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that the procurements for Federal As- ing or has any arrangement concerning sistance Programs conform to the prospective employment. standards set forth in this regulation

(1) The term immediate family includes (b) These standards contained in this husband, wife, father, mother, brother, subpart do not relieve the procuring sister, son, daughter, father-in-law, party of the contractual responsibil- mother-in-law, brother-in-law, sisterities arising under its contracts. The in-law, son-in-law, and daughter-inprocuring party is the responsible au- law. thority, without recourse to CSA, re (2) The term financial or other interest garding the settlement and satisfaction includes but is not limited to: of all contractual and administrative

(1) Any direct or indirect financial inissues arising out of procurements en

terest in the specific contract, includtered into, in support of a grant or

ing a commission or fee, a share of the other agreements. This includes dis

proceeds, prospect of a promotion or of putes, claims, protests of award, source

future employment, a profit, or any evaluation of other matters of a con

other form of financial reward. tractual nature. Matters concerning

(ii) Any of the following interests in violation of law are to be referred to

the business with which the procuring such local, State or Federal authority

party is contracting: Ownership; partas may have proper jurisdiction.

nership interest or other beneficial in(c) Section 626(a) of the Economic

terest of five percent or more; ownerOpportunity Act as amended, states that, “Whoever, being an officer, direc

ship of five percent or more of the

stock; employment in a managerial cator, agent, or employee of, or con

pacity; or membership on the board of nected in any capacity with, any agency, receiving financial assistance under

directors or governing body. this Act embezzles, willfully

(c) The board members, employees, misapplies, steals, or obtains by fraud

or agents of the procuring party shall any of the monies, funds, assets, or

neither solicit nor accept gratuities, property which are the subiect of a · favors, or anything of monetary value grant or contract of assistance pursu

from contractors, potential contracant to this Act, shall be fined not more

tors, or parties to subagreements. than $10,000 or imprisoned for not more than two years, or both; but if the

$ 1050.160_7 Standard-open competi

tion. amount so embezzled, misapplied, stolen or obtained by fraud does not ex (a) All procurement transactions ceed $100, he shall be fined not more

shall be conducted in a manner to prothan $1,000 or imprisoned not more vide, to the maximum extent practical, than one year or both”.

open and free competition.

(b) The procuring party should be $ 1050.160–6 Standard-code of con- alert to organizational conflicts of induct.

terest or noncompetitive practices (a) The procuring party shall main- among contractors that may restrict tain a code of conduct that shall gov- or eliminate competition or otherwise ern the performance of its board mem- restrain trade. Examples of what is bers, employees, and agents engaged in considered to be restrictive of competiawarding and administering contracts tion include, but are not limited to: (1) using Federal funds. The code shall Placing unreasonable requirements on provide for disciplinary actions to be firms in order for them to qualify to do applied for violations of the code.

business, (2) non-competitive practices (b) No employee, officer or agent of between firms, (3) organizational conthe procuring party shall participate in flicts of interest, and (4) unnecessary the selection or in the award or admin- experience and bonding requirements. istration of a contract supported by In particular, a contractor that develCSA funds where to his knowledge he ops or drafts specifications, requireor his immediate family, partners, or ments, a statement of work, an invitaorganization in which he or his imme- tion for bids and/or a request for prodiate family or partner has a financial posals for a particular procurement by interest or with whom he is negotiat- a nongovernmental procuring party

should be excluded from competing for that procurement.

(c) Solicitations shall clearly set forth all requirements that the bidder/ offeror must fulfill in order for the bid offer to be evaluated.

(1) Awards shall be made to the responsible bidder/offeror whose bid/offer is responsive to the solicitation and is most advantageous to the procuring

ous to the procuring party, price and other factors considered

(2) Factors such as discounts, transportation costs, and taxes may be considered in determining the lowest bid. Any and all bids/offers may be rejected when it is in the procuring party's interest to do so and, in the case of governmental procuring parties, such rejections are in accordance with government's applicable law, rules, or regulations.

(c) The following affirmative steps shall be taken to assure that small and minority businesses are utilized when possible as sources of supplies, equip ment, construction, and services. These steps include:

(1) Including qualified small and minority businesses on solicitation lists.

(2) Assuring that small and minority businesses are solicited whenever they are potential sources.

(3) When economically feasible, dividing total requirements into smaller tasks or quantities so as to permit maximum small and minority business participation.

(4) Where the requirement permits, establishing delivery schedules which will encourage participation by small and minority business.

(5) Using the services and assistance of the Small Business Administration, the Office of Minority Business Enterprise of the Department of Commerce and the Community Services Administration as required.

(6) If any subcontracts are to be let, requiring the prime contractor to take the affirmative steps listed above.

(d) The procuring party shall take similar appropriate affirmative action in support of women's business enter

$ 1050.160-8 Standard-procedures.

The procuring party shall establish written procurement procedures which provide for, at a minimum, the following:

(a) Proposed procurement actions shall follow a procedure to assure that unnecessary or duplicative items are not purchased. Where appropriate, an analysis shall be made of lease and purchase alternatives to determine which would be the most economical, practical procurement. To foster greater economy and efficiency public grantees are encouraged to enter into State and local intergovernmental agreements for procurement or use of common goods and services.

(b) Solicitations for goods and services shall be based upon a clear and accurate description of the technical requirements for the material, product or service to be procured. Such descrip tion shall not, in competitive procurements, contain features which unduly restrict competition. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a "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 bidders/offerors shall be clearly specified.

(e) The procuring party is encouraged to procure goods and services from labor surplus areas.

(f) The type of procuring instruments used, e.g., fixed-price contracts, cost reimbursable contracts, purchase orders, incentive contracts, shall be determined by the procuring party but must be appropriate for the particular procurement and for promoting the best interest of the grant project or program involved. The "cost-plus-apercentage-of-cost" and percentage of construction cost methods of contracting shall not be used.

(8) 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.

(h) Any proposed sole source con- required if the procurement is expected tract, or proposed contract where only to exceed $10,000 and specifies a brand one bid or proposal is received by a name product or the procuring party's nongovernmental procuring party, procedures or operation fails to comply shall be subject to prior approval by with one or more significant aspects of the appropriate CSA administering of this rule. If the latter situation exists fice if the aggregate expenditure for all the CSA administering office will noitems procured from the contractor tify the grantee in writing with a copy will exceed $5,000 in a 12-month period. to the Office of Federal Procurement In addition, for any procurement con- policy. tract in which payment will be made (j) The procuring party should make by the procuring party in whole or in some form of price or cost analysis in part with title I grant funds, if the connection with every negotiated proproposed contractor does the major curement action. Price analysis may be part of its business with the procuring accomplished in various ways, includparty and/or if the proposed contractoring the comparison of price quotations is a firm established or controlled by a submitted, market prices and similar member or members of the procuring indices together with discounts. Cost party's staff or board, CSA approval analysis is the review and evaluation of will be based on, but not be limited to, each element of cost proposed by the the following:

offeror to determine reasonableness, (1) Evidence that the proposed con allocability and allowability. Costs or tractor is a non-profit corporation prices based on estimated costs for conwhose income and assets would, in tracts shall be allowed only to the exevent of failure of the procuring party, tent that cost incurred or cost esticontinue to be used to benefit low-in mates included in negotiated prices are come individuals;

consistent with Federal cost principles. (2) Evidence that the hiring and pro (k) Grantees shall maintain records curement policies of the proposed con sufficient to detail the significant histractor include the same prohibitions tory of a procurement. These records against nepotism and conflict of inter shall include, but are not necessarily est as those found in 8 1050.160-6 of this limited to, information pertinent to subpart;

the following: rationale for the method (3) Inclusion in the contract of a pro of procurement, selection of contract vision that the management, financial, type, contractor selection or rejection, and procurement records of the pro and the basis for the cost or price. posed contractor must be made avail (1) A system for contract administraable for inspection and examination to tion shall be maintained to ensure conthose parties and on the same basis as tractor conformance with terms, condirequired for private nonprofit grantees tions, and specifications of the conin Subpart D of this part;

tract, and to ensure adequate and time(4) Submission by the proposed con- ly follow-up of all purchases. tractor of an audited revenue and expenditures statement and balance

(45 FR 28137, Aug. 28, 1980, as amended at 45

FR 59153, Sept. 8, 1980) sheet dated within the last twelve months; and

(5) Submission of supporting docu- 81060.160–9 Method of procurement mentation that the prices being

for State and local governments. charged are competitive with prices Procurement under grants shall be being charged for similar items and/or made by one of the following methods: services by other businesses.

Small purchase procedures; competi(1) Any proposed sole source contract, tive sealed bids (formal advertising); or proposed contract where only one competitive negotiation; and/or nonbid or proposal is received by a govern- competitive negotiation. mental procuring party shall be subject (a) Small purchase procedures are to prior approval by the CSA admin- those relatively simple and informal istering office if the procurement is ex- procurement methods that are sound pected to exceed $10,000. For govern- and appropriate for a procurement of mental entities prior approval also is services, supplies or other property,

costing in the aggregate not more than $10,000. Grantees shall comply with State or local small purchase dollar limits under $10,000. If small purchase procedures are used for a procurement under a grant, price or rate quotations shall be obtained from an adequate number of qualified sources.

(b) In competitive sealed bids (formal advertising), sealed bids are publicly solicited and a firm-fixed-price con tract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is lowest in price.

(1) In order for formal advertising to be feasible, appropriate conditions must be present, including, as a minimum, the following:

(i) A complete, adequate and realistic specification or purchase description is available.

(11) Two or more responsible suppliers are willing and able to compete effectively for the grantee's business.

(iii) The procurement lends itself to a firm-fixed-price contract, and selection of the successful bidder can appropriately be made principally on the basis of price.

(2) If formal advertising is used for a procurement under a grant, the following requirements shall apply.

(1) A sufficient time prior to the date set for opening of bids, bids shall be solicited from an adequate number of known suppliers. In addition, the invitation shall be publicly advertised.

(ii) The invitation for bids, including specifications and pertinent attachments, shall clearly define items or services needed in order for the bidders to properly respond to the invitation.

(111) All bids shall be opened publicly at the time and place stated in the invitation for bids.

(iv) A firm-fixed-price contract award shall be made by written notice to that responsible bidder whose bid, conform ing to the invitation for bids, is lowest. Where specified in the bidding documents, factors such as discounts, transportation costs and life cycle costs shall be considered in determining which bid is lowest. Payment discounts may only be used to determine low bid when prior experience of the grantee

indicates that such discounts are generally taken.

(v) Any or all bids may be rejected when there are sound documented business reasons in the best interest of the program.

(c) In competitive negotiation, proposals are requested from a number of sources and the request for proposal is publicized, negotiations are normally conducted with more than one of the sources submitting offers, and either a fixed-price or cost-reimbursable type contract is awarded, as appropriate. Competitive negotiation may be used if conditions are not appropriate for the use of formal advertising. If competitive negotiation is used for a procurement under a grant, the following requirements shall apply:

(1) Proposal shall be solicited from an adequate number of qualified sources to permit reasonable competition consistent with the nature and requirements of the procurement. The request for proposals shall be publicized and reasonable requests by other sources to compete shall be honored to the maximum extent practicable.

(2) The request for proposal shall identify all significant evaluation factors, including price or cost where required and their relative importance.

(3) The grantee shall provide mechanisms for technical evaluation of the proposals received, determinations of responsible offerors for the purpose of written or oral discussions, and selection for contract award.

(4) Award may be made to the responsible offeror whose proposal will be most advantageous to the procuring party, price and other factors considered. Unsuccessful offerors should be notified promptly.

(5) Grantees may utilized competitive negotiation procedures for procurement of Architectural Engineering professional services, whereby competitor' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and resonable compensation.

(d) Noncompetitive negotiation is procurement through solicitation of a proposal from only one source, or after solicitation of a number of sources, competition is determined inadequate. Noncompetitive negotiation may be


used when the award of a contract is observe the bonding requirements profeasible under small purchase, competi- vided for in 45 CFR part 1050, subpart C. tive bidding (formal advertising) or (d) Executive Order 11246. All concompetitive negotiation procedures. tracts in excess of $10,000 shall contain Circumstances under which a contract a provision requiring compliance with may be awarded by noncompetitive ne Executive Order 11246, entitled “Equal gotiation are limited to the following: Employment Opportunity,” as amend

(1) The item is available only from a ed by Executive Order 11375, and as single source;

supplemented in Department of Labor (2) Public exigency or emergency

Regulations (41 CFR part 60). when the urgency for the requirement

(e) Davis-Bacon Act. All construction will not permit a delay incident to

contracts in excess of $2,000 shall incompetitive solicitation;

clude a provision for compliance with (3) The Federal grantor agency au

the Davis-Bacon Act (40 U.S.C. 276a to thorizes noncompetitive negotiation;

a-7) as supplemented by Department of

Labor Regulations (29 CFR part 5). (4) After solicitation of a number of

Under this Act contractors shall be re

quired to pay wages to laborers and sources, competition is determined inadequate.

mechanics at a rate not less than the

minimum wages specified in a wage de(e) Additional innovative procure

termination made by the Secretary of ment methods may be used by grantees

Labor. In addition, contractors shall be with the approval of the appropriate

required to pay wages not less often CSA administering office.

than once a week. The grantee shall $ 1060.160–10 Standard-contract pro

place a copy of the current prevailing visions.

wage determination issued by the De

partment of Labor in each solicitation The requirements relate to provi

and the award of a contract shall be sions that must be included in con

conditioned upon acceptance of the tracts for procurements that are sub wage determination. All suspected or ject to this regulation. The term con

reported violations shall be reported to tracts in this section shall be construed CSA by the grantee as including subcontracts.

(1) Copeland Act. All contracts or sub(a) Administrative Remedies for Viola

contracts in excess of $2,000 for contions. Contracts in excess of $10,000 struction or repair shall include a proshall contain contractual provisions or vision for compliance with the conditions that will allow for adminis Copeland "Anti-Kick Back" Act (18 trative, contractual or legal remedies U.S.C. 874) as supplemented in Departin instances where contractors violate ment of Labor regulations (29 CFR part or breach contract terms, and provide 3). This Act provides that each contracfor such remedial actions as appro

tor or subgrantee shall be prohibited priate.

from inducing, by any means, any per(b) Termination Provisions. Contracts son employed in the construction, comin excess of $10,000 shall contain suit pletion, or repair of public work, to able provisions for termination by the give up any part of the compensation procuring party, including the manner to which he is otherwise entitled. All by which termination will be effected suspected or reported violations shall and the basis for settlement. In addi. be reported to CSA by the grantee. tion, such contracts shall describe con- (g) Contract Work Hours and Safety ditions under which the contract may Standards Act. All contracts awarded by be terminated for default as well as grantees and subgrantees in excess of conditions where the contract may be $2,000 for construction contracts and in terminated because of circumstances excess of $2,500 for other contracts beyond the control of the contractor. which involve the employment of me

(c) Bonding Requirements. In all con- chanics or laborers shall include a protracts for construction or facility im- vision for compliance with sections 103 provement awarded by a nongovern- and 107 of the Contract Work Hours and mental procuring part (A-110 only) for Safety Standards Act (40 U.S.C. 327-330) more than $100,000, the recipient shall as supplemented by Department of

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