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Indian tribe; Provided, That such tribe or tribal organization shall require any subcontractor performing work under the contract to provide a performance bond in the amount and manner set forth in § 1-10.104-1 of this title.

(b) The clause to be included in construction contracts with Indian tribes and Indian organizations relative to performance bonds is set forth in § 14H-70.621.

§ 14H-70.804 Payment bonds.

(a) Payment bonds will not be required from an Indian tribe or Indian organization serving as a governmental instrumentality of an Indian tribe: However, such tribe or tribal organization shall require any subcontractor performing work under the contract to provide a payment bond in the amount and manner set forth in § 110.105-1 of this title.

(b) The clause to be included in construction contracts with Indian tribes and Indian organizations relative to payment bonds is set forth in § 14H70.621.

§ 14H-70.805 Liability insurance.

(a) This section prescribes policies and procedures with respect to the furnishing of liability insurance by Indian contractors in accordance with 25 CFR 271.45.

(b) Contracting offices shall assure themselves that all contracts with tribal organizations provide for the tribal organization to obtain general liability insurance and motor vehicle insurance. Each such contract shall further provide that the insurance carrier must be satisfactory to the contracting officer and that the contractor shall forward to the contracting officer a copy of the certificate of insurance as soon as such certificate is received from the insurance carrier.

§ 14H-70.806 Insurance coverage.

(a) The insurance provided by the contractor shall provide coverage to the contractor, the United States, their agents, and their employees within minimum amounts that are at least comparable to the minimum insurance coverage carried by other or

ganizations in the same general area performing similar activities.

(b) The insurance shall provide for a waiver by the insurance carrier of any right it may have to raise as a defense the tribe's sovereign immunity from suit when a claim is within the limits of the policy. Further, the insurance shall not empower the insurance carrier to waive or otherwise limit the tribe's sovereign immunity outside or beyond the coverage and limits of the policy of insurance.

§ 14H-70.807 Exceptions.

(a) In those cases where the contracting officer determines that the risk of death, personal injury or property damage under the contract is small and that the time and cost of procuring the insurance is great in relation to the risk, he may exempt such contracts from the requirements of this subpart.

(b) Some of the factors which the contracting officer shall consider in determining the magnitude of the risk involved are:

(1) The nature of the program contracted for.

(2) The number of persons involved in performing the contract.

(3) The contract period.

(4) The number of persons likely to come in contact with or be affected by the performance of the contract.

(5) The nature and value of any property which might be affected by the contract.

§ 14H-70.808 Motor vehicle insurance.

Notwithstanding the provisions of § 14H-70.807, any contract which requires or authorizes, either expressly or by implication, the use of motor vehicles must contain a provision requiring the tribal contractors to provide motor vehicle insurance, regardless of how small the risk may seem.

§ 14H-70.809 Insurance clause.

The clause contained in § 14H-70.611 shall be included in all contracts with tribal contractors, unless the contracting officer determines that an exemption is warranted under § 14H-70.807. The limits of liability prescribed in the clause may be modified by the con

tracting officer when he determines such action is warranted.

[40 FR 51332, Nov. 14, 1975, as amended at 43 FR 37450, Aug. 23, 1978]

Subpart 14H-70.9-Labor

§ 14H-70.901 Labor standards in construction contracts.

The provisions of Subpart 1-12.4 of this title are applicable to construction contracts entered into pursuant to the Act, except when the contractor is the recognized governing body of an Indian tribe or a non-profit Indian organization serving as a governmental instrumentality of an Indian tribe.

§ 14H-70.902 Labor standards in subcontracts.

Subcontracts shall include and subcontractors shall comply with the provisions of Part 1-12 of the Federal Procurement Regulations (41 CFR Part 1-12) to the extent that the provisions are applicable to the subcontract requirements. Questions concerning the applicability of the provisions of Part 1-12 of the Federal Procurement Regulations should be addressed to the contracting officer.

Subpart 14H-70.10-Contract Cost Principles and Procedures

§ 14H-70.1001 Principles for determining costs.

The principles for determining costs applicable to contracts under the Act are contained in Appendix A to 25 CFR Part 276.

§ 14H-70.1002 Predetermined fixed rates.

(a) Indirect cost or overhead rates may be negotiated annually where cost experience, reliable accounting data and other pertinent facts are available to support the projection of allowable costs for the period covered by the contract or grant. Negotiated rates shall not result in an amount which will exceed actual costs.

(b) Where cost experience and accounting data are not available to support a negotiated rate and where the estimated amount of the contract is less than $10,000, a lump sum over

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(a) When a tribal organization desires overhead rates to be established and where no other Federal agency has established a rate nor will be expected to do so, the tribal organization may request through the contracting officer that a rate be established. The request shall be supported by, as a minimum:

(1) A schedule of common costs which cannot be feasibly charged as direct costs of a program and are costs benefiting more than one program.

(2) The nature and extent of services provided and their relevance to the specific program.

(3) Methods and manner of distribution of costs.

(4) Total business of all programs to which indirect costs will be distributed.

(b) The contracting officer shall, after review and if indicated, further consultations with the tribal organization, forward the request to the Department of Interior, Office of Audit and Investigation, for review and audit as determined necessary. In the event a rate is approved without audit, the contract shall contain a clause to the effect that upon audit the rate may be changed retroactively to the beginning of the contract period.

(c) An audit by the Department's Office of Audit and Investigation will not be required prior to contract award and overhead rates may be approved by the Contracting Officer when:

(1) The amount of the contract is less than $100,000.

(2) The contract is not the initial contract with the particular tribal organization, an overhead rate was previously established, and the overhead rate currently requested does not exceed that previously established one by more than one percentage point.

(3) Current overhead rates have been established by another Federal agency.

Subpart 14H-70.11-Procurement Forms

§ 14H-70.1101 Applicability of standard forms.

The standard forms prescribed in Part 1-16 of this title may be used in connection with contracts entered into pursuant to the Act when applicable and may be modified when deemed necessary. However, standard forms other than SF 147 that contain clauses not prescribed by this Part 14H-70 shall not be used.

Subpart 14H-70.12-Procurement of Construction

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(a) Subpart 1-18.10 of this title is not applicable.

(b) The contract clauses required by § 1-18.703-1 of this title shall be inserted in construction contracts with an Indian tribe or an Indian organization which serves as a governmental instrumentality of an Indian tribe, but shall be prefaced by the provision contained in § 1-18.703-2 of this title.

(c) In all cases, the contracting officer shall obtain and insert the Wage Determination Decision issued by the Secretary of Labor in the contract prior to award of any contract for construction that falls within the purview of the Davis-Bacon Act. The Wage Determination Decision should be furnished sufficiently in advance of the

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(a) At the request of a tribal contractor, and subject to the conditions hereinafter set forth, and Chapter 2000 of the Treasury Fiscal Requirements Manual as modified or supplemented, the Government will make advance payments to tribal organizations as prescribed in 25 CFR 271.41.

(b) Any request for advance payment by a tribal contractor shall specify the amount(s) required and the dates such advance(s) will be required and shall be supported by a schedule of estimated expenditures.

(c) An initial advance will be limited to the amount of estimated expenditures for a period of time required to effect payment, based on experience in the locality. The initial advance may be made in amounts at times deter

mined suitable to satisfy the minimum essential needs of the contractor.

(d) Subsequent advances may be made at times and in amounts determined necessary to insure availability of funds for timely payment of the contractor's obligations and to minimize the time between withdrawal from the Treasury and expenditure. For advance payment methods other than the Letter of Credit method, requests for advances made after an initial advance shall be accompanied and supported by a report of expenditures to date, the amount of funds on hand, and the anticipated needs until receipt of payment.

[40 FR 51332, Nov. 14, 1975, as amended at 43 FR 37450, Aug. 23, 1978]

§ 14H-70.1404

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Advance payments when special bank account required. (a) Contracts authorizing making of advance payments shall, except as provided in 25 CFR 271.41(a)(2)(i), require that the check be mailed to a bank to be deposited in a special bank account in the name of the contractor. No part of the funds deposited in the special bank account shall be mingled with other funds of the contractor prior to withdrawal to meet obligations accruing under the contract.

(b) For all advance payments requiring the use of a special bank account, the form of Agreement for Special Bank Account prescribed in § 14H70.1410 shall be used.

(c) All contracts requiring the use of a special bank account shall contain the contract clause prescribed in § 14H-70.612(b).

§ 14H-70.1405 Letter of credit.

When a contract authorizes advance payments totaling $120,000 or more and the contract period is one year or more, advance payments will normally be made by Letter of Credit in accordance with the policies and procedures contained in Treasury Fiscal Requirements Manual, Chapter 2000, as modified or supplemented.

§ 14H-70.1406 Approval of advance payments.

(a) Area Directors may approve advance payments which do not exceed $250,000 in the aggregate. When the contract term is for more than one year, Area Directors may approve advance payments which do not exceed $250,000 in the aggregate for each succeeding year of the contract.

(b) Requests for advance payments exceeding $250,000 in the aggregate for the term of the contract, or one year if a multi-year contract, shall be forwarded to the Commissioner of Indian Affairs by Area Director for submission to the Department in accordance with § 14-30.406 of this title. However, this limitation does not apply when the advance payment(s) is made through a Letter-of-Credit.

[40 FR 51332, Nov. 14, 1975, as amended at 43 FR 37450, Aug. 23, 1978]

§ 14H-70.1407 Sub-advances.

Sub-advances may be made when predetermined as a part of a contracted program or when specifically authorized in writing by the contracting officer. Subadvances will not be made to individuals except for approved travel and in such cases shall not exceed the minimum required for one trip and shall be settled by voucher or repayment within 30 days.

§ 14H-70.1408 Interest.

(a) Contractors shall not be held accountable for interest earned on funds advanced pending disbursement. However, it is required that bank balances be maintained at the minimum level consistent with program requirements, and requests for advances shall be reviewed to insure that excess funds are not advanced.

(b) Contractors shall not be charged interest by the Bureau for funds advanced under contracts entered into pursuant to the Act.

§ 14H-70.1409 Automatic advances.

When periodic payments under a contract will be essentially uniform and predictable, automatic advance payments may be authorized by the contracting officer to avoid delay inherent in payments based on formal

request by the contractor. In such cases, reports of expenditures will be required and payments will be adjusted as necessary to prevent withdrawal of funds over and above that needed for efficient operation, and to insure adequate funds for timely settlement of the contractor's obligations. Adjustments to automatic advances shall be made after consultation with the contractor.

§ 14H-70.1410 Agreement for special bank account.

(a) In all instances where deposit of an advance payment in a special bank account is required, the following form of agreement will be used:

AGREEMENT FOR SPECIAL BANK ACCOUNT

(1) This agreement entered into between the United States of America, hereinafter called the "Government," contractor, and Bank, each represented by the officials executing this agreement.

(2) The Government and the contractor entered into the contract(s) or Supplemental Agreement(s) thereto, providing for the making of advance payment(s) to the contractor. Copy of the advance payment clause included in the contract is attached to and made a part of this agreement.

(i) The advance payment clause requires that amounts advanced to the contractor be deposited in a Special Bank Account at a member bank or banks of the Federal Reserve System or any "insured" bank within the meaning of the Act creating the Federal Deposit Insurance Corporation (Act August 23, 1935; 49 Stat. 684, as amended; 12 U.S.C. 264), separate from the contractor's general or other funds; and, the Bank being such a bank, the parties are agreeable to so depositing said amounts with the Bank.

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(ii) This Special Bank Account shall be designated as indicated in paragraph (7) of this agreement.

(3) In consideration of the foregoing, and for other good and valuable considerations, it is agreed that:

(i) The Government shall have a lien upon the credit balance in said account to secure the repayment of all advance payments made to the contractor, which lien shall be superior to any lien or claim of the bank with respect to such account.

(ii) The Bank will be bound by the provisions of the advance payment clause relating to the deposit in and withdrawl of funds from the Special Bank Account, but shall not be responsible for the use of funds withdrawn from said account. Upon receipt by the Bank of written directions of any kind

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