activities conducted by institutions of higher education. (OMB Circular No. A-21.) $100b.83 Nonprofit organizations. (a) Nonconstruction. The principles for determining the allowable costs of nonconstruction activities conducted by nonprofit organizations other than institutions of higher education, hospitals, States, and local governments are set forth in Appendix D to this subchapter. (b) Construction. Appendix D to this subchapter shall be used as a guide for determining the allowable costs of construction by nonprofit organizations (other than institutions of higher education, hospitals, States, and local governments). (20 U.S.C. 1221c (b) (1).) (a) It should be noted that the cost principles applicable to a subgrantee or cost-type contractor under a grant will not necessarily be the same as those applicable to the State agency. For example, where a State agencly awards a subgrant or cost-type contract to an institution of higher education, Appendix C to this subchapter would apply to the costs incurred by the institution of higher education, even though Appendix B to this subchapter would apply to the costs incurred by the State. (b) The principles to be used in determining the allowable costs of work performed by commercial organizations under cost-type contracts a warded to them are set forth in 41 CFR Subpart 1-15.2. (20 U.S.C. 1221c(b) (1).) Subpart H-Matching and Cost Sharing §100b.90 Purpose and scope. This subpart sets forth criteria and procedures for the allowability and evaluation of cash and in-kind contributions in satisfying matching or cost sharing requirements applicable to State agencies. (OMB Circular No. A-102, Attachment F.) § 100b.91 Definitions. "Cash contributions" means the State agency's cash outlay, including the outlay of money contributed to the State agency by third parties. Unless authorized by Federal legislation, outlays charged to other Federal grants or to Federal contracts may not be considered as cash contributions of the State agency. "In-kind contributions" represent the value of noncash contributions provided by the State agency or third parties. Inkind contributions may consist of charges for real property and nonexpendable personal property, and the value of goods to the federally-supported activity. Unless otherwise authorized by Federal legislation, charges for property purchased wholly with Federal funds, and charges based on the Federal share of the value of property purchased partly with Federal funds, may not be considered as the State agency's in-kind contributions. "Matching or cost sharing" represents, in general, that portion of project costs not borne by the Federal Government. "Project costs" means the sum of (a) the allowable costs incurred by the State agency and (b) the allowable in-kind contributions made by third parties. (OMB Circular No. A-102, Attachment F.) § 100b.92 Allowability. (a) Matching or cost sharing may consist of: (1) Charges incurred by the State agency as project costs. Not all charges require cash outlays during the grant period by the State agency; examples are depreciation and use allowances for buildings and equipment. (2) Project costs financed with cash contributed or donated to the State agency by third parties. (3) Project costs represented by inkind contributions made by non-Federal third parties. Where in-kind contributions are made by the Federal Government, they may be included in the State agency's matching or cost sharing only if Federal legislation authorizes such inclusion. (b) All contributions whether cash or in-kind (including in-kind contributions from third parties) shall be accepted as part of the State agency's matching or cost sharing when such contributions: (1) Are identifiable from the State agency's records, (2) Are not included as contributions for any other federally assisted program, or any Federal contract, (3) Are necessary and reasonable for proper and efficient accomplishment of project objectives, (4) If made by the State agency, are types of costs which are allowable under the applicable cost principles specified in Subpart G of this part, (5) Are not borne by the Federal Government directly or indirectly under any Federal grant or contract (unless the other grant or contract may, under authority of law, be used for matching or cost sharing), and (6) Conform to other applicable provisions of this subpart. (OMB Circular No. A-102, Attachment F.) § 100b.93 Valuation of in-kind contributions from third parties. (a) Valuation of volunteer services.(1) General. Volunteer services may be furnished by professional and technical personnel, consultants, and other skilled and unskilled labor. Volunteered service may be counted as matching or cost sharing if it is an integral and necessary part of an approved program. (2) Rates for volunteer services. Rates for volunteers should be consistent with those regular rates paid for similar work in other activities of the State agency. In cases where the kinds of skills required for the federally assisted activities are not found in the other activities of the State agency, rates used should be consistent with those paid for similar work in the labor market in which the State agency competes for the kind of services involved. (3) Volunteers employed by other organizations. When an employer other than the State agency furnishes the services of an employee, these services shall be valued at the employee's regular rate of pay (exclusive of fringe benefits and overhead cost): Provided, These services are in the same skill for which the employee is normally paid. (b) Valuation of donated real or tangible personal property, or use thereof(1) Donation of title. If the donor transfers title to the property, the amount to be allowed as matching or cost sharing shall be determined as if the State agency had purchased the property and had paid the fair market value of the property at the time of transfer. (2) Donation of use. If only use of the property is donated, and the donor retains title, the amount to be allowed as matching or cost sharing shall be determined as if the State agency had rented the property and had paid the property's fair rental value. (3) Appraisal. The Commissioner may require that the value of real property be established by an independent ap praiser (i.e., a private realty firm or a General Services Administration representative) and certified by the responsible official of the State agency as a precondition to allowability for matching or cost sharing purposes. (c) Valuation or other in-kind contributions by third parties. Other necessary in-kind contributions made by third parties specifically for and in direct benefit to the Federal program may be accepted as matching or cost sharing: Provided, That they are adequately supported and permissible under the law. Such charges must be reasonable and properly justifiable. (OMB Circular No. A-102, Attachment F.) § 100b.94 Supporting records for in kind contributions from third parties. The following requirements pertain to the State agency's supporting records for in-kind contributions from third parties: (a) The extent of volunteer services must be supported by the same methods used by the State agency for its employees. (b) The basis for determining the charges for personal services, material, equipment, buildings, and land must be documented. (OMB Circular No. A-102, Attachment F.) Subpart I-Procurement Standards § 100b.100 Scope of subpart. and This subpart provides standards for use by State agencies in establishing procedures for the procurement of supplies, equipment, construction, other services whose cost is borne in whole or in part as a direct charge by the Federal Government. These standards are furnished to insure that such materials and services are obtained in an effective manner and in compliance with the provisions of applicable Federal Law and Executive Orders. (OMB Circular No. A-102, Attachment O.) § 100b.101 General. (a) State agencies may use their own procurement policies provided that procurements whose cost is borne in whole or in part as a direct charge by the Federal Government adhere to the standards set forth in this subpart. (b) The standards contained in this subpart do not relieve the State agency of the responsibilities arising under its contracts. The State agency is the responsible authority regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into in support of a grant. This includes but is not limited to: Disputes, claims, protests of award, source evaluation, or other matters of a contractual nature. Matters concerning violation of law are to be referred to such local, State, or Federal authority as may have proper jurisdiction. (OMB Circular No. A-102, Attachment O.) § 100b.102 Code of conduct. The State agency shall maintain a code or standard of conduct which shall govern the performance of its officers, employees, or agents in contracting with and expending Federal funds. The State agency's officers, employees or agents, shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or potential contractors. To the extent permissible under State or local law, rules or regulations, such standards shall provide for appropriate penalties, sanctions, or other disciplinary actions to be applied for violations of such standards either by the State agency's officers, employees, or agents, or by contractors or their agents. (OMB Circular No. A-102, Attachment O.) § 100b.103 Free competition. All procurement transactions of the State agency, regardless of whether negotiated or advertised and without regard to dollar value, shall be conducted in a manner so as to provide maximum open and free competition. The State agency should be alert to organizational conflicts of interest or noncompetitive practices among contractors which may restrict or eliminate competition or otherwise restrain trade. (OMB Circular No. A-102, Attachment O.) § 100b.104 Procedural requirements. The State agency shall establish procurement procedures which provide for, as a minimum, the following: (a) Proposed procurement actions shall be reviewed by appropriate officials of the State agency to avoid purchasing unnecessary or duplicative items. Where appropriate, an analysis shall be made of lease and purchase alternatives to determine which would be the most economical, practical procurement. (b) Invitations for bids or requests for proposals shall be based upon a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description shall not, in competitive procurements, contain features which unduly restrict competition. "Brand name or equal" description may be used as a means to define the performance or other salient requirements of a procurement and, when so used, the specific features of the named brand which must be met by offerors should be clearly specified. (c) Positive efforts shall be made by the State agency to utilize small business and minority-owned business sources of supplies and services. Such efforts should allow these sources the maximum feasible opportunity to compete for contracts to be performed under Federal grants. (d) The type of procuring instruments used (i.e., fixed-price contracts, cost reimbursable contracts, purchase orders, incentive contracts, etc.) shall be appropriate for the particular procurement and for promoting the purposes of the Federal program involved. The "costplus-a-percentage-of-cost" method of contracting shall not be used. (e) Formal advertising, with adequate purchase description, sealed bids, and public openings shall be the required method of procurement unless negotiation pursuant to § 100b.105 is necessary to accomplish sound procurement. However, procurements of $2,500 or less need not be so advertised unless otherwise required by State or local law or regulations. When formal advertising is employed: (1) The awards shall be made to the responsible bidder whose bid is responsive to the invitation and is most advantageous to the State agency, price and other factors considered. Factors such as discounts, transportation costs, and taxes may be considered in determining the lowest bid. (2) Invitations for bids shall clearly set forth all requirements which the bidder must fulfill in order for his bid to be evaluated by the State agency. (3) Any or all bids may be rejected (a) Procurements may be negotiated ated if one or more of the following conditions prevail: (1) The public exigency will not permit the delay incident to advertising; (2) The material or service to be procured is available from only one person or firm; all contemplated sole source procurements where the aggregate expenditure is expected to exceed $5,000 shall be referred to the Commissioner for prior approval; (3) The aggregate amount involved does not exceed $2,500; (4) The contract is for personal or professional services, or for any service to be rendered by a university, college, or other educational institution; (5) The material or services are to be procured and used outside the limits of the United States and its possessions; (6) No acceptable bids have been received after formal advertising; (7) The purchases are for highly perishable materials or medical supplies, for material or services where the prices are established by law, for technical items or equipment requiring standardization and inter-changeability of parts with existing equipment, for experimental, developmental research work, for supplies purchased for authorized resale, and for technical or specialized supplies requiring substantial initial investment for manufacture; or or (8) Negotiation is otherwise authorized by applicable Federal, State, or local law, rules or regulations. (b) Notwithstanding the existence of circumstances justifying negotiation, competition shall be obtained to the maximum extent practicable. (OMB Circular No. A-102, Attachment O.) § 100b.106 Contractor responsibility. Contracts shall be made by State agencies only with responsible contractors who possess the potential ability to perform successfully under the terms and conditions of a proposed procurement. Consideration shall be given to such matters as contractor integrity, record of past performance, financial and teechnical resources, and accessibility to other necessary resources. (OMB Circular No. A-102, Attachment O.) § 100b.107 Records for negotiated procurements by State agencies. The procurement records or files of State agencies for negotiated purchases (a) General. (1) The State agency shall include provisions to define a sound and complete agreement in all contracts and subgrants which it awards when the contract or subgrant costs are to be borne as a direct charge in whole or in part by Federal funds. (2) In awarding contracts, the State agency must comply with the applicable requirements of paragraphs (b) and (c) of this section. (3) In awarding subgrants, the State agency must comply with the applicable requirements of paragraph (c) of this section. (b) Contracts under grants. (1) The State agency's contracts shall contain contractual 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) All contracts awarded by State agencies in excess of $2,500 shall contain suitable provisions for termination by the State agency including the manner by which it will be effected and the basis for settlement. In addition, such contracts shall set forth the 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) In all contracts for construction or facility improvement awarded in excess of $100,000, the bonding requirements set forth in Subpart J of this part shall be observed. (4) All negotiated contracts (except those of $2,500 or less) shall include provisions giving access to, and requiring retention of, the contractor's records in accordance with § 100b.477. (c) Subgrants. (1) Provisions for compliance with Executive Order No. 11246, entitled, "Equal Employment Opportunity," as implemented in Department of Labor regulations (41 CFR Part 60) shall be included in all subgrants to which they are applicable. (2) All subgrants in excess of $2,000 for construction or repair shall include a provision for compliance with the Copeland "Anti-Kick Back" Act (18 U.S.C. 874) as implemented in Department of Labor regulations (29 CFR Part 3). The State agency shall report all suspected or reported violations to the Commissioner. (3) All research or development agreements, whether contracts or subgrants, shall contain a notice to the effect that rights to inventions conceived or first actually reduced to practice in the course of or under the agreement shall be governed by the Department's Patent Regulations (Parts 6 and 8 of this title), implementing terms and conditions of the grant, and any pertinent regulations or other requirements consistent therewith issued by the State agency. The State agency shall assure that the performer of the research or development work either is given all necessary information regarding these matters, or is advised as to the source of such information. This subparagraph shall also apply to nonresearch and nondevelopment awards in fields of science or technology in which there has been little significant experience outside of work funded by the Federal Government. (4) Each contract of an amount in excess of $2,500 awarded by a State agency or subgrantee shall provide that the contractor will comply with applicable regulations and standards of the Cost of Living Council in establishing wages and prices. The provision shall advise the contractor that submission of a bid or offer or the submittal of an invoice or voucher for property, goods, or services furnished under a contract or agreement with the State agency or subgrantee shall constitute a certification by him that amounts to be paid do not exceed maximum allowable levels authorized by the Cost of Living Council regulations or standards. Suspected violations shall be reported by the State agency in writing to the local Internal Revenue Service field office with a copy to the Commissioner. (5) Contracts and subgrants in excess of $100,000 shall contain a provision which requires compliance with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act of 1970 as amended (42 U.S.C. 1857b, et seq.). Suspected violations shall be reported by the State agency in writing to the regional office of the United States Environmental Protection Agency, with a copy to the Commissioner. (OMB Circular No. A-102, Attachment O.) State agencies shall observe their regular requirements and practices with respect to bonding and insurance. No additional bonding and insurance requirements will be imposed, including fidelity bonds, except as provided in §§ 100b.121 and 100b.122. (OMB Circular No. A-102, Attachment B.) improvement. A State agency which receives a grant which requires contracting for construction or facility improvement (including any grant which provides for alterations or renovations of real property) shall follow its own requirements and practices relating to bid guarantees, performance bonds, and payment bonds except for contracts exceeding $100,000. For contracts exceeding $100,000, the minimum requirements shall be as follows: (a) 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. (b) A performance bond on the part of the contractor for 100 percent of the contract price. A performance bond is one |