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 constructed with grant funds) do not constitute program income.

(d) Recipients shall record the receipt and expenditure of revenues related to the program (such as taxes, special assessments, levies, fines, etc.) as a part of the grant program transactions.

(e) The disposition of program income received subsequent to the closeout of a grant shall be governed by the provisions of § 571.512(c).

§ 571.506 Force account construction.

(a) The utilization of Tribal work forces for construction or renovation activities performed as part of the activities funded under this part shall be approved by HUD prior to the start of project implementation.

(b) In its request for an approval of force account construction or renovation, a grantee shall provide the following:

(1) Documentation to indicate that it has carried out or can carry out successfully a project of this size or magnitude;

(2) Documentation to indicate that it has obtained or can obtain adequate supervision for the workers to be utilized;

(3) Information showing that the workers to be utilized are listed on the Tribal payroll and are employed directly by an arm, department or other governmental instrumentality of the Tribe.

(c) Any and all excess funds derived from the force account construction or renovation activities shall accrue to the grantee and may be reprogrammed for other activities eligible under this part.

(d) Insurance coverage for force account workers and activities shall, where applicable, include workman's compensation, 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

ing the settlement of all contractual and administrative issues arising from the procurements entered into in support of a grant. 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 Tribal, Federal, or other authority as may have proper jurisdiction. Grantees may use their own procurement regulations provided that procurements made with HUD grant funds adhere to the standards set forth as follows:

(a) The grantee shall maintain a code or standard of conduct which shall govern the performance of its officers, employees, or agents in contracting with and expending HUD grant funds. The Grantee's officers, employees, or agents shall neither solicit nor accept gratuities, favors or anything of monetary value from contractors. To the extent permissible by law, rules or regulations, such standards shall provide for penalties, sanctions, or other disciplinary actions to be applied for violations of such standards by either the grantee's officers, employees or agents or by contractors or their agents.

(b) All procurement transactions 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 grantee should be alert to organizational conflicts of interest or noncompetitive practices among contractors which may restrict or eliminate competition or otherwise restrain trade.

(c) The grantee shall establish procurement procedures which provide for, as a minimum, the following requirements:

(1) Proposed procurement actions shall be reviewed by grantee officials 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.

(2) Invitations for bids or requests for proposals shall be based upon clear and accurate descriptions of the tech

nical requirements for the materials, products, or services to be procured. Such descriptions 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.

(3) Positive efforts shall be made by the grantee to utilize small business and minority business sources of supplies and services. Such efforts should allow these sources the maximum feasible opportunity to compete for contracts to be performed utilizing Federal grant funds.

(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.

Generally procurements may be negotiated by the grantee if:

(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 prior approval);

(iii) The aggregate amount involved does not exceed $10,000;

(iv) The contract is for personal or professional services, or for any service to be rendered by a university, college, or other educational institution;

(v) The material or services are to be procured and used outside the limits of the United States and its possessions;

(vi) No acceptable bids have been received after formal advertising;

(vii) The purchases are for highly perishable material or medical supplies, for material or services where the prices are established by law, for technical items or equipment requireing 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;

(viii) Otherwise authorized by law, rules or regulations. Notwithstanding the existence of circumstances justifying negotiation, competition shall be obtained to the maximum extent practicable.

(d) Contracts shall be made 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, or accessibility to other necessary resources.

(1) Procurement records or files for purchase in amounts in excess of $10,000 shall provide at least 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.

(2) A system for contract administration shall be maintained to assure contractor conformance with terms, conditions, and specifications of the contract or order, and to assure adequate and timely follow-up of all purchases.

(e) The grantee shall include, in addition 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).

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(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 Order No. 11246, entitled "Equal Employment Opportunity", as amended by 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

each contractor or subgrantee shall be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public works, to give up any part of the compensation to which he is otherwise entitled. The grantee shall report all suspected or reported violations to the grantor agency.

(6) Unless waived by the Secretary, as provided in §571.603(b) of these regulations, all construction contracts awarded by grantees and subgrantees in excess of $2,000 shall include a provision for compliance with the DavisBacon Act (40 U.S.C. 276a to a-7) as supplemented by Department of Labor regulations (20 CFR Part 5). Contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not less often than once a week. The grantee shall place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation and the award of a contract shall be conditioned upon the acceptance of the wage determination. The grantee shall report all suspected or reported violations to HUD.

(f) Where applicable, all contracts awarded by grantees and subgrantees in excess of $2,000 for construction contracts and in excess of $2,500 for other contracts which involve the employment of mechanics or laborers shall include a provision for compliance with sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-330) as supplemented by Department of Labor regulations (29 CFR Part 5), Under section 103 of the Contract Work Hours and Safety Standards Act, each contractor is required to compute the wages of every mechanic and laborer on the basis of a standard work day of 8 hours and a standard work week of 40 hours. Work in excess of the standard work day or work week is permissible: Provided, That the worker is compensated at a rate of no less than 1 1⁄2 times the basic rate for pay for all hours worked in excess of 8 hours in any calendar day or 40 hours in a work

week. Section 107 of the Contract Work Hours and Safety Standards Act is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary, hazardous, or dangerous to his health and safety as determined under construction, safety, and health standards promulgated by the Secretary of Labor. These requirements do not apply to the purchase of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.

(g) All negotiated contracts (except those of $10,000 or less) awarded by grantees shall include a provision to the effect that the grantee, HUD, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to all books, documents, papers, and records of the contractor which are directly pertinent to a specific grant program for the purpose of making audits, examinations, excerpts, and transcriptions for a period of not less than three years after project completion.

(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 requirements.

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:

(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

(e) The Secretary may issue the applicant a letter to proceed to incur costs to alleviate imminent threats: Provided, That applicable environmental review requirements pursuant to § 571.602 have been met.

Subpart E-Application Procedures and Selection Criteria for Comprehensive Grants

§ 571.400 General policies.

(a) Comprehensive Indian Community Development Demonstration Program. In order to meet the objectives of this section, HUD may accept applications for assistance to carry out a comprehensive community development program as described below. Indian Tribes will receive this form of assistance on a limited, demonstration Dasis. Recipients of comprehensive program assistance will be selected by HUD according to the Threshold Requirements and Criteria for Selection established in this part. Preapplica-ions and full applications are required or funding under this subpart.

(b) Definition of Comprehensive Grant Programs. A Comprehensive Grant Program is comprised of those ommunity development activities reuiring single- or multi-year assistance rovided under this part and shall ave the following characteristics: (1) It shall consist of two or more acvities that bear a relationship to ach other, which either in terms of upport of necessity are carried out in coordinated manner; and

(2) The activities which are the comonents of this program will have a bstantial beneficial impact in meetg one or more community developent needs of the applicant.

(c) Other factors to be considered. (1) determining whether or not a pro-am is comprehensive and eligible for nding as such, HUD will take into nsideration funds from other urces which are being used to treat nilar problems in the same general

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(2) For purposes of this section, adnistration and management are not nsidered activities. Planning can be nsidered a comprehensive program tivity.

To the greatest extent feasible, comprehensive program activities shall be concentrated within a defined geographical area unless the applicant, can demonstrate to the satisfaction of HUD that carrying out more widely dispersed activities is the only logical means to address the problem identified.

(d) Full applications for comprehensive programs will be accepted only upon the invitation of HUD.

(e) In order to ensure that adequate resources are available to fund Basic Grant applications, not more than twenty percent (20%) of the funds allocated to a Regional or Field Office will be used to fund Comprehensive Grant Programs in any fiscal year unless otherwise waived by the Secretary to meet special situations.

(f) Notwithstanding any of these provisions, consideration of an application for a Comprehensive Program t Grant in no way commits HUD ultimately to funding such a proposal. Final funding determinations will be based solely on the information provided in the applications and on the amount of funds made available under: this part and allocated to Regional or Field Offices.

(g) HUD may approve single- or multi-year comprehensive grants for fewer activities and less money than requested taking into consideration:

(1) The amount of funds available; (2) The nature of the activities pro-28 posed;

(3) The relative need of the applicant and the potential impact of the comprehensive program when compared with other applications for comprehensive assistance.

§ 571.401 Preapplications.

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