(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 recipient'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 recipient's matching or cost sharing when such contributions:

(1) Are identifiable from the recipient'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 recipient, 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.) § 100a.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 recipient. In cases where the kinds of skills required for the federally assisted activities are not found in the other activities of the recipient, rates used should be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved.

(3) Volunteers employed by other organizations. When an employer other than the recipient 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 recipient 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 recipient 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 appraiser (i.e., a private realty firm or a General Services Administration representative) and certified by the responsible official of the recipient as a precondition to allowability for matching or cost sharing purposes.

(c) Valuation of other in-kind contributions by third parties. Other necessary in-kind contributions made by third parties specifically for and in direct benefit to the project 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.) § 100a.94 Supporting records for in

kind contributions from third parties. The following requirements pertain to the recipient's supporting records for inkind contributions from third parties:

(a) The extent of volunteer services must be supported by the same methods used by the recipient 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
§ 100a.100 Scope of subpart.

This subpart provides standards for use by recipients in establishing procedures for the procurement of supplies, equipment, construction, and 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.) § 100a.101 General.

(a) Recipients 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 recipient of the responsibilities arising under its contracts. The recipient 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 or contract. 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.) § 100a.102 Code of conduct.

The recipient 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 recipient'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, or if the recipient is not a State or local government to the extent that the recipient determines that it has the legal and practical capacity for enforcement, such standards shall provide for appropriate penalties, sanctions, or other disciplinary actions to be applied for violations of such standards either by the recipients' officers, employees, or agents, or by contractors of their agents. (OMB Circular No. A-102, Attachment O.) § 100a.103 Free competition.

All procurement transactions of the recipient, 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 recipient 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.) § 100a.104 Procedural requirements.

The recipient shall establish procurement procedures which provide for, as a minimum, the following:

(a) Proposed procurement actions shall be reviewed by appropriate officials of the recipient 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 recipient 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 or contracts.

(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 project or program involved. The "costplus-a-percentage-of-cost" method of contracting shall not be used.

(e) If the recipient is a State or local government, formal advertising, with adequate purchase description, sealed bids, and public openings shall be the required method of procurement unless negotiation pursuant to § 100a.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 by the State or local government:

(1) The awards shall be made to the responsible bidder whose bid is responsive to the invitation and is most advantageous to the State or local government, 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 or local government.

(3) Any or all bids may be rejected when it is in the State or local government's interest to do so, and such rejections are in accordance with applicable State or local law, rules, and regulations. (OMB Circular No. A-102, Attachment O.) § 100a.105 Negotiated procurements by State or local governments.

(a) Procurements may be negotiated by State or local government recipients if it is not practicable or feasible to use formal advertising. Generally, procurements may be negotiated 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 interchangeability of parts with existing equipment, for experimental, developmental or research work, for supplies purchased for authorized resale, and

for technical or specialized supplies requiring substantial initial investment for manufacture; 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.) § 100a.106 Contractor responsibility.

Contracts shall be made by recipients 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 technical resources, and accessibility to other necessary resources.

(OMB Circular No. A-102, Attachment O.) § 100a.107 Records for negotiated procurements by State or local govern

ments.

The procurement records or files of State or local government recipients for negotiated purchases in amounts in excess of $2,500 shall include the following pertinent information: justification for the use of negotiation in lieu of advertising, contractor selection, and the basis for the cost or price negotiated. Justification for the use of negotiation in lieu of advertising may be provided on a class basis or on an individual contract basis.

(OMB Circular No. A-102, Attachment O.) § 100a.108 Contract administration sys

tem.

A system for contract administration shall be maintained by the recipient to assure contractor compliance with terms, conditions, and specifications of the contract or order, and to assure adequate and timely follow up of all purchases. (OMB Circular No. A-102, Attachment O.) § 100a.109 Contract provisions.

(a) General. (1) The recipient shall include provisions to define a sound and complete agreement in all contracts and subcontracts which it awards when the contract or subcontract costs are to be borne as a direct charge in whole or in part by Federal funds.

(2) In awarding contracts and subcontracts, the recipient must comply with

the applicable requirements of paragraph (b) of this section.

(b) Contracts under grants and contracts. (1) If the recipient is a State or local government, its 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 or local government recipients in excess of $2,500 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 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 § 100a.477.

(5) Each contract of an amount in excess of $2,500 awarded by a recipient shall provide for compliance 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 recipient 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 recipient in writing to the local Internal Revenue Service field office with a copy to the Commissioner.

(6) Contracts 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 recipient in writing to the regional office of the United States Environmental Pro

(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 executed in connection with a contract to secure fulfillment of all the contractor's obligations under the contract.

(c) A payment bond on the part of the contractor for 100 percent of the contract price. A payment bond is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract.

(OMB Circular No. A-102, Attachment B.) § 100a.122 Loan guarantees.

Where in connection with a grant or contract, the Commissioner also guarantees the payment of money borrowed by the recipient, the Commissioner may, at his discretion, require adequate bond

ing and insurance if the bonding and insurance requirements of the recipient are not deemed to be sufficient to protect adequately the interests of the Federal Government.

(OMB Circular No. A-102, Attachment B.) Subpart K-Construction Requirements § 100a.155 Scope.

The provisions contained in this subpart apply to recipients of Federal financial assistance for construction under Federal programs under which construction is authorized by law. (20 U.S.C. 1221c(b)(1).) § 100a.156 Definition.

For the purposes of this subpart, the term "facilities" means one or more structures in one or more locations, constructed pursuant to this subpart. (20 U.S.C. 1221c(b)(1).)

§ 100a.157 Manner of construction.

Construction must be functional, undertaken in an economical manner, and not elaborate in design or extravagant in the use of materials in comparison with facilties of a similar type constructed in the State (or other applicable geographic area) within such period as may be designated by the Commission as appropriate for the purposes of this section. (20 U.S.C. 1221c (b)(1).)

§ 100a.158 Timeliness of work.

The recipient shall cause work on the project to be commenced within a reasonable time after receipt of notification from the Commissioner that funds have been awarded, and the project shall be prosecuted to completion with reasonable diligence.

(20 U.S.C. 1232c (b) (1).)

(a) Approval by the Commissioner of the final working drawings and specifications shall be obtained before the proposed construction is advertised or placed on the market for bidding.

(b) The construction shall go to final completion in accordance with the application and approved drawings and specifications.

(c) The recipient shall submit to the Commissioner for prior approval changes that materially alter the scope or costs of the project, use of space, or functional layout.

(20 U.S.C. 1221c(b) (1).)

(42 U.S.C. 2000d.)

§ 100a.161 Title to site.

The recipient shall have, or shall obtain, a fee simple or such other estate or interest in the site, including access thereto, as is sufficient to assure undisturbed use and possession of the facilities for not less than the useful life of the facilities, or 50 years, whichever is the greater.

(OMB Circular No. A-102, attachment N.) § 100a.164 Contracting.

(a) Except as otherwise provided by State or local law, all contracting for construction (including the purchase and installation of built-in equipment) shall be on a lump sum fixed-price basis; and, except as provided in paragraph (b) of this section, contracts shall be awarded pursuant to Subpart I of this part on the basis of competitive bidding with award of the contract to the lowest responsive and responsible bidder.

(b) If one or more items of construction are covered by an established alternative procedure for awarding contracts, consistent with State and local laws and regulations, which is approved by the Commissioner and is designed to assure construction in an economical manner consistent with sound business practice, such alternative procedure may

followed.

(20 U.S.C. 1221c(b)(1).) § 100a.168 Reports.

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