vices or reimbursement programs or projects;

(j) The extent to which community resources will be utilized by the project;

(k) The extent to which the center will provide preventive health services so as to maintain and improve the health status of the population served; and

(1) The extent to which center operations will emphasize direct health services, efficiency of operations and sound financial management.

Subpart D-Grants for Operating Community Health Projects

§ 51c.401 Applicability.

The regulations of this subpart, in addition to the regulations of Subpart A are applicable to grants awarded pursuant to section 330(d)(1)(B) of the Act for the costs of operation of projects which provide health services to medically underserved populations.

§ 51c.402 Application.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of § 51c.104 of Subpart A, contain information sufficient to enable the Secretary to determine that the project for which the grant is sought will meet the requirements of § 51c.403 of this subpart.

§ 51c.403 Project elements.

A project for the operation of a community health project supported under this subpart must:

(a) Meet all of the requirements of § 51c.303 of this part except for paragraph (h).

(b) Provide those services enumerated in §51c.102(c)(1) of this part which the Secretary determines to be feasible and desirable and which are specified in the grant award.

(c) Establish a governing board meeting the requirements of § 51c.304 by the end of the period of support under section 330(d)(1)(B) of the Act and this subpart.

851c.404 Grant evaluation and award.

(a) Within the limits of funds determined by the Secretary to be available for such purpose, the Secretary may award grants under this subpart to applicants therefor which will, in his judgment, best promote the purposes of section 330(d)(1)(B) of the Act and the applicable regulations of this part, (1) Where the project meets the requirements of § 51c.403(a); and

(2) Taking into consideration the following:

(i) The degree to which the project would provide the services enumerated in § 51c.102(c)(1) and the feasibility of its providing all of such enumerated services by the end of the period of support under section 330(d)(1)(B) of the Act and this subpart;

(ii) Whether the project will have a governing board meeting the requirements of § 51c.304 by the end of the period of support under section 330(d)(1)(B) of the Act and this subpart;

(iii) The degree to which the applicant intends to integrate services supported by a grant under this subpart with health services provided under other Federally assisted health service or reimbursement programs or projects;

(iv) The need of the population to be served for the services to be provided;

(v) The potential of the project for the development of new and effective methods for health services delivery and management;

(vi) The soundness of the fiscal plan for assuring effective utilization of grant funds and maximizing non-grant revenue;

(vii) The administrative and management capacity of the applicant; and

(viii) The extent to which community resources will be utilized in the project.

(b) The Secretary may:

(1) Make no more than two grants for the same entity under section 330(d)(1)(B) of the Act;

(2) Not make any grant under section 330(d)(1)(B) to an entity which, for the same project, has been awarded more than one grant under section 330(c) of the Act;

(3) Not make a grant under section 330(d)(1)(B) to an entity which has

been awarded a grant under section 330(d)(1)(A) of the Act.

Subpart E-Acquisition and Modern

ization of Existing Buildings

SOURCE: 41 FR 57000, Dec. 30, 1976, unless otherwise noted.

§ 51c.501 Applicability.

The regulations of this subpart, in addition to the regulations of the other applicable subparts of this part, are applicable to grants under section 330 of the Act for project costs which include the cost of acquisition and/or modernization of existing buildings (including the cost of amortizing the principal of, and paying the interest on, loans).

§ 51c.502 Definitions.

As used in this subpart:

(a) "Equipment" means discrete items of property which are necessary for the functioning of the project with respect to which the grant is made, but does not include items which have an expected service life of one year or less or items consumed or expended in use, such as glassware, chemicals, fuel, drugs, paper, and disposable household items.

(b) "Existing building" means a completed or substantially completed structure and the realty on which it is located.

(c) "Modernization” means the alteration, repair, remodeling and/or renovation of a building (including the initial equipment thereof) which, when completed, will render the building suitable for use by the project for which the grant is made. It includes onsite improvements to the building's site which are essential to the use of the building for the project.

§ 51c.503 Application.

(a) General requirements. An application for a grant under this part for a project under Subparts B, C, or D which includes the acquisition and/or modernization of an existing building must include the following:

(1) A legal description of the site and a drawing showing the location of the building;

(2) A description of the architectural, structural, and other pertinent characteristics of the building sufficient to show that it is or that it will be, after alteration and renovation or after modernization, suitable for use by the project;

(3) A detailed estimate of the cost of the proposed acquisition and/or modernization;

(4) A description of, and copies of any relevant documents concerning, any existing or proposed financing arrangements for the acquisition and/or modernization;

(5) The proposed schedule for acquisition and/or modernization and occupancy;

(6) An assessment of the environmental impact of the proposed acquisition and/or modernization as called for by section 102(2)(c) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(c)) and such information as may be necessary to comply with the National Historic Preservation Act of 1966 (16 U.S.C. 470(f));

(7) Reasonable assurances that—

(i) The applicant has or will obtain a fee simple or such other estate or interest in the site, including necessary easements and rights-of-way, sufficient to assure for a period of not less than 20 years (in the case of interim facilities, for the period constituting the estimated useful life of such facilities) undisturbed use and possession for the purpose of the operation of the project;

(ii) The building will be used for the purposes for which the grant is made;

(iii) The building complies, or after alteration and renovation or after modernization will comply, with applicable State and local codes and with:

(A) "American National Standard Specifications for Making Buildings and Facilities Accessible to, and Usable by, the Physically Handicapped" Number ANSI A117.1-1961 (R 1971), as modified by other standards prescribed by the Secretary or the Administrator of the General Services Administration. The applicant shall be responsible for conducting inspections to insure compliance with the specifications;

(B) The applicable standards set forth in Life Safety Code 1973, NFPA

No. 101, which is hereby incorporated by reference and made a part hereof. Copies of such document are available for examination at the Department's and Regional Offices' Information Centers listed in 45 CFR 5.31 and may also be obtained from the National Fire Protection Association, 470 Atlantic Avenue, Boston, MA 02210 for $3.00 per copy.

(iv) In the case of a public applicant with an approved project which involves the displacement of persons or businesses on or after January 2, 1971, whose real property has or will be taken, the applicant will comply with the provisions of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Pub. L. 91-646) and the applicable regulations issued thereunder (45 CFR Part 15);

(v) Sufficient funds will be available to meet any portion of the cost of acquiring and/or modernizing the building not borne by the grant under this part;

(vi) Sufficient funds will be available after acquisition and/or modernization of the building for effective use of the building for the purposes of the project;

(vii) The applicable requirements of the Flood Protection Act of 1973 have been met;

(8) Such other information as the Secretary may reasonably require.

(b) Requirement for acquisition grants. Except for a grant solely for amortization of principal and payment of interest on an existing loan, an application for a grant for a project which includes the acquisition of an existing building must include, in addition to the requirements of paragraph (a) of this section, evidence satisfactory to the Secretary that the applicant has explored other alternatives to the proposed acquisition (such as leasing facilities or acquiring other facilities in the project's catchment area) and that the proposed acquisition constitutes the soundest alternative from a financial and program standpoint.

(c) Requirements for modernization grants. In addition to the requirements of paragraph (a) of this section, an application for a grant for a project which includes modernization of an

existing building must include the following:

(1) Plans and specifications for the proposed modernization which conform to the standards specified in § 51c.503(a)(7)(iii);

(2) Reasonable assurance that any laborer or mechanic employed by any contractor or subcontractor in the performance of work on the modernization project will be paid wages at rates not less than those prevailing on similar work in the locality as determined by the Secretary of Labor under the Davis-Bacon Act (40 U.S.C. 276a et seq.) and will receive compensation at a rate not less than one and one-half times his basic rate of pay for all hours worked in any workweek in excess of 8 hours in any calendar day; and

(3) Copies of any construction and materials contracts already entered into for the proposed modernization. § 51c.504 Project elements.

(a) General requirements. A grantee which has received a grant under section 330 of the Act for a project which includes the acquisition and/or modernization of an existing building must:

(1) Assurances. Comply with the assurances provided pursuant to this subpart.

(2) Approval of estimated cost. Not enter into any contract for the acquisition and/or modernization funded under this subpart where the cost of such acquisition and/or modernization exceeds the estimates in the application, without the prior approval of the Secretary.

(3) Non-default. Make every effort to prevent any default on any loan secured by the building and, in the event of a default, promptly notify the Secretary of the default and make every effort on a timely basis to cure the default.

(b) Requirements for acquisition grants. In addition to the requirements of paragraph (a) of this section, a grantee which has received a grant under section 330 of the Act for a project which includes the acquisition of an existing building must:

(1) Bona-fide sale. Acquire or, in the case of a grant solely for amortization

of principal and payment of interest on an existing loan, have acquired the existing building pursuant to a bonafide sale involving an actual cost to the applicant and resulting in additional or improved facilities for the purposes of the project.

set

(2) Standards of construction and equipment. Except in the case of a grant solely for amortization of principal and payment of interest on an existing loan, obtain a determination by the Secretary that the facility conforms (or upon completion of any necessary alteration and renovation or modernization will conform) to the standards forth in § 51c.503(a)(7)(iii) of this subpart before entering into a final or unconditional contract for the acquisition. Where the Secretary finds that exceptions to or modifications of any such standards would be consistent with the purposes of the Act and of the program, he may authorize such exceptions or modifications.

(3) Financing. Where the grantee will obtain a loan secured by the building in order to acquire the building, obtain such financing at the lowest current rate prevailing in the area for comparable loans on comparable facilities.

(c) Requirements for modernization grants. In addition to the requirements of paragraph (a) of this section, a grantee which has received a grant under section 330 of the Act for a project which includes the modernization of an existing building must:

(1) Costs in excess of approved costs. Finance all costs in excess of the estimated costs approved in the application and submit to the Secretary for prior approval any changes that substantially alter the scope of the function, utilities, or safety of the facility.

(2) Competitive bids. (i) Obtain the approval of the Secretary before the project is advertised or placed on the market for bidding; such approval must include a determination by the Secretary that the final plans and specifications conform to the standards set forth in § 51c.503(a)(7)(iii) of these regulations.

(ii) Except as otherwise provided by State or local law, contract for construction (including the purchase and

installation of built-in equipment) on a lump sum fixed-price basis, and award contracts on the basis of competitive bidding obtained by public advertising with award of the contracts to the lowest responsive and responsible bidders. The provision for exceptions based on State and local law shall not be invoked to give local contractors or suppliers a percentage preference over non-local contractors bidding for the same contract. Such practices are precluded by this paragraph.

(3) Construction contracts. (i) Include the following conditions and provisions in all construction contracts for the modernization project:

(A) The provisions set forth in "DHEW Requirements for Federally Assisted Construction Contracts Regarding Labor Standards and Equal Employment Opportunities," Form DHEW 514 (rev. 7/76) (issued by the Office of Grants Administration Policy, U.S. Department of Health, Education, and Welfare) pertaining to the Davis-Bacon Act, the Contract Work Hours Standards Act, and the Copeland Act (Anti-Kickback) Regulations, except in the case of contracts in the amount of $2,000 or less; and pertaining to Executive Order 11246, 30 FR 12319 (September 24, 1965), as amended, relating to nondiscrimination in construction contract employment, except in the case of contracts in the amount of $10,000 or less;

(B) That the contractor shall furnish performance and payment bonds each of which shall be in the full amount of the contract price, and shall maintain, during the life of the contract, adequate fire, workmen's compensation, public liability, and property damage insurance: Provided, however, That in the case of a State or local unit of government which enters into a construction contract of less than $100,000, State or local provisions with respect to performance and payment bonds shall be deemed to meet the requirements of this paragraph; and

(C) That the Secretary shall have access at all reasonable times to work wherever it is in preparation or progress, and the contractor shall provide proper facilities for such access and inspection.

(ii) Executive Order 11246. Comply with the requirements of Executive Order 11246, 30 FR 12319 (September 24, 1965) as amended, relating to nondiscrimination in construction contract employment, and the applicable rules, regulations, and procedures prescribed pursuant thereto.

(4) Modernization supervision. Provide and maintain competent and adequate architectural or engineering supervision and inspection at the modernization site to insure that the completed work conforms with the plans and specifications.

(5) Completion responsibility. Complete the modernization in accordance with the grant application and the approved plans and specifications.

(6) Progress reports. Furnish progress reports and such other information concerning the modernization as the Secretary may require.

(d) The Secretary may at any time approve exceptions to the provisions of this section where he finds that such exceptions are not inconsistent with section 330 of the Act, other requirements of law, or the purposes of the program.

§ 51c.505 Determination of cost.

The cost of acquisition and/or modernization of existing buildings for which funds may be granted under this part will be determined by the Secretary, utilizing such documentation submitted by the applicant as the Secretary may prescribe (including the reports of such real estate appraisers as the Secretary may approve) and other relevant factors, taking into consideration only that portion of the existing building necessary for the operation of the approved project.

§ 51c.506 Use of grant funds.

Grant funds may be used to amortize the principal of or pay interest on a loan or mortgage on an existing building acquired under this part, including a building purchased by a grantee prior to the promulgation of this part, but only if the building is being used for the purposes of section 330 and complies with the applicable provisions of this subpart and only to the extent the Secretary finds such

principal amounts and interest rates to be reasonable.

§ 51c.507 Facility which has previously received Federal grant.

No grant for the acquisition of a facility which has previously received a Federal grant for construction, acquisition, or equipment shall serve either to reduce or restrict the liability of the applicant or any other transferor or transferee from any obligation of accountability imposed by the Federal Government by reason of such prior grant.

NOTE.-Incorporation by reference provision approved by the Director of the FEDERAL REGISTER on September 15, 1976 and is on file in the FEDERAL REGISTER library.