasonable for the extra services to be rendered.
E. Regardless of who furnishes the construction inspector, the
Architect/Engineer shall be held responsible for making sufficient
visits to the project site to determine, in general, if the work is
proceeding in accordance with the construction contract.
F. All negotiated Architect/Engineer contracts (except those of
$100,000 or less awarded under small purchase procedures) awarded by
Recipients shall include a provision to the effect that the
Recipient, EDA, the Comptroller General of the United States, the
Inspector General of the Department of Commerce, or any of their
duly authorized representatives, shall have access to any documents,
books, papers, and records of the Architect/Engineer (which are
directly pertinent to a specific grant project) for the purpose of
making an audit, examination, excerpts, and transcriptions. The
Recipient shall require the Architect/Engineer to maintain all
required records for at least three years after the Recipient makes
final payment and all pending matters are closed.
G. EDA requirements for the agreement for Architect/Engineer
services are contained in Exhibit A-1 to these ``Requirements for
Approved Projects''.
7. Multiple Contracts and Phasing
A. The Recipient is strongly urged to award all contracts for
the project construction at one time. Where compelling reasons
justify phasing the project, the Recipient must secure the approval
of EDA for phasing prior to advertising any portion for bid. The
Recipient's request for approval of phasing must include:
(1) Valid reasons justifying the request, and
(2) A statement from the Recipient that it can, and will, fund
any overrun that arises in the later phases.
B. Normally EDA will not disburse funds until all construction
contracts have been awarded (an exception is the development of a
water source when required to determine the availability of an
adequate source of water supply in terms of both quality and
quantity as called for in the Grant Agreement). Disbursement of
grant funds by phases must be approved by EDA. Such approvals will
be given only if the Recipient can demonstrate that a severe
hardship will result if such approval is not given and there are
compelling reasons why all phases cannot be contracted for at the
same time. The Recipient must be capable of meeting incurred costs
prior to the first disbursement of EDA grant funds.
8. Recipient Furnished Equipment and/or Materials
The Recipient may wish to incorporate into the project equipment
and/or materials which it will secure through its own efforts. It is
the responsibility of the Recipient to assure that such equipment
and/or materials are adequate for the proposed use. The use of such
equipment and materials must be approved by EDA to be eligible for
EDA financial participation. The Recipient must be prepared to show
that the cost claimed for such equipment and/or materials is
competitive with local market costs. Acquisitions of Recipient
furnished equipment and/or materials under this section is subject
to the requirements of 15 CFR Part 24 or OMB Circular A-110 (or any
DOC rule implementing such Circular, as applicable). The Recipient
shall be required to submit with its request for approval either a
paid invoice or current quotes from not less than three suppliers
who normally distribute such equipment and/or materials. EDA may
require that major equipment items be subject to a lien in favor of
EDA and may also require a statement from the Recipient regarding
expected useful life and salvage value.
9. Services Performed by the Recipient's Own Forces
A. The Recipient may have a portion or all of the design,
construction, inspection, legal services, or other work and/or
services in connection with the project performed by personnel who
are employed by the Recipient either full-time or part-time (in-
house), subject to the following conditions:
(1) EDA must review and approve the Recipient's plan if this
method is to be elected by the Recipient.
(2) Such work or services performed by in-house personnel may be
considered an eligible cost for EDA reimbursement if in conformance
with Office of Management and Budget Circulars A-87, A-21 or A-122,
as appropriate.
(3) If a portion of the architect/engineer services is to be
performed by in-house forces, the Recipient will submit a statement
listing the services to be so performed. This statement should
accompany the architect/engineer agreement when it is submitted to
EDA for approval.
B. Due to the difficulty in monitoring force account
construction and the limited EDA staff available to perform the
monitoring, force account construction is strongly discouraged. The
force account method of construction may be approved only if:
(1) The Recipient has a special skill required for the
construction, e.g., construction of unique Indian structures, or
(2) Substantial cost savings can be demonstrated, or
(3) The Regional Office is satisfied that the Recipient has made
all reasonable efforts to obtain a contractor, but has failed to do
so because of uncontrollable factors, such as the remoteness of the
site combined with a small contract or an overabundance of
construction work in the project area, or
(4) It has been determined by EDA that special circumstances
require its use to successfully complete the project.
(5) EDA has available the publication, ``Guidelines for Force
Account Projects'', which can be secured from the EDA Regional
Office. This publication can be very helpful in ensuring that this
type of project activity would be an eligible project cost.
10. Construction Management Services
A. For the purposes of this document, Construction Management is
defined as the services of a firm with competent and experienced
staff to act as the Recipient's agent to perform all or part of the
following:
(1) Aid the project designer to find expedited or less costly
methods of construction (Value Engineering).
(2) Monitor the contracting process. This may vary in scope from
giving advice to the Recipient to complete control of the
contracting process.
(3) Inspection or supervision of inspection of the construction
work.
(4) Controlling the expenditure of project funds on a multi-
faceted or highly complex project.
(5) Controlling unusual methods of contracting such as ``fast
track'' or ``turn-key''.
B. EDA will not normally approve the use of a Construction
Management firm for projects costing less than $5 million.
C. If the Recipient wishes to use a Construction Manager, EDA
will participate in such costs only if EDA approves the proposed or
actual contract for such services between the Recipient and the
Construction Manager.
D. The compensation for Construction Management services is
subject to the same rules as those for architect/engineer services.
E. The Construction Management Agreement must spell out who is
responsible for construction inspection, approval of construction
and supply contracts, change orders and other areas of possible
conflicts (i.e., the division of responsibility and authority
between the Recipient, the Architect/Engineer and the Construction
Manager).
11. Certification of Acquisition of Land, Easements and Rights-of-
Way
A. As required in the Financial Assistance Award the Recipient
must furnish evidence satisfactory to the EDA that it has good and
merchantable title to the tracts or parcels of land on which
buildings, structures, or other project improvements will be
located, with any liens or encumbrances noted, and that it has
obtained all necessary easements, permits, rights-of-way,
franchises, condemnations, and all Federal, State and local
approvals necessary to the completion of the project.
B. To aid EDA in making its determination, the Recipient must
furnish a description of the sites and rights-of-way on which the
project will be located. Exhibit C of this
[[Page 5363]]
document is a ``Certificate as to Project Site, Rights-of-Way, and
Easements,'' which is a format acceptable to EDA as evidence of the
Recipient's title to the real property necessary for the project.
The Recipient has the option to prepare the title opinion in a
format that meets local law or custom. Any title opinion submitted
must be approved by EDA. EDA may require additional documentation.
C. If land acquisition is a part of the project, the EDA project
file must be documented to show the basis for determining that the
amount of land acquired and the cost of the land is reasonable. If
an appraisal is required, a professional appraiser(s) should perform
the service. An appraiser registered with a national society and/or
licensed by the State will normally be required.
D. Any significant change in the amount and cost of land from
that upon which the project approval was based must be approved by
EDA to be eligible for EDA reimbursement.
E. No financial assistance under the Act will be approved for a
project involving public or privately owned land adjacent to or in
the vicinity of a federally owned or operated airfield, unless the
Recipient can demonstrate that the proposed project is compatible
with the airfield land use plan prepared for that facility.
12. Relocation Assistance
The provisions of the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 (P.L. 91-646), as amended,
are applicable to all States and political subdivisions of States
and non-profits which are recipients of EDA funding assistance. This
Act requires financial and other assistance to persons, businesses,
or farm operations displaced from real property acquired for a
project financed wholly or in part with Federal funds. It also
requires compliance with specific guidelines pertaining to
reimbursable costs incidental to such land acquisition. Recipients
are required to comply fully with the intent of this Act.
13. Certification of Adequacy of Treatment of Sewage and Other
Waste
A. EDA will not provide financial assistance for projects
involving sewer or other waste disposal facilities unless a State
permit has been obtained by the Recipient in those States where EPA
has delegated authority to the State to certify adequacy of
treatment. In those States where EPA has not delegated such
authority, a certificate of adequacy of treatment must be obtained
from EPA in addition to a State permit.
B. Certification of adequacy of treatment is not normally
required under the following conditions:
(1) For single service connections unless an unusual effluent is
expected.
(2) For replacement of portions of an existing sewer system
where sewage flow resulting from the project is not increased.
(3) For projects which will include only storm drainage as the
component and the flow from the storm sewer is not introduced in the
existing sanitary sewer system.
C. If EPA certification is required, EDA will not authorize the
advertising, bid opening nor a disbursement of grant funds until an
unconditional certificate has been obtained. The EDA Project Manager
will prepare all EDA requests to EPA for Certificates of Adequacy of
Treatment for projects which involve sewage and/or storm drainage
facilities. The certification should be obtained as early as
practicable after acceptance of the project application by EDA. The
Recipient must provide as much of the following information as is
required to obtain the certification:
(1) For sanitary sewer system.
a. A general descriptive statement of the project explaining the
problem to be eliminated and the proposed method of elimination.
b. A vicinity map of the complete project area showing the
location and size of all existing and proposed sanitary and storm
sewer lines in plan view, the street system, topographical features,
overflows and bypasses.
c. Project design criteria, including the following data:
(i) Industrial and domestic contribution. (Type of industrial
contribution should be stated).
(ii) Line and treatment facility sizing and design criteria used
therefor.
(iii) Population figures used.
(iv) Number of existing and planned sewer connections.
d. Design criteria to be used for the new treatment facilities.
This should include the following data:
(i) Type and extent of existing treatment.
(ii) Industrial and domestic contribution. (Type of industrial
contribution should be stated).
(iii) Peak and average flow data.
(iv) Component sizing and design criteria used therefor.
e. For existing treatment facilities to be affected by the
proposed project submit the design criteria, permit number and
effluent limitations.
f. If available, as-built drawings of existing treatment
facilities showing the location, type, number and size of the
treatment facilities. If as-built drawings are not available a
single line drawing of the existing structures such as lift
stations, manholes, pumping stations, etc., will be accepted.
g. Agreements, if any, for treatment by other entities.
(2) For projects involving only storm sewer facilities submit
the following dated statement, signed by the Recipient's authorized
representative; ``This proposed storm water sewer system will be
constructed and operated so as to exclude the introduction of
domestic sewage and industrial or agricultural waste and will not be
connected in any way to a sanitary sewer system.''
(3) Upon receipt by EDA, the certification of adequacy of
treatment will be reviewed to assure that the certification is
unconditional. EDA will not accept a conditional certification
(defined as an approval conditioned on the occurrence of a future
event such as the future construction of a sewage treatment plant).
14. Project Financing
Prior to obtaining EDA approval of the project's final plans and
specifications, the Recipient should furnish evidence to the EDA
Project Manager that the Recipient has its share of matching funds
either on hand or firmly committed. Any change in the amount or
availability of the Recipient's share must be made known to EDA at
this time. This is equally true of the interim financing amount and
availability.
15. Safeguarding Funds
A. Checks drawn to pay project costs will be signed by the
Authorized Representative of the Recipient and may be counter-signed
by other representatives of the Recipient if he/she so designates.
The Recipient shall retain all bank statements, deposit slips,
canceled checks, and related invoices pertaining to these project
costs to facilitate final audit.
B. Consistent with the national goal of expanding the
opportunities for minority business enterprises, Recipients are
encouraged to use minority banks as the depository for project
funds.
C. Although a separate bank account is not required by EDA, the
Recipient is urged to use one for the EDA project as it will be
helpful to audit project costs claimed by the Recipient at project
closeout.
D. For non-governmental Recipients EDA requires that the
Recipient furnish evidence that the custodian of the project funds
is bonded in an amount not less than the amount of the EDA grant. If
subject to 15 CFR Part 24, the Recipient must furnish assurances
that the Recipient's financial management system meets the
requirements of 15 CFR Part 24.20, Financial Administration, if this
was not accomplished prior to approval of the grant award.
16. Department of Commerce Metric Program
Section 5164 of the Omnibus Trade and Competitiveness Act of
1988 (P.L. 100-418) designates the metric system of measurement as
the preferred system of weights and measures for U.S. trade and
commerce.
17. Seasonality
It is EDA policy to promote construction of projects
continuously throughout the year. Recipients and their Architect/
Engineers are encouraged to design projects so that construction
will not be unreasonably curtailed by weather.
18. Design for the Handicapped
A. Any building or facility financed in whole or in part with
assistance under the Act must be designed, constructed, or altered,
so as to insure ready access to, and use of, such building or
facility by the physically handicapped, as required by P.L. 90-480
(42 U.S.C. 4151-4156) and the regulations promulgated thereunder (41
CFR Subpart 101-19.6).
B. Except as otherwise provided in paragraph C of this section,
every building, except a residential structure, shall be designed,
constructed, or altered in accordance with the minimum standards
contained in the ``American National Standard Specifications for
Making Buildings
[[Page 5364]]
and Facilities Accessible to, and Usable by, the Physically
Handicapped,'' Number A 117.1 (1971) approved by and available from
the American National Standards Institute, Inc., 1430 Broadway, New
York, NY 10018.
C. The standards established in paragraph (B) of this section
shall not apply to:
(1) The design, construction, or alteration of any portion of a
building or facility which need not, because of its intended use, be
made accessible to, or usable by, the public or by physically
handicapped persons;
(2) The alteration of an existing building if the alteration
does not involve the installation of, or work on, existing stairs,
doors, elevators, toilets, entrances, drinking fountains, floors,
telephone locations, curbs, parking areas, or any other facilities
susceptible of installations or improvements to accommodate the
physically handicapped;
(3) The alteration of an existing building or facility, or of
such portions thereof, to which application of the standards is not
structurally possible.
D. The standards established in paragraph (B) of this section
may be modified or waived on a case-by-case basis, provided that the
Administrator of the General Services Administration determines that
such waiver or modification is clearly necessary.
19. Reporting of Project Progress
A. Recipients are required to constantly monitor project
progress to assure that time schedules are being met, project work
units by time periods are being accomplished, and other performance
goals are being achieved. This review shall be made for each
program, function, or activity as set forth in the approved grant
application.
B. The Recipient is required to submit a project performance
report for each calendar quarter. The report will cover the
following for each program, function, or activity involved:
(1) A comparison of actual accomplishments to the timetable
established in the Grant Award;
(2) Reasons for delays in those cases where the time table
approved by EDA was not met;
(3) Any change to the purpose, nature, location, bona-fide need,
neighborhood served, size, funding, or cost of the project;
(4) All change orders issued up to the date of the report and
not previously reported to EDA, and
(5) Other pertinent information including, when appropriate, an
analysis and explanation of and cost overruns or high unit costs.
C. The project performance report will be due not later than
January 15, April 15, July 15 and October 15 for the immediate
previous quarter year. This requirement shall begin with the
Recipient's acceptance of the EDA Grant Award and shall end when EDA
approves the final grant disbursement.
D. Between the required performance reporting dates, events may
occur which have significant impact upon the project or program. In
such cases, the Recipient will be required to inform EDA as soon as
the following types of conditions become known:
(1) Problems, delays, or adverse conditions which will
materially affect the ability of the Recipient to attain program
objectives, prevent the meeting of time schedules and goals, or
preclude the attainment of project work by established time periods.
This disclosure shall be accomplished by a statement of the action
taken, or contemplated, and any Federal assistance needed to resolve
the situation.
(2) Favorable developments or events which enable meeting time
schedules and goals sooner than anticipated or producing more work
than originally projected; or
(3) If any performance review conducted by the Recipient
discloses the need for change in the budget estimates, the Recipient
is required to submit a request for budget revision.
E. A sample format for the required project performance report
is included herein as Exhibit J. The report will be sent to the EDA
Regional Office. The Recipient may use a format other than the EDA
sample, provided that the information called for in this section is
furnished.
F. EDA does not normally permit grant advances. However, where
EDA determines that grant advances are necessary and in the best
interest of the Government and the Recipient, the Recipient will be
required to submit with the project performance report a Report of
Federal Cash Transactions. The EDA Regional Office shall furnish the
required forms for this report.
G. EDA will not process any requests for grant disbursement from
Recipients with delinquent performance reports.
20. Environmental Requirements
A. EDA is required by law to insure that proper environmental
review of its actions take place; that there is a proper balance
between the goals of economic development and environmental
enhancement in its actions; and, that adverse environmental impacts
from its actions are mitigated or avoided to the extent possible.
B. Environmental assessments of EDA actions are conducted in
accordance with the National Environmental Policy Act of 1969, as
amended (NEPA) (42 U.S.C. 4321 et. seq.), the Environmental Quality
Improvement Act (42 U.S.C. 4371 et. seq.), The Clean Air Act, as
amended (42 U.S.C. 7401 et. seq.), the National Historic
Preservation Act of 1966 (16 U.S.C. 470 et. seq.), The Wild and
Scenic Rivers Act, as amended (16 U.S.C. 1271 et. seq.), the Flood
Disaster Protection Act of 1973, as amended (42 U.S.C. 4002 et.
seq.), the Federal Water Pollution Control Act, as amended (33
U.S.C. 1251 et. seq.), and the Council on Environmental Quality
(CEQ) Regulations (40 CFR Section 1500-1508), as specified in EDA
Directives 17.02-2, 17.02-7, and 17.04, as hereafter amended or
superseded. Directives are available from any EDA office.
C. EDA recipients are subject to Federal, state and local
requirements concerning hazardous substances, including, but not
limited to, the Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA), Public Law 96-510 (1980), as amended by
Public Law 99-499 (1986), 42 U.S.C. 9601-9675; and the Resource
Conservation and Recovery Act (RCRA), Public Law 89-272 (1965), as
amended by Public Law 94-580 (1976), Public Law 96-482 (1980) and
Public Law 98-616 (1984), 42 U.S.C. 6901-6991.
21. Project Revisions
After Recipient acceptance of the EDA grant award, any change to
the project as described in the grant award must be reviewed and
approved by EDA. To be eligible for EDA financial participation the
proposed revision must meet certain conditions. See Section V of
this document for guidelines on securing EDA approval of proposed
project revisions.
Section II--Contracting For Project Construction
1. Contracting Standards
A. For States: If a State is the recipient of the EDA grant
award, the State may follow the same policies and procedures it uses
for procurements from its non-Federal funds provided that the State
will ensure that every purchase order or other contract includes any
clauses required by Federal statutes and Executive Orders and their
implementing regulations. For reimbursable cost determinations, OMB
Circular A-87 will be applicable.
B. For Other than States: Recipients of EDA grants other than
States may use their own procurement procedures which reflect
applicable State and local laws and regulations, provided that the
procurements conform to applicable Federal law and the standards
contained in these ``Requirements for Approved Projects''.
Recipients may request EDA to approve self-certification of their
procurement system. Such self-certification shall not limit EDA's
right to survey the system. The Recipient must cite specific
procedures, regulations, standards, etc. as being in compliance with
EDA and other Federal requirements and have its system available for
review. In the absence of written procurement regulations issued by
the Recipient which meet the following requirements, applicable
federal procurement standards shall govern.
C. Contract Administration System: Recipients will maintain a
contract administration system which ensures that contractors
perform in accordance with the terms, conditions and specifications
of their contracts or purchase orders.
D. Standards of Conduct: Recipients shall maintain a written
code or standards of conduct which shall govern the performance of
their officers, employees or agents engaged in the award and
administration of contracts supported by Federal funds. No employee,
officer or agent of the Recipient shall participate in selection, or
in the award or administration of a contract supported by Federal
funds if a conflict of interest, real or apparent, would be
involved. Such a conflict would arise when any of the following has
a financial or other interest in the firms elected for award:
(1) an employee, officer or agent
(2) any member of his/her immediate family
(3) his or her partner
(4) an organization which employs, or is about to employ, any of
the above.
The Recipient's officers, employees or agents shall neither
solicit nor accept
[[Page 5365]]
gratuities, favors or anything of monetary value from contractors,
potential contractors, or parties to subagreements except that
Recipients may set minimum rules where the financial interest is not
substantial or the gift is an unsolicited item of nominal intrinsic
value.
To the extent permitted by State or local law or regulations,
such standards of conduct shall provide for penalties, sanctions, or
other disciplinary actions for violations of such standards by the
Recipient's officers, employees, or agent, or by contractors or
their agents.
E. State and Local Agreements: To foster greater economy and
efficiency, Recipients are encouraged to enter into State and local
intergovernmental agreements for procurement or use of common goods
and services.
F. Surplus Property: Recipients are encouraged to use Federal
excess and surplus property in lieu of purchasing new equipment and
property whenever such use is feasible and reduces project costs.
G. Value Engineering: Recipients are encouraged to use value
engineering clauses in contracts for construction projects of
sufficient size to offer reasonable opportunities for cost
reductions. EDA will not normally approve value engineering costs
for construction contracts with estimated costs of less than
$1,000,000. Value engineering is defined for the purposes of this
paragraph as a systematic and creative analysis of each contract
item or task to ensure that its essential function is provided at
the overall lower cost. Value engineering, as a function, is done
separately from the architect/engineer design by a person or firm
not controlled by the architect/engineer.
H. Awards to Responsible Contractors: Recipients will make
awards only to responsible contractors possessing the ability to
perform successfully under the terms and conditions of a proposed
procurement. Consideration will be given to such matters as
contractor integrity, compliance with public policy, record of past
performance and financial and technical resources.
I. Maintenance of Records: Recipients will maintain records
sufficient to detail the significant history of each procurement
affecting the EDA assisted project. These records will include, but
are not necessarily limited to, the rationale for method of
procurement, selection of contract type, contractor selection or
rejection, and the basis for contract price.
J. Time and Material Contracts: Recipients will use time and
material type contracts only:
(1) After a determination that no other type of contract is
suitable, and
(2) If the contract includes a ceiling price that the contractor
exceeds at its own risk.
K. Settlement of Issues: Recipients alone will be responsible,
in accordance with good administrative practice and sound business
judgment, for the settlement of all contractual and administrative
issues arising out of procurements. These issues include, but are
not limited to source evaluation, protests, disputes and claims.
These standards do not relieve the Recipient of any contractual
responsibilities under its contracts. EDA will not substitute its
judgment for that of the Recipient unless the matter is primarily a
Federal concern. Violations of law will be referred to the local,
State, or Federal authority having proper jurisdiction.
L. Protest Procedures: Recipients will have protest procedures
to handle and resolve disputes relating to their procurements and
shall in all instances disclose information regarding the protest to
EDA. A protestor must exhaust all administrative remedies with the
Recipient before pursuing a protest with EDA. Reviews of protests by
EDA will be limited to:
(1) Violations of Federal law or regulations (violations of
State or local law will be under the jurisdiction of State or local
authorities); and
(2) Violations of the Recipient's protest procedures for failure
to review a complaint or protest. Protests received by EDA other
than those specified above will be referred to the Recipient for
resolution.
2. Competition in Procurement
A. All procurement transactions affecting the EDA project will
be conducted in a manner providing full and open competition
consistent with the standards contained herein. 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 awards 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 of
other relevant requirements of the procurement, and
(7) Any arbitrary action in the procurement process.
B. Recipients will conduct procurements in a manner that
prohibits the use of statutorily or administratively imposed in-
State or local geographical preferences in the evaluation of bids or
proposals, except in those cases where applicable Federal statutes
expressly mandate or encourage geographic preference. Nothing in
these Requirements for Approved Projects preempts State licensing
laws. When contracting for architectural and engineering (A/E)
services, geographical location may be a selection criteria provided
its application leaves an appropriate number of qualified firms,
given the nature and size of the project, to compete for the
contract.
C. Recipients will have written selection procedures for
procurement actions. These procedures will 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 descriptions shall not, in competitive procurements,
contain features which unduly restrict competition. The description
may include a statement of the qualitative nature of the material,
product or service to be procured, and when necessary, shall set
forth those minimum essential characteristics and standards to which
it must conform if it is to satisfy its intended use. Detailed
product specifications should be avoided if at all possible. When it
is impractical or uneconomical to make a clear and accurate
description of the technical requirements, a ``brand name or equal''
description may be used as a means to define the performance or
other salient requirements of a procurement. The specific features
of the named brand which must be met by offerors shall be clearly
stated; and
(2) Identify all requirements which the offerors must fulfill
and all other factors to be used in evaluating bids or proposals.
D. Recipients will ensure that all lists of prequalified
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, Recipients will not
preclude potential bidders from qualifying during the solicitation
period.
3. Acceptable Methods of Procurement
A. Procurement by Small Purchase Procedures: Small purchase
procedures are those relatively simple and informal procurement
methods for securing services, supplies or other property that do
not cost more than the simplified acquisition threshold fixed at 41
U.S.C. 403(11) (currently set at $100,000) in the aggregate. If
small purchase procurements are used, price or rate quotations will
be obtained from an adequate number of qualified sources (normally
at least three quotes will be required).
B. 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 lowest in price. The sealed bid method is the preferred
method for procuring construction. In order for sealed bidding to be
feasible, the following conditions should be present:
(1) A complete, adequate and realistic specification or purchase
description approved by EDA is available,
(2) Two or more responsible bidders are willing and able to
compete effectively for the business, and
(3) 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.
C. If sealed bids are used, the following requirements apply:
(1) The invitation for bids will be publicly advertised and bids
shall be solicited from an adequate number of known suppliers,
providing them sufficient time prior to the date set for the opening
of bids.
(2) The invitation for bids, which will include any
specifications and pertinent attachments, shall define the items or
services in order for the bidder to properly respond.
(3) All bids will be publicly opened at the time and place
prescribed in the invitation for bids.
[[Page 5366]]
(4) A firm fixed-price contract award will be made in writing to
the lowest responsive and responsible bidder. When specified in
bidding documents, factors such as discounts, transportation costs
and life cycle costs shall be considered in determining which bid is
lowest. Payment discounts will only be used to determine the low bid
when prior experience indicates that such discounts are usually
taken advantage of.
(5) Any or all bids may be rejected if there is a sound and
properly documented reason.
D. Procurement by Competitive Proposals: The technique of
competitive proposals may be used on EDA projects to secure
architect/engineer services and is 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 will be publicized and will identify
all evaluation factors and their relative importance. Any response
to publicized requests for proposals shall be honored to the maximum
extent practical.
(2) Proposals will be solicited from an adequate number of
qualified sources (normally EDA requires responses from at least
three responsible firms).
(3) Recipients will have a method for conducting technical
evaluations of the proposals received and for selecting awardees.
(4) Awards will be made to the responsible firm whose proposal
is most advantageous to the program, with price and other factors
considered.
(5) Recipients 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. Procurement by Noncompetitive Proposals: This technique
requires EDA prior written concurrence and is conducted by
solicitation of a proposal from only one source, or after
solicitation of a number of sources, competition is determined
inadequate. Procurement by noncompetitive proposals may be used only
when the award of a contract is infeasible under small purchase
procedures, sealed bids or competitive proposals and one of the
following circumstances applies:
(1) The item is available only from a single source; or
(2) The public exigency or emergency for the requirement will
not permit a delay resulting from competitive solicitation; or
(3) After solicitation of a number of sources, competition is
determined inadequate.
4. Unacceptable Method of Procurement
The cost-plus-a-percentage-of-cost method of contracting is
unacceptable for use on EDA assisted projects. EDA grant funds may
not be used to reimburse costs incurred under such a contract.
5. Contracting with Disadvantaged Firms
A. The Recipient shall make positive efforts to utilize small
businesses, minority-owned firms, and women's business enterprises,
whenever possible. Recipients shall take all of the following steps
to further this goal.
(1) Ensure that small businesses, minority-owned firms, and
women's business enterprises are used to the fullest extent
practicable.
(2) Make information on forthcoming opportunities available and
arrange time frames for purchases and contracts to encourage and
facilitate participation by small businesses, minority-owned firms,
and women's business enterprises.
(3) Consider in the contract process whether firms competing for
larger contracts intend to subcontract with small businesses,
minority-owned firms, and women's business enterprises;
(4) Encourage contracting with consortiums of small businesses,
minority-owned firms and women's business enterprises when a
contract is too large for one of these firms to handle individually.
(5) Use the services and assistance, as appropriate, of such
organizations as the Small Business Administration, and the
Department of Commerce's Minority Business Development Agency in the
solicitation and utilization of small businesses, minority-owned
firms and women's business enterprises.
6. Contract Cost and Price Analysis
A. Recipients must perform a cost or price analysis in
connection with every procurement action including contract
modifications (change orders). The method and degree of analysis is
dependent upon the facts surrounding the particular procurement
situation, but as a starting point, Recipients must make independent
estimates before receiving bids or proposals. A cost analysis must
be performed when the offeror is required to submit the elements of
his estimated cost, e.g., under professional, consulting, and
architectural/engineering services contracts. A cost analysis will
be necessary when adequate price competition is lacking, and for
sole source procurements, including contract modifications or change
orders, unless price reasonableness can be established on the basis
of a catalog or market price of a commercial product sold in
substantial quantities to the general public or based on prices set
by law or regulation. A price analysis will be used in all other
instances to determine the reasonableness of the proposed contract
price.
B. Recipients will negotiate profit as a separate element of the
price for each contract in which there is no price competition and
in all cases where cost analysis is performed. To establish a fair
and reasonable profit, consideration will be given to the complexity
of the work to be performed, the risk borne by the contractor, the
contractor's investment, the amount of subcontracting, the quality
of its record of past performance and industry profit rates in the
surrounding geographical area for similar work.
C. Costs or prices based on estimated costs for contracts under
grants will be allowable only to the extent that costs incurred or
cost estimates included in negotiated prices are consistent with
Federal cost principles (see OMB Circulars A-21, A-87 or A-122 as
applicable). Recipients may reference their own cost principles that
comply with the applicable Federal cost principles.
D. The cost-plus-a-percentage of cost and percentage of
construction cost methods of contracting shall not be used.
7. Advertising for Bids
A. In the absence of State or local law to the contrary, the
advertisement for bids should appear in publications of general
circulation a minimum of four times within a 30 day period prior to
the opening of bids.
B. When the estimated construction cost exceeds one million
dollars, the advertisement for bids should appear in publication(s)
with national circulation a minimum of four times within the 30-day
period prior to the opening of bids.
C. Additional circulation of the invitation for bids is
encouraged if it is needed to obtain the coverage necessary to
secure competitive bids.
D. Generally, a minimum of 30 days should be allowed for
submission of bids.
8. Bonding and Insurance Requirements
A. For construction or facility improvement contracts or
subcontracts exceeding $100,000 the following minimum bonding
requirements apply:
(1) The bonding company selected must be listed in U.S. Treasury
Department Circular 570.
(2) A bid guarantee from each bidder equivalent to five percent
of the bid price. The bid guarantee shall consist of a firm
commitment such as a bid bond, certified check, or other negotiable
instrument accompanying a bid as assurance that the bidder will,
upon acceptance of his bid, execute such contractual documents as
may be required within the time specified.
(3) A performance bond on the part of the contractor for 100
percent of the contract price.
(4) A payment bond on the part of the contractor for 100 percent
of the contract provisions.
B. The Recipient shall require that each construction contractor
and all subcontractors maintain, during the life of its contract,
Workmen's Compensation Insurance, Public Liability Insurance, and
such other types of special coverage required by the nature of the
work and State and local law. When appropriate, the Recipient shall
require the prime contractor to provide Builder's Risk Insurance as
part of the construction contract. In any case, the responsibility
for seeing that coverage is obtained and kept in force remains with
the Recipient. Such coverage is an eligible project cost, when
obtained by the Recipient directly.
[[Page 5367]]
9. Bid Schedules for Alternative Materials
A. Should the Recipient, acting upon the advice of his/her
consultant Architect/Engineer desire to obtain competitive prices
for differing materials, such bids should be requested on the basis
of ``Bid Schedule A'', ``Bid Schedule B'', etc. Bid Schedules, as
used herein, refer to the method used to obtain bids on more than
one material to be used for the same purpose. As an example, if
2,000 linear feet of sewer line were to be installed, Bid Schedule A
might call for the pipe material to be cast iron. Bid Schedule B
might call for the pipe material to be ductile iron. Bid Schedule C
might call for the material to be asbestos cement, etc.
B. If bids are asked for on the basis of two or more Bid
Schedules as set forth above, the bid documents must clearly set
forth that the contract will be awarded to the bidder having
proposed the lowest responsive bid within the amount of funds
announced as available by the Recipient to finance the contract and
including the Bid Schedule upon which that Contractor bid the lowest
price.
C. If the Recipient wishes to use a bid material which will
result in increased cost, EDA may permit the use of the material
chosen, but the amount of grant participation by EDA shall remain
based on the lowest responsive bid. The contract must be awarded to
the lowest bidder determined in accordance with the procedure
described above unless a deviation is specifically allowed in
applicable State and local law.
10. Non-EDA Work
A. If the Recipient plans to add work that is an addition to the
approved EDA project, the following will apply:
(1) The advertisement for bids, all bid documents, and contract
documents shall clearly define and separate the EDA portion of the
work from the non-EDA portion.
(2) The Recipient may offer for bid and award work in addition
to the EDA portion, provided:
a. the Recipient understands that EDA will participate in the
EDA portion only;
b. the additional work does not adversely affect the original
intent of the EDA project or its economic impact, as approved.
(3) Contracts shall be so drawn that the EDA-assisted portion of
the work is clearly identifiable at all times during construction.
(4) Underruns in the EDA project cannot be applied to assist the
Recipient in funding work which is not a part of the EDA project. It
is the responsibility of the Recipient to pay for all added work in
full.
(5) In the event of an overrun on the EDA portion of the work,
it is the Recipient's responsibility to supply the necessary
additional funds and to deposit such funds in the project account. A
revised project budget estimate will then be prepared which will
clearly show the portion of project cost to be shared by EDA and the
portion the Recipient must fund in its entirety. In addition, the
overall percentage participation of EDA in the project shall be
clearly identified.
B. When the EDA project is included with non-EDA assisted work,
the Recipient will normally award to the lowest bidder on all the
work. However, EDA participation will be based on the lowest bid for
the EDA-assisted portion. When this occurs, the Recipient will
prepare a memorandum to EDA, which will clearly present the details
of the award.
11. EDA Review of Proposed Procurement Documents
A. If a Recipient wishes to have its procurement system
certified by EDA, it should follow the procedures in Section II 1 B
of these ``Requirements for Approved Projects''. If EDA certifies
the Recipient's procurement system, the Recipient may not have to
submit proposed bid documents to EDA for approval if instead it
submits an executed copy of the Checklist for Construction Contracts
(see Exhibit A-2).
B. EDA approval of plans, specifications, contract and related
documents is to assure compliance with terms of the EDA grant award
and does not attest to the accuracy or completeness of design,
dimensions, details, proper selection of materials nor compliance
with required codes or ordinances. This responsibility rests with
the Recipient.
C. A pre-bid review of proposed construction bid documents by
EDA is required if:
(1) The procurement is expected to exceed the simplified
acquisition threshold (currently $100,000) and the Recipient's
procurement procedures and operations have not been certified by EDA
and/or do not comply with the procurement standards of this
document, or
(2) The scope of the work as approved in the EDA grant award has
changed, or
(3) The proposed bid documents specify one or more ``brand
name'' products.
D. A pre-award review by EDA is required if:
(1) The procurement is expected to exceed the simplified
acquisition threshold (currently $100,000) and is to be awarded
without competition after one bid or offer is received in response
to a solicitation, or
(2) The proposed award is more than the simplified acquisition
threshold and is to be awarded to other than the apparent low bidder
under a sealed bid procurement, or
(3) A proposed contract modification changes the scope of a
contract or increases the contract amount by more than the
simplified acquisition threshold, or
(4) The Recipient's procurement procedures or operation fails to
comply with the procurement standards in this Requirement for
Approved Construction Projects, or
(5) The procurement, which is expected to exceed the simplified
acquisition threshhold, specifies a ``brand name'' product.
E. It will greatly expedite EDA's review of the proposed bid
documents if the Recipient completes the Checklist for Construction
Contracts (Exhibit A-2), has it signed by the Recipient's authorized
representative and submits it to the EDA regional office with the
proposed construction bid package for approval. EDA review and
approval of the proposed contract documents will also be expedited
if the Recipient uses standardized documents such as ``Contract
Documents for Construction of Federally Assisted Water and Sewer
Projects'' jointly prepared, endorsed by, and available from, the
Environmental Protection Agency, the Rural Development Agency, the
Department of Housing and Urban Development, the Associated General
Contractors of America, the Consulting Engineers Council and the
National Society of Professional Engineers. Standardized contract
forms available from the American Institute of Architects are also
acceptable to EDA.
F. Until EDA has reviewed and approved the Recipient's proposed
contracts and related procurement documents, the Recipient will be
proceeding at its own risk regarding the eligibility of costs
incurred.
12. Construction and Services Contract Provisions
A. The proposed contract documents to be part of the invitation
for bids should contain at least the following:
(1) An Index.
(2) Advertisement for Bids.
(3) Information for Bidders.
(4) Bid Form.
(5) Contract Form.
(6) Bid Bond.
(7) Performance Bond.
(8) Payment Bond.
(9) General Conditions.
(10) ``Supplemental General Conditions'' (to be furnished by
EDA).
(11) Technical Specifications.
(12) Working Drawings.
(13) Notice of Requirements for Affirmative Action to Ensure
Equal Employment Opportunity (E.O. 11246 and 41 CFR 60-4) (Exhibit
E).
B. The package sent to EDA should also contain a documentation
of the estimated cost for the proposed contract (see Section II 6.
of these ``Requirements for Approved Projects'').
C. The Recipient shall include the following contract provisions
or conditions in all procurement contracts and subcontracts for the
EDA assisted project.
(1) Contracts in excess of the simplified acquisition threshold
(currently $100,000) shall contain provisions or conditions which
will allow for administrative, contractual, or legal remedies in
instances where contractors violate or breach contract terms, and
provide for such sanctions and penalties as may be appropriate.
(2) Contracts in excess of the simplified acquisition threshold
shall contain suitable provisions for termination by the Recipient
including the manner by which it will be effected and the basis for
settlement. In addition, such contracts shall describe conditions
under which the contract may be terminated for default as well as
conditions where the contract may be terminated because of
circumstances beyond the control of the contractor.
(3) All contracts awarded in excess of $10,000 by the Recipient
and their contractors or subrecipients shall contain a provision
requiring compliance with Executive Order 11246, entitled ``Equal
Employment Opportunity,'' as amended by Executive Order 11375, and
as supplemented in Department of Labor regulations (41 CFR Part 60).
(4) All contracts and subgrants in excess of $2,000 for
construction or repair shall
[[Page 5368]]
include a provision for compliance with the Copeland ``Anti-
Kickback'' Act (18 U.S.C. 874) as supplemented in Department of
Labor regulations (29 CFR, Part 3). This Act provides that each
contractor or subrecipient shall be prohibited from inducing, by any
means, any person employed in the construction, completion, or
repair of public works, to give up any part of the compensation to
which he/she is otherwise entitled. The Recipient shall report all
suspected or reported violations to EDA.
(5) All construction contracts in excess of $2,000 awarded by
the Recipient and Subrecipients shall include a provision for
compliance with the Davis-Bacon Act (40 U.S.C. 276a to a-7) as
supplemented by Department of Labor regulations (29 CFR Part 5).
Under this Act contractors shall be required to pay wages to
laborers and mechanics at a rate not less than the minimum wages
specified in a wage determination made by the Secretary of Labor. In
addition, contractors shall be required to pay wages not less often
than once a week. The Recipient shall place a copy of the current
prevailing wage determination issued for each solicitation and the
award of a contract shall be conditioned upon the acceptance of the
wage determination. The Recipient shall report all suspected or
reported violations to EDA.
(6) Where applicable, all contracts awarded by the Recipients
and Subrecipients in excess of $2,000 for construction contracts and
in excess of $2,500 for other contracts which involve the employment
of mechanics or laborers shall include a provision for compliance
with Sections 102 and 107 of the Contract Work Hours and Safety
Standards Act (40 U.S.C. 327-330) as supplemented by Department of
Labor regulations (29 CFR Part 5). Under Section 102 of this Act,
each contractor shall 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
1-\1/2\ times the basic rate of pay for all hours worked in excess
of 40 hours in the work week.
(7) Section 107 of the Contract Work Hours and Safety Standards
Act is applicable to construction work and provides that no laborer
or mechanic shall 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.
(8) Contracts or agreements for the performance of experimental,
developmental, or research work shall provide for the rights of the
Federal Government and the Recipient in any resulting invention in
accordance with 37 CFR part 401, ``Rights to Inventions made by
Nonprofit Organizations and Small Business Firms under Grants,
Contracts and Cooperative Agreements''.
(9) All negotiated contracts (except those awarded by small
purchases procedures) awarded by the Recipient shall include a
provision to the effect that the Recipient, EDA, the Office of
Inspector General, the Comptroller General of the United States, or
any of their duly authorized representatives, shall have access for
the purpose of audit and examination to any books, documents,
papers, and records of the contractor which are directly pertinent
to that specific contract.
(10) The Recipient shall require contractors to maintain all
required records for three years after the Recipient makes final
payments and all other pending matters are closed.
(11) Contracts and subgrants of amounts in excess of $100,000
shall contain a provision that requires the Recipient to agree to
comply with all applicable standards, orders, or regulations issued
pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.) and the
Federal Water Pollution Control Act as amended (33 U.S.C. 1251 et
seq.) Violations shall be reported to EDA and the regional office of
the Environmental Agency (EPA).
(12) Recipients and subrecipients must contain mandatory
standards and policies relating to energy efficiency which are
contained in the State energy conservation plan, where applicable,
issued in compliance with the Energy Policy and Conservation Act
(P.L. 94-165).
(13) EDA may require changes, remedies, changed conditions,
access and record retention and suspension of work clauses approved
by the Office of Federal Procurement Policy.
(14) The EDA project number should appear on all drawings and on
the face sheet of specification documents. In the case of a single
sheet layout included in folders, the project number should be shown
on the face of the sheet or at a point which will be outside when
folded. If the layout consists of two or more sheets, all sheets
should be so identified.
(15) In all cases, a reasonable time must be allowed to perform
the work and the contract documents should stipulate the number of
calendar days allowed for completing the work.
(16) EDA urges that a liquidated damage provision be included in
all construction contracts with a specific dollar amount of daily
damage to be assessed against the Contractor for each calendar day
beyond the stipulated completion date. The daily amount of damages
shall be a reasonable and adequate amount based upon the
circumstances and estimated dollar cost of the individual contract,
or the revenue-producing capacity of the project. The liquidated
damages provision provides the Recipient with a feasible means of
securing compensation for damages for delays in completing the work.
Without such a provision, the proving of such damage is difficult
and usually entails court action. In the event that the Recipient
objects to the inclusion of a liquidated damages provision in
construction contracts, a statement of the reasons for objecting
should be submitted with the proposed contract documents.
(17) The Architect/Engineer should be encouraged to use
deductive alternates which do not alter the scope of the project,
affect the economic impact or project revenue, or change the project
justification. Thus, should the bids exceed the cost estimate,
deductive alternates may be used to reduce the cost to the extent
necessary to come within the approved funds. Deductive alternates,
where used, must be listed in the order to be used on the bid
documents and must be taken in that order when awarding the
contract. Deductive alternates should not be used for material. EDA
recommends that unit price bidding based on quantities estimated by
the Architect/Engineer so as to arrive at a total base bid be used
to the greatest practical degree.
(18) The limiting of materials and/or equipment to a particular
manufacturer or brand name (``sole source'') must have EDA approval
to be eligible for reimbursement from grant funds unless an ``or
equal'' clause is included in the equipment specifications.
(19) EDA discourages the use of performance type specifications.
If the Recipient or his/her Architect/Engineer wishes to use
performance type specifications, written approval must be secured
from EDA.
(20) See Section II, paragraph 8 of these ``Requirements for
Approved Projects'' for bonding and insurance requirements.
(21) Exhibit B, ``Supplemental General Conditions'' found in the
Exhibits section of these ``Requirements for Approved Projects''
must be made a part of the construction bid and contract documents
unless all EDA and other Federal requirements contained therein are
covered elsewhere.
(22) The bidding documents should stipulate that:
a. the Recipient may consider any bid informal which is not
prepared and submitted in accordance with the provision of the bid
documents and may waive any informalities or reject any and all
bids;
b. any bid may be withdrawn prior to the time scheduled for the
opening of bids but not afterward; and
c. any bid received after the time and date specified for the
bid opening shall not be considered.
(23) Stated allowances may be used for certain items such as
door and/or window hardware with the approval of EDA.
(24) All of the above documents shall be included in the sets of
bidding documents to be issued to prospective bidders, with any
changes or additions recommended by EDA. The responsibility for
complying with all State and local laws rests with the Recipient.
(25) Exhibit E to these ``Requirements for Approved Projects''
is a notice which provides goals and timetables for minority and
female participation in construction work. This notice must be
included in all invitations for bids for construction projects for
which the prime contract and any related subcontracts are in excess
of $10,000. EDA shall furnish the Recipient with the appropriate
goals and timetables to be inserted in the above notice. In
addition, the requirements of the above notice have been provided in
the ``Supplemental General Conditions'' (Exhibit B) as the Standard
Federal Equal Employment Opportunity Construction Contract
Specifications.
(26) EDA approval of plans, specifications, contract and related
documents is to assure compliance with terms of the Grant
[[Page 5369]]
Agreement and does not imply nor attest to the accuracy or
completeness of design, dimensions, details, proper selection of
materials, nor compliance with required codes or ordinances. This
responsibility rests with the Recipient.
(27) In the absence of State or local law to the contrary, the
advertisement for bids will conform to the requirements of Section
II 7 of these ``Requirements for Approved Projects''.
(28) Only complete sets of plans and specifications should be
issued to prospective contractors and/or subcontractors.
(29) Generally, a minimum of 30 days should be allowed for
submission of bids.
13. Wage Rates
A. Wage rates paid for labor must not be less than the
prevailing area wages as determined by the Secretary of Labor and
embodied in the construction contract, pursuant to the provisions of
the Davis-Bacon Act, as amended (40 U.S.C. 276a to 276a-7). EDA will
secure the wage determination for the Recipient based on the
following.
B. Most areas of the United States are covered by existing
Department of Labor (DOL) wage decisions published and updated at
irregular intervals. If the Recipient's project is in a covered
area, the EDA Regional Office will supply copies of the applicable
wage decision upon the Recipient's request. If the area is not
covered by an existing wage decision the following procedure will
apply. Between 60 and 45 days prior to the anticipated date of
advertising for bids, the Recipient shall send to the EDA Regional
Office a request for a wage determination (also referred to as a
wage decision) defining the type of construction category (Building,
Heavy or Highway) with each feature of work listed under the
appropriate category. In addition, the crafts or skills needed for
each category shall be listed and any pertinent wage information
available submitted, such as statements from the secretaries of the
Association of General Contractors and the Building Trades Council
having jurisdiction. In isolated communities, certified copies of
current contractors' payrolls for similar type work in the area
concerned may accompany the request. When a State wage determination
is required by State law, the Recipient must secure a schedule of
rates from the State Labor Department and incorporate both State and
Federal schedules of rates in the contract documents. The Recipient
is responsible for seeing that the wage rates shown in the contract
documents reflect not less than the higher of the Federal or State
rate by trade. EDA will secure the wage decision from the
appropriate Department of Labor Regional Administrator.
C. Each feature of work scheduled must call for Building, Heavy,
or Highway wage rates, if applicable. Where a proposed contract
involves only one type of construction, the specifications shall so
state. Where more than one type of construction is involved, the
specification shall identify, as specifically as possible, into
which category of construction each work item falls. This decision,
made by the Recipient in consultation with the Architect/Engineer,
shall be based on local or area practice to insure fairness to all
prospective bidders on construction contracts to be awarded.
D. Wage decisions are only valid for a 120-day period and
extensions of wage decisions shall not be granted. If the decision
expires without being superseded prior to award of contract, a new
wage decision must be secured and included in the proposed contract
documents prior to award. The request for a new wage decision shall
be addressed to the EDA Regional Office. If the wage rate included
in the Invitation for Bids is superseded, the new wage rate must be
substituted if the new wage rate decision is dated over ten days
prior to the bid openings; otherwise the old wage rate shall apply.
E. Contractors and subcontractors shall be advised that upon
acceptance of their bids, they are obligated to pay not less than
the established wage rate unless otherwise required by law. Wage
rates need not be listed for non-manual workers, including
executive, supervisory, administrative and clerical employees.
F. Wage rate schedules are generally not required for contracts
between Recipients and railroads and other public utilities for
construction services to the extent that the services are performed
by personnel employed directly by the utility concerned and paid at
rates prevailing for the type of work and utility concerned.
G. EDA or the Department of Labor may cause investigation to be
made as may be necessary to assure compliance with the labor
standard clauses required by the regulations contained in 29 CFR,
Part 5 and the applicable statutes listed therein. Complaints made
to, or which come to the attention of the Recipient, shall be called
to the attention of the EDA Regional Office.
H. The Recipient shall require each contractor and subcontractor
to submit, in compliance with the Davis-Bacon Act, a weekly payroll
record. These records shall be retained for a period of three years
from the date of completion of the contract and in a manner
reasonably accessible. Such payroll records shall be made available
at all times for inspection by EDA, the Department of Commerce
Inspector General or their authorized representative, and by
authorized representatives of the Department of Labor. The Recipient
shall file these records by contract number. If the Recipient wishes
to use another system for maintaining these records, the EDA
Regional Office shall be consulted to avoid any violations of the
Privacy Act. The Recipient shall check the submitted payroll records
to assure they contain the following:
(1) A properly completed payroll Form WH-347, or
(2) If another form is used, all the information required by
Form WH-347, including the name, address, correct job
classification, rate of pay, daily and weekly number of hours
worked, deductions made, and actual wages paid for all employees;
and the Statement of Compliance, properly executed as shown on the
reverse side of Department of Labor Form WH-347, ``Payroll Reporting
Form'' containing all of the information requirements including the
Statement of Compliance. Copies are available from the
Superintendent of Documents, U.S. Government Printing Office,
Washington, D.C. 20402.
I. Where a construction contract has been awarded and work has
commenced on the EDA approved project prior to acceptance of the
Grant Award, wage rates and requirements listed herein shall be
retroactive to the date of start of construction.
14. The Bid Opening
A. Whether or not an EDA representative is present at the bid
opening, the Recipient will furnish the following to the EDA
Regional Office:
(1) a statement signed by the Authorized Representative of the
Recipient, certifying that all bids were received sealed and were
opened in his/her presence;
(2) copy of official minutes of the bid opening;
(3) a copy of the bid tabulation.
15. Overrun at the Bid Opening
A. If the lowest responsive bid received at the bid opening
exceeds the amount of funds available to finance the contract:
(1) the Recipient may without taking deductive alternates:
a. reject all bids;
b. augment the funds available in an amount sufficient to enable
award to the lowest responsive bidder.
(2) The Recipient may take deductive alternates in the order
shown in the Invitation for Bids until at least one of the
responsive bids less deductive alternates result in a price within
the funds announced as available. Then award may be made to that
bidder. It should be noted that this procedure may change the order
of bidders and thus extra care must be exercised to insure that:
a. all responsive bids are considered;
b. deductive alternates have been taken in the exact order shown
in the Invitation for Bids; and
c. only sufficient deductive alternates have been taken to
reduce at least one of the responsible bids to or below the amount
of funds announced as available.
(3) In no event, however, should the Recipient negotiate with
the low bidder or other bidders in order to reduce the cost within
the funds available.
B. If the low bid less all deductive alternates exceeds the
funds available, the Recipient may:
(1) furnish the additional funds required. If the Recipient
intends to finance the overrun from his/her own funds, he/she will
furnish a written letter or statement to the EDA regional office
affirming his/her intention to finance the overrun and indicating
the source of funds. If such funds are to be borrowed an appropriate
supplemental financial plan must be prepared by the Recipient; or
(2) reject all bids and have the Architect/Engineer redesign the
project, within the approved scope, to reduce the cost to, or below
the approved amount and readvertise; or
(3) request additional EDA financial assistance as a last
resort. However, before the Regional Office can accept a request for
additional EDA funds, it will be necessary for the Recipient to
furnish the following documentation to the EDA Regional Office:
[[Page 5370]]
a. a written statement from the Architect/Engineer giving his/
her professional opinion that redesign of the project within the
approved scope or using new or additional deductive alternates
cannot reasonably be expected to reduce the cost to within the
available funds; and
b. a written statement from the Authorized Representative or
governing body of the Recipient that the Recipient cannot furnish
the additional funds required, giving the reasons plus documentation
and/or statistics relative to the financial condition of the
Recipient.
16. Underrun Funds at the Bid Opening
A. If the total amount of construction contract awards is less
than the approved line item for construction and/or any of the other
line items in the EDA approved budget experiences an underrun such
that the total expected actual cost will be less than the cost
estimated in the EDA approved budget, EDA must be notified.
B. Underrun funds resulting from the situation described in
paragraph A above may not be used to enhance or increase the scope
of the project.
17. EDA Approval of the Contract Award
A. EDA must review and approve the award of all necessary
contracts in order for the cost to be eligible for EDA
reimbursement. However, pending EDA approval the Recipient may issue
the Notice to Proceed permitting the work to go forward.
B. To obtain approval of the contract award, the Recipient shall
submit to the EDA Regional Office:
(1) those items listed in Section II, Paragraph 13A and 13B of
these ``Requirements for Approved Projects'', if not furnished
previously;
(2) evidence of bidder's qualification. Architect/Engineer must
review and add his/her opinion of bidder's qualifications;
(3) evidence of publication of advertisement for bids;
(4) certified evidence of the Recipient's ability to provide the
financial participation required by the Grant Agreement;
(5) evidence of ability to provide construction financing;
(6) evidence of ability to provide the movable equipment and
furnishings necessary to make the project a usable facility;
(7) a resume of Resident Engineer's or Resident Inspector's
qualifications for approval if not previously furnished;
(8) evidence of establishing a project accounting system for the
project; and
(9) evidence of bonding of those persons authorized to draw upon
the project funds as required by State and/or local law.
C. Prior to awarding any contract the Recipient should contact
the EDA Regional Office so that the contractor can be checked
against the list of contractors debarred, ineligible, or suspended
from dealing with the Federal government or indebted to the United
States. Costs for work done by such contractors are ineligible for
EDA financial participation.
18. Executed Bid Award
A. After the bid award has been made, if EDA requests it, the
Recipient will submit to EDA one set of bound executed contract
documents. Each set shall consist of:
(1) all documents furnished the bidder prior to receipt of bids
and upon which base bids were submitted;
(2) a signed or certified copy of the contract or agreement
executed between the Recipient and the Contractor, including all
addenda as issued, with necessary blanks completed;
(3) a copy of performance and payment bonds, dated the same date
or subsequent to the date of the contract, supported by a properly
signed and dated power of attorney, issued by the Surety. The Surety
must be authorized to transact a fidelity and surety business in the
State where the project is located and must be on the Treasury
Department's current Circular 570, as ``Companies Holding
Certificate of Authority as Acceptable Sureties on Federal Bonds and
as Acceptable Reinsuring Companies''. The underwriting limitations
provided for in the said Treasury Department listing shall be
applicable. A bound set of final plans are to be submitted with each
set of contract documents.
(4) copies of insurance policies and/or certificates described
in paragraph 5 of Section III of these ``Requirements for Approved
Projects''.
19. Preconstruction Conference
Before the start of construction, an EDA representative may
arrange to meet with the Recipient, the Architect/Engineer, and the
Prime Contractor(s) to discuss EDA requirements on such matters as
project supervision, on-site inspections, progress schedules,
reports, payrolls, payments to contractors, contract change orders,
insurance, safety, and other items pertinent to the project. At this
conference, all parties shall be prepared to discuss any anticipated
problems or issues that could affect the timely completion of the
project.
Section III--Construction Procedures
1. Recipient Responsibilities
A. The Recipient is responsible for expeditiously prosecuting
the project to completion, for monitoring project progress, for
keeping EDA advised of project progress, for adequate construction
inspection, for prompt payment of costs incurred for the project and
for monitoring the contractor's compliance with local, State and
Federal construction requirements.
B. The Recipient, with the assistance of its architect/engineer,
is responsible for the accuracy and completeness of the plans,
specifications and other contract documents. The Recipient, with the
assistance of its architect/engineer, is responsible for the
accuracy and completeness of the design, dimensions, details, proper
selection of materials, and compliance with applicable building
codes or ordinances. EDA review of proposed and/or final contract
documents does not in any way relieve the Recipient of the foregoing
responsibilities.
2. Employment of Local Labor
A. The maximum feasible employment of local labor shall be made
in the construction of EDA assisted public works projects. The
Recipient should supply a list of the successful bidder's
anticipated labor requirements to the applicable Federal/State
Employment Office far enough in advance of the start of construction
so that the employment office may provide the contractor with the
names of suitable local personnel from its rolls.
B. The contractor shall be required to include the above
requirement in every subcontract for all work on the EDA assisted
project.
3. Construction Progress Schedule
A. If requested by EDA, the Recipient will secure from the
contractor or Architect/Engineer, and furnish a copy to EDA, of the
predicted construction progress chart and a schedule of amounts for
contract payments.
B. The construction progress chart should be updated monthly by
the Recipient, the Architect/Engineer or the contractor. A copy for
each month will be attached to the Quarterly Performance Report. The
EDA Regional Office will advise as to the content of the report. The
report will be due quarterly throughout the construction of the
project.
C. After a review of the project the EDA project manager may
discuss with the Recipient, or the Recipient's representative, the
appropriate type of progress chart. The bar graph type of chart will
generally be acceptable but some type of network analysis may be
more appropriate for projects with cost in excess of $1 million and
with greater than average complexity. The cost for such network
analysis may be an eligible project cost if EDA approves its use.
4. Construction Sign
A. The Recipient shall require the prime contractor to secure or
construct, erect, and maintain in good condition throughout the
construction period, a sign or signs, (specifications for the sign
are included as an exhibit to this document), at the project site in
a conspicuous place indicating that the Federal government is
participating in the project. EDA may require more than one sign if
site conditions so warrant.
B. Project signs will not be erected on public highway rights-
of-way.
C. Location and height of signs will be coordinated with the
agency responsible for highway or street safety in the area if any
possibility exists for obstruction to traffic line of sight.
D. Whenever EDA site sign specifications conflict with State law
or local ordinance, the EDA regional director may modify such
conflicting specifications so as to comply with the State law or
local ordinance.
E. When appropriate, EDA may require that a bilingual project
sign be used. Specifications for such a sign are contained in this
document in Exhibit B.
5. Inspection of Construction
The Recipient must provide competent project inspection during
the construction period. The inspector may be an employee of the
Recipient, an employee of the architect/
[[Page 5371]]
engineer, or a person(s) under contractual control of the Recipient.
The extent of the inspection and the selection of the inspector must
be approved by EDA. Pertinent information regarding the proposed
inspector's experience, qualifications, salary plan and the scope of
his responsibilities and authorities shall be furnished to EDA for
this purpose.
6. Occupancy Prior to Completion
A. If the project or any part of it is to be occupied or used
prior to its acceptance from the contractor, the Recipient must:
(1) notify EDA of the intent to occupy or use the facility and
the effective date of the occupancy or use;
(2) secure the written consent of the contractor;
(3) secure an endorsement from the insurance carrier and consent
of the surety permitting occupancy or use during the period of
construction; and.
(4) secure permanent fire and extended coverage insurance, where
applicable, including a permit to complete construction.
B. EDA may require from the Recipient an assurance to protect
the EDA investment in the project, prior to the approval of
occupancy and/or use of all or any part of the project before
completion of the construction.
7. Contractor Payrolls
A. Each contractor and subcontractor must be required by the
Recipient to maintain weekly payroll records. These records are to
be retained for a period of three years from the date of project
closeout. Each contractor and subcontractor must also be required to
furnish a copy of each payroll to the Recipient. The Recipient is
responsible to assure that the payrolls meet the following
standards:
(1) Wage rates and fringe benefits paid agree with the
Department of Labor wage rate, or State wage rates if they are
higher.
(2) Name, address, and Social Security number and work
classification is shown for all employees.
(3) The Certificate of Prime Contractor on the reverse side of
the Form WH-347 has been properly executed. If EDA has approved a
substitute form for the WH-347 the substitute form must contain the
certification as well as all of the above standards.
B. EDA may require that copies of the weekly payroll records be
furnished to the applicable EDA regional office.
8. Civil Rights Requirements
The regulations issued under Executive Order 11246 (41 CFR 60-
1.7) require the submission of compliance reports regarding civil
rights. Standard Form 100 is to be used for this purpose. The
requirement applies to any person or entity subject to Executive
Order 11246 who:
(1) has 50 or more employees; and
(2) is a prime contractor or first-tier subcontractor; and
(3) has a Federally assisted contract, subcontract or purchase
order amounting to $50,000 or more.
9. Contract Change Orders
A. After the construction contracts have been executed, it may
become necessary to alter them. This requires a formal contract
change order, issued by the Recipient and accepted by the
contractor. All contract change orders must be concurred in by EDA
even if the Recipient is to pay for all additional costs resulting
from the change or the contract price is to be reduced. The work on
the project may continue pending EDA review and concurrence in the
change order but the Recipient should be aware that all such work is
at the Recipient's risk as to whether the cost for the work will be
an eligible project cost for EDA participation until EDA concurrence
is received for the change order.
B. The Recipient or its architect/engineer shall perform a cost
or price analysis in connection with every change order which
affects the contract price.
C. Proposed contract change orders will be prepared by the
Recipient in sufficient quantity that two copies can be furnished to
EDA for concurrence. Necessary supporting statements, estimates,
specifications, and plans will be attached. Before submission to the
EDA regional office, the change order must be signed by the
Recipient, the Architect/Engineer, and the contractor. The Recipient
will be notified in writing of EDA concurrence if the change order
is acceptable to EDA.
D. EDA will not approve change orders which change the purpose
and intent (the scope) of the project. Change orders that add
minimally or incidently to the cost of the project but do not change
the project scope may be approved by EDA provided that either:
(1) the Recipient has agreed in writing to fund the additional
cost, in which case all work involved in the accomplishment of the
change order will be an ineligible project cost and no EDA funds
will be used to pay for it; or
(2) there are sufficient funds remaining in the project budget
to cover the change order without jeopardizing the completion of the
project.
E. EDA will not approve EDA financial participation in change
orders that are solely for the purpose of using excess funds
resulting from an underrun of one or more of the items in the EDA
approved project budget. EDA approval of change orders must be based
on a finding by EDA that the work called for in the change order is
within the project scope and is necessary for the proper functioning
of the project.
F. Normally change orders should be submitted to EDA for
approval as the changes occur.
G. Unit prices are often used as a basis on which to make a
contract award. In addition, they may be used for establishing
actual costs where actual quantities differ from estimated
quantities. When actual quantities differ substantially from those
estimated quantities upon which the contractor's bid was based, a
``substantial variation'' results. A substantial variation is
usually considered to be for actual quantities in excess of 115% to
120% or less than 85% to 90% of the estimated quantities.
Substantial variations will normally require a change order to the
contract whether or not a change in unit price is involved. Any
increase in quantity which will result in an overall project cost
overrun will require a change order to the contract. Any change to a
unit price shown in the contract documents will require a change
order to the contract.
10. Inspection for Final Acceptance
A. A final inspection will be scheduled by the Recipient when
all construction has been completed, the architect/engineer has
accomplished his/her final inspection and all deficiencies have been
corrected. The project must be complete and functional before the
final inspection is performed.
B. The final inspection will be made by representatives of the
Recipient, the architect/engineer and the contractor(s). EDA must be
given advance notice of the final inspection so that an EDA
representative may participate, at the option of EDA.
11. Specific Requirements for Subcontractors
A. The Recipient is responsible to ensure that the contractor(s)
causes appropriate provisions to be inserted in all subcontracts to
bind subcontractors to EDA contract requirements as contained
herein, in 15 CFR Part 24, or in 15 CFR Part 14 as appropriate.
B. Each subcontractor must agree to comply with all applicable
Federal, State, and local requirements in addition to those set
forth in this section.
C. Prior to the approval of any subcontract EDA will check the
proposed subcontractor against the listing of contractors debarred,
ineligible, suspended or indebted to the United States from
contractual dealings with Federal government departments. The work
performed by any such contractor or subcontractor will be ineligible
for reimbursement wholly or partially from EDA grant funds.
D. All subcontracts in excess of $10,000 shall include, or
incorporate by reference, the equal opportunity clause of Executive
Order 11246.
E. All subcontracts must contain a nondiscrimination clause.
F. Each subcontract must contain a requirement for compliance
with the Davis-Bacon and related acts.
G. Each subcontractor must submit weekly payroll records and a
weekly statement of compliance. These documents should be submitted
to the prime contractor. The subcontractor can satisfy this
requirement by submitting a properly executed Department of Labor
Form WH-347.
H. Each subcontract with every subcontractor must contain a
clause committing the subcontractor to employment of local labor to
the maximum extent possible.
I. The Standard Terms and Conditions of the grant agreement
impose other requirements which the Recipient will be required to
have the prime contractor impose on the subcontractor.
J. All subcontractors who meet the conditions set forth in
Paragraph 9B of this Section III must submit a completed Standard
Form 100 by March 30 of each year.
K. Subcontractors performing work in areas covered by published
goals for minorities will be required to report monthly on Form CC-
257.
[[Page 5372]]
12. Safety
A. All contractors on EDA assisted projects are required to
perform their work in accordance with OSHA regulations and the
Contract Work Hours and Safety Standards Act (40 USC 327-330) as
supplemented by Department of Labor regulations (29 CFR Part 5). The
Recipient or its Architect/Engineer should periodically check the
contractor's compliance.
B. The Recipient shall notify EDA of all serious accidents and/
or injuries that occur on the EDA assisted project.
Section IV--Financial Administration
1. Standards for Financial Management Systems
A. A State must expend and account for grant funds in accordance
with State laws and procedures for expending and accounting for its
own funds. Fiscal control and accounting procedures of the State, as
well as its Subrecipients and cost-type contractors, must be
sufficient to:
(1) Permit preparation of reports required by this document and
applicable regulations and statutes cited herein, and
(2) Permit the tracing of funds to a level of expenditures
adequate to establish that such funds have not been used in
violation of the restrictions and prohibitions of applicable
statutes.
B. The financial management systems of other Recipients must
meet the following standards:
(1) Financial reporting: Accurate, current, and complete
disclosure of the financial results of financially assisted
activities must be made in accordance with the financial reporting
requirements of the grant or subgrant.
(2) Accounting records: Recipients must maintain records which
adequately identify the source and application of funds provided for
financially assisted activities. These records must contain
information pertaining to grant awards and authorizations,
obligations, unobligated balances, assets, liabilities, outlays or
expenditures, and income.
(3) Internal controls: Effective control and accountability must
be maintained for all grant and subgrant cash, real and personal
property, and other assets. Recipients must adequately safeguard all
such property and must assure that it is used solely for authorized
purposes.
(4) Budget controls: Actual expenditures or outlays must be
compared with budgeted amounts for each grant or subgrant. Financial
information must be related to performance or productivity data,
including the development of unit cost information whenever
appropriate or specifically required in the grant or subgrant
agreement. If unit cost data are required, estimates based on
available documentation will be accepted whenever possible.
(5) Allowable costs: Applicable OMB cost principles, agency
program regulations, and the terms of grant agreements will be
followed in determining the reasonableness, allowableness, and
allocability of costs.
(6) Source documentation. Accounting records must be supported
by such source documentation as canceled checks, paid bills,
payrolls, time and attendance records, contract and subgrant award
documents, etc.
(7) Cash management. Procedures for minimizing the time elapsing
between the transfer of funds from the U.S. Treasury and
disbursement by Recipients must be followed whenever advance payment
procedures are used. When advances are made by electronic transfer
of funds methods, the Recipient must make drawdowns as close as
possible to the time of making disbursements.
C. EDA may review the adequacy of the financial management
system of any applicant for financial assistance as part of a pre-
award review or at any time subsequent to award.
2. Grant Disbursements
A. Reimbursement. Reimbursement is the preferred method of grant
disbursement. EDA will not use the percentage of completion method
to pay construction grants. The Recipient may use that method to pay
its construction contractor. However, EDA's payments to the
Recipient will be based on the Recipient's actual rate of
disbursement.
B. Effect of program income, refunds, and audit recoveries on
payment. Recipients shall disburse program income, rebates, refunds,
contract settlements, audit recoveries and interest earned on such
funds before requesting additional grant disbursements.
C. Withholding payments. EDA will not withhold payments for
proper charges incurred by Recipients unless--
(1) The Recipient has failed to comply with grant award
conditions, or
(2) The Recipient is indebted to the United States.
Cash withheld for failure to comply with grant award conditions,
but without suspension of the grant, shall be released to the
Recipient upon subsequent compliance. When a grant is suspended,
payment adjustments will be made in accordance with the section on
enforcement contained in this document.
EDA will not make payment to Recipients for amounts that are
withheld by Recipients from payment to contractors to assure
satisfactory completion of work. Payments shall be made by EDA when
the Recipients actually disburse the withheld funds to the
contractors or to escrow accounts established to assure satisfactory
completion of work.
D. Cash depositories. Consistent with the national goal of
expanding the opportunities for minority business enterprises,
Recipients are encouraged to use minority banks (a bank which is
owned at least 50 percent by minority group members). A list of
minority owned banks can be obtained from the Minority Business
Development Agency, Department of Commerce, Washington, DC 20230.
EDA will not require the Recipient to maintain a separate bank
account unless required by Federal-State agreement.
E. Interest earned on advances.
(1) For entities subject to 15 CFR Part 24: Except for interest
earned on advances of funds exempt under the Intergovernmental
Cooperation Act (31 U.S.C. 6501 et seq.) and the Indian Self-
Determination Act (23 U.S.C. 450), Recipients shall promptly, but at
least quarterly, remit interest earned on advances to EDA. The
Recipient may keep interest amounts up to $100 per year for
administrative expenses.
(2) For entities subject to 15 CFR Part 14 and any DOC rule
implementing such Circular: Entities not subject to the Cash
Management Improvement Act may keep up to $250 for administrative
costs, to be remitted annually.
3. Allowable Costs
A. Limitation on use of funds. Grant funds may be used only for:
(1) The allowable costs of the Recipients, and cost-type
contractors, including allowable costs in the form of payments to
fixed-price contractors; and
(2) Reasonable fees or profit to cost-type contractors but not
any fee or profit (or other increment above allowable costs) to the
Recipient.
B. Applicable cost principles. For each kind of organization,
there is a set of Federal principles for determining allowable
costs. Allowable costs will be determined in accordance with the
cost principles applicable to the organization incurring the costs.
The following chart lists the kinds of organizations and the
applicable cost principles.
Table 1.--Cost Principles
------------------------------------------------------------------------
For the costs of a-- Use the principles in--
------------------------------------------------------------------------
State, local or Indian tribal government.. OMB Circular A-87.
Private nonprofit organization other than OMB Circular A-122
an (1) institution of higher education,
(2) hospital, or (3) organization named
in OMB Circular A-122 as not subject to
that circular.
Educational institutions.................. OMB Circular A-21.
For-profit organization other than a 48 CFR Part 31. Contract
hospital and an organization named in OMB Cost Principles and
Circular A-122 as not subject to that Procedures, or uniform cost
circular. accounting standards that
comply with cost principles
acceptable to EDA.
------------------------------------------------------------------------
4. Period of Availability of Funds
A. Generally, the maximum period for any EDA financial
assistance that is provided is not more than 5 years from the end of
the fiscal year of the award. Normally, costs incurred after the end
of the funding period will not be eligible for reimbursement from
the EDA grant.
B. Liquidation of obligations. A Recipient must liquidate all
obligations incurred under the award not later than 90 days after
the acceptance of the project from the construction contractor or
before the end of the funding period, whichever occurs earlier.
[[Page 5373]]
5. Matching or Cost Sharing
A. Acceptable Costs and Contributions: With the qualifications
and exceptions listed on the next page of this section, a matching
or cost sharing requirement may be satisfied by either or both of
the following:
(1) Allowable costs incurred by the Recipient, or a cost-type
contractor under the assistance agreement. This includes allowable
costs borne by non-Federal grants or by cash donations from non-
Federal third parties.
(2) The value of third party in-kind contributions applicable to
the period to which the cost sharing or matching requirements
applies.
B. Qualifications and exceptions:
(1) Costs borne by other Federal grant agreements. Except as
provided by Federal statute, a cost sharing or matching requirement
may not be met by costs borne by another Federal grant. This
prohibition does not apply to income earned by a Recipient or
Subrecipient from a contract awarded under another Federal grant.
(2) General revenue sharing. For the purpose of this section,
general revenue sharing funds distributed under 31 U.S.C. 6702 are
not considered Federal grant funds.
(3) Cost or contributions counted towards other Federal costs-
sharing requirements. Neither costs nor the values of third party
in-kind contributions may count towards satisfying a cost sharing or
matching requirement of a grant agreement if they have been or will
be counted towards satisfying a cost sharing or matching requirement
of another Federal grant agreement, a Federal procurement contract,
or any other award of Federal funds.
(4) Costs financed by program income. Costs financed by program
income, as defined in the following section on program income, shall
not count towards satisfying a cost sharing or matching requirement
unless they are expressly permitted in the terms of the assistance
agreement.
(5) Services or property financed by income earned by
contractors. Contractors under a grant may earn income from the
activities carried out under the contract in addition to the amounts
earned from the party awarding the contract. No costs of services or
property supported by this income may count toward satisfying a cost
sharing or matching requirement unless other provisions of the grant
agreement expressly permit this kind of income to be used to meet
the requirement.
(6) Records. Costs and third party in-kind contributions
counting towards satisfying a cost sharing or matching requirement
must be verifiable from the records of Recipients or cost-type
contractors. These records must show how the value placed on third
party in-kind contributions was derived. To the extent feasible,
volunteer services will be supported by the same methods that the
organization uses to support the allocability of regular personnel
costs.
(7) Special standards for third party in-kind contributions.
a. Third party in-kind contributions count towards satisfying a
cost sharing or matching requirement only where, if the party
receiving the contributions were to pay for them, the payments would
be allowable costs.
b. Some third party in-kind contributions are goods and services
that, if the Recipient, or contractor receiving the contribution had
to pay for them, the payments would have been an indirect costs.
Costs sharing or matching credit for such contributions shall be
given only if the Recipient, or contractor has established, along
with its regular indirect cost rate, a special rate for allocating
to individual projects or programs the value of the contributions.
c. A third party in-kind contribution to a fixed-price contract
may count towards satisfying a cost sharing or matching requirement
only if it results in:
(i) An increase in the services or property provided under the
contract (without additional cost to the Recipient or Subrecipient),
or
(ii) A cost savings to the Recipient or Subrecipient.
d. The values placed on third party in-kind contributions for
cost sharing or matching purposes will conform to the rules in the
succeeding sections of this part. If a third party in-kind
contribution is a type not treated in those sections, the value
placed upon it shall be fair and reasonable.
C. Valuation of Donated Services:
(1) Volunteer services. Unpaid services provided to a Recipient
by individuals will be valued at rates consistent with those
ordinarily paid for similar work in the Recipient's organization. If
the Recipient does not have employees performing similar work, the
rates will be consistent with those ordinarily paid by other
employers for similar work in the same labor market. In either case,
a reasonable amount for fringe benefits may be included in the
valuation.
(2) Employees of other organizations. When an employer other
than a Recipient, or cost-type contractor furnishes free of charge
the services of an employee in the employee's normal line of work,
the services will be valued at the employee's regular rate of pay
exclusive of the employee's fringe benefits and overhead costs. If
the services are in a different line of work, paragraph A of this
section applies.
D. Valuation of Third Party Donated Supplies and Loaned
Equipment or Space:
(1) If a third party donates supplies, the contribution will be
valued at the market value of the supplies at the time of donation.
(2) If a third party donates the use of equipment or space in a
building but retains title, the contribution will be valued at the
fair rental rate of the equipment or space.
E. Valuation of Third Party Donated Equipment, Buildings, and
Land: If a third party donates equipment, buildings, or land, and
title passes to a Recipient or Subrecipient, the treatment of the
donated property will depend upon the purpose of the grant, as
follows:
(1) Awards for capital expenditures. If the purpose of the grant
is to assist the Recipient in the acquisition of property, the
market value of that property at the time of donation may be counted
as cost sharing or matching.
(2) Other awards. If assisting in the acquisition of property is
not the purpose of the grant or subgrant, the following paragraphs
of this section apply:
a. If approval is obtained from EDA, the market value at the
time of donation of the donated equipment or buildings and the fair
rental rate of the donated land may be counted as cost-sharing or
matching. In all cases, the approval may be given only if a purchase
of the equipment or rental of the land would be approved as an
allowable direct cost. If any part of the donated property was
acquired with Federal funds, only the non-federal share of the
property may be counted as cost-sharing or matching.
b. If approval is not obtained under the above paragraph, E(2)b
no amount may be counted for donated land, and only depreciation or
use allowances may be counted for donated equipment and buildings.
The depreciation or use allowances for this property are not treated
as third party in-kind contributions. Instead, they are treated as
costs incurred by the Recipient. They are computed and allocated
(usually as indirect costs) in accordance with the cost principles
specified in OMB Circulars A-87, A-21 and A-122, in the same way as
depreciation or use allowances for purchased equipment and
buildings. The amount of depreciation or use allowances for donated
equipment and buildings is based on the property's market value at
the time it was donated.
F. Valuation of Recipient Donated Real Property for
Construction/Acquisition: If a Recipient donates real property for a
construction or facilities acquisition project, the current market
value of that property may be counted as cost-sharing or matching.
If any part of the donated property was acquired with Federal funds,
only the non-federal share of the property may be counted as cost-
sharing or matching.
G. Appraisal of Real Property: In some cases it will be
necessary to establish the market value of land or a building or the
fair rental rate of land or of space in a building. In these cases,
EDA may require the market value or fair rental value be set by an
independent appraiser, and that the value or rate be certified by
the Recipient.
6. Program Income
A. General. Recipients are encouraged to earn income to defray
program costs. Program income includes income from fees for services
performed, from the use or rental of real or personal property
acquired with grant funds, from the sale of commodities or items
fabricated under a grant agreement, and from payments of principal
and interest on loans made with grant funds. Program income does not
normally include interest on grant funds, rebates, credits,
discounts, refunds, etc. and interest earned on any of them.
B. Definition of program income. Program income means gross
income received by the Recipient directly generated by a grant
supported activity, or earned only as a result of the grant
agreement during the grant period. ``During the grant period'' is
the time between the effective date of the award and the ending date
of the award reflected in the final financial report.
C. Cost of generating program income. If authorized by Federal
regulations or the grant agreement, costs incidental to the
generation
[[Page 5374]]
of program income may be deducted from gross income to determine
program income.
D. Governmental revenues. Taxes, special assessments, levies,
fines, and other such revenues raised by a Recipient are not program
income unless the revenues are specifically identified in the grant
agreement as program income.
E. Royalties. Income from royalties and license fees for
copyrighted material, patents, and inventions developed by a
Recipient is program income only if the revenues are specifically
identified in the grant agreement as program income.
F. Property. Proceeds from the sale of real property or
equipment will be handled in accordance with the requirements of
Section VII of these ``Requirements for Approved Projects''.
G. Use of program income. Program income shall be deducted from
outlays which may be both Federal and non-federal as described
below, unless the grant agreement specifies another alternative (or
a combination of the alternatives). In specifying alternatives, the
Federal agency may distinguish between sources, kinds, or amounts of
income. Alternative uses include:
(1) Deduction. Ordinarily program income shall be deducted from
total allowable costs to determine the net allowable costs. Program
income shall be used for current costs unless EDA authorizes
otherwise. Program income which the Recipient did not anticipate at
the time of the award shall be used to reduce the EDA and Recipient
contributions rather than to increase the funds committed to the
project.
(2) Addition. When authorized, program income may be added to
the funds committed to the grant agreement by EDA and the Recipient.
The program income shall be used for the purposes and under the
conditions of the grant agreement.
(3) Cost sharing or matching. When authorized, program income
may be used to meet the cost sharing or matching requirement of the
grant agreement. The amount of the Federal grant award remains the
same.
H. Income after the award period. Income earned beginning at the
end of the award period (see Paragraph 4A of this Section IV) and
ending at the end of the useful life of the project shall be used
only for the following purposes:
(1) To satisfy any debt service (mortgage payments) existing
during this time period. Note that any new encumbrances on the EDA
assisted facility during this period must have EDA approval.
(2) For necessary operation, maintenance and repair services.
(3) Any excess above the costs of (1) and (2) above may be used
for other economic development purposes in the same economic
development area with the concurrence of EDA.
7. Non-Federal Audit
A. Basic rule: Recipients and Subrecipients are subject to audit
requirements contained in the Single Audit Act amendments of 1996
(31 U.S.C. 7501-7) and revised OMB Circular A-133, ``Audits of
State, Local Governments, and Non-Profit Organizations''.
Section V--Amendments to Grant Agreements
1. General Requirements
A. Between approval and closeout of an EDA construction project,
one or more changes in the project may be necessary to resolve
unforeseen problems or remove obstacles to the project's successful
completion. In most instances, the proposed change can be effected
only through a formal amendment to the project.
B. Project amendments generally fall into the following
categories.
(1) Time extensions;
(2) Budget revisions;
(3) Additional funding (overrun);
(4) Permitted waiver of EDA regulations;
(5) Changes which do not involve overall funding (e.g., change
of Recipient; method and schedule of financing; addition, deletion,
or change affecting a line item in the approved project cost
estimate);
(6) Change to the Special Conditions of the Grant Award;
(7) Termination (for cause or by mutual consent).
C. A change-of-scope determination may be necessary before a
decision can be made if the requested change involves a change to
the purpose, bona fide need, nature or community served of the
project.
2. Changes to the Project Scope
A. Project scope is defined as the purpose, bona fide need,
nature and community served of the approved grant. A project
amendment which amounts to a change of scope is, in fact, the
substitution of one grant for another. A change of scope
modification to a project which was funded in a prior fiscal year
cannot be approved by EDA. Modifications to projects funded from the
current fiscal year's appropriation, or from a no-year
appropriation, do not constitute a prohibited change of scope but
must have the written approval of EDA. Any proposed change to an EDA
assisted project which is a change of scope will be disapproved by
EDA.
B. Certain types of project modifications can be approved by EDA
if specified findings can be made. These include time extensions for
commencement or completion of work, waivers of certain EDA
requirements and some types of budget line item changes.
C. Certain types of project modifications presumptively
constitute a change of scope, although the facts of a particular
situation could permit such modifications to be approved. Examples
are:
(1) A change of Recipient;
(2) A change of project location;
(3) Addition of a new line item to the EDA approved budget;
(4) An expansion of the activity associated with a budget line
item.
D. Every proposed modification to a grant shall be considered
not only in the light of the foregoing policy on change of scope,
but shall also be processed in accordance with all EDA legal and
technical requirements so that grants as amended will not deviate
from the standards employed in initial grant approval.
3. Time Extensions
A. The Recipient is responsible for expeditiously prosecuting
the implementation of the project in accordance with the project
development time schedule contained in the EDA grant award. As soon
as the Recipient becomes aware that it will not be possible to meet
the time schedule, it must notify the EDA Regional Office. The
Recipient's notice to EDA should contain the following information.
(1) An explanation of the Recipient's inability to complete work
by the specified date (e.g., a lengthy period of unusual weather
delayed the contractor's ability to excavate the site; major re-
engineering required in order to obtain state or Federal approvals;
or unplanned environmental mitigation required).
(2) A statement that no other changes to the project are
contemplated;
(3) Documentation that demonstrates there is still a bona fide
need for the project; and
(4) A statement that no further delay is anticipated and that
the project can be completed within the revised time schedule.
B. EDA will advise the Recipient if a formal written request
from the Recipient for a time extension will be required. The
Recipient should be aware that grant disbursements may be suspended
while the Recipient is not in compliance with the time schedule.
C. EDA reserves the right to suspend and/or terminate any grant
if the Recipient fails to proceed with reasonable diligence to
accomplish the project as intended.
4. Budget Line Item Revisions
A. The tabulation of estimated project costs contained in the
EDA Grant Award is the controlling budget for the project. Budget
line item revisions which do not involve a change of scope may be
approved by EDA if:
(1) no new EDA funds are involved; and
(2) another budget line item (preferably the contingency line
item, although this is not mandatory) has funds which can be used
without significantly adversely affecting the object of that line
item; and
(3) unless the line item which is proposed to be supplemented is
supplemented, the activity associated with that line item cannot be
completed; and
(4) no new line items are being added to the budget.
B. Funds may be transferred to other approved budget line items
from the contingencies line item provided the activity associated
with the line item cannot be completed unless the line item to be
supplemented is supplemented.
C. The transfer of funds from line items other than the
contingencies line item may be permitted with EDA written permission
provided there will be no significant adverse effect to the object
of the line item from which the transfer is to be made.
D. The construction line item shall be revised at the time of
contract award to reflect the actual contract amount(s). Underrun
amounts shall be transferred to the contingencies line item.
Recipients are reminded that contingency funds are only to be used
to cover situations resulting from unknown conditions and changes
required
[[Page 5375]]
for the fulfillment of the previously authorized project activities
intended under the grant award. Underrun funds cannot be used to
change the scope of the project.
E. The Recipient shall notify EDA of any proposed transfer of
funds from one budget line item to another.
5. Additional EDA Funding
A. In accepting the award of an EDA grant the Recipient agreed
to fund any overrun(s). Additional EDA funding for an approved
project is unlikely to be approved. To be considered for approval it
must compete with other requests for scarce EDA funds. If an overrun
occurs as a result of the construction contract bid opening, before
EDA will accept a formal request for additional EDA funds it will be
necessary for the Recipient to furnish the following documentation
to EDA:
(1) A written statement from the Recipient's Architect/Engineer
giving reasons for his professional opinion that redesign of the
project within the approved scope, or using new or additional
deductive alternates cannot reasonably be expected to reduce the
cost to within the available funds.
(2) A written statement from the administrative head of the
Recipient's organization justifying why the Recipient cannot furnish
the additional funds required. Relevant data may be in the form of
an audit performed within the past two years, schedule of bonded
debt, assessed property values as a percentage of market value, tax
rates, and percent of collection. The statement should state why
non-EDA sources of funds cannot be used.
B. Acceptance by EDA of a request for additional EDA assistance
does not indicate approval. Any further action by the Recipient
pending EDA's review of the Recipient's request is at the
Recipient's risk.
6. Termination of the EDA Grant
A. Termination for Cause
(1) If a Recipient materially fails to comply with any term of a
grant award, whether stated in a Federal statute, regulation,
assurance, grant application, or notice of award, EDA may take one
or more of the following actions, as appropriate in the
circumstances:
a. Temporarily withhold disbursement of grant funds pending
correction of the deficiency by the Recipient, or more severe
enforcement action by EDA;
b. Disallow (that is, deny both use of funds and matching credit
for) all or part of the cost of the activity or action not in
compliance;
c. Wholly or partly suspend or terminate the current award;
d. Withhold further awards for the project or program;
e. Take other remedies that may be legally available.
(2) In taking an enforcement action, EDA will provide the
Recipient an opportunity for such hearing, appeal, or other
administrative proceeding to which the Recipient is entitled under
any statute or regulation applicable to the action involved.
(3) Costs resulting from obligations incurred by the Recipient
after notice by EDA of suspension of, or termination of, the grant,
are not allowable unless EDA expressly authorizes them in the notice
of suspension or intent to terminate, or subsequently. Other
Recipient costs during suspension or after termination which are
necessary and not reasonably avoidable are allowable if:
a. The costs result from obligations which were properly
incurred by the Recipient before the effective date of the
suspension or termination, are not in anticipation of it, and in the
case of termination, are noncancellable; and,
b. The costs would be allowable if the award were not suspended
or expired normally at the end of the funding period in which the
termination takes effect.
(4) The enforcement remedies identified in this section,
including suspension and termination, do not preclude Recipient from
being subject to ``Debarment and Suspension'' under E.O.s 12549 and
12689 and implementing regulations at 15 CFR Part 26.
B. Termination for Convenience
(1) Terminations for convenience have the following
requirements:
a. EDA may propose the termination for convenience, in which
case the two parties shall agree upon the termination conditions,
including the effective date and in the case of partial termination,
the portion to be terminated; or
b. The Recipient may propose the termination to EDA in writing,
setting forth the reasons for such termination, the effective date,
and in the case of partial termination, the portion to be
terminated. However, if, in the case of a partial termination, EDA
determines that the remaining portion of the grant will not
accomplish the purposes for which the grant was made, EDA may
terminate the grant in its entirety under the termination for cause
procedures or termination for convenience procedures with the
consent of the Recipient. An appropriate official of the Recipient
may request EDA to cancel or terminate a project. This request must
be accompanied by a certified resolution or ordinance authorizing
the requesting party to make such request. EDA will determine the
legal sufficiency of such request.
Section VI--Project Closeout Procedures
1. Audit Requirements
A. Recipients are subject to audit requirements contained the
Single Audit Act of 1984, and the amendments of 1996, (31 U.S.C.
7501-7) and revised OMB Circular A-133, ``Audits of States, Local
Governments, and Non-Profit Organizations''. If the Recipient has no
current audit performed in accordance with the Single Audit Act, EDA
will advise the Recipient of the procedure for securing the required
audit.
B. Normally, if the Recipient has had an audit in accordance
with the Single Audit Act within the prescribed period, EDA will not
require a project specific audit. However, if the documentation
supplied by the Recipient is inadequate for a determination by EDA
of the eligibility of claimed costs for reimbursement from the EDA
grant, EDA may require such a project specific audit. EDA reserves
the right to: (1) require the Recipient to secure an independent
audit of the project cost, or (2) conduct an audit of project costs
using Department of Commerce auditors, and (3) recover any costs
previously allowed for EDA reimbursement but found by the audit to
be not allowable.
C. From time to time the Department of Commerce Office of the
Inspector General selects an EDA assisted project for audit. If its
project is one of those selected, the Recipient will be notified in
advance.
D. In arranging for audit services, Section II, Contracting for
Project Construction will be followed. An independent audit arranged
by the Recipient must meet the standards of the Comptroller General
publication, ``Standards for Audit of Government Organizations,
Programs, Activities, and Functions''.
2. Closeout Procedures
A. When project construction is complete, the final inspection
has been completed, and the Recipient has accepted the project from
the contractor, the Recipient can begin the closeout process. This
should include notifying EDA of the following actions:
(1) Compliance with all Special Conditions of the EDA grant
award, including but not limited to the following:
(2) Securing permanent insurance for above ground facilities.
(3) Results of a review of the project to determine that all
changes to the project have been brought to the attention of EDA.
(4) Provisions have been made for the retention for three years
of all records pertaining to the project.
(5) Certificate of Final Completion has been prepared, executed
and a copy furnished to EDA.
(6) As-built drawings have been received from the contractor
and/or the architect/engineer.
(7) A copy of a current Single Audit Act audit of the Recipient
has been furnished to EDA. If no Single Audit Act audit is available
but is required, the Recipient's plan to secure the audit has been
furnished to EDA and approved. If no Single Audit Act audit is
required, EDA has been advised and has determined whether an
independent audit will be required.
(8) To the knowledge of the Recipient there are no outstanding
Davis-Bacon or local labor employment violations.
(9) EDA has been notified of any change, lien, mortgage or other
encumbrance relating to the ownership of the project.
(10) EDA has been notified of any unresolved contract/contractor
disputes.
(11) If required, a lien or Covenant of Purpose, Use, and
Ownership in favor of EDA has been executed and recorded.
(12) A record will be maintained by the Recipient of the useful
life of the facility as determined by EDA during which period the
Recipient may not alienate its ownership or change the use and
purpose of the EDA assisted facility without EDA's written
permission.
B. Recipients shall submit, within 90 calendar days after the
completion of the project, all financial, performance and other
reports as required by the terms and conditions of the grant award.
C. Unless EDA authorizes an extension, the Recipient shall
liquidate all obligations
[[Page 5376]]
incurred under the grant award no later than 90 calendar days after
the funding period or the date of completion, whichever is earlier,
as specified in the terms and conditions of the award.
D. When EDA is satisfied that the audit requirement has been met
and the actions discussed in paragraphs A, B, and C above have been
accomplished, the Recipient may request the final grant
disbursement. The request will be will be prepared on EDA Form ED-
113, Outlay Report and Request for Reimbursement for Construction
Programs. EDA may assist with filling out the form but it is the
responsibility of the Recipient to assure that the numbers on the
form are correct. The following documentation should accompany the
executed form ED-113 when it is sent to the EDA Regional Office
unless the documentation has been previously furnished:
(1) Copies of all executed contracts, subcontracts (if claimed
separate from the prime contract), contract change orders, vouchers,
canceled checks, and other evidence of costs incurred necessary to
substantiate the costs claimed on the Form ED-113;
(2) A copy of the currently valid Single Audit Act audit if one
was performed;
(3) Payroll forms, if any of the cost claimed is for work
performed by in-house work forces
(4) Payroll Compliance Certificate;
(5) Civil Rights documents;
(6) Title opinions, legal descriptions, bills of sale, title
records, etc., for any land cost being claimed; and
(7) Specifics of any administrative costs being claimed.
E. The Recipient will be advised by EDA of costs found eligible,
costs found ineligible and the reasons for findings of
ineligibility. If a balance of the grant is due to the Recipient,
the balance will be paid by electronic transmittal. If the Recipient
has received a grant amount in excess of the amount due the
Recipient, the Recipient will be requested to refund the excess to
EDA payable to the U.S. Treasury.
F. The closeout of an award does not affect any of the
following:
(1) The right of EDA to disallow costs and recover funds on the
basis of a later audit or other review.
(2) The obligation of the Recipient to return any funds due as a
result of later refunds, corrections, or other transactions.
(3) Requirements for property management, records retention and
performance measurement reports.
(4) Audit requirements.
Section VII--Post Construction Grant Requirements
1. Real Property
A. All property that is acquired or improved with EDA grant
assistance shall be held in trust by the grantee for the benefit of
the project purposes under which the property was acquired or
improved.
B. During the estimated useful life of the project, EDA retains
an undivided equitable reversionary interest in property acquired or
improved with EDA grant assistance.
C. EDA may approve the substitution of an eligible entity for a
grantee. The original grantee remains responsible for the period it
was the grantee, and the successor grantee holds the project
property with the responsibilities of an original grantee under the
award.
D. The requirements contained in this part apply solely to grant
and cooperative agreement award projects.
2. Definitions
A. As used in this Section VII:
(1) Dispose includes sell, lease, abandon, or use for a purpose
or purposes not authorized under the grant award or this part.
(2) Estimated useful life means that period of years from the
time of award, determined by EDA as the expected life-span of the
project.
(3) Grantee includes any recipient, subrecipient, awardee, or
subawardee of grant assistance under the Public Works and Economic
Development Act of 1965.
(4) Owner includes fee owner, transferee, lessee, or optionee of
real property upon which project facilities or improvements are or
will be located, or real property improved under a project which has
as its purpose that the property be sold.
(5) Personal Property means all property other than real
property.
(6) Project means the activity and property acquired or improved
for which a grant is awarded. When property is used in other
programs ``project'' includes such programs.
(7) Property includes all forms of property, real, personal
(tangible and intangible), and mixed.
(8) Real property means any land, improved land, structures,
appurtenances thereto, or other improvements, excluding movable
machinery and equipment. Improved land also includes land which is
improved by the construction of such project facilities as roads,
sewers, and water lines which are not situated directly on the land
but which contribute to the value of such land as a specific part of
the project purpose.
3. Use of Property
A. The grantee or owner shall use any property acquired or
improved in whole or in part with grant assistance only for the
authorized purpose of the project as long as it is needed during the
estimated useful life of the project and such property shall not be
leased, sold, disposed of or encumbered without the written
authorization of EDA.
B. In the event that EDA and the grantee determine that property
acquired or improved in whole or in part with grant assistance is no
longer needed for the original grant purpose, it may be used in
other Federal grant programs, or programs that have purposes
consistent with those authorized for support by EDA, if EDA approves
such use.
C. When the authorized purpose of the EDA grant is to develop
real property to be leased or sold, as determined by EDA, such sale
or lease is permitted provided the sale is consistent with the
authorized purpose of the grant and with applicable EDA requirements
concerning, but not limited to, nondiscrimination.
D. When acquiring replacement personal property of equal or
greater value, the grantee may trade-in the property originally
acquired or sell the original property and use the proceeds in the
acquisition of the replacement property, provided that the
replacement property shall be used for the project and be subject to
the same requirements as the original property.
4. Unauthorized Use
A. Except as provided in 3B, 3C, or 3D above, whenever, during
the expected useful life of the project, any property acquired or
improved in whole or in part with grant assistance is disposed of
without the approval of EDA, or no longer used for the authorized
purpose of the project, the Federal Government shall be compensated
by the grantee for the Federal share of the value of the property;
provided that for equipment and supplies, the standards of the
Uniform Administrative Requirements for Grants at 15 CFR Part 24 and
15 CFR Part 14 or any supplements or successors thereto, as
applicable, shall apply.
B. If property is disposed of without approval, EDA may assert
its interest in the property to recover the Federal share of the
value of the property for the Federal Government. EDA may pursue its
rights under both paragraphs A and B of this section, except that
the total amount to be recovered shall not exceed the Federal share,
plus costs and interest.
5. Federal Share
A. For purposes of this Section, the Federal share of the value
of property is that percentage of the current fair market value of
the property attributable to the EDA participation in the project
(after deducting actual and reasonable selling and fix-up expenses,
if any, incurred to put the property into condition for sale).
B. Where the grantee's interest in property is a leasehold for a
term of years less than the depreciable remaining life of the
property, that factor shall be considered in determining the
percentage of the Federal share.
C. If property is transferred from the grantee to another
eligible entity, as provided in paragraph 1C above, the Federal
Government shall be compensated the Federal share of any money paid
by or on behalf of the successor grantee to or for the benefit of
the original grantee, provided that EDA may first permit the
recovery by the original grantee of an amount not exceeding its
investment in the project nor exceeding that percentage of the value
of the property that is not attributable to the EDA participation in
the project.
D. When the Federal Government is compensated for the Federal
share of the value of property acquired or improved in whole or in
part with grant assistance, EDA has no further interest in the
ownership, use or disposition of the property.
6. Encumbrances
A. Except as provided in paragraph 6C below, grantee-owned
property acquired or improved in whole or in part with grant
assistance may not be used to secure a mortgage or deed of trust or
otherwise be
[[Page 5377]]
used as collateral or encumbered except to secure a grant or loan
made by a State or Federal agency or other public body participating
in the same project.
B. Encumbering such property other than as permitted in this
section is an unauthorized use of the property requiring
compensation to the Federal Government as provided in paragraphs 4
and 5 above.
C. EDA may waive the provisions of paragraph 6A above for good
cause when EDA determines all of the following:
(1) All proceeds from the grant/loan to be secured by the
encumbrance on the property shall be available only to the grantee,
and all proceeds from such secured grant/loan shall be used only on
the project for which the EDA grant was awarded or on related
activities of which the project is an essential part;
(2) The lender/grantor would not provide funds without the
security of a lien on the project property; and
(3) There is a reasonable expectation that the borrower/grantee
will not default on its obligation.
D. The EDA Assistant Secretary or his/her designee may waive the
provisions of paragraphs A and B above as to an encumbrance on
property which is financed by an EDA construction grant when he/she
determines that the encumbrance arises solely from the provisions of
a pre-existing water, sewer or other utility encumbrance which by
its terms extends to additional property connected to such
facilities. EDA's determination shall make reference to the specific
requirements (for example, ``water system and all accessions,
additions or improvements thereto'') which extend the terms of the
pre-existing encumbrance to the property which is financed and/or
improved by the EDA construction grant.
7. Civil Rights Restriction
Among other applicable requirements, the Recipient or in the
case of a transfer , the transferee, of real property, structures or
improvements thereon or interests therein acquired, leased, or
improved with EDA assistance may not sell, lease, or otherwise make
any part of such premises available for occupancy by any person,
firm, or entity unless the Recipient includes in the instrument
effecting the sale, lease or transfer a covenant running with the
land that assures that the purchaser, lessee or occupant will comply
with the nondiscrimination provisions of the Civil Rights Act of
1964, as amended as provided in 15 CFR 8.5(b)(5)(6) and (11).
8. Performance Reports
The Government Performance and Results Act of 1993 (GPRA)
requires EDA to report the outputs and outcomes of projects (e.g.
actual job creation). Recipients are required to submit reports of
performance to EDA at the intervals stated in Section I Paragraph 2E
of these Requirements for Approved Construction Projects.
9. Record Retention
Architect/engineering records and payroll records relating to
the project must be retained as described in Section I Paragraph 6 F
, Section II Paragraph 14 H, and Section III Paragraph 9 A.
10. Program Income Earned After the Award Period
The uses for program income earned after the award period are
described in Section IV 6 H.
Section VIII--Exhibits
This section contains a copy of the Exhibits cited elsewhere in
this Volume and other items which may be helpful to the Recipient as
it proceeds through project design, construction, and closeout. The
EDA forms shown as exhibits herein are updated and revised as new
procedures and requirements become known. Thus, the exhibit may not
be the latest version of the form currently in use. The Recipient
should check with the EDA regional office to be sure the correct
form is being used before the initial use of any of the exhibits.
The documents marked with an asterisk (*) are available from the EDA
regional office, if needed.
A. Checklists for:
(1) Architect/Engineer Contracts
(2) Construction Contracts
(3) Initial Grant Disbursement
(4) Project Closeout
B. Supplemental General Conditions
C. Certificate as to Project Site, Rights-of-Way, and Easements
(Form ED-152)
D. *Sample Agreement and Mortgage
E. Notice of Requirements for Affirmative Action to Ensure Equal
Employment Opportunity (E.O. 11246)
F. *Sample Contract Documents
(1) Advertisement for Bid
(2) Information for Bidders
(3) Bid for Lump Sum or Unit Price Contracts
(4) Bid Bond
(5) Agreement (Construction Contract)
(6) Performance Bond
(7) Payment Bond
(8) General Conditions
(9) Contractor's Application for Payment (AIA Document #G 702)
(10) Weekly Payroll Form (use Dept. of Labor's Form WH-347)
(11) Notice of Award
(12) Notice to Proceed
(13) Change Order
G. Recipient's Outlay Report and Request for Reimbursement for
Construction Programs (Form ED-113)
H. ACH Vendor/Miscellaneous Payment Enrollment Form (Form SF-3881)
I. Sample Final Acceptance Inspection Report
J. Sample Quarterly Performance Report
K. Sample Architect/Engineer's Certificate
L. Sample Certificate of Grantee/Borrower's Attorney
M. Information Required for EPA Certification as to Adequacy of
Treatment
N. Financial Status Report (Form SF269)
Checklist for Architect/Engineer Contracts
Although the use of this checklist is not mandatory, its use
will expedite EDA's review of the architect/engineer contract. When
completed by the Recipient it should be submitted to the EDA
regional office soon after the grant award is approved by EDA and
accepted by the Recipient if the architect/engineer contract has
been previously executed. If the architect/engineer contract has not
been executed prior to the Recipient's acceptance of the grant
award, this checklist may be completed and sent to the appropriate
regional office as soon as the architect/engineer contract is signed
and prior to any request for disbursement of EDA grant funds. The
appropriate responses should be circled in ink and signed by the
authorized representative of the Recipient.
Y N The Recipient has written procurement
procedures with which the architect/
engineer contract has been found to
be in compliance.
Y N The Architect/Engineer was selected
competitively by sealed bids (formal
advertising) or by competitive
proposals. If not, attach an
explanation of the selection method
and the reason(s) for using that
method.
Y N Requests for proposals were
publicized and all evaluation
factors and their relative
importance were identified therein.
Any response to publicized requests
for proposals were honored to the
maximum extent practical.
Y N Proposals were solicited from an
adequate number of qualified sources
(normally it is sufficient to secure
at least three proposals from
qualified proposers). If less than 3
qualified proposals were secured,
attach an explanation to this
document.
Y N The Recipient has a method for
conducting technical evaluations of
proposals received and for selecting
the best proposal, price and other
factors considered.
Y N The Recipient determined the
responsible firm whose proposal was
most advantageous to the program,
with price and other factors
considered. Competitor's
qualifications were evaluated and
the most qualified competitor was
selected, subject to negotiation of
fair and reasonable compensation.
Y N The Architect/Engineer agreement
provides for all services required
by the Recipient for the planning,
design and construction phase of the
proposed project. Appropriate
standards or guides developed by
such professional organizations as
the American Consulting Engineers
Council (ACEC), American Society of
Civil Engineers (ASCE), National
Society of Professional Engineers
(NSPE), and/or the American
Institute of Architects (AIA) may be
used where the Recipient does not
have standard procurement documents.
[[Page 5378]]
Y N The Architect/Engineer's fee for
basic services is either a fixed
price or a cost reimbursement with
an agreed maximum. (The amount of
EDA participation will be based on a
determination, subject to audit,
that the fee compensation is
reasonable)
Y N The architect/engineer contract
compensation is not based on the use
of the cost-plus-a-percentage-of-
cost or percentage of construction
cost form of compensation. (These
forms of compensation are not
eligible for EDA participation).
Y N The Architect/Engineer's fee covers
all services necessary for the
successful execution of the project,
including consultations, surveys,
soil investigations, supervision,
travel, ``as-built'' or record
drawings, arrow diagram (CPM/PERT)
where applicable, and incidental
costs.
Y N The basic fee does not exceed that
prevailing for comparable services
in the project area. If the total
fee is in excess of the prevailing
rate because of special services to
be performed, these services are
identified in the agreement. Such
additional charges may be approved
for grant participation by the EDA
if they:
11. Do not duplicate a charge for
services provided for in the basic
fee and are within the normal scope
of the Architect/Engineer's
responsibilities;
12. Are a proper charge against the
project cost; and
c. Are reasonable for the extra
services to be rendered.
Y N Regardless of who furnishes the
construction inspector, the
agreement requires the Architect/
Engineer to make sufficient visits
to the project site to determine, in
general, if the work is proceeding
in accordance with the construction
contract.
Y N If the Architect/Engineer contract(s)
price exceeds $100,000 (awarded
under small purchase procedures), it
includes a provision to the effect
that the Recipient, EDA, the
Comptroller General of the United
States, the Inspector General of the
Department of Commerce, or any of
their duly authorized
representatives, shall have access
to any documents, books, papers, and
records of the Architect/Engineer
(which are directly pertinent to a
specific grant program) for the
purpose of making an audit,
examination, excerpts, and
transcriptions. The Recipient shall
require the Architect/Engineer to
maintain all required records for at
least three years after the
Recipient makes final payment and
all pending matters are closed.
Y N The agreement for architect/engineer
services provides an adequate basis
for the Recipient to require the
Architect/Engineer to:
Y N Design the project in
accordance with the
intent of the Grant
Award;
Y N Redesign the project in
the event the preliminary
cost estimate, the final
cost estimate, or the
lowest responsive bid
less deductive
alternates, exceeds the
funds available by an
amount or percentage to
be mutually agreeable to
the Recipient and the
Architect/Engineer;
Y N Design any sewage
treatment or other sewage
facility so that a
certificate of adequacy
of treatment can be
obtained as required by
Section 106 of the Public
Works and Economic
Development Act of 1965,
as amended;
Y N Include in all contracts
and subcontracts with
costs in excess of
$100,000 a provision
which requires compliance
with all applicable
standards, orders, or
requirements issued under
the Clean Air Act (42
U.S.C. 7401 et. seq.) and
the Federal Water
Pollution Act (33 USC
1251 et seq., as
amended). (Violations
shall be reported to EDA
and to the regional
office of the U.S.
Environmental Protection
Agency).
Y N Include in all contracts
and subcontracts in
excess of the small
purchase threshold of
$100,000, provisions or
conditions which will
allow for administrative,
contractual or legal
remedies in instances
where contractors violate
or breach contract terms,
and provide for such
sanctions and penalties
as may be appropriate;
Y N Include in all contracts
in excess of $10,000
suitable provisions for
termination by the
Recipient including the
manner in which it will
be affected and the basis
for settlement. In
addition, such contracts
shall describe conditions
under which the contract
may be terminated for
default as well as
conditions where the
contract may be
terminated because of
circumstances beyond the
control of the
contractor;
Y N Include in all contracts
in excess of $10,000 a
provision requiring
compliance with Executive
Order 11246,
entitled''Equal
Employment Opportunity,''
as amended by Executive
Order 11375, and as
supplemented in
Department of Labor
regulations (41 CFR Part
60);
Y N Include in all contracts
in excess of $2,000 for
construction or repair a
provision for compliance
with the Copeland ``Anti-
Kickback''Act (18 USC
874) as supplemented in
Department of Labor
regulations (29 CFR, Part
3). This Act provides
that each contractor or
subrecipient shall 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 is otherwise entitled.
(The Recipient shall
report all suspected or
reported violations to
EDA).
[[Page 5379]]
Y N Include in all
construction contracts in
excess of $2,000 a
provision for compliance
with the Davis-Bacon Act
(40 USC 276a to a-7) as
supplemented by
Department of Labor
regulations (29 CFR Part
5). Under this Act
contractors shall be
required to pay wages to
laborers and mechanics at
a rate not less than the
minimum wages specified
in a wage determination
made by the Secretary of
Labor. In addition,
contractors shall be
required to pay wages not
less often than once a
week. A copy of the
current prevailing wage
determination issued by
the Department of Labor
must be included in each
solicitation and the
award of a contract shall
be conditioned upon the
acceptance of the wage
determination. (All
suspected or reported
violations shall be
reported to EDA. Davis-
Bacon wage determinations
are not applicable to
Recipient employed
``Force Account''
workers).
Y N Include in all contracts
in excess of $2,000 for
construction contracts
and in excess of $2,500
for other contracts which
involve the employment of
mechanics or laborers, a
provision for compliance
with Sections 102 and 107
of the Contract Work
Hours and Safety
Standards Act (40 USC 327-
330) as supplemented by
Department of Labor
regulations (29 CFR, Part
5). Under Section 103 of
the Act, each contractor
shall 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 not less than
1\1/2\ times the basic
rate of pay for all hours
worked in excess of 40
hours in the work week.
Section 107 of the Act is
applicable to
construction work and
provides that no laborer
or mechanic shall be
required to work in
surroundings or under
working conditions which
are unsanitary,
hazardous, or dangerous
to his health and safety.
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. Work
performed by employees of
the Recipient (in-house
forces) on the EDA-
assisted project will be
subject to the following:
1. Work performed in
excess of eight hours per
day will be reimbursed by
EDA at the normal rate of
pay unless the Recipient
can show that a higher
rate is required by State
or local law or union
contract;
2. Work performed in
excess of 40 hours per
week may be reimbursed by
EDA at a higher rate than
normal if the Recipient
can show that it normally
pays for such work at a
higher rate. In any case
the rate for work in
excess of 40 hours per
week may not exceed one
and one half times the
normal hourly rate.
Y N Include a notice in all
contracts involving
research, developmental,
experimental or
demonstration work
requiring that all
patentable processes,
discoveries or inventions
which arise or are
developed in the course
of, or under, such
contract shall be
reported to EDA. The
notice will state that
the Government has an
interest in any such
patentable processes,
discoveries or inventions
corresponding to the
percentage of total
project cost funded by
EDA.
Y N Include in all negotiated
contracts (except those
awarded by small purchase
procedures) a provision
to the effect that the
Recipient, EDA, the
Comptroller General of
the United States, or any
of their duly authorized
representatives, shall
have access to any books,
documents, papers, and
records of the contractor
which are directly
pertinent to that
specific contract, for
the purpose of making
audit, examination,
excerpts, and
transcriptions.
Y N Include in all contracts a
requirement that the
contractor maintain all
relevant project records
for three years after the
Recipient has made final
payment to the contractor
and all other pending
matters are closed.
Y N State a specific timetable
in the architect/engineer
agreement for:
1. Completing preliminary
plans and associated cost
estimates;
2. Completing final plans,
specifications, and cost
estimates;
[[Page 5380]]
3. Securing required State
and local approvals; and
4. Completing proposed
contract documents in a
form sufficient for
soliciting bids for
construction of the
project.
(If the Recipient has
executed an Architect/
Engineer agreement
without such a
requirement for a
timetable, EDA shall
require that an addendum
to the agreement be
executed to incorporate
this requirement).
Y N Provide surveillance of
project construction to
assure compliance with
plans, specifications,
and all other contract
documents. If the
Recipient chooses to use
the Architect/Engineer as
the project inspector,
the requirements for
construction inspection
services shall be clearly
defined and the amount
the Recipient is required
to pay for such services
shall be stated.
Y N Be responsible for any
damages arising from any
defects in design or
negligence in the
performance of the
construction inspector,
if the inspector is
furnished by the
Architect/Engineer. (EDA
recommends that the
Architect/Engineer be
required to take
insurance, when
available, to cover
liability for such
damages).
Y N Supervise any required
subsurface explorations
such as borings, soil
tests, and the like, to
determine amounts of rock
excavation or foundation
conditions, no matter
whether they are
performed by the
Architect/Engineer or by
others paid by the
Recipient.
Y N Attend bid openings,
prepare and submit
tabulation of bids, and
make a recommendation as
to contract award.
Y N Review proof of bidder's
qualifications and
recommend approval or
disapproval.
Y N Prepare and submit
proposed contract change
orders when applicable.
There shall be no charge
to the Recipient when the
change order is required
to correct errors or
omissions by the
Architect/Engineer. (To
be eligible for EDA
participation the
specific change order
must have written
approval from EDA and
must have some form of
cost or price analysis
performed by the
Recipient or the
Architect/Engineer).
Y N Submit a report not less
frequently than quarterly
to the Recipient covering
the general progress of
the job and describing
any problems or factors
contributing to delay.
Y N Review and approve the
contractor's schedule of
amounts for contract
payment.
Y N Certify partial payments
to contractors.
Y N Assure that a ten percent
(10%) retainage is
withheld from all
payments on construction
contracts until final
acceptance by the
Recipient and approval by
the EDA Regional Office,
unless State or local law
provides otherwise.
Y N Prepare ``as-built'' or
record drawings after
completion of the
project. Reproducible
originals will be
furnished to the
Recipient within 60 days
after all construction
has been completed and
the final inspection has
been performed. (One set
of copies shall be
furnished to the EDA
Regional Office only if
requested by the Regional
Office).
Y N Review and approve the
contractor's submission
of samples and shop
drawings, where
applicable.
Y N Comply with all Federal
statutes relating to non-
discrimination. These
include but are not
limited to:
1. Title VI of the Civil
Rights Act of 1964 (P.L.
88-352) which prohibits
discrimination on the
basis of race, color, or
national origin;
2. Section 112 of PL 92-45
and Title IX of the
Education Amendments of
1972, as amended (20
U.S.C. 1681-1683, and
1685-1686) which
prohibits discrimination
on the basis of sex;
3. Section 504 of the
Rehabilitation Act of
1973, as amended (29
U.S.C. 794) which
prohibits discrimination
on the basis of
handicaps;
4. The Age Discrimination
Act of 1975, as amended
(42 U.S.C. 6101-6107)
which prohibits
discrimination because of
age;
5. The Drug Abuse Office
and Treatment Act of 1972
(P.L. 93-255), as
amended, relating to non-
discrimination on the
basis of drug abuse;
6. The Comprehensive
Alcohol Abuse and
Alcoholism Prevention,
Treatment and
Rehabilitation Act of
1970 (P.L. 91-616), as
amended, relating to non-
discrimination on the
basis of alcohol abuse or
alcoholism;
7. Sections 523 and 527 of
the Public Health Service
Act of 1912 (42 U.S.C.
290 dd-3 and 290ee-3), as
amended, relating to
confidentiality of
alcohol and drug abuse
patient records;
8. Title VIII of the Civil
Rights Act of 1968 (42
U.S.C. 3601 et. seq.), as
amended, relating to non-
discrimination in the
sale, rental or financing
of housing;
9. Any other non-
discrimination provisions
in the specific
statute(s) under which
the application for
Federal assistance is
being made; and
10. The requirements of
any other non-
discrimination statute(s)
which may apply.
[[Page 5381]]
Y N Incorporate into the
proposed construction
contract documents a
designation of all of the
different types of
construction which will
be used for the project;
such as Building, Heavy
or Highway in accordance
with all local and State
laws and practices. For
this purpose either the
plans, the specifications
or both shall clearly
delineate where each type
stops and another starts.
Y N Consider in the
establishment of the
compensation any cost
savings that may be
realized through multiple
use of the same design.
Y N Provide in all proposed
construction contracts
deductive alternates
which can be taken, if
necessary, to reduce the
bid price so that the
lowest responsive bid for
construction of the
project will not exceed
the funds available.
Y N Design the facility to
comply with the Americans
with Disabilities Act
(ADA) (P.L. 101-336) and
the Accessibility
Guidelines for Buildings
and Facilities, as
amended, (36 CFR Part 191
and Executive Order
12699.
Y N Design for seismic safety
in accordance with
Executive Order 12699
which imposes
requirements that
federally assisted
facilities be designed
and constructed in
accordance with the 1991
ICBO Uniform Building
Code or 1992 Supplement
to the BOCA National
Building Code and/or 1991
Amendments to the SBCC
Standard Building Code.
Y N Provide sufficient plans,
specifications, bid
sheets, cost estimates,
design analysis, and
other contract documents
required for the project.
The number of copies to
be furnished by the
Architect/Engineer as
part of his/her
compensation for basic
services shall be
specified in the
agreement.
Y N Use forms for instructions
to bidders, general
conditions, contract, bid
bond, performance bond,
and payment bond which
meet EDA requirements.
All proposed contract
documents are subject to
EDA approval. (Documents
contained in ``Contract
Documents for
Construction of Federally
Assisted Water and Sewer
Projects'' are acceptable
for this purpose).
The name and address of the Architect/Engineer is: __________
Y N The Architect/Engineer
will perform project
inspection services. If
not, provide the name and
address of the firm or
person that will provide
project construction
inspection services:
__________
The contract price for Basic Services is $-----------------------------
The contract price for Extra Services is $-----------------------------
The contract price for inspection services is $.-----------------------
The number of proposals received were----------------------------------
The number of bidders disqualified were--------------------------------
----------------------------------------------------------------------
Recipients Authorized Representative
----------------------------------------------------------------------
Date
Checklist for Construction Contracts
Although the use of this checklist is not mandatory, its use by
the Recipient will expedite EDA's review of the construction
contract. When used by the Recipient, it should be submitted to EDA
at or before the invitation for construction contract bids is
published. EDA reserves the right to perform a pre-award review of
the proposed procurement documents or a review of the executed
contract documents at any time within the record retention time
frame. The appropriate responses should be circled in ink and the
authorized representative of the Recipient should sign the form
where indicated.
The following documents are included in the invitation for bids:
Y N An index
Y N The advertisement for bids
Y N The information for bidders
Y N The bid form
Y N The contract form
Y N EDA's Supplemental General Conditions
(to be furnished by EDA)
Y N The recipient's general conditions
Y N The technical specifications
Y N The working drawings
Y N The applicable wage rates (to be
furnished by EDA)
Y N Notice of Requirements for
Affirmative Action to Ensure Equal
Employment Opportunity (to be
furnished by EDA)
The bid documents contain the following provisions:
Y N Details of how the successful bidder
will be selected
Y N Actions to be taken by the Recipient
if the lowest bid exceeds the funds
available
Y N Requirement for 5% bid bond, 100%
payment bond and 100% performance
bond
Y N The order in which alternates, if
any, are to be taken
Y N Provisions for termination of the
contract including default of the
contractor and conditions beyond the
control of the contractor
Y N Provisions for administrative,
contractural or legal remedies for
contractor breach or violation of
contract terms and provision for
such sanctions and penalties as may
be appropriate
Y N A requirement that the contractor
maintain all relevant project
records for three years after the
Recipient has made final payment to
the contractor
Y N A requirement that the bidders submit
proof of qualification to do the
work called for in the contract
Y N Notice that progress payments will
have a 10% retainage ( unless
otherwise required by State or local
law)
Y N A requirement for the contractor to
submit all shop drawings, samples
and change orders to the Architect/
Engineer and Recipient for approval
Y N A requirement for a construction
progress estimate and periodic
progress reports from the
construction contractor
Y N A procedure for the settlement of
disputes between the contractor, the
contractor's subcontractors, the
Architect/Engineer and the Recipient
Y N A liquidated damages provision for
failure of the contractor to meet
the specified construction
timetable. The amount specified in
the proposed contract is $---- per
day
Y N The proposed design contains no
materials or products specified by
brand name without an ``or equal''
provision
Y N A requirement is included for
compliance with Federal regulations
as listed in EDA's Supplemental
General Conditions, EDA's Standard
Terms and Conditions to the grant
award and the Special Conditions to
the grant award
Y N The bidders will be limited to those
on a prequalified list maintained by
the Recipient. If so, explain on an
attached sheet the procedure that is
used to place prospective bidders on
the list.
Y N Recipient furnished materials and/or
equipment will be incorporated into
the projects outside the
construction contract. If so, attach
a list of such materials and/or
equipment.
[[Page 5382]]
Y N No part of the project construction
will be accomplished by the
Recipient's own forces or by labor
hired directly by the Recipient for
this specific project. If so,
contact the EDA regional office for
further guidance
Y N The contract is solely for the EDA
project. If non-EDA work is
included, contact the EDA regional
office for further guidance.
Y N The land, rights of way and easements
required for the construction and
operation of the project are owned
by the Recipient or otherwise have
been appropriately permitted by the
responsible authorities.
Y N The Recipient's share of the project
cost is on hand or immediately
available.
Y N Provisions for construction
inspection are in place.
Y N All applicable terms and conditions
of the grant award have been
satisfied. If not, please explain on
an attached sheet.
Y N The scope of work for the project as
described in the grant award has not
changed.
The construction period specified in the proposed contract is
for ______ months.
The Architect/Engineer's cost estimate for construction is
$______.
The advertising period will be from ______ to ______.
----------------------------------------------------------------------
Recipient's Authorized Representative
----------------------------------------------------------------------
Date
Checklist for Initial Grant Disbursement
Grant Recipient:-------------------------------------------------------
EDA Project #----------------------------------------------------------
Grant Recipient's Authorized Representative:
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
This checklist is for guidance on the information the EDA
regional office will need before an initial grant disbursement can
be approved. The regional office may use their own version of this
checklist which may or may not be required to be sent in with the
initial grant disbursement request. Use of the checklist will
expedite EDA processing of the initial grant disbursement.
Y N NA The EDA grant award/offer was
accepted within the 15 day after
receipt time limit.
Y N NA Those Special Conditions to the
grant award requiring action prior
to the initial grant disbursement
have been satisfied.
Y N NA An architect/engineer contract has
been approved by EDA.
Y N NA An unconditional ``EPA Section 106''
certificate has been secured and a
copy furnished to, or received
from, EDA.
Y N NA All required land, easements and
rights-of-way have been secured and
title opinion has been approved by
EDA.
Y N NA The proposed bid documents were
approved by EDA.
Y N NA The final plans, specifications and
contract documents have been
approved by EDA.
Y N NA All contracts required for
completion of the project have been
executed and approved by EDA.
Y N NA If the answer to the previous
question is ``N'', a request for
phasing has been made to, and
approved by, EDA.
Y N NA Bid award of the construction
contract was to the lowest bidder.
Y N NA The full firm name and owner's name
of all contractors have been
furnished to EDA for checking
against the Federal debarred and
ineligible list.
Y N NA The company listed as surety for the
low bidder is listed on Treasury
Department Circular 570 and
possesses sufficient capability to
insure the project.
Y N NA Davis-Bacon wage rates have been
incorporated into all construction
contracts.
Y N NA EDA's Supplemental General
Conditions have been incorporated
into all construction contracts.
Y N NA Matching funds for the Recipient's
share are on hand or immediately
available.
Y N NA A first lien or Property Management
Agreement has been executed,
recorded and submitted to EDA.
Y N NA A relocation assistance plan as
required by the Uniform Relocation
Assistance Act has been approved by
EDA.
Y N NA Use of force account (workmen hired
by the Recipient specifically for
the EDA approved project) has been
approved by EDA.
Y N NA Use of in-house forces (workmen who
are part of the Recipient's current
workforce) has been approved by
EDA.
Y N NA EDA approval of the start of
construction before the award of
the EDA grant has been received.
Y N NA All work accomplished by change
order which is part of the claim
for the initial grant disbursement
has been approved by EDA.
Y N NA All proposed or actual changes to
the EDA approved budget have been
approved by EDA.
Y N NA All project activities to the date
of the initial grant disbursement
request have been accomplished
within the approved time schedule
or EDA approved extension.
Y N NA Currently due project performance
reports have been submitted to EDA.
Y N NA Tabulation of bids, bid form of the
low bidder (and bid form of any
bidder to whom the Recipient has
made, or proposes to make to other
than the lowest bidder) and
certified minutes of the bid
opening have been submitted to EDA.
Checklist for Project Closeout
Grant Recipient:-------------------------------------------------------
EDA Project #----------------------------------------------------------
Grant Recipient's Authorized Representative:
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
This checklist is for the Recipient's guidance on the
information the EDA regional office will need to close out the EDA
assisted project. Although its use is not mandatory, using it will
expedite EDA's processing of the final grant disbursement.
Y N NA All of the Special Conditions to the
EDA grant award have been satisfied
and approved by the EDA regional
office.
Y N NA A final inspection was performed by
the Architect/Engineer and the
completion of the project with all
deficiencies corrected has been
accepted by the Architect/Engineer
in writing.
Y N NA The Recipient has accepted the
project without deficiencies from
the contractor.
Y N NA All currently due project progress
reports have been submitted to the
EDA regional office.
Y N NA The project was completed on time or
an EDA approved time extension is
on file.
Y N NA As-built drawings have been received
from the Architect/Engineer and are
on file.
Y N NA If requested by EDA, photographs of
above ground facilities have been
submitted to EDA.
Y N NA The Recipient understands that a
warranty inspection is to be
performed before the warranty
expiration date and the results
submitted to EDA.
Y N NA All audit issues have been resolved.
Y N NA If occupancy of the facilities by
the Recipient was obtained prior to
the Recipient's or Architect/
Engineer's acceptance of the
facility from the contractor
evidence of consent of the
contractor, the insurance carrier,
and the surety is on file.
Y N NA Permanent insurance on the facility
has been obtained.
Y N NA The Recipient is aware that project
records must be retained for a
minimum of three years.
[[Page 5383]]
Y N NA The Recipient is aware that for the
EDA determined useful life of the
EDA assisted facilities, all real
property must be used for
originally authorized purposes and
the Recipient shall not dispose of
or encumber its title or other
interests. When the facility is no
longer needed for the orignally
authorized purpose and the useful
life has not expired, the Recipient
will request instructions from EDA.
The instructions will conform to
applicable DoC and EDA regulations.
Y N NA All payments due to contractors for
construction, services and supplies
for the project are current except
for contract retainage if project
has not been accepted.
Y N NA The first Post Construction Report
evaluating the achievement of the
Core Performance Measures listed in
the Standard Terms and Conditions
to the EDA grant has been submitted
to EDA.
Exhibit B--Supplemental General Conditions
These Supplemental General Conditions are intended for use by
Economic Development Administration Grantees. They contain specific
EDA and other Federal requirements not normally found in non-Federal
contract documents. The requirements contained herein must be
incorporated into all construction contracts and subcontracts funded
wholly or in part with EDA funds.
Supplemental General Conditions
S1 Definitions
S2 Federally Required Contract Provisions
S3 Required Provisions Deemed Inserted
S4 Inspection by EDA Representatives
S5 Construction Schedule and Periodic Estimates
S6 Contractor's Title to Material
S7 Inspection and Testing of Materials
S8 ``Or Equal'' Clause
S9 Patents
S10 Claims for Extra Cost
S11 Contractor's and Subcontractor's Insurance
S12 Contract Security
S13 Safety and Health Regulations for Construction
S14 Minimum Wages
S15 Withholding of Payments
S16 Payrolls and Basic Records
S17 Apprentices and Trainees
S18 Subcontracts
S19 Termination and Debarment
S20 Overtime Requirements
S21 Equal Employment Opportunity
S22 Other Prohibited Interests
S23 Employment of Local Labor
S24 Historical and Archeological Data Preservation Act of 1974
S25 Clean Air and Federal Water Pollution Control Act
S26 Use of Lead-Based Paints on Residential Structures
S27 Signs
Supplemental General Conditions
S-1 Definitions
The following terms as used in these Supplemental General
Conditions are respectively defined as follows:
a. ``Contractor'': A person, firm, or corporation with whom this
Contract is made by the Owner.
b. ``Subcontractor'': A person, firm, or corporation supplying
labor and materials or only labor, for work at the site of the
project, for and under separate contract or agreement with the
Contractor.
c. ``Work on (at) the project'': Work to be performed at the
location of the project, including the transportation of materials
and supplies to or from the location of the project by employees of
the Contractor and any subcontractor.
d. ``Apprentice'': (1) A person employed and individually
registered in a bona fide apprenticeship program registered with the
U.S. Department of Labor, Bureau of Apprenticeship and Training, or
with a State apprenticeship agency recognized by the Bureau; or (2)
a person in his/her first 90 days of probationary employment as an
apprentice in such an apprenticeship program, who is not
individually registered in the program, but who has been certified
by the Bureau of Apprenticeship and Training or a State
apprenticeship council (where appropriate) to be eligible for
probationary employment as an apprentice.
e. ``Trainee'': A person receiving on-the-job training in a
construction occupation under a program which is approved (but not
necessarily sponsored) by the U.S. Department of Labor, Manpower
Administration, Bureau of Apprenticeship and Training, and which is
reviewed from time to time by the Manpower Administration to insure
that the training meets adequate standards.
S-2 Federally Required Contract Provisions
a. Administrative, contractual, or legal remedies in instances
where contractors violate or breach contract terms, and provide for
such sanctions and penalties as may be appropriate (Contracts more
than the simplified acquisition threshold--currently fixed at
$100,000, see 41 USC 403(11)).
b. Termination for cause and for convenience by the grantee
including the manner by which it will be effected and the basis for
settlement (All contracts in excess of $10,000).
c. Compliance with Executive Order 11246 of September 24, 1965
entitled ``Equal Employment Opportunity,'' as amended by Executive
Order 11375 of October 13, 1967 and as supplemented in Department of
Labor regulations (41 CFR Chapter 60) (All construction contracts
awarded in excess of $10,000 by grantees and their contractors or
subgrantees).
d. Compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C.
874) as supplemented in Department of Labor regulations (29 CFR Part
3) (All contracts and subgrants for construction or repair).
e. Compliance with the Davis-Bacon Act (40 U.S.C. 276a to a-7)
as supplemented by Department of Labor regulations (29 CFR Part 5)
(Construction contracts in excess of $2,000 awarded by grantees and
subgrantees).
f. Compliance with sections 103 and 107 of the Contract Work
Hours and Safety Standards Act (40 U.S.C. 327-330) as supplemented
by Department of Labor regulations (29 CFR Part 5) (Construction
contracts awarded by grantees and subgrantees in excess of $2,000,
and in excess of $2,500 for other contracts which involve the
employment of mechanics or laborers).
g. EDA requirements and regulations pertaining to reporting.
h. EDA requirements and regulations pertaining to patent rights
with respect to any discovery or invention which arises or is
developed in the course of or under such contract.
i. EDA requirements and regulations pertaining to copyrights and
rights in data.
j. Access by the grantee, EDA, the Comptroller General of the
United States, or any of their duly authorized representatives to
any books, documents, papers, and records of the contractor which
are directly pertinent to that specific contract for the purpose of
making audit, examination, excerpts, and transcriptions.
k. Retention of all required records for three years after
grantees or subgrantees make final payments and all other pending
matters are closed.
l. Compliance with all applicable standards, orders, or
requirements issued under section 306 of the Clear Air Act (42
U.S.C. 1857(h)), section 508 of the Clean Water Act (33 U.S.C.
1368), Executive Order 11738, and Environmental Protection Agency
regulations (40 CFR Part 15) (Contracts, subcontracts, and subgrants
of amounts in excess of $ 100,000).
m. Mandatory standards and policies relating to energy
efficiency which are contained in the state energy conservation plan
issued in compliance with the Energy Policy and Conservation Act
(Pub L. 94-163, 89 Stat. 871).
S-3 Required Provisions Deemed Inserted
Each and every provision of law and clause required by law to be
inserted in this contract shall be deemed to be inserted herein and
the contract shall be read and enforced as though it were included
herein, and if through mistake or otherwise any such provision is
not inserted, or is not correctly inserted, then upon the
application of either party the contract shall forthwith be
physically amended to make such insertion of correction.
S-4 Inspection by Economic Development Representatives
The authorized representatives and agents of the Economic
Development Administration shall be permitted to inspect all work,
materials, payrolls, records of personnel, invoices of materials and
other relevant data and records.
S-5 Construction Schedule and Periodic Estimates
Immediately after execution and delivery of the contract, and
before the first partial payment is made, the Contractor shall
deliver
[[Page 5384]]
to the Owner an estimated construction progress schedule in form
satisfactory to the Owner, showing the proposed dates of
commencement and completion of each of the various subdivisions of
work required under the Contract Documents and the anticipated
amount of each monthly payment that will become due the Contractor
in accordance with the progress schedule. The Contractor also shall
furnish the Owner (a) a detailed estimate giving a complete
breakdown of the contract price and (b) periodic itemized estimates
of work done for the purpose of making partial payments thereon. The
costs employed in making up any of these schedules will be used only
for determining the basis of partial payments and will not be
considered as fixing a basis for additions to or deductions from the
contract price.
S-6 Contractor's Title to Material
No materials or supplies for the work shall be purchased by the
Contractor or by any subcontractor subject to any chattel mortgage
or under a conditional sale contract or other agreement by which an
interest is retained by the seller. The Contractor warrants that he/
she has good title to all materials and supplies used by him/her in
the work, free from all liens, claims or encumbrances.
S-7 Inspection and Testing of Materials
All materials and equipment used in the construction of the
project shall be subject to adequate inspection and testing in
accordance with accepted standards. The laboratory or inspection
agency shall be selected by the Owner.
Materials of construction, particularly those upon which the
strength and durability of the structure may depend, shall be
subject to inspection and testing to establish conformance with
specifications and suitability for intended users.
S-8 ``Or Equal'' Clause
Whenever a material, article or piece of equipment is identified
on the plans or in the specifications by reference to manufacturers'
or vendors' names, trade names, catalogue numbers, etc., it is
intended merely to establish a standard; and, any material, article
or equipment of other manufacturers and vendors which will perform
adequately the duties, imposed by the general design will be
considered equally acceptable provided the material, article or
equipment so proposed is, in the opinion of the Architect/Engineer,
of equal substance and function. It shall not be purchased or
installed by the Contractor without the Architect/Engineer's written
approval.
S-9 Patents
The Contractor shall hold and save the owner and its officers,
agents, servants and employees harmless from liability of any nature
or kind, including cost and expenses for, or on account of, any
patented or unpatented invention, process, article or appliance
manufactured or used in the performance of the contract, including
its use by the Owner, unless otherwise specifically stipulated in
the contract documents.
License or Royalty Fee: License and/or royalty fees for the use
of a process which is authorized by the Owner of the project must be
reasonable, and paid to the holder of the patent, or his authorized
licensee, directly by the Owner and not by or through the
Contractor. If the Contractor uses any design, device or materials
covered by letters, patent or copyright, he/she shall provide for
such use by suitable agreement with the Owner of such patented or
copyrighted design, device or material. It is mutually agreed and
understood that, without exception, the contract prices shall
include all royalties or costs arising from the use of such design,
device or materials, in any way involved in the work. The Contractor
and/or his/her Sureties shall indemnify and hold harmless the Owner
of the project from any and all claims for infringement by reason of
the use of such patented or copyrighted design, device or materials
or any trademark or copyright in connection with work agreed to be
performed under this contract,and shall indemnify the Owner for any
cost, expense or damage which it may be obliged to pay by reason of
such infringement at any time during the prosecution of the work or
after completion of the work.
S-10 Claims for Extra Costs
No claims for extra work or cost shall be allowed unless the
same was done in pursuance of a written order from the Architect/
Engineer approved by the Owner.
S-11 Contractor's and Subcontractor's Insurance
The Contractor shall not commence work under this contract until
he/she has obtained all the insurance required by the Owner, nor
shall the Contractor allow any subcontractor to commence work on
his/her subcontract until the insurance required of the
subcontractor has been so obtained and approved.
a. Types of insurance normally required are:
1. Workmen's Compensation.
2. Contractor's Public Liability and Property Damage.
3. Contractor's Vehicle Liability.
4. Subcontractors Public Liability, Property Damage and Vehicle
Liability.
5. Builder's Risk (Fire and Extended Coverage).
b. Scope of Insurance and Special Hazards. The insurance
described above shall provide adequate protection for the Contractor
and his/her claims which may arise from operations under this
contract, whether such operations be by the insured or by any one
directly or indirectly employed by him/her and also against any of
the special hazards which may be encountered in the performance of
this contract.
c. Proof of Carriage of Insurance The Contractor shall furnish
the Owner with certificates showing the type, amount, class of
operations covered, effective dates and dates of expiration of
policies.
S-12 Contract Security Bonds
If this contract is for an amount in excess of $100,000 the
Contractor shall furnish a performance bond in an amount at least
equal to one hundred percent (100%) of the contract price as
security for the faithful performance of this contract and also a
payment bond in an amount equal to one hundred percent (100%) of the
contract price or in a penal sum not less than that prescribed by
State, Territorial or local law, as security for the payment of all
persons performing labor on the project under this contract and
furnishing materials in connection with this contract. The
performance bond and the payment bond may be in one or in separate
instruments in accordance with local law. Before final acceptance
each bond must be approved by the Economic Development
Administration. If this contract is for an amount less than $100,000
the Owner will specify the amount of the payment and performance
bonds.
S-13 Safety and Health Regulations for Construction
In order to protect the lives and health of his/her employees
under the contract, the Contractor shall comply with all pertinent
provisions of the Contract Work Hours and Safety Standards Act, as
amended, commonly known as the Construction Safety Act as pertains
to health and safety standards; and shall maintain an accurate
record of all cases of death, occupational disease, and injury
requiring medical attention or causing loss of time from work,
arising out of and in the course of employment on work under the
contract. Section 107 of the Act is applicable to construction work
and provides that no laborer or mechanic shall be required to work
in surroundings or under working conditions which are unsanitary,
hazardous, or dangerous to his health and safety as determined under
construction, safety and health standards promulgated by the
Secretary of Labor.
The Contractor alone shall be responsible for the safety,
efficiency, and adequacy of his/her plan, equipment, appliances, and
methods, and for any damage which may result from their failure or
their improper construction, maintenance, or operation.
S-14 Minimum Wages
All mechanics and laborers employed or working on the site of
the work, or under the United States Housing Act of 1937, or under
the Housing Act of 1949 in the construction or development of the
project will be paid unconditionally and not less often than once a
week, and without subsequent deduction or rebate on any account
(except such payroll deductions as are permitted by regulations
issued by the Secretary of Labor under the Copeland Act (29 CFR Part
3)), the full amounts due at time of payment computed at wage rates
not less than those contained in the wage determination of the
Secretary of Labor which is attached hereto and made a part hereof,
regardless of any contractual relationship which may be alleged to
exist between the Contractor and subcontractor and such laborers and
mechanics; and the wage determination decision shall be posted by
the Contractor at the site of the work in a prominent place where it
can be easily seen by the workers. For the purpose of this clause,
contributions made or costs reasonably anticipated under Section
1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics
are considered wages paid to
[[Page 5385]]
such laborers or mechanics, subject to the provisions of 29 CFR
5.5(a)(1)(iv).
Also for the purpose of this clause, regular contributions made
or costs incurred for more than a weekly period under plans, funds,
or programs, but covering the particular weekly period, are deemed
to be constructively made or incurred during such weekly period.
The Owner shall require that any class of laborers and
mechanics, including apprentices and trainees, which is not listed
in the wage determination and which is to be employed under the
contract, shall be classified or reclassified conformable to the
wage determination and a report of the action taken shall be sent by
the Federal agency to the Secretary of Labor. In the event the
interested parties cannot agree on the proper classification or
reclassification of a particular class of laborers and mechanics,
including apprentices and trainees, to be used, the questions
accompanied by the recommendation of the contracting officer shall
be referred to the Secretary of Labor for final determination.
Whenever the minimum wage rate prescribed in the contract for a
class of laborers or mechanics includes a fringe benefit which is
not expressed as an hourly wage rate and the Contractor is obligated
to pay a cash equivalent of such a fringe benefit, the Owner shall
require an hourly cash equivalent to be established. In the event
the interested parties cannot agree upon a cash equivalent of the
fringe benefit, the question, accompanied by the recommendation of
the Owner, shall be referred to the Secretary of Labor for
determination.
If the Contractor does not make payments to a trustee or other
third person, he/she may consider as part of the wages of any
laborer or mechanic the amount of any costs reasonably anticipated
in providing benefits under a plan or program of a type expressly
listed in the wage determination decision of the Secretary of Labor
which is a part of this contract; provided, however, the Secretary
of Labor has found, upon the written request of the Contractor, that
the applicable standards of the Davis-Bacon Act have been met. The
Secretary of Labor may require the Contractor to set aside in a
separate account assets for the meeting of obligations under the
plan or program.
S-15 Withholding of Payments
The Economic Development Administration may withhold or cause to
be withheld from the Contractor as much of the accrued payments or
advances as may be considered necessary to pay laborers and
mechanics, including apprentices and trainees, employed by the
Contractor or any subcontractor on the work, the full amount of
wages required by the contract in accordance with the Davis-Bacon
Act. In the event of failure to pay any laborer or mechanic,
including any apprentice or trainee employed or working on the
project site or under the United States Housing Act of 1937 or under
the Housing Act of 1949, in the construction or development of the
project, all or part of the wages required by the contract, the
Economic Development Administration may, after written notice to the
Contractor, sponsor, applicant, or Owner, take action as may be
necessary to cause the suspension of any further payment, advance,
or guaranty of funds until such violations have ceased.
S-16 Payrolls and Basic Records
Payrolls and basic records relating thereto will be maintained
during the course of the work and preserved for a period of three
years thereafter for all laborers and mechanics working at the EDA
project site, or under the United States Housing Act of 1937 or
under the Housing Act of 1949, in the construction or development of
the project. Such records shall contain the name and address of each
employee, his/her correct classification, rate of pay (including
contributions or costs anticipated of the types described in Section
9(b)(2) of the Davis-Bacon Act), daily and weekly number of hours
worked, deductions made and actual wages paid. Whenever the
Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the
wages of any laborer or mechanic include the amount of any costs
reasonably anticipated in providing benefits under a plan program
described in Section 1(b)(2)(B) of the Davis-Bacon Act the
Contractor shall maintain records which show that the commitment to
provide such benefits is enforceable, that the plan or program is
financially responsible, and that the plan or program has been
communicated in writing to the laborers or mechanics affected, plus
records which show the costs anticipated or the actual cost incurred
in providing such benefits.
The Contractor shall submit weekly a copy of all payrolls to the
Owner on DOL Form WH-347 or equivalent. The copy shall be signed on
the reverse side by the employer or his/her agent indicating that
the payrolls are correct and complete, that the wage rates contained
therein are not less than those determined by the Secretary of Labor
and that the classifications set forth for each laborer or mechanic
conform with the work he/she performed. This submission is required
under this contract and the Copeland regulations of the Secretary of
Labor (29 CFR Part 3) and the filing with the initial payroll or any
subsequent payroll of a copy of any findings by the Secretary of
Labor under 20 CFR 5.5(a)(1)(iv) shall satisfy this requirement. The
Prime Contractor shall be responsible for the submission of copies
of payrolls of all subcontractors. The Contractor shall make the
records required under the labor standards clause of the contract
available for inspection by authorized representatives of the
Economic Development Administration and the Department of Labor, and
shall permit such representatives to interview employees during
working hours on the job.
S-17 Apprentices and Trainees
Apprentices will be permitted to work as such only when they are
registered, individually, under a bona fide apprenticeship program
registered with a State apprenticeship agency which is recognized by
the Bureau of Apprenticeship and Training, U.S. Department of Labor;
or, if no such recognized agency exists in a State, under a program
registered with the Bureau of Apprenticeship and Training, U.S.
Department of Labor. The allowable ratio of apprentices to
journeymen in any craft classification shall not be greater than the
ratio permitted to the Contractor as to his/her entire work force
under the registered program. Any employee listed on a payroll at an
apprentice wage rate, who is not a trainee as defined in Section S-
1e herein and is not registered as above, shall be paid the wage
rate determined by the Secretary of Labor for the classification of
work he actually performed. The Contractor or subcontractor shall be
required to furnish to the Owner written evidence of the
registration of his/her program and apprentices as well as of the
appropriate ratios and wage rates for the area of construction prior
to using any apprentices on the contract work.
Trainees will be permitted to work as such when they are bona
fide trainees employed pursuant to a program approved by the U.S.
Department of Labor, Manpower Administration, Bureau of
Apprenticeship and Training, and when the subparagraph below is
applicable, in accordance with the provisions of Part 5, Subpart A,
Title 29, Code of Federal Regulations.
On contracts in excess of $10,000, the employment of all
laborers and mechanics, including apprentices and trainees, as
defined in Section 29 CFR 5.5 shall also be subject to the
provisions of Part 5, Subpart A, Title 29, Code of Federal
Regulations. Apprentices and trainees shall be hired in accordance
with the requirements of Part 5, Subpart A. The provisions of
Sections S-14, S-15, and S-17 shall be applicable to every
invitation for bids, and to every negotiation, request for
proposals, or request for quotations, for an assisted construction
contract, and to every such contract entered into on the basis of
such invitation or negotiation. Part 5, Subpart A, Title 29, Code of
Federal Regulations shall constitute the conditions of each assisted
contract in excess of $10,000, and each Owner concerned shall
include these conditions or provide for their inclusion, in each
such contract. These ``Supplemental General Conditions'' shall also
be included in each such contract.
S-18 Subcontracts
The Contractor shall insert in any subcontracts these same
``Supplemental General Conditions.''
S-19 Termination and Debarment
A breach of any one of the Sections S-15 through S-18 may be
considered by the Owner and by the Economic Development
Administration as grounds for termination of the contract and for
debarment as provided in 29 CFR 5.6.
S-20 Overtime Requirements
No Contractor nor any subcontractor contracting for any part of
the contract work which may require or involve the employment of
laborers or mechanics shall require or permit any laborer or
mechanic in any workweek in which he/she is employed on such work to
work in excess of forty hours in such workweek unless such laborer
or mechanic receives compensation at a rate not less than one and
one-half times his/her basic
[[Page 5386]]
rate of pay for all hours in excess of forty hours in such workweek.
In the event of any violation of the clause set forth in the
subsection above, the Contractor and any subcontractor responsible
therefor, shall be liable to any affected employee for his/her
unpaid wages. In addition, such Contractor and subcontractor shall
be liable to the United States (in the case of work done under
contract for the District of Columbia or territory, to such District
of Columbia or to such territory) for liquidated damages. Such
liquidated damages shall be computed with respect to each individual
laborer or mechanic employed in violation of the clause set forth
above in the sum of $10.00 for each calendar day on which such
employee was required or permitted to work in excess of the standard
workweek of forty hours without payment of the overtime wages
required by the clause set forth above.
The Economic Development Administration may withhold or cause to
be withheld, from any monies payable on account of work performed by
the Contractor or subcontractor, such sums as may administratively
be determined to be necessary to satisfy any liabilities of such
Contractor or subcontractor for unpaid wages and liquidated damages
as provided in the clause set forth above.
The Contractor shall insert in all subcontracts the clause set
forth above in this section and also a clause requiring the
subcontractors to include these clauses in any lower tier
subcontracts that may, in turn, be made.
S-21 Equal Employment Opportunity
No person in the United States shall, on the grounds of race,
color, national origin, age, physical handicap, or sex be excluded
from participation in, be denied the benefits of, or be subjected to
discrimination under any program or activity receiving Federal
financial assistance; Reference Title VI of the Civil Rights Act of
1964 (42 USC 2000d) and Section 112 of Public Law 92-65, Age
Discrimination Act of 1975 (42 USC 6102) and Section 504 of the
Rehabilitation Act of 1973 (26 USC 794).
Form ED-503. The Owner and all Contractors, subcontractors,
suppliers, leasees and other parties directly participating in the
Recipient's project agree that during and in connection with the
associated agreement relating to the Federally assisted program, (i)
they will comply, to the extent applicable, as Contractors,
subcontractors, lessees, suppliers, or in any other capacity, with
the applicable provisions of 13 CFR 311 and the Regulations of the
United States Department of Commerce (Part 8 of Subtitle A of Title
15 of the Code of Federal Regulations) issued pursuant to Title VI
of the Civil Rights Act of 1964 (P.L. 88-352), and will not thereby
discriminate against any person on the grounds of race, sex, color,
age, or national origin in their employment practices, in any of
their own contractual agreements, in all services or accommodations
which they offer to the public, and in any of their other business
operations, (ii) they will provide information required by or
pursuant to said Regulations to ascertain compliance with the
Regulations and these assurances, and (iii) their non-compliance
with the nondiscrimination requirements of said Regulations and
these assurances shall constitute a breach of their contractual
arrangements with the Owner whereby said agreements may be canceled,
terminated or suspended in whole or in part or may be subject to
enforcement otherwise by appropriate legal proceedings.
Executive Order 11246, 3 CFR 339 (1965) (Equal Opportunity
Clause). During the performance of this contract, the Contractor
agrees as follows:
a. The Contractor shall not discriminate against any employee or
applicant for employment because of age, race, color, religion, sex,
handicap, or national origin. The Contractor shall take affirmative
action to ensure the applicants are employed, and that employees are
treated during employment, without regard to their age, race, color,
religion, sex, handicap 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.
b. The Contractor agrees to post in conspicuous places available
to employees and applicants for employment, notices to be provided
by the Grantee setting forth the provisions of this
nondiscrimination clause.
c. The Contractor shall, in all solicitations or advertisements
for employees placed by or on behalf of the Contractor, state that
all qualified applicants shall receive consideration for employment
without regard to race, color, religion, sex, or national origin.
d. A notice to be provided by the Grantee shall be sent to each
labor union or representative of workers with which he/she has a
collective bargaining agreement or other contract of understanding,
advertising the labor union or workers' representative of the
Contractor's commitment under Section 202 of Executive Order No.
11246 of September 24, 1965, and copies of the notice shall be
posted in conspicuous places available to employees and applicants
for employment.
e. The Contractor shall comply with all provisions of Executive
Order No. 11246 of September 24, 1965, and of rules, regulations,
and relevant orders of the Secretary of Labor.
f. The Contractor shall furnish all information and reports
required by Executive Order No. 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/her books, records,
and accounts by the Economic Development Administration and the
Secretary of Labor for purpose of investigation to ascertain
compliance with such rules, regulations, and orders. Each Contractor
and subcontractor of federally assisted construction work is
required to file an Equal Employment Opportunity Employer
Information Report (EEO-1) on Standard Form 100, annually on March
31. Forms and instructions are available at the EDA Regional
Offices.
g. In the event of the Contractor's noncompliance with the
nondiscrimination clauses of this contract or with any such rules,
regulations, or orders, this contract may be canceled, terminated,
or suspended in whole or in part and the Contractor may be declared
ineligible for further Government contracts in accordance with
procedures authorized in Executive Order No. 11246 of September 24,
1965, and such other sanctions may be imposed (and remedies
involved) as provided in Executive Order No. 11246 of September 24,
1965, or by rule, regulation, or order of the Secretary of Labor, or
as otherwise provided by law.
h. The Contractor shall include the provisions of paragraphs a.
through g. in every subcontract or purchase order unless exempted by
rules, regulations, or orders of the Secretary of Labor issued
pursuant to Section 203 of Executive Order No. 11246 of September
24, 1965, so that such provisions will be binding upon each
subcontractor or vendor. The Contractor shall take such action with
respect to any subcontractor or purchase order as the Economic
Development Administration may direct as a means of enforcing such
provisions, including sanctions for noncompliance; provided,
however, that in the event the Contractor becomes involved in, or is
threatened with litigation with a subcontractor or vendor as a
result of such direction by the Grantee/Borrower, the Contractor may
request the United States to enter into such litigation to protect
the interests of the United States.
i. Exemptions to Above Equal Opportunity Clause (41 CFR Chap.
60):
(1) Contracts and subcontracts not exceeding $10,000 (other than
Government bills of lading) are exempt. The amount of the contract,
rather than the amount of the Federal financial assistance, shall
govern in determining the applicability of this exemption.
(2) Except in the case of subcontractors for the performance of
construction work at the site of construction, the clause shall not
be required to be inserted in subcontracts below the second tier.
(3) Contracts and subcontracts not exceeding $10,000 for
standard commercial supplies or raw materials are exempt.
Standard Federal Equal Employment Opportunity Construction Contract
Specifications (Executive Order 11246 et seq)
1. As used in these specifications:
a. ``Covered area'' means the geographical area described in the
solicitation from which this contract resulted;
b. ``Director'' means Director, Office of Federal Contract
Compliance Programs, United States Department of Labor, or any
person to whom the Director delegates authority;
c. ``Employer identification number'' means the Federal Social
Security number used on the Employer's Quarterly Federal Tax Return,
U. S. Treasury Department Form 941.
d. ``Minority'' includes:
(i) Black (all persons having origins in any of the Black
African racial groups not of Hispanic origin);
(ii) Hispanic (all persons of Mexican, Puerto Rican, Cuban,
Central or South
[[Page 5387]]
American or other Spanish Culture or origin, regardless of race);
2. Asian and Pacific Islander (all persons having origins in any
of the original peoples of the Far East, Southeast Asia, the Indian
Subcontinent, or the Pacific Islands);
a. American Indian or Alaskan Native (all persons having origins
in any of the original peoples of North America and maintaining
identifiable tribal affiliations through membership and
participation or community identification).
3. Whenever the Contractor, or any subcontractor at any tier,
subcontracts a portion of the work involving any construction trade,
it shall physically include in each subcontract in excess of $l0,000
the provisions of these specifications and the Notice which contains
the applicable goals for minority and female participation and which
is set forth in the solicitations from which this contract resulted.
4. If the Contractor is participating (pursuant to 41 CFR 60-
4.5) in a Hometown Plan approved by the U. S. Department of Labor in
the covered area either individually or through an association, its
affirmative action obligations on all work in the Plan area
(including goals and timetables) shall be in accordance with that
Plan for those trades which have unions participating in the Plan.
Contractors must be able to demonstrate their participation in and
compliance with the provisions of any such Hometown Plan. Each
Contractor or subcontractor participating in an approved Plan is
individually required to comply with its obligations under the EEO
clause, and to make a good faith effort to achieve each goal under
the Plan in each trade in which it has employees. The overall good
faith performance by other Contractors or subcontractors toward a
goal in an approved Plan does not excuse any covered Contractor's or
subcontractor's failure to make good faith efforts to achieve the
Plan goals and timetables.
5. The Contractor shall implement the specific affirmative
action standards provided in Paragraphs 7a through p of these
specifications. The goals set for the Contractor in the solicitation
from which this contract resulted are expressed as percentages of
the total hours of employment and training of minority and female
utilization the Contractor should reasonably be able to achieve in
each construction trade in which it has employees in the covered
area. The Contractor is expected to make substantially uniform
progress toward its goals in each craft during the period specified.
6. Neither the provisions of any collective bargaining agreement
nor the failure by a union with whom the Contractor has a collective
bargaining agreement, to refer either minorities or women shall
excuse the Contractor's obligations under these specifications,
Executive Order 11246, or the regulations promulgated pursuant
thereto.
7. In order for the nonworking training hours of apprentices and
trainees to be counted in meeting the goals, such apprentices and
trainees must be employed by the Contractor during the training
period, and the Contractor must have made a commitment to employ the
apprentices and trainees at the completion of their training,
subject to the availability of employment opportunities. Trainees
must be trained pursuant to training programs approved by the U.S.
Department of Labor.
8. The Contractor shall take specific affirmative actions to
ensure equal employment opportunity. The evaluation of the
Contractor's compliance with these specifications shall be based
upon its effort to achieve maximum results from its actions. The
Contractor shall document these efforts fully, and shall implement
affirmative action steps at least as extensive as the following:
a. Ensure and maintain a working environment free of harassment,
intimidation, and coercion at all sites, and in all facilities at
which the Contractor's employees are assigned to work. The
Contractor, where possible, will assign two or more women to each
construction project. The Contractor shall specifically ensure that
all superintendents and other on-site supervisory personnel are
aware of and carry out the Contractor's obligation to maintain such
a working environment, with specific attention to minority or female
individuals working at such sites or in such facilities.
b. Establish and maintain a current list of minority and female
recruitment sources, provide written notification to minority and
female recruitment sources and to community organizations when the
Contractor or its unions have employment opportunities available,
and maintain a record of the organizations' responses.
c. Maintain a current file of the names, addresses and telephone
numbers of each minority and female off-the-street applicant and
minority and female referral from a union, a recruitment source or
community organization and of what action was taken with respect to
each such individual. If such individual was sent to the union
hiring hall for referral and was not referred back to the Contractor
by the union or, if referred, not employed by the Contractor, this
shall be documented in the file with the reason therefor, along with
whatever additional actions the Contractor may have taken.
d. Provide immediate written notification to the Regional
Director when the union or unions, with which the Contractor has a
collective bargaining agreement, have not referred to the Contractor
a minority person or woman sent by the Contractor, or when the
Contractor has other information that the union referral process has
impeded the Contractor's efforts to meet its obligations.
e. Develop on-the-job training opportunities and/or participate
in training programs for the area which expressly include minorities
and women, including upgrading programs and apprenticeship and
trainee programs relevant to the Contractor's employment needs,
especially those programs funded or approved by the Department of
Labor. The Contractor shall provide notice of these programs to the
sources compiled under Paragraph 7b above.
f. Disseminate the Contractor's EEO policy by providing notice
of the policy to unions and training programs and requesting their
cooperation in assisting the Contractor in meeting its EEO
obligations; by including it in any policy manual and collective
bargaining agreement; by publicizing it in the company newspaper,
annual report, etc.; by specific review of the policy with all
management personnel and with all minority and female employees at
least once a year; and by posting the company EEO policy on bulletin
boards accessible to all employees at each location where
construction work is performed.
g. Review, at least annually, the company's EEO policy and
affirmative action obligations under these specifications with all
employees having any responsibility for hiring, assignment, layoff,
termination or other employment decisions including specific review
of these items with onsite supervisory personnel such as
Superintendents, Supervisors, etc., prior to the initiation of
construction work at any job site. A written record shall be made
and maintained identifying the time and place of these meetings,
persons attending, subject matter discussed, and disposition of the
subject matter.
h. Disseminate the Contractor's EEO policy externally by
including it in any advertising in the news media, and providing
written notification to, and discussing the Contractor's EEO policy
with, other Contractors and subcontractors with whom the Contractor
anticipates doing business.
i. Direct its recruitment efforts, both oral and written, to
minority, female and community organizations, to schools with
minority and female students and to minority and female recruitment
and training organizations serving the Contractor's recruitment area
and employment needs. Not later than one month prior to the date for
the acceptance of applications for apprenticeship or other training
by any recruitment source, the Contractor shall send written
notification to organizations such as the above, describing the
openings, screening procedures, and tests to be used in the
selection process.
j. Encourage present minority and female employees to recruit
other minority persons and women and, where reasonable, provide
after-school, summer and vacation employment to minority and female
youth both on the site and in other areas of a Contractor's
workforce.
k. Validate all tests and other selection requirements where
there is an obligation to do so under 14 CFR Part 60-3.
l. Conduct, at least annually, an inventory and evaluation of
all minority and female personnel for promotional opportunities and
encourage these employees to seek or to prepare for, through
appropriate training, etc., such opportunities.
m. Ensure that seniority practices, job classifications, work
assignments and other personnel practices, do not have a
discriminatory effect by continually monitoring all personnel and
employment-related activities to ensure that the EEO policy and the
Contractor's obligations under these specifications are being
carried out.
n. Ensure that all facilities and company activities are
nonsegregated except that separate or single-user toilet and
necessary changing facilities shall be provided to assure privacy
between the sexes.
o. Document and maintain a record of all solicitations of offers
for subcontracts from
[[Page 5388]]
minority and female construction contractors and suppliers,
including circulation of solicitations to minority and female
contractor associations and other business associations.
p. Conduct a review, at least annually, of all supervisors'
adherence to and performance under the Contractor's EEO policies and
affirmative action obligations.
8. Contractors are encouraged to participate in voluntary
associations which assist in fulfilling one or more of their
affirmative action obligations (Paragraph 7a through p). The efforts
of a contractor association, joint contractor-union, contractor
community, or other similar group of which the Contractor is a
member and participant, may be asserted as fulfilling any one or
more of its obligations under Paragraph 7a through p of these
Specifications provided that the Contractor actively participates in
the group, makes every effort to assure that the group has a
positive impact on the employment of minorities and women in the
industry, ensures that the concrete benefits of the program are
reflected in the Contractor's minority and female workforce
participation, makes a good faith effort to meet its individual
goals and timetables, and can provide access to documentation which
demonstrates the effectiveness of actions taken on behalf of the
Contractor. The obligation to comply, however, is the Contractor's
and failure of such a group to fulfill an obligation shall not be a
defense for the Contractor's noncompliance.
9. A single goal for minorities and a separate single goal for
women have been established. The Contractor, however, is required to
provide equal employment opportunity and to take affirmative action
for all minority groups, both male and female, and all women, both
minority and nonminority. Consequently, the Contractor may be in
violation of the Executive Order if a particular group is employed
in a substantially disparate manner (for example, even though the
Contractor has achieved its goals for women generally, the
Contractor may be in violation of the Executive Order if a specific
minority group of women is underutilized).
10. The Contractor shall not use the goals and timetables or
affirmative action standards to discriminate against any person
because of race, color, religion, sex, or national origin.
11. The Contractor shall not enter into any subcontract with any
person or firm debarred from Government contracts pursuant to
Executive Order 11246.
12. The Contractor shall carry out such sanctions and penalties
for violation of these specifications and of the Equal Opportunity
Clause, including suspension, termination and cancellation of
existing subcontracts as may be imposed or ordered pursuant to
Executive Order 11246, as amended, and its implementing regulations,
by the Office of Federal Contract Compliance Programs. Any
Contractor who fails to carry out such sanctions and penalties shall
be in violation of these specifications and Executive Order 11246,
as amended.
13. The Contractor, in fulfilling its obligations under these
specifications, shall implement specific affirmative action steps,
at least as extensive as those standards prescribed in Paragraph 7
of these specifications, so as to achieve maximum results from its
efforts to ensure equal employment opportunity. If the Contractor
fails to comply with the requirements of the Executive Order, the
implementing regulations or these specifications, the Director shall
proceed in accordance with 41 CFR 60-4.8.
14. The Contractor shall designate a responsible official to
monitor all employment-related activity to ensure that the company
EEO policy is being carried out, to submit reports relating to the
provisions hereof, as may be required by the Government and to keep
records. Records shall at least include for each employee the name,
address, telephone numbers, construction trade union affiliation if
any, employee identification number when assigned, social security
number, race, sex, status (e.g., mechanic, apprentice, trainee
helper, or laborer), dates of changes in status, hours worked per
week in the indicated trade, rate of pay, and locations at which the
work was performed. Records shall be maintained in an easily
understandable and retrievable form; however, to the degree that
existing records satisfy this requirement, contractors shall not be
required to maintain separate records.
15. Nothing herein provided shall be construed as a limitation
upon the application of other laws which establish different
standards of compliance or upon the application or requirements for
the hiring of local or other area residents (e.g., those under the
Public Works Employment Act of 1977 and the Community Development
Block Grant Program).
16. The goals for minority and female participation in each
trade will be furnished by the Economic Development Administration
of the U.S. Department of Commerce.
S-22 Other Prohibited Interests
No official of the Owner who is authorized in such capacity and
on behalf of the Owner to negotiate, make, accept or approve, or to
take part in negotiating, making, accepting, or approving any
architectural, engineering, inspection, construction or material
supply contract or any subcontract in connection with the
construction of the project, shall become directly or indirectly
interested personally in this contract or in any part hereof. No
officer, employee, architect, attorney, engineer, or inspector of or
for the Owner who is authorized in such capacity and on behalf of
the Owner to exercise any legislative, executive, supervisory or
other similar functions in connection with the construction of the
project, shall become directly or indirectly interested personally
in this contract or in any part thereof, any material supply
contract, subcontract, insurance contract, or any other contract
pertaining to the project.
S-23 Employment of Local Labor
a. The maximum feasible employment of local labor shall be made
in the construction of public works and development facility
projects receiving direct Federal grants. Accordingly, every
Contractor and subcontractor undertaking to do work on any such
project which is or reasonably may be done as on-site work, shall
employ, in carrying out such contract work, qualified persons who
regularly reside in the designated area where such project is to be
located, or in the case of Economic Development Centers, qualified
persons who regularly reside in the center or in the adjacent or
nearby redevelopment areas within the Economic Development District,
except:
(1) To the extent that qualified persons regularly residing in
the designated area or Economic Development District are not
available.
(2) For the reasonable needs of any such Contractor or
subcontractor, to employ supervisory or specially experienced
individuals necessary to assure an efficient execution of the
Contract.
(3) For the obligation of any such Contractor or subcontractor
to offer employment to present or former employees as the result of
a lawful collective bargaining contract, provided that in no event
shall the number of non-resident persons employed under this
subparagraph exceed twenty percent of the total number of employees
employed by such Contractor and his/her subcontractors on such
project.
b. Every such Contractor and subcontractor shall furnish the
United States Employment Service Office in the area in which a
public works or development facility project is located with a list
of all positions for which it may from time to time require
laborers, mechanics, and other employees, the estimated numbers of
employees required in each classification, and the estimated dates
on which such employees will be required.
c. The Contractor shall give full consideration to all qualified
job applicants referred by the local employment service, but it is
not required to employ any job applicants referred whom the
Contractor does not consider qualified to perform the classification
of work required.
d. The payrolls maintained by the Contractor shall contain the
following information: full name, address, and social security
number and a notation indicating whether the employee does, or does
not, normally reside in the area in which the project is located, or
in the case of an Economic Development Center, in such center or in
an adjacent or nearby redevelopment area within the Economic
Development District, as well as an indication of the ethnic
background of each worker.
e. The Contractor shall include the provisions of this condition
in every subcontract for work which is, or reasonably may be, done
as on-site work.
S-24 Historical and Archaeological Data Preservation Act
Requirements
The Contractor agrees to facilitate the preservation and
enhancement of structures and objects of historical, architectural
or archaeological significance and when such items are found and/or
unearthed during the course of project construction, to consult
[[Page 5389]]
with the State Historic Preservation Officer for recovery of the
items. Reference: National Historic Preservation Act of 1966 (80
Stat 915, 16 USC 470) and Executive Order No. 11593 of May 31, 1971.
S-25 Clean Air Act of 1970, Et Seq. and Federal Water Pollution
Control Act as Amended by the Clean Water Act of 1977
The Contractor agrees to comply with Federal clean air and water
standards during the performance of this contract and specifically
agrees to the following:
a. The term ``facility'' means any building, plant,
installation, structure, mine, vessel or other floating craft,
location or site of operations; owned, leased, or supervised; by the
Contractor and the subcontractors; for the construction, supply and
service contracts entered into by the Contractor;
b. Any facility to be utilized in the accomplishment of this
contract is not listed on the Environmental Protection Agency's List
of Violating Facilities pursuant to 40 CFR, Part 15.20;
c. In the event a facility utilized in the accomplishment of
this contract becomes listed on the EPA list, this contract may be
canceled, terminated, or suspended in whole or in part;
d. It will comply with all the requirements of Section 114 of
the Clean Air Act and Section 308 of the Water Pollution Control Act
relating to inspection, monitoring, entry, reports, and information,
as well as all other requirements specified in Section 114 and
Section 308, respectively, and all regulations and guidelines issued
thereunder;
e. It will promptly notify the Government of the receipt of any
notice from the Director, Office of Federal Activities,
Environmental Protection Agency, indicating that any facility
utilized or to be utilized in the accomplishment of this contract is
under consideration for listing on the EPA List of Violating
Facilities;
f. It will include the provisions of Paragraphs a. through g. in
every subcontract or purchase order entered into for the purpose of
accomplishing this contract, unless otherwise exempted pursuant to
the EPA regulations implementing the Air or Water Acts above (40
CFR, Part 15.5), so that such provisions will be binding on each
subcontractor or vendor;
g. In the event that the Contractor or the subcontractor for the
construction, supply and service contracts entered into for the
purpose of accomplishing this contract were exempted from complying
with the above requirements under the provisions of 40 CFR, Part
15.5 (a), the exemption shall be nullified should the facility give
rise to a criminal conviction (see 40 CFR 15.20) during the
accomplishment of this contract. Furthermore, with the nullification
of the exemption, the above requirements shall be effective. The
Contractor shall notify the Government, as soon as the Contractors'
or the subcontractors' facility is listed for having given rise to a
criminal conviction noted in 40 CFR, Part 15.20.
S-26 Use of Lead-Based Paints on Residential Structures
If the work under this contract involves construction or
rehabilitation of residential structures, the Contractor shall
comply with the Lead-based Paint Poisoning Prevention Act (see 42
U.S.C. 4831). The Contractor shall assure that paint used on the
project on applicable surfaces does not contain lead in excess of
the percentages set forth in Paragraphs (a) and (b) of this section.
In determining compliance with these standards, the lead content of
the paint shall be measured on the basis of the total nonvolatile
content of the paint or on the basis of an equivalent measure of
lead in the dried film of paint already applied.
a. For paint manufactured after June 22, 1977, paint may not
contain lead in excess of 6 one-hundredths of 1 percent (.00006)
lead by weight.
b. For paint manufactured on or before June 22, 1977, paint may
not contain lead in excess of five-tenths of 1 percent lead by
weight.
As a condition to receiving assistance under the Act, recipients
shall assure that the restriction against the use of lead-based
paint is included in all contracts and subcontracts involving the
use of Federal funds.
Definitions
1. ``Applicable surfaces'' are those exterior surfaces which are
readily accessible to children under 7 years of age.
2. ``Residential structures'' means houses, apartments, or other
structures intended for human habitation, including institutional
structures where persons reside, which are accessible to children
under 7 years of age, such as day care centers, intermediate and
extended care facilities, and certain community facilities.
S-27 EDA Signs
The Contractor shall supply, erect, and maintain a project sign
according to the specifications set forth below:
EDA Site Sign Specifications
Size: Sign A: 4' x 8' x 1\7/8\'' Sign B: 4' x 8' x \3/4\''
Materials: Face: Sign A: \1/4\'' tempered Masonite; Sign B: \3/4\''
or greater shop sanded (exterior) Plywood (one side only)
Framing: Sign A: 2'' x 4'' nominal on four sides and center cross
bracing; Sign B: 2'' x 4'' center cross bracing only
Supports: 4'' x 4'' x 12' nominal post
Assembly: Sign A: 2'' x 4'' frame to fit 4' x 8' board with 2'' x
4'' cross braces; Sign B: To be mounted directly to the 4'' x 4''
post, with cross bracing
Mounting: Signs A and B are to be mounted to the 4'' x 4'' post with
a \3/8\'' minimum bolt and nut, four on each side of the sign. Each
bolt is to have two washers, one between the sign and the head of
the bolt and the other between the post and the nut.
Erection: 4'' x 4'' posts are to be set three to four feet deep into
concrete 12'' in diameter.
Paint: Face: Three coats outdoor enamel (sprayed); Rear: One coat
outdoor enamel (sprayed)
Colors: Crimson Red, Stark White and Royal Blue. Specifically, white
background; ``JOBS'' in red; ``for your community'' in blue; ``EDA''
logo and ``PROVIDED BY EQUAL OPPORTUNITY EMPLOYERS, in partnership
with the U.S. DEPARTMENT OF COMMERCE--Economic Development
Administration'' in black. ``By working together we can provide
economic opportunities for Americans'' in black.
Lettering: Silk screen enamels. Lettering sizes and positioning will
be as illustrated.
Project signs will not be erected on public highway rights-of-
way.
Location and height of signs will be coordinated with the agency
responsible for highway or street safety in the area, if any
possibility exists for obstruction to traffic line of sight.
If, at the end of the project, the sign is reusable, it shall be
disposed of as directed by the EDA Regional Office.
Whenever EDA Site Sign specifications conflict with State law or
local ordinances, the EDA Regional Director may modify such
conflicting specifications so as to comply with that State law or
local ordinance.
BILLING CODE 3510-24-P
[[Page 5390]]
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[[Page 5391]]
[GRAPHIC] [TIFF OMITTED] TR03FE99.001
BILLING CODE 3510-24-C
[[Page 5392]]
Notice
This attached Exhibit D, ``Agreement and Mortgage'' is furnished
as a sample. The actual form which the Recipient may be required to
sign may differ from the sample dependent upon the type of property,
the form of ownership, and the intent of the EDA assisted project
(Check with the Regional Attorney in the EDA regional office).
Attention is called to the ``useful life'', stated in terms of
years, during which period the ``Agreement and Mortgage'' will
remain in effect.
Agreement and Mortgage
WHEREAS, ________ (hereinafter called ``Mortgagor''), whose
address is ________ has applied to, received and accepted from the
United States Department of Commerce, Economic Development
Administration (EDA), whose address is ________ a grant in the
amount of ________ and No/100 Dollars ($ ) (Grant Amount)
pursuant to a Grant Agreement entered into by the parties on
________, and bearing EDA Project Number ____-____-____ (the
Project); and
WHEREAS, pursuant to the application filed by Mortgagor
requesting said grant and pursuant to the Grant Agreement, the Grant
Amount is to be used for the purpose of making improvements
consisting of ________ on the real Property described in Exhibit
``A,'' attached hereto and made a part hereof (the Property); and
WHEREAS, any transfer or conveyance of a Project by an EDA
Grantee must have the prior written approval of EDA. However, EDA,
under authority of the Public Works and Economic Development Act of
1965, as amended, 42 U.S.C. Section 3121, is not authorized to
permit transfer or conveyance of a Project to parties which are not
eligible to receive EDA grants unless EDA is repaid its share of the
fair market value of the Project or unless the authorized purpose of
the EDA grant was to develop land in order to lease it for a
specific use, in which case EDA may authorize a lease of the Project
if certain conditions are met; and
WHEREAS, the aforesaid grant from EDA provides that the
authorized purpose for which the Grant Amount may be used is to
develop and improve the Property in order to lease it for a specific
use while further providing, inter alia, that Mortgagor will not
sell, mortgage, or otherwise use or alienate any right to, or
interest in the Property, other than by a lease permitted by the
Grant Agreement, or use the Property for purposes other than and
different from those purposes set forth in the Grant Agreement and
the application made by Mortgagor therefor, such alienation or use
being prohibited by 13 CFR Part 314, or by 15 CFR Part 24 or by
Office of Management and Budget Circular A-110, Attachment N (the
OMB Circular); and
WHEREAS, the value of EDA's right to repayment under the terms
of 15 CFR Part 24 and OMB Circular A-110 is difficult to establish;
and
WHEREAS, at this time, Mortgagor and EDA desire to establish a
value for EDA's share of the Project in the event that the Property
is used, transferred or alienated in violation of the Grant
Agreement, 15 CFR Part 24, OMB Circular A-110 or 13 CFR Part 314;
NOW THEREFORE, Mortgagor does hereby mortgage, warrant, grant
and convey unto EDA, its successors and assigns, a mortgage on said
Property to secure a debt that shall become due and payable by
Mortgagor to EDA upon the use, transfer or alienation of the
Property in violation of the Grant Agreement or in violation of the
regulations set forth in 13 CFR Part 314, 15 CFR Part 24, or OMB
Circular A-110, as such Grant Agreement, regulations or Circular may
be amended from time to time, provided, however, that the lien and
encumbrance of this AGREEMENT AND MORTGAGE shall terminate and be of
no further force and effect years from the date hereof, which
period of years has been established as the useful life of the
improvements to the Property. The amount of the lien, encumbrance
and debt created by this Agreement shall be the Grant Amount or the
amount actually disbursed or an amount determined pursuant to 13 CFR
Part 314. Mortgagor does hereby acknowledge that said debt shall
accrue and be due and payable upon any use, transfer, or alienation
prohibited by the Grant Agreement, 15 CFR Part 24, OMB Circular A-
110, or 13 CFR Part 314, and does, moreover, agree that such debt
shall be extinguished only through the full payment thereof to the
United States.
Mortgagor further covenants and agrees as follows:
1. Lease of Property:
If the Grant Application and Grant Agreement authorize Mortgagor
to lease the Property, all lease arrangements must be consistent
with the authorized general and special purpose of the grant; said
lease arrangements will provide adequate employment and economic
benefits for the area in which the Property is located; said lease
arrangements must be consistent with EDA policies concerning, but
not limited to, nondiscrimination and environmental requirements,
and that the proposed Lessee is providing adequate compensation to
Mortgagor for said lease. Any lease agreements entered into by
Mortgagor of the Property shall be subordinate, junior and inferior
to this AGREEMENT AND MORTGAGE.
2. Charges; Liens:
Mortgagor shall protect the title and possession of the
Property, pay when due all taxes, assessments, and other charges,
fines and impositions now existing or hereafter levied or assessed
upon the Property and preserve and maintain the priority of the lien
hereby created on the Property including any improvements hereafter
made a part of the realty.
3. Hazard Insurance:
Mortgagor shall insure and keep insured all improvements now or
hereafter created upon the Property against loss or damage by fire
and windstorm and any other hazard or hazards included within the
term ``extended coverage.'' The amount of insurance shall be the
full insurable value of said improvements. Any insurance proceeds
received by Mortgagor due to loss shall be applied to restoration or
repair of the Property damaged, provided such restoration or repair
is economically feasible and the security of this Mortgage is not
thereby impaired. If such restoration or repair is not economically
feasible or if the security of this Mortgage would be impaired,
Mortgagor shall use said insurance proceeds to compensate EDA for
its fair share. EDA's fair share shall be a percentage of said
insurance proceeds equal to its grant percentage in the total cost
of the grant program for which the damaged or destroyed real
property was acquired or improved.
4. Preservation and Maintenance of the Property:
Mortgagor shall keep the Property in good condition and repair
and shall not permit or commit any waste, impairment, or
deterioration of the Property.
5. Inspection:
EDA may make or cause to be made reasonable entries upon and
inspection of the Property.
6. Condemnation:
The proceeds of any award or claim for damages, direct or
consequential, in connection with any condemnation or other taking
of the Property, or part thereof, or for any conveyance in lieu of
condemnation shall be used by Mortgagor to compensate EDA for its
fair share. EDA's fair share shall be a percentage in the total cost
of the grant program for which the condemned property was acquired
or improved.
7. Forbearance by EDA Not a Waiver:
Any forbearance by EDA in exercising any right or remedy
hereunder, or otherwise affordable by applicable law, shall not be a
waiver of or preclude the exercise of any right or remedy hereunder.
8. Recording of Mortgage--Mortgagee's Copy:
Mortgagor shall record this AGREEMENT AND MORTGAGE in the County
where the Property is located, thereby securing to EDA an estate in
the Property. Mortgagee shall be furnished a confirmed copy of this
Mortgage at the time of execution, and after recordation thereof.
9. Remedies Cumulative:
All remedies provided in this Mortgage are distinct and
cumulative to any other right or remedy under this Mortgage or
afforded by law or equity, and may be exercised concurrently,
independently or successively.
10. Notice:
Any notice from EDA to Mortgagor provided for in this Mortgage
shall be mailed by certified mail to Mortgagor's last known address
or at such address as Mortgagor may designate to EDA by certified
mail to EDA's address, except for any Notice given to Mortgagor in
the manner as may be prescribed by applicable law as provided
hereafter in this Mortgage.
11. Upon Mortgagor's breach of any covenant or agreement of
Mortgagor in this AGREEMENT AND MORTGAGE, EDA, its designees,
successors or assigns may declare the entire indebtedness secured
hereby immediately due, payable and collectible. This AGREEMENT AND
MORTGAGE may be enforced by the Secretary of Commerce of the United
States of America, the Assistant
[[Page 5393]]
Secretary of Commerce for Economic Development or their designees,
successors or assigns, by and through a foreclosure action brought
either in a United States District Court, or in any State Court
having jurisdiction, but such action shall not be deemed to be a
waiver of the aforesaid debt or of any possible further or
additional action to recover repayment thereof.
After any breach on the part of Mortgagor, EDA, its designees,
successors or assigns shall, upon bill filed or the proper legal
proceedings being commenced for the foreclosure of this Mortgage, be
entitled, as a matter of right, to the appointment by any competent
court, without notice to any party, of a receiver of the rents,
issues and profits of the Property, with power to lease and control
the Property, and with such other powers as may be deemed necessary.
12. Governing Law; Severability:
This AGREEMENT AND MORTGAGE shall be governed by applicable
Federal law and nothing contained herein shall be construed to limit
the rights the EDA, its designees, successors or assigns is entitled
to under applicable Federal law. In the event that any provision or
clause of this instrument conflicts with applicable law, such
conflict shall not affect other provisions of this instrument which
can be given effect without the conflicting provision, and to this
end the provisions of this instrument are declared to be severable.
IN WITNESS WHEREOF, Mortgagor has hereunto set its hand and seal
on this the ______ day of ______19, ______.
WITNESS:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
By:--------------------------------------------------------------------
Mortgagor
Its:-------------------------------------------------------------------
STATE OF
COUNTY OF
The foregoing instrument was acknowledged before me, a Notary
Public in and for said County and State, this day of ______
19______, by the ______ on behalf of said
----------------------------------------------------------------------
Notary Public
My commission expires--------------------------------------------------
Notice of Requirements for Affirmative Action To Ensure Equal
Employment Opportunity (Executive Order 11246 and 41 CFR Part 60-4)
The following notice shall be included in, and shall be a part
of all solicitations for offers and bids on all Federal and
federally assisted construction contracts or subcontracts in excess
of $10,000.
The Offerer's or Bidder's attention is called to the ``Equal
Opportunity Clause'' and the ``Standard Federal Equal Employment
Opportunity Construction Contract Specifications'' set forth herein.
The goals and timetables for minority and female participation,
expressed in percentage terms for the Contractor's aggregate
workforce in each trade on all construction work in the covered area
are as follows:
------------------------------------------------------------------------
Goals for minority Goals for female
Timetables participation for participation for
each trade each trade
------------------------------------------------------------------------
* Insert goals for * Insert goals for
each year. each year.
------------------------------------------------------------------------
* Goals to be furnished by EDA.
These goals are applicable to all the Contractor's construction
work (whether or not it is Federal or federally assisted) performed
in the covered area.
The Contractor's compliance with the Executive Order and the
regulations in 41 CFR Part 60-4 shall be based on its implementation
of the Equal Opportunity Clause, specific affirmative action
obligations required by the specifications set forth in 41 CFR 60-
4.3 (a) and its efforts to meet the goals established for the
geographical area where the contract resulting from this
solicitation is to be performed.
The hours of minority and female employment and training must be
substantially uniform throughout the length of the contract, and in
each trade. The Contractor shall make a good faith effort to employ
minorities and women evenly on each of its projects. The transfer of
minority or female employees or trainees from Contractor to
Contractor or from project to project for the sole purpose of
meeting the Contractor's goals shall be a violation of the contract,
the Executive Order and the regulations in 41 CFR 60-4. Compliance
with the goals will be measured against the total work hours
performed.
The Contractor shall provide written notification to the
appropriate Regional Office of the Office of Contract Compliance
Programs within 10 working days of award of any construction
subcontract in excess of $10,000 at any tier for construction work
under the contract resulting from this solicitation. The
notification shall list the name, address and telephone number of
the subcontractor; employer identification number; estimated dollar
amount of the subcontract; estimated starting and completion dates
of the subcontract; and the geographical area in which the contract
is to be performed.
As used in this notice, and in the contract resulting from this
solicitation, the ``covered area'' is (insert description of the
geographical area where the contract is to be performed giving the
state, county and city, if any).
BILLING CODE 3510-24-P
[[Page 5394]]
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BILLING CODE 3510-24-C
[[Page 5395]]
Information for Bidders
BIDS will be received by-----------------------------------------------
(herein called the ``OWNER''), at--------------------------------------
until ______, 19______, and then at said office publicly opened and
read aloud.
Each BID must be submitted in a sealed envelope, addressed to
______ at ______. Each sealed envelope containing a BID must be
plainly marked on the outside as BID for ______ and the envelope
should bear on the outside the name of the BIDDER, his address, his
license number if applicable and the name of the project for which
the BID is submitted. If forwarded by mail, the sealed envelope
containing the BID must be enclosed in another envelope addressed to
the OWNER at ______.
All BIDS must be made on the required BID form. All blank spaces
for BID prices must be filled in, in ink or typewritten, and the BID
form must be fully completed and executed when submitted. Only one
copy of the BID form is required.
The OWNER may waive any informalities or minor defects or reject
any and all BIDS. Any BID may be withdrawn prior to the above
scheduled time for the opening of BIDS or authorized postponement
thereof. Any BID received after the time and date specified shall
not be considered. No BIDDER may withdraw a BID within 60 days after
the actual date of the opening thereof. Should there be reasons why
the contract cannot be awarded within the specified period, the time
may be extended by mutual agreement between the OWNER and the
BIDDER.
BIDDERS must satisfy themselves of the accuracy of the estimated
quantities in the BID Schedule by examination of the site and a
review of the drawings and specifications including ADDENDA. After
BIDS have been submitted, the BIDDER shall not assert that there was
a misunderstanding concerning the quantities of WORK or of the
nature of the WORK to be done.
The OWNER shall provide to BIDDERS prior to BIDDING, all
information which is pertinent to, and delineates and describes, the
land owned and rights-of-way acquired or to be acquired.
The CONTRACT DOCUMENTS contain the provisions required for the
construction of the PROJECT. Information obtained from an officer,
agent, or employee of the OWNER or any other person shall not affect
the risks or obligations assumed by the CONTRACTOR or relieve him
from fulfilling any of the conditions of the contract.
Each BID must be accompanied by a BID bond payable to the OWNER
for five percent of the total amount of the BID. As soon as the BID
prices have been compared, the OWNER will return the BONDS of all
except the three lowest responsible BIDDERS. When the Agreement is
executed the bonds of the two remaining unsuccessful BIDDERS will be
returned. The BID BOND of the successful BIDDER will be retained
until the payment BOND and performance BOND have been executed and
approved, after which it will be returned. A certified check may be
used in lieu of a BID BOND.
A performance BOND and a payment BOND, each in the amount of 100
percent of the CONTRACT PRICE, with a corporate surety approved by
the OWNER, will be required for the faithful performance of the
contract.
Attorneys-in-fact who sign BID BONDS or payment BONDS and
performance BONDS must file with each BOND a certified and effective
dated copy of their power of attorney.
The party to whom the contract is awarded will be required to
execute the Agreement and obtain the performance BOND and payment
BOND within ten (10) calendar days from the date when the NOTICE OF
AWARD is delivered to the BIDDER. The NOTICE OF AWARD shall be
accompanied by the necessary Agreement and BOND forms. In case of
failure of the BIDDER to execute the Agreement, the OWNER may at his
option consider the BIDDER in default, in which case the BID BOND
accompanying the proposal shall become the property of the OWNER.
The OWNER within ten (10) days of receipt of acceptable
performance BOND, payment BOND, and Agreement signed by the party to
whom the Agreement was awarded shall sign the Agreement and return
to such party an executed duplicate of the Agreement. Should the
OWNER not execute the Agreement within such period, the BIDDER may
by WRITTEN NOTICE withdraw his signed Agreement. Such notice of
withdrawal shall be effective upon receipt of the notice by the
OWNER.
The NOTICE TO PROCEED shall be issued within ten (10) days of
the execution of the Agreement by the OWNER. Should there be reasons
why the NOTICE TO PROCEED cannot be issued within such period, the
time may be extended by mutual agreement between the OWNER and the
CONTRACTOR. If the NOTICE TO PROCEED has not been issued within the
ten (10) day period or within the period mutually agreed upon, the
CONTRACTOR may terminate the Agreement without further liability on
the part of either party.
The OWNER may make such investigations as he deems necessary to
determine the ability of the BIDDER to perform the WORK, and the
BIDDER shall furnish to the OWNER all such information and data for
this purpose as the OWNER may request. The OWNER reserves the right
to reject any BID if the evidence submitted by, or investigation of,
such BIDDER fails to satisfy the OWNER that such BIDDER is properly
qualified to carry out the obligations of the Agreement and to
complete the WORK contemplated therein.
A conditional or qualified BID will not be accepted.
Award will be made to the lowest responsible BIDDER.
All applicable laws, ordinances, and the rules and regulations
of all authorities having jurisdiction over construction of the
PROJECT shall apply to the contract throughout.
Each BIDDER is responsible for inspecting the site and for
reading and being thoroughly familiar with the CONTRACT DOCUMENTS.
The failure or omission of any BIDDER to do any of the foregoing
shall in no way relieve any BIDDER from any obligation in respect to
his BID.
Further, the BIDDER agrees to abide by the requirements under
Executive Order No. 11246, as amended, including specifically the
provisions of the equal opportunity clause set forth in the
SUPPLEMENTAL GENERAL CONDITIONS.
The low BIDDER shall supply the names and addresses of major
material SUPPLIERS and SUBCONTRACTORS when requested to do so by the
OWNER.
Inspection trips, for prospective BIDDERS will leave from the
office of the
----------------------------------------------------------------------
The ENGINEER is ____________. His address is ____________.
Bid
Proposal of __________ (hereinafter called ``BIDDER''),
organized and existing under the laws of the State of __________
doing business as __________.*
---------------------------------------------------------------------------
* Insert ``a corporation'', ``a partnership'', or ``an
individual as applicable.
---------------------------------------------------------------------------
To the __________ (hereinafter called ``OWNER'').
In compliance with your Advertisement for Bids, BIDDER hereby
proposes to perform all WORK for the construction of __________ in
strict accordance with the CONTRACT DOCUMENTS, within the time set
forth therein, and at the prices stated below.
By submission of this BID, each BIDDER certifies, and in the
case of a joint BID each party thereto certifies as to his own
organization, that this BID has been arrived at independently,
without consultation, communication, or agreement as to any matter
relating to this BID with any other BIDDER or with any competitor.
BIDDER hereby agrees to commence WORK under this contract on or
before a date to be specified in the NOTICE TO PROCEED and to fully
complete the PROJECT within __________ consecutive calendar days
thereafter. BIDDER further agrees to pay as liquidated damages, the
sum of $__________ for each consecutive calendar day thereafter as
provided in section 15 of the General Conditions.
BIDDER acknowledges receipt of the following ADDENDUM:
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BILLING CODE 3510-24-C
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General Conditions
1. Definitions
2. Additional Instructions and Detail Drawings
3. Schedules, Reports and Records
4. Drawings and Specifications
5. Shop Drawings
6. Materials, Services and Facilities
7. Inspection and Testing
8. Substitutions
9. Patents
10. Surveys, Permits, Regulations
11. Protection of Work, Property, Persons
12. Supervision by Contractor
13. Changes in the Work
14. Changes in the Contract Price
15. Time for Completion and Liquidated Damages
16. Correction of Work
17. Subsurface Conditions
18. Suspension of Work, Termination and Delay
19. Payments to Contractor
20. Acceptance of Final Payment as Release
21. Insurance
22. Contract Security
23. Assignments
24. Indemnification
25. Separate Contracts
26. Subcontracting
27. Engineer's Authority
28. Land and Rights of Way
29. Guaranty
30. Arbitration
31. Taxes
1. Definitions
1.1 Wherever used in the CONTRACT DOCUMENTS, the following
terms shall have the meanings indicated which shall be applicable to
both the singular and plural thereof:
1.2 ADDENDA--Written or graphic instruments issued prior to the
execution of the Agreement which modify or interpret the CONTRACT
DOCUMENTS, DRAWINGS and SPECIFICATIONS, by additions, deletions,
clarifications or corrections.
1.3 BID--The offer or proposal of the BIDDER submitted on the
prescribed form setting forth the prices for the WORK to be
performed.
1.4 BIDDER--Any person, firm or corporation submitting a BID
for the WORK.
1.5 BONDS--Bid, Performance, and Payment Bonds and other
instruments of security, furnished by the CONTRACTOR and his surety
in accordance with the CONTRACT DOCUMENTS.
1.6 CHANGE ORDER--A written order to the CONTRACTOR authorizing
an addition, deletion or revision in the WORK within the general
scope of the CONTRACT DOCUMENTS, or authorizing an adjustment in the
CONTRACT PRICE or CONTRACT TIME.
1.7 CONTRACT DOCUMENTS--The contract, including Advertisement
For Bids, Information for Bidders, BID, Bid Bond, Agreement, Payment
Bond, Performance Bond, NOTICE OF AWARD, NOTICE TO PROCEED, CHANGE
ORDER, DRAWINGS, SPECIFICATIONS, and ADDENDA.
1.8 CONTRACT PRICE--The total monies payable to the CONTRACTOR
under the terms and conditions of the CONTRACT DOCUMENTS.
1.9 CONTRACT TIME--The number of calendar days stated in the
CONTRACT DOCUMENTS for the completion of the WORK.
1.10 CONTRACTOR--The person, firm or corporation with whom the
OWNER has executed the Agreement.
1.11 DRAWINGS--The part of the CONTRACT DOCUMENTS which show
the characteristics and scope of the WORK to be performed and which
have been prepared or approved by the ENGINEER.
1.12 ENGINEER--The person, firm or corporation named as such in
the CONTRACT DOCUMENTS.
1.13 FIELD ORDER--A written order effecting a change in the
WORK not involving an adjustment in the CONTRACT PRICE or an
extension of the CONTRACT TIME, issued by the ENGINEER to the
CONTRACTOR during construction.
1.14 NOTICE OF AWARD--The written notice of the acceptance of
the BID from the OWNER to the successful BIDDER.
1.15 NOTICE TO PROCEED--Written communication issued by the
OWNER to the CONTRACTOR authorizing him to proceed with the WORK and
establishing the date of commencement of the WORK.
1.16 OWNER--A public or quasi-public body or authority,
corporation, association, partnership, or individual for whom the
WORK is to be performed.
1.17 PROJECT--The undertaking to be performed as provided in
the CONTRACT DOCUMENTS.
1.18 RESIDENT PROJECT REPRESENTATIVE--The authorized
representative of the OWNER who is assigned to the PROJECT site or
any part thereof.
1.19 SHOP DRAWINGS--All drawings, diagrams, illustrations,
brochures, schedules and other data which are prepared by the
CONTRACTOR, a SUBCONTRACTOR, manufacturer, SUPPLIER or distributor,
which illustrate how specific portions of the WORK shall be
fabricated or installed.
1.20 SPECIFICATIONS--A part of the CONTRACT DOCUMENTS
consisting of written descriptions of a technical nature of
materials, equipment, construction systems, standards and
workmanship.
1.21 SUBCONTRACTOR--An individual, firm or corporation having a
direct contract with the CONTRACTOR or with any other SUBCONTRACTOR
for the performance of a part of the work at the site.
1.22 SUBSTANTIAL COMPLETION--That date as certified by the
ENGINEER when the construction of the PROJECT or a specified part
thereof is sufficiently completed, in accordance with the CONTRACT
DOCUMENTS, so that the PROJECT or specified part can be utilized for
the purposes for which it is intended.
1.23 SUPPLEMENTAL GENERAL CONDITIONS--Modifications to General
Conditions required by a Federal agency for participation in the
PROJECT and approved by the agency in writing prior to inclusion in
the CONTRACT DOCUMENTS, or such requirements that may be imposed by
applicable state laws.
1.24 SUPPLIER--Any person or organization who supplies
materials or equipment for the WORK, including that fabricated to a
special design, but who does not perform labor at the site.
1.25 WORK--All labor necessary to produce the con struction
required by the CONTRACT DOCUMENTS, and all materials and equipment
incorporated or to be incorporated in the PROJECT.
1.26 WRITTEN NOTICE--Any notice to any party of the Agreement
relative to any part of this Agreement in writing and considered
delivered and the service thereof completed, when posted by
certified or registered mail to the said party at his last given
address, or delivered in person to said party or his authorized
representative on the WORK.
2. Additional Instructions and Detail Drawings
2.1 The CONTRACTOR may be furnished additional instructions and
detail drawings, by the ENGINEER, as necessary to carry out the WORK
required by the CONTRACT DOCUMENTS.
2.2 The additional drawings and instruction thus supplied will
become a part of the CONTRACT DOCUMENTS. The CONTRACTOR shall carry
out the WORK in accordance with the additional detail drawings and
instructions.
3. Schedules, Reports and Records
3.1 The CONTRACTOR shall submit to the OWNER such schedule of
quantities and costs, progress schedules, payrolls, reports,
estimates, records and other data where applicable as are required
by the CONTRACT DOCUMENTS for the WORK to be performed.
3.2 Prior to the first partial payment estimate the CONTRACTOR
shall submit construction progress schedules showing the order in
which he proposes to carry on the WORK, including dates at which he
will start the various parts of the WORK, estimated date of
completion of each part and, as applicable:
3.2.1 The dates at which special detail drawings will be
required; and
3.2.2 Respective dates for submission of SHOP DRAWINGS, the
beginning of manufacture, the testing and the installation of
materials, supplies and equipment.
3.3 The CONTRACTOR shall also submit a schedule of payments
that he anticipates he will earn during the course of the WORK.
4. Drawings and Specifications
4.1 The intent of the DRAWINGS and SPECIFICATIONS is that the
CONTRACTOR shall furnish all labor, materials, tools, equipment, and
transportation necessary for the proper execution of the WORK in
accordance with the CONTRACT DOCUMENTS and all incidental work
necessary to complete the PROJECT in an acceptable manner, ready for
use, occupancy or operation by the OWNER.
4.2 In case of conflict between the DRAWINGS and
SPECIFICATIONS, the SPECIFICATIONS shall govern. Figure dimensions
on DRAWINGS shall govern over scale dimensions, and detailed
DRAWINGS shall govern over general DRAWINGS.
4.3 Any discrepancies found between the DRAWINGS and
SPECIFICATIONS and site
[[Page 5407]]
conditions or any inconsistencies or ambiguities in the DRAWINGS or
SPECIFICATIONS shall be immediately reported to the ENGINEER, in
writing, who shall promptly correct such inconsistencies or
ambiguities in writing. WORK done by the CONTRACTOR after his
discovery of such discrepancies, inconsistencies or ambiguities
shall be done at the CONTRACTOR'S risk.
5. Shop Drawings
5.1 The CONTRACTOR shall provide SHOP DRAWINGS as may be
necessary for the prosecution of the WORK as required by the
CONTRACT DOCUMENTS. The ENGINEER shall promptly review all SHOP
DRAWINGS. The ENGINEER'S approval of any SHOP DRAWING shall not
release the CONTRACTOR from responsibility for deviations from the
CONTRACT DOCUMENTS. The approval of any SHOP DRAWING which
substantially deviates from the requirement of the CONTRACT
DOCUMENTS shall be evidenced by a CHANGE ORDER.
5.2 When submitted for the ENGINEER'S review, SHOP DRAWINGS
shall bear the CONTRACTOR'S certification that he has reviewed,
checked and approved the SHOP DRAWINGS and that they are in
conformance with the requirements of the CONTRACT DOCUMENTS.
5.3 Portions of the WORK requiring a SHOP DRAWING or sample
submission shall not begin until the SHOP DRAWING or submission has
been approved by the ENGINEER. A copy of each approved SHOP DRAWING
and each approved sample shall be kept in good order by the
CONTRACTOR at the site and shall be available to the ENGINEER.
6. Materials, Services and Facilities
6.1 It is understood that, except as otherwise specifically
stated in the CONTRACT DOCUMENTS, the CONTRACTOR shall provide and
pay for all materials, labor, tools, equipment, water, light, power,
transportation, supervision, temporary construction of any nature,
and all other services and facilities of any nature whatsoever
necessary to execute, complete, and deliver the WORK within the
specified time.
6.2 Materials and equipment shall be so stored as to insure the
preservation of their quality and fitness for the WORK. Stored
materials and equipment to be incorporated in the WORK shall be
located so as to facilitate prompt inspection.
6.3 Manufactured articles, materials and equipment shall be
applied, installed, connected, erected, used, cleaned and
conditioned as directed by the manufacturer.
6.4 Materials, supplies and equipment shall be in accordance
with samples submitted by the CONTRACTOR and approved by the
ENGINEER.
6.5 Materials, supplies or equipment to be incorporated into
the WORK shall not be purchased by the CONTRACTOR or the
SUBCONTRACTOR subject to a chattel mortgage or under a conditional
sale contract or other agreement by which an interest is retained by
the seller.
7. Inspection and Testing
7.1 All materials and equipment used in the construction of the
PROJECT shall be subject to adequate inspection and testing in
accordance with generally accepted standards, as required and
defined in the CONTRACT DOCUMENTS.
7.2 The OWNER shall provide all inspection and testing services
not required by the CONTRACT DOCUMENTS.
7.3 The CONTRACTOR shall provide at his expense the testing and
inspection services required by the CONTRACT DOCUMENTS.
7.4 If the CONTRACT DOCUMENTS, laws, ordinances, rules,
regulations or orders of any public authority having jurisdiction
require any WORK to specifically be inspected, tested, or approved
by someone other than the CONTRACTOR, the CONTRACTOR will give the
ENGINEER timely notice of readiness. The CONTRACTOR will then
furnish the ENGINEER the required certificates of inspection,
testing or approval.
7.5 Inspections, tests or approvals by the engineer or others
shall not relieve the CONTRACTOR from his obligations to perform the
WORK in accordance with the requirements of the CONTRACT DOCUMENTS.
7.6 The ENGINEER and his representatives will at all times have
access to the WORK. In addition, authorized representatives and
agents of any participating Federal or state agency shall be
permitted to inspect all work, materials, payrolls, records of
personnel, invoices of materials, and other relevant data and
records. The CONTRACTOR will provide proper facilities for such
access and observation of the WORK and also for any inspection, or
testing thereof.
7.7 If any WORK is covered contrary to the written instructions
of the ENGINEER it must, if requested by the ENGINEER, be uncovered
for his observation and replaced at the CONTRACTOR'S expense.
7.8 If the ENGINEER considers it necessary or advisable that
covered WORK be inspected or tested by others, the CONTRACTOR, at
the ENGINEER'S request, will uncover, expose or otherwise make
available for observation, inspection or testing as the ENGINEER may
require, that portion of the WORK in question, furnishing all
necessary labor, materials, tools, and equipment. If it is found
that such WORK is defective, the CONTRACTOR will bear all the
expenses of such uncovering, exposure, observation, inspection and
testing and of satisfactory reconstruction. If, however, such WORK
is not found to be defective, the CONTRACTOR will be allowed an
increase in the CONTRACT PRICE or an extension of the CONTRACT TIME,
or both, directly attributable to such uncovering, exposure,
observation, inspection, testing and reconstruction and an
appropriate CHANGE ORDER shall be issued.
8. Substitutions
8.1 Whenever a material, article or piece of equipment is
identified on the DRAWINGS or SPECIFICATIONS by reference to brand
name or catalogue number, it shall be understood that this is
referenced for the purpose of defining the performance or other
salient requirements and that other products of equal capacities,
quality and function shall be considered. The CONTRACTOR may
recommend the substitution of a material, article, or piece of
equipment of equal substance and function for those referred to in
the CONTRACT DOCUMENTS by reference to brand name or catalogue
number, and if, in the opinion of the ENGINEER, such material,
article, or piece of equipment is of equal substance and function to
that specified, the ENGINEER may approve its substitution and use by
the CONTRACTOR. Any cost differential shall be deductible from the
CONTRACT PRICE and the CONTRACT DOCUMENTS shall be appropriately
modified by CHANGE ORDER. The CONTRACTOR warrants that if
substitutes are approved, no major changes in the function or
general design of the PROJECT will result. Incidental changes or
extra component parts required to accommodate the substitute will be
made by the CONTRACTOR without a change in the CONTRACT PRICE or
CONTRACT TIME.
9. Patents
9.1 The CONTRACTOR shall pay all applicable royalties and
license fees. He shall defend all suits or claims for infringement
of any patent rights and save the OWNER harmless from loss on
account thereof, except that the OWNER shall be responsible for any
such loss when a particular process, design, or the product of a
particular manufacturer or manufacturers is specified, however if
the CONTRACTOR has reason to believe that the design, process or
product specified is an infringement of a patent, he shall be
responsible for such loss unless he promptly gives such information
to the ENGINEER.
10. Surveys, Permits, Regulations
10.1 The OWNER shall furnish all boundary surveys and
establish all base lines for locating the principal component parts
of the WORK together with a suitable number of bench marks adjacent
to the WORK as shown in the CONTRACT DOCUMENTS. From the information
provided by the OWNER, unless otherwise specified in the CONTRACT
DOCUMENTS, the CONTRACTOR shall develop and make all detail surveys
needed for construction such as slope stakes, batter boards, stakes
for pile locations and other working points, lines, elevations and
cut sheets.
10.2 The CONTRACTOR shall carefully preserve bench marks,
reference points and stakes and, in case of willful or careless
destruction, he shall be charged with the resulting expense and
shall be responsible for any mistakes that may be caused by their
unnecessary loss or disturbance.
10.3 Permits and licenses of a temporary nature necessary for
the prosecution of the WORK shall be secured and paid for by the
CONTRACTOR unless otherwise stated in the SUPPLEMENTAL GENERAL
CONDITIONS. Permits, licenses and easements for permanent structures
or permanent changes in existing facilities shall be secured and
paid for by the OWNER, unless otherwise specified. The CONTRACTOR
shall give all notices and
[[Page 5408]]
comply with all laws, ordinances, rules and regulations bearing on
the conduct of the WORK as drawn and specified. If the CONTRACTOR
observes that the CONTRACT DOCUMENTS are at variance therewith, he
shall promptly notify the ENGINEER in writing, and any necessary
changes shall be adjusted as provided in Section 13, CHANGES IN THE
WORK.
11. Protection of Work, Property and Persons
11.1 The CONTRACTOR will be responsible for initiating,
maintaining and supervising all safety precautions and programs in
connection with the WORK. He will take all necessary precautions for
the safety of, and will provide the necessary protection to prevent
damage, injury or loss to all employees on the WORK and other
persons who may be affected thereby, all the WORK and all materials
or equipment to be incorporated therein, whether in storage on or
off the site, and other property at the site or adjacent thereto,
including trees, shrubs, lawns, walks, pavements, roadways,
structures and utilities not designated for removal, relocation or
replacement in the course of construction.
11.2 The CONTRACTOR will comply with all applicable laws,
ordinances, rules, regulations and orders of any public body having
jurisdiction. He will erect and maintain, as required by the
conditions and progress of the WORK, all necessary safeguards for
safety and protection. He will notify owners of adjacent utilities
when prosecution of the WORK may affect them. The CONTRACTOR will
remedy all damage, injury or loss to any property caused directly or
indirectly, in whole or in part, by the CONTRACTOR, any
SUBCONTRACTOR or anyone directly or indirectly employed by any of
them or anyone for whose acts any of them be liable, except damage
or loss attributable to the fault of the CONTRACT DOCUMENTS or to
the acts or omissions of the OWNER or the ENGINEER or anyone
employed by either of them or anyone for whose acts either of them
may be liable, and not attributable, directly or indirectly, in
whole or in part, to the fault or negligence of the CONTRACTOR.
11.3 In emergencies affecting the safety of persons or the WORK
or property at the site or adjacent thereto, the CONTRACTOR, without
special instruction or authorization from the ENGINEER or OWNER,
shall act to prevent threatened damage, injury or loss. He will give
the ENGINEER prompt WRITTEN NOTICE of any significant changes in the
WORK or deviations from the CONTRACT DOCUMENTS caused thereby, and a
CHANGE ORDER shall thereupon be issued covering the changes and
deviations involved.
12. Supervision by Contractor
12.1 The CONTRACTOR will supervise and direct the WORK. He will
be solely responsible for the means, methods, techniques, sequences
and procedures of construction. The CONTRACTOR will employ and
maintain on the WORK a qualified supervisor or superintendent who
shall have been designated in writing by the CONTRACTOR as the
CONTRACTOR'S representative at the site. The supervisor shall have
full authority to act on behalf of the CONTRACTOR and all
communications given to the supervisor shall be as binding as if
given to the CONTRACTOR. The supervisor shall be present on the site
at all times as required to perform adequate supervision and
coordination of the WORK.
13. Changes in the Work
13.1 The OWNER may at any time, as the need arises, order
changes within the scope of the WORK without invalidating the
Agreement. If such changes increase or decrease the amount due under
the CONTRACT DOCUMENTS, or in the time required for performance of
the WORK, an equitable adjustment shall be authorized by CHANGE
ORDER.
13.2 The ENGINEER, also, may at any time, by issuing a FIELD
ORDER, make changes in the details of the WORK. The CONTRACTOR shall
proceed with the performance of any changes in the WORK so ordered
by the ENGINEER unless the CONTRACTOR believes that such FIELD ORDER
entitles him to a change in CONTRACT PRICE or TIME, or both, in
which event he shall give the ENGINEER WRITTEN NOTICE thereof within
seven (7) days after the receipt of the ordered change. Thereafter
the CONTRACTOR shall document the basis for the change in CONTRACT
PRICE or TIME within thirty (30) days. The CONTRACTOR shall not
execute such changes pending the receipt of an executed CHANGE ORDER
or further instruction from the OWNER.
14. Changes in Contract Price
14.1 The CONTRACT PRICE may be changed only by a CHANGE ORDER.
The value of any WORK covered by a CHANGE ORDER or of any claim for
increase or decrease in the CONTRACT PRICE shall be determined by
one or more of the following methods in the order of precedence
listed below:
(a) Unit prices previously approved.
(b) An agreed lump sum.
(c) The actual cost for labor, direct overhead, materials,
supplies, equipment, and other services necessary to complete the
work. In addition there shall be added an amount to be agreed upon
but not to exceed fifteen (15) percent of the actual cost of the
WORK to cover the cost of general overhead and profit.
15. Time For Completion and Liquidated Damages
15.1 The date of beginning and the time for completion of the
WORK are essential conditions of the CONTRACT DOCUMENTS and the WORK
embraced shall be commenced on a date specified in the NOTICE TO
PROCEED.
15.2 The CONTRACTOR will proceed with the WORK at such rate of
progress to insure full completion within the CONTRACT TIME. It is
expressly understood and agreed, by and between the CONTRACTOR and
the OWNER, that the CONTRACT TIME for the completion of the WORK
described herein is a reasonable time, taking into consideration the
average climatic and economic conditions and other factors
prevailing in the locality of the WORK.
15.3 If the CONTRACTOR shall fail to complete the WORK within
the CONTRACT TIME, or extension of time granted by the OWNER, then
the CONTRACTOR will pay to the OWNER the amount for liquidated
damages as specified in the BID for each calendar day that the
CONTRACTOR shall be in default after the time stipulated in the
CONTRACT DOCUMENTS.
15.4 The CONTRACTOR shall not be charged with liquidated
damages or any excess cost when the delay in completion of the WORK
is due to the following, and the CONTRACTOR has promptly given
WRITTEN NOTICE of such delay to the OWNER or ENGINEER.
15.4.1 To any preference, priority or allocation order duly
issued by the OWNER.
15.4.2 To unforeseeable causes beyond the control and without
the fault or negligence of the CONTRACTOR, including but not
restricted to, acts of God, or of the public enemy, acts of the
OWNER, acts of another CONTRACTOR in the performance of a contract
with the OWNER, fires, floods, epidemics, quarantine restrictions,
strikes, freight embargoes, and abnormal and unforeseeable weather:
and
15.4.3 To any delays of SUBCONTRACTORS occasioned by any of the
causes specified in paragraphs 15.4.1 and 15.4.2 of this article.
16. Correction of Work
16.1 The CONTRACTOR shall promptly remove from the premises all
WORK rejected by the ENGINEER for failure to comply with the
CONTRACT DOCUMENTS, whether incorporated in the construction or not,
and the CONTRACTOR shall promptly replace and reexecute the WORK in
accordance with the CONTRACT DOCUMENTS and without expense to the
OWNER and shall bear the expense of making good all WORK of other
CONTRACTORS destroyed or damaged by such removal or replacement.
16.2 All removal and replacement WORK shall be done at the
CONTRACTOR'S expense. If the CONTRACTOR does not take action to
remove such rejected WORK within ten (10) days after receipt of
WRITTEN NOTICE, the OWNER may remove such WORK and store the
materials at the expense of the CONTRACTOR.
17. Subsurface Conditions
17.1 The CONTRACTOR shall promptly, and before such conditions
are disturbed, except in the event of an emergency, notify the OWNER
by WRITTEN NOTICE of:
17.1.1 Subsurface or latent physical conditions at the site
differing materially from those indicated in the CONTRACT DOCUMENTS:
or
17.1.2 Unknown physical conditions at the site, of an unusual
nature, differing materially from those ordinarily encountered and
generally recognized as inherent in WORK of the character provided
for in the CONTRACT DOCUMENTS.
17.2 The OWNER shall promptly investigate the conditions, and
if he finds that such conditions do so materially differ and cause
an increase or decrease in the cost of, or in the time required for,
performance of the WORK, an equitable adjustment shall be made and
the CONTRACT DOCUMENTS
[[Page 5409]]
shall be modified by a CHANGE ORDER. Any claim of the CONTRACTOR for
adjustment hereunder shall not be allowed unless he has given the
required WRITTEN NOTICE; provided that the OWNER may, if he
determines the facts so justify, consider and adjust any such claims
asserted before the date of final payment.
18. Suspension of Work, Termination and Delay
18.1 The OWNER may suspend the WORK or any portion thereof for
a period of not more than ninety days or such further time as agreed
upon by the CONTRACTOR by WRITTEN NOTICE to the CONTRACTOR and the
ENGINEER which notice shall fix the date on which WORK shall be
resumed. The CONTRACTOR will resume that WORK on the date so fixed.
The CONTRACTOR will be allowed an increase in the CONTRACT PRICE or
an extension of the CONTRACT TIME, or both, directly attributable to
any suspension.
18.2 If the CONTRACTOR is adjudged as bankrupt or insolvent, or
if he makes a general assignment for the benefit of his creditors,
or if a trustee or receiver is appointed for the CONTRACTOR or for
any of his property, or if he files a petition to take advantage of
any debtor's act, or to reorganize under the bankruptcy or
applicable laws, or if he repeatedly fails to supply sufficient
skilled workmen or suitable materials or equipment, or if he
repeatedly fails to make prompt payments to SUBCONTRACTORS or for
labor, materials or equipment or if he disregards laws, ordinances,
rules, regulations or orders of any public body having jurisdiction
of the WORK or if he disregards the authority of the ENGINEER, or if
he otherwise violates any provision of the CONTRACT DOCUMENTS, then
the OWNER may, without prejudice to any other right or remedy and
after giving the CONTRACTOR and his surety a minimum of ten (10)
days from delivery of a WRITTEN NOTICE, terminate the services of
the CONTRACTOR and take possession of the PROJECT and of all
materials, equipment, tools, construction equipment and machinery,
thereon owned by the CONTRACTOR, and finish the WORK by whatever
method he may deem expedient. In such case the CONTRACTOR shall not
be entitled to receive any further payment until the WORK is
finished. If the unpaid balance of the CONTRACT PRICE exceeds the
direct and indirect costs of completing the PROJECT, including
compensation for additional professional services, such excess SHALL
BE PAID TO THE CONTRACTOR. If such costs exceed such unpaid balance,
the CONTRACTOR will pay the difference to the OWNER. Such costs
incurred by the OWNER will be determined by the ENGINEER and
incorporated in a CHANGE ORDER.
18.3 Where the CONTRACTOR'S services have been so terminated by
the OWNER, said termination shall not affect any right of the OWNER
against the CONTRACTOR then existing or which may thereafter accrue.
Any retention or payment of monies by the OWNER due the CONTRACTOR
will not release the CONTRACTOR from compliance with the CONTRACT
DOCUMENTS.
18.4 After ten (10) days from delivery of a WRITTEN NOTICE to
the CONTRACTOR and the ENGINEER, the OWNER may, without cause and
without prejudice to any other right or remedy, elect to abandon the
PROJECT and terminate the Contract. In such case, the CONTRACTOR
shall be paid for all WORK executed and any expense sustained plus
reasonable profit.
18.5 If, through no act or fault of the CONTRACTOR, the WORK is
suspended for a period of more than ninety (90) days by the OWNER or
under an order of court or other public authority, or the ENGINEER
fails to act on any request for payment within thirty (30) days
after it is submitted or the OWNER fails to pay the CONTRACTOR
substantially the sum approved by the ENGINEER or awarded by
arbitrators within thirty (30) days of its approval and
presentation, then the CONTRACTOR may, after ten (10) days from
delivery of a WRITTEN NOTICE to the OWNER and the ENGINEER,
terminate the CONTRACT and recover from the OWNER payment for all
WORK executed and all expenses sustained. In addition and in lieu of
terminating the CONTRACT, if the ENGINEER has failed to act on a
request for payment or if the OWNER has failed to make any payment
as aforesaid, the CONTRACTOR may upon ten (10) days written notice
to the OWNER and the ENGINEER stop the WORK until he has been paid
all amounts then due, in which event and upon resumption of the
WORK, CHANGE ORDERS shall be issued for adjusting the CONTRACT PRICE
or extending the CONTRACT TIME or both to compensate for the costs
and delays attributable to the stoppage of the WORK.
18.6 If the performance of all or any portion of the WORK is
suspended, delayed, or interrupted as a result of a failure of the
OWNER or ENGINEER to act within the time specified in the CONTRACT
DOCUMENTS, or if no time is specified, within a reasonable time, an
adjustment in the CONTRACT PRICE or an extension of the CONTRACT
TIME, or both, shall be made by CHANGE ORDER to compensate the
CONTRACTOR for the costs and delays necessarily caused by the
failure of the OWNER or ENGINEER.
19. Payments to Contractor
19.1 At least ten (10) days before each progress payment falls
due (but not more often than once a month), the CONTRACTOR will
submit to the ENGINEER a partial payment estimate filled out and
signed by the CONTRACTOR covering the WORK performed during the
period covered by the partial payment estimate and supported by such
data as the ENGINEER may reasonably require. If payment is requested
on the basis of materials and equipment not incorporated in the WORK
but delivered and suitably stored at or near the site, the partial
payment estimate shall also be accompanied by such supporting data,
satisfactory to the OWNER, as will establish the OWNER's title to
the material and equipment and protect his interest therein,
including applicable insurance. The ENGINEER will, within ten (10)
days after receipt of each partial payment estimate, either indicate
in writing his approval of payment and present the partial payment
estimate to the OWNER, or return the partial payment estimate to the
CONTRACTOR indicating in writing his reasons for refusing to approve
payment. In the latter case, the CONTRACTOR may make the necessary
corrections and resubmit the partial payment estimate. The OWNER
will, within ten (10) days of presentation to him of an approved
partial payment estimate, pay the CONTRACTOR a progress payment on
the basis of the approved partial payment estimate. The OWNER shall
retain ten (10) percent of the amount of each payment until final
completion and acceptance of all work covered by the CONTRACT
DOCUMENTS. The OWNER at any time, however, after fifty (50) percent
of the WORK has been completed, if he finds that satisfactory
progress is being made, shall reduce retainage to five (5%) percent
on the current and remaining estimates. When the WORK is
substantially complete (operational or beneficial occupancy), the
retained amount may be further reduced below five (5) percent to
only that amount necessary to assure completion. On completion and
acceptance of a part of the WORK on which the price is stated
separately in the CONTRACT DOCUMENTS, payment may be made in full,
including retained percentages, less authorized deductions.
19.2 The request for payment may also include an allowance for
the cost of such major materials and equipment which are suitably,
stored either at or near the site.
19.3 Prior to SUBSTANTIAL COMPLETION, the OWNER, with the
approval of the ENGINEER and with the concurrence of the CONTRACTOR,
may use any completed or substantially completed portions of the
WORK. Such use shall not constitute an acceptance of such portions
of the WORK.
19.4 The OWNER shall have the right to enter the premises for
the purpose of doing work not covered by the CONTRACT DOCUMENTS.
This provision shall not be construed as relieving the CONTRACTOR of
the sole responsibility for the care and protection of the WORK, or
the restoration of any damaged WORK except such as may be caused by
agents or employees of the OWNER.
19.5 Upon completion and acceptance of the WORK, the ENGINEER
shall issue a certificate attached lo the final payment request that
the WORK has been accepted by him under the conditions of the
CONTRACT DOCUMENTS. The entire balance found to be due the
CONTRACTOR, including the retained percentages, but except such sums
as may be lawfully retained by the OWNER, shall be paid to the
CONTRACTOR within thirty (30) days of completion and acceptance of
the WORK.
19.6 The CONTRACTOR will indemnify and save the OWNER or the
OWNER'S agents harmless from all claims growing out of the lawful
demands of SUBCONTRACTORS, laborers, workmen, mechanics,
materialmen, and furnishers of machinery and parts thereof,
equipment, tools, and all supplies, incurred in the furtherance of
the performance of the WORK. The CONTRACTOR shall, at the OWNER'S
request, furnish satisfactory evidence that all obligations of the
nature designated above have been paid, discharged, or waived. If
the CONTRACTOR fails to do so the OWNER may, after having notified
the
[[Page 5410]]
CONTRACTOR, either pay unpaid bills or withhold from the
CONTRACTOR'S unpaid compensation a sum of money deemed reasonably
sufficient to pay any and all such lawful claims until satisfactory
evidence is furnished that all liabilities have been fully
discharged whereupon payment to the CONTRACTOR shall be resumed, in
accordance, with the terms of the CONTRACT DOCUMENTS, but in no
event shall the provisions of this sentence be construed to impose
any obligations upon the OWNER to either the CONTRACTOR, his Surety,
or any third party. In paying any unpaid bills of the CONTRACTOR,
any payment so made by the OWNER shall be considered as a payment
made under the CONTRACT DOCUMENTS by the OWNER to the CONTRACTOR and
the OWNER shall not be liable to the CONTRACTOR for any such
payments made in good faith.
19.7 If the OWNER fails to make payment thirty (30) days after
approval by the ENGINEER, in addition to other remedies available to
the CONTRACTOR, there shall be added to each such payment interest
at the maximum legal rate commencing on the first day after said
payment is due and continuing until the payment is received by the
CONTRACTOR.
20. Acceptance of Final Payment as Release
20.1 The acceptance by the CONTRACTOR of final payment shall be
and shall operate as a release to the OWNER of all claims and all
liability to the CONTRACTOR other than claims in stated amounts as
may be specifically excepted by the CONTRACTOR for all things done
or furnished in connection with this WORK and for every act and
neglect of the OWNER and others relating to or arising out of this
WORK. Any payment, however, final or otherwise, shall not release
the CONTRACTOR or his sureties from any obligations under the
CONTRACT DOCUMENTS or the Performance BOND and Payment BONDS.
21. Insurance
21.1 The CONTRACTOR shall purchase and maintain such insurance
as will protect him from claims set forth below which may arise out
of or result from the CONTRACTOR'S execution of the WORK, whether
such execution be by himself or by any SUBCONTRACTOR or by anyone
directly or indirectly employed by any of them, or by anyone for
whose acts any of them may be liable:
21.1.1 Claims under workmen's compensation, disability benefit
and other similar employee benefit acts;
21.1.2 Claims for damages because of bodily injury,
occupational sickness or disease, or death of his employees;
21.1.3 Claims for damages because of bodily injury, sickness or
disease, or death of any person other than his employees;
21.1.4 Claims for damages insured by usual personal injury
liability coverage which are sustained (1) by any person as a result
of an offense directly or indirectly related to the employment of
such person by the CONTRACTOR, or (2) by any other person; and
21.1.5 Claims for damages because of injury to or destruction
of tangible property, including loss of use resulting therefrom.
21.2 Certificates of Insurance acceptable to the OWNER shall be
filed with the OWNER prior to commencement of the WORK. These
Certificates shall contain a provision that coverages afforded under
the policies will not be canceled unless at least fifteen (15) days
prior WRITTEN NOTICE has been given to the OWNER.
21.3 The CONTRACTOR shall procure and maintain, at his own
expense, during the CONTRACT TIME, liability insurance as
hereinafter specified;
21.3.1 CONTRACTOR'S General Public Liability and Property
Damage Insurance including vehicle coverage issued to the CONTRACTOR
and protecting him from all claims for personal injury, including
death, and all claims for destruction of or damage to property,
arising out of or in connection with any operations under the
CONTRACT DOCUMENTS, whether such operations be by himself or by any
SUBCONTRACTOR under him, or anyone directly or indirectly employed
by the CONTRACTOR or by a SUBCONTRACTOR under him. Insurance shall
be written with a limit of liability of not less than, $500,000 for
all damages arising out of bodily injury, including death, at any
time resulting therefrom, sustained by any one person in any one
accident; and a limit of liability of not less than $500,000
aggregate for any such damages sustained by two or more persons in
any one accident. Insurance shall be written with a limit of
liability of not less than $200,000 for all property damage
sustained by any one person in any one accident; and a limit of
liability of not less than $200,000 aggregate for any such damage
sustained by two or more persons in any one accident.
21.3.2 The CONTRACTOR shall acquire and maintain, if
applicable, Fire and Extended Coverage insurance upon the PROJECT to
the full insurable value thereof for the benefit of the OWNER, the
CONTRACTOR, and SUBCONTRACTORS as their interest may appear. This
provision shall in no way release the CONTRACTOR or CONTRACTOR'S
surety from obligations under the CONTRACT DOCUMENTS to fully
complete the PROJECT.
21.4 The CONTRACTOR shall procure and maintain at his own
expense, during the CONTRACT TIME, in accordance with the provisions
of the laws of the state in which the work is performed, Workmen's
Compensation Insurance, including occupational disease provisions,
for all of his employees at the site of the PROJECT and in case any
work is sublet, the CONTRACTOR shall require such SUBCONTRACTOR
similarly to provide Workmen's Compensation Insurance, including
occupational disease provisions for all of the latter's employees
unless such employees are covered by the protection afforded by the
CONTRACTOR. In case any class of employees engaged in hazardous work
under this contract at the site of the PROJECT is not protected
under Workmen's Compensation statute, the CONTRACTOR shall provide,
and shall cause each SUBCONTRACTOR to provide, adequate and suitable
insurance for the protection of his employees not otherwise
protected.
21.5 The CONTRACTOR shall secure, if applicable, ``All Risk''
type Builder's Risk Insurance for WORK to be performed. Unless
specifically authorized by the OWNER, the amount of such insurance
shall not be less than the CONTRACT PRICE totaled in the BID. The
policy shall cover not less than the losses due to fire, explosion,
hail, lightning, vandalism, malicious mischief, wind, collapse,
riot, aircraft, and smoke during the CONTRACT TIME, and until the
WORK is accepted by the OWNER. The policy shall name as the insured
the CONTRACTOR, the ENGINEER, and the OWNER.
22. Contract Security
22.1 The CONTRACTOR shall within ten (10) days after the
receipt of the NOTICE OF AWARD furnish the OWNER with a Performance
Bond and a Payment Bond in penal sums equal to the amount of the
CONTRACT PRICE, conditioned upon the performance by the CONTRACTOR
of all undertakings, covenants, terms, conditions and agreements of
the CONTRACT DOCUMENTS, and upon the prompt payment by the
CONTRACTOR to all persons supplying labor and materials in the
prosecution of the WORK provided by the CONTRACT DOCUMENTS. Such
BONDS shall be executed by the CONTRACTOR and a corporate bonding
company licensed to transact such business in the state in which the
WORK is to be performed and named on the current list of ``Surety
Companies Acceptable on Federal Bonds'' as published in the Treasury
Department Circular Number 570. The expense of these BONDS shall be
borne by the CONTRACTOR. If at any time a surety on any such BOND is
declared a bankrupt or loses its right to do business in the state
in which the WORK is to be performed or is removed from the list of
Surety Companies accepted on Federal BONDS, CONTRACTOR shall within
ten (10) days after notice from the OWNER to do so, substitute an
acceptable BOND (or BONDS) in such form and sum and signed by such
other surety or sureties as may be satisfactory to the OWNER. The
premiums on such BOND shall be paid by the CONTRACTOR. No further
payments shall be deemed due nor shall be made until the new surety
or sureties shall have furnished an acceptable BOND to the OWNER.
23. Assignments
23.1 Neither the CONTRACTOR nor the OWNER shall sell, transfer,
assign or otherwise dispose of the Contract or any portion thereof
or of his right, title or interest therein, or his obligations
thereunder, without written consent of the other party.
24. Indemnification
24.1 The CONTRACTOR will indemnify and hold harmless the OWNER
and the ENGINEER and their agents and employees from and against all
claims, damages, losses and expenses including attorney's fees
arising out of or resulting from the performance of the WORK,
provided that any such claims, damage, loss or expense is
attributable to bodily injury sickness, disease or death, or to
injury to or destruction of
[[Page 5411]]
tangible property including the loss of use resulting therefrom; and
is caused in whole or in part by any negligent or willful act or
omission of the CONTRACTOR, and SUBCONTRACTOR, anyone directly or
indirectly employed by any of them or anyone for whose acts any of
them may be liable.
24.2 In any and all claims against the OWNER or the ENGINEER,
or any of their agents or employees, by any employee of the
CONTRACTOR, any SUBCONTRAC-TOR, anyone directly or indirectly
employed by any of them, or anyone for whose acts any of them may be
liable, the indemnification obligation shall not be limited in any
way by any limitation on the amount or type of damages, compensation
or benefits payable by or for the CONTRACTOR or any SUBCONTRACTOR
under workmen's compensation acts, disability benefit acts or other
employee benefits acts.
24.3 The obligation of the CONTRACTOR under this paragraph
shall not extend to the liability of the ENGINEER, his agents or
employees arising out of the preparation or approval of maps,
DRAWINGS, opinions, reports, surveys, CHANGE ORDERS, designs or
SPECIFICATIONS.
25. Separate Contracts
25.1 The OWNER reserves the right to let other contracts in
connection with this PROJECT. The CONTRACTOR shall afford other
CONTRACTORS reasonable opportunity for the introduction and storage
of their materials and the execution of their WORK, and shall
properly connect and coordinate his WORK with theirs. If the proper
execution or results of any part of the CONTRACTOR'S WORK depends
upon the WORK of any other CONTRACTOR, the CONTRACTOR shall inspect
and promptly report to the ENGINEER any defects in such WORK that
render it unsuitable for such proper execution and results.
25.2 The OWNER may perform additional WORK related to the
PROJECT by himself, or he may let other contracts containing
provisions similar to these. The CONTRACTOR will afford the other
CONTRACTORS who are parties to such Contracts (or the OWNER, if he
is performing the additional WORK himself), reasonable opportunity
for the introduction and storage of materials and equipment and the
execution of WORK, and shall properly connect and coordinate his
WORK with theirs.
25.3 If the performance of additional WORK by other CONTRACTORS
or the OWNER is not noted in the CONTRACT DOCUMENTS prior to the
execution of the CONTRACT, written notice thereof shall be given to
the CONTRACTOR prior to starting any such additional WORK. If the
CONTRACTOR believes that the perform-ance of such additional WORK by
the OWNER or others involves him in additional expense or entitles
him to an extension of the CONTRACT TIME, he may make a claim
therefor as provided in Sections 14 and 15.
26. Subcontracting
26.1 The CONTRACTOR may utilize the services of specialty
SUBCONTRACTORS on those parts of the WORK which, under normal
contracting practices, are performed by specialty SUBCONTRACTORS.
26.2 The CONTRACTOR shall not award WORK to SUBCONTRACTOR(s),
in excess of fifty (50%) percent of the CONTRACT PRICE, without
prior written approval of the OWNER.
26.3 The CONTRACTOR shall be fully responsible to the OWNER for
the acts and omissions of his SUBCONTRACTORS, and of persons either
directly or indirectly employed by them, as he is for the acts and
omissions of persons directly employed by him.
26.4 The CONTRACTOR shall cause appropriate provisions to be
inserted in all subcontracts relative to the WORK to bind
SUBCONTRACTORS to the CONTRACTOR by the terms of the CONTRACT
DOCUMENTS insofar as applicable to the WORK of SUBCONTRACTORS and to
give the CONTRACTOR the same power as regards terminating any
subcontract that the OWNER may exercise over the CONTRACTOR under
any provision of the CONTRACT DOCUMENTS.
26.5 Nothing contained in this CONTRACT shall create any
contractual relation between any SUBCONTRACTOR and the OWNER.
27. Engineer's Authority
27.1 The ENGINEER shall act as the OWNER'S representative
during the construction period. He shall decide questions which may
arise as to quality and acceptability of materials furnished and
WORK performed. He shall interpret the intent of the CONTRACT
DOCUMENTS in a fair and unbiased manner. The ENGINEER will make
visits to the site and determine if the WORK is proceeding in
accordance with the CONTRACT DOCUMENTS.
27.2 The CONTRACTOR will be held strictly to the intent of the
CONTRACT DOCUMENTS in regard to the quality of materials,
workmanship and execution of the WORK. Inspections may be made at
the factory or fabrication plant of the source of material supply.
27.3 The ENGINEER will not be responsible for the construction
means, controls, techniques, sequences, procedures, or construction
safety.
27.4 The ENGINEER shall promptly make decisions relative to
interpretation of the CONTRACT DOCUMENTS.
28. Land and Rights-of-Way
28.1 Prior to issuance of NOTICE TO PROCEED, the OWNER shall
obtain all land and rights-of-way necessary for carrying out and for
the completion of the WORK to be performed pursuant to the CONTRACT
DOCUMENTS, unless otherwise mutually agreed.
28.2 The OWNER shall provide to the CONTRACTOR information
which delineates and describes the lands owned and rights-of-way
acquired.
28.3 The CONTRACTOR shall provide at his own expense and
without liability to the OWNER any additional land and access
thereto that the CONTRACTOR may desire for temporary construction
facilities, or for storage of materials.
29. Guaranty
29.1 The CONTRACTOR shall guarantee all materials and equipment
furnished and WORK performed for a period of one (1) year from the
date of SUBSTANTIAL, COMPLETION. The CONTRACTOR warrants and
guarantees for a period of one (1) year from the date of SUBSTANTIAL
COMPLETION of the system that the completed system is free from all
defects due to faulty materials or workmanship and the CONTRACTOR
shall promptly make such corrections as may be necessary by reason
of such defects including the repairs of any damage to other parts
of the system resulting from such defects. The OWNER will give
notice of observed defects with reasonable promptness. In the event
that the CONTRACTOR should fail to make such repairs, adjustments,
or other WORK that may be made necessary by such defects, the OWNER
may do so and charge the CONTRACTOR the cost thereby incurred. The
Performance BOND shall remain in full force and effect through the
guarantee period.
30. Arbitration
30.1 All claims, disputes and other matters in question arising
out of, or relating to, the CONTRACT DOCUMENTS or the breach
thereof, except for claims which have been waived by the making and
acceptance of final payment as provided by Section 20, shall be
decided by arbitration in accordance with the Construction Industry
Arbitration Rules of the American Arbitration Association. This
agreement to arbitrate shall be specifically enforceable under the
prevailing arbitration law. The award rendered by the arbitrators
shall be final, and judgment may be entered upon it in any court
having jurisdiction thereof.
30.2 Notice of the demand for arbitration shall be filed in
writing with the other party to the CONTRACT DOCUMENTS and with the
American Arbitration Association, and a copy shall be filed with the
ENGINEER. Demand for arbitration shall in no event be made an any
claim, dispute or other matter in question which would be barred by
the applicable statute of limitations.
30.3 The CONTRACTOR will carry on the WORK and maintain the
progress schedule during any arbitration proceedings, unless
otherwise mutually agreed in writing.
31. Taxes
31.1 The CONTRACTOR will pay all sales, consumer, use and other
similar taxes required by the law of the place where the WORK is
performed.
BILLING CODE 3510-24-P
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Exhibit G--[Reserved]
Exhibit H--[Reserved]
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BILLING CODE 3510-24-C
[[Page 5426]]
Instructions for Completion of EDA'S Core Performance Measures Report
for Title I/IX Construction Facilities
The instructions below are in outline form and correspond to
identical items in the Core Performance Measures Report. Complete
the report by filling in the spaces and responding to the questions.
If there is not sufficient space on the report for a response,
please respond on an attachment to the report. On page one of the
Report, indicate the EDA Project Number and the Reporting Period.
Part I: Grantee Organization
1. Grantee Name: Enter the legal name of the Grantee.
2. Address: Enter the physical address of the Grantee.
3. Telephone: Enter the telephone number, including area code,
of the Grantee.
4. Fax: Enter the facsimile number, including area code, of the
Grantee.
5. E-mail Address: Enter the Internet address of the Grantee.
6. Contact Person & Title: Name the person to contact on matters
related to this report. Also, provide the contact person's telephone
number, including area code, if different from the Grantee's
telephone number.
7. Project Location: Enter the county, state and zip code of
project location.
8. GIS Coordinates: Provide geographic mapping coordinates for
project location, if available.
Part II: EDA Project Budget
Enter the project budget as estimated at time of approval.
Enter the actual project budget at time of project completion
and close-out.
Enter only dollars used as part of the EDA total project cost
for the construction project (scope of work and eligible costs
defined in the grant agreement).
Part III: Outcomes (Actual) Reported at Project Completion Only
1. Compliance With Construction Schedule
a. Construction start date: Ener the estimated date (specified
in the Special Award Conditions) for starting construction on the
EDA project. Also, enter the actual date (substantiated by the
Grantee's construction records and source documentation) for
starting construction on the EDA project.
b. Construction completion date: Enter the estimated date
(specified in the Award Conditions) for completing construction on
the EDA project. Also, enter the actual date (substantiated by the
Grantee's construction records and source documentation) for
completing construction on the EDA project.
2. Construction Jobs Created (Please provide information on
construction jobs for all construction projects, not just PWIP)
a. Construction jobs created: Enter the estimated number of
construction jobs at the time of project approval and the actual
number of construction jobs at project completion (Part-time
construction jobs which were created during the construction phase
of the EDA project should be converted to FTE.). If estimated/actual
figures are not available, please provide the average annual
construction wage for your area $______ and the proportion of total
project costs allocated to labor for this or similar projects of
this type ______%.
Part IV: Outcomes (Actual) Reported at Project Completion and at 3
Years and 6 Years After Project Completion.
1. Permanent Jobs:
a. Created jobs: Enter the number of private sector jobs created
by project beneficiaries as a result of the EDA construction
project. In tallying direct jobs, only permanent and direct jobs may
be counted; part-time jobs should be converted to full-time
equivalents (by summing the total hours worked per week for all
part-time employees and dividing by the standard hourly work week
for full-time employees, normally 35-40 hours). Indirect jobs should
be reported separately in the space provided.
1. Direct Jobs: These are jobs that are created at the project
site by the identified beneficiaries, and other directly-related
jobs created by subsequent employers as a result of the project. For
some projects (e.g., roads, water and sewer lines), direct jobs may
include those created by firms that which were not originally
anticipated as part of the project, but which located or expanded in
the area as a result of the project.
2. Indirect Jobs: These are jobs that are created within the
local labor market area by the EDA project through increased
supplier or consumer demand--commonly referred to as spin-off jobs
resulting from increased employment by local suppliers and increased
commercial/retail jobs due to increased wages generated by direct
jobs. (For the purpose of this report, there is no need to
distinguish between indirect and induced effects).
b. Retained (saved) jobs: Enter the number of private sector
jobs retained or saved by project beneficiaries as a result of the
EDA construction project. In tallying jobs, follow the instructions
for created jobs in the paragraph (IV.1.a.) above.
c. Total jobs: Add the number of created jobs in IV.1.a. and the
number of retained jobs in IV.1.b. and enter the total jobs here in
IV.1.c.
Note: A list of the employers showing the number of jobs created
or saved by each should be maintained as part of the supporting data
in the Grantee's project files.
2. Additional Dollars Invested:
(Note: Dollars should be separated between: (1) dollars invested
in the EDA construction project; and (2) dollars directly related
to, but not a part of, the EDA construction project. Dollars
invested in the EDA construction project are the non-Federal
matching funds that were identified at the time of EDA grant
approval and are included in the total project costs for the
construction project shown in Section II above. Do not double count
these dollars below.)
Additional dollars invested include dollars that support project
objectives, but are not included as part of the EDA project costs.
Though occasionally difficult to quantify these directly-related
investments, an attempt should be made to identify them on this
report. Examples are investments in facilities occupied by project
beneficiaries or employers that were constructed with other public
or private funds as a result of the EDA project. Also include
investments by firms using residual capacity of EDA-financed
infrastructure (notably water and sewer services).
Indirect investments are those associated with the location or
expansion of spin-off commercial business and/or wholesalers
resulting from increased demand for goods and services generated by
the project, or new investment in retail and consumer services.
If you cannot determine indirect jobs or investment, estimate
the number of firms which located or expanded in the area as result
of the increased supplier/consumer demand generated by the project
below: Estimated number of firms creating indirect jobs ______ and/
or investment ______.
a. Private Sector: Enter the total dollars from private sector
investors, employers and other private sector sources such as the
local financing institutions, and private donors. Include private
investment in plant and equipment.
b. Local public: Enter the total dollars from local public
sources such city/county appropriations, G.O./revenue bond issues,
and economic development sales taxes.
c. State: Enter the total dollars from state sources such as
state appropriations and CDBG funds to the state.
d. Other Federal: Enter the total dollars from other Federal
sources as HUD, Agriculture, and Transportation funds.
e. Totals: Add the other dollars from IV.2.a through IV.2.d. and
enter the total dollars on IV.2.e.
3. Increase in Local Tax Base:
Enter here on IV.3 the dollar increase in the local tax base
(the taxable real and business personal property) attributable to
the EDA project. Please check whether these are actual dollars of
dollars computed using a multiplier. Please provide the multiplier,
if applicable.
4. Local Capacity Anticipated and Actual Results:
An evaluation should be made regarding how well the EDA
construction project has met the initial objectives listed in IV.4.a
through IV.4.e below. Indicate by percentages, that portion of the
project which was initially envisioned as the justification for the
project under one or more of the listed categories. Individual
ratings (with 10 being the ``best'' (i.e., the project has totally
met the objective in every conceivable way) and 1 being the
``worst'' (i.e., the project has not met the objective in any way at
all). As an example, a project may have initially been intended to
support a single private business (100%), but may actually have
resulted in creating jobs associated with other businesses, perhaps
diversified the local economy, or provided other community benefits.
Thus, a rating would be warranted for those categories as well as
for the first category.
Not all objectives listed here may apply to the EDA project.
Please mark ``NA'' if a given result was not anticipated or
achieved. A narrative explaining the results or any unique
situations associated with the project would also be useful.
[[Page 5427]]
V. Please submit a photograph of the project and/or business
activity assisted by the project.
PART 306--PLANNING ASSISTANCE
Sec.
306.1 Purpose and scope.
306.2 Application evaluation criteria.
306.3 Award requirements.
306.4 Award conditions.
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Sec. 306.1 Purpose and scope.
The primary objective of planning assistance is to provide funding
for administrative expenses to support the formulation and
implementation of economic development planning programs and for the
conduct of planning activities designed to create and retain permanent
jobs and increase incomes, particularly for the unemployed and
underemployed in the nation's most economically distressed areas.
Planning activities supported by these funds must be part of a
continuous process involving the active participation of public
officials and private citizens, and include the following:
(a) Analyzing local economies;
(b) Defining economic development goals;
(c) Determining project opportunities; and
(d) Formulating and implementing an economic development program
that includes systematic efforts to reduce unemployment and increase
incomes.
Sec. 306.2 Application evaluation criteria.
(a) EDA uses the application evaluation criteria set forth in part
304 of this chapter. In addition, EDA evaluates applications on the
following:
(1) Quality of the proposed work program;
(2) Management and staff capacity and qualifications of the
applicant organization; and
(3) Extent of broad-based representation including for example,
involvement of the local civic, business, leadership, labor, minority,
and other community interests in the applicant's economic development
activities.
(b) Previously funded grantees, in addition to the requirements of
paragraph (a) of this section, will also be evaluated on the basis of
the quality of their past performance.
Sec. 306.3 Award requirements.
(a) Planning assistance shall be used in conjunction with any other
available Federal planning assistance to ensure adequate and effective
planning and economical use of funds.
(b) Grant rate:
(1) The maximum Federal grant rate for a project under this part
is,
(i) 50 percent, except as supplemented as provided in
Sec. 301.4(b), or
(ii) 75 percent, if that is greater than the maximum supplemented
grant rate provided in Sec. 301.4(b), and the project meets the
criteria of paragraph (b)(2) of this section.
(2) A project is eligible for a supplemental grant increasing the
Federal share to up to 75 percent when the applicant is able to
demonstrate that,
(i) The project is intended to address problems arising from actual
or threatened severe unemployment, significantly low per capita income,
or a special need that qualifies an area for eligibility under
Sec. 301.2(b),
(ii) The project is in substantial part devoted to activities
addressing the needs of the most economically distressed parts of the
total area served by the applicant,
(iii) The applicant is uniquely qualified to address the major
causes of actual or threatened economic distress in the area served by
the applicants, and
(iv) The applicant cannot provide the non-Federal share otherwise
required because in the overall economic situation there is a lack of
available non-Federal share due, for instance, to the pressing demand
for its use elsewhere.
(3) A project receiving a supplemental grant increasing the Federal
share under paragraph (b)(2) of this section is not eligible for
additional Federal grant assistance under Sec. 301.4(d).
(c) As a condition of the receipt of assistance by a State under
this part 306:
(1) The State must have or develop a CED Strategy;
(2) Any State plan developed with such assistance must be developed
cooperatively by the State, political subdivisions of the State, and
the economic development districts located wholly or partially within
the State;
(3) Any overall State economic development planning assisted under
this section shall be a part of a comprehensive planning process that
shall consider the provision of public works to:
(i) Promote economic development and opportunity,
(ii) Foster effective transportation access,
(iii) Enhance and protect the environment, and
(iv) Balance resources through the sound management of physical
development;
(4) Upon completion of the State plan, the State must,
(i) Certify to EDA that, in the development of the State plan,
local and economic development district plans were considered and, to
the maximum extent practicable, the State plan is consistent with the
local and economic development district plans; and
(ii) Identify any inconsistencies between the State plan and the
local and economic development district plans and provide a
justification for each inconsistency; and
(5) The State must submit to EDA an annual report on the planning
process so assisted.
Sec. 306.4 Award conditions.
Financial, performance and progress reports, and project products
will be as specified in the Special Award Conditions of the grant.
PART 307--LOCAL TECHNICAL ASSISTANCE, UNIVERSITY CENTER TECHNICAL
ASSISTANCE, NATIONAL TECHNICAL ASSISTANCE, TRAINING, RESEARCH, AND
EVALUATION
Subpart A--Local Technical Assistance
Sec.
307.1 Purpose and scope.
307.2 Application evaluation criteria.
307.3 Award and grant rate requirements.
Subpart B--University Center Program
307.4 Purpose and scope.
307.5 Application evaluation criteria.
307.6 Award and grant rate requirements.
Subpart C--National Technical Assistance, Training, Research, and
Evaluation
307.7 Purpose and scope.
307.8 Application evaluation criteria.
307.9 Award and grant rate requirements.
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Subpart A--Local Technical Assistance
Sec. 307.1 Purpose and scope.
Local Technical Assistance projects are intended to:
(a) Determine the causes of excessive unemployment,
underemployment, low per capita income, or high poverty rates in areas
and regions of the Nation;
(b) Assist in formulating and implementing new economic development
tools, models, and innovative techniques that will raise employment and
income levels; and
(c) Assist distressed communities in formulating and implementing
new economic development programs to increase the technology and human
capacity of the communities. Local Technical Assistance funds may not
be used to start or expand a private business.
Sec. 307.2 Application evaluation criteria.
EDA selects local technical assistance projects for grant awards
according to
[[Page 5428]]
the general application evaluation criteria set forth in part 304 of
this chapter and the extent, as appropriate, the project:
(a) Strengthens the local capacity to undertake and promote
effective economic development programs targeted to people and areas of
distress;
(b) Benefits distressed areas;
(c) Helps to diversify distressed economies;
(d) Demonstrates innovative approaches to stimulating economic
development in distressed areas;
(e) Is consistent with the CED Strategy or other strategy accepted
by EDA for the area in which the project is located; and
(f) Presents a reasonable, itemized budget.
Sec. 307.3 Award and grant rate requirements.
(a) EDA will provide assistance for the period of time required to
complete the project scope of work, generally not to exceed twelve
months.
(b) Financial reports, progress reports, and project products will
be specified in the Special Award Conditions of the grant or
cooperative agreement.
(c) If the project is regional in scope, EDA may determine that the
requirement that public or private nonprofit organizations must act in
cooperation with officials of a political subdivision of a State is
satisfied by the nature of the project;
(d) Grant rate:
(1) The maximum Federal grant rate for a project under this subpart
is:
(i) 50 percent, except as supplemented as provided in
Sec. 301.4(b); or
(ii) 100 percent, if the project is not feasible without, and
merits, a reduction or waiver of the non-Federal share required under
the rate provided in Sec. 301.4(b).
(2) A project is eligible for a supplemental grant increasing the
Federal share to up to 75 percent when the applicant is able to
demonstrate that,
(i) It cannot provide the non-Federal share otherwise required
because in the overall economic situation there is a lack of available
non-Federal share due, for instance, to the pressing demand for its use
elsewhere;
(ii) The project is addressing major causes of distress in the
service area and requires the unique characteristics of the applicant,
which will not participate in the program if it must provide all or
part of a 50 percent non-Federal share; or
(iii) The project is for the benefit of local, State, regional, or
national economic development efforts, and will be of no or only
incidental benefit to the recipient.
(3) A project receiving a supplemental grant increasing the Federal
share under paragraph (d)(2) of this section is not eligible for
additional Federal grant assistance under Sec. 301.4(d).
Subpart B--University Center Program
Sec. 307.4 Purpose and scope.
The University Center technical assistance program is designed to
help improve the economies of distressed areas. It helps institutions
of higher education (or other applicants) use their own and other
resources to address the economic development problems and
opportunities of areas serviced.
Sec. 307.5 Application evaluation criteria.
EDA selects University Center projects for grant awards according
to the general application evaluation criteria set forth in part 304 of
this chapter and the extent, as appropriate, the project:
(a) Has the commitment of the highest management levels of the
sponsoring institution;
(b) Provides evidence of adequate non-Federal financial support,
either from the sponsoring institution or other sources;
(c) Outlines activities consistent with the expertise of the
proposed staff, the academic programs, and other resources available
within the sponsoring institution;
(d) Presents a reasonable budget;
(e) Documents past experience of the sponsoring institution in
operating technical assistance programs; and
(f) Balances the geographic distribution of University Centers
across the country. Only the Assistant Secretary has the authority to
approve the selection for grant assistance of a University Center that
has not received University Center assistance for the previous year.
Sec. 307.6 Award and grant rate requirements.
(a) EDA will provide assistance for the period of time required to
complete the project scope of work, generally not to exceed twelve
months.
(b) If the project is regional in scope, EDA may determine that the
requirement that public or private nonprofit organizations must act in
cooperation with officials of a political subdivision of a State is
satisfied by the nature of the project;
(c) Financial reports, progress reports and project products will
be specified in the Special Award Conditions of the grant or
cooperative agreement.
(d) Grant rate:
(1) The maximum Federal grant rate for a project under this subpart
is:
(i) 50 percent, except as supplemented as provided in
Sec. 301.4(b), or
(ii) 75 percent, if that is greater, if the project is not feasible
without, and merits, a reduction or waiver of the non-Federal share
required under the rate provided in Sec. 301.4(b).
(2) A project is eligible for a supplemental grant increasing the
Federal share to up to 75 percent when the applicant is able to
demonstrate that:
(i) It cannot provide the non-Federal share otherwise required
because in the overall economic situation there is a lack of available
non-Federal share due, for instance, to the pressing demand for its use
elsewhere;
(ii) The project is addressing major causes of distress in the area
serviced and requires the unique characteristics of the applicant,
which will not participate in the program if it must provide all or
part of a 50 percent non-Federal share; or
(iii) The project is for the benefit of local, State, regional, or
national economic development efforts, and will be of no or only
incidental benefit to the recipient.
(3) A project receiving a supplemental grant increasing the Federal
share under paragraph (e)(2) of this section is not eligible for
additional Federal grant assistance under Sec. 301.4(d).
Subpart C--National Technical Assistance, Training, Research, and
Evaluation
Sec. 307.7 Purpose and scope.
(a) The purposes of National Technical Assistance, Training,
Research, and Evaluation projects are:
(1) To determine the causes of excessive unemployment,
underemployment, outmigration or other problems indicating economic
distress in areas and regions of the Nation;
(2) To assist in formulating and implementing new economic
development tools and national, State, and local programs that will
raise employment and income levels and otherwise produce solutions to
problems resulting from the above conditions;
(3) To evaluate the effectiveness and economic impact of programs,
projects, and techniques used to alleviate economic distress and
promote economic development, and
(4) To assist in disseminating information about effective
programs,
[[Page 5429]]
projects and techniques that alleviate economic distress and promote
economic development.
(b) EDA may during the course of the year, identify specific
national technical assistance, training, research or evaluation
projects it wishes to have conducted. Ordinarily, EDA specifies these
projects in a NOFA, which also provides the appropriate point of
contact and address.
(c) National technical assistance, research, training, and
evaluation funds may not be used to start or expand a private business.
Sec. 307.8 Application evaluation criteria.
EDA selects projects for national technical assistance, training,
research or evaluation grant awards according to the general
application evaluation criteria set forth in part 304 of this chapter
and the extent, as appropriate, the project:
(a) Does not depend upon further EDA or other Federal funding
assistance to achieve results;
(b) Strengthens the capability of local, State, or national
organizations and institutions, including nonprofit economic
development groups, to undertake and promote effective economic
development programs targeted to people and areas of distress;
(c) Benefits severely distressed areas;
(d) Helps to diversify distressed economies; and
(e) Demonstrates innovative approaches to stimulating economic
development in distressed areas.
Sec. 307.9 Award and grant rate requirements.
(a) EDA will provide assistance for the period of time required to
complete the project scope of work. Normally, this does not exceed
twelve months.
(b) If the project is regional or national in scope, EDA may
determine that the requirement that public or private nonprofit
organizations must act in cooperation with officials of a political
subdivision of a State is satisfied by the nature of the project;
(c) Financial reports, progress reports, and project products will
be specified in the Special Award Conditions of the grant or
cooperative agreement.
(d) Grant rate:
(1) The maximum Federal grant rate for a project under this subpart
is:
(i) 50 percent, except as supplemented as provided in
Sec. 301.4(b); or
(ii) 100 percent, if the project is not feasible without, and
merits, a reduction or waiver of the non-Federal share required under
the rate provided in Sec. 301.4(b).
(2) A project is eligible for a supplemental grant increasing the
Federal share to up to 100 percent when the applicant is able to
demonstrate that
(i) The project is addressing major causes of distress in the area
serviced and requires the unique characteristics of the applicant,
which will not participate in the program if it must provide all or
part of a 50 percent non-Federal share; or
(ii) The project is for the benefit of local, State, regional, or
national economic development efforts, and will be of no or only
incidental benefit to the recipient.
PART 308--REQUIREMENTS FOR ECONOMIC ADJUSTMENT GRANTS
Sec.
308.1 Purpose and scope.
308.2 Criteria.
308.3 Use of economic adjustment grants.
308.4 Selection and evaluation factors.
308.5 Applicant requirements.
308.6 Post-approval requirements.
Appendix A to Part 308--Section 209 Economic Adjustment Program
Revolving Loan Fund; Plan Guidelines.
Appendix B to Part 308--Section 209 Economic Adjustment Program
Revolving Loan Fund Grants; Standard Terms and Conditions.
Appendix C to Part 308--Section 209 Economic Adjustment Program
Revolving Loan Fund Grants; Administrative Manual.
Appendix D to Part 309--Section 209 Economic Adjustment Program
Revolving Loan Fund Grants; Audit Guidelines
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Sec. 308.1 Purpose and scope.
(a) The purpose of economic adjustment grants is to address the
needs of communities experiencing adverse economic changes that may
occur suddenly or over time, including but not limited to those caused
by:
(1) Military base closures or realignments, defense contractor
reductions in force, or Department of Energy defense-related funding
reductions,
(2) Disasters or emergencies, in areas with respect to which a
major disaster or emergency has been declared under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121
et seq.),
(3) International trade,
(4) Fishery failures, in areas with respect to which a
determination that there is a commercial fishery failure has been made
under sec. 312(a) of the Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. 1861a(a)),
(5) Long-term economic deterioration, or
(6) Loss of a major community employer.
(b) Economic Adjustment grants are intended to enhance a distressed
community's ability to compete economically by stimulating private
investment in targeted economic sectors through use of tools that:
(1) Help organize and carry out a CED Strategy;
(2) Expand the capacity of public officials and economic
development organizations to work effectively with businesses;
(3) Assist in overcoming major obstacles identified in the
strategy;
(4) Enable communities to plan and coordinate: The use of Federal
and other resources available to support economic recovery, development
of regional economies, or recovery from natural or other disasters; and
(5) Encourage the development of innovative public/private
approaches to economic restructuring and revitalization.
Sec. 308.2 Criteria.
(a) A grant may be made under this part only when the project will
help the area to meet a special need arising from actual or threatened
severe unemployment or economic adjustment problems resulting from
severe changes in economic conditions; and the area for which a project
is to be carried out has a strategy and the project is consistent with
the strategy, except that the strategy requirement shall not apply to
planning projects.
(b) The term ``special need'' in paragraph (a) of this section
means conditions of unemployment, per capita income, or special need
that qualify an area for eligibility under Sec. 301.2(b).
(c) Additional criteria, and/or priority consideration factors for
assistance, may be set forth in a NOFA.
Sec. 308.3 Use of economic adjustment grants.
(a) Grants may be used to pay for developing a strategy to
alleviate long-term economic deterioration or a sudden and severe
economic dislocation, or to pay for a project in implementation of such
a strategy.
(1) Strategy grants may support developing, updating, or refining a
strategy.
(2) Implementation grants support activities identified in an EDA-
approved strategy. Specific activities may be funded as separate grants
or as multiple elements of a single grant. Examples of implementation
activities include:
(i) Infrastructure improvements, such as site acquisition, site
preparation,
[[Page 5430]]
construction, rehabilitation and/or equipping of facilities;
(ii) Provision of business or infrastructure financing through the
funding of locally administered Revolving Loan Funds (RLFs), which may
include interest rate buy downs;
(iii) Market or industry research and analysis;
(iv) Technical assistance, including organizational development
such as business networking, restructuring or improving the delivery of
business services, or feasibility studies;
(v) Public services;
(vi) Training (provided that it does not duplicate Department of
Labor, Department of Education or other Federally-supported training
programs), and
(vii) Other activities as justified by the strategy which meet
statutory and regulatory requirements.
(b) Economic Adjustment grants may be spent directly by the grantee
or redistributed to other entities.
(1) Redistribution in the form of grants may only be to eligible
recipients of grants under part 308.
(2) Redistribution in the form of loans, loan guarantees, or
equivalent assistance may be to public or private entities, including
private for-profit entities.
(c) Revolving Loan Fund (RLF) applicants must submit an RLF Plan in
accordance with this part and RLF guidelines, Appendix A of this part,
displayed at EDA's web site, http://www.doc.gov/eda. A copy of the RLF
guidelines is available from EDA and a copy will be furnished to an
award recipient with the Offer of Financial Assistance.
Sec. 308.4 Selection and evaluation factors.
(a) Projects will be selected in accordance with part 304 of this
chapter and the additional criteria as provided in subsections (b) and
(c), as applicable.
(b) Strategy grants. EDA will review strategy grant applications
for:
(1) Proper authority, mandate, and capacity of the applicant to
lead and manage the planning process and strategy implementation;
(2) Representation of the public and private sectors in the
development of the strategy's objectives. Representation may include:
Public program and service providers, trade and business associations,
educational and research institutions, community development
corporations, minorities, labor, low-income, etc.; and
(3) The proposed scope of work for the strategy focuses on the
structural economic problem(s) and includes provisions for undertaking
appropriate research and analysis to support a realistic, market-based,
adjustment strategy.
(c) Implementation Grants.
(1) EDA will review implementation grant applications for the
extent to which,
(i) The strategy shows
(A) An understanding of the economic problems being addressed;
(B) An analysis of the economic sectors that constitute the
community's economic base, including particular strengths and
weaknesses that contribute to or detract from a community's current and
potential economic competitiveness;
(C) Strategic objectives that focus on stimulating investment in
new and/or existing economic activities that offer good prospects for
revitalization and growth; and
(D) Identified resources and plans for coordinating such resources
to implement the overall strategy; and
(ii) The proposed project is identified as a necessary element of
or consistent with the strategy.
(2) Revolving Loan Fund (RLF) Grants. For applicants asking to
capitalize or recapitalize an RLF, EDA will review the application for:
(i) The need for a new or expanded public financing tool to enhance
other business assistance programs and services targeting economic
sectors and/or locations described in the strategy;
(ii) The types of financing activities anticipated; and
(iii) The capacity of the RLF organization to manage lending,
create networks between the business community and other financial
providers, and contribute to the adjustment strategy.
(d) Additional criteria, or priority consideration factors for
assistance, may be set forth in a NOFA.
Sec. 308.5 Applicant requirements.
Each application for a grant under part 308 must:
(a) Include evidence of area and applicant eligibility (see part
301);
(b) Include, or incorporate by reference, if so approved by EDA, a
strategy, as provided in Sec. 301.3 (except that a strategy is not
required when a funding request is for planning assistance, i.e., a
strategy grant);
(c) Identify the sources of the other funds, both eligible Federal
and non-Federal, that will make up the balance of the proposed
project's financing, including any private sources of financing. The
application must show that such other funds are committed to the
project and will be available as needed. The local share must not be
encumbered in any way that would preclude its use consistent with the
requirements of the grant; and
(d) Explain how the proposed project meets the criteria of
Sec. 308.2.
Sec. 308.6 Post-Approval requirements.
(a) Financial, performance, and progress reports will be specified
in the Special Award Conditions of the grant.
(b) Projects involving construction shall comply with the
provisions of subpart B of part 305.
(c) RLF Supplemental Requirements and Guidelines--RLF grants are
subject to the requirements set forth in this part and the
publications: EDA's RLF Standard Terms, EDA's RLF Administrative
Manual, and EDA's RLF Audit Guidelines, Appendixes B-D of this part
displayed at EDA's web site, http://www.doc.gov/eda. A copy of these
documents is available from EDA and a copy will be furnished to an
award recipient with the Offer of Financial Assistance.
Appendix A to Part 308--Section 209 Economic Adjustment Program
Revolving Loan Fund; Plan Guidelines
OMB Approval No. 0610-0095.
Approval expires 07/31/99
Burden Statement for Revolving Loan Fund Plan
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to
the requirements of the Paperwork Reduction Act, unless that
collection of information displays a currently valid OMB Control
Number.
The information is required to obtain or retain benefits from
the Economic Development Administration pursuant to Economic
Development Administration Reform Act, Public Law 105-393. No
confidentiality for the information submitted is promised or
provided except that which is exempt under 5 U.S.C. 552(b)(4) as
confidential business information.
The public reporting burden for this collection is estimated to
average 40 hours per response including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. Send comments regarding this burden
estimate or any other aspect of this collection of information,
including suggestions for reducing this burden to: Economic
Development Administration, Herbert C. Hoover Building, Washington,
DC, 20230, and to the Office of Information and Regulatory Affairs,
Office of Management and Budget, Washington, DC 20503.
Purpose
EDA requires Revolving Loan Fund (RLF) grantees to manage their
RLFs in accordance with a plan. The Plan must be approved by EDA
prior to the grant award, but may be modified subsequently, with EDA
approval,
[[Page 5431]]
as provided for in the RLF Administrative Manual (Section X.D.).
These guidelines are designed to assist grant applicants prepare and
document an RLF Plan that (1) is tailored to supporting
implementation of the area's Economic Adjustment Strategy, (2)
provides for administrative clarity, continuity and consistency, and
(3) is acceptable to EDA.
EDA Evaluation Criteria
EDA will use the following criteria in evaluating RLF Plans:
1. The Plan flows from and is consistent with the Economic
Adjustment Strategy for the area, as approved by EDA.
2. It is internally consistent, i.e., it is a coherent statement
of the strategic purpose of the particular RLF and the various
considerations influencing the selection of its financing strategy,
policies and loan selection criteria.
3. The financing strategy demonstrates a knowledgeable analysis
of the local capital market and the financing needs of the targeted
businesses.
4. The financing policies and portfolio standards are consistent
with EDA policy and requirements.
5. The strategic objectives defined are sufficiently meaningful,
though not necessarily quantified, so that progress toward them can
be assessed over time.
6. The administrative procedures for operating the RLF are
consistent with generally accepted prudent lending practices for
public lending institutions.
Format and Content
The format for the Plan provides for two distinct parts: the
Revolving Loan Fund Strategy and the Operational Procedures. Each
part contains a number of sections designed to facilitate the
orderly and logical presentation of the required information.
However, the organization of the material and the level of detail
provided in the subsections of Part I may be varied to improve the
narrative flow, provided the substantive content is adequately
covered.
The title page of the Plan document should show the grant
recipient organization's name and the date the Plan was approved.
Normally, approval is required to be by resolution of the
organization's governing board. States are exempted from this
requirement.
Part I: The Revolving Loan Fund Strategy
The RLF strategy is the approach selected by the grant recipient
organization for using RLF financing as part of the broader business
development strategy designed to support achievement of the goals
and objectives established through the area/community's economic
adjustment or development planning process. The sequence of the
subsections of this Part are designed to lead the reader from the
general to the more specific, providing the reader with an
understanding of how the RLF strategy was arrived at, and
establishing the strategic, organizational and programmatic context
for the proposed use of the RLF.
A. Economic Adjustment Program Overview
A short description of the area's economic adjustment program,
i.e., the strategy and the full range of activities planned and
being implemented, should be provided. The following topics must be
included:
1. The nature and scale of the economic adjustment problem(s)
underlying the economic distress statistics that resulted in the
area becoming eligible for Section 209 assistance.
2. The process through which the Economic Adjustment Strategy
was developed. Was it an outgrowth of an ongoing economic
development program, such as the Overall Economic Development
Program (OEDP) required for other forms of EDA assistance, or a
special initiative undertaken in-house or by a consultant? What
community organizations and interest groups were, and continue to
be, involved in further refining the strategy and overseeing its
implementation?
3. Area resources/assets (potential or actual growth industries,
industries that could be more productive, work force skills, natural
resources, etc.) on which the strategy is designed to build. What
specific opportunities have been identified for expanding or
strengthening existing economic activities and/or creating new
activities?
4. The strategic adjustment goals and objectives derived from
the conclusions described above and an assessment of the capacity of
the community to invest in pursuing the opportunities identified.
5. The implementation programs and activities, both underway and
planned, that support the strategic objectives. Note that while
business development activities should be identified here, in
addition to other activities, Section B requires a detailed
discussion of the business development strategy.
6. The organizational structure and distribution of
responsibility for managing the on-going adjustment program. What
agency is responsible for maintaining the adjustment strategy,
evaluating results and updating it as needed? What agencies/
organizations manage or coordinate implementation of key elements in
the overall strategy, in particular, the business development
strategy of which the RLF is to be a component.
B. The Business Development Strategy
As emphasized in EDA's guidelines for preparing an Economic
Adjustment Strategy, a key element of any community's adjustment
program should be its business development strategy. A community's
business development strategy will depend on the particular
opportunities identified for stimulating business investment and
productivity. Participation of the business community in the
development of the strategy is essential, as is a firsthand
knowledge of the characteristics of firms within the targetted
economic sectors and their individual needs for assistance.
It is the experience of working with the business sector in
designing and implementing a business development strategy that
enables the community to (1) determine the need for an RLF, and (2)
define the types of RLF investments that will be most effective in
complementing other types of business assistance in supporting the
objectives of the adjustment program.
If the business development strategy is already well documented
in the community's Economic Adjustment Strategy, it need only be
summarized sufficiently to provide a bridge between the adjustment
strategy and the RLF financing strategy. If not well documented, it
should be described in more detail. The following features of the
strategy should be addressed:
1. The objectives of the business development strategy, for
example, increase the capacity of local firms to supply parts and
services to a major local manufacturer, encourage creation of firms
to develop and commercialize products that add value to a local
resource, assist small manufacturing firms incorporate new
production technologies and/or develop new markets, etc.
2. The pertinent characteristics of the businesses or
prospective businesses in the economic sectors targeted by the
strategy; for example, their size, age, ownership, management,
products, markets, competitiveness, production processes, capital,
etc.
3. The types of assistance needed by these businesses and would-
be entrepreneurs to take advantage of the opportunities identified;
for example, access to technical information (market data, new
technologies and production processes, exporting), hands-on
management and technical assistance, financing, incubator space,
etc. How were and are these needs being identified: surveys, on-site
interviews, business forums, etc.?
4. The programs/activities being undertaken by the public sector
and/or development organizations to address the identified needs.
Are there other sources of assistance available; for example, a
technical college, business development center, industrial extension
service, SCORE program, an SBA Small Business Development Center
and/or a Certified Development Corporation, etc.? Are there private
sector organizations, industry and/or business associations that
promote information exchange and technical support?
C. The Financing Strategy
The community's financing strategy should take into account all
the sources of financing, public and private, available to support
its business development objectives, and should identify the best
and appropriate sources to meet the differing creditworthiness and
needs of the types of businesses targeted for investment. Analysis
of the characteristics of the demand for and supply of financing
will determine the appropriate financing niche for the RLF. This
should be discussed in terms of the following:
1. The current types of financing needs and opportunities in the
targeted business sectors and specific types of firms within them.
What further needs and opportunities are expected to emerge as
implementation of the strategy progresses?
2. The current availability of public and private financing in
the area. What are the prevailing commercial lending policies/
restrictions? What role is anticipated for the public and private
lenders in supporting the community's business development strategy?
[[Page 5432]]
3. The characteristics of the financing niche that the RLF would
occupy.
a. Types of businesses/firms?
b. Types of financing?
c. Types of terms?
4. The impact RLF financing is anticipated to have on
accomplishing the community's economic adjustment objectives in the
next 3-5 years. For example, with respect to:
a. Restructuring/strengthening the local economy.
b. Stimulating private investment, both through leveraging
commercial financing and ``showing the way to other investors.''
c. Enhancing job opportunities.
D. Financing Policies
Consistent with the role identified for the RLF in the
community's financing strategy, and with due consideration for the
need to manage and protect the RLF capital, the specific policies
designed to govern RLF financing should be discussed as follows:
1. The standard lending terms, and any concessionary or special
financing techniques that the RLF will entertain to accomplish the
objectives of the business development strategy. Discuss the key
factors that will determine how such techniques might be employed.
a. The range of allowable interest rates the RLF will charge
borrowers.
b. Requirements for equity or cash injections to be provided by
the RLF borrower.
(1) Will the policy be the same for new as opposed to
established businesses?
(2) Will any deviations be allowed, e.g., for working capital
loans?
c. The standard repayment terms for both working capital and
fixed asset loans, and any deviations.
(1) If the RLF anticipates moratoria on principal payments,
specify the maximum moratorium period.
(2) What key factors will determine when any deviations will be
employed?
2. The types of collateral to be required of borrowers.
3. The minimum and maximum loan sizes that the RLF will
entertain.
E. Portfolio Standards and Targets
RLF portfolio standards and targets are used by EDA as surrogate
measures for the economic performance of an RLF. They should be
established as follows:
1. The anticipated percentage of RLF investments in each of the
following:
a. Industrial/commercial/Service businesses (Show any
subcomponents, if significant and if identified in the business
development strategy.)
b. New businesses/expansion/retention
2. The anticipated percentage of the RLF portfolio that will be
targeted towards working capital loans and fixed asset loans (note
that EDA allows a maximum of 50 percent for working capital loans
during the grant disbursement phase of the RLF)
3. Private investment leveraging ratio for the portfolio
overall. Sources of private investment that may be included are:
financing from other lenders (e.g., banks, investment companies,
etc.) or private investment on the part of the borrower or other
firms in conjunction with the RLF financing.
4. Cost per job for the portfolio overall.
F. RLF Loan Selection Criteria
In addition to the required selection criterion that financing
is not otherwise available, what ``economic impact'' criteria will
be used to evaluate proposed loans?
G. Performance Assessment Process
Describe the process and factors that the grant recipient will
use (1) to periodically assess the performance of the RLF in
accomplishing its stated economic adjustment objectives, and (2) to
modify the RLF Plan as needed.
Part II: Revolving Loan Fund Operational Procedures
This part of the RLF Plan is designed to cover in detail the
specific operational procedures to be followed by the grant
applicant/recipient in administering the RLF.
Section A requires an overview of the organizational
distribution of responsibility for the key elements in operating the
RLF. Sections B. through E. require, for each item indicated, a
short description of (1) how it will be addressed, the procedure/
requirement to be used, if any, (2) the documentation that will be
used, (3) the party(ies) responsible for carrying out the
requirement, and (4) the time frame within which it is to be
implemented.
A. Organizational Structure
1. Provide an overview of the organizational structure within
which the RLF will be operated. For each of the functions critical
to the conduct of the RLF's lending activities, identify the
responsible parties including any from outside the organization. Use
a schematic diagram if helpful.
Critical operational functions include: identification and
development of appropriate financing opportunities; provision of
business assistance and advisory services to prospective and actual
borrowers (identify the types and sources of services available);
environmental reviews; and loan management (loan processing, credit
analysis, loan write-ups and recommendations, closings, collections
and servicing, handling defaulted loans and foreclosures, and
compliance with grant requirements). Note that a more detailed
description of how some of these functions will be handled is
requested in sections below.
2. Describe the size and general composition of the
organization's RLF loan board; include experience and occupational
requirements. Describe its duties and responsibilities, membership
terms and quorum requirements.
An RLF loan board must be responsible for approving loans, all
major loan modifications (or waivers), and loan foreclosure actions.
It must also be responsible for at least recommending RLF loan
policy (actual approval of loan policy may take place at a higher
level). The loan board should include members with business
experience (representation of targeted industries and/or business
sectors is desirable provided it will not cause a conflict of
interest), members with financing experience, members from both the
public and private sectors and minority members representative of
the community. At least one member with financing experience
(similar to the type of loans to be made under the RLF program) must
be present for each loan decision.
B. Loan Processing Procedures
1. Standard Loan Application Requirements--include a list of
items or a checklist showing the items to be required of RLF loan
applicants. [It is acknowledged that not all items will apply to
each loan applicant and that certain situations may require
additional items not on the list.]
2. Credit Reports.
3. Appraisal Reports.
4. Environmental Reviews.
5. Standard Collateral Requirements--include requirements for
personal guarantees and insurance (hazard, keyman life, flood, and
title).
6. Standard Equity Requirements--when listing equity
requirements, differentiate between existing and new companies, and
fixed asset and working capital loans. Note that an allowable
requirement for a working capital loan may simply require a borrower
to have a certain net working capital position. Equity is defined as
an amount or percentage of capital (or lien free assets) that is
required to be added to a project from borrower or investor sources.
7. Loan Write-up--indicate the items to be addressed in the RLF
loan write-up. At a minimum, a loan write-up must discuss how the
proposed RLF loan is not replacing private lender funding sources--
refer to Section IV.B.3. of the RLF Administrative Manual. Other
items should include a summary of the firm's history, management,
product, production capability, market conditions, financing,
collateral, repayment ability, consistency with the RLF's financing
policy and whether there are any environmental problems associated
with the project. A Loan Write-up summarizes the key aspects of a
loan; it is prepared by the RLF grant recipient and is usually
provided to the RLF loan board prior to the loan decision.
8. Procedures for loan approvals, documentation of loan board
decisions, and notification of borrowers.
C. Loan Closing and Disbursement Procedures
1. General Closing Requirements--include documentation required
to confirm any needed equity injection and private lender financing.
2. Loan Closing Documentation Requirements--provide a checklist
of the standard documents that will be required for the types of
loans to be made under the RLF. Indicate any special timing
requirements, e.g., Uniform Commercial Code (UCC) searches prior to
and/or subsequent to a UCC filing on personal property.
3. Loan Disbursement Requirements--indicate borrower
requirements for drawing loan funds, i.e., is a borrower required to
provide any evidence (e.g., an invoice) that it has ordered an asset
prior to receiving loan funds to ensure that funds are ordered only
when actually needed and that they will be
[[Page 5433]]
used as agreed in the loan agreement, any pre-disbursement
requirements for working capital loans, any special requirements for
construction financing, and any other disbursement procedures that
are necessary to protect RLF assets.
D. Loan Servicing Procedures
1. Loan Payment and Collection Procedures--indicate the standard
method(s) of loan payment by RLF borrowers, e.g., payment coupon
books, automatic payment withdrawals, or other methods. Indicate any
procedures for protection and timely deposit of RLF loan payments.
Note that unused RLF funds must be Federally insured if deposited in
a financial institution.
2. Loan Monitoring Procedures--indicate the standard procedures
for monitoring loan conditions, including requirements/procedures
for financial statements, annual insurance renewals, UCC refilings,
borrower site visits, tickler files, and compliance with any Federal
requirements of the grant.
3. Late Payment Follow-up Procedures--indicate the standard
procedures for handling loans that are in arrears up to 90 days and
discuss any late penalty requirements (which should be stated in the
note).
4. Procedures for Handling Loans over 90 days in arrears.
5. Write-off Procedures--indicate how the RLF will account for
loan write-offs.
E. Administrative Procedures
1. Procedures for Loan Files and Loan Closing Documentation--
indicate what should be included in an RLF loan file, e.g., the
application, loan commitment letters, copy of private lender loan
agreement, financial statements, annual insurance certifications,
annual site visit reports, general correspondence, job reports, etc.
Indicate any procedures for safekeeping loan documents, particularly
the loan closing documents. At a minimum, all original notes, loan
agreements, personal guarantees and security agreements should be
placed in a fireproof facility or container.
2. Procedures for Complying with EDA Reporting Requirements--
provide an overview of how RLF loan payments and RLF Income sources
will be tracked and accounted for in order to meet EDA reporting
requirements. [RLF Income sources including interest from loans and
from accounts holding idle RLF funds, loan fees, late payment fees,
and any other sources of RLF revenue.]
3. Grantee control procedures for ensuring compliance with all
grant requirements and for monitoring the RLF portfolio.
Prior to the initial grant disbursement, the grant recipient
must also certify that the basic loan documents are in place and
that these documents have been reviewed by counsel for adequacy to
protect the interests of the RLF. The minimum documents required
are:
--Note
--Loan Agreement
--Security Agreement(s)
--Deed of trust or Mortgage
--Agreement of Prior Lienholder
Appendix B to Part 308--Section 209 Economic Adjustment Program
Revolving Loan Fund Grants; Standard Terms and Conditions
Approval expires 07/31/99.
Burden Statement for Revolving Loan Fund Standard Terms and
Conditions
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to
the requirements of the Paperwork Reduction Act, unless that
collection of information displays a currently valid OMB Control
Number.
The information is required to obtain or retain benefits from
the Economic Development Administration pursuant to Economic
Development Administration Reform Act, Public Law 105-393. No
confidentiality for the information submitted is promised or
provided except that which is exempt under 5 U.S.C. 552(b)(4) as
confidential business information.
The public reporting burden for this collection is estimated to
average 12 hours per response including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. Send comments regarding this burden
estimate or any other aspect of this collection of information,
including suggestions for reducing this burden to: Economic
Development Administration, Herbert C. Hoover Building, Washington,
DC, 20230, and to the Office of Information and Regulatory Affairs,
Office of Management and Budget, Washington, DC 20503.
Table of Contents
A. Program Statement
B. Overall Statutory and Executive Order Requirements
.01 EDA Statute and Regulations
.02 Administrative Requirements
.03 Civil Rights Requirements
.04 Hatch Act
C. General Requirements
.01 Grant Terms and Conditions
.02 Compliance with EDA Instructions
.03 Exclusion from Certification and Disclosure requirements
.04 Duplication of Work
.05 Reimbursement of Costs Prior to Award
.06 Other Funding Sources
.07 Availability of Information
.08 Procurement Standards & Use of Consultants/Contractors
.09 Program Performance Notification
.10 Attorney and Consultant Fees
.11 Suspension and Termination of Grant
D. RLF Requirements for Recipients and Borrowers
.01 Prudent Lending Practices
.02 Inclusion of requirements in RLF Loan Documents
.03 Annual RLF Plan Certifications
.04 RLF Plan Modifications
.05 Eligible Area
.06 Relocation
.07 Grant Disbursement Schedule
.08 Capital Utilization Standard
.09 Civil Rights
.10 Environment
.11 Earthquake Requirements
.12 Flood Hazard Insurance
.13 Davis-Bacon
.14 Contract Work Hours and Safety Standards Act & Anti-
Kickback
.15 Access for the Handicapped
.16 Conflict of Interest
E. Financial Requirements
.01 Budget
.02 Method of Payment
.03 Request For Budget Change
.04 Matching and Cost Sharing
.05 Program Income
.06 RLF Income
.07 Indirect Costs
.08 Additional Funding and/or Extension of Award
.09 Debts
.10 Interest-Bearing Accounts
.11 Bonding and Payment of Funds
.12 Grant Violations and Ineligible Costs
F. Reporting Requirements
.01 Financial and Performance Reports
.02 Other Reports
.03 Subcontracting Reports
G. Administrative Cost and Loan Records Retention
.01 Administrative Cost Records
.02 Loan Records:
.03 General
H. Audit
.01 Requirements
.02 Establishment and Collection of Audit-Related Debts
I. Miscellaneous Items
.01 Programmatic Changes
.02 Name Check Review
.03 Prohibition Against Assignment
.04 Covenant Against Contingent Fees
.05 Officials Not To Benefit
.06 Sub-Award and/or Contract to Other Federal Agencies
.07 Property Management
.08 Rights to Inventions Made by Nonprofit Organizations and
Small Business Firms
.09 Executive Order 12432, Minority Business Enterprise
.10 Internal Revenue Service (IRS) Information
.11 Government wide Debarment, Suspension and Other
Responsibility Matters (Nonprocurement)
.12 Restrictions on Lobbying
A. Program Statement
These Standard Terms and Conditions apply to all Economic
Adjustment Program awards for revolving loan fund activities funded
under Section 209 of the Public Works and Economic Development Act
of 1965, P.L. 89-136, as amended (42 U.S.C. 3121, et seq.).
For the purpose of these Standard Terms and Conditions, (a) the
term ``Government'' refers to the Economic Development
Administration (EDA); (b) the term ``Recipient'' refers to the
undersigned recipient of Government funds under the Agreement to
which this attachment is made a part; the term
``Department'' refers to the Department of Commerce; (d) the term
``Regional Office'' refers to the appropriate Regional Office of the
Economic
[[Page 5434]]
Development Administration; (e) the term ``Federal Program Officer''
refers to the Regional Director of the appropriate EDA Regional
Office (the Federal Program Officer is responsible for programmatic
and technical aspects of this award); (f) the term ``Grants
Officer'' refers to the Assistant Secretary for Economic Development
or his or her designated representative (the Grants Officer is
responsible for all administrative aspects of this award and is
authorized to award, amend, suspend, and terminate financial
assistance awards); (g) the term ``Project'' refers to the activity
for which the Government grant was awarded; and (h) ``RLF'' refers
to this revolving loan fund grant project.
B. Overall Statutory and Executive Order Requirements
Some of the terms and conditions herein contain, by reference or
substance, a summary of the pertinent statutes or regulations issued
by a Federal agency and published in the Code of Federal
Regulations. To the extent that it is a summary, such term or
condition is not in derogation of, or an amendment to, the statute
or regulation.
The Recipient shall comply, and require any contractor which
provides services on behalf of the Recipient to comply with all
applicable Federal, state, territorial, and local laws, in
particular, the following Federal public laws, the regulations
issued thereunder, Executive Orders and OMB Circulars, and the
requirements listed in Section D. herein:
.01 EDA Statute and Regulations: Applicable provisions of the
Public Works and Economic Development Act of 1965, P.L. 89-136, as
amended (42 U.S.C. 3121, et seq.)and regulations in 13 CFR, Chapter
III.
.02 Administrative Requirements: Administrative requirements
for grants, OMB Circular No. A-110, ``Grants and Agreements with
Institutions of Higher Education, Hospitals, and Other Nonprofit
Organizations,'' and its attachments, as amended or as superseded in
the Department's regulations, or those found in 15 CFR Part 24,
``Uniform Administrative Requirements For Grants and Cooperative
Agreements to State and Local Governments,'' as applicable. In the
event of inconsistency or conflict between the administrative
requirements and EDA's enabling legislation or regulations, the
latter shall prevail;
.03 Civil Rights Requirements: Title VI of the Civil Rights Act
of l964, as amended (42 U.S.C. 2000d-2000d-4); 15 CFR Part 8;
Executive Orders 11246 and 11375; 4l CFR Part 60-4; P.L. 92-65,
Section 112, prohibiting sex discrimination on programs under the
Public Works and Economic Development Act; 13 CFR Part 317 imposing
civil rights requirements on recipients; regulations issued pursuant
to the Age Discrimination Act of 1965 (42 U.S.C. 6101 et seq.) 15
CFR Part 20; Section 504 of the Rehabilitation Act of 1973, as
amended (29 U.S.C. 794), and the implementing regulations of the
Department of Commerce in 15 CFR 8b, prohibiting discrimination
against and providing fair and equitable treatment of the
handicapped under programs or activities receiving Federal financial
assistance; and such other civil rights legislation, regulations,
and Executive Orders as applicable;
.04 Hatch Act: Recipient will comply with the provisions of the
Hatch Act (5 U.S.C. Section 1501-1508 and 7324-7328) which limit the
political activities of employees whose principal employment is
funded in whole or in part with Federal funds.
C. General Requirements
.01 Grant Terms and Conditions: The Recipient and any
consultant/contractor providing services on behalf of the Recipient
shall comply with the Grant Award and all terms and conditions
thereto. The decision of the Government in interpreting the terms
and conditions of this grant shall be final.
.02 Compliance with EDA Instructions: The Recipient shall
comply with EDA Revolving Loan Fund guidelines, manuals and other
instructions as may be issued from time to time by the Government in
connection with the assistance herein offered. All such instructions
are to be applied on the effective date of the award.
.03 Exclusion from Certification and Disclosure requirements:
An Indian tribe or organization that is seeking an exclusion from
Certification and Disclosure requirements must provide (preferably
in an attorney's opinion) the Government with the citation of the
provision or provisions of Federal law upon which it relies to
conduct lobbying activities that would otherwise be subject to the
prohibitions in and to the Certification and Disclosure requirements
of Section 319 of Public Law No. 101-121.
.04 Duplication of Work: The purpose and scope of work for
which this award is made shall not duplicate programs for which
monies have been received, committed, or applied for from other
sources, public or private. The Recipient shall submit full
information about related programs that may be initiated within the
award period. The Recipient shall immediately provide written
notification to the Federal Program Officer in the event that other
Federal financial assistance is received during the award period
relative to the scope of work of this award.
.05 Reimbursement of Costs Prior to Award: Funds provided under
this award shall not be used to pay for the cost of any work started
or completed prior to the effective date of this award.
.06 Other Funding Sources: Federal-share funds budgeted or
awarded for this Project shall not be used to replace any financial
support previously provided or assured from any other source. The
Recipient agrees that the general level of expenditure by the
Recipient for the benefit of program area and/or program designated
in the Special Terms and Conditions of this award, or any amendment
or modification thereto, shall be maintained and not reduced as a
result of the Federal-share funds received under this Project.
.07 Availability of Information: The Recipient agrees that all
information resulting from its activities and not exempt from
disclosure under the Freedom of Information Act, 5 U.S.C. 522, shall
be made freely available to the public. This requirement is
exclusive to the Recipient and is not applicable to confidential
information disclosed or obtained in the normal borrower/lender
relationship.
.08 Procurement Standards & Use of Consultants/Contractors: The
procurement standards and procedures set forth in 15 CFR Part 24,
``Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments,'' Section 24.36 or OMB
Circular No. A-110, ``Uniform Administrative Requirements for Grants
and Agreements with Institutions of Higher Education, Hospitals, and
Other Nonprofit Organizations,'' Attachment O or its implementing
Department regulation, as appropriate, shall apply to all awards.
For all proposals and contracts where costs are expected to exceed
the simplified acquisition threshold, the scope of work (request for
proposal) and the cost of such must be submitted to and approved by
the Government prior to employment of such consultants or
contractors. The Recipient shall ensure that any consultant or
contractor paid from funds provided under this award either directly
or through program income is bound by all applicable award terms and
conditions. The Government shall not be liable hereunder to a third
party nor to any party other than the Recipient.
.09 Program Performance Notification: The Recipient shall
inform the Government as soon as the following types of conditions
become known:
a. Problems, delays, or adverse conditions that materially
affect the ability to attain program objectives, prevent the meeting
of time schedules or goals, or preclude the attainment of project
work units by established time periods. This disclosure shall be
accompanied by a statement of the action taken, or contemplated, and
any EDA assistance needed to resolve the situation.
b. Favorable developments or events that enable meeting time
schedules and goals sooner than anticipated or producing more work
units than originally projected.
.10 Attorney and Consultant Fees: The Recipient hereby agrees
that no funds made available from this grant shall be used, directly
or indirectly, for paying attorneys' or consultants' fees in
connection with securing this grant or other grants or cooperative
agreements from EDA.
.11 Suspension and Termination of Grant:
a. When a Recipient has failed to comply with the grant award
stipulations, standards, or conditions, EDA may, on reasonable
notice to the Recipient, suspend the grant and withhold further
payments, or prohibit the Recipient from incurring additional
obligations of grant funds, pending corrective action by the
Recipient or a decision to terminate in accordance with the
following paragraphs. EDA shall allow all necessary and proper costs
which the Grantee could not reasonably avoid during the period of
suspension, provided they meet the provisions of applicable OMB cost
principles and the grant terms and conditions.
b. Whenever the Recipient shall fail in its fiduciary
responsibilities, or shall be unable
[[Page 5435]]
or unwilling to perform, as trustee of this grant to serve the
purpose of the Economic Adjustment program for which it was made,
EDA may suspend, terminate or transfer this grant to an eligible
successor Recipient, with jurisdiction over the Project area, to
administer it as such trustee. The Recipient shall cooperate with
EDA in accomplishing the transfer of this grant to such successor
Recipient.
c. EDA may terminate any grant in whole, or in part, at any time
before the date of completion, whenever it is determined that the
Recipient has failed to comply with the conditions of the grant
(termination for cause). EDA shall promptly notify the Recipient in
writing of the determination and the reasons for the termination,
together with the effective date. Payments made to recipients or
recoveries by the Federal sponsoring agencies under grants or other
agreements terminated for cause shall be in accordance with the
legal rights and liabilities of the parties. Whenever EDA terminates
any RLF grant for cause, in whole or in part, it has the right to
recover residual funds and assets of the RLF grant in accordance
with the legal rights of the parties.
d. In accordance with subsections (a) (b) and (c) above, EDA may
suspend or terminate any grant for cause based on, but not limited
to, the following: (1) failure to make loans in accordance with the
RLF Plan, including the time-schedule for loan closings; (2) failure
to obtain prior EDA approval for such changes to the RLF Plan,
including provisions for administering the RLF, as specified in the
RLF Administrative Manual, as amended; (3) failure to submit
progress, financial or audit reports as required by the terms and
conditions of the grant agreement; (4) failure to comply with
prohibitions against conflict-of-interest for any transactions
involving the use of RLF funds; (5) failure to operate the RLF in
accordance with the RLF Plan and the terms and conditions of the
grant agreement.
e. EDA or the Recipient may terminate this grant in whole or, in
part, when the parties agree that the continuation of the project
would not produce beneficial results commensurate with the further
expenditure of funds (termination for convenience). The parties
shall agree upon the termination conditions, including the effective
date and, in the case of partial terminations, the portion to be
terminated. The Recipient shall cancel as many outstanding
obligations as possible. EDA shall allow full credit to the
Recipient for the Federal share of the noncancelable obligations,
properly incurred by the Recipient prior to termination.
f. If there is a partial termination of the EDA grant, the full
amount of the original nonfederal matching share is expected to be
retained in the RLF for lending purposes unless otherwise provided
for in the grant agreement or agreed to in writing by the
Government.
g. Other grant closeout procedures set forth in 15 CFR, Part 24,
or OMB Circular No. A-110, or its implementing Department
regulation, as applicable, shall also apply.
D. RLF Requirements for Recipients and Borrowers
.01 Prudent Lending Practices: The Recipient agrees to
administer the RLF in accordance with lending practices generally
accepted as prudent for public loan programs. Such practices cover
loan processing, documentation, loan approval, collections,
servicing, administrative procedures and recovery actions. The
Recipient agrees to follow local laws and filing requirements to
perfect and maintain security interests in RLF collateral.
.02 Inclusion of requirements in RLF Loan Documents: The
Recipient agrees to incorporate applicable Federal requirements
described herein in RLF loan agreements to ensure borrower
compliance.
.03 Annual RLF Plan Certifications: The Recipient agrees to
certify annually to the Government that the RLF is being operated in
accordance with the RLF Plan (as referenced in the Special Terms and
Conditions of the grant, as amended); and that the RLF Plan is
consistent with, and supports, implementation of the current
Economic Adjustment Strategy for the project area.
.04 RLF Plan Modifications: The Recipient agrees, because
economic conditions change and new approaches to stimulating
economic adjustment may be needed, to seek EDA approval of such
modifications to the RLF Plan as may be required for the RLF to
continue to be fully supportive of the area's Economic Adjustment
Strategy, as updated and approved by EDA. The Recipient further
agrees to request EDA approval of modifications to the Plan at any
time there is evidence that such modifications are needed to ensure
effective use of the RLF as a strategic financing tool.
.05 Eligible Area: The Recipient shall use the RLF only in the
areas eligible for Section 209 assistance as approved by the
Government and defined in the Special Terms and Conditions of the
grant. To add a new eligible area to a previously awarded RLF grant,
the Recipient shall obtain the prior written approval of the
Government. To ensure that the economic benefits of RLF loans remain
within eligible lending areas, the Recipient shall include a
provision in RLF loan documents to call loans if the economic
activity financed is moved outside the eligible lending area.
.06 Relocation: The Recipient agrees that RLF funds shall not
be used to relocate jobs from one commuting area to another. The
Recipient shall include a provision in RLF loan documents to call
loans if it is determined that (a) the business used the RLF loan to
relocate jobs from another commuting area or (b) the economic
activity financed is moved to another commuting area to the
detriment of local workers.
.07 Grant Disbursement Schedule: The Recipient agrees, unless
otherwise specified in the Special Terms and Conditions of the grant
award, to make loans in the initial round of lending at a rate such
that no less than 50 percent of the grant funds are disbursed within
18 months, 80 percent within two years and 100 percent within three
years of the date of the grant award. The Recipient acknowledges
that if it fails to meet any of these disbursement deadlines, the
Government will not disburse additional grant funds unless (1) the
funds are required to close loans approved prior to the deadline and
which will be fully disbursed to the borrower(s) within 45 days, or
(2) the funds are required to meet continuing disbursement
obligations on loans closed prior to the deadline, or (3) the
Government has approved in writing an extension of the deadline. In
no event, will the time permitted for full disbursement of the grant
funds extend beyond September 30, of the fifth year after the fiscal
year of the grant award. Funds not disbursed in accordance with the
foregoing will automatically be retained by the Federal Government.
.08 Capital Utilization Standard: Subsequent to full
disbursement of the grant funds, the Recipient agrees to manage its
repayment and lending activities to maintain 75 percent or more of
the RLF capital loaned out or committed at all times, unless a
different standard has been agreed to in writing by the Government.
The Recipient agrees to comply with Government sanctions if the
applicable capital utilization standard is not met within a
reasonable time period.
.09 Civil Rights: The Recipient agrees that RLF funds will be
made available on a nondiscriminatory basis and that no applicant
will be denied a loan on the basis of race, color, national origin,
religion, age, handicap, or sex. The Recipient agrees to market the
RLF program to prospective minority and women borrowers. The
Recipient shall include a provision in the RLF loan documents that
prohibits borrowers from discriminating against employees or
applicants for employment or providers of goods and services. The
Recipient agrees to monitor borrower compliance with civil rights
laws.
.10 Environment: The Recipient shall develop and implement an
environmental review process in accordance with the intent of the
National Environmental Policy Act of 1969, as amended (P.L. 91-190),
as implemented by the ``Regulations'' of the President's Council on
Environmental Quality (40 CFR Parts 1500-1508).
In addition, the Recipient shall indemnify and hold the
Government harmless from and against all liabilities that the
Government may incur as a result of providing an award to assist,
directly or indirectly, in the preparation of site(s) or
construction, renovation or repair of any facility or site(s), if
applicable, to the extent that such liabilities are incurred because
of ground water, surface, soil or other conditions caused by
operations of the Recipient or any of its predecessors on the
property;
The Recipient shall adopt procedures to review the impacts of
prospective loan proposals on the physical environment. The RLF Plan
shall provide for disapproval of any loan project which would
adversely (without mitigation) impact flood plains, wetlands,
significant historic or archeological properties, drinking water
resources, or nonrenewable natural resources. In administering the
RLF, the Recipient shall adopt procedures to comply with applicable
laws and statutes including, but not limited to, the following:
[[Page 5436]]
a. The Clean Air Act, as amended (42 U.S.C. 7401 et seq.);
b. The Federal Water Pollution Control Act, as amended (33
U.S.C. 1251, et seq.);
c. The Coastal Zone Management Act of 1972, P.L. 92-583, as
amended (16 U.S.C. 1451, et seq.);
d. Executive Order 11988, Floodplain Management (May 24, 1977),
and regulations and guidelines issued thereunder by the Economic
Development Administration;
e. Executive Order 11990, Protection of Wetlands (May 24, 1977);
f. The Endangered Species Act of 1973 P.L. 93-205, as amended
(16 U.S.C.1531, et seq.);
g. The Safe Drinking Water Act, P.L. 93-523, as amended (42
U.S.C. 300f-300j-9);
h. The Wild and Scenic Rivers Act, as amended (16 U.S.C. 1271,
et seq.);
I. The Resource Conservation and Recovery Act of 1976, P.L. 94-
580, as amended (42 U.S.C. 6901);
j. The Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (CERCLA), P.L. 96-510, as amended, by
Superfund Amendments and Reauthorization Act of 1986 (SARA) (42
U.S.C. 9601, et seq.) [As deemed necessary, the Recipient shall
require compliance with EDA policy and procedures regarding the
identification of hazardous and toxic waste on real property
affected by RLF activities in accordance with EDA Directive 17.01,
promulgated to reduce liabilities for environmental cleanup under
CERCLA and SARA. This will require a certification to demonstrate a
``due diligence'' examination of project site(s) and for any
environmental contamination that may affect real property for which
EDA might be placed in the chain of title, or that is affected by
EDA assisted construction activities.];
k. The National Historic Preservation Act P.L. 89-665 (16 U.S.C.
470, et seq.), (36 CFR Part 800);
l. Coastal Barriers Resources Act P.L. 97-348 (16 U.S.C. 3501,
et seq.); and
m. All state and local environmental review requirements with
all applicable Federal, state and local standards. The Recipient
shall ensure that potential borrowers' environmental submittal is
reviewed. Should a proposed RLF project require the preparation of
an Environmental Assessment (EA) or an Environmental Impact
Statement/Report (EIS/EIR) in response to Federal, state or local
requirements, the Recipient shall be responsible for ensuring
compliance with the requirement prior to providing any loan
assistance under the RLF.
.11 Earthquake Requirements: For use in new building
construction projects: The Recipient is aware of and intends to
comply with one of three model Codes outlined by the Committee on
Seismic Safety in Construction (ICSSC): 1991 ICBO Uniform Building
Code; 1992 Supplement to the BUCA National Building Code; or 1991
Amendments to the SBCC Standard Building Code.
.12 Flood Hazard Insurance: Where applicable, the Recipient
shall require RLF borrowers to obtain flood hazard insurance
pursuant to the Flood Disaster Protection Act of 1973, P.L. 93-234,
as amended (42 U.S.C. 4002, et seq.);
.13 Davis-Bacon: The Recipient shall require borrowers to
comply with the Davis-Bacon Act, as amended [40 U.S.C. 276a-276a-5);
42 U.S.C. 3222], when construction is financed in whole or in part
by the RLF and when any related construction contract exceeds
$2,000.
.14 Contract Work Hours and Safety Standards Act & Anti-
Kickback Act: The Recipient shall require borrowers to comply, where
applicable, with the Contract Work Hours and Safety Standards Act,
as amended (40 U.S.C. 327-333) and with the Anti-Kickback Act, as
amended (40 U.S.C. 276(c); 18 U.S.C. 874);
.15 Access for the Handicapped: The Recipient shall ensure that
if the RLF is used in whole or in part to finance a building or
facility intended for use by the public or for the employment of
physically handicapped, it must be accessible to the physically
handicapped, pursuant to Public Law 90-480, as amended (42 U.S. C.
4151, et seq.), and the regulations issued thereunder;
.16 Conflict of Interest:
a. The Recipient shall not make RLF funds available to a
business entity if the owner of such entity or any owner of an
interest in such entity is related by blood, marriage, law or
business arrangement to the Recipient or an employee of the
Recipient or any member of the Recipient's Board of Directors, or a
member of any other Board (hereinafter referred to as ``other
Board'') which advises, approves, recommends or otherwise
participates in decisions concerning loans or the use of grant
funds.
b. No officer, employee, or member of the Recipient's Board of
Directors, or other Board, or person related to the officer,
employee, or member of the Board by blood, marriage, law, or
business arrangement shall receive any benefits resulting from the
use of loan or grant funds, unless the officer, employee, or Board
member affected first discloses to the Recipient on the public
record the proposed or potential benefit and receives the
Recipient's written determination that the benefit involved is not
so substantial as to affect the integrity of the Recipient's
decision process and of the services of the officer, employee or
board member.
c. An officer, employee or board member of the Recipient shall
not solicit or accept, directly or indirectly, any gift, gratuity,
favor, entertainment or any other thing of monetary value, for
himself or for another person, from any person or organization
seeking to obtain a loan or any portion of the grant funds.
d. Former board members and/or officers are ineligible to apply
for or receive loan or grant funds for a period of one year from the
date of termination of his/her services.
E. Financial Requirements
.01 Budget: The line item budget for this award is found in the
budget summary of the grant award. Funds budgeted under the RLF
portion of a grant shall be used for loan projects and, if
specified, for audit costs related to the RLF, but shall not be used
for other administrative costs related to the RLF.
.02 Method of Payment: Payments will be made by the Automated
Clearing House Electronic Funds Transfer (ACH/EFT) System which
transfers funds directly to a Recipient's bank account without
regard to dollar amount. Initially, the Recipient must complete the
Payment Information Form ACH Vendor Payment System (SF 3881) and
return it to the EDA Regional Office. The award number must be
included on the first line of the COMPANY INFORMATION section. The
SF 3881 should first be forwarded to the Recipient's bank so that
the bank can fill in the FINANCIAL INSTITUTION INFORMATION section
before returning the SF 3881 to the EDA Regional Office.
The completed SF 3881 shall be submitted together with the
completed Request for Advance or Reimbursement (SF 270), to the EDA
Regional Office. Subsequently, only a completed SF 270 is necessary
to request a transfer of funds unless information on the original SF
3881 has changed. Note: When completing SF 270 for an ACH/EFT
transfer of funds, type ``ACH/EFT'' in Item No. 10 of the form to
indicate a transfer of funds through the Automated Clearing House
Electronic Funds Transfer System.
.03 Request For Budget Change: Request for budget changes must
be submitted to the Federal Program Officer for approval. However, a
budget change involving a reduction in the line item for audit costs
for an equal increase in the RLF capital requires only written
notification to the Government to be effective.
.04 Matching and Cost Sharing: a. Local Share: In affirming
this award, the Recipient certifies that the non-Federal share of
project costs is committed and is available as needed for the
project, that the non-Federal share is from sources which can be
used as match for the EDA project and that the non-Federal share is
not encumbered or otherwise conditional.
b. To the extent applicable to this award, cash contributions by
the Recipient are expected to be paid out at the same general rate
as the Federal share, but in no event shall the Federal share be
paid out at a faster rate than the Recipient's contribution. Any
exceptions must be approved in writing by the Grants Officer based
on sufficient documentation demonstrating previously determined
plans for or later commitment of cash contributions.
c. The approved budget for this award is predicated normally
upon a sharing of allowable costs. In the event allowable costs are
less than the approved budget, the Federal share of this award will
be limited to the Federal pro-rata share of the total allowable
costs not to exceed the total Federal dollar amount reflected on the
award document. However, consistent with Section C.11.f, the full
amount of the nonfederal matching share will be expected to remain
for use in the RLF unless otherwise provided for.
.05 Program Income: Program Income includes repayments of RLF
loan principal and RLF Income (defined in Section E.06 below).
Program Income, with the exception of current RLF Income, may be
used only for relending and must be used by the Recipient (1) prior
to requesting a disbursement of EDA grant funds, or (2) concurrently
with the proceeds of such a disbursement.
[[Page 5437]]
.06 RLF Income: RLF Income is defined as interest earned on
outstanding loan principal, interest earned on accounts holding RLF
funds not needed for immediate lending, all loan fees and loan-
related charges received from RLF borrowers, and other income
generated from RLF operations. The Recipient may use RLF Income only
to capitalize the RLF and/or to cover eligible and reasonable costs
necessary to administer the RLF, unless otherwise provided for in
the Special Terms and Conditions of the grant.
If RLF Income will be used to pay for RLF administrative
expenses, the Recipient agrees (1) to use RLF Income only for those
administrative expenses incurred during the same twelve-month period
in which it is earned, and (2) to add any RLF Income remaining
unexpended at the end of each period to the RLF capital base. RLF
Income added to the RLF capital base may not be withdrawn, other
than for lending purposes, without the prior written consent of the
Government. The Recipient should refer to current EDA administrative
instructions regarding specification of the twelve-month accounting
period, the format for documenting income and expenses and such
reporting requirements as may be applicable.
.07 Indirect Costs: a. The Recipient may use indirect costs as
an eligible administrative expense chargeable against RLF Income if
the indirect costs reflect an established indirect cost rate
negotiated and approved by a cognizant Federal agency prior to the
year end in which the costs are charged, subject to the limitation
in subparagraph b. below.
b. The Department's acceptance of negotiated rates as provided
in this section is subject to total indirect costs not to exceed 100
percent of total direct costs charged against RLF Income. Where the
indirect cost rate exceeds 100 percent, a 100 percent rate shall be
used to compute the dollar amount of indirect costs.
c. Excess indirect costs will not be used to offset unallowable
or disallowed direct costs when the total allowable costs are
determined.
d. If the Recipient has not previously established an indirect
cost rate with a Federal agency, the negotiation and approval of a
rate is subject to the procedures in the applicable OMB costs
principles and the following subparagraphs:
1. The Office of Inspector General (OIG) is authorized to
negotiate indirect cost rates on behalf of the Department for those
organizations which the Department is cognizant. The OIG will
negotiate only fixed rates. The Recipient is required to submit to
the OIG (with a copy of its transmittal letter provided to the
Grants Officer) the documentation (indirect cost proposal, cost
allocation plan, etc.) necessary to establish such rates 90 days
prior to the year end in which indirect costs will be charged. If
the documentation is not submitted during this time period, charges
of indirect costs against RLF Income for that year will not be
allowable and cannot be carried forward, unless the OIG determines
there is a finding of good and sufficient cause to excuse the
Recipient's delay in submitting the documents.
2. When a Federal agency other than the Department of Commerce
has responsibility for establishing an indirect cost rate, the
Recipient is required to submit to that Federal agency (with a copy
of its transmittal letter provided to the Grants Officer and the
Department of Commerce OIG) the documentation (indirect cost
proposal, cost allocation plan, etc.) necessary to establish such
rates within the Recipient's fiscal year during which indirect costs
will be charged against RLF Income. If the documentation is not
submitted during this time period, charges of indirect costs against
RLF Income will be unallowable and cannot be carried forward, unless
the OIG determines there is a finding of good and sufficient cause
to excuse the Recipient's delay in submitting the documents.
.08 Additional Funding and/or Extension of Award: The
Government has no obligation to provide any additional funding in
connection with this award. Any renewal of this award to increase
funding or to extend the period of performance is at the sole
discretion of the Government.
.09 Debts: a. Any debts determined to be owed the Federal
Government shall be paid promptly by the Recipient. A debt will be
considered delinquent if it is not paid within 30 days of the due
date. If the debt is not paid by the stated due date, the Recipient
shall be subject to late payment charges imposed by the Federal
Government. The late payment charges are as follows:
1. Interest charge on the delinquent debt. As established by the
Debt Collection Act of 1982, the minimum annual rate to be assessed
is the Department of the Treasury's Current Value of Funds Rate. The
interest charge shall accrue from the date of the letter which
notifies the debtor of the debt and the interest requirements. This
rate is published in the Federal Register by the Department of the
Treasury. The assessed rate shall remain fixed for the duration of
the indebtedness;
2. A penalty charge on any portion of a debt that is delinquent
for more than 90 days, although the charge will accrue and be
assessed from the date the debt became delinquent; and
3. An administrative charge to cover processing and handling of
the amount due.
b. State and local governments are not subject to subparagraphs
.11 a.2 and 3 above.
c. Once an account receivable has been established or a
repayment agreement to pay the debt has been approved, failure to
pay the debt by the due date on the billing may result in the
suspension of payments to the Recipient under any current Department
of Commerce awards and/or placement of the Recipient on a
Reimbursement Only by Treasury Check method of payment until the
debt is paid.
d. If a debt is over 30 days old, any Department of Commerce
awards to the Recipient may be suspended and the Recipient may be
suspended or debarred from further Federal financial and non
financial assistance and benefits, as provided in 15 CFR Part 26,
until the debt has been paid in full or until a repayment agreement
has been approved and payments are made in accordance with the
agreement. Failure to pay the debt or establish a repayment
agreement by the due date will also result in the referral of the
debt for collection action.
e. Payment of the debt may not come from other Federally
sponsored programs. Verification that other Federal funds have not
been used will be made during future program visits and audits.
.10 Interest-Bearing Accounts: All RLF grant funds disbursed to
reimburse Recipients for loan obligations already incurred must be
held in interest bearing accounts until disbursed to the borrower.
In the event that a loan disbursement is delayed beyond 30 days from
the date of receipt of the Federal disbursement, the undisbursed
funds must be returned to the Government for credit to the
Recipient's account. Interest earned on prematurely withdrawn funds
must be returned to the Government (with the exception of $100 per
year which may be retained for administrative expenses by states,
local governments and Indian tribes per 15 CFR Part 24, and $250 for
those subject to OMB Circular A-110 or its implementing Department
regulation) and shall be remitted promptly, but no less frequently
than quarterly. All checks submitted should state ``EDA'' on their
face and the award number followed by the word INTEREST in order to
identify the check in question as remittance of interest income.
Checks will be sent to the address below: Economic Development
Administration, P.O. Box 100202, Atlanta, Georgia 30384.
.11 Bonding and Payment of Funds: Prior to payment of funds
hereunder, the Recipient shall provide evidence to the Government
that it has fidelity bond coverage of persons authorized to handle
funds under this award in an amount determined by the Government
sufficient to protect the interests of the RLF and the Government.
.12 Grant Violations and Ineligible Costs: The Recipient hereby
agrees that the Government may, at its option, withhold disbursement
of any award funds if the Government learns, or has knowledge, that
the Recipient has failed to comply in any manner with any provision
of the award. The Government will withhold funds until the violation
or violations have been corrected to the Government's satisfaction.
The Recipient further agrees to reimburse the Government for any
ineligible costs which were paid from award funds. If a violation
occurs or an ineligible expenditure is made subsequent to full
disbursement of the grant, the Government, at its option, may elect
to have the Recipient repay the RLF for the amount of any ineligible
cost incurred. Failure to remedy an ineligible expenditure or grant
violation will be grounds for suspension and/or termination.
F. Reporting Requirements
Financial and Performance Reports must be submitted according to
the schedule indicated below. Failure to submit required reports in
a timely manner may result in (1) withholding payments under this
award, (2) deferring the processing of new awards, amendments, or
supplemental funding pending the receipt of the overdue report(s),
(3) establishing an account receivable for the difference between
the total Federal share of Outlays last reported and the amount
[[Page 5438]]
disbursed, and/or, (4) suspending or terminating the grant in whole,
or in part.
.01 Financial and Performance Reports: The Recipient shall
submit financial and status reports to the EDA Regional Office
semiannually unless otherwise instructed by the Government. The
reports will be in a form prescribed by the Government and shall be
submitted for a minimum of one year following full disbursement of
the grant. Subsequently, the Recipient may be eligible for
graduation to a shortened, annual reporting format at the discretion
of the Federal Program Officer. Graduation to the annual report will
be based on an assessment of the Recipient's track record and on
current RLF operations. The Recipient must obtain written
authorization from the Government to convert to the annual reporting
option.
Subsequently, the Recipient shall submit annual reports for the
duration of the RLF unless the Federal Program Officer determines
that more frequent and/or detailed reporting is necessary due to
grant violations or other problems. Following remedial action, the
Recipient may request the Federal Program Officer to convert back to
annual reporting.
a. Initial Semiannual Report: Except for recapitalization
awards, the Recipient shall submit the initial semiannual report on
April 30, covering loan activity for the period ending March 31, (if
the grant was awarded from April 1, through September 30), and on
October 31, covering loan activity for the period ending September
30, (if the grant was awarded from October 1, through March 31).
b. Subsequent Semiannual Reports: Following the initial report,
other than for recapitalization awards, the Recipient shall submit
subsequent semiannual reports on either April 30, or October 31,
covering RLF activity for the periods ending March 31, and September
30, respectively.
c. Annual Reports: If authorized by the Government, the
Recipient shall submit annual reports in place of semiannual reports
as instructed by the Government.
d. Performance Measures: The Recipient agrees to submit to EDA
as part of the semiannual or annual reports referenced in F.01.
(a.), (b.) and (c.) above, the information identified as the Core
Performance Measures listed below. EDA will advise the Recipient in
writing, not less than 90 days prior to the time for submission, in
the event there are any modifications in the information required to
be submitted.
A. Performance and Outcomes at the Completion of the Initial Round
of Funding 1
---------------------------------------------------------------------------
\1\ Full disbursement of the grant award.
---------------------------------------------------------------------------
Compliance with implementation schedule for
disbursement of RLF dollars.
Jobs created and saved (actual) through RLF loans.
Number of loans made by the RLF.
Non-RLF dollars leveraged by the RLF loan.
1. Private sector dollars.
2. Other dollars leveraged.
RLF Capital Base (total RLF funding + program income -
loan writeoffs).
B. Project Outcomes after Full Disbursement of Grant
Jobs created and saved (actual) through RLF loans.
Number of loans made by the RLF.
Non-RLF dollars leveraged by the RLF loan.
1. Private sector dollars.
2. Other dollars leveraged.
RLF Capital Base (total RLF funding + program income -
loan writeoffs).
.02 Other Reports: The Recipient agrees to submit other
reports, as may be required from time to time, to the Government.
.03 Subcontracting Reports: Recipients of awards which involve
both Federal financial assistance valued at $500,000 or more and
procurement of supplies, equipment, construction or services shall
be required to submit the SF-334, ``MBE/WBE Utilization Under
Federal Grants, Cooperative Agreements, and Other Federal Financial
Assistance.'' Reports shall be submitted on a quarterly basis for
the period ending March 31, June 30, September 30, and December 31.
Reports are due no later than 30 days following the end of the
reporting period during which any procurement in excess of $10,000
is executed under this award. The report should be submitted in
duplicate to the EDA Regional Office.
G. Administrative Cost and Loan Records Retention
.01 Administrative Cost Records: Records of administrative
costs incurred for activities relating to the operation of the RLF
shall be retained for three years from the actual submission date of
the last Semiannual or Annual Report which covers the period during
which such costs were claimed, or for five years from the date the
costs were claimed, whichever is less. The retention period for
records of equipment acquired in connection with the RLF shall be
three years from the date of disposition, replacement, or transfer
of the equipment.
.02 Loan Records: Loan files and related documents and records
shall be retained over the life of the loan and for a three year
period from the date of final disposition of the loan. The date of
final disposition of the loan is defined as the date of: (1) full
payment of the principal, interest, fees, penalties, and other fees
or costs associated with the loan; or (2) final settlement or write-
off of any unpaid amounts associated with the loan.
.03 General: If any litigation, claim, negotiation, audit or
other action involving the RLF or its assets has commenced before
the expiration of the three-year (or five-year) period, all
administrative and program records pertaining to such matters shall
be retained until completion of the action and the resolution of all
issues which arise from it, or until the end of the regular three-
year (or five-year) period, whichever is later.
The record retention periods described in this section
(Administrative Cost and Loan Records Retention) are minimum periods
and such prescription is not intended to limit any other record
retention requirement of law or agreement. Any records retained for
a period longer than so prescribed shall be available for inspection
the same as records retained as prescribed. In any event, EDA will
not question administrative costs claimed more than three years old,
unless fraud is an issue.
H. Audit
The Inspector General of the Department of Commerce, or any of
his or her duly authorized representatives, shall have access to any
pertinent books, documents, papers and records of the Recipient,
whether written, printed, recorded, produced or reproduced by any
mechanical, magnetic or other process or medium, in order to make
audits, inspections, excerpts, transcripts or other examinations as
authorized by law.
.01 Requirements: a. Federal Audit: Under the Inspector General
Act of 1978, as amended, 5 USC App. I, section 1 et seq., an audit
of this award may be conducted at any time. The Office of Inspector
General usually will make the arrangements to audit this award,
whether the audit is performed by Inspector General personnel, an
independent accountant under contract with the Department, or any
other Federal, State or local audit entity.
b. Recipient Audit: 1. For awards to institutions of higher
education, and other nonprofit organizations, the Recipient is
subject to the audit requirements found at 15 CFR Part 29b; for
awards to governmental entities, the Recipient is subject to the
audit requirements found at 15 CFR Part 29a.
2. Any audit report performed in compliance with the
requirements of 15 CFR Part 29a or Part 29b shall be sent to the
cognizant Federal agency and to the Federal Program Officer. A copy
of the transmittal letter to the cognizant Federal agency should be
provided to the Grants Officer. If the Department of Commerce is the
cognizant Federal agency, the audit report should be sent to the
following address: Federal Audit Clearinghouse, Bureau of the
Census, 1201 East 10th Street, Jeffersonville, Indiana 47132.
c. For awards where a special award condition stipulates that an
audit be conducted of this particular award, the Recipient shall
arrange for an audit of the award in accordance with Governmental
auditing standards.
.02 Establishment and Collection of Audit-Related Debts: a. An
audit of this award may result in the disallowance of costs incurred
by the Recipient and the establishment of a debt (account
receivable) due the Government. For this reason, a Recipient should
take seriously its responsibility to respond to all audit findings
and recommendations with adequate explanations and supporting
evidence whenever audit results are disputed and the Recipient has
the opportunity to comment.
b. A Recipient whose award is audited has the following
opportunities to dispute the proposed disallowance of costs and the
establishment of a debt:
1. Unless the Inspector General determines otherwise, the
Recipient will be given 30 days from the transmittal of the draft
audit report in which to submit written comments and documentary
evidence.
2. The Recipient will be given 30 days from the transmittal of
the final audit report in which to submit written comments and
documentary evidence. There will be no
[[Page 5439]]
extension of this deadline. Based on all of the evidence available
at the expiration of this time period, the Department will make a
decision on the actions it will take as a result of the final audit
report.
3. The Government's decisions to disallow costs under the award
and to establish a debt (as well as its decisions on non financial
issues) will be sent to the Recipient in an Audit Resolution
Determination letter. The Recipient will be given 30 days from the
transmittal of this letter in which to pay any debt. This letter
will contain information on the procedures to be followed by the
Recipient to appeal the Department's decisions. An appeal does not
preclude the Recipient's obligation to pay the debt nor does the
appeal preclude the accrual of interest on the debt. The appeal must
be submitted to the Grants Officer and the Office of Inspector
General within 30 days after receipt of the Audit Resolution
Determination letter. There will be no extension of this deadline.
This appeal is the last opportunity for the Recipient to submit to
the Department arguments and evidence that dispute the validity of
the audit-related debt.
4. After the opportunity to appeal has expired, or after the
final decision on reconsideration has been made, the Department will
not accept any submissions from the Recipient concerning its dispute
of the Department's decisions on the settlement of costs under the
award. If the debt is not paid, the Department will undertake other
collection action but will not thereafter reconsider the legal
validity of the debt.
c. There are no other administrative appeals available in the
Department of Commerce concerning this matter.
I. Miscellaneous Items
.01 Programmatic Changes: All requests by the Recipient for
programmatic changes must be submitted to the Government which will
notify the Recipient in writing of the determination.
.02 Name Check Review:
a. A name check review shall be performed by the Office of
Inspector General on key individuals associated with non profit
organizations. b. The Department reserves the right to take any of
the actions described in subparagraph H.02 c. below if one of the
following occurs as a result of the name check review:
1. Any of the key individuals associated with non profit
organizations who are not exempt from the name check review fails to
submit the Form CD-346 and, if required, the Form FD-258;
2. The Recipient, key individual, or any other person associated
with this award made an incorrect statement or omitted a material
fact on the Form CD-346 or Form FD-258; or
3. Significant adverse findings result from the name check
review that reflect on the integrity or responsibility of the
Recipient and/or key individual.
c. In the event of significant adverse findings from the name
check review, the Government, at its discretion, may take one or
more of the following actions:
1. Terminate the award immediately for cause;
2. Require the removal from association with the management of
and/or implementation of the Project any person or persons and, if
appropriate, require that the Grants Officer be afforded the right
of final approval of any person or persons to replace any individual
removed as a result of this condition; and/or
3. Make appropriate provisions or revisions at the Government's
discretion with respect to method of payment and/or financial
reporting requirements.
.03 Prohibition Against Assignment: Notwithstanding any other
provision of this award, the Recipient shall not transfer, pledge,
mortgage, or otherwise assign this award, or any interest therein,
or any claim arising thereunder, to any party or parties, bank trust
companies, or other financing or financial institutions.
.04 Covenant Against Contingent Fees: Unless otherwise
specified in the Special Award Conditions, the Recipient warrants
that no person or selling agency has been employed or retained to
solicit or secure this award upon an agreement or understanding for
a commission, percentage, brokerage, or contingent fee, excepting
bona fide employees, or bona fide established commercial, or selling
agencies maintained by the Recipient for the purpose of securing
business. For breach or violation of the warrant, the Government
shall have the right to cancel this award without liability or, at
its discretion, to deduct from the award sum, or otherwise recover,
the full amount of such commission, percentage, brokerage, or
contingent fee.
.05 Officials Not To Benefit: No member of or delegate to
Congress or resident Federal Commissioner shall be admitted to any
share or part of this award or to any benefit that may arise
therefrom; but this provision shall not be construed to extend to
this award if made to a corporation, education, or nonprofit
institution for its general benefit.
.06 Sub-Award and/or Contract to Other Federal Agencies: a. The
Recipient, subrecipient, contractor and/or subcontractor shall not
sub-grant or subcontract the Project in whole or in any part to any
agency of the Department of Commerce.
b. The Recipient, subrecipient, contractor and/or subcontractor,
shall not sub-grant or subcontract any part of the Project to any
other Federal department, agency or instrumentality, without the
advance written approval of the Grants Officer.
.07 Property Management: The Recipient may utilize RLF Income
generated from loan activities to acquire property necessary to
administer the RLF. Neither grant funds nor match funds shall be
used to purchase property for RLF administration. RLF Income
(defined in Section E.06) can only be used to acquire necessary RLF
property to the extent of the benefits received.
Eligible property for RLF activities will normally include (1)
Expendable Personal Property (which includes all tangible personal
property, including supplies, other than nonexpendable property),
and (2) Nonexpendable Personal Property (which includes tangible
personal property, including equipment).
Title to Expendable and Nonexpendable Personal Property acquired
in whole or in part with RLF Income for use in the RLF shall vest
with the Recipient. The Recipient shall not encumber its title or
other interests in RLF property without prior written approval from
the Government. The Recipient shall use and manage nonexpendable
personal property as long as needed and shall maintain nonexpendable
personal property records, control systems and physical inventories.
a. Disposition of Personal Property: In the ordinary course of
business, the Recipient may dispose of personal property for
upgrading purposes or when no longer needed for the project
activity. The RLFs share of the proceeds from any disposition shall
be treated as a contribution to RLF Income and may be returned to
the RLF for lending or used for RLF administrative expenses.
b. Disposition of Expendable and Nonexpendable Property Under
RLF Termination: If the RLF is terminated, the Recipient shall
submit a request for disposition instructions to the Federal Program
Officer who shall provide the Recipient with disposition
instructions. Disposition may include one of the following:
1. If the total aggregate fair market value of unused personal
property at the termination of the RLF is $1,000 or less for awards
subject to OMB Circular A-110 or any Department rule superseding
such Circular, or $5,000 or less for awards subject to 15 CFR Part
24 and is not needed for any other Federally-sponsored project or
program, the Recipient may retain or sell the expendable personal
property without compensating the Government.
2. If the total aggregate fair market value of personal property
at the termination of the award exceeds $1,000 for awards subject to
OMB Circular A-110 or any Department rule superseding such Circular,
or $5,000 for awards subject to 15 CFR Part 24 and is not needed for
any other Federally-sponsored project or program, the Recipient may
retain, sell, or otherwise dispose of the property and shall
compensate the Government for its share.
3. The following apply only to the disposition of nonexpendable
personal property:
(a) The Recipient shall submit a completed form CD-281, ``Report
of Government Property in Possession of Contractor'' along with the
request for disposition instructions.
(b) The Government's disposition instructions may additionally
include the following: (1) The Recipient may be instructed to ship
the nonexpendable personal property elsewhere. The Recipient may
receive the nonfederal share of the market value plus shipping
costs; or (2) for awards subject to the provisions of OMB Circular
A-110 or Department regulation superseding such Circular, the
Government reserves the right to transfer title to the Federal
Government or to a third party named by the awarding agency if the
nonexpendable personal property had a unit acquisition cost of
$1,000 or more. For awards subject to 15 CFR Part 24, the Government
reserves the right to transfer title to the Federal Government or to
a third party
[[Page 5440]]
named by the awarding agency for any nonexpendable personal
property. When title is transferred, the Recipient shall be
compensated for its share.
c. Disposition of Real Property Under RLF Termination: If the
RLF is terminated and the Recipient holds title to real property
through foreclosure or other legal actions, the Recipient shall
request disposition instructions from the Regional Program Officer.
Disposition may include one of the following:
1. The Recipient shall retain title after it compensates the
Federal Government for its share;
2. The Recipient shall sell the property and pay the Federal
Government for its share after the deduction of any actual and
reasonable selling and fix-up expenses, if any, from the sales
proceeds; or
3. The Recipient shall transfer title to the property to the
Federal Government provided that in such cases the Recipient shall
be entitled to compensation computed by applying the Recipient's
percentage of participation in the cost of the project to the
current fair market value of the property.
d. Debt Instruments Under RLF Termination: If the RLF is
terminated, the Recipient shall request disposition instructions
from the Regional Program Officer for disposition of debt
instruments in the RLF portfolio.
.08 Rights to Inventions Made by Nonprofit Organizations and
Small Business Firms: The policy and procedures set forth in
Department of Commerce regulations 37 CFR Part 401, Rights to
Inventions made by Nonprofit Organizations and Small Business Firms
under Government Grants, Contracts, and Cooperative Agreements,
published in the Federal Register on March 18, 1987, shall apply to
all grants and cooperative agreements made where the purpose is
experimental, developmental, or research work.
Pursuant to Executive Order 12899, the Department is required to
notify the owner of any valid patent covering technology whenever
the Department or its financial assistance Recipients, without
making a patent search, knows ( or has demonstrable reasonable
grounds to know) that technology covered by a valid United States
patent has been or will be used without a license from the owner.
To ensure proper notification, if the Recipient uses or has used
patented technology under this award without a license or permission
from the owner, the Recipient must notify the Department Patent
Counsel at the following address, with a copy to the Grants Officer:
U.S. Department of Commerce, Office of Chief Counsel for Technology,
Patent Counsel, 14th Street and Constitution Avenue, NW, Washington,
D.C. 20230.
The notification shall include the following information:
a. The award number.
b. The name of the Department awarding agency.
c. A copy of the patent.
d. A description of how the patented technology was used.
e. The name of the Recipient contact, including an address and
telephone number.
.09 Executive Order 12432, Minority Business Enterprise: In
support of Executive Order 12432, signed by the President on July
14, 1983, the Department of Commerce encourages all Recipients to
utilize minority firms and enterprises in contracts under grants and
cooperative agreements. The Office of Program Development, Minority
Business Development Agency, will assist Recipients in matching
qualified minority enterprises with contract opportunities. For
further information contact: U.S. Department of Commerce, Minority
Business Development Agency, Office of Program Development, Herbert
C. Hoover Building, 14th Street and Constitution Avenue, NW,
Washington, D.C. 20230.
.10 Internal Revenue Service (IRS) Information: a. A Recipient
classified for tax purposes as an individual, partnership,
proprietorship, or medical corporation is required to submit a
taxpayer identification number (TIN) (either social security number
or employer identification number as applicable) on Form W-9,
``Payer's Request for Taxpayer Identification Number.''
Tax-exempt organizations and corporations (with the exception of
medical corporations) are excluded from this requirement. The
Recipient should submit the form to the Grants Officer within 60
days of the effective date of award.
The Department provides the Recipient's TIN to the IRS on Form
1099-G, ``Statement for Recipients of Certain Government Payments.''
Applicable Recipients who either fail to provide their taxpayer
identification number or provide an incorrect number may not be
eligible for funding or have funding suspended until the requirement
is met.
b. Privacy Act Statement--Mandatory Disclosure, Authority,
Purpose, and Uses: Disclosure of your social security number or
employer identification number is mandatory for Federal income tax
reporting purposes under the authority of 26 U.S.C., Section 6011
and 6109(d), and 26 CFR Part 301, Section 301.6109-1. This is to
ensure the accuracy of income computation by the Internal Revenue
Service. This information will be used to identify an individual who
is compensated by funds of the Department of Commerce or paid
interest under the Prompt Payment Act. A Recipient who either fails
to provide the taxpayer identification number or provides an
incorrect number may not be eligible for funding or have funding
suspended until requirement is met. This information is being
provided to the Internal Revenue Service on Form 1099.
.11 Government wide Debarment, Suspension and Other
Responsibility Matters (Nonprocurement): a. This award is subject to
Executive Order 12549, Debarment and Suspension, and 15 CFR Part 26,
``Government wide Debarment and Suspension (Nonprocurement).'' A
person (as defined at 15 CFR Sec. 26.105(n)) who is debarred or
suspended shall be excluded from Federal financial and nonfinancial
assistance and benefits under Federal programs and activities except
to the extent prohibited by law or authorized in writing by the
Department.
b. The Recipient shall provide immediate notification to the
Grants Officer if at any time the Recipient learns that its
certification, Form CD-511, ``Certifications Regarding Debarment,
Suspension and Other Responsibility Matters; Drug-Free Workplace
Requirements and Lobbying,'' was erroneous when submitted or has
become erroneous by reason of changed circumstances. Subrecipients
in lower tier transactions shall provide the same updated notice to
the Recipient.
c. Unless the Department authorizes in writing an exception in
accordance with 15 CFR Secs. 26.215, 26.220, and/or 26.625, the
Recipient of this award shall not knowingly do business under a
covered transaction with a person who is debarred or suspended, or
with a person who is ineligible for or voluntarily excluded from
that covered transaction. The Recipient shall not renew or extend
covered transactions (other than no-cost time extensions) with any
person who is debarred, suspended, ineligible, or voluntarily
excluded, except as provided in 15 CFR Part 26.215. Violation of
this restriction may result in disallowance of costs, annulment or
termination of award, issuance of a stop work order, debarment or
suspension, or other remedies, as appropriate.
d. The Recipient shall require each applicant/bidder for a lower
tier covered transaction (except subcontracts for goods or services
under the $100,000 small purchase threshold unless the subtier
Recipient will have a critical influence on or substantive control
over) at any tier under this award to file a certification, Form CD-
512, ``Certifications Regarding Debarment, Suspension, Ineligibility
and Voluntary Exclusion--Lower Tier Covered Transactions and
Lobbying,'' without modification, for it and its principals in any
proposal/solicitation submitted in connection with the lower tier
covered transaction. Certifications shall be retained by the
Recipient.
e. The Recipient shall include the following provisions
regarding debarment and suspension in all subtier covered
transactions:
1. This lower tier covered transaction is subject to Executive
Order 12549, ``Debarment and Suspension,'' and 15 CFR Part 26,
``Government wide Debarment and Suspension (Nonprocurement).''
Unless authorized by the Department in writing, a person (as defined
at 15 CFR Sec. 26.105(n)) who is debarred or suspended shall be
excluded from Federal financial and nonfinancial assistance and
benefits under Federal programs and activities except to the extent
prohibited by law or authorized by the Department.
2. Unless the Department authorizes in writing an exception in
accordance with 15 CFR Secs. 26.215, 26.220, and/or 26.625, the
Recipient of this lower tier covered transaction shall not knowingly
do business under a covered transaction with a person who is
debarred or suspended, or with a person who is ineligible for or
voluntarily excluded from that covered transaction. The Recipient of
this sub-award shall not renew or extend covered transactions (other
than no-cost time extensions) with any person who is debarred,
suspended, ineligible, or voluntarily excluded, except as provided
in 15 CFR Sec. 26.215.
[[Page 5441]]
f. The Recipient shall include the following provision in each
application and in each bid for a lower tier covered transaction at
any tier under this award:
Each applicant/bidder for a lower tier covered transaction
(except subcontracts for goods or services under the $100,000 small
purchase threshold unless the subtier Recipient will have a critical
influence on or substantive control over the award) at any tier
under this Federal award must file Form CD-512, ``Certifications
Regarding Debarment, Suspension, Ineligibility and Voluntary
Exclusion--Lower Tier Covered Transactions and Lobbying,'' without
modification, at the time of application/bid.
Applicants/bidders should review the instructions for
certification included in the regulations before completing the
certification. The prospective lower tier participant shall provide
immediate written notice to the person to whom this proposal is
submitted if at any time the prospective lower tier participant
learns that its certification was erroneous when submitted or has
become erroneous by reason of changed circumstances. Certifications
shall be retained by the Recipient.
.12 Restrictions on Lobbying (applicable to awards exceeding
$100,000 in Federal funding): a. This award is subject to Section
319 of Public Law 101-121, which added Section 1352, regarding
lobbying restrictions, to Chapter 13 of Title 31 of the United
States Code as implemented by 15 CFR Part 28. The Recipient of this
award and subrecipients are generally prohibited from using Federal
funds for lobbying the Executive or Legislative Branches of the
Federal Government in connection with this award.
b. The Recipient shall require each person who requests or
receives from the Recipient a sub-grant, contract, or subcontract
exceeding $100,000 of Federal funds at any tier under this award, to
file Form CD-512, ``Certifications Regarding Debarment, Suspension,
Ineligibility and Voluntary Exclusion--Lower Tier Covered
Transactions and Lobbying,'' without modification, and, if
applicable, SF-LLL, ``Disclosure of Lobbying Activities,'' form
regarding the use of any nonfederal funds for lobbying.
Certifications shall be retained by the next higher tier. All
disclosure forms, however, shall be forwarded from tier to tier
until received by the Recipient, who shall forward all disclosure
forms to the Grants Officer.
c. The Recipient shall include the following provision in all
contracts, subcontracts, or sub-grants:
This contract, subcontract, or sub-grant is subject to Section
319 of Public Law 101-121, which added Section 1352, regarding
lobbying restrictions, to Chapter 13 of Title 31 of the United
States Code as implemented by 15 CFR Part 28. Each bidder/applicant/
recipient of this contract, subcontract, or sub-grant and
subrecipients are generally prohibited from using Federal funds for
lobbying the Executive or Legislative Branches of the Federal
Government in connection with this award.
d. The Recipient shall include the following contract clauses
regarding lobbying in each application for a sub-grant and in each
bid for a contract or subcontract exceeding $100,000 of Federal
funds at any tier under the Federal award:
Each applicant/recipient of a subgrant and each bidder/
applicant/recipient of a contract or subcontract exceeding $100,000
of Federal funds at any tier under the Federal award must file Form
CD-512, ``Certifications Regarding Debarment, Suspension,
Ineligibility and Voluntary Exclusion--Lower Tier Covered
Transactions and Lobbying,'' and Standard Form-LLL, ``Disclosure of
Lobbying Activities,'' regarding the use of any nonfederal funds for
lobbying. Certifications shall be retained by the next higher tier.
All disclosure forms, however, shall be forwarded from tier to tier
until received by the Recipient of the Federal award, who shall
forward all disclosure forms to the Grants Officer.
Each subgrantee, contractor, or subcontractor that is subject to
the Certification and Disclosure provision of this Contract Clause
is required to file a disclosure form within 15 days of the end of
each calendar quarter in which there occurs any event that requires
disclosure or that materially affects the accuracy of the
information contained in any disclosure form previously filed by
such person. Disclosure forms shall be forwarded from tier to tier
until received by the Recipient of the Federal award (grant), who
shall forward all disclosure forms to the Grants Officer.
Appendix C to Part 308--Section 209 Economic Adjustment Program
Revolving Loan Fund Grants; Administrative Manual
OMB Approval No. 0610-0095
Approval expires 07/31/99
Burden Statement for Revolving Loan Fund Administrative Manual:
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to
the requirements of the Paperwork Reduction Act, unless that
collection of information displays a currently valid OMB Control
Number.
The information is required to obtain or retain benefits from
the Economic Development Administration pursuant to Economic
Development Administration Reform Act, Public Law 105-393. No
confidentiality for the information submitted is promised or
provided except that which is exempt under 5 U.S.C. 552(b)(4) as
confidential business information.
The public reporting burden for this collection is estimated to
average 12 hours per response including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. Send comments regarding this burden
estimate or any other aspect of this collection of information,
including suggestions for reducing this burden to: Economic
Development Administration, Herbert C. Hoover Building, Washington,
DC, 20230, and to the Office of Information and Regulatory Affairs,
Office of Management and Budget, Washington, DC 20503.
Table of Contents
I. Purpose
II. Authority
A. Grant Recipients as Trustees
B. Grantor Authority to Change Policies
C. Precedence of Grant Documents and Published Regulations
III. Grantee Responsibilities
A. Prudent Lending Practices
B. Protection of RLF Assets
C. Federal Requirements Applicable to Grant Recipients
D. Federal Requirements Applicable to RLF Borrowers
IV. Revolving Loan Fund Restrictions
A. Lending Area Restrictions
1. Eligible Lending Area
2. Modification of the Eligible Area
3. Recapitalization Rule
B. Borrower Restrictions
1. Eligible Lending Area
2. Relocation
3. Credit Otherwise Available
4. Public and Quasi-Public Borrowers
5. Private Developers
6. Other
C. Financing Restrictions
D. Interest Rates
E. Private Leveraging
V. RLF Capital
A. RLF Capitalization
B. Nonfederal Matching Share
C. Partial Termination and Deobligation
VI. RLF Administrative Costs
A. General Requirements
B. Auditing Costs
C. Other Eligible RLF Administrative Costs
VII. RLF Income
A. Definition
B. Eligible Uses
C. Administrative Requirements
1. Accounting Records
2. RLF Income and Expense Statement
3. Reporting Requirements
4. Ineligible Costs
VIII. Revolving Loan Fund Plan
A. Purpose
B. Format and Content
C. EDA Approval
D. Annual Plan Certification
E. Plan Modifications
IX. Disbursement of Grant Funds
A. Pre-Disbursement Requirements
B. Disbursement Procedures
C. Principal Repayments During Grant Disbursement Phase
D. Loan Closing/Disbursement Schedule
E. Time Schedule Extensions
X. Capital Utilization Standard
A. Definition
B. Deviation
C. Sequestration of Excess Funds
D. Persistent Noncompliance
XI. Monitoring
A. Reports
1. Grant Status Reports
2. Financial and Performance Reports
3. Annual Reports
4. Special Reports
B. Audits
C. Site Visits
XII. Noncompliance With the Grant Terms
A. Suspension
B. Termination for Cause
[[Page 5442]]
C. Partial Termination
XIII. Termination for Convenience
XIV. Recovery of EDA Interest in the RLF Assets
XV. Sale or Securitization of Loans
XVI. Appendix--Reference Material and Exhibits
I. Purpose
This Manual describes the compliance, reporting, grant record
keeping and other administrative requirements and procedures that
apply to Revolving Loan Fund (RLF) grants funded by the Economic
Development Administration (EDA) under Section 209 of the Public
Works and Economic Development Act of 1965, as amended. These
requirements apply to new RLFs and to the future actions of all RLFs
funded prior to the Manual's effective date. The requirements apply
to RLFs funded under the Sudden and Severe Economic Dislocation
(SSED) and the Long-Term Economic Deterioration (LTED) components of
Section 209. They also apply to the revolving phases of RLFs funded
for the initial purpose of providing financing to one or more
identified business firms.
II. Authority
A. Grant Recipients as Trustees: Recipients of EDA grants to
operate RLFs hold RLF funds in trust to serve the purpose of the
Economic Adjustment program for which the grant award was made. The
grant recipient's obligation to the Federal Government continues as
long as the Federal interest in EDA RLF assets, in the form of cash,
receivables, personal and real property, and notes or other
financial instruments developed through the use of the funds,
continues to exist. If EDA determines that a grant recipient is
failing to meet this obligation, the Agency will assert its
equitable reversionary interest in the RLF assets. However, EDA's
nonassertion of its interest does not constitute a waiver thereof.
B. Grantor Authority to Change Policies: EDA, as the Federal
agency charged with implementing the program, is obligated to
promulgate policies and procedures applicable to all RLF grant
recipients to insure compliance with Federal requirements, to
safeguard the public's interest in the grant assets, and to promote
effective use of the funds in accomplishing the purpose for which
they were granted.
Pursuant to this obligation, grant terms and conditions require
grant recipients to comply with changes in regulations and other
requirements and policies that EDA may issue from time-to-time. Such
changes apply to actions taken by all grant recipients, existing and
prospective, after the effective date of the changes. Loans made by
grant recipients prior to the effective date of the changes are not
affected unless so required by law.
As a matter of policy, EDA will subject proposed RLF changes to
public review when practicable.
EDA's policy is to administer RLF grants uniformly, but it is
understood that there may be situations warranting a variance. To
accommodate these situations and to encourage innovative and
creative ways to address economic adjustment problems, requests for
variances to the requirements of this Manual will be considered if
they are consistent with the goals of the Section 209 program and
with an RLF's strategy, make sound economic and financial sense, and
do not conflict with applicable legal requirements.
C. Precedence of Grant Documents and Published Regulations: The
Grant Award, executed by EDA and the recipient, together with the
Budget, Special Terms and Conditions and the Standard Terms and
Conditions, as may be amended, and the current regulations,
published at 13 CFR Part 308, constitute the requirements,
hereinafter referred to as ``Terms and Conditions,'' applicable to
an EDA RLF grant. This Manual is designed to clarify and
administratively implement those requirements. In the event of
conflict, the aforementioned documents take precedence over this
Manual.
III. Grantee Responsibilities
A. Prudent Lending Practices: RLF grant recipients are required
to operate RLFs in accordance with lending practices generally
accepted as prudent for public loan programs. Such practices cover
loan processing, documentation, servicing and administrative
procedures, as outlined in the current RLF Plan Guidelines.
B. Protection of RLF Assets: RLF grant recipients are required
(1) to obtain adequate and appropriate collateral from borrowers,
and (2) to act diligently to protect the interests of the RLF,
through collection, foreclosure, or other recovery actions on
defaulted loans.
C. Federal Requirements Applicable to Grant Recipients: Grant
recipients are responsible for complying with the Federal laws and
regulations, Executive Orders and Office of Management and Budget
(OMB) Circulars which are referenced in the Terms and Conditions, as
may be amended, for RLF grants. These include administrative and
audit requirements, cost principles, and other laws, regulations and
Executive Orders pertaining to requirements from civil rights to
lobbying restrictions.
D. Federal Requirements Applicable to RLF Borrowers: Grant
recipients are responsible for ensuring that prospective borrowers
are aware of, and comply with, the Federal statutory and regulatory
requirements that apply to activities carried out with RLF loans.
The most common of these requirements relate to environmental
protection, civil rights, Davis-Bacon wage rates and handicap access
on construction projects, and the prohibited use of RLF funds for
businesses that relocate jobs from one commuting area to another.
Grant recipients are responsible for developing an appropriate
review process in accordance with the intent of the National
Environmental Policy Act of 1969, (P.L. 91-190) as amended, as
implemented by the ``Regulations'' of the President's Council on
Environmental Quality. The process shall include disapproval of loan
projects which would adversely (without mitigation) impact
floodplains, wetlands, significant historic or archeological
properties, drinking water resources, or nonrenewable natural
resources. Grant recipients are also responsible for openly
marketing the RLF to prospective minority and women borrowers, and
monitoring borrower compliance with civil rights requirements that
prohibit borrowers from discriminating against employees or
applicants for employment, or providers of goods and services. These
and the other Federal requirements described in the Terms and
Conditions of each grant should be included, as applicable, in each
RLF's standard loan agreement to ensure borrower compliance where
necessary. Grant recipients are expected to act diligently to
correct instances of noncompliance, including the recall of loans,
if necessary.
IV. Revolving Loan Fund Restrictions
The following restrictions apply generally to RLFs:
A. Lending Area Restrictions
1. Eligible Lending Area: The economic activity and the benefits
of RLF loans must be located within the eligible areas identified in
the grant award.
2. Modification of the Eligible Area: Areas within the
operational jurisdiction of the grant recipient that were not
identified in the grant award, but that meet or may subsequently
meet the Agency's criteria for eligibility under Section 209, may
qualify to be added to an RLF's eligible lending area. To ascertain
qualification, a grant recipient must make a written request to EDA
to determine whether a new area is eligible for assistance under
existing grant terms. Area eligibility data are updated quarterly
and eligibility lists are maintained by EDA's Regional Offices.
Unless stipulated otherwise in the grant award, once an area's
eligibility is approved by EDA, that area retains its eligibility
indefinitely.
3. Recapitalization Rule: If EDA funds are used to recapitalize
an existing RLF, the new grant funds may be used only in areas
eligible for assistance at the time the recapitalization grant is
invited (and in areas that become eligible between the time of
invitation and the grant award). Areas that were eligible under the
previous EDA grant award but not under the new award may continue to
receive RLF assistance under the previous grant award only. Areas
which become eligible subsequent to the grant award require EDA
approval as discussed above in Section IV.A.2.
If a grant recipient has received EDA funds to recapitalize an
existing RLF and the respective grants serve different eligible
lending areas, the grant recipient is responsible for maintaining
adequate accounting records to substantiate that each grant is being
used in the appropriate eligible lending area.
B. Borrower Restrictions
1. Eligible Lending Area: An RLF borrower must retain the
activity financed in the eligible lending area for the term of the
loan. The RLF's standard loan agreement should include a provision
to call the loan if the activity financed is moved from the eligible
lending area.
2. Relocation: RLF financing may not be used by a borrower for
any activity that serves to relocate jobs from one commuting area to
another. This applies both to a
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business which uses RLF financing to relocate jobs into an eligible
area from a different commuting area, and to a business which
relocates jobs, created as a result of RLF financing, to a different
commuting area. An RLF's standard loan agreement should include a
provision for calling the loan if it is determined that (a) the
business used the RLF loan to relocate jobs from another commuting
area, or (b) the activity financed was subsequently moved to a
different commuting area to the detriment of local workers. The
commuting area is that area defined by the distance people travel to
work in the locality of the project receiving RLF financial
assistance.
3. Credit Otherwise Available: A borrower is not eligible for
RLF financing if credit is otherwise available on terms and
conditions which would permit completion and/or the successful
operation or accomplishment of the project activities to be
financed. The grant recipient is responsible for determining that
each borrower meets this requirement and for documenting the basis
for its determination in the loan write-up. A loan write-up must
include a discussion of the particular features of the local capital
market and/or of the individual borrower or project to be financed
that result in the need for RLF financing. It should also briefly
describe the key aspects of the business and the loan including a
discussion of the prospective borrower's ability to repay.
The grant recipient is also responsible for obtaining
supplemental evidence, as appropriate, to support the need for RLF
financing. This may include the following:
a. A commitment letter from a participating bank stating the
loan terms, the maximum amount to be extended by the bank, and the
need for the RLF's participation; and/or
b. Bank rejection letter(s), if obtainable, listing the proposed
loan terms.
Exception to Credit Test: RLF financing may also be used as an
incentive, through favorable loan terms, to attract a new business
or a business expansion into an eligible area. The business may be
credit worthy but would otherwise not locate in the area without RLF
financing as an incentive. To undertake this type of project, the
grant recipient must sufficiently document the need for RLF
assistance and should obtain certification from the company, stating
that it would not locate the proposed project at the intended
location without RLF assistance. Grant recipients are cautioned that
failure to document adequately the need for an RLF loan may be
grounds for declaring a loan ineligible and requiring the grant
recipient to repay any outstanding loan balance to the RLF, or
return the Federal share to EDA.
4. Public and Quasi-Public Borrowers: A public or quasi-public
organization is not eligible to receive RLF financial assistance
unless (a) the activity financed directly benefits or will directly
benefit identifiable business concerns, and (b) there is reasonable
assurance that the activity financed will result in increased
business activity in the near term.
5. Private Developers: Private developers are not eligible for
RLF assistance unless the activity financed is non-speculative,
consistent with the strategic and lending objectives of the RLF, and
directly benefits or will directly benefit identifiable business
concerns.
6. Other: A grant recipient shall not use its RLF to make a loan
to itself or to a related organization.
C. Financing Restrictions
1. Loans to a borrower for the purpose of investing in interest
bearing accounts, certificates of deposit, or other investments not
related to the objectives of the RLF are prohibited. To preclude
ineligible uses of RLF funds, the purpose of each RLF loan should be
clearly stated in the RLF loan agreement.
2. For initial RLF grants, the total dollar amount of loans for
working capital purposes may not exceed 50% of the total RLF capital
prior to the full disbursement of grant funds, unless otherwise
stipulated in the grant agreement. (``RLF capital'' consists of the
funds which capitalized the RLF plus such earnings and fees
generated by RLF activities as may be added to the RLF capital base
to be used for lending.) For recapitalization grants and for initial
grants after the grant funds are fully disbursed, the portfolio
working capital percentage may, with EDA's prior written approval,
exceed 50 percent. In reviewing requests to increase the 50 percent
limit on working capital loans, EDA will consider, among other
things, the grant recipient's experience with working capital loans
and whether the request is consistent with the area's Economic
Adjustment Strategy and the RLF Plan.
3. RLF capital may not be used to:
a. Acquire an equity position in a private business;
b. Subsidize interest payments on an existing loan;
c. Provide the equity contribution required of borrowers under
other Federal loan programs;
d. Enable an RLF borrower to acquire an interest in a business,
either through the purchase of stock or through the acquisition of
assets, unless the need for RLF financing is sufficiently justified,
and documented in the loan write-up (referenced in IV.B.3 above).
Acceptable justification could include acquiring a business to
substantially save it from imminent foreclosure or acquiring it to
expand it with increased investment. In any case, the resulting
economic benefits should be demonstrably consistent with the
strategic objectives of the RLF;
e. Refinance existing debt unless:
(1) There is sound economic justification and the grant
recipient sufficiently documents in the loan write-up that the RLF
is not replacing private capital solely for the purpose of reducing
the risk of loss to an existing lender(s) or to lower the cost of
financing to a borrower, or
(2) An RLF uses RLF income sources and/or recycled RLF funds to
purchase the rights of a prior lienholder during an in-process
foreclosure action in order to preclude a significant loss on an RLF
loan. This action may be undertaken only if there is a high
probability of receiving compensation within a reasonable time
period (18 months) from the sale of assets sufficient to cover an
RLF's expenses plus a reasonable portion of the outstanding loan
obligation.
(Note: Since a grant recipient will be required to repay the
amount of an ineligible loan, it is recommended that EDA be
contacted for clarification or written confirmation if there is any
question regarding either of the refinancing exceptions described
above.)
4. Prior to full disbursement of grant funds, the grant
recipient may not use the RLF to guarantee loans made by other
lenders. In the revolving phase, after the full disbursement of
grant funds, the RLF may be used to guarantee loans of private
lenders provided the Recipient has obtained EDA's prior written
approval of its proposed loan guarantee activities. The plan for any
loan guarantee activities should include the following information:
a. The maximum guarantee percentage that will be offered;
b. A certification from the RLF attorney that the guarantee
agreement is acceptable by local standards. At minimum, the
guarantee agreement must include the following: the maximum reserve
requirement; the rights and duties of each party in regard to loan
collections, servicing, delinquencies and defaults; foreclosures;
bankruptcies; collateral disposition and the call provisions of the
guarantee; and interest income and loan fees, if any, which will
accrue to the RLF.
D. Interest Rates
A grant recipient can make loans and loan guarantees to eligible
borrowers at interest rates and under conditions determined by the
Recipient to be most appropriate in achieving the goals of the RLF.
However, the minimum interest rate an RLF can charge is four (4)
percentage points below the current money center prime rate quoted
in the Wall Street Journal or the maximum interest rate allowed
under State law, whichever is lower, but in no event may the
interest rate be less than four (4) percent. However, should the
prime interest rate exceed fourteen (14) percent, the minimum RLF
interest rate is not required to be raised above ten (10) percent if
to do so would compromise the ability of the RLF to implement its
financing strategy.
E. Private Leveraging
Unless stipulated otherwise in the grant agreement, RLF loans
must be used to leverage private investment of at least two dollars
for every one dollar of RLF investment. This leveraging requirement
applies to the portfolio as a whole rather than to individual loans
and is effective for the life of the RLF. Private investment, to be
classified as leveraged, must be made concurrently with an RLF loan
as part of the same business development project and may include (1)
capital invested by the borrower or others, (2) financing from
private entities, and (3) 90 percent of the guaranteed portions of
SBA 7(a) and SBA 504 debenture loans. Private investments do not
include equity build-up in a borrower's assets or prior capital
investments by the borrower unless made within nine months of the
RLF loan and with the concurrence of the RLF Recipient. If a grant
recipient can
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demonstrate that the 2:1 leverage requirement is too restrictive for
its lending area and that it impedes the purpose for which the grant
was made, it may request EDA to waive or modify the grant agreement.
V. RLF Capital
A. RLF Capitalization
The original sources of capital for EDA RLFs are normally EDA
grant funds and a nonfederal cash matching share. The EDA grant
funds and the nonfederal matching funds can be used only for the
purpose of making loans under an RLF, unless otherwise provided for
in the grant agreement and grant budget, e.g., budgeted audit costs.
Costs associated with the preparation of the grant application are
not eligible expenses and are not reimbursable from the funds
invested as RLF capital.
B. Nonfederal Matching Share
The grant agreement specifies the amount of nonfederal cash
share required for an RLF grant. This is usually not less than 25%
of the total RLF capital investment. The nonfederal share funds must
be loaned either before or proportionately with EDA funds. Upon
repayment, the nonfederal share funds are treated the same as EDA
funds, repayments of principal must be placed in the RLF for
relending and interest payments must be used either for relending or
for eligible RLF administrative costs. The nonfederal matching share
must be available when needed for lending and must be under the
control of the grant recipient (or its designee) for the duration of
the RLF for use in accordance with the terms of the grant.
C. Partial Termination and Deobligation
In the event that a portion of the EDA grant is terminated and
deobligated (refer to Section XII. below) and is no longer available
to a grant recipient due to its failure to meet the terms of a
grant, the nonfederal matching share shall remain in the RLF unless
otherwise specified in the grant agreement or agreed to in writing
by EDA.
VI. RLF Administrative Costs
A. General Requirements
Grant recipients are responsible for the administrative costs
associated with operating an RLF. Evidence of sufficient and
reliable sources of funds to cover RLF administrative expenses is a
key factor in project selection. As grant funds are disbursed for
loans and an RLF begins to generate income from lending activities,
such income (referred to as ``RLF Income'' and defined in Section
VII.A.), as distinguished from principal repayments, may be used to
cover eligible, reasonable, and documented administrative costs
necessary to operate the RLF. When RLF Income is used for RLF
administrative expenses, rather than added to the RLF capital base
for lending, grant recipients are required to complete an RLF Income
and Expense Statement as discussed in Section VII.C.2.
B. Auditing Costs
The grant budget accompanying the grant award lists the maximum
amount of grant funds that may be used to defray the costs of audits
required under the terms of the grant. In addition to funds budgeted
in the grant award, audit costs may be reimbursed from RLF Income
and from resources of the grant recipient. Audit costs are
chargeable against the grant award if permitted in the grant budget
and RLF Income to the extent that the costs charged are equitably
distributed and reflect the benefits received. Grant funds budgeted
for audit costs that are unused may be reallocated to the RLF
capital base without EDA's permission. Additional information on
grant audits is discussed in Section XI.B. and in EDA's Revolving
Loan Funds Grants Audit Guidelines (RLF Audit Guidelines).
C. Other Eligible RLF Administrative Costs
Costs eligible for reimbursement from RLF Income must be
consistent with the cost principles outlined in the appropriate OMB
cost principle circular (OMB A-21, A-87 or A-122) and with the RLF
Audit Guidelines. The requirements for using RLF Income are
discussed in detail in Section VII.
Some of the common administrative costs that may be charged
against RLF Income include RLF staff salaries and fringe benefits,
RLF-related training, travel, marketing, general administration,
business counseling and management assistance, portfolio management,
materials and supplies, equipment rental and acquisitions prorated
based on RLF usage, building rent, outside professional services,
insurance, loan closing costs and the costs to protect collateral
subsequent to foreclosure.
RLF administrative costs may be separated into direct and
indirect costs. Direct costs are those that can be identified
specifically with a particular cost objective, such as an RLF
program; indirect costs are those that are incurred for a common or
joint purpose benefitting more than one program or cost objective
and are not readily assignable. All costs charged against RLF Income
must be supported by formal accounting records and source
documentation. All indirect and joint costs charged against RLF
Income must additionally be supported by a cost allocation plan
approved by the cognizant Federal agency.
VII. RLF Income
A. Definition
RLF Income includes interest earned on outstanding loan
principal, interest earned on accounts holding RLF funds not needed
for immediate lending, all loan fees and loan-related charges
received from RLF borrowers, and other income generated from RLF
operations. (Note that the definition of RLF Income does not include
repayments of loan principal because RLF principal repayments
represent the return of capital and not ``income''. Consequently,
RLF Income is a narrower definition of income than ``program
income'' in the Uniform Administrative Requirements For Grants And
Cooperative Agreements To State And Local Governments in 15 CFR Part
24.25, which includes principal repayments).
In accounting for RLF Income, any proceeds from the sale,
collection, or liquidation of a defaulted loan, up to the amount of
the unpaid principal, will be treated as repayments of RLF principal
and placed in the RLF for lending purposes only. Any proceeds in
excess of the unpaid principal will be treated as RLF Income.
B. Eligible Uses
While RLF Income can be used to pay for eligible and reasonable
administrative costs as discussed above, RLF grant recipients are
expected to add a reasonable percentage of RLF Income to the RLF
capital base to compensate not only for loan losses and the effects
of inflation over time, but also to maintain a minimum funding level
for the future borrowing needs within the eligible lending area. To
determine the appropriate amount of RLF Income to return to an RLF,
RLF operators should consider the costs necessary to operate an RLF
program, the availability of other monetary resources, the portfolio
risk level and projected capital erosions from loan losses and
inflation, the community's (or area's) commitment to the RLF, and
the anticipated demand for RLF loans.
(Note: RLF Income that is not used for administrative purposes
during the twelve month period in which it is earned must be added
to the RLF capital base for lending purposes by the end of the
twelve month period (see Section VII.C.2. below for selection of the
twelve month period). Only RLF Income earned during a current period
may be used for current administrative expenses. RLF Income may not
be withdrawn from an RLF in a subsequent period for any uses, other
than lending, without the written consent of EDA.)
C. Administrative Requirements
Grant recipients electing to use RLF Income to cover all or part
of a RLF's administrative costs must comply with the following
provisions:
1. Accounting Records: Grant recipients must (a) maintain
adequate accounting records and source documentation to substantiate
the amount and percent of RLF Income expended for eligible RLF
administrative costs, and (b) comply with applicable OMB cost
principles and with the RLF Audit Guidelines when charging costs
against RLF Income. Records must be retained by grant recipients for
at least three years. If fraud is an issue, records must be retained
until the issue is resolved.
2. RLF Income and Expense Statement: The Recipient must complete
the RLF Income and Expense Statement (RLF Income Statement) located
in Exhibit A, within 90 days of the twelve month period ending
either September 30 or the Recipient's fiscal year end, whichever
period is selected by the Recipient. The Recipient shall notify EDA
of its selection in its first report to EDA. Once the period is
selected, it may not be changed without prior written permission of
EDA.
In lieu of completing an RLF Income Statement, the grant
recipient may substitute information contained in an independent
audit report provided it is in substance and in detail comparable to
that provided in the RLF Income Statement. Should an audit report be
used, the grant recipient will have to provide additional
information certifying certain employee information requested in the
RLF Income Statement.
[[Page 5445]]
3. Reporting Requirements: Grant recipients using fifty (50)
percent or more or $100,000 or more of RLF Income for RLF
administrative expenses during the selected twelve month period must
submit the completed RLF Income Statement to the EDA Regional Office
within 90 days of the period ending date. Grant recipients whose RLF
Income usage is under 50 percent and less than $100,000 shall retain
the RLF Income Statement for three years. The grant recipient shall
make it available to EDA personnel upon request.
4. Ineligible Costs: For any costs determined by EDA to have
been an ineligible use of RLF Income, the grant recipient shall
reimburse the RLF or EDA. EDA will notify the grant recipient of the
time period allowed for, and the manner in which to make,
reimbursement.
VIII. Revolving Loan Fund Plan
A. Purpose
Grant recipients are required by the terms and conditions of the
grant agreement to manage RLFs in accordance with an RLF Plan (Plan)
generally approved prior to the grant award. The Plan serves two
purposes. First, it summarizes how the RLF will be used to support
implementation of the area's economic adjustment strategy, a
statutory prerequisite to award of a Section 209 Implementation
grant. Second, it documents the operating procedures established by
the grant recipient to ensure consistent administration of the RLF
in accordance with the Terms and Conditions of the grant and prudent
public lending practices.
B. Format and Content
The Plan has two distinct parts. Part I, ``The RLF Strategy,''
summarizes the area's economic adjustment strategy, including the
business development objectives, and describes the RLF's financing
strategy, policies and portfolio standards. Part II, ``RLF Operating
Procedures,'' serves as the internal operating manual for the RLF.
The grant recipient is required to address a number of topics
specifically identified by EDA, but otherwise has considerable
discretion in designing and documenting operating procedures
appropriate to the relative scale and complexity of its financing
function. The required format and content for the two parts of the
Plan are described in EDA's RLF Plan Guidelines.
C. EDA Approval
Unless specifically otherwise permitted by EDA, the Plan must be
approved by EDA prior to the grant award.
D. Annual Plan Certification
Grant recipients are required to certify annually with the
submission of the program report for the period ending September 30
(see Section XI.A), that the RLF loan board and the grant
recipient's governing board have reviewed the RLF's performance for
the preceding year relative to the area's adjustment strategy and
the RLF Plan and have determined that:
1. The RLF Plan is consistent with and supportive of the area's
current economic adjustment strategy; and
2. The RLF is being operated in accordance with the policies and
procedures contained in the RLF Plan, and the loan portfolio meets
the standards contained therein.
With the exception of States, the certification should normally
be in the form of a resolution passed by the grant recipient's
governing board. Certification by State grantees should be by an
authorized State official.
E. Plan Modifications
Approval of modifications to Part I of the Plan may be requested
at any time the grant recipient or EDA determines that the Plan is
either outdated relative to the current adjustment needs and
objectives of the area or specific lending policies and/or
requirements are impeding effective use of the RLF as a strategic
financing tool. Prerequisites for EDA's consideration of proposed
modifications to Part I of the Plan include the following:
1. When the modification request is based on a significant
redirection of an area's economic adjustment strategy, it must be
accompanied by a copy of the current strategy. The strategy
submitted must:
a. Have been prepared or reviewed and updated, as necessary and
appropriate, within the last 12 months by the grant recipient or
area organization responsible for its preparation and maintenance;
b. Address, for the purposes of EDA, the same geographic/
jurisdictional area covered by the original strategy, unless the
eligible area has been/is being expanded as provided for by the
terms and conditions of the grant;
c. Include the information specified in EDA's current guidelines
for preparing and documenting an economic adjustment strategy,
including evidence of the continuing need for the RLF; and
d. Provide sufficient evidence that the proposed modifications
are necessary and justified.
2. When the proposed modification is designed to permit more
effective use of RLF financing in support of its unchanged strategic
objectives, the grant recipient must submit adequate written
justification for the proposed change(s). Submission of a current
adjustment strategy is not required.
3. Certification that the proposed revisions are consistent with
EDA policy and do not violate the terms and conditions of the grant.
4. Certification that the purpose and scope of the RLF as a
financing tool for supporting implementation of the area's economic
adjustment strategy remain unchanged.
5. Certification that prudent management of the RLF assets would
not be compromised.
Grant recipients funded prior to the effective date of this
Manual are encouraged but not required, unless determined otherwise
by EDA, to comply with the new RLF Plan format when modifying any
part of their plan.
Operational procedures, as documented in Part II of the Plan, so
long as consistent with EDA requirements and the terms and
conditions of the grant award, may be modified with the approval of
the grant recipient's governing board. A copy of any revisions to
Part II should be submitted for the EDA file within 30 days of
approval. For grant recipients other than States, Plan modifications
should be approved by resolution of the organization's governing
board.
IX. Disbursement of Grant Funds
A. Pre-Disbursement Requirements
1. The grant recipient is required to provide evidence that it
has fidelity bond coverage for persons authorized to handle funds
under the grant award in an amount sufficient to protect the
interests of EDA and the RLF. Such insurance coverage must exist at
all times during the life of the RLF.
2. The grant recipient is required to provide a certification by
an independent accountant familiar with the grant recipient's
accounting system that its accounting system is adequate to
identify, safeguard, and account for all RLF funds, including RLF
Income.
3. The grant recipient is required to certify that the standard
RLF loan documents necessary for lending are in place and that these
documents have been reviewed by legal counsel for adequacy and
compliance with the terms and conditions of the grant. The standard
loan documents must include at a minimum, the following: Loan
Application, Loan Agreement, Promissory Note, Security Agreement(s),
Deed of Trust or Mortgage, and Agreement of Prior Lien Holder.
B. Disbursement Procedures
The grant recipient is required to draw grant funds
electronically by the Automated Clearing House Electronic Funds
Transfer (ACH/EFT) system. A grant recipient may request
disbursements only at the time and in the amount immediately needed
to close a loan or disburse funds to a borrower. RLF grant funds are
considered to be made available to grant recipients on a
reimbursement basis (as an obligation is incurred by the grant
recipient at the time of loan approval and loan announcement). Grant
funds should be requested only for immediate use, i.e., when the
intent is to disburse the funds within 14 days of receipt. If grant
funds are requested and the loan disbursement is subsequently
delayed, a grant recipient may hold the funds up to 30 days from the
date of receipt, but should return the funds if disbursement of the
grant funds is unlikely within the 30 day period. Returned funds
will be normally available to the grant recipient for future
drawdown. When returning prematurely drawn funds, checks should
identify on their face the name of the grantor agency--``EDA''
followed by the grant award number and the words ``Premature Draw.''
The grant recipient may also indicate, if a cover letter is sent,
that a credit in the amount of the check is to be made to the grant
award number for future drawdown. Checks should be submitted to:
Economic Development Administration, P.O. Box 100202, Atlanta,
Georgia 30384.
As stated above, the nonfederal matching share must be disbursed
either proportionately with the EDA grant funds or at a faster rate.
Interest earned on prematurely drawn grant funds must be returned to
EDA at least quarterly for deposit in the U.S. Treasury. (Note:
Grantees may deduct and retain a portion of such earned
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interest for administrative expenses up to the maximum amounts
allowed under either 15 CFR Part 24 or OMB Circular A-110 or its
implementing Department regulation, as applicable). Returned
interest payments should indicate on the face of the check ``EDA''
followed by grant award number and the word ``Interest''. Checks for
interest should be submitted to the same Atlanta, Georgia address as
above.
To request a grant disbursement by the ACH/EFT method, a grant
recipient must submit a completed Request For Advance or
Reimbursement, Standard Form 270 to the EDA Regional Office using
the attached Special Instructions (Exhibit B) which are specific to
RLF grants. Grant recipients may generally expect to have funds
available for subsequent disbursement from five to ten working days
after the EDA Regional Office receives the SF 270.
C. Principal Repayments During Grant Disbursement Phase
Principal repayments from active RLF loans that are received by
the grant recipient must be placed immediately in the loan fund to
be available for relending only. As each new loan is made, the grant
recipient may request a disbursement of grant funds only for the
difference, if any, between the amount of funds available for
relending (from repayments of loan principal and RLF Income) and the
amount of the new loan, less an amount for local matching funds as
may be required to be disbursed concurrent with the grant (refer to
Section V.B. for matching fund requirements). However, RLF Income
received during the current period (as defined in Section VII.C.2.)
may be held for the duration of the period to cover eligible
administrative expenses, and need not be disbursed in order to draw
additional grant funds.
D. Loan Closing/Disbursement Schedule
RLF loan activity must be sufficient to draw down grant funds in
accordance with the prescribed time schedule for loan closings and
disbursements to eligible RLF borrowers. Unless otherwise stated in
the grant agreement, the time schedule requires that the initial
round of lending (i.e., the grant disbursement phase) be completed
within three (3) years of the grant award with no less than 50
percent of the grant funds, and of the nonfederal matching share,
disbursed within eighteen months and 80 percent within two years.
Should the grant recipient substantially fail to meet any of the
prescribed deadlines, additional grant funds will not be disbursed
unless (1) funds are needed to close and disburse funds on loans
approved prior to the deadline and will be disbursed within 45 days
of the deadline, (2) funds are needed to meet continuing
disbursement obligations on loans closed prior to the deadline, or
(3) EDA has approved a time schedule extension.
(Note: An approved loan is defined as a loan that has been
approved by the RLF loan board but has not been closed. A loan is
closed when the loan agreement and note have been signed by the
borrower. The full amount of a loan may be disbursed to the borrower
at the time of loan closing, or may be disbursed in installments and
under conditions specified in the loan agreement.)
E. Time Schedule Extensions
Grant recipients are responsible for contacting EDA as soon as
conditions become known that may materially affect their ability to
meet any of the required disbursement deadlines. Except under the
conditions described, a grant recipient is required to submit a
written request for continued use of grant funds beyond the missed
deadline. Extension requests must provide good reason for the delay
and demonstrate that (1) the delay was unforeseen or generally
beyond the control of the Recipient, (2) the need for the RLF still
exists, (3) the current or planned use, and anticipated benefits of
the RLF remain consistent with the current adjustment strategy and
RLF Plan, and (4) achievement of a new proposed time schedule is
reasonably possible and why no further delays are foreseen. EDA is
under no obligation to grant a time extension, and in the event an
extension is denied, EDA will deobligate (terminate) all or part of
the unused portion of grant.
By law, grant funds remain available to EDA for disbursement
only until September 30 of the fifth year after the fiscal year of
the grant award. No time extensions will be granted beyond that time
and any undisbursed funds remaining will be deobligated.
X. Capital Utilization Standard
A. Definition
During the revolving phase, grant recipients are expected to
manage their repayment and lending schedules to maximize the amount
of capital loaned out or committed at all times. Under normal
circumstances, at least 75 percent of an RLF's capital should be in
use. [RLF Income earned during the current period (as defined in
Section VII.C.2) is not included as RLF capital.] EDA may recognize
exceptions for RLFs whose Plan calls for making loans that are large
relative to the size of the capital base. RLFs with capital bases in
excess of $4 million are expected to maintain a proportionately
higher percentage of their funds loaned out. The percentage will be
determined by EDA on a case-by-case basis.
When the percentage of capital loaned out falls below the
applicable standard, the dollar amount of the funds equivalent to
the difference between the actual percentage of capital loaned out
and the standard is referred to as ``excess funds.''
B. Deviation
In the event that there are excess funds at the time a
semiannual report is due, the grant recipient must submit an
explanation of the situation with the report, and if there is a
significant deviation from the standard, as determined by EDA, the
grant recipient must describe the remedial action to be taken.
C. Sequestration of Excess Funds
At any time subsequent to a second consecutive report showing
that the applicable standard has not been met, EDA may require the
grant recipient to deposit excess funds in an interest bearing
account; that portion of the interest earned on that account,
attributable to the EDA grant, will be remitted to the U.S.
Treasury. EDA approval will be required to withdraw sequestered
funds.
D. Persistent Noncompliance
EDA will normally give the grant recipient a reasonable period
of time to loan the excess funds and achieve the standard. However,
when a grant recipient fails to achieve the applicable standard
after a reasonable period of time, as determined by EDA, the grant
will be subject to sanctions for suspension and/or termination as
described in Section XII of this Manual.
XI. Monitoring
EDA monitors grant recipients for compliance with the Terms and
Conditions of the grant, for performance against national norms and
individual portfolio standards, and for the contribution of the RLF
to the area's economic adjustment process. Monitoring and
performance assessments are based on periodic reports submitted by
the grant recipients, organizational and Federal audits, and site
visits by EDA staff.
A. Reports
1. Grant Status Reports: Grant recipients are required to submit
standard Federal grant status reports to EDA during the grant
disbursement phase as specified in the Terms and Conditions of the
grant agreement. These include: (a) Standard Form 270, Request for
Advance or Reimbursement, which is submitted each time a grantee
needs to draw Federal funds (see Section IX.B. and Exhibit B); and
(b) Standard Form 272, Federal Cash Transactions Report (Exhibit C),
which is due within 15 days following the end of each calendar
quarter and shows the status of grant funds. Failure to submit a
Standard Form 272, when due, will prevent a grant recipient from
obtaining funds until the form is submitted.
2. Financial and Performance Reports: All grant recipients are
required to complete and submit Financial and Performance Reports
(Exhibit D) semiannually unless otherwise notified by EDA.
a. Initial Report: For grants, other than recapitalizations,
awarded between October 1, and March 31, the initial report due date
is the following October 31. For grants awarded between April 1 and
September 30, the initial report due date is the following April 30.
b. Subsequent Reports: After the initial report, the semiannual
report is due on October 31, for the period of loan activity ending
September 30, and April 30, for the period ending March 31.
Generally, RLF grant recipients will be required to submit
reports to the EDA Regional Office every six months for a minimum of
one year after disbursement of all grant funds, after which a grant
recipient may be eligible for ``graduation'' to a shorter, annual
reporting format (Exhibit E). Grant recipients must request this in
writing. Recipients of recapitalization grants shall report on the
full amount of their RLF funds in each subsequent semiannual or
annual report submitted.
[[Page 5447]]
3. Annual Reports: For grant recipients graduated to an annual
reporting schedule, the report covers the twelve month period ending
September 30, and is due October 31. The annual reporting
requirement continues through the life of an RLF unless EDA
determines that more frequent or detailed reports are needed for
closer monitoring of grant violations or other problems. Note that
the annual report requires documentation of capital utilization at
semiannual intervals pursuant to the requirements of Section X.
4. Special Reports: Special reports to enable EDA monitoring of
compliance issues arising from audits, site visits, or other reviews
may be requested from the grant recipient in writing on a case by
case basis.
First time grant recipients may be required to submit periodic
reports on their progress in initiating RLF activity, prior to the
due date of the first semiannual report.
B. Audits
Grant recipients are subject to the following audit requirements
for the duration of the RLF.
1. In accordance with the terms and conditions of the grant
award, the grant recipient shall arrange for a Single Audit as
referenced in the RLF Audit Guidelines and OMB Circular A-133. Such
audits should be conducted by an independent auditor who meets the
general standards specified in generally accepted government
auditing standards. With the exception of newly awarded grants and
limited circumstances described in the RLF Audit Guidelines, the
majority of RLF grant recipients will require an annual audit.
Pursuant to the Single Audit Act Amendments of 1996 (P.L. 104-
156), and OMB Circular A-133, as codified in DOC Regulations found
at 15 CFR Part 29, audits are required of all State, local
government and non-profit corporation RLF grant recipients that
expended total Federal awards of at least $300,000 in a given fiscal
year. For all RLF grants, the calculation of RLF expenditures will
include the beginning balance of all outstanding loans plus the
current year's loan and loan-related expenditures. The cost
principles to be followed are contained in OMB Circulars A-21, A-87
or A-122, as applicable.
Audit requirements for RLF's are summarized in the EDA RLF Audit
Guidelines which should be made available to the auditor prior to
the audit engagement. Failure to comply with these requirements
could result in an unacceptable audit.
2. The U.S. Department of Commerce Office of Inspector General
(OIG) may audit, inspect, or investigate an RLF grant at any time.
C. Site Visits
EDA will periodically schedule site visits to review the grant
recipient's operating procedures, monitor progress and evaluate the
effectiveness of the RLF in supporting the area's economic
adjustment process and strategic objectives.
XII. Noncompliance With the Grant Terms
A. Suspension
EDA may suspend RLF lending activity when EDA determines that a
grant recipient has failed to comply with the grant terms. Before
suspending a grant, EDA may give the grant recipient a reasonable
period of time in which to take the necessary corrective action to
comply with the grant terms. However, should it appear that the
grant recipient had not taken or will not take the necessary action,
and/or that continued operation of the RLF would place the assets at
risk, EDA may suspend the grant immediately. Upon suspension, the
grant recipient will be prohibited from any new lending activity,
although normal loan servicing and collection efforts will continue.
In addition, the grant recipient may be subject to restrictions on
the use of RLF Income and specific actions to protect the RLF assets
may be required.
In the event that the compliance problems are not resolved
during the suspension period, EDA will attempt to resolve the issues
through means including working with the Recipient to identify a
successor to assume responsibility for administering the RLF in
accordance with the terms of the original grant agreement. If issues
cannot be resolved, EDA will initiate proceedings to terminate the
grant for cause.
B. Termination for Cause
EDA may terminate an RLF grant for cause with or without prior
suspension of lending activity.
C. Partial Termination
When EDA determines, after a reasonable period of time, that a
grant recipient is unable or unwilling to use the full amount of the
grant funds or of the RLF capital and RLF Income thereby generated,
EDA may partially terminate the grant if EDA determines that the
remaining capital is sufficient to support continuation of an
effective RLF operation.
When a grant recipient fails to complete the initial round of
lending in the time schedule provided in the grant agreement, the
unused grant funds may be deobligated and the grant award amended to
reflect the reduced grant amount. The nonfederal matching share will
be expected to remain in the RLF unless otherwise specified in the
grant agreement or agreed to in writing by EDA.
Grant recipients in the revolving phase who persistently fail to
make maximum use of the available RLF capital, as defined by the
applicable capital utilization standard in Section X, will be
required to return excess funds, in an amount determined by EDA, to
the U.S. Treasury. This amount will not be greater than EDA's
proportionate share of the excess funds sequestered at the time. The
grant award will be amended to reflect the reduced amount of EDA's
participation.
XIII. Termination for Convenience
A grant recipient has the right to request termination for
convenience of the grant, in whole, or in part, at any time.
Termination is undertaken without prejudice to the grant recipient
upon agreement of both parties that the purpose of the grant would
not be served by further expenditure of funds, and in the case of a
partial termination, EDA determines that sufficient funds remain to
permit an effective RLF operation. The Federal share of the funds
must be returned to the U.S. Treasury as described below in Section
XIV.
XIV. Recovery of EDA Interest in the RLF Assets
In case of termination, for cause or convenience, EDA has the
responsibility, on behalf of the Federal Government, to recover its
fair share of the value of the RLF assets consisting of cash,
receivables, personal and real property, and notes or other
financial instruments developed through use of the funds. EDA's fair
share is the amount computed by applying the percentage of EDA
participation in the total capitalization of the RLF to the current
fair market value of the assets thereof; provided that with EDA's
approval the Recipient may use for other economic development
purposes that portion of such RLF property which EDA determines is
attributable to the payment of interest on RLF loans and not used by
the Recipient for administrative or other allowable expenses. In
addition, EDA has the right to compensation, over and above its
share of the current fair market value of the assets, when it is
determined that the value of such assets has been reduced by the
improper/illegal use of grant funds.
XV. Sale or Securitization of Loans
Grant recipients may, with EDA's prior written consent, further
the objectives of the RLF through the sale of loans or
securitization of the loan portfolio to generate money to be used
for additional loans as part of the RLF. A grant recipient
contemplating such an action is advised to consult with EDA prior to
development of a formal proposal.
In the event of the sale, collection, or liquidation of loans,
any proceeds, net of repaid principal and reasonable administrative
costs incurred, up to the amount of the outstanding loan principal,
must be returned to the RLF for relending. Any net proceeds from
loan sales above the outstanding loan principal is considered RLF
Income and must either be added to the RLF capital base for lending
or used to cover eligible costs for administering the RLF in
accordance with the rules for use of RLF Income.
XVI. Appendix
The following reference materials and required or sample
reporting formats are available from EDA:
OMB Circulars and CFR'S (List of Reprints)
15 CFR Part 24, Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments
OMB Circular A-87, Cost Principles for State and Local Governments
15 CFR Part 29a, Audit Requirements for State and Local Governments
15 CFR Part 29b, Audit Requirements for Institutions of Higher
Education and Other Nonprofit Organizations
OMB Circular A-133, Audits of States, Local Governments and
Nonprofit Organizations
[[Page 5448]]
OMB Circular A-110, Grants and Agreements with Institutions of
Higher Education, Hospitals, and Other Nonprofit Organizations
Uniform Administrative Requirements
OMB Circular A-122, Cost Principles for Nonprofit Organizations
OMB Circular A-21, Cost Principles for Educational Institutions
48 CFR Part 31, Contract Cost Principles and Procedures
15 CFR Part 26, Governmentwide Debarment and Suspension and
Governmentwide Requirements for Drug Free Workplace
EDA Reference Materials and Reporting Formats
EXHIBIT A: RLF Income and Expense Statement with Instructions
EXHIBIT B: Request for Advance or Reimbursement (SF-270) with EDA
Special Instructions
EXHIBIT C: Federal Cash Transaction Report (SF-272)
EXHIBIT D: Semiannual Report for RLF Grants with Instructions
EXHIBIT E: Annual Report for RLF Grants with Instructions
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Exhibit A (back)--Instructions for RLF Income and Expense Statement
The RLF INCOME AND EXPENSE STATEMENT is to be used by recipients
of revolving loan fund (RLF) grants provided by the Economic
Development Administration (EDA), U.S. Department of Commerce. The
Statement is to be completed for each year in which a grantee uses
income generated from RLF activities to pay for RLF administrative
expenses. It should be completed within 90 days of a grant
recipient's fiscal year end or September 30. The period will be
selected by the grant recipient; once selected, it may not be
changed without the prior approval of EDA. Instructions for
submitting the Statement are included in the EDA Administrative
Manual, Section VII. Expenses charged to RLF income sources must be
eligible under the terms of the grant and must comply with
applicable OMB cost principles and the EDA RLF Audit Guide. For
grantees completing the Statement for the first time, or which did
not charge any expenses against RLF income sources in a prior
period, complete only the second column marked ``Most Recent
Period'' and answer questions 7. And 8.
Except for the items explained below, all items on the Statement
are self-explanatory or are adequately addressed in the RLF Audit
Guide and applicable OMB Cost Principles.
Item and Entry
1 ``RLF INCOME'' includes all interest earned on outstanding loan
principal, interest earned on accounts holding idle RLF funds, and
loan fees and other loan-related earnings.
2d Enter the amount of grantee out-of-pocket costs which were
necessary to process and close RLF loans. These costs may include
such costs for credit reports, title insurance, Uniform Commercial
Code searches, filing fees, appraisals, etc., which are recorded in
the grantee's accounting records. Any costs not recorded in the
grantee's accounting records, e.g., those paid directly by a
borrower to a third party, or those that were netted against loan
fees (thereby reducing reported income), need not be reported here.
2g Enter the costs charged to RLF Income for RLF-related training
for employees involved in RLF operations. These costs may include
training materials, textbooks, tuition and registration fees. Any
training-related travel costs should be reported in Item 2c.
5 ``Cumulative NET RLF INCOME'' includes all RLF Income earned
during the life of the RLF that was not used for RLF administrative
expenses. The amount reported should be inclusive of the NET RLF
INCOME reported in Item 4. (The Cumulative NET RLF INCOME for the
most recent period should equal the sum of the amounts in Item 5 for
the prior period and in Item 4 for the most recent period.
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Exhibit B (Revised 12/98)--Special Instructions for Completion of
Standard Form 270 for EDA Revolving Loan Fund Grants
These instructions apply to revolving loan fund (RLF) grants
funded by the Economic Development Administration (EDA). U.S.
Department of Commerce, under Section 209 of the Public Works and
Economic Development Act of 1965, as amended. RLF grant recipients
are required to use Standard Form 270 to draw grant funds when
needed to disburse to RLF borrowers. Funds may be drawn only for
immediate use (i.e., when the intent is to disburse the funds within
14 days of receipt), and only to the extent that the recipient does
not have funds on hand from loan repayments and certain RLF income
sources to cover the proposed disbursement request. (See below and
EDA's RLF Administrative Manual, Section IX, for further details.)
Grant funds not disbursed within 30 days of receipt must be returned
to EDA. Items 1b, 3, 9, 11c, 11e, and 11i are self-explanatory;
specific instructions for other items follow:
Item and Entry
1a Indicate whether the request is for a reimbursement or an
advance. (Note the RLF disbursements are normally considered
reimbursement as a reimbursable obligation is created at the time of
loan approval. A request for an advance may be requested under
special circumstances.
2 Disregard.
4 Enter the Federal grant number or other identifying number
assigned by EDA. If the reimbursement or advance is for more than
one grant or other agreement, insert N/A; then show the aggregate
amounts. On a separate sheet, list each grant or agreement number
and the Federal share of outlays made against the grant or
agreement.
5 Enter in numerical order the number of this disbursement request.
Begin with the number ``1'' for each new grant.
6 Enter the employer identification number assigned by the US
Internal Revenue Service, or the FICE (institution) code if
requested by EDA.
7 This space is reserved for an account number or other identifying
number that may be assigned by the grant recipient.
8 Disregard.
10 Enter ``ACH/EFT'' for funds disbursement by the Automated
Clearing House Electronic Funds Transfer System. For further
details, refer to Section E.02 of the RLF Standard Terms and
Conditions.
11 The purpose of the vertical columns (a), (b), and (c) is to
provide space for separate cost breakdowns when a project has been
planned and budgeted by program, function, or activity. If
additional columns are needed, use as many additional forms as
needed and indicate the page number in the space provided in upper
right; if more than one column is used, the summary totals of all
programs, functions, or activities should be shown in the ``total''
column on the first page.
11a Enter in ``as of date'', the month, day and year of the ending
of the accounting period to which this amount applies. Enter the
amount of cumulative outlays for RLF loans from the following
sources: EDA RLF grant funds, matching funds, and program income
(defined in Section VII.A of the RLF Administrative Manual).
Include actual, pending (previous outlays requests that have not
yet been disbursed) and proposed (those proposed under this request)
outlays. For recapitalized RLF's--those where a subsequent EDA RLF
grant was made to the same recipient--treat cumulative outlays as
beginning with the inception of the RLF.
11b Cumulative Program Income, as defined below, must be used
before or concurrent with the disbursement of new grant funds
(pursuant to Section IX of the RLF Administrative Manual).
Cumulative Program Income is a net figure computed, as follows:
+Cumulative Principal Repaid*
+Cumulative RLF Income Received**
-Cumulative Administrative Cost Expensed to RLF Income***
Footnotes:
*This is the cumulative RLF loan principal that has been repaid
from inception of the RLF.
**This includes all RLF Income earned and received from
inception of the RLF. Current period RLF Income on hand may be
excluded from this amount if any portion of it is anticipated to be
used during the remainder of the current period. Note that failure
to exclude these funds here will increase Cumulative Program Income
(line 11b) which will lower the amount of grant funds to be
requested for disbursement (line 11i). Any RLF Income available at
the end of a period is required to be added to the RLF capital base
for lending.
***Enter all administrative costs Expensed to RLF Income from
Inception of the RLF.
Definitions
Program Income--is the sum of all RLF principal repayments plus
RLF Income (defined below).
RLF Income--includes all RLF-generated income from loan fees,
interest earned on loans and on accounts holding idle RLF funds, and
other loan-related earnings.
Period--refers to the 12-month reporting period by each grant
recipient; it may end on either September 30 or the grantee's fiscal
year-end date. (Refer to Section VII.C.2. of RLF Administrative
Manual.
11d Enter ``0'' unless an advance of grant funds is being
requested--see Item 1a above.
11f Enter the total amount of the matching funds previously
expended plus matching funds to be disbursed as part of this request
(and any previous pending request, if applicable). When calculating
this amount, note that the matching funds amount in 11f as a percent
of the amount on line 11c may not be less than the percentage
relationship between the aggregate of matching funds and of total
project costs indicated in the grant award(s). Matching funds must
be expended either before or at least proportionately with EDA grant
funds.
11g Enter the EDA share of the amount on line 11e. This should be
the difference between the amounts on lines 11e and 11f.
11h Enter the amount of EDA funds previously requested. This should
be equal to the amount reported in Item 11g of the previous SF 270
submitted by the recipient.
12 Disregard.
13 In the space indicated for ``agency use'' or on a separate page,
provide the following disbursement information:
a. Indicate whether the RLF identified in Section 4 is an
``initial'' or ``recapitalization'' RLF grant. If an initial grant,
show the EDA grant funds expended as a percent of total expenditures
by dividing the amount reported in Item 11g by the amount reported
in Item 11e. If a recapitalization grant, show both the EDA and the
matching fund dollar outlays (including actual and proposed outlays)
for the grant disbursement; also show the percentage of EDA dollar
outlays to total dollar outlays for the grant under disbursement.
b. If any previously requested grant funds have been received
but not disbursed, list the date of receipt and the amount remaining
to be disbursed. If not applicable, type ``NA''.
c. List the RLF borrowers and the respective RLF dollar amounts
anticipated to be disbursed under this request.
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Instructions
Public reporting burden for this collection of information is
estimated to average 120 minutes per response, including timer for
reviewing instructions, searching existing data sources, gathering
and maintaining the data needed, and completing and reviewing the
collection of information. Send comments regarding the burden
estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to the Office of
Management and Budget, Paperwork Reduction Project (0348-0003),
Washington, DC 20503.
Please do not return your completed form to the Office of
Management and Budget, send it to the address provided by the
sponsoring agency.
Please type of print legibly, Items 1, 2, 8, 9, 10, 11d, 11e,
11h, and 15 are self explanatory, specific instructions for other
items are as follows:
Item and Entry
3 Enter employer identification number assigned by the U.S. Internal
Revenue Service or the FIC (institution) code.
If this report covers more than one grant or other agreement,
leave items 4 and 5 blank and provide the information on Standard
Form 272-A, Report of federal Cash Transactions--Continued;
otherwise;
4 Enter Federal grant number, agreement number, or other identifying
numbers if requested by sponsoring agency.
5 This space reserved for an account number or other identifying
number that may be assigned by the recipient.
6 Enter the letter of credit number that applies to this report. If
all advances were made by Treasury check, enter ``NA'' for not
applicable and leave items 7 and 8 blank.
7 Enter the voucher number of the last letter-of-credit payment
voucher (Form TUS 5401) that was credited to your account.
11a Enter the total amount of Federal cash on hand at the beginning
of the reporting period including all of the Federal funds on
deposit, imprest funds, and undeposited Treasury checks.
11b Enter total amount of Federal funds received through payment
vouchers (Form TUS 5401) that were credited to your account during
the reporting period.
11c Enter the total amount of all Federal funds received during the
reporting period through Treasury checks, whether or not deposited.
11f Enter the total Federal cash disbursements, made during the
reporting period, including cash received as program income.
Disbursements as used here also include the amount of advances and
payments less refunds to subgrantees or contractors, the gross
amount of direct salaries and wages, including the employee's Share
of benefits if treated as a direct cost, interdepartmental charges
for supplies and services, and the amount to which the recipient is
entitled for indirect costs.
11g Enter the Federal share of program income that was required to
be used on the project or program by the terms of the grant or
agreement.
11i Enter the amount of all adjustments pertaining to prior periods
affecting the ending balance that have not been included in any
lines above. Identify each grant or agreement for which adjustment
was made, and enter an explanation for each adjustment under
``Remarks''. Use plain sheets of paper if additional space is
required.
11j Enter the total amount of Federal cash on hand at the end of the
reporting period. This amount should include all funds on deposit,
imprest funds, and undeposited funds (line 3, less line h, plus or
minus line I).
12 Enter the estimated number of days until the cash on hand, shown
on line 11j, will be expended. If more than three days cash
requirements are on hand, provide an explanation under ``Remarks''
as to why the drawdown was made prematurely, or other reasons for
the excess cash. The requirement for the explanation does not apply
to prescheduled or automatic advances.
13a Enter the amount of interest earned on advances of Federal funds
but not remitted to the Federal agency. If this includes any amount
earned and not remitted to the Federal sponsoring agency for over 60
days, explain under ``Remarks''. Do not report interest earned on
advances to States.
13b Enter amount of advance to secondary recipients included in item
11h.
14 In addition to providing explanations as required above, give
additional explanation deemed necessary by the recipient and for
information required by the Federal sponsoring agency in compliance
with governing legislation. Use plain sheets of paper if additional
space is required.
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Instructions for Completion of EDA's Semiannual Reports for Revolving
Loan Fund Grants
The instructions below are in outline form and correspond to
identical items in the Semiannual Report. Complete the Semiannual
Report by filling in the spaces and responding to the questions. On
page one of the Report, indicate the reporting period in the upper
right hand corner. The reporting periods end on September 30 and
March 31, and all data entries are to be effective with these ending
dates. Submit completed Reports to the EDA regional office by
November 1 and May 1, respectively. DO NOT INCLUDE IN PARTS 1-3 OF
THE REPORT ANY DATA ON INITIAL LOANS UNDER A SECTION 209 SSED GRANT/
LOAN; LIST THESE ITEMS SEPARATELY IN PART 4 ONLY.
Part I: Portfolio Status
A. Status of Direct Loans: Show the current status of all direct
RLF loans that have been closed. DO NOT include approved loans that
have not been closed. In column two, ``RLF $ Loaned,'' include only
the funds loaned by the RLF, including EDA and grantee matching
funds, NOT the financing provided by other lenders.
1. Total Loans Made: Enter the total number and dollar amount of
all RLF loans closed to date. Under column two, ``RLF $ Loaned,''
the amount should always represent the original loan amount.
2. Fully Repaid: Enter the number and original dollar amount of
RLF loans that have been fully repaid.
3. Current Loans: Enter the number and original dollar amount of
RLF loans that are current on RLF loan payments. In column three,
``RLF Principal Outstanding,'' enter the principal balance
outstanding for current RLF loans.
4. Delinquent: Enter the number and original dollar amount of
RLF loans that are delinquent. For this report, a ``delinquent''
loan is defined as one that is up to 60 days past due. Enter also
the principal balance outstanding on the delinquent loans. (If a
previously delinquent borrower is now current, or making payments in
accordance with an amended note and payment schedule, show this loan
as current).
5. In Default: Enter the number and original dollar amount of
RLF loans that are in default. For this report, a ``default'' is
defined as any loan that is over 60 days past due but not written
off. (An RLF grantee may, at its option, classify a loan as
defaulted if it is under 60 days past due. If a previously defaulted
loan has been rewritten and/or the borrower is now current, the loan
should be shown as current). Enter the principal balance outstanding
on defaulted loans.
6. Total Active Loans: On line 6, enter the sum of lines 3, 4,
and 5 to obtain the number, amount and principal outstanding for
Total Active Loans. (Total Active Loans are defined as loans that
are either current, delinquent or in default--exclusive of loans
that have been fully repaid or written off).
7. Total Written Off: Enter the aggregate number and original
amounts of defaulted loans that have been written off. Enter also
the principal balance outstanding on loans written off or the actual
amount lost, whichever is smaller.
B. Status of Loan Guarantees: The same criteria as above apply
to the Status of Loan Guarantees. In column two, note that the ``RLF
$ Reserved'' are the RLF dollars that are actually set aside and
held in reserve to cover any losses on guaranteed loans. In column
three, ``Total Amount Guaranteed'' is the amount of the original
loan that is/was guaranteed by the RLF. In column four, ``Current
Exposure'' is the dollar amount of the RLF's contingent liability as
of the date of the current report; this amount is usually computed
by multiplying the percent of the original guarantee by the
outstanding loan balance.
Part II: Portfolio Summary
A. Summary of Loan Activities: For each listed item, provide
information on both Total and Active RLF loans closed to date. Total
Loans include loans that are current, delinquent and in default, as
well as those that have been fully repaid and written off. Active
Loans include only current delinquent and defaulted loans,
specifically those included in A.3-5. and B.3-5., Part I, page one,
of the Semiannual Report.
1. # RLF Loans: Enter the number of RLF loans closed for both
Total Loan (I.A.6. and I.B.6., page one) categories. Be sure to
include the number of both direct and guaranteed loans closed.
2. RLF $$ Loaned: Enter the amount of RLF dollars loaned for
both Total Loan (I.A.1. and I.B.1., page one) and Active Loan
(I.A.6. and I.B.6., page one) categories. For loan guarantees, use
column three, ``Total Amount Guaranteed,'' for the RLF dollar amount
loaned.
3. Non-RLF $$ Leveraged by RLF:
a. Private: Enter the Private Dollars Leveraged for both Total
and Active Loan categories. Unless stipulated otherwise in the grant
agreement, RLF loans must be used to leverage private investment of
at least two dollars for every one dollar of RLF investment. Private
dollars leveraged include private financing and private investments
provided to the ``project'' in which the RLF is an integral
component. A ``project'' is defined as an activity consisting of
interrelated components which share a common goal. Private
investments include both cash provided to the project and donated
assets which come from outside the borrowing enterprise. For donated
assets, only the equity in the assets (defined as the assets' market
value less any security interest) may be counted in the leverage
ratio. For purposes of calculating private dollars invested, 90
percent of the guaranteed portions of SBA 7(a) and SBA 504 debenture
loans may be included. As a reminder, the RLF must fill a legitimate
financing gap in the project for the private funds to be considered
``leveraged dollars''.
b. Other: Enter any Other investments Leveraged for both Total
and Active Loan categories by the RLF loan in the ``project'',
including other public financing (e.g., HUD-CDBG, USDA-IRP loans,
etc.).
4. Total Project Financing: Enter the sum of RLF dollars loaned
and non-RLF dollars leveraged by the RLF, items II.A.2. plus
II.A.3.c.
5. Private Sector Jobs: Enter the number of jobs created and the
number of saved jobs for both Total and Active loan categories. In
tallying jobs, only permanent and direct jobs may be counted; part-
time jobs should be converted to full-time equivalents (by summing
the total hours worked per week for all part-time employees and
dividing by the standard hourly work week for full-time employees,
normally 35-40 hours). Job information data should be collected at
least annually. For seasonal businesses, more frequent collection of
job data is usually necessary to obtain realistic employment figures
for an annualized average.
Grantees should use the following definitions in completing the
job information section of this report:
a. Actual Created Jobs: A job is counted as ``created (actual)''
if it was created as a result of and attributable to the RLF loan
project, and has been verified by the borrower (or grantee) as
actually created. Jobs are usually verified by requesting the
borrower to complete a questionnaire at least on an annual basis
indicating the number of jobs actually created and attributable to
the RLF project, or by the grantee performing an on-site job count.
Other job data should also be requested from the borrowers in order
to complete Part IV of the Report. The documentation for job counts
should be placed in the project files.
Created jobs may be credited if the jobs were created within
five years of loan disbursement or, if construction is involved,
within five years after construction completion. All jobs credited
must be attributable to the RLF project. A created job must be
removed from the credited created jobs if the job fails to last at
least 18 months. Any job which meets the creditable job created
criteria is counted as part of the total actual jobs created
permanently, regardless of the status of the loan.
For loans that have been paid in full, grantees may use the job
information data that is on file provided there is adequate
confidence in the reliability of the data. If there is a question on
the reliability, the data should be verified by the next semiannual
reporting period.
b. Saved Jobs are existing jobs where it can be documented that
without the RLF assistance the jobs would have been lost.
Exception--Created/Saved Jobs Subsequently Lost: If an RLF
borrower subsequently ceases business (or closes a segment of its
business) thereby eliminating previously created or saved jobs,
these jobs may continue to be counted in the Semiannual Report only
if they were maintained for a minimum of 18 months prior to the
loss.
6. RLF $$ Loaned for Fixed Assets: Enter for both Total and
Active loan categories, the amount of closed RLF loans that were
used for the purchase, installation or construction of fixed assets.
If a single RLF loan was used jointly for fixed asset and working
capital purposes, only the fixed asset amount should be reported on
this line. For a guaranteed loan that was used jointly for fixed
assets and working capital, multiply the percent of the original
loan that is/was guaranteed by the amount of the loan that was used
for fixed assets.
[[Page 5464]]
7. RLF $$ Loaned for Working Capital: Enter for both Total and
Active loan categories, the amount of closed RLF loans that were
used for working capital purposes as defined by generally accepted
accounting principles. Consistent with item II.A.6. above, include
on this line only the amount or portion of a RLF loan that was
actually used for working capital purposes. (The amounts on this
line plus the amounts in II.A.6. should equal the total RLF dollars
loaned in item II.A.2. for both Total and Active loans,
respectively).
8. RLF $$ Loaned for Start-up, Expansion & Retention: Enter for
both Total and Active loan categories, the amount of RLF loans that
were used for Start-up loans, Expansion loans and Retention loans.
Each loan in the RLF portfolio is to be categorized as either a
Start-up, an Expansion or a Retention loan. A Start-up loan is one
to a new business that has limited or no prior operating history. An
Expansion loan involves an existing operating company that will
expand operations and create jobs. A Retention loan is where the
existing jobs of the company are ``saved'' as a direct result of the
RLF assistance. [The sums of these loan categories (8.a. + 8.b. +
8.c.) should equal the total RLF dollars loaned in item II.A.2. for
both Total and Active loans, respectively].
9. RLF $$ Loaned for Industrial, Commercial & Service: Enter for
both Total and Active loan categories, the dollar amount of closed
RLF loans that went to Industrial, Commercial and Service projects.
All RLF loans should be placed in one of these three categories,
which are defined below and which utilized the Standard Industrial
Classification (SIC) Manual as a guide:
Industrial projects include manufacturing, agriculture,
forestry, fishing, mining, and construction businesses--essentially
businesses engaged in the production of a product.
Commercial projects include retail and wholesale trade
businesses.
Service projects include businesses which provide a service to
individuals or businesses, i.e., those not engaged in the production
of a product or the sale of merchandise.
10. RLF $$ Loaned for Minority Businesses: Enter for both Total
and Active loan categories, the amount of closed RLF loans that went
to minority-owned businesses. To be considered minority-owned, a
company must be at least 51 percent owned by African-Americans,
Hispanics, Asians and/or Indians.
11. RLF $$ Loaned for Women-owned Businesses: Enter for both
Total and Active loan categories, the amount of closed RLF loans
that went to women-owned businesses. Include only firms with at
least 51 percent ownership by women.
12. Other: Enter for both Total and Active loan categories, the
amount of closed RLF loans that went to a targeted use identified in
the RLF Plan but not included above.
B. Comparison of RLF Portfolio to RLF Plan: As indicated in the
narrative in the Semiannual Report, use the RLF Plan to obtain the
applicable ratios and percentages for completing the first column.
For column two (Total Loans) and column three (Active Loans), use
the appropriate figures from Part II.A. to compute the ratios and
percentages requested. The formula for each item is listed in the
brackets next to that item. [As an example, item #1--Cost per Job,
is computed by dividing the figures on line A.2. by those on line
A.5.d. (from Part II) for both Total and Active loans,
respectively].
Part III: Portfolio Financial Status
A. RLF Funding Sources:
1.-3. Enter on lines one through three the total funds committed
to the RLF by funding source, regardless of whether the funds have
been drawn into the RLF. Outside of the EDA funds, the funding
categories will include either funds provided solely by the grantee
or from ``other'' sources, e.g., CDBG, state, or private donations
for the specific use of the RLF. Specify the funding source if
``other''.
4. Enter the sum of all funding sources, items III.A.1. through
III.A.3. inclusive.
B. Program Income Earned to Date:
5. Enter the total interest earned directly from RLF loans. This
amount should equal the aggregate interest earned from individual
loans which are listed in Part IV.
6. Enter interest earned from deposits and investments of:
a. RLF loan payments, including principal and interest;
b. RLF loan fees, including origination, servicing and
processing fees, late fees and penalties; and
c. Advances of local matching funds and EDA funds. EDA funds
must be timed to meet the actual, immediate disbursement needs of
the RLF borrowers. Otherwise, grant funds plus any interest earned
thereon must be returned to EDA. (Note that grantees may deduct and
retain a portion of such earned interest for administrative expenses
up to the maximum amounts allowed under either 15 CFR Part 24 or OMB
Circular A-110 or its implementing Department regulation, as
applicable).
7. Enter the aggregate of all fees earned from RLF loans from
processing, servicing, closing, late fees and any other loan-related
earnings.
8. Enter the sum of III.B.5. through III.B.7., inclusive.
9. Enter the amount from III.B.8. that has been used to cover
eligible RLF administrative expenses to date. (Time cards are to be
maintained for all direct labor costs charged against RLF Program
Income. If indirect costs are charged against the RLF, the grantee
must have an indirect cost allocation plan). Inasmuch as RLF
administrative costs can only be reimbursed from RLF income earned
in the same accounting period, available RLF income earned in a
current period may be set aside for administrative costs which will
be incurred over the remainder of the period (Refer to Section VII.
of the Administrative Manual for additional information).
10. Subtract the amount on line III.B.9. from III.B.8. and enter
the difference here. Do not deduct amounts set aside for future
administrative expenses. Lines III.B.8 less line III.B.9. should
equal the amount of line III.B.10; if not, explain on separate page.
Note that if the grant recipient anticipates using any of the
available RLF income earned in the current period during the
remainder of the period, it may deduct this from the amount
otherwise reported in the space. Conversely, if the recipient is
certain that it will not need any of the available RLF income during
the remainder of the period, it should include this amount in the
figure reported as RLF Income added to the RLF for Lending. Any RLF
income on hand at the end of a period must be added to the RLF
Capital Base for lending purposes.
(Note: References to Program Income in B.8. through B.10. should
be interpreted to mean RLF Income as used in the RLF Administrative
Manual).
C. Status of RLF Capital:
11. Self-explanatory (enter the amount from III.A.4.).
12. Self-explanatory (enter the amount from III.B.10.).
13. Self-explanatory (enter the sum of the amounts lost from
direct loans and guaranteed loans, from I.A.7. and I.B.7., page 1
respectively).
14. Self-explanatory (enter the sum of III.C.11. and III.C.12.,
less III.C.13).
D. Current Balance Available for New Loans:
15. Self-explanatory (enter the RLF principal outstanding from
I.A.6., page 1).
16. Self-explanatory (enter the total RLF dollars reserved for
loan guarantees, which are not available for lending, from I.B.6.,
page 1).
17. Self-explanatory (deduct amounts shown in III.D.15. and
III.D.16. from III.C.14.).
18. Enter the aggregate amount of RLF funds that have been
approved and committed but not closed nor disbursed.
19. Self-explanatory (enter the amount in III.D.17. less
III.D.18.).
20. Current Balance Available Percentage--applies only to RLF's
that have been fully disbursed. Enter the percent that is obtained
by dividing the amount in III.D.19. by the amount in III.C.14.
21. Insert the Current Balance Available Percentage (same
calculation as in #20 above), but for the preceding six month period
obtained from the previous Semiannual Report.
(Note: The percentages obtained in III.D.20. and III.D.21. are
used to evaluate compliance with EDA's Excess Retention Policy
established in 1988. If the percentages in III.D.22. and in
III.D.23. both exceed 25 percent, the grantee is in violation of the
policy and is required to submit an addendum to the report
explaining the reasons for the violation and the steps it proposes
to take to reduce the percentage below 25 percent. Subsequently, the
grantee may be required to submit the EDA share of any amount over
25 percent, which normally will be made available to the grantee for
a time period established by EDA. Funds not used during this time
period may become permanently unavailable to the grantee).
Part IV: Portfolio Loan List
Self-explanatory.
Part V: Miscellaneous Information & Certification
A. Recent Loan Activity:
[[Page 5465]]
1.-4. Self-explanatory.
B. Capital Utilization: (Section X. of RLF Administrative
Manual)
5.-7. Self-explanatory.
C. RLF Income & Expenses: (Section VII. of RLF Administrative
Plan)
8.-12. Self-explanatory.
D. Administration:
13.-17. Self-explanatory.
E. Annual RLF Plan Certification: (Section VIII. of the RLF
Administrative Manual and Section D.03. of the Standard Terms and
Conditions)
18. Self-explanatory (Required only once a year).
BILLING CODE 3510-24-P
[[Page 5466]]
[GRAPHIC] [TIFF OMITTED] TR03FE99.037
[[Page 5467]]
[GRAPHIC] [TIFF OMITTED] TR03FE99.038
[[Page 5468]]
[GRAPHIC] [TIFF OMITTED] TR03FE99.039
BILLING CODE 3510-24-P
[[Page 5469]]
Instructions For Completion of EDA's Annual Reports For Revolving Loan
Fund Grants
These instructions are for completion of the Annual Report form
for EDA revolving loan fund (RLF) grants. The Annual Report is an
abbreviated version of the Semiannual Report. RLF grantees that are
reporting on a semiannual basis are eligible to apply for graduation
to this streamlined report one year after full disbursement of the
initial round of RLF capital.
A. Portfolio Financial Status and Capital Utilization
1. Enter the total funds committed to the RLF. Outside of EDA
funds, matching funds may include funds provided solely by the
grantee or from other sources, e.g., CDBG, state or private
donations for the specific use of the RLF. Exclude any funding
commitments that may have been removed from the RLF, as approved by
EDA.
2. Enter the Total RLF Income earned by the RLF to date. RLF
Income, as defined in Section VII. of the RLF Administrative Manual,
includes:
a. Total interest earned directly from RLF loans.
b. Interest earned from deposits and investments of:
RLF loan payments, including principal and interest;
RLF loan fees, including origination, servicing and
processing fees. late fees and penalties; and
Advances of local matching funds and EDA funds. EDA
funds must be timed to meet the actual, immediate disbursement needs
of the RLF borrowers. Otherwise, grant funds plus any interest
earned therein must be returned to EDA. (Note that grantees may
deduct and retain a portion of such earned interest for
administrative expenses up to the maximum amounts allowed under
either 15 CFR Part 24 or OMB Circular A-110 or its implementing
Department regulation, as applicable.
3. Enter the amount from A.2. that has been used to cover
eligible RLF administrative expenses to date. (Time cards are to be
maintained for all direct labor costs charged against RLF Program
Income. If indirect costs are charged against the RLF, the grantee
must have an indirect cost allocation plan). In as much as RLF
administrative costs can only be reimbursed from RLF income earned
in the same accounting period, available RLF income earned in a
current period may be set aside for administrative costs which will
be incurred over the remainder of the period (Refer to Section VII.
of the Administrative Manual for additional information).
4. Enter the amount of any available RLF Income earned in a
current period which may be set aside for future administrative
costs incurred over the remainder of the period. If, however, the
selected period ends on September 30, funds can not be set aside
without EDA approval since any RLF Income that is not used for
administrative costs during the period in which it is earned must be
added to the RLF Capital Base at the end of the period.
5. Enter the cumulative Losses on Direct and Guaranteed Loans
for those loans written-off.
6. Calculate the current level of the RLF's Capital Base by
adding the amounts entered in #1 and #2, and subtracting from this
sum the amounts in #3, #4 and #5. The RLF Capital Base represents
the aggregate amount of capital potentially available for lending.
7. Enter the amount of Loan Principal Outstanding on Direct RLF
Loans.
8. Enter the amount of RLF dollars that are required to be set
aside or reserved for RLF guarantees of other loans. If not
applicable, enter N/A.
9. Enter the aggregate amount of RLF funds that have been
approved and committed but not closed nor disbursed.
10. Calculate the amount of RLF Capital Utilized, i.e., RLF
capital outstanding and committed, by summing the amounts in #7, #8
and #9.
11. Calculate the RLF Utilization Rate by dividing #10 (RLF
Capital Utilized) by #6 (RLF Capital Base). This indicates the
percentage of RLF capital in use for comparison with the Capital
Utilization Standard as discussed in Section X. of the
Administrative Manual. Persistent noncompliance with the Standard
could require sequestration of excess funds, remittance of interest
earned on sequestered funds, and eventual loss of excess funds if
not placed in use within a reasonable period of time.
12. The RLF Capital Utilization Rate is calculated every six
months for the periods ending March 31 and September 30, in
accordance with Section X.C. of the RLF Administrative Manual.
B. Recent Loan Activity
13-16. As appropriate, enter the number of applications received
and loans closed for the last 12 month period. Also enter the number
of applications received and the number of loans closed from
Minority-owned and Women-owned firms. Ownership is defined as
controlling interest of 51% or more. A loan is considered closed
when all loan documents have been signed.
C. Portfolio Status
17. Enter the total number and original dollar amount of all RLF
loans made to date.
18. Enter the amount of principal outstanding for Total Active
Loans. (Total Active Loans are defined as direct loans that are
either current, delinquent or in default--exclusive of loans that
have been fully repaid or written off).
19. For active loans only, enter the principal outstanding on
direct loans that are current and those that are delinquent.
Segregate delinquent loans into two categories, those less than or
equal to 60 days past due and those more than 60 days past due. For
this report, a ``delinquent'' loan is defined as one that is up to
60 days past due. (If a previously delinquent borrower is now
current, or making payments in accordance with an amended note and
payment schedule, show this loan as current).
20. Enter the total principal balance outstanding on direct
loans written-off or the actual amount lost, whichever is smaller.
21. Enter the total non-RLF dollars leveraged (Private & Other)
and corresponding leverage ratios in conjunction with the RLF direct
loans. Unless stipulated otherwise in the grant agreement, RLF loans
must be used to leverage private investment of at least two dollars
for every one dollar of RLF investment. Private dollars leveraged
include private financing and private investments provided to the
``project'' in which the RLF is an integral component. A project is
defined as an activity consisting of interrelated components which
share a common goal. Private investments include both cash provided
to the project and donated assets which come from outside the
borrowing enterprise. For donated assets, only the equity in the
assets (defined as the assets' market value less any security
interest) may be counted in the leverage ratio. For purposes of
calculating private dollars invested, 90 percent of the guaranteed
portions of SBA 7 (a) and SBA 504 debenture loans may be included.
As a reminder, the RLF must fill a legitimate financing gap in the
project for the private funds to be considered ``leveraged dollars'.
Other investments leveraged by the RLF in the project may
include other non-RLF dollars such as HUD-CDBG, USDA-IRP loans, etc.
22. For active loans provided by other lenders and guaranteed by
the RLF, enter the contingent liability of the RLF on outstanding
loan principal, i.e., the current RLF exposure on all active RLF
guarantees. This amount is usually computed by multiplying the
percent of the original guarantee by the outstanding loan balance.
23. For active loans provided by other lenders and guaranteed by
the RLF, enter any amounts of RLF funds that are actually set aside
and held in reserve to cover any losses on guaranteed loans.
24. Enter the total number of jobs created and saved over the
life of the RLF. In tallying jobs, only permanent and direct jobs
may be counted; part-time jobs should be converted to full-time
equivalents (by summing the total hours worked per week for all
part-time employees and dividing by the standard hourly work week
for full-time employees, normally 35-40 hours). Job information data
should be collected at least annually. For seasonal businesses, more
frequent collection of job data is usually necessary to obtain
realistic employment figures for an annualized average.
Grantees should use the following definitions in completing the
job information section of this report:
a: Actual Created Jobs: A job is counted as ``created (actual)''
if it was created as a result of and attributable to the RLF loan
project, and has been verified by the borrower (or grantee) to
complete a questionnaire at least on an annual basis indicating the
number of jobs actually created and attributable to the RLF project,
or by the grantee performing an on-site job count. The documentation
for job counts should be placed in the project files.
Created jobs may be credited if the jobs were created within
five years of loan disbursement or, if construction is involved,
within five years after construction completion. All jobs credited
must be attributable to the RLF project. A created job must be
removed from the credited created jobs if the job fails to last at
least 18 months.
[[Page 5470]]
Any job which meets the creditable job created criteria is counted
as part of the total actual jobs created permanently, regardless of
the status of the loan.
For loans that have been paid in full, grantees may use the job
information data that is on file provided there is adequate
confidence in the reliability of the data. If there is a question on
the reliability, the data should be verified by the next annual
reporting period.
b: Saved Jobs are existing jobs where it can be documented that
without the RLF assistance the jobs would have been lost.
Exception--Created/Saved Jobs Subsequently Lost: If an RLF
borrower subsequently ceases business (or closes a segment of its
business) thereby eliminating previously created or saved jobs,
these jobs may continue to be counted in the Annual Report only if
they were maintained for a minimum of 18 months prior to the loss.
D. Administration
25-30. Self-explanatory.
E. Capital Utilization
31-33. Self-explanatory (Refer to Section X. of the RLF
Administrative Manual).
F. RLF Plan Certification
34. Self-explanatory (See Section VIII. of the RLF
Administrative Manual and Section D.03. of the RLF Standard Terms
and Conditions for additional details).
Appendix D to Part 308--Section 209 Economic Adjustment Program
Revolving Loan Fund Grants; Audit Guidelines
OMB Approval No. 0610-0095 Approval expires 07/31/99
Burden Statement for Revolving Loan Fund Audit Manual
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to
the requirements of the Paperwork Reduction Act, unless that
collection of information displays a currently valid OMB Control
Number.
The information is required to obtain or retain benefits from
the Economic Development Administration pursuant to Economic
Development Administration Reform Act, Public Law 105-393. The
reason for collecting this information is to enable the Economic
Development Administration to monitor revolving loan fund projects
for compliance with Federal and other requirements. No
confidentiality for the information submitted is promised or
provided except that which is exempt under 5 U.S.C. 552(b)(4) as
confidential business information.
The public reporting burden for this collection is estimated to
average 12 hours per response including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. Send comments regarding this burden
estimate or any other aspect of this collection of information,
including suggestions for reducing this burden to: Economic
Development Administration, Herbert C. Hoover Building, Washington,
DC 20230, and to the Office of Information and Regulatory Affairs,
Office of Management and Budget, Washington, DC 20503.
Table of Contents
I. Purpose
II. Program Objectives
III. Program Procedures
IV. Program History
V. Frequency of Audits
VI. When an Audit is Required
VII. Types of Audits
A. Program Specific Audit
B. Single Audit
VIII. Special Considerations for Single Audits of RLFs
A. Schedule of Expenditures of Federal Awards
B. Criteria For Determining Major Programs
C. Calculating ``Total Federal Expenditures'' For RLF Grants
D. Footnote Disclosure
IX. Use of Another Entity For Program Administration
X. Reporting Entity
XI. Audit Report Due Dates
XII. Distribution of the Audit Report
XIII. Auditor Selection
XIV. Compliance Guidelines
A. Specific Compliance Requirements
B. General Compliance Requirements
1. Background
2. Common RLF Administrative Costs
XV. Securitization
XVI. Administrative Cost and Loan Records Retention
A. Administrative Cost Records
B. Loan Records
C. General
Attachment 1
Attachment 2
Section 209 Economic Adjustment Program Revolving Loan Fund Grants
Audit Guidelines
I. Purpose
This document describes the audit requirements for revolving
loan fund (RLF) grants funded under the Section 209 Economic
Adjustment Program of the Economic Development Administration (EDA).
It provides an overview of relevant Office of Management and Budget
(OMB) circulars and other Federal regulations as they relate to
administrative and audit requirements for EDA RLF grants. It also
discusses costs that may be eligible under an RLF grant program and
requirements for records retention. It is intended to supplement
applicable OMB circulars and Federal regulations. If there is a
conflict between information contained in this document and the OMB
circulars or Federal regulations, the latter shall prevail. In the
absence of a conflict, EDA reserves the right to limit Federal
standards.
This document is intended for grant recipients and for
independent auditors as an aid in understanding the audit and
compliance requirements for EDA RLF grants. Each recipient of an EDA
RLF grant is responsible for reading this document and providing it
to the independent auditor prior to the start of an audit. Failure
to make this information available to the independent auditor could
result in an unacceptable audit report.
II. Program Objectives
RLF grants are administered under EDA's Section 209 Program,
which was created in 1974 by an amendment to the Public Works and
Economic Development Act of 1965 (PWEDA), to provide grant
assistance to help communities adjust to sudden and severe economic
dislocations (SSED) and long-term economic deterioration (LTED). EDA
Section 209 grants may be used for business development assistance,
planning, research, technical assistance, training, infrastructure,
and other development activities which meet the purpose of the
program.
RLF grants provide capital for loan pools which finance business
development activities consistent with local economic development
strategies. Loan repayments, plus interest and other related income,
create a revolving source of capital to finance other business
enterprises. RLF loans are used to stimulate economic activity and
to provide financing to businesses when private credit is
unavailable to complete a project.
III. Program Procedures
Priority consideration for RLF funding is given to those
proposals which have the greatest potential to benefit areas
experiencing or threatened with substantial economic distress.
Proposals are evaluated based on conformance with statutory and
regulatory requirements, the economic adjustment needs of the area,
the merits of the proposed project in addressing those needs, and
the applicant's ability to manage the grant effectively. Each
approved RLF grant is operated in accordance with an RLF Plan which
is part of the grant agreement. The RLF Plan summarizes the RLF's
strategic objectives and the operational procedures to carry out the
purpose of the grant.
IV. Program History
EDA awarded its first RLF grant in 1975. To date, the Agency has
awarded more than 700 grants aggregating in excess of $500 million
for the establishment or recapitalization of RLFs nationwide. In
turn, RLF grantees have made more than 7,200 loans to private sector
businesses, which loans have either leveraged or have the potential
for leveraging in excess of $1.9 billion private capital based on a
private investment to total RLF monies loaned ratio of 3.83:1. There
are generally two types of RLF grants, those established as RLFs
from the initial disbursement of grant funds, and those established
only after repayments are received from business loans originally
funded from grants. Most RLF grants are of the first type.
RLF programs are operated by local governments, regional
development corporations, States and other non-profit organizations.
EDA RLF grants normally require a matching contribution from local
sources. Historically, the local match contribution has averaged 25%
of an RLF's capitalization, but waivers have been extended in
special situations such as natural disasters. The average EDA RLF
grant was
[[Page 5471]]
capitalized at just over $1 million in total assets. While the size
of individual loans extended by these grant recipients vary
markedly, the typical RLF loan has averaged $70,000 over time.
V. Frequency of Audits
Each RLF grant recipient shall have an audit performed annually
for the duration of the RLF program except in the following limited
circumstances which may permit biennial audits:
--A state or local government recipient that adopted a mandatory,
constitutional or statutory requirement for less frequent audits
prior to January 1, 1987, which requirement still remains in effect;
or
--A non-profit recipient that had biennial audits for all biennial
periods ending between July 1, 1992 and January 1, 1995.
VI. When an Audit Is Required
Pursuant to the Single Audit Act Amendments of 1996 (P.L 104-
156) and OMB Circular A-133, audits are required of all State, local
government and non-profit corporation RLF grant recipients that
expended total Federal awards of at least $300,000 in a given fiscal
year. For all RLF grants, the calculation of RLF expenditures will
include the beginning balance of all outstanding loans plus the
current year's loan and loan-related expenditures. With the
exception of newly awarded grants and limited circumstances listed
in Paragraph V. herein, the majority of RLF grant recipients will
require an annual audit.
To calculate the total RLF expended, follow the information
provided in the box below. Note that only the Federal share (exclude
the matching fund share) of the amount calculated should be used for
the determination of an audit. Audit procedures, however, must
encompass both the Federal and any matching funds which comprise an
RLF.
--The year's beginning balance of outstanding RLF loans; plus
--RLF loan expenditures during the fiscal year; plus
--The amount of RLF Income 1 earned and expended on
eligible administrative expenses during the fiscal year.
---------------------------------------------------------------------------
\1\ RLF Income includes interest earned on loans, interest
earned on accounts holding RLF funds not needed for immediate
lending, loan fees received from borrowers, and other income
generated from RLF activities.
---------------------------------------------------------------------------
VII. Types of Audits
Entities which spend $300,000 or more in Federal awards will be
required to have either (I) a program-specific audit or (ii) a
single audit. An entity can elect a program-specific audit if all
funds expended come from only one Federal program. An entity must
have a single audit in a fiscal year in which it spends funds from
more than one Federal program. These guidelines are not intended to
be a complete manual of procedures, nor are they intended to
supplant the auditor's judgment of the work required for either the
program-specific audit or a single audit which includes coverage of
an EDA RLF. The auditor should refer to OMB Circular A-133 for a
detailed listing of requirements for these types of audits. These
guidelines are designed to discuss special considerations for audits
of RLFs.
A. Program Specific Audit
A program-specific audit is an audit of one program performed in
accordance with Federal laws and regulations and any audit guides
available for that program. There is not a program-specific audit
guide written for the RLF program. Since a program-specific audit
guide is not available, the auditee and auditor shall have basically
the same responsibilities for the RLF program as they would have for
an audit of a major program in a single audit. Section VIII of these
guidelines describes some special considerations for auditing an EDA
RLF. OMB Circular A-133, Section 235 provides instructions for
completing a program-specific audit.
B. Single Audit
A single audit covers all Federal awards received and expended
during an organization's fiscal year. Unlike the program specific
audit, this type of audit requires a financial statement audit of
the grant recipient. A single audit is performed by an independent
auditor who meets the general standards specified in generally
accepted government auditing standards.
Attachment I provides a current list of applicable audit-related
documents with which the auditor should become familiar. Since
accounting requirements and reference materials are subject to
periodic revisions, grant recipients and auditors are responsible
for utilizing the most current reference information available.
VIII. Special Considerations for Single Audits of RLFs
A. Schedule of Expenditures of Federal Awards
The auditee is required to report certain information in this
schedule including: (1) the identity of all Federal award programs
by program title and by catalogue number listed in the Catalog of
Federal Domestic Assistance (CFDA) and (2) the total expenditures
for each Federal award program by grantor agency. For EDA RLF
grants, the program title is ``Special Economic Development and
Assistance Programs--[either Sudden and Severe Economic Dislocation
(SSED) or Long-Term Economic Deterioration (LTED)] Revolving Loan
Fund.'' The CFDA number is ``11.307'' for both SSED and LTED grants.
To assist program officials, it is helpful to include the number of
each EDA RLF grant in the schedule. The method for calculating the
total Federal expenditure amount to be reported on the schedule is
shown in Section VIII.C. below.
Note that in the third and fourth digits of each grant number,
an SSED grant is denoted by the number ``19'', and an LTED grant by
the number ``39''. Exceptions include numerical identification of
defense or disaster-related RLFs which may have several variations
as determined by fiscal year or specific disaster program
appropriations.
B. Criteria for Determining Major Programs
Federal award programs must be identified as Major Programs
through a risk-based approach described in OMB Circular A-133. Prior
to the issuance of the revised OMB Circular A-133, a Major Program
was defined solely in monetary terms. The new risk-based approach
also requires that the auditor consider the current and prior audit
results and the inherent risk of the program in making a
determination of Major Programs subject to audit. Major Programs
require more extensive audit procedures than Other Federal Programs.
C. Calculating ``Total Federal Expenditures'' For RLF Grants
For RLF grants, ``Total Federal expenditures'' normally includes
only the Federal share of an RLF's expenditures. It is calculated as
shown in the box below using only the Federal share of each
component.
Determining Total Federal Expenditures 2:
\2\ If the Federal share of an RLF's total expenditures cannot
be readily determined, the total RLF expenditures (including both
Federal and matching funds) may be used in lieu of ``total Federal
expenditures'' provided the inclusion of matching funds is
disclosed.
---------------------------------------------------------------------------
--The year's beginning balance of outstanding RLF loans; plus
--RLF loan expenditures during the fiscal year; plus
--The amount of RLF Income 3 earned and expended on
eligible administrative expenses during the fiscal year.
---------------------------------------------------------------------------
\3\ Defined in footnote 1, page 3.
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D. Footnote Disclosure (Schedule)
In addition to reporting the Federal expenditures for an RLF
program on the schedule of expenditures of Federal awards, a
footnote to the schedule should disclose the value of the loans
outstanding at the end of the year.
IX. Use of Another Entity for Program Administration
A grant recipient may employ the services of another
organization to perform certain duties and responsibilities under a
grant. In delegating responsibilities, the grant recipient may be
responsible for ensuring that the other entity is audited in
accordance with OMB Circular A-133 and complies with the grant terms
and conditions. The degree of responsibility delegated is the key
factor in determining whether another entity is a subrecipient or
vendor (and whether an audit is required). Subrecipients are
normally required to have an audit performed while vendors would not
usually be audited unless program compliance requirements apply to
the vendor.
An organization is a subrecipient if it receives or is
responsible for RLF funds, and some or all of the following
characteristics exist. It is responsible for (I) applicable grant
compliance requirements; (ii) programmatic decisions including, but
not limited to, approving RLF lending policies, final lending
decisions including eligibility determina-tions, major amendments to
loans, and/or foreclosure actions; and/or (iii) its performance is
measured against meeting objectives of the program.
[[Page 5472]]
An organization is a vendor if it provides services in support
of an RLF grant and has the following distinguishing
characteristics. It provides agreed services within its normal
business operations and provides similar services to other
purchasers, it operates in a competitive environment, and program
compliance requirements usually do not directly pertain to the
services provided. If grant compliance requirements apply to the
vendor's activities, the grant recipient is responsible for ensuring
compliance by the vendor. This may require monitoring the vendor's
activities or requiring an audit of vendor activities as may be
appropriate under the circumstances. A vendor is normally
responsible only for compliance within the terms of its contract.
An example of a vendor would be a bank or collection company
which provides services to the grant recipient merely for the
collection of loan payments. This would be considered a vendor
relationship because the entity under contract would not be involved
with any major program decisions. However, if this entity had
expanded responsibilities, such as the final approval authority for
loans and foreclosure actions, it would be considered a subrecipient
due to the nature and degree of its responsibilities. It would be
required to be audited in accordance with OMB Circular A-133, and to
comply with the terms and conditions of the grant.
X. Reporting Entity
The definition of a financial reporting entity is based upon the
concept of accountability. A reporting entity may consist of a
primary unit and component units. The decision to include a
component unit in the reporting entity is based on whether (1) the
primary unit is financially accountable for the component unit, and
(2) the nature and significance of the relationship between the
primary unit and the component unit is such that exclusion would
cause the reporting entity's financial statements to be misleading
or incomplete.
While it is management's responsibility to define the reporting
entity, one of the initial tasks performed by the auditor is to
independently determine whether management has properly defined the
reporting entity, pursuant to the Government Accounting Standards
Board's (GASB) Statement No. 14, The Financial Reporting Entity.
XI. Audit Report Due Dates
The audit must be completed and the report package submitted
within 9 months following the end of the period audited, unless a
longer period has been agreed to in advance. However, for fiscal
years ending on or before June 30, 1998, auditees shall have 13
months after the end of the audit period to submit the reporting
package. In either case, the required reporting package shall be
submitted within 30 days after issuance of the auditor's report to
the auditee.
XII. Distribution of the Audit Report
The reporting package should be submitted to the Federal
Clearinghouse in accordance with the requirements of OMB Circular A-
133, Section 320. In addition, an auditee shall submit the reporting
package, leaving out the data collection form which is strictly for
the Clearinghouse's use, to the EDA regional office responsible for
monitoring the RLF.
XIII. Auditor Selection
In arranging for audit services, grant recipients are required
to follow the administrative requirements and procurement standards
prescribed in the applicable Federal administrative document found
at 15 CFR, Part 24, or OMB Circular A-110. In addition, guidance in
selection of an auditor is available in a document entitled ``How to
Avoid a Substandard Audit: Suggestions for Procuring an Audit.''
This document was developed by the National Intergovernmental Audit
Forum and is available from the General Accounting Office at
telephone number (202) 512-6000.
XIV. Compliance Guidelines
For both program specific audits and single audits, the auditor
is required to determine whether the grant recipient has complied
with applicable laws and regulations. Compliance testing involves
(1) the testing of specific requirements for individual Federal
programs, as available, and (2) the testing of general requirements
which are applicable to all Federal programs. In addition, there may
be other laws and regulations listed in the grant terms which may
apply to both the grant recipient and to the RLF loan recipients.
OMB has issued a provisional compliance supplement for use with
the revised OMB Circular A-133. The provisional compliance
supplement addresses 14 types of compliance areas that are generic
to all programs. It also addresses specific requirements for about
100 programs. It is not clear whether the RLF program will be
included in the compliance supplement.
A. Specific Compliance Requirements
DOC's proposed compliance requirements and suggested audit
procedures for EDA Section 209 RLF grants are provided in Attachment
2. Independent auditors should follow these procedures in testing
for specific compliance requirements for RLF grants. Comments and
suggestions on this material are welcome and should be submitted to
the U.S. Department of Commerce, Office of Inspector General, 401 W.
Peachtree Street, N.W., Suite 2342, Atlanta, GA 30308.
B. General Compliance Requirements--Supplemental Information
The OMB Compliance Supplements list fourteen general
requirements and suggested auditing procedures which are applicable
to all Federal assistance awards. For the general requirement listed
as ``Allowable Costs And Cost Principles,'' supplemental information
is provided below. This information should be considered when
testing general compliance requirements.
1. Background
Eligible Costs For RLF Grants: EDA grant funds and matching
funds for an RLF must be used in accordance with the purposes
specified in the grant agreement. Eligible uses generally include
RLF loans and any specified costs listed in the grant agreement
(e.g., budgeted audit costs). Unless specifically stated in the
grant, the costs to administer an RLF program are not eligible for
reimbursement from either the EDA grant or the matching funds.
RLF Income: RLF Income includes interest earned on loans,
interest earned on accounts holding RLF funds not needed for
immediate lending, loan fees and other income generated from RLF
activities. RLF Income may be used only for RLF loans or for
eligible expenses necessary to operate an RLF program. RLF Income
that is used for RLF administrative expenses is subject to
applicable OMB cost principles and to the requirements described
below.
Only current period expenses may be expensed against current
period RLF Income. Any exceptions to this require EDA approval. The
accounting period for determining compliance with this requirement
is selected by the grant recipient and may be either the recipient's
or the Federal fiscal year. The accounting period selected is
submitted to EDA in the annual or semiannual reports. (Refer to
Section VII. of the prevailing EDA RLF Administrative Manual for
additional details.)
RLF program funds (including initial grant and matching funds
and the repayments of loan principle and RLF Income) should be
separately accounted for in the accounting system of each grant
recipient. When possible, expenses charged to an RLF program should
be categorized in detail at least at the level indicated in the RLF
Income and Expense Statement (see Exhibit A of EDA's prevailing RLF
Administrative Manual).
Cost Principles: The applicable OMB Cost Principles are found in
either OMB Circular A-21, A-87, or A-122. Administrative costs that
may be charged against RLF Income will be classified as either
direct or indirect costs. Direct costs include those that can be
identified specifically with a particular cost objective, such as an
RLF program. Indirect costs are those incurred for a common or joint
purpose benefitting more than one program or cost objective and are
not readily assignable.
Cost Allocation Plans: Costs may be allocated against RLF Income
only to the extent that they can be distributed in reasonable
proportion to the benefits received, and are supported by a cost
allocation plan and formal accounting records which will
substantiate the propriety of charges. Indirect costs may not exceed
100% of allowable direct costs as reflected in the cost allocation
plan.
Cost allocation plans, which include indirect cost rate
proposals, normally must be approved by the cognizant Federal
agency. Local governments (OMB Circular A-87 organizations) are
required to retain cost allocation plans and/or indirect cost rate
proposals at the local level unless the cognizant agency requests
submittal for negotiation and approval. All cost allocation plans
and/or indirect cost rate proposals must be approved at the local
level and must be available to the cognizant agency, if requested.
The independent auditor is responsible for reviewing cost allocation
plans and/or indirect cost rate proposals to
[[Page 5473]]
determine the reasonableness and validity of costs charged against
different cost objectives or programs.
The Office of Inspector General, U.S. Department of Commerce
(OIG), is designated the cognizant agency responsible for the audit,
approval and negotiation of cost allocation plans and/or indirect
cost rate proposals for most EDA economic development districts, as
defined in Title IV of PWEDA. When an EDA district organization
allocates costs requiring a cost allocation plan and/or an indirect
cost rate proposal, the organization is not required to submit
either of these to the OIG unless the OIG is the cognizant agency
and requests submittal, or the cost allocation plan and/or the
indirect cost rate proposal is the initial one for the organization.
Cost allocation plans and indirect cost rate proposals must be
available for review upon demand, if requested.
2. Common RLF Administrative Costs
A description of common administrative costs that may be charged
against RLF Income include, but are not limited to, the following:
Advertising/Marketing: Allowable costs for advertising and
marketing include costs for media services to recruit RLF personnel,
market the RLF program, solicit RLF loan prospects, procure RLF-
related goods and services, and sell RLF assets. Eligible costs may
also include the cost of printing RLF brochures and travel and other
expenses directly related to the promotion of an RLF program.
Audits: The costs of audits conducted in accordance with the
grant audit requirements are allowable. The charges may be treated
as either direct or indirect costs consistent with the applicable
OMB cost principles. Grant and matching funds may be used for audit
costs only to the extent listed in the approved grant budget or
grant terms. In addition, auditing costs charged against an RLF
program may not exceed an RLF's equitable share of the cost.
Bonding: The costs of premiums for fidelity bonds covering
employees who handle RLF funds are allowable to the extent that such
costs are reasonable and distributed equitably in proportion to the
RLF's share of the costs.
Building Space: Rent for building space or the utilization of
depreciation or use allowances is an allowable expense subject to
the provisions of the applicable OMB cost principles. Maintenance
costs are eligible expenses to the extent that they are not
otherwise included in rental or other charges for space. See also
``Lease Transactions'' below.
Capital Expenditures: In accordance with current OMB cost
principles, capital expenditures for equipment and other capital
assets require prior EDA approval. For state and local governments
(OMB Circular A-87), equipment is defined as tangible, personal
property having a useful life of more than one year and an
acquisition cost which equals the lesser of the capitalization level
established by the organization or $5,000. For nonprofits (OMB
Circular A-122 organizations), equipment is defined as tangible,
personal property having a useful life of more than two years and an
acquisition cost of more than $500 per unit. The dollar amount for
nonprofits is expected to increase when OMB Circular A-122 is
revised. In the interim, nonprofits may request EDA to approve an
amendment to the grant terms to allow for purchases of capital
equipment up to the lesser of the capitalization level established
by the organization or $5,000.4
---------------------------------------------------------------------------
\4\ A request for a grant amendment would allow the use of
current period RLF Income for current purchases (up to $5,000 per
unit) for equipment, other capital assets, and repairs which
materially increase the value or useful life of capital assets and
which are essential for the operations and administration of the
grantee's RLF program.
---------------------------------------------------------------------------
Where appropriate, an analysis should be made of lease vs.
purchase alternatives to determine which would be the most
economical and practical procurement method. To be an allowable
charge against RLF Income, a capital expenditure must be reasonable
and essential for the operation and administration of an RLF
program. Such charges must reflect an RLF's use of the equipment
based upon an equitable allocation method.
Alternatively, grant recipients may be compensated for the use
of equipment and other nonexpendable personal property through
depreciation or use allowances subject to the provisions of the
applicable OMB cost principles and the requirements herein.
Procurement transactions must be conducted in a manner which
provides, to the maximum extent practical, open and free competition
consistent with the procurement standards published at 15 CFR Part
24 or in OMB Circular A-110, as applicable. When acquired personal
property is no longer needed for RLF activities or is disposed of
for upgrading purposes, the RLF should be compensated for its share
of the disposition proceeds. Procedures should be established and
followed to provide for the highest possible return on property
disposition.
Employee Salaries & Fringe: Allowable employee salaries and
fringe includes the compensation for personal services including,
but not limited to salaries, wages and fringe benefits. Payrolls
must be supportable by time and attendance or equivalent records for
individual employees. Salaries, wages and fringe benefits of
employees chargeable to more than one grant program or other cost
objective must be supportable by appropriate time distribution
records, or a cost allocation plan, and distributed equitably in
reasonable proportion to the benefits received. Compensation for
employee services may include only those services performed during
the grant period.
The salaries and expenses of the office of the Governor of a
State or the chief executive of a political subdivisions thereof,
are considered a cost of general government and are unallowable as
an expense against RLF Income. The salary and expenses of an
executive director of an EDA economic development district are
allowable, provided such costs are allocated equitably relative to
the benefits derived and the total costs charged against all grant
programs does not exceed 100% of the cost item being allocated.
Compensation of members of an RLF loan board is discussed under
``RLF Loan Board Compensation'' below.
Leasing Transactions: The accounting and financial reporting
treatment for lease agreements depend on whether the lease is
classified as a capital lease or an operating lease.
An operating lease is a rental agreement requiring periodic
payments for the use of an asset during a given period of time. An
operating lease does not transfer a material equity in the property
leased. The rent payments under an operating lease are allowable to
the extent that the lease rate is reasonable when compared with area
market conditions.
A capital lease is a rental agreement where the lessee acquires
a substantial portion of the rights to an asset. In substance, a
capital lease represents the purchase of the asset. Financial
Accounting Standards Board (FASB) Statement Number 13, Accounting
for Leases, as amended, provides guidelines for capital lease
transactions. The periodic payments under a capital lease are
reimbursable up to the amount that would be allowed had the
organization purchased the property on the date the lease agreement
was executed. For example, reimbursable expenses could include
depreciation or use allowances, maintenance, taxes and insurance,
but excluding any unallowable costs.
For lease agreements between related parties, a determination
must be made whether the related parties are required to prepare
financial reports as a single reporting entity. If reporting as a
single entity is required for financial reporting purposes, the
assets of the organizations shall be combined, and any reimbursable
expenses between the parties shall be computed based upon the cost
of ownership. Specific financial statement disclosures pertaining to
related parties are required by FASB 57, Related Party Disclosures.
Materials & Supplies: The costs of materials and supplies used
during the accounting period for RLF-related activities are
allowable expenses.
Outside Professional Services: The costs of RLF-related services
necessary and appropriate to prudently administer and protect RLF
assets are allowable. Examples of professional service providers
include independent accountants, attorneys, appraisers and others
who advise RLF operators and who are not officers or employees of
the grantee organization or part of the grantee's department (if the
grantee is a governmental entity). Professional service providers
generally include those who provide loan packaging, underwriting,
closing, monitoring, collections, recovery, sale, and/or protection
of collateral services. Costs for professional services are eligible
for reimbursement provided they are consistent with the purpose of
the grant and allocated equitably based on the benefits derived.
(See applicable OMB cost principles for additional information on
professional services.)
RLF Loan Board Compensation: RLF loan board members, including
advisory board members, who are not employees of the grant
[[Page 5474]]
recipient, are not eligible for compensation from RLF Income except
as may be provided for in the reimbursement of travel costs
consistent with the grant recipient's travel policies or in
accordance with Federal Travel Regulations (see ``Travel'' below).
Since RLF loan board members usually serve as representatives of
their profession or employer organizations, compensation for other
than travel-related expenses is not normally allowed. However, if
there are exceptional circumstances that warrant consideration of a
waiver, EDA approval may be requested.
Training: The costs of training materials, textbooks, fees
charged by educational institutions, and travel costs for part-time
education of employees to improve their skills and performance in
the management, administration and operation of an RLF are
allowable. Extended or full-time training is unallowable except when
specifically authorized by EDA in advance. Travel costs to attend
meetings and professional conferences are allowable when the primary
purpose of the meeting or conference is the dissemination of
technical information relating to the grant program.
Travel: The costs for transportation, lodging, subsistence and
related items incurred by employees who are on travel status for
official business related to RLF activities are allowable. Typical
travel expenses might include the costs associated with visiting or
meeting potential borrowers, servicing and monitoring loan projects,
and meeting with bankers, accountants, attorneys and others
affiliated with existing or potential RLF borrowers. It may also
include the travel costs associated with marketing the RLF program
or hiring RLF program personnel.
Travel costs expensed to RLF Income must be applied consistent
with the travel provisions established by the grant recipient in its
regular operations and with the applicable OMB cost circular.
Organizational travel provisions should be documented in a policy
manual. In the absence of formal travel policies, the ``Federal
Travel Regulations'' as published in the Code of Federal Regulations
shall apply.
For additional information on allowable costs, refer to
applicable OMB cost principles or contact the Office of Inspector
General, U.S. Department of Commerce, or EDA's Regional or
Headquarter's Office.
XV. Securitization
RLF grant recipients may, with EDA's prior written consent,
further the objectives of the RLF through the sale of loans or
Securitization 5 of its loan portfolio. Auditors should
determine whether Securitization has occurred, and if so, whether
EDA consent was obtained.
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\5\ Securitization is a financing technique of securing the
investment of new capital with the stream of income generated by one
or more (usually a large group of) existing loans. For EDA's
purposes, the term intentionally encompasses a wide variety of
techniques to access investor capital by securing those investments
with the value of an existing RLF economic development loan
portfolio. This deliberately broad definition covers a number of
actual and potential schemes to access investor capital that appear
to deviate from the more traditional definition and yet provide
flexible alternatives to RLF operators for raising additional funds.
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XVI. Administrative Cost and Loan Records Retention
A. Administrative Cost Records
Records of administrative costs incurred for activities relating
to the operation of the RLF shall be retained for three (3) years
from the actual submission date of the last Semiannual or Annual
Report which covers the period during which such costs were claimed,
or for five (5) years from the date the costs were claimed,
whichever is less. The retention period for records of equipment
acquired in connection with the RLF shall be three (3) years from
the date of disposition, replacement or transfer of the equipment.
B. Loan Records
Loan files and related documents and records shall be retained
over the life of the loan and for a three (3) year period from the
date of final disposition of the loan. The date of final disposition
of the loan is defined as the date of: (1) full payment of the
principal, interest, fees, penalties and other fees or costs
associated with the loan; or (2) final settlement or write-off of
any unpaid amounts associated with the loan.
C. General
If any litigation, claim, negotiation, audit or other action
involving the RLF or its assets has commenced before the expiration
of the three-year or five-year period, all administrative and
program records pertaining to such matters shall be retained until
completion of the action and the resolution of all issues which
arise from it, or until the end of the regular three-year or five-
year period, whichever is later.
The record retention periods described in this section are
minimum periods and such prescription is not intended to limit any
other record retention requirement of law or agreement. Any records
retained for a period longer than so prescribed shall be available
for inspection the same as records retained as prescribed. In any
event, EDA will not question administrative costs claimed more than
three (3) years old. However, if fraud is an issue, records must be
retained until the issue is resolved.
Attachment 1--Circulars, Regulations & Other Documents For Audits of
EDA RLF Grants
The OMB circulars and Federal regulations relevant to RLF grant
recipients are listed in the table below for the different types of
RLF grant recipients, i.e., governments, nonprofits or universities.
Since these and the other documents listed on page ii are updated
periodically, users must be careful to utilize the most current
version available.
----------------------------------------------------------------------------------------------------------------
Circular or regulation Government Nonprofit University
----------------------------------------------------------------------------------------------------------------
Administrative Requirements
----------------------------------------------------------------------------------------------------------------
15 CFR Part 24............................................... X
OMB Circular A-110........................................... ............... X X
----------------------------------------------------------------------------------------------------------------
Cost Principles
----------------------------------------------------------------------------------------------------------------
OMB Circular A-21............................................ ............... ............... X
OMB Circular A-87............................................ X
OMB Circular A-122........................................... ............... X
----------------------------------------------------------------------------------------------------------------
Audit Requirements
----------------------------------------------------------------------------------------------------------------
OMB Circular A-133........................................... X X X
----------------------------------------------------------------------------------------------------------------
The regulations for EDA Section 209 (RLF) grants are found in
Title 13 of the Code of Federal Regulations (CFR), Part 308. The
Department of Commerce regulations implementing the OMB audit
requirements are found in 15 CFR, Part 29.
Other duties and responsibilities of grant recipients are
defined in the Special Terms and the Standard Terms and Conditions
of each EDA RLF grant. Each RLF should have an RLF Plan which is
included as part of the Special Terms and Conditions. The RLF Plan
summarizes the RLF's lending strategy, the loan standards and the
operational procedures under which an RLF will be administered.
In addition, all RLF grant recipients are required to follow
policies and procedures as prescribed by EDA. The most recent are
included in the prevailing EDA RLF
[[Page 5475]]
Administrative Manual and in the RLF Standard Terms and Conditions.
Both documents apply to all EDA RLF grants.
Additional Guidance for State and Local Governmental Entities
Audits
American Institute of Certified Public Accountants (AICPA) Audit and
Accounting Guide, Audits of State and Local Governmental Units,
issued May 1, 1996.
AICPA Audit and Accounting Guide, The Not-for-Profit Organizations,
issued June 1, 1996.
Government Auditing Standards, issued by the Comptroller General of
the United States, 1994 revision (Yellow Book).
OMB Circular A-133, Audits of States, Local Governments and Non-
Profit Organizations, issued June 30, 1997.
OMB Provisional Compliance Supplement for Single Audits (expected to
be issued in late 1997).
Additional Guidance for Non-Profit Entities Audits
AICPA, Statement of Position 92-9, Audits of Not-for-Profit
Organizations Receiving Federal Awards, issued December 1992. (Note:
Because of significant changes to Government Auditing Standards and
OMB Circular A-133, much of this is outdated. AICPA is developing a
new SOP to supersede SOP 92-9).
AICPA Statement of Auditing Standards No. 74, Compliance Auditing
Applicable to Governmental Entities and Other Recipients of
Governmental Financial Assistance, issued February 1995.
Attachment 2--Economic Development Administration Section 209 Revolving
Loan Fund Grants (CFDA 11.307)
I. Program Objectives
Revolving loan fund (RLF) grants for business development
assistance are available under Section 209 of the Public Works and
Economic Development Act of 1965 (PWEDA). These grants are
administered by the Economic Development Administration (EDA) to
help communities adjust to sudden and severe economic dislocations
and long-term economic deterioration. RLF grants provide capital to
establish loan pools which finance business activities and stimulate
economic development in accordance with local development
strategies. RLFs typically provide financing that is not otherwise
available. Loan repayments plus interest and other income replenish
RLF capital to provide a revolving resource for additional loans.
II. Program Procedures
RLF grants are made to EDA designated economic development
districts established under Title IV of PWEDA, Indian tribes,
states, cities or other political subdivisions, consortia of
political subdivisions, Community Development Corporations defined
in 42 U.S.C. 9802, nonprofit organizations determined to be
representative of a redevelopment area, and certain specified
governments. Priority consideration for RLF funding is given to
those proposals which have the greatest potential to benefit areas
experiencing or threatened with substantial economic distress.
III. Compliance Requirements and Suggested Audit Procedures
A. Types of Services Allowed or Unallowed
Compliance Requirement
Allowed Services: RLF grant and matching funds may be used only
for purposes specified in the grant budget and grant agreement.
Eligible uses normally include disbursements for RLF loans and the
audit costs of RLF activities. Unlike grant and matching funds, RLF
Income 1 may be used for RLF loans as well as for
eligible RLF administrative expenses (see Section C. Earmarking
below for additional details).
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\1\ RLF Income includes the interest earned on loans, interest
earned on accounts holding RLF funds not needed for immediate
lending, loan fees received from borrowers, and other income
generated from RLF activities.
---------------------------------------------------------------------------
Suggested Audit Procedure
Review grant budget and grant agreement, and determine whether
RLF funds were used for specified purposes.
B. Eligibility
Compliance Requirement
Eligibility: Eligibility for RLF assistance is based upon the
following: (1) the activity financed being located in an eligible
lending area (usually defined in the Special Terms and Conditions of
the grant, as may be amended); and (2) the borrower being unable to
obtain credit in the private capital market on terms and conditions
which would permit the completion and/or successful operation of the
project to be financed.
Ineligible Recipients: The RLF grant recipient cannot make a
loan to itself, to related parties, or to entities that would
violate the conflict of interest provisions of the grant agreement
(see Section D.16. of the Standard Terms and Conditions).
Suggested Audit Procedure
Review the Special Terms and Conditions and any amendments
thereto, and scan the current addresses of selected RLF borrowers to
determine whether borrowers are located within the eligible lending
area.
On selected borrowers, test for borrower's inability to obtain
private credit by verifying the existence of a loan write-up
2 in the grant recipient's files. If there is a potential
violation, check the RLF Administrative Manual, Section IV.B.3., for
exceptions; this Section also discusses the loan write-up. No other
tests are necessary.
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\2\ A loan write-up is a written record prepared by the RLF
administrator which discusses, at a minimum, the need for providing
RLF financing to a borrower. It may be supported by third party
supplemental evidence as applicable and obtainable.
---------------------------------------------------------------------------
Review the conflict of interest provisions in the Standard Terms
and Conditions, review any procedures that the grant recipient may
have to avoid conflicts of interest, scan loan documentation, and
determine whether RLF loans were made to ineligible recipients as
defined above.
C. Matching, Level of Effort, and/or Earmarking Requirements
Matching
Compliance Requirements
A matching share of nonfederal funds required is specified in
the grant agreement. Matching funds must be loaned either before or
proportionately with EDA grant funds. When loans are repaid, both
the matching and the EDA funds must remain in the control of the
grant recipient (or subrecipient) for the duration of the RLF.
Suggested Audit Procedures
Determine through the grant documents and recipient accounting
records that required levels of matching were met.
Determine that the funds used for matching have been retained in
the RLF.
Level of Effort (Capital Utilization)
Compliance Requirements
During the revolving phase 3 of an RLF grant, the
grant recipient is expected to manage its RLF so at least 75 percent
of the RLF's capital is in use. The size of the RLF may justify a
variation from this standard percentage. Variations require EDA
approval.
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\3\ The revolving phase begins after all available grant and
matching funds have been initially disbursed.
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Suggested Audit Procedures
Determine that the percentage of outstanding loan dollars to
total RLF capital complies with the prescribed usage level in the
revolving phase. If the resultant percentage does not comply with
the requirement, determine the duration or number of consecutive
reporting periods of noncompliance. (See Section X., Capital
Utilization Standard, of the EDA RLF Administrative Manual for
details, and note that the reporting periods end on September 30 and
March 31 of each year.)
Earmarking
Compliance Requirements
Pursuant to the prevailing EDA RLF Administrative Manual, RLF
Income 4 earned in a period may be used for lending or
for RLF administrative expenses of the same period only. Any RLF
Income remaining at the end of a period must be permanently added to
the RLF's capital base to be used for lending. Any exceptions
require EDA approval.
---------------------------------------------------------------------------
\4\ Defined in Footnote 1, Page ii.
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(Note: Prior to March 15, 1993, RLF Income was not required to
be added to the RLF capital base at the end of a period. The
accounting period is selected by the grant recipient and ends on
either its fiscal year end or the Federal fiscal year end.
Repayments of loan principal may be used only for re-lending.)
Suggested Audit Procedures
Verify that any RLF Income earned within the period has been
used for such period's RLF administrative expenses, for loans, or
that any unexpended RLF Income earned in the period has been added
to the RLF capital base.
[[Page 5476]]
D. Special Reporting Requirements
Compliance Requirements
Grant recipients electing to use RLF Income to cover all or part
of an RLF's administrative expense must annually complete an ``RLF
Income and Expense Statement.'' (If the grant recipient uses more
than fifty percent or more than $100,000 of a period's RLF Income
for RLF administrative expenses, the statement is submitted to EDA
within 90 days of the period ending date.)
Suggested Audit Procedures
Review the procedures for preparing the report (See Section VII.
of EDA RLF Administrative Manual) and evaluate for adequacy.
E. Special Tests and Provisions
Compliance Requirements
RLF grant recipients are expected to follow lending practices
generally accepted as prudent for public lending programs.
Suggested Audit Procedures
Review the grant recipient's RLF Plan for loan disbursement and
collection procedures. Determine whether these procedures are being
followed.
During the Disbursement Phase 5 of an RLF grant, a
grant recipient must demonstrate there is sufficient RLF loan
activity to draw grant funds within the approved period allotted.
This usually is in accordance with the following schedule: 50% of
grant and matching funds disbursed within 18 months of the grant
award, 80% within two (2) years, and 100% within three (3) years.
Any time extensions require EDA's approval. By law, grant funds
remain available for disbursement by EDA only until September 30 of
the fifth year after the fiscal year of the grant award.
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\5\ The Disbursement Phase is defined as the approved time
period for drawing all EDA grant funds.
---------------------------------------------------------------------------
F. Preservation of Government's Interest in Assets
Compliance Requirements
In instances where RLF grant recipients elect to Securitize
their loan portfolios, EDA's prior written consent must be obtained
and the value of the Federal Government's reversionary interest in
assets retained.
Suggested Audit Procedures
Review grant recipients records where Securitization may have
occurred and determine whether grantee obtained EDA's written
consent as required.
PARTS 309-313--[RESERVED]
PART 314--PROPERTY
Subpart A--In General
Sec.
314.1 Federal interest, applicability.
314.2 Definitions.
314.3 Use of property.
314.4 Unauthorized use.
314.5 Federal share.
314.6 Encumbrances.
Subpart B--Real Property
314.7 Title.
314.8 Recorded statement.
Subpart C--Personal Property
314.9 Recorded statement--title.
314.10 Revolving loan funds.
Subpart D--Release of EDA's Property Interest
314.11 Procedures for release of EDA's property interest.
Authority: 42 U.S.C. 3211; 19 U.S.C. 2341-2355; 42 U.S.C. 6701;
42 U.S.C. 184; Department of Commerce Organization Order 10-4.
Subpart A--In General
Sec. 314.1 Federal interest, applicability.
(a) Property that is acquired or improved with EDA grant assistance
shall be held in trust by the recipient for the benefit of the purposes
of the project under which the property was acquired or improved.
Limited exceptions to this requirement are listed in Sec. 314.7(c).
(b) During the estimated useful life of the project, EDA retains an
undivided equitable reversionary interest in property acquired or
improved with EDA grant assistance, except for the exceptions listed in
Sec. 314.7(c).
(c) EDA may approve the substitution of an eligible entity for a
recipient. The original recipient remains responsible for the period it
was the recipient, and the successor recipient holds the project
property with the responsibilities of an original recipient under the
award.
Sec. 314.2 Definitions.
As used in this part 314 of this chapter:
Dispose includes sell, lease, abandon, or use for a purpose or
purposes not authorized under the grant award or this part.
Estimated useful life means that period of years, determined by EDA
as the expected lifespan of the project.
Owner includes fee owner, transferee, lessee, or optionee of real
property upon which project facilities or improvements are or will be
located, or real property improved under a project which has as its
purpose that the property be sold or leased.
Personal Property means all property other than real property.
Project means the activity and property acquired or improved for
which a grant is awarded. When property is used in other programs as
provided in Sec. 314.3(b), ``project'' includes such programs.
Property includes all forms of property, real, personal (tangible
and intangible), and mixed.
Real property means any land, improved land, structures,
appurtenances thereto, or other improvements, excluding movable
machinery and equipment. Improved land also includes land which is
improved by the construction of such project facilities as roads,
sewers, and water lines which are not situated directly on the land but
which contribute to the value of such land as a specific part of the
project purpose.
Recipient includes any recipient of grant assistance under the
Public Works and Economic Development Act of 1965, as amended, prior to
or as amended by Public Law 105-393, or under Title II, Chapters 3 and
5 of the Trade Act of 1974, Title I of the Public Works Employment Act
of 1976, the Public Works Employment Act of 1977, or the Community
Emergency Drought Relief Act of 1977, and any EDA-approved successor to
such recipient.
Sec. 314.3 Use of property.
(a) The recipient or owner must use any property acquired or
improved in whole or in part with grant assistance only for the
authorized purpose of the project and such property must not be leased,
sold, disposed of or encumbered without the written authorization of
EDA.
(b) However, in the event that EDA and the recipient determine that
property acquired or improved in whole or in part with grant assistance
is no longer needed for the original grant purpose, it may be used in
other Federal grant programs, or programs that have purposes consistent
with those authorized for support by EDA, but only if EDA approves such
use.
(c) When the authorized purpose of the EDA grant is to develop real
property to be leased or sold, as determined by EDA, such sale or lease
is permitted provided it is for adequate consideration and the sale is
consistent with the authorized purpose of the grant and with applicable
EDA requirements concerning, but not limited to, nondiscrimination and
environmental compliance. The term ``adequate consideration'' means
consideration that is fair and reasonable under the circumstances of
the sale or lease, and may include money, services, property exchanges,
contractual commitments, or acts of forbearance.
(d) When acquiring replacement personal property of equal or
greater value, the recipient may, with EDA's approval, trade-in the
property originally acquired or sell the original property and use the
proceeds in the acquisition of the replacement property, provided that
the replacement property shall be used for the project and be
[[Page 5477]]
subject to the same requirements as the original property.
Sec. 314.4 Unauthorized use.
(a) Except as provided in Secs. 314.3(b), (c) or (d), whenever,
during the expected useful life of the project, any property acquired
or improved in whole or in part with grant assistance is disposed of,
or no longer used for the authorized purpose of the project, the
Federal Government must be compensated by the recipient for the Federal
share of the value of the property; provided that for equipment and
supplies, the standards of the Uniform Administrative Requirements for
Grants at 15 CFR parts 14 and 24 or any supplements or successors
thereto, as applicable, shall apply.
(b) If property is disposed of or encumbered without EDA approval,
EDA may assert its interest in the property to recover the Federal
share of the value of the property for the Federal Government. EDA may
pursue its rights under both paragraphs (a) and (b) of this section to
recover the Federal share, plus costs and interest.
Sec. 314.5 Federal share.
(a) For purposes of this part, the Federal share of the value of
property is that percentage of the current fair market value of the
property attributable to the EDA participation in the project (after
deducting actual and reasonable selling and fix-up expenses, if any,
incurred to put the property into condition for sale). The Federal
share excludes that value of the property attributable to acquisition
or improvements before or after EDA's participation in the project and
not included in project costs.
(b) Where the recipient's interest in property is a leasehold for a
term of years less than the depreciable remaining life of the property,
that factor will be considered in determining the percentage of the
Federal share.
(c) If property is transferred from the recipient to another
eligible entity, as provided in Sec. 314.1(c), the Federal Government
must be compensated the Federal share of any money or money equivalent
paid by or on behalf of the successor recipient to or for the benefit
of the original recipient, provided that EDA may first permit the
recovery by the original recipient of an amount not exceeding its
investment in the project nor exceeding that percentage of the value of
the property that is not attributable to the EDA participation in the
project.
(d) When the Federal Government is fully compensated for the
Federal share of the value of property acquired or improved in whole or
in part with grant assistance, EDA has no further interest in the
ownership, use, or disposition of the property.
Sec. 314.6 Encumbrances.
(a) Except as provided in Sec. 314.6(c), recipient-owned property
acquired or improved in whole or in part with grant assistance may not
be used to secure a mortgage or deed of trust or otherwise be used as
collateral or encumbered except to secure a grant or loan made by a
State or Federal agency or other public body participating in the same
project. This provision does not prevent projects from being developed
on previously encumbered property, if the requirements of Sec. 314.7(b)
are met.
(b) Encumbering project property other than as permitted in this
section is an unauthorized use of the property requiring compensation
to the Federal Government as provided in Secs. 314.4 and 314.5.
(c) EDA may waive the provisions of Sec. 314.6(a) for good cause
when EDA determines all of the following:
(1) All proceeds from the grant/loan to be secured by the
encumbrance on the property shall be available only to the recipient,
and all proceeds from such secured grant/loan shall be used only on the
project for which the EDA grant was awarded or on related activities of
which the project is an essential part;
(2) The grantor/lender would not provide funds without the security
of a lien on the project property; and
(3) There is a reasonable expectation that the borrower/recipient
will not default on its obligation.
(d) EDA may waive the provisions of Sec. 314.6(a) as to an
encumbrance on property which is acquired and/or improved by an EDA
grant when EDA determines that the encumbrance arises solely from the
requirements of a pre-existing water or sewer facility or other utility
encumbrance which by its terms extends to additional property connected
to such facilities.
Subpart B--Real Property
Sec. 314.7 Title.
(a) The recipient must hold title to the real property required for
a project, except in limited cases as provided in paragraph 314.7(c) of
this section. Except in those limited cases, the recipient must furnish
evidence, satisfactory in form and substance to EDA, that title to real
property required for a project (other than property of the United
States) is vested in the recipient, and that such easements, rights-of-
way, State permits, or long-term leases as are required for the project
have been or will be obtained by the recipient within an acceptable
time as determined by EDA.
(b)(1) The recipient must disclose to EDA all:
(i) Liens,
(ii) Mortgages,
(iii) Other encumbrances,
(iv) Reservations,
(v) Reversionary interests, or
(vi) Other restrictions on title or the recipient's interest in the
property.
(2) No such encumbrance or restriction will be acceptable if, as
determined by EDA, the encumbrance or restriction will interfere with
the construction, use, operation or maintenance of the project during
its estimated useful life.
(c) EDA may determine that a long-term leasehold interest for a
period not less than the estimated useful life of the project, or an
agreement for the recipient to purchase the property, will be
acceptable, but only if fee title is not obtainable and the lease or
purchase agreement provisions adequately safeguard the Federal
Government's interest in the project. Also, EDA may permit the
following exceptions to the requirement that the recipient hold title
to the real property required for a project.
(1) When a project includes construction within a railroad's right-
of-way or over a railroad crossing, it may be acceptable for the work
to be completed by the railroad and for the railroad to continue to
own, operate and maintain that portion of the project, if required by
the railroad, and provided that this is a minor but essential component
of the project.
(2) When a project includes construction on a State-owned or local
government-owned highway, it may be acceptable for the State or local
government to own, operate and maintain that portion of the project, if
required by the State or local government, provided that this is a
minor but essential component of the project, the construction is
completed in accordance with EDA requirements, and the State or local
government provides assurances to EDA:
(i) That the State or local government will operate and maintain
the improvements for the useful life of the project as determined by
EDA;
(ii) That the State or local government will not sell the
improvements for the useful life of the project, as determined by EDA;
and
(iii) That the use of the property will be consistent with the
authorized purpose of the project.
(3) When the authorized purpose of the project is to construct
facilities to
[[Page 5478]]
serve industrial or commercial parks or sites owned by the recipient
for sale or lease to private parties, such sale or lease is permitted
so long as EDA requirements continue to be met. EDA may require
evidence that the recipient has title to the park or site prior to such
sale or lease.
(4) When the authorized purpose of the project is to construct
facilities to serve privately owned industrial or commercial parks or
sites for sale or lease, such ownership, sale or lease is permitted so
long as EDA requirements continue to be met. EDA may require evidence
that the private party has title to the park or site prior to such sale
or lease, and may condition the award of project assistance upon
assurances by the private party relating to the sale or lease that EDA
determines are necessary to assure consistency with the project
purposes.
Sec. 314.8 Recorded statement.
(a) For all projects involving the acquisition, construction or
improvement of a building, as determined by EDA, the recipient shall
execute a lien, covenant or other statement of EDA's interest in the
property acquired or improved in whole or in part with the funds made
available under the award. The statement shall specify in years the
estimated useful life of the project and shall include, but not be
limited to disposition, encumbrance, and compensation of Federal share
requirements of this part 314. The statement shall be satisfactory in
form and substance to EDA.
(b) The statement of EDA's interest must be perfected and placed of
record in the real property records of the jurisdiction in which the
property is located, all in accordance with local law.
(c) Facilities in which the EDA investment is only a small part of
a large project, as determined by EDA, may be exempted from the
requirements of this section.
Subpart C--Personal Property
Sec. 314.9 Recorded statement--Title.
For all projects which EDA determines involve the acquisition or
improvement of significant items of tangible personal property,
including but not limited to ships, machinery, equipment, removable
fixtures or structural components of buildings, the recipient shall
execute a security interest or other statement of EDA's interest in the
property, acceptable in form and substance to EDA, which statement must
be perfected and placed of record in accordance with local law, with
continuances refiled as appropriate. Whether or not a statement is
required by EDA to be recorded, the recipient must hold title to the
personal property acquired or improved as part of the project, except
as otherwise provided in this part.
Sec. 314.10 Revolving loan funds.
(a) With EDA's consent, recipients holding revolving loan fund
(RLF) property (including but not limited to money, notes, and security
interests) may sell such property or encumber such property as part of
a securitization of the RLF portfolio. The net transaction proceeds
must be used for additional loans as part of the RLF project;
(b) When a recipient determines that it is no longer necessary or
desirable to operate an RLF, the RLF may be terminated; provided that,
unless otherwise stated in the award, the recipient must compensate the
Federal Government for the Federal share of the value of the RLF
property. The Federal share is that percentage of the capitalized RLF
contributed by EDA applied to all RLF property, including the present
value of all outstanding loans. However, with EDA's prior approval,
upon termination the recipient may use for other economic development
purposes that portion of such RLF property that EDA determines is
attributable to the payment of interest.
Subpart D--Release of EDA's Property Interest
Sec. 314.11 Procedures for Release of EDA's Property Interest.
(a) Before the expiration of the estimated useful life of the grant
project, EDA may release, in whole or in part, any real property
interest, or tangible personal property interest, in connection with a
grant after the date that is 20 years after the date on which the grant
was awarded. (The term ``tangible personal property'' excludes debt
instruments, currency, and accounts in financial institutions.) Except
as provided in paragraph (b) of this section, such release is not
automatic; it requires EDA's approval, which will not be withheld
except for good cause. The release may be unconditional, or may be
conditioned upon some activity of the recipient intended to be pursued
as a consequence of the release.
(b) EDA hereby releases all of its real and tangible personal
property interests in projects awarded under the Public Works
Employment Act of 1976 (Pub. L. 94-369) and under that act as amended
by the Public Works Employment Act of 1977 (Pub. L. 95-28).
(c)(1) Notwithstanding Secs. 314.11(a) and (b), in no event, either
before or after the release of EDA's interest, may project property be
used:
(i) In violation of the nondiscrimination requirements of the
project award, or
(ii) For religious purposes prohibited by the holding of the U.S.
Supreme Court in Tilton v. Richardson, 403 U.S. 672 (1971).
(2) Such use voids the release, and is an unauthorized use of the
property, as provided in Sec. 314.4.
PART 315--CERTIFICATION AND ADJUSTMENT ASSISTANCE FOR FIRMS
Subpart A--General Provisions
Sec.
315.1 Purpose and scope.
315.2 Definitions.
315.3 Confidential business information.
315.4 Eligible applicants.
315.5 Selection process.
315.6 Evaluation criteria.
315.7 Award requirements.
Subpart B--Trade Adjustment Assistance Centers
315.8 Purpose and scope.
Subpart C--Certification of Firms
315.9 Certification requirements.
315.10 Processing petitions for certification.
315.11 Hearings, appeals and final determinations.
315.12 Termination of certification and procedure.
315.13 Loss of certification benefits.
Subpart D--Assistance to Industries
315.14 Assistance to firms in import-impacted industries.
Authority: 42 U.S.C. 3211; 19 U.S.C. 2391, et seq.; 42 U.S.C.
5141; E.O. 12372; Department of Commerce Organization Order 10-4.
Subpart A--General provisions
Sec. 315.1 Purpose and scope.
The regulations in this part implement certain changes to
responsibilities of the Secretary of Commerce under Chapter 3 of Title
II of the Trade Act of 1974, as amended (19 U.S.C. 2341 et. seq.)
(Trade Act), concerning adjustment assistance for firms. The statutory
authority and responsibilities of the Secretary of Commerce relating to
adjustment assistance are delegated to EDA. EDA has the duties of
certifying firms as eligible to apply for adjustment assistance,
providing technical adjustment assistance to eligible recipients, and
providing assistance to organizations representing trade injured
industries.
[[Page 5479]]
Sec. 315.2 Definitions.
As used in this part 315 of this chapter:
Adjustment assistance is technical assistance provided to firms or
industries under Chapter 3 of Title II of the Trade Act.
Adjustment proposal means a certified firm's plan for improving its
economic situation.
Certified firm means a firm which has been determined by EDA to be
eligible to apply for adjustment assistance.
Confidential business information means information submitted to
EDA or TAACs by firms that concerns or relates to trade secrets for
commercial or financial purposes which is exempt from public disclosure
under 5 U.S.C. 552(b)(4), 5 U.S.C. 552b(c)(4) and 15 CFR part 4.
Decreased absolutely means a firm's sales or production has
declined:
(1) Irrespective of industry or market fluctuations; and
(2) Relative only to the previous performance of the firm.
Directly competitive means:
(1) Articles which are substantially equivalent for commercial
purposes, i.e., are adapted to the same function or use and are
essentially interchangeable; and
(2) Oil or natural gas (exploration, drilling or otherwise
produced).
Firm means an individual proprietorship, partnership, joint
venture, association, corporation (including a development
corporation), business trust, cooperative, trustee in bankruptcy or
receiver under court decree and including fishing, agricultural
entities and those which explore, drill or otherwise produce oil or
natural gas. When a firm owns or controls other firms as described
below, for purposes of receiving benefits under this part, the firm and
such other firms may be considered a single firm when they produce like
or directly competitive articles or are exerting essential economic
control over one or more production facilities. Such other firms
include:
(1) Predecessor;
(2) Successor;
(3) Affiliate; or
(4) Subsidiary.
A group of workers threatened with total or partial separation
means there is reasonable evidence that such total or partial
separation is imminent.
Like articles means articles which are substantially identical in
their intrinsic characteristics.
Partial separation means either:
(1) A reduction in an employee's work hours to 80 percent or less
of the employee's average weekly hours during the year of such
reductions as compared to the preceding year; or
(2) A reduction in the employee's weekly wage to 80 percent or less
of his/her average weekly wage during the year of such reduction as
compared to the preceding year.
Person means individual, organization or group.
The record means:
(1) A petition for certification of eligibility to qualify for
adjustment assistance;
(2) Any supporting information submitted by the petitioner;
(3) Report of the EDA investigation in regard to the petition; and
(4) Any information developed during the investigation or in
connection with any public hearing held on the petition.
Recipient means a firm, Trade Adjustment Assistance Center or other
party receiving adjustment assistance or through which adjustment
assistance is provided under the Trade Act.
A significant number or proportion of workers means 5 percent of
the firm's work force or 50 workers, whichever is less. An individual
farmer is considered a significant number or proportion of workers.
Substantial interest means a direct, material, economic interest in
the certification or noncertification of the petitioner.
Technical Assistance means assistance provided to firms or
industries under Chapter 3 of Title II of the Trade Act.
A totally separated worker means an employee who has been laid off
or whose employment has been terminated by his/her employer for lack of
work.
Sec. 315.3 Confidential business information.
EDA will follow the procedures set forth in 15 CFR Sec. 4.7, and
submitters should so designate any information they believe
confidential.
Sec. 315.4 Eligible applicants.
(a) Trade Adjustment Assistance Centers (TAACs) are eligible
applicants. A TAAC can be:
(1) A university affiliate;
(2) State or local government affiliate;
(3) Non-profit organization.
(b) Firms;
(c) Organizations assisting or representing industries in which a
substantial number of firms or workers have been certified as eligible
to apply for adjustment assistance under sections 223 or 251 of the
Trade Act including the following:
(1) Existing agencies;
(2) Private individuals;
(3) Firms;
(4) Universities;
(5) Institutions;
(6) Associations;
(7) Unions; or
(8) Other non-profit industry organizations.
Sec. 315.5 Selection process.
(a) TAACs are selected in accordance with the following:
(1) Currently funded TAACs are invited by EDA to submit either new
or amended applications, provided they have performed in a satisfactory
manner and complied with previous and/or current conditions in their
cooperative agreements with EDA and contingent upon availability of
funds. Such TAACs shall submit an application on a form approved by
OMB, as well as a proposed budget, narrative scope of work, and such
other information as requested by EDA. Acceptance of an application or
amended application for a cooperative agreement does not assure funding
by EDA; and
(2) New TAACs will be invited to submit proposals, and if they are
acceptable, EDA will invite an application on a form approved by OMB.
An application will be accompanied by a narrative scope of work,
proposed budget and such other information as requested by EDA.
Acceptance of an application does not assure funding by EDA.
(b) Firms are selected in accordance with the following:
(1) Firms may apply for certification generally through a TAAC by
filling out a petition for certification. The TAAC will provide
technical assistance to firms wishing to fill out such petitions;
(2) Once firms are certified in accordance with the procedures
described in Secs. 315.9 and 315.10, an adjustment proposal is usually
prepared with technical assistance from a party independent of the
firm, usually the TAAC, and submitted to EDA;
(3) Certified firms which have submitted acceptable adjustment
proposals within the time limits described in Sec. 315.13 below, may
begin implementation of such proposal, generally through the TAAC and
often with Technical Assistance from the TAAC, by submitting a request
to the TAAC to provide assistance in implementing an accepted
adjustment proposal; and
(4) EDA determines whether or not to provide assistance for
adjustment proposals based upon Sec. 315.6(c)(2).
(c) Organizations representing trade injured industries must meet
with an EDA representative to discuss the industry problems,
opportunities and assistance needs, and if invited by EDA may then
submit an application as
[[Page 5480]]
approved by OMB, as well as a scope of work and proposed budget.
Sec. 315.6 Evaluation criteria.
(a) Currently funded TAACs are generally evaluated based on the
following:
(1) How well they have performed under cooperative agreements with
EDA and if they are in compliance with the terms and conditions of such
cooperative agreements;
(2) Proposed scope of work, budget and application or amended
application; and
(3) The availability of funds.
(b) New TAACs are generally evaluated on the following:
(1) Demonstrates competence in administering business assistance
programs;
(2) Background and experience of staff;
(3) Proposed scope of work, budget and application; and
(4) The availability of funding.
(c) Firms are generally evaluated based on the following:
(1) For certification, firms' petitions are selected strictly on
the basis of conformance with requirements set forth in Sec. 315.9
below;
(2) An adjustment proposal is evaluated on the basis of the
following:
(i) The proposal must be submitted to EDA within 2 years after the
date of the certification of the firm; and
(ii) The adjustment proposal must include a description of any
technical assistance requested to implement such proposal including
financial and other supporting documentation as EDA determines is
necessary, based upon either:
(A) An analysis of the firm's problems, strengths and weaknesses
and an assessment of its prospects for recovery; or
(B) If EDA so determines, an acceptable adjustment proposal can be
prepared on the basis of other available information.
(iii) The adjustment proposal must be evaluated to determine that
it:
(A) Is reasonably calculated to contribute materially to the
economic adjustment of the firm, i.e., that such proposal will be a
constructive aid to the firm in establishing a competitive position in
the same or a different industry;
(B) Gives adequate consideration to the interests of a sufficient
number of separated workers of the firm, by providing for example that
the firm will:
(1) Give a rehiring preference to such workers;
(2) Make efforts to find new work for a number of such workers; and
(3) Assist such workers in obtaining benefits under available
programs.
(C) Demonstrates that the firm will make all reasonable efforts to
use its own resources for economic development, though under certain
circumstances, resources of related firms or major stockholders will
also be considered.
(d) Organizations representing trade injured industries must
demonstrate that the industry is injured by increased imports and that
the activities to be funded will yield some short-term actions that the
industry itself (and individual firms) can and will take toward the
restoration of the industry's international competitiveness.
(1) The emphasis is on practical results that can be implemented in
the near term, and long-term research and development activities are
given low priority.
(2) It is also expected that the industry will continue activities
on its own without the need for continued Federal assistance.
Sec. 315.7 Award requirements.
(a) Award periods are as follows:
(1) TAACs are generally funded for 12 months;
(2) Firms are generally provided assistance over a 2-year period;
and
(3) Organizations representing trade injured industries are
generally funded for 12 months.
(b) Matching requirements are as follows:
(1) There are no matching requirements for certification assistance
provided by the TAACs to firms or for administrative expenses for the
TAACs;
(2) All adjustment proposals and implementation assistance must
include not less than 25% nonfederal match, provided to the extent
practicable, by firms being assisted; and
(3) Contributions of at least 50% of the total project cash cost,
in addition to appropriate in kind contributions, are expected from
organizations representing trade injured industries.
Subpart B--Trade Adjustment Assistance Centers
Sec. 315.8 Purpose and scope.
(a) Trade Adjustment Assistance Centers (TAACs) are available to
assist firms in all fifty states, the District of Columbia and the
Commonwealth of Puerto Rico in obtaining adjustment assistance. TAACs
provide technical assistance in accordance with this subpart either
through their own staffs or by arrangements with outside consultants.
Information concerning TAACs serving particular areas can be obtained
from EDA. See the annual FY NOFA for the appropriate point of contact
and address.
(b) Prior to submitting a request for technical assistance to EDA,
a firm should determine the extent to which the required technical
assistance can be provided through a TAAC. EDA will provide technical
assistance through TAACs whenever EDA determines that such assistance
can be provided most effectively in this manner. Requests for technical
assistance will normally be made through TAACs.
(c) TAACs generally provide technical assistance to a firm by
providing the following:
(1) Assistance to a firm in preparing its petition for
certification;
(2) Assistance to a certified firm in diagnosing its strengths and
weaknesses and developing an adjustment proposal for the firm; and
(3) Assistance to a certified firm in the implementation of the
adjustment proposal for the firm.
Subpart C--Certification of Firms
Sec. 315.9 Certification requirements.
A firm will be certified eligible to apply for adjustment
assistance based upon the petition for certification if EDA determines,
under section 251(c) of the Trade Act, that:
(a) A significant number or proportion of workers in such firm have
become totally or partially separated, or are threatened to become
totally or partially separated;
(b) Either sales or production, or both of the firm have decreased
absolutely; or sales or production, or both of any article that
accounted for not less than 25 percent of the total production or sales
of the firm during the 12-month period preceding the most recent 12-
month period for which data are available have decreased absolutely;
and
(c) Increases of imports (absolute or relative to domestic
production) of articles like or directly competitive with articles
produced by such firm contributed importantly to such total or partial
separation or threat thereof, and to such decline in sales or
production; provided that imports will not be considered to have
contributed importantly if other factors were so dominant, acting
singly or in combination, that the worker separation or threat thereof,
or decline in sales or production would have been essentially the same
irrespective of the influence of imports.
Sec. 315.10 Processing petitions for certification.
(a) Firms are encouraged to consult with a TAAC or EDA for guidance
and
[[Page 5481]]
assistance in the preparation of their petitions for certification.
(b) A firm seeking certification shall complete a petition (OMB
Control Number 0610-0091) in the form prescribed by EDA with the
following information about such firm:
(1) Identification and description of the firm, including legal
form of organization, economic history, major ownership interests,
officers, directors, management, parent company, subsidiaries or
affiliates, and production and sales facilities;
(2) Description of goods and services produced and sold;
(3) Description of imported articles like or directly competitive
with those produced;
(4) Data on its sales, production and employment for the two most
recent years;
(5) Copies of its audited financial statements, or if not
available, unaudited financial statements and Federal income tax
returns for the two most recent years;
(6) Copies of unemployment insurance reports for the two most
recent years;
(7) Information concerning its major customers and their purchases;
and
(8) Such other information as EDA may consider material.
(c) EDA shall determine whether the petition has been properly
prepared and can be accepted. Immediately thereafter, EDA shall notify
the petitioner that the petition has been accepted or advise the
petitioner that the petition has not been accepted, but may be
resubmitted at any time without prejudice when the specified
deficiencies have been corrected and the resubmission will be treated
as a new petition.
(d) A notice of acceptance of a petition shall be published in the
Federal Register.
(e) An investigation shall be initiated by EDA to determine whether
the petitioner meets requirements set forth in section 251(c) of the
Trade Act and Sec. 315.9 above. The investigation can be terminated at
any time for failure to meet such requirements. A report of this
investigation shall become part of the record upon which a
determination of the petitioner's eligibility to apply for adjustment
assistance shall be made.
(f) A petitioner may withdraw a petition for certification if a
request for withdrawal is received by EDA before a certification
determination or denial is made. Such firm may submit a new petition at
any time thereafter in accordance with the requirements of this section
and Sec. 315.9.
(g) Following acceptance, EDA shall decide what action to take on
petitions for certification as follows:
(1) Make a determination based on the record as soon as possible
after all material has been submitted. In no event may the period
exceed 60 days from the date on which the petition was accepted; and
(2) Either certify the petitioner eligible to apply for adjustment
assistance or deny the petition, and in either event EDA shall promptly
give notice of the action in writing to the petitioner. A notice to the
petitioner or any parties requesting notice as specified in
Sec. 315.10(d) of a denial of a petition shall specify the reasons upon
which the denial is based. If a petition is denied, the petitioner
shall not be entitled to resubmit its petition within one year from the
date of the denial. At the time of the denial of a petition EDA may
waive the 1-year limitation for good cause.
Sec. 315.11 Hearings, appeals and final determinations.
(a) Any petitioner may appeal to EDA from a denial of certification
provided that the appeal is received by EDA in writing by personal
delivery or by registered mail within 60 days from the date of notice
of denial under Sec. 315.10(g). The appeal shall state the grounds on
which the appeal is based, including a concise statement of the
supporting facts and law. The decision of EDA on the appeal shall be
the final determination within the Department of Commerce. In the
absence of an appeal by the petitioner under this paragraph, such final
determination shall be determined under Sec. 315.10(g).
(b) A firm, its representative or any other interested domestic
party aggrieved by a final determination under paragraph (a) of this
section may, within 60 days after notice of such determination, begin a
civil action in the United States Court of International Trade for
review of such determination in accordance with section 284 of the
Trade Act (19 U.S.C. 2395).
(c) EDA will hold a public hearing on an accepted petition not
later than 10 days after the date of publication of the Notice of
Acceptance in the Federal Register if requested by either the
petitioner or any other person found by EDA to have a substantial
interest in the proceedings, under procedures, as follows:
(1) The petitioner and other interested persons shall have an
opportunity to be present, to produce evidence, and to be heard;
(2) A request for public hearing must be delivered by hand or by
registered mail to EDA. A request by a person other than the petitioner
shall contain:
(i) The name, address, and telephone number of the person
requesting the hearing; and
(ii) A complete statement of the relationship of the person
requesting the hearing to the petitioner and the subject matter of the
petition, and a statement of the nature of its interest in the
proceedings.
(3) If EDA determines that the requesting party does not have a
substantial interest in the proceedings, a written notice of denial
shall be sent to the requesting party. The notice shall specify the
reasons for the denial;
(4) EDA shall publish a notice of a public hearing in the Federal
Register, containing the subject matter, name of petitioner, and date,
time and place of hearing;
(5) EDA shall appoint the presiding officer of the hearing who
shall determine all procedural questions;
(6) Procedures for requests to appear are as follows:
(i) Within 5 days after publication of the Notice of Public Hearing
in the Federal Register, each party wishing to be heard must file a
request to appear with EDA. Such request may be filed by:
(A) The party requesting such hearing;
(B) Any other party with substantial interest; or
(C) Any other party demonstrating to the satisfaction of the
presiding officer that it should be allowed to be heard.
(ii) The party filing the request shall submit the names of the
witnesses and a summary of the evidence it wishes to present; and
(iii) Such requests to appear may be approved as deemed appropriate
by the presiding officer.
(7) Witnesses will testify in the order and for the time designated
by the presiding officer, except that the petitioner shall have the
opportunity to make its presentation first. After testifying, a witness
may be questioned by the presiding officer or his/her designee. The
presiding officer may allow any person who has been granted permission
to appear to question the witnesses for the purpose of assisting him/
her in obtaining relevant and material facts on the subject matter of
the hearing;
(8) The presiding officer may exclude evidence which s/he deems
improper or irrelevant. Formal rules of evidence shall not be
applicable. Documentary material must be of a size consistent with ease
of handling, transportation, and filing. Large exhibits may be used
during the hearing, but copies of such exhibits must be provided in
reduced size for submission as evidence. Two
[[Page 5482]]
copies of all documentary evidence must be furnished to the presiding
officer during the hearing;
(9) Briefs may be presented to the presiding officer by parties who
have entered an appearance. Three copies of such briefs shall be filed
with the presiding officer within 10 days of the completion of the
hearing; and
(10) Procedures for transcripts are as follows:
(i) All hearings will be transcribed. Persons interested in
transcripts of the hearings may inspect them at the U.S. Department of
Commerce in Washington, D.C., or purchase copies as provided in 15 CFR
part 4, Public Information; and
(ii) Confidential business information as determined by EDA shall
not be a part of the transcripts. Any confidential business information
may be submitted directly to the presiding officer prior to the
hearing. Such information shall be labeled Confidential Business
Information. For the purpose of the public record, a brief description
of the nature of the information shall be submitted to the presiding
officer during the hearing.
Sec. 315.12 Termination of certification and procedure.
(a) Whenever EDA determines that a certified firm no longer
requires adjustment assistance or for other good cause, EDA will
terminate the certification and promptly publish notice of such
termination in the Federal Register. The termination will take effect
on the date specified in the Notice.
(b) EDA shall immediately notify the petitioner and shall state the
reasons for such termination.
Sec. 315.13 Loss of certification benefits.
A firm may fail to obtain benefits of certification, regardless of
whether its certification is terminated for any of the following
reasons:
(a) Failure to submit an acceptable adjustment proposal within 2
years after date of certification. While approval of an adjustment
proposal may occur after the expiration of such 2-year period, an
acceptable adjustment proposal must be submitted before such
expiration;
(b) Failure to submit documentation necessary to start
implementation or modify its request for adjustment assistance
consistent with its adjustment proposal within 6 months after approval
of the adjustment proposal and 2 years have elapsed since the date of
certification. If the firm anticipates that a longer period will be
required to submit documentation, such longer period should be
indicated in its adjustment proposal. If the firm becomes unable to
submit its documentation within the allowed time, it should notify EDA
in writing of the reasons for the delay and submit a new schedule. EDA
has the discretion to accept or refuse a new schedule;
(c) If the firm's request for adjustment assistance has been
denied, the time period allowed for the submission of any documentation
in support of such request has expired, and 2 years have elapsed since
the date of certification; or
(d) Failure to diligently pursue an approved adjustment proposal,
and 2 years have elapsed since the date of certification.
Subpart D--Assistance to Industries
Sec. 315.14 Assistance to firms in import-impacted industries.
(a) Whenever the International Trade Commission makes an
affirmative finding under section 202(B) of the Trade Act that
increased imports are a substantial cause of serious injury or threat
thereof with respect to an industry, EDA shall provide to the firms in
such industry, assistance in the preparation and processing of
petitions and applications for benefits under programs which may
facilitate the orderly adjustment to import competition of such firms.
(b) EDA may provide technical assistance, on such terms and
conditions as EDA deems appropriate for the establishment of industry
wide programs for new product development, new process development,
export development or other uses consistent with the purposes of this
part.
(c) Expenditures for technical assistance under this section may be
up to $10,000,000 annually per industry and shall be made under such
terms and conditions as EDA deems appropriate.
PART 316--GENERAL REQUIREMENTS FOR FINANCIAL ASSISTANCE
Sec.
316.1 Environment.
316.2 Excess capacity.
316.3 Nonrelocation.
316.4 Procedures in disaster areas.
316.5 Project servicing for loans and loan guarantees.
316.6 Public information.
316.7 Relocation assistance and land acquisition policies.
316.8 Additional requirements; Federal policies and procedures.
316.9 Amendments and changes.
316.10 Preapproval award costs.
316.11 Intergovernmental review of projects under EDA's public
works, economic adjustment, planning, local technical assistance,
and university center programs.
316.12 Fees for paying attorneys and consultants.
316.13 Economic development information clearinghouse.
316.14 Project administration, operation, and maintenance.
316.15 Maintenance of standards.
316.16 Records and audits.
316.17 Acceptance of certifications by applicants.
316.18 Reports by recipients.
316.19 Project administration by districts.
Authority: 42 U.S.C. 3211; 19 U.S.C. 2391, et seq.; Department
of Commerce Organization Order 10-4.
Sec. 316.1 Environment.
(a) The purpose of this section is to ensure proper environmental
review of EDA's actions under PWEDA and the Trade Act and to comply
with the Federal environmental statutes and regulations in making a
determination that balances economic development and environmental
enhancement and mitigates adverse environmental impacts to the extent
possible.
(b) Environmental assessments of EDA actions will be conducted in
accordance with the statutes, regulations, and Executive Orders listed
below. This list will be supplemented and modified, as applicable, in
EDA's annual FY NOFA.
(1) Requirements under the National Environmental Policy Act of
1969 (NEPA), Pub. L. 91-190, as amended, 42 U.S.C. 4321 et seq. as
implemented under 40 CFR parts 1500 et seq. including the following:
(i) The implementing regulations of NEPA require EDA to provide
public notice of the availability of project specific environmental
documents such as environmental impact statements, environmental
assessments, findings of no significant impact, records of decision
etc., to the affected public as specified in 40 CFR 1506.6(b); and
(ii) Depending on the project location, environmental information
concerning specific projects can be obtained from the Environmental
Officer in the appropriate Washington, D.C. or regional office listed
in the NOFA;
(2) Clean Air Act, Pub. L. 88-206 as amended, 42 U.S.C. 7401 et.
seq.;
(3) Clean Water Act (Federal Water Pollution Control Act), c. 758,
62 Stat. 1152 as amended, 33 U.S.C. 1251 et. seq.;
(4) Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (CERCLA), Pub. L. 96-510, as amended, 42 U.S.C.
9601 et. seq. and the Superfund Amendments and Reauthorization Act of
1986 (SARA), Pub. L. 99-499, as amended;
(5) Floodplain Management Executive Order 11988 (May 24, 1977);
[[Page 5483]]
(6) Protection of Wetlands Executive Order 11990 (May 24, 1977);
(7) Resource Conservation and Recovery Act of 1976, Pub.L. 94-580
as amended, 42 U.S.C. 6901 et seq.;
(8) Historical and Archeological Data Preservation Act, Pub. L. 86-
523, as amended, 16 U.S.C. Sec. 469a-1 et. seq.;
(9) National Historic Preservation Act of 1966, Pub. L. 89-665, as
amended, 16 U.S.C. Sec. 470 et. seq.;
(10) Endangered Species Act of 1973, Pub. L. 93-205, as amended, 16
U.S.C. Sec. 1531 et. seq.;
(11) Coastal Zone Management Act of 1972, Pub. L. 92-583, as
amended, 16 U.S.C. Sec. 1451 et. seq.;
(12) Flood Disaster Protection Act of 1973, Pub. L. 93-234, as
amended, 42 U.S.C. Sec. 4002 et seq.;
(13) Safe Drinking Water Act of 1974, Pub. L. 92-523, as amended,
42 U.S.C. Sec. 300f-j26;
(14) Wild and Scenic Rivers Act, Pub. L. 90-542, as amended, 16
U.S.C. Sec. 1271 et seq.;
(15) Environmental Justice in Minority Populations and Low-Income
Populations Executive Order 12898 (February 11, 1994);
(16) Farmland Protection Policy Act, Pub. L. 97-98, as amended, 7
U.S.C. Sec. 4201 et seq.; and
(17) Other Federal Environmental Statutes and Executive Orders as
applicable.
Sec. 316.2 Excess capacity.
(a) Definitions. For purposes of this section only the following
definitions apply:
Beneficiary means a firm or group of firms, enterprise or
organization (public or private) that provides a commercial product or
service and that benefits from an EDA-assisted project.
Capacity means the maximum amount of a product or service that can
be supplied to the market area over a sustained period by existing
enterprises through the use of present facilities and customary work
schedules for the industry.
Commercial product or service means a product or service that
competes with other providers of the same kinds of product or service.
Demand means the actual quantity of a commercial product or service
that users are willing to purchase in the market area served by the
intended beneficiary of the EDA assisted project.
Efficient capacity means that part of capacity derived from the use
of contemporary structures, machinery and equipment, designs, and
technologies.
Existing competitive enterprise means an established operation
which either produces or delivers the same kind of commercial product
or service to all or a substantial part of the market area served by
the intended beneficiary of the EDA assisted project.
Firm means any enterprise which produces or sells a commercial
product or service.
Market Area means the geographic area within which commercial
products or services compete for purchase by customers.
Product or service means a good, material, or commodity, or the
availability of a service or facility.
Section 208 means section 208 of PWEDA.
(1) A section 208 study is a detailed economic analysis/evaluation
of competitive impact.
(2) A section 208 report is a summary of supply/demand factors.
(3) A section 208 exemption may apply to a project having one or
more of the characteristics listed in paragraph (e) of this section.
(b) Under section 208:
(1) No financial assistance under PWEDA shall be extended to any
project when the result would be to increase the production of products
or services when there is not sufficient demand for such products or
services, to employ the efficient capacity of existing competitive
commercial or industrial enterprises; and
(2) When EDA considers extending assistance for a project that
benefits a firm or industry that provides a commercial product or
service, the beneficiary is subject to a 208 report, study, or
exemption, resulting in a finding that the project will or will not
violate section 208. A section 208 study or report is required, except
as provided in paragraph (e) of this section.
(c) The following procedures shall be followed to the extent
necessary to provide EDA with sufficient information to prepare a 208
study or report:
(1) The beneficiary shall submit, as early as possible, the
following information with regard to each commercial product or service
affected by the project:
(i) A detailed description of the commercial product or service;
(ii) Current and projected amount and value of annual sales or
receipts;
(iii) Market area; and
(iv) Name of other suppliers and amount of commercial product or
service presently available in the market area.
(2) If the beneficiary has conducted or commissioned a relevant
market study, it shall be made available to EDA as early as possible,
for possible use by EDA in the 208 study or report.
(d) A section 208 report will form an acceptable basis on which to
make a section 208 compliance finding when the beneficiary's projected
new or additional annual output is less than one percent of the last
recorded annual output in the market area, or when it is otherwise
apparent that a 208 study is not required to determine that the project
will not violate section 208.
(e) Unless EDA determines that circumstances require a section 208
study or report, EDA will make a finding of compliance with section 208
without doing a section 208 report or study for those projects which
have one or more of the following characteristics:
(1) The project is primarily for the use and benefit of the
community as a whole without contributing to a new or significantly
expanded output of commercial products or services;
(2) The project will not contribute directly to the production or
distribution of new or expanded output of commercial products or
services, to any significant degree;
(3) The project will replace or restore capacity recently destroyed
by flood, fire, wind, or other natural disaster, without contributing
to significant expansion of the previously existing supply of the same
kinds of commercial products or services;
(4) The project will assure the retention of physical capacity and/
or employment without significantly expanding the existing supply of
commercial products or services;
(5) The project will assure the reopening of facilities closed
within two years of the date of reopening, if the facility will provide
the same kinds of products or services as previously provided, without
a significant increase in output;
(6) The project will replace, rebuild or modernize, within the same
labor market area, facilities which within the previous two years have
been, or are to be, displaced by official governmental action, without
a change in the kind or significant increase in output of the
commercial product or service previously provided;
(7) The project assures completion of a project previously assisted
by EDA, where further funding is required because of revised project
cost estimates, rather than for additional productive capacity;
(8) The project is wholly or primarily for planning, technical
assistance, research, evaluation, other studies, or for the training of
workers, and not for the benefit of a firm or industry that produces a
commercial product or service; or
(9) No firm benefitted by the project will use 50 percent or more
of any EDA-financed service or facility.
[[Page 5484]]
Sec. 316.3 Nonrelocation.
(a) General requirements for nonrelocation for funding under PWEDA
are as follows:
(1) EDA financial assistance will not be used to assist employers
who transfer jobs from one commuting area to another. A commuting area
(``area'') is that area defined by the distance people travel to work
in the locality of the project receiving EDA financial assistance;
(2) Every applicant for EDA financial assistance has an affirmative
duty to inform EDA of any employer who will benefit from such
assistance who will transfer jobs (not persons) in connection with the
EDA grant;
(3) EDA will determine compliance with this requirement prior to
grant award based upon information provided by the applicant during the
project selection process; and
(4) Each applicant and identified primary beneficiary of EDA
assistance, which for purposes of this section means an entity
providing economic justification for the project, must submit its
certification of compliance with this section, and other applicable
information as determined by EDA.
(b) The nonrelocation requirements stated in paragraph (a) of this
section shall not apply to businesses which:
(1) Relocated to the area prior to the date of the applicant's
request for EDA assistance;
(2) Have moved or will move into the area primarily for reasons
which have no connection to the EDA assistance;
(3) Will expand employment in the area where the project is to be
located substantially beyond employment in the area in which the
business had originally been located;
(4) Are relocating from technologically obsolete facilities to be
competitive;
(5) Are expanding into the new area by adding a branch, affiliate,
or subsidiary while maintaining employment levels in the old area or
areas; or
(6) Are determined by EDA to be exempt.
Sec. 316.4 Procedures in Disaster Areas.
When non-statutory EDA administrative or procedural conditions for
financial assistance awards cannot be met by applicants under PWEDA as
the result of a disaster, EDA may waive such conditions.
Sec. 316.5 Project servicing for loans and loan guarantees.
EDA will provide project servicing to borrowers and lenders who
received EDA loans and/or guaranteed loans under any programs
administered by EDA. This includes but is not limited to loans under
PWEDA prior to the effective date of Public Law 105-393, the Trade Act
and the Community Emergency Drought Relief Act of 1977.
(a) EDA will continue to monitor such loans and guarantees in
accordance with the loan or guarantee program.
(b) Borrowers/lenders shall submit to EDA any requests for
modifications of their agreements with EDA. EDA shall, in accordance
with applicable laws and policies, including the Federal Credit Reform
Act of 1990 (2 U.S.C. 661c(e)), consider and respond to such
modification requests.
(c) In the event that EDA determines it necessary or desirable to
take actions to protect or further the interests of EDA in connection
with loans or guarantees made or evidences of indebtedness purchased,
EDA may:
(1) Assign or sell at public or private sale, or otherwise dispose
of for cash or credit, in its discretion and upon such terms and
conditions as it shall determine to be reasonable, any evidence of
debt, contract, claim, personal or real property, or security assigned
to or held by it in connection with financial assistance extended;
(2) Collect or compromise all obligations assigned to or held by it
in connection with EDA financial assistance projects until such time as
such obligations may be referred to the Attorney General for suit or
collection; and
(3) Take any and all other actions determined by it to be necessary
or desirable in purchasing, servicing, compromising, modifying,
liquidating, or otherwise administratively dealing with or realizing on
loans or guaranties made or evidences of indebtedness purchased.
Sec. 316.6 Public information.
The rules and procedures regarding public access to the records of
the Economic Development Administration are found at 15 CFR part 4.
Sec. 316.7 Relocation assistance and land acquisition policies.
Recipients of EDA financial assistance under PWEDA and the Trade
Act (States and political subdivisions of States and non-profits as
applicable) are subject to requirements set forth at 15 CFR part 11.
Sec. 316.8 Additional requirements; Federal policies and procedures.
Recipients, as defined under Sec. 314.2 of this chapter, are
subject to all Federal laws and to Federal, Department of Commerce, and
EDA policies, regulations, and procedures applicable to Federal
financial assistance awards, including 15 CFR part 24, Uniform
Administrative Requirements for Grants and Cooperative Agreements to
State and Local Governments, or 15 CFR part 14, Uniform Administrative
Requirements for Grants and Agreements With Institutions of Higher
Education, Other Non-Profit and Commercial Organizations, whichever is
applicable.
Sec. 316.9 Amendments and changes.
(a) Requests by recipients for amendments to a grant shall be
submitted in writing to EDA for approval, and shall contain such
information and documentation necessary to justify the request.
(b) Any changes made without approval by EDA are made at grantee's
own risk of suspension or termination of the project.
(c) Changes of project scope after the time the project grant funds
could be obligated will not be approved by EDA. In most cases, project
grant funds cannot be obligated after September 30 of the fiscal year
the grant is awarded.
Sec. 316.10 Preapproval award costs.
Project activities carried out before approval of an application by
EDA are carried out at the sole risk of the applicant. Such activity
could result in rejection of such project application, the disallowance
of costs, or other adverse consequences as a result of non-compliance
with Federal requirements, including, but not limited to, civil rights
requirements, Federal labor standards, or Federal environmental,
historic preservation or related requirements.
Sec. 316.11 Intergovernmental review of projects under EDA's public
works, economic adjustment, planning, local technical assistance, and
university center programs.
(a) When the applicant is not a State, Indian tribe or other
general-purpose governmental authority, the applicant must afford the
appropriate general purpose local governmental authority of the area a
minimum of 15 days in which to review and comment on the proposed
project. The applicant shall furnish with the application a copy of
such comments, or a statement of the efforts made to obtain them
together with an explanation of the actions taken to address any
comments received.
(b) Applicants as appropriate, must also give State and local
governments a reasonable opportunity to review and comment on the
proposed project if the State has a Single Point of Contact review
process, including comments from areawide planning organizations in
[[Page 5485]]
metropolitan areas as provided for in 15 CFR part 13.
Sec. 316.12 Fees for paying attorneys and consultants.
Grant funds must not be used directly or indirectly to pay for
attorney's or consultant's fees in connection with obtaining grants and
contracts for projects funded under PWEDA.
Sec. 316.13 Economic development information clearinghouse.
EDA will provide assistance and information as follows:
(a) Maintain a central information clearinghouse on matters
relating to economic development, economic adjustment, disaster
recovery, defense conversion, and trade adjustment programs and
activities of the Federal and State governments, including political
subdivisions of States;
(b) Assist potential and actual applicants for economic
development, economic adjustment, disaster recovery, defense
conversion, and trade adjustment assistance under Federal, State, and
local laws in locating and applying for the assistance; and
(c) Assist areas described in Sec. 301.2(b) and other areas by
providing to interested persons, communities, industries, and
businesses in the areas any technical information, market research, or
other forms of assistance, information, or advice that would be useful
in alleviating or preventing conditions of excessive unemployment or
underemployment in the areas.
Sec. 316.14 Project administration, operation, and maintenance.
EDA shall approve Federal assistance under PWEDA only if satisfied
that the project for which Federal assistance is granted will be
properly and efficiently administered, operated, and maintained.
Sec. 316.15 Maintenance of standards.
In accordance with sec. 602 of PWEDA all laborers and mechanics
employed by contractors or subcontractors on public projects assisted
by EDA under PWEDA shall be paid in accordance with the Davis-Bacon
Act, as amended (40 U.S.C. 276a-276a-5).
Sec. 316.16 Records and audits.
(a) Each recipient of Federal assistance under PWEDA shall keep
such records as the Secretary shall require, including records that
fully disclose--
(1) The amount and the disposition by the recipient of the proceeds
of the assistance;
(2) The total cost of the project in connection with which the
assistance is given or used;
(3) The amount and nature of the portion of the cost of the project
provided by other sources; and
(4) Such other records as will facilitate an effective audit.
(b) Access to books for examination and audit--The Secretary, the
Inspector General of the Department, and the Comptroller General of the
United States, or any duly authorized representative, shall have access
for the purpose of audit and examination to any books, documents,
papers, and records of the recipient that relate to assistance received
under PWEDA.
Sec. 316.17 Acceptance of certifications by applicants.
EDA will accept an applicant's certifications, accompanied by
evidence satisfactory to EDA, that the applicant meets the requirements
of PWEDA. Each applicant must include in such evidence satisfactory
information that any non-Federal funds (or eligible Federal funds)
required to match the EDA share of project costs are committed to the
project and will be available as needed.
Sec. 316.18 Reports by recipients.
(a) In general, each recipient of assistance under PWEDA must
submit reports to EDA at such intervals and in such manner as EDA shall
require, except that no report shall be required to be submitted more
than 10 years after the date of closeout of the assistance award.
(b) Each report must contain an evaluation of the effectiveness of
the economic assistance provided in meeting the need that the
assistance was designed to address and in meeting the objectives of
PWEDA
Sec. 316.19 Project administration by District organization.
When an Economic Development District is not a recipient or co-
recipient of an award for a project involving construction, the
District organization may administer the project for such recipient if
the following conditions are met, as determined by EDA:
(a) The recipient has requested (either in the application or by
separate written request) that the district organization for the area
in which the project is located perform the project administration;
(b) The recipient certifies and EDA finds that:
(1) Administration of the project is beyond the capacity of the
recipient's current staff to perform and would require hiring
additional staff or contracting for such services,
(2) No local organization/business exists that would be able to
administer the project in a more efficient or cost-effective manner
than the staff of the district, and
(3) The staff of the district would administer the project
themselves, without subcontracting the work out;
(c) EDA approves the request either by approving the application in
which the request is made, or by separate specific written approval;
and
(d) The allowable costs for the administration of the project by
the district organization staff will not exceed the customary and
reasonable amount that would be allowable if the district were the
recipient.
PART 317--CIVIL RIGHTS
Sec.
317.1 Civil rights.
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Sec. 317.1 Civil rights.
(a) Discrimination is prohibited in programs receiving federal
financial assistance from EDA in accordance with the following
authorities:
(1) Section 601 of Title VI of the Civil Rights Act of 1964,
codified at 42 U.S.C. 2000d et seq. (proscribing discrimination on the
basis of race, color, or national origin), and the Department of
Commerce's implementing regulations found at 15 CFR part 8;
(2) 42 U.S.C. 3123 (proscribing discrimination on the basis of
sex);
(3) 29 U.S.C. 794, as amended, and the Department of Commerce's
implementing regulations found at 15 CFR part 8b (proscribing
discrimination on the basis of disabilities);
(4) 42 U.S.C. 6101, as amended, and the Department of Commerce's
implementing regulations found at 15 CFR part 20; and
(5) Other Federal statutes, regulations and Executive Orders as
applicable.
(b) Definitions:
(1) Other Parties means, as an elaboration of the definition in 15
CFR part 8, entities which, or which are intended to create and/or save
15 or more permanent jobs as a result of EDA assistance provided that
they are also either specifically named in the application as
benefitting from the project, or are or will be located in an EDA
building, port, facility, or industrial, commercial or business park
prior to EDA's final disbursement of funds awarded for the project.
(2) Additional definitions are provided in EDA's Civil Rights
Guidelines and 15 CFR part 8.
[[Page 5486]]
(c) All recipients of EDA financial assistance under PWEDA and the
Trade Act, and Other Parties are required to submit the following to
EDA:
(1) Written assurances that they will comply with Department of
Commerce and EDA regulations, and such other requirements as may be
applicable, prohibiting discrimination;
(2) Employment data in such form and manner as determined by EDA;
(3) Information on civil rights status and involvement in charges
of discrimination in employment or the provision of services during the
2 years previous to the date of submission of such data as follows:
(i) Description of the status of any lawsuits, complaints or the
results of compliance reviews; and
(ii) Statement indicating any administrative findings by a Federal
or State agency.
(4) Whenever deemed necessary by EDA to determine that applicants
and other parties are in compliance with civil rights regulations, such
applicants and other parties shall submit additional information in the
form and manner requested by EDA; and
(5) In addition to employment record requirements found in 15 CFR
8.7, complete records on all employees and applicants for employment,
including information on race, sex, national origin, age, education and
job-related criteria must be retained by employers.
(d) To enable EDA to determine that there is no discrimination in
the distribution of benefits in projects which provide service
benefits, in addition to requirements listed in paragraph (c) of this
section, applicants are required to submit any other information EDA
may deem necessary for such determination.
(e) EDA assisted planning organizations must meet the following
requirements:
(1) For the selection of representatives, EDA expects planning
organizations and OEDP Committees to take appropriate steps to ensure
that there is adequate representation of minority and low-income
populations, women, people with disabilities and Federal and State
recognized American Indian tribes and that such representation is
accomplished in a nondiscriminatory manner; and
(2) EDA assisted planning organizations and OEDP Committees shall
take appropriate steps to ensure that no individual will be subject to
discrimination in employment because of their race, color, national
origin, sex, age or disability.
(f) Reporting and other procedural matters are set forth in 15 CFR
parts 8, 8(b), 8(c), and 20 and the Civil Rights Guidelines which are
available from EDA's Regional Offices. See part 300 of this chapter.
PART 318--EVALUATIONS OF UNIVERSITY CENTERS AND ECONOMIC
DEVELOPMENT DISTRICTS
Sec.
318.1 University Center performance evaluations.
318.2 Economic Development District performance evaluations.
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Sec. 318.1 University Center performance evaluations.
(a) EDA will evaluate the performance of each University Center.
EDA will:
(1) Evaluate each University Center at least once every three
years;
(2) Assess the University Center's contribution to providing
technical assistance, conducting applied research, and disseminating
project results, in accordance with the scope(s) of work funded during
the evaluation period; and
(3) For peer review, ensure the participation of at least one other
University Center, as appropriate, in the evaluation.
(b) The purpose of the evaluations of University Centers is to
determine which centers are performing well and are worthy of continued
grant assistance from EDA, and which should not receive continued
assistance, so that university centers that have not previously
received assistance may receive EDA assistance.
Sec. 318.2 Economic Development District performance evaluations.
EDA will evaluate the performance of each Economic Development
District. EDA will:
(a) Evaluate each Economic Development District at least once every
three years;
(b) Assess the Economic Development District's management
standards, financial accountability, and program performance in
accordance with the current instructions for Economic Development
District performance appraisals; and
(c) For peer review, ensure the participation of at least one other
Economic Development District organization, as appropriate, in the
evaluation.
Dated: January 20, 1999.
Phillip A. Singerman,
Assistant Secretary, Economic Development Administration.
[FR Doc. 99-1983 Filed 1-26-99; 12:31 pm]
BILLING CODE 3510-24-P
