tion loans and interest earned on revolving funds. Receipts derived from the operation of a public work or facility, the construction of which was assisted under this part (e.g., admission fees paid by persons using recreational facilities constructed with grant funds, and service fees paid by households using a water facility con#tructed with grant funds) do not contitute program income. (d) Recipients shall record the reeipt and expenditure of revenues reated to the program (such as taxes, pecial assessments, levies, fines, etc.) s a part of the grant program transctions. (e) The disposition of program ncome received subsequent to the loseout of a grant shall be governed y the provisions of § 571.512(c). 571.506 Force account construction. (a) The utilization of Tribal work rces for construction or renovation etivities performed as part of the acvities funded under this part shall be pproved by HUD prior to the start of -oject implementation. (b) In its request for an approval of rce account construction or renovaon, a grantee shall provide the folwing: 1) Documentation to indicate that has carried out or can carry out sucssfully a project of this size or magcude; 2) Documentation to indicate that has obtained or can obtain adequate pervision for the workers to be utied; 3) Information showing that the rkers to be utilized are listed on the bal payroll and are employed ditly by an arm, department or other ernmental instrumentality of the be. c) Any and all excess funds derived m the force account construction or ovation activities shall accrue to grantee and may be reprommed for other activities eligible ler this part. 1) Insurance coverage for force acnt workers and activities shall, ere applicable, include workman's pensation, public liability, proper ty damage, builder's risk and vehicular liability. (e) The grantee shall specify and apply reasonable construction or renovation standards to work performed under the force account. (f) The contracting and procurement standards set forth in § 571.508 do not apply to activities undertaken by force account, with the exception of material equipment and supply procurements for which those standards shall apply. § 571.507 Indian preference requirements. (a) Activities funded under this part are subject to the following Indian Preferences requirements: (1) Preference and opportunities for training and employment in connection with the administration of these activities shall be given to Indians and Alaska Natives; (2) All prospective contractors shall be required to submit, as part of their bid submissions, a plan for the maximum utilization of Indian and Alaska Native workers; (3) Preference in the award of contracts and subcontracts in connection with the administration of these activities shall be given to Indians and Alaskan Native organizations and economic enterprises. The grantee shall give preference to an Indian or Alaska Native-owned firm so long as the bid by this firm does not exceed the lowest bid submitted by more than 10 percent. All preferences shall be publicly announced in the bid announcements. Any contractor claiming Indian preference shall provide evidence, as required by the grantee to support its claim. § 571.508 Procurement and contracting standards. The standards contained in this section are identical to OMB Procurement and contracting standards except for two additions: the Indian preference requirements and the Secretarial waiver of Davis-Bacon requirements. The standards do not relieve the grantee of the contractual responsibilities arising from its contracts. The grantee is the responsible authority, without recourse to HUD, regard ll contractual nical requirements for the materials, (3) Positive efforts shall be made by shall maintain a of conduct which rformance of its ofor agents in con1 expending HUD Grantee's officers, nts shall neither sogratuities, favors or tary value from conextent permissible by ulations, such stande for penalties, sancisciplinary actions to olations of such standthe grantee's officers, ents or by contractors rement transactions reether negotiated or adithout regard to dollar conducted in a manner de maximum open and on. The grantee should ganizational conflicts of noncompetitive practices actors which may restrict competition or otherwise e. (4) The type of procuring instruments used (i.e., fixed price contracts, cost reimbursable contracts, etc.) shall be appropriate for the particular procurement and for promoting the best interests of the grant program involved. The "cost-plus-a-percentage-ofcost" method of contracting shall not be used. Formal advertising, with adequate purchase description, sealed bids, and public openings shall be the required method of procurement unless negotiation pursuant to the provisions of the following paragraph is necessary to accomplish sound procurement. However, procurements of $10,000 or less need not be advertised unless otherwise required by local law or regulations. Where such advertised bids are obtained, the awards shall be made to the responsible bidder whose bid is responsive to the invitation and is most advantageous to the grantee, price, Indian preference, and other factors considered. (Factors such as discounts, transportation costs, and taxes may be considered in determining the lowest bid). Invitations for bids shall clearly set forth all requirements which the bidder must fulfill in order for his bid to be evaluated by the grantee. Any or all bids may be rejected when it is in the grantee's interest to do so, and such rejections are in accordance with applicable laws, rules and regulations. Procurements may be negotiated if it is impracticable and infeasible to use formal advertising. antee shall establish prorocedures which provide inimum, the following re osed procurement actions itations for bids or requests Generally procurements may be nego- (i) The public exigency will nct permit the delay incident to advertising; (ii) 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 HUD for rior approval); (iii) The aggregate amount involved (iv) The contract is for personal or rofessional services, or for any service O be rendered by a university, college, r other educational institution; (v) The material or services are to be rocured and used outside the limits E the United States and its possesons; (vi) No acceptable bids have been re- (vii) The purchases are for highly research work for supplies purased for authorized resale and for chnical or specialized supplies reiring substantial initial investment - manufacture; viii) Otherwise authorized by law, es or regulations. Notwithstanding e existence of circumstances justify negotiation, competition shall be ained to the maximum extent pracable. d) Contracts shall be made only h responsible contractors who poss the potential ability to perform cessfully under the terms and conons of a proposed procurement. nsideration shall be given to such cters as contractor integrity, record past performance, financial and nical resources, or accessibility to er necessary resources. > Procurement records or files for chase in amounts in excess of 000 shall provide at least the fol_ng pertinent information: Justifion for the use of negotiation in lieu of advertising, contractor selec tion, and the basis for the cost or pric negotiated. (2) A system for contract administra tion shall be maintained to assure con tractor conformance with terms, con ditions, and specifications of the con tract or order, and to assure adequate and timely follow-up of all purchases (e) The grantee shall include, in ad dition to provisions to define a sound and complete agreement, the following provisions in all contracts and subgrants: (1) Contracts shall contain such 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 remedial actions as appropriate. (2) All contracts in excess of $10,000 shall contain suitable provisions for termination by the grantee including the manner by which they will be effected and the basis for settlement. In addition, such contracts shall describe conditions under which the contracts may be terminated because of circumstances beyond the control of the contractors. (3) In all contracts for construction of facility improvements awarded in excess of $10,000, grantee shall observe the bonding requirements set forth in these regulations § 571.509(j)(11). in (4) All construction contracts awarded by recipients and their contractors or subgrantees having a value of more than $10,000 shall contain a provision requiring compliance with Executive ployment Opportunity", as amended Order No. 11246, entitled "Equal Emby Executive Order No. 11375 and supplemented in Department of Labor Regulations (41 CFR Part 60). However, this Equal Opportunity provision shall apply only to the extent that it is not inconsistent with the Indian Preference requirements set forth in § 571.507. (5) All contracts and subgrants shall contain provisions for compliance with the Copeland "Anti-Kick-Back" Act (18 U.S.C. 874) as supplemented in Department of Labor Regulations (29 CFR Part 3). This Act provides that ntee shall be ng, by any loyed in the , or repair of p any part of ich he is othgrantee shall reported viola ncy. week. Section 107 of the Contract (g) All negotiated contracts (except the Secretary, 303(b) of these uction contracts and subgrantees all include a prowith the Davis. 276a to a-7) as partment of Labor Part 5). Contracd to pay wages to nics at a rate not um wages specified ation made by the r. In addition, conquired to pay wages n once a week. The e a copy of the curwage determination partment of Labor in and the award of a conditioned upon the e wage determination. ll report all suspected tions to HUD. plicable, all contracts ntees and subgrantees 2,000 for construction in excess of $2,500 for s which involve the emmechanics or laborers a provision for complitions 103 and 107 of the ork Hours and Safety et (40 U.S.C. 327-330) as d by Department of Labor (29 CFR Part 5), Under (h) Contracts and subgrants of amounts in excess of $100,000 shall contain a provision which requires the recipient to agree to comply with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act of 1970 (42 U.S.C. 1857 et seq.). Violations shall be reported to HUD and the regional office of the Environmental Protection Agency. § 571.509 Bonding and insurance require- A Tribe receiving a grant under this section for an activity which requires contracting for construction or facility improvement shall follow its own requirements 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: of the Contract Work Safety Standards Act, each s required to compute the very mechanic and laborer s of a standard work day of d a standard work week of Work in excess of the standlay or work week is permissided, That the worker is comat a rate of no less than 1 1⁄2 e basic rate for pay for all orked in excess of 8 hours in ndar day or 40 hours in a work (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 Did as assurance that the bidder wil!, upon acceptance of his bid, execute such contractual documents as may be -equired within the time specified. (b) A performance bond or other se-urity acceptable to HUD, such as a Letter of Credit or escrow, for an mount determined by HUD to be adeuate for the protection of the intersts of the federal government. (c) A payment bond or other securiy acceptable to HUD, such as a Letter f Credit or escrow, for an amount deermined by HUD to be adequate for ne protection of the interests of the ederal government. tinent to the grant program shall b retained by the recipient for a perio of three years from the date of the submission of the performance repor except as follows: (a) Records that are the subject o audit findings shall be retained for three years or until such audit find ings have been resolved, whichever is later. (b) Records for nonexpended property which was acquired with Federal grant funds shall be retained for three years after the final disposition. § 571.512 Grant close-out procedures. (a) Applicability. The policies and procedures contained in this section apply to the closeout of grants made pursuant to this part. Grants made to Indian Tribes in Fiscal Years 1975, 1976 and 1977, pursuant to Subpart E of Part 570 (Discretionary Grants) shall be closed out in accordance with at 24 CFR 570.512. the policies and procedures set forth (b) Initiation of Closeout. HUD will advise the recipient to initiate closeout procedures when HUD determines, in consultation with the recipient, that there are no impediments to closeout and that the following criteria have been met or will be shortly: (1) All costs to be paid with grant funds have been incurred, with the exception of (i) closeout costs such as payment for the final audit; and (ii) any unsettled third-party claims against the recipient. Costs are incurred when goods and services are received and contract work is performed. With respect to activities (such as property rehabilitation) which are carried out by means of revolving loan accounts, loan guarantee accounts, or similar mechanisms, costs shall be confor such activities are drawn from the sidered as incurred at the time funds used for the purposes described in the recipient's letter of credit and initially approved Community Development Program. (2) The recipient has submitted a grantee performance report. If a performance report was previously submitted with a subsequent grant application, as required by § 571.702, it shall be updated and resubmitted upon |