time during the progress of the work on the contract it becomes necessary to deliver any item or items and materials upon which the Government has a lien as aforesaid to a third person, the Contractor shall notify such third person of the lien herein provided and shall obtain from such third person a receipt, in duplicate, acknowledging, inter alia the existence of such lien. A copy of each receipt shall be delivered by the Contractor to the Contracting Officer. If this contract is terminated in whole or in part and the Contractor is authorized to sell or retain termination inventory acquired for or allocated to this contract, such sale or retention shall be made only if approved by the Contracting Officer, which approval shall constitute a release of the Government's lien hereunder to the extent that such termination inventory is sold or retained, and to the extent that the proceeds of the sale, or the credit allowed for such retention on the Contractor's termination claim, is applied in reduction of advance payments then outstanding hereunder.

(1) Insurance. The Contractor represents and warrants that he is now maintaining with responsible insurance carriers, (1) insurance upon his own plant and equipment against fire and other hazards to the extent that like properties are usually insured by others operating plants and properties of similar character in the same general locality; (2) adequate insurance against liability on account of damage to persons or property; and (3) adequate insurance under all applicable workmen's compensation laws. The Contractor agrees that, until work under this contract has been completed and all advance payments made hereunder have been liquidated, he will (i) maintain such insurance; (ii) maintain adequate insurance upon any materials, parts, assemblies, subassemblies, supplies, equipment and other property acquired for or allocable to this contract and subject to the Government lien hereunder; and (iii) furnish such certificates with respect to his insurance as the Administering Office may from time to time require.

(j) Prohibition against assignment. Notwithstanding any other provision of this contract, the Contractor shall not

transfer, pledge, or otherwise assign this contract, or any interest therein, or any claim arising thereunder, to any party or parties, bank, trust company, or other financing institution.

(k) Designations and determinations(1) Amount. The amount of advance payments at any time outstanding hereunder shall not exceed $

(2) Depository. The bank designated for the deposit of payments made hereunder shall be:

(3) Interest charge. No interest shall be charged for advance payments made hereunder. The Contractor shall charge interest at the rate of 6 percent per annum on subadvances or down payments to subcontractors, and such interest will be credited to the account of the Government. However, interest need not be charged on subadvances on nonprofit subcontracts with nonprofit educational or research institutions for experimental, research or development work.

(4) Administering Office. The office administering advance payments shall be the office designated as having responsibility for awarding the contract.

(1) Other security. The terms of this contract shall be considered adequate security for advance payments hereunder, except that if at any time the administering Office deems the security furnished by the Contractor to be inadequate, the Contractor shall furnish such additional security as may be satisfactory to the Administering Office, to the extent that such additional security is available.

[40 FR 53147, Nov. 14, 1975; 44 FR 69933, Dec. 5, 1979]

§36.227 Recordkeeping, reporting and audit.

(a) The standard clauses regarding "Accounts, Audit, and Records" and "Examination of Records" as set forth in 41 CFR 3-4.60 apply to contracts awarded under the Act. Further, Recordkeeping will be in accordance with uniform Administrative Standards.

(b) In addition, where Federal financial assistance is involved in the contract effort, the following clause, which is also set forth in 41 CFR 34.60, will be incorporated as a special provision of such contracts:

REPORTS TO THE INDIAN PEOPLE

The contractor, as a recipient of Federal flnancial assistance, shall make reports and information available to the Indian people served or represented by the contractor. Such reports will reflect how the Federal assistance funds were utilized to the benefit of the Indian people served or represented as follows: (insert specific reporting requirements formats and method of distribution to the Indian people as may be prescribed in the scope of the contract and the Uniform Administrative Standards).

(c) Annual reporting. (1) For each fiscal year during which a tribal organization receives or expends funds pursuant to a contract under this subpart, the tribe which requested the contract must submit a report to the Area Director. The report shall include, but need not be limited to, an accounting of the amounts and purposes for which the contract funds were expended and information on the conduct of the program or services involved. The report shall include any other information requested by the Area Director and shall be submitted as follows:

(i) When the contract is with the governing body of an Indian tribe, the tribe shall submit the report to the Area Director.

(ii) When the contract is with a tribal organization other than the governing body of the tribe, the tribe has the option of having the tribal organization prepare the report and submit it to the tribe for review and approval before the tribe submits it to the Area Director.

(iii) When the contract benefits more than one tribe, the tribal organization shall prepare and submit the report to each of the tribes benefiting under the contract. Each tribe shall endorse the report before submitting it to the Area Director.

(2) The annual report shall be submitted to the Area Director within 60 days of the end of the fiscal year in which the contract was performed. However, the period for submitting the report may be extended if there is just cause for such extension.

(3) In addition to the yearly reporting requirement given in paragraphs (a) and (b) of this section, the tribal contractor shall furnish other reports required by the Secretary.

Section 6 of Pub. L. 93-638, 25 U.S.C. 450(d) provides:

Whoever, being an officer, director, agent, or employee of, or connected in any capacity with, any recipient of a contract or subcontract pursuant to this Act or the Act of April 16, 1934 (48 Stat. 596), as amended, embezzles, willfully misapplies, steals, or obtains by fraud any of the money, funds, assets, or property which are the subject of such a contract, or subcontract, shall be fined not more than $10,000 or imprisoned for not more than two years, or both, but if the amount so embezzled, willfully misapplied, stolen, or by fraud does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both.

$36.230 Contract revisions or amendments.

(a) Any contract made under this subpart may be revised or amended as deemed necessary to carry out the purposes of the program, project, or function being contracted. Those changes initiated by the Government shall be subject to the applicable contract Change Clauses prescribed in 41 CFR 34.6013 and 3-4.6014.

(b) However, a tribal contractor may make a written request for a revision or amendment of a contract to the Contracting Officer. Such requests will

be treated in the same manner as initial Self-Determination Proposals and evaluated in accordance with the criteria specified in §36.208 of this subpart. If the contracting officer declines revision or amendment of the contract as requested, he shall notify the tribal organization in writing within 30 days after receiving the request. Thereafter, an appeal to the Contracting Officer's declination to amend the contract will follow the same processing and procedures outlined in §36.214 of this subpart.

§ 36.231 Retrocession of contract programs.

(a) Whenever an Indian tribe requests retrocession for any contract or portion thereof entered into under this Subpart, retrocession shall be in accordance with the clause titled "Retrocession" as set forth in 41 CFR 34.6013 and 3-4.6014, and shall be effective upon a date specified by the Contracting Officer but no later than 120 days after the date of the request from the tribe, except when the tribe and the Contracting Officer mutually agree on a later date.

(b) Immediately after a request for retrocession, representatives of the tribe and the Contracting Officer shall meet and take the following actions:

(1) Mutually agree on a plan for orderly transfer of responsibilities.

(2) Mutually agree on a plan for inventorying materials and supplies on hand.

(3) Establish an accounting of funds, current and anticipated obligations, and costs of operation until the retrocession date.

(4) Identify all records relating to the contract and to the contracted function.

(c) On the date of retrocession, the tribal contractor will deliver to the Contracting Officer all property, materials, supplies and records of whatever nature which have been identified as necessary for the continuation of the program, project or function.

(d) Within 30 calendar days after retrocession, the tribe will furnish the Contracting Officer with a report including but not limited to an accounting of the amounts and purposes for which Federal funds were expended, a

description and evaluation of program accomplishments, and reasons why retrocession was requested.

(e) Retrocession of a contract by an Indian tribe shall be without prejudice to:

(1) Any other contract to which it is a party.

(2) Any other contracts it may request.

(3) Any future request to contract for the programs or services covered by the retroceded contract.

(f) Tribal assumption of retroceded contracts. Whenever an Indian tribe chooses to retrocede a contract operated by a tribal organization other than the tribal governing body, the tribal governing body may request to contract for the program. In such a case, the tribal governing body shall submit a contract proposal pursuant to this subpart.

§ 36.232 Contractor assistance.

To the extent practicable, the Director, Indian Health Service, shall, at the request of a tribal organization, provide technical assistance to the contractor in attempting to resolve problems or deficiencies in the performance of the contract and to assist the contractor in taking such corrective action as may be prescribed pursuant to §36.233(a).

$36.233 Assumption and reassumption of contract programs.

(a) When the Director or his delegate determines that the performance of a contractor under these regulations involves (1) the violation of the rights or endangerment of the health, safety, or welfare or any persons, or (2) gross negligence or the mismanagement in the handling or use of funds under the contract, he will, in writing, notify the contractor of such determination and will request that the contractor take such corrective action within such period of time as the Director or his delegate may prescribe.

(b) When the Director or his delegate determines that a contractor has not taken corrective action (as prescribed by him under paragraph (a) of this section) to his satisfaction, he may, after the contractor has been provided an opportunity for a hearing in accordance

with paragraph (c) of this section, rescind the contract in whole or in part and, if he deems it appropriate, assume or resume control or operation of the program, activity, or service involved.

(c)(1) When the Director or his delegate has made a determination described in paragraph (b) of this section, he shall in writing notify the contractor of such determination and of the contractor's right to request a review of such determination and of the determination described in paragraph (a) of this section. Such notification by the Director or his delegate shall set forth the reasons for the determination in sufficient detail to enable the contractor to respond and shall inform the contractor of its right to a hearing on the record before a Contract Appeals Board described in paragraph (d) of this section. Upon the request of the contractor for a hearing, the Board, established pursuant to paragraph (d) of this section shall in writing within 10 days of the establishment notify the contractor of the time, place and date of the hearing which will be held not later than 45 days after the request for a hearing.

(2) Where the Director or his delegate determines that a contractor's performance under a contract awarded under this subpart poses an immediate threat to the safety of any person, he may immediately rescind the contract in whole or in part and, if he deems it appropriate, assume or resume control or operation of the program, activity, or service involved. Upon such a decision he will immediately notify the contractor of such action and the basis therefor; and offer the contractor an opportunity for a hearing on the record before the Contract Appeals Board established pursuant to paragraph (d) of this section to be held within 10 days of each action.

(d)(1) The Contract Appeals Board shall be composed of 3 persons ap pointed by the Director, Indian Health Service. Such persons may not be selected from the immediate office of any person participating in the determinations at issue. The Board shall afford the contractor the right:

(1) To notice of the issues to be considered;

(ii) To be represented by counsel;

(iii) To present witnesses on contractor's behalf;

(iv) To cross-examine other witnesses either orally or through written interrogatories; and

(v) To compel the appearance of Indian Health Service personnel or to take depositions of such persons at reasonable times and places.

(2) The Contracts Appeals Board shall make an initial written decision which shall become final with 20 days unless the Director, Indian Health Service or his representative modifies or reverses the decision. Any such decision by the Director of the Indian Health Service or his representative be in writing, shall be specific as to the reasons for such decision, and shall be considered final.

(3) Where Board is considering issues arising under paragraph (c)(2) of this section, the Board shall within 25 days after the conclusion of the hearing, notify all parties in writing of its decision, which shall be considered final.

(e) In any case where the officer has rescinded a contract under paragraphs (b) or (d) of this section, he may decline to enter into a new contract agreement with the contractor until such time as he is satisfied that the basis for the recission has been corrected.

Nothing in this section shall be construed as contravening the Occupational Safety and Health Act of 1970 (84 Stat. 1590), as amended (29 U.S.C. 651).

§36.234 Operation of retroceded or reassumed contracts.

(a) The IHS shall endeavor to provide to the tribe(s) and Indians served by a retroceded or reassumed contract not less than the same quantity and quality of service it would have provided if there had been no contract.

(b) The IHS shall endeavor to provide to the tribe(s) and Indians served by a retroceded or reassumed contract not less than the same quantity and quality of permanent and temporary personnel that meet the U.S. Civil Service qualifications, it would have provided if there has been no contract.

(c) IHS officials cannot decline to accept a retroceded contract or to reassume a contract because they are unable to provide the quality and quan