The technology and communications advances of the last decade have created a globally competitive environment with opportunities for American goods and services. At the beginning of a new century, the United States economy is a thriving marketplace characterized by continued prosperity and growth.

For every successful community, however, the Nation has at least one or multiple locations overcome by economic need or distress, areas that will experience further decline without the implementation of technology-led approaches that create sustainable, new market and/or liveable communities with the capacity for world success.

The Economic Development Administration (EDA) provides meaningful assistance generally on a cost-shared basis to economically-challenged communities. Through a broad range of flexible economic development tools, EDA promotes local partnerships for job creation and economic growth.

The Public Works Program is considered the mainstay of job creation for EDA. Publically validated reports show that one million dollars of EDA public works investments create at least 327 direct permanent jobs, generate $10.08 million of private sector investment, add $10.13 million to the local tax base, and create jobs at an EDA cost of $3,058 per job.

This publication, “Requirements for Approved Construction Projects”, is the policy and procedures guidebook for the proper use of assistance provided by EDA. It was designed to assist the EDA grant recipient to complete its project economically, within quality standards, and in accordance with regulations governing federal grant assisted construction projects.

Your EDA assisted project, when successfully completed, will be an integral part of both EDA’s and your community’s plans and hopes for national and local economic development through cooperative effort.

2. The EDA Grant Award
a. Project description ...........................................……………………………….... I-2
b. Standard terms and conditions ...................………………………….................. I-2
c. Special conditions ......................................……………………………….......... I-2
d. Grant expiration date ...................………………………………......................... I-2
e. Combined type of grants ..............…………………………............................ I-2
f. Performance measures ........................…………………………...................... I-2

3. Initial Actions
a. Initial EDA Regional Office actions ........................…………………........... I-3
b. Pre-award construction .......................................………………………….... I-3
c. Davis-Bacon requirement for pre-award construction ..………….................. I-3

4. Project Management Conference .................................……………….......... I-3

5. Selection of the Architect/Engineer
a. Pre-award selection of the A/E ............................…………………….......... I-3
b. Acceptable forms of contracts .....................................……………………. I-4

6. The Architect/Engineer Contract for Services
a. Suggested forms for contract format .........................…………………........ I-4
b. Acceptable types of cost reimbursement for A/E services .......……............ I-4
c. Prohibited forms of compensation .................…………………................... I-4
d. Basic and special services ........................………………………................. I-5
e. Construction inspection ...............................………………………............. I-5
f. A/E record keeping and access to records .....………………....................... I-5
g. Required provisions of the A/E contract .......………………....................... I-5

7. Multiple Contracts and Phasing
a. Project phasing ............................................……………………………..... I-5
b. Disbursement of the grant for phased projects ...................…………......... I-6

8. Recipient Furnished Equipment and/or Materials ..............……................. I-6

9. Services Performed by the Recipient's Own Forces
a. Use of in-house forces ...................................………………………......... I-6
b. Use of force-account forces ...........................……………………............ I-7
c. Wage Rate for Force Account Employees .....……………........................ I-7

10. Construction Management Services
a. Definition of construction management services ..........………................ I-7
b. Cost threshold ............................................…………………………....... I-8
c. EDA approval for cost reimbursement ......…………….......................... I-8
d. Compensation ..........................................…………………………........ I-8
e. Assigning responsibility ...........................……………………................ I-8

11. Certification of Acquisition of Land, Easements and Rights-of-Way
a. Title, easements, rights-of-way, etc. ...............…………….................... I-8
b. Title opinions ................................................………………………….. I-8
c. Amount and cost of land, etc. ........................………………….............. I-8
d. Changes in amount and cost of land .............……………...................... I-9
e. Federally owned/controlled airfield restriction ...……........................ I-9

12. Relocation Assistance .............................................……………...... I-9

13. Certification of Adequacy of Treatment of sewage and other waste
a. Certification of adequacy ....................................………………....... I-9
b. Exceptions ...............................................………………………....... I-9
c. Certification Requirements ....................……………….................... I-9

14. Project Financing ..................................………………................... I-10

15. Safeguarding Funds
a. Documentation of project costs .....................……………............... I-10
b. Use of minority banks ...................................……………….......... I-10
c. Separate bank accounts ..................................………………........ I-10
d. Bonding of project fund custodian ................……….................... I-10

16. Department of Commerce Metric Program ................................... I-10

17. Seasonality ........................................................………………... I-10

18. Design for the Handicapped
a. Source of requirement ....................................………………........ I-11
b. Requirements for buildings ...........................……………............ I-11
c. Exceptions .....................................……………………................ I-11
d. Waivers .....................................………………………................ I-11

19. Reporting of Project Progress
a. Recipient review of project progress .............……….................... I-11
b. The project performance report ......................………….............. I-11
c. Project performance report due dates ..................………............. I-12
d. Reporting non-routine performance items ...........……................. I-12
e. Project performance report format ......................……….............. I-12
f. Grant advances .........................................……………………..... I-13
g. Delinquent performance reports ..................…………................. I-13

20. Environmental Requirements
a. Policy statement .....................................…………………........... I-13
b. Applicable directives ...............................………………............. I-13
c. Hazardous substances requirements ............………..................... I-13

21. Project Revisions ..............................................……………...... I-13

SECTION II: CONTRACTING FOR PROJECT CONSTRUCTION
1. Contracting Standards
A. State recipients ........................................…………………......... II-1
B. Recipients other than states .....................………………….................. II-1
C. The contract administration system ............…………..….................... II-1
D. Standards of conduct ....................................……………..………....... II-1
E. State and local agreements ..........................……………..……............. II-2
F. Use of surplus property .................................……………….……......... II-2
G. Value engineering ........................................………………………...... II-2
H. Awards to responsible contractors ...............……………….................. II-2
I. Maintenance of records ................................……………………........... II-2
J. Use of time and material contracts ...............………………................... II-2
K. Settlement of contractual issues ..................……………….................... II-3
L. Protest procedures ......................................…………………….……..... II-3

2. Competition in Procurement
A. Full and open competition ..................................…………………........ II-3
B. Prohibition of use of state or local geographical preferences ................. II-4
C. Requirements for procurement actions ....................……………........... II-4
D. Use of prequalification lists ...............................…………………......... II-4

3. Acceptable Methods of Procurement
A. Small purchase procedures ................................…………………......... II-4
B. Procurement by sealed bids ..........................….………………............. II-5
C. Requirements for sealed bids ........................………………….............. II-5
D. Procurement by competitive proposals .........……………...................... II-5
E. Procurement by noncompetitive proposals .........………….................... II-6

4. Unacceptable Method of Procurement ................…..……...................... II-6

5. Contracting with Disadvantaged Firms
A. Affirmative steps for use of disadvantaged firms .............……….......... II-7

6. Contract Cost and Price Analysis
A. The price analysis .........................................………………………...... II-7
B. Federal cost principles ...................................……………………......... II-8
C. Prohibited methods of contracting .................………………................. II-8

7. Advertising for Bids
A. Frequency of advertisement for bids ............................……………..... II-8
B. Requirements for projects over $1,000,000 ..................…………........ II-8
C. Additional circulation of invitation for bids .................………............ II-8

8. Bonding and Insurance Requirements
A. Minimum bond amounts ....................................…………………...... II-8
B. Insurance requirements .......................................…………………..... II-9

9. Bid Schedules for Alternative Materials
A. Use of bid schedules .....................................……………………....... II-9
B. Method of award .......................……………………......................... II-9
C. Exceptions and deviations .............………………............................ II-9

10. Non-EDA Work
A. Requirements for adding non-EDA work ...……….......................... II-9
B. Restrictions on award of contract .................................…………… II-10

11. EDA Review of Proposed Procurement Documents
A. Procurement system certification ..............…………...................... II-10
B. EDA approval of contract documents ..........………….................... II-10
C. EDA pre-bid review ......................................…………………...... II-11
D. EDA pre-award review .................................………………......... II-11
E. Use of standardized documents and checklists ...…….................... II-11

12. Construction and Services Contract Provisions
A. Required contract documents ..............……………....................... II-11
B. Cost documentation .....................................…………………....... II-12
C. Required contract provisions .......................…………….............. II-12

13. Wage Rates
A. Applicable act ....................................……………………............ II-16
B. Wage rate coverage ....................................…………………........ II-16
C. Different types of coverage ........................……………............... II-17
D. Period of wage rate validity ..........................……………............ II-17
E. Application and exception for wage rates .....……....................... II-17
F. Exceptions for railroads and public utilities .................……......... II-17
G. EDA or Department of Labor investigations ...............…….......... II-18
H. Record retention ...................................…………………….......... II-18
I. Retroactivity of wage rates .....................………………....………........... II-18

14. The Bid Opening
A. EDA representation at the bid opening ...............………...………........... II-18

15. Overrun at Bid Opening
A. When lowest bid exceeds funds available ....................……………......... II-19
B. When lowest bid less deductive alternates exceeds funds available .......... II-19

16. Underrun at Bid Opening
A. EDA notification ...........................................…………………………..... II-20

17. EDA Approval of the Contract Award
A. EDA approval ...............................................……………………………. II-20
B. Requirements for EDA approval .......................…………………............ II-20
C. Checking debarred, ineligible, or suspended contractors ....……............ II-21

18. Executed Bid Award
A. Contents of executed contract documents to be furnished to EDA ..…....... II-21

19. Preconstruction Conference .....................................…………………...... II-22

SECTION III: CONSTRUCTION PROCEDURES
1. Recipient Responsibilities
A. Recipient responsibilities for project monitoring ...............………........... III-1
B. Recipient responsibilities for project documents .................…………....... III-1

2. Employment of Local Labor
A. Anticipated labor requirements ................................…………………...... III-1

3. Construction Progress Schedule
A. Construction progress chart ..........................……………………............. III-1
B. Monthly update .............................................…………………………….. III-1
C. Acceptable formats .......................................…………………………...... III-1

4. Construction Sign
A. Contractor responsibility .........................…………………….................. III-2
B. Location of sign .....................................…………………………............ III-2
C. Local agency coordination .....................……………………................... III-2
D. Modification of sign specifications .........………………......................... III-2
E. Bilingual signs .........................................…………………………......... III-2

5. Inspection of Construction ............................…………………................. III-2

6. Occupancy Prior to Completion
A. Recipient responsibilities ..............................……………………............ III-2
B. Role of EDA .........................................……………………………........ III-3

7. Contractor Payrolls
A. Payroll retention requirements ............................…………………......... III-3
B. Applicable Executive Order and form ................……………................. III-3

8. Civil Rights Requirements ..................................………………............. III-3

9. Contract Change Orders
A. Notification to and approval from EDA .......................…………......... III-4
B. Cost and price analysis .......................................…………………….... III-4
C. Required copies .........................................………………………......... III-4
D. Prohibited change of scope ......................………………….................. III-4
E. Change order requirements .......................…………………................. III-4
F. EDA approval ...........................................…………………………...... III-4
G. Substantial variations ...............................…………………….............. III-4

10. Inspection for Final Acceptance
A. Final inspection .......................................……………………………......... III-5
B. Interested parties ......................................……………………….……........ III-5

11. Specific Requirements for Subcontractors ..................…………................ III-5

12. Safety ..........................................................……………………………….. III-6

SECTION IV: FINANCIAL ADMINISTRATION
1. Standards for Financial Management Systems
A. Requirements for State recipients ..........................…………….……..........IV-1
B. Requirements for other recipients ............................…………….……........IV-1
C. EDA review ..............................................………………………….……....IV-2

2. Grant Disbursements
A. The reimbursement method ......................................………………………..IV-2
B. Effect of program income ........................................……………….………..IV-2
C. Withholding payments ....................................…………………….…….......IV-2
D. Cash depositories ..........................................………………….………….....IV-3
E. Interest earned on advances ...........................……….………….……............IV-3

3. Allowable Costs
A. Limitation on use of funds .................................……………………….........IV-3
B. Applicable cost principles .................................……………..………….......IV-3

4. Period of Availability of Funds
A. General ..................................................……………………..……………...IV-4
B. Liquidation of obligations .......................………………….……..................IV-4

5. Matching or Cost Sharing
A. Basic rule ............................................………………….……………..........IV-4
B. Qualification and exceptions ......................…………….…………...............IV-5
C. Valuation of donated services ......................………………………...............IV-6
D. Valuation of 3rd party donated supplies and loaned equipment or space .......IV-6
E. Valuation of 3rd party donated equipment, buildings and land .......…….......IV-7
F. Valuation of Recipient donated real property for construction/acquisition ......IV-7
G. Appraisal of real property ...................................………………………….....IV-7

6. Program Income
A. General ................................................…………………………………….....IV-8
B. Definition of program income ............................………………………..........IV-8
C. Cost of generating program income ................................……………………..IV-8
D. Governmental revenues .................................……………………………........IV-8
E. Royalties ...............................................……………………………………......IV-8
F. Sale of real property ...........................……………………………….................IV-8
G. Use of program income ................................……………………………..........IV-8
H. Income after the award period ..............…………………………......................IV-9

7. Non-Federal Audit .........................................…………………………..........IV-9

SECTION V: AMENDMENTS TO GRANT AGREEMENTS
1. General Requirements
A. Unforeseen problems ....................................…………………………......... V-1
B. Types of project amendments .......................……………………….............. V-1
C. Change of scope determination .....................……………………................. V-1

2. Changes to the Project Scope
A. Definition of project scope ............................…………………………........... V-1
B. Approval by EDA .........................................………………………………..... V-2
C. Types of project modifications .....................………………………................. V-2
D. EDA review of proposed modifications ........…………………....................... V-2

3. Time Extensions
A. Recipient responsibilities ....................................…………………………..... V-2
B. Suspension of disbursements ..............................………………………......... V-3
C. Request approval process ...................................…………………………..... V-3
D. EDA right to suspend or terminate the grant ......………………..................... V-3

4. Budget Line Item Revisions
A. Requirements for approval by EDA ...................……………………............. V-3
B. Transfers between budget line items ...................……………………............. V-3
C. Transfer from contingencies line item ................…………………................. V-3
D. Use of underrun funds ........................................……………………………... V-3
E. Notification of budget line item changes ...........………………….................... V-4

5. Additional EDA Funding
A. Request for additional EDA funds ...........................……………………......... V-4
B. Proceeding before EDA approval ...........................………………………....... V-4

6. Termination of the EDA Grant
A. Termination for cause ...................................……………………………......... V-4
B. Termination for convenience ...................................………………………….... V-5

SECTION VI: PROJECT CLOSEOUT PROCEDURES
1. Audit Requirements
A. Securing Single Audit Act audit ...................………………………..................VI-1
B. Specific audits ...............................................…………………………………..VI-1
C. Department of Commerce audits ..................……………………….................VI-1
D. Audit standards .............................................…………………………………..VI-1

2. Closeout Procedures
A. Beginning the closeout process ....................……………………….................VI-1
B. Final grant reports .........................................……………………………….....VI-2
C. Liquidation of obligations .............................………………………….............VI-2
D. The final grant disbursement .........................………………………..............VI-2
E. Eligible and ineligible costs ..........................………………………..............VI-3
F. After closeout requirements ..........................………………………..............VI-3

SECTION VII: POST CONSTRUCTION GRANT REQUIREMENTS
1. Real Property
A. Grantee ownership ........................................…………………………...... VII-1
B. EDA’s reversionary interest .....................…………………….................. VII-1
C. Successor grantees ...................................………………………….......... VII-1
D. Applicability of requirements ..................……………………................... VII-1

2. Definitions .....................................................……………………………... VII-1

3. Use of Property
A. Use only for authorized purposes ................................…………………... VII-2
B. Property no longer needed for grant purpose ...............…………….......... VII-2
C. Property for lease or sale ...................................………………………...... VII-2
D. Property substitutions .....................................…………………………..... VII-2

4. Unauthorized use
A. Disposal without EDA approval ...............................……………………... VII-2
B. EDA actions for disposal without approval .............………………............. VII-3

5. Federal Share
A. Calculation of federal share ................................………………………..... VII-3
B. Leasehold depreciation .......................................………………………….. VII-3
C. Transfer to another eligible grantee ....................………………….............. VII-3
D. EDA interest after compensation .................................……………………. VII-3

6. Encumbrances
A. Restrictions on encumbrances ...................................……………………... VII-3
B. Compensation for encumbrances ..............................……………………... VII-3
C. Waivers ...............................................…………………………………...... VII-3
D. Water and sewer exceptions ...................……………………….................. VII-4

7. Civil Rights Restriction ......................................……………………........... VII-4

8. Performance Reports ..........................................………………………........ VII-4

9. Record Retention .................................................………………………….. VII-4

10. Program Income Earned After the Award Period ..........................……….. VII-5

SECTION VIII: EXHIBITS.

1. Basis for Economic Development Administration (EDA) Requirements

A. These Requirements for Approved Construction Projects apply to all awards for construction projects and they are based on Office of Management and Budget (OMB) administrative requirements for Federal grants as set forth in OMB Circulars and on regulations set forth in the Code of Federal Regulations (CFR) Section 13 Chapter III, Section 15 Part 24 and Section 15 Part 14 as they may be amended.

B. These Requirements for Approved Construction Projects are intended to organize and explain the various requirements that apply to Federally-assisted construction programs. They are not intended to derogate, replace, or negate the above cited Federal requirements. Conflicts between these Requirements for Approved Construction Projects and the documents referred to above should be brought to the attention of EDA immediately. Any inconsistences or conflicts shall be resolved in favor of such Federal requirements.
 

C. EDA, as a Federal agency, is obligated to promulgate policies and procedures applicable to Recipients of EDA grants to insure compliance with Federal requirements, to safeguard the public’s interest in the grant assets, and to promote the effective use of grant funds in accomplishing the purpose for which they were granted. Pursuant to this obligation, grant terms and conditions require Recipients to comply with changes in regulations and other requirements and policies EDA may issue from time to time. Such changes apply to actions taken by all Recipients of EDA grants, existing and prospective, after the effective date of the changes.

D. EDA’s policy is to administer grants uniformly, but it is understood that there may be situations warranting a variance. To accommodate these situations and to encourage innovative and creative ways to address economic development problems, requests for variances to therequirements of this Requirements for Approved Construction Projects will be considered if they are consistent with the goals of EDA programs, make sound and financial sense, and do not conflict with applicable Federal and regulatory requirements.

2. The EDA Grant Award

The EDA grant award contains mandatory requirements and information vital to the accomplishment of the project. It should be read carefully with particular attention paid to:

A. The description of the project. This description and the corresponding scope of work must be adhered to. Proposed changes to EDA approved projects will be permitted by EDA only if they are necessary to the proper functioning of the project. Enhancements to the project that were not envisioned in the grant award will not be approved for EDA participation.

B. The Standard Terms and Conditions for Public Works and Development Facilities and Economic Adjustment Construction Projects. The Standard Terms and Conditions contain, by reference or substance, a summary of the pertinent statutes, regulations published in the Federal Register or Code of Federal Regulations, Executive Orders or OMB Circulars.

C. The Special Conditions of the grant award. The Special Conditions generally contain two types of information. The first type relates specifically to the grant being awarded. The second type relates to all approved grants and are of recent origin and therefore have not yet been incorporated into the Standard Terms and Conditions. Special attention should be paid to the Project Development Time Schedule. The time schedule can only be extended as a result of a written request from the Recipient and a written approval by EDA. Failure to meet the time schedule is considered a violation of the grant award and may result in action by EDA to suspend and/or terminate the grant. No disbursement of EDA grant funds is permitted when a project has exceeded the time schedule in the grant award unless EDA has given written approval to a time schedule extension.

D. For projects approved prior to October 1, 1999, the EDA grant funds remain available for a period beginning at the time the grant is awarded and ending five (5) years after the end of the fiscal year in which the grant was approved. Any funds not disbursed to the Recipient before the end of that period are automatically canceled and will be deobligated and will no longer be available for payment of costs incurred by the Recipient.

E. Combination construction and nonconstruction grants. If the EDA grant award is for both construction and nonconstruction, the Recipient must obtain prior written approval from EDA before making any fund or budget transfer from nonconstruction to construction or vice versa.

F. Performance Measures. The Standard Terms and Conditions of the EDA grant award make reference to “Core Performance Measures” that requires post-construction reports to be submitted to EDA. The first report will be due at the completion of construction of the project. The due dates for the submission of the second and third reports are 3 years and six years after the completion of construction. Questions regarding the content or submission of these reports should be directed to EDA.

3. Initial Actions

A. After the Grant Award has been affirmed, the EDA Regional Office will mail a pre-construction package to the Recipient that includes a copy of "Requirements for approved Construction Projects", and a list of items that need special attention (such as the project development time schedule), and a list of any unresolved problems identified during the preapproval review process. The EDA Project Manager will then contact the Recipient to offer assistance and guidance, to arrange for an updated schedule of the Recipient's proposed activities and to arrange a Project Management Conference.

B. Because it is the policy of EDA to discourage the undertaking of any construction prior to the submission of an application for financial assistance, special consideration and judgment must be executed if it becomes necessary for a project to proceed prior to award of the EDA grant. Commencement of a project prior to approval of the application for assistance is not prohibited, but it may jeopardize the favorable consideration of such application since, among other things, it raises a rebuttable presumption that funds necessary for the accomplishment of the project are otherwise available and that proper contracting procedures and labor standards may not have been followed.

C. If construction of the project was begun before affirmation of the grant award, the Recipient will be required to document to EDA’s satisfaction that it has complied with all EDA requirements, including but not limited to the payment of Davis-Bacon wages from the start of construction and environmental requirements, in order to qualify for EDA reimbursement of costs incurred, if agreed to in the grant award.

4. Project Management Conference

Whenever practical, the Project Management Conference will be held at the Recipient’s location; however, if necessary and required for appropriate EDA personnel to be present, it may be held at another location including in the Regional Office. The Recipient's Authorized Representative, Architect/Engineer, attorney and possibly the Recipient's financial representative should be in attendance. Reasonable costs for transportation, meals and lodging for these individuals are an authorized cost under the administrative line item in the project budget. Per diem costs eligible for EDA reimbursement may not exceed the current Federal per diem rate.

5. Selection of the Architect/Engineer

A. If an Architect/Engineer has been selected by the Recipient prior to EDA approval of the grant award and the contract between the Recipient and the Architect/Engineer has not been previously submitted to EDA, it should be submitted as soon after the grant award as possible. If the selection has not been made at the time of grant award the contract should be sent to the EDA Regional Office as soon as possible after its execution by both parties.

B. For EDA to participate in the cost for architect/engineer services the Architect/Engineer must be selected competitively by sealed bids (formal advertising) or by competitive proposals. If the selection is made by competitive proposal the following requirements apply:

(1) Requests for proposals shall be publicized and shall identify all evaluation factors and their relative importance. Any response to publicized requests for proposals shall be honored to the maximum extent practical;

(2) Proposals will be solicited from an adequate number of qualified sources (normally sufficient to secure at least three proposals from qualified proposers);

(3) The Recipient will have a method for conducting technical evaluations of proposals received and for selecting the best proposal, price and other factors considered;

(4) The Recipient will determine the responsible firm whose proposal is most advantageous to the program, with price and other factors considered. Competitor's qualifications will be evaluated and the most qualified competitor will be selected, subject to negotiation of fair and reasonable compensation.

6. The Architect/Engineer Contract for Services

A. The architect/engineer agreement shall provide for all services required by the Recipient for the planning, design and construction phase of the proposed project. Appropriate standards or guides developed by such professional organizations as the American Consulting Engineers Council (ACEC), American Society of Civil Engineers (ASCE), National Society of Professional Engineers (NSPE), and/or the American Institute of Architects (AIA) may be used where the Recipient does not have standard procurement documents.

B. The Architect/Engineer’s fee for basic services must be either a fixed price or a cost reimbursement with an agreed maximum to be eligible for EDA participation. The amount of EDA participation will be based on a determination, subject to audit, that the compensation is reasonable.

C. The use of the cost-plus-a-percentage-of-cost and percentage of construction cost forms of compensation are specifically prohibited.

D. The Architect/Engineer's fee shall cover all services necessary for the successful execution of the project, including consultations, surveys, soil investigations, supervision, travel, "as-built" or record drawings, arrow diagram (CPM/PERT) where applicable, and incidental costs. The basic fee shall not exceed that prevailing for comparable services in the project area. If the total fee is in excess of the prevailing rate because of special services to be performed, these services shall be identified in the agreement. Such additional charges may be approved for grant participation by EDA if they:

(1) Do not duplicate a charge for services provided for in the basic fee and are within the normal scope of the Architect/Engineer's responsibilities;

(2) Are a proper charge against the project cost; and

(3) Are reasonable for the extra services to be rendered.

E. Regardless of who furnishes the construction inspector, the Architect/Engineer shall be held responsible for making sufficient visits to the project site to determine, in general, if the work is proceeding in accordance with the construction contract.

F. All negotiated architect/engineer contracts (except those of $100,000 or less awarded under small purchase procedures) awarded by Recipients shall include a provision to the effect that the Recipient, EDA, the Comptroller General of the United States, the Inspector General of the Department of Commerce, or any of their duly authorized representatives, shall have access to any documents, books, papers, and records of the architect/engineer (which are directly pertinent to a specific grant project) for the purpose of making an audit, examination, excerpts, and transcriptions. The Recipient shall require the Architect/Engineer to maintain all required records for at least three years after the Recipient makes final payment and all pending matters are closed.

G. EDA requirements for the agreement for architect/engineer services are contained in Exhibit A-1 to these “Requirements for Approved Construction Projects”.

7. Multiple Contracts and Phasing

A. The Recipient is strongly urged to award all contracts for the project construction at one time. Where compelling reasons justify phasing the project, the Recipient must secure the approval of EDA for phasing prior to advertising any portion for bid. The Recipient's request for approval of phasing must include:

(1) Valid reasons justifying the request, and

(2) A statement from the Recipient that it can, and will, fund any overrun that arises in the later phases.

B. Normally EDA will not disburse funds until all construction contracts have been awarded, (an exception is the development of a water source when required to determine the availability of an adequate source of water supply in terms of both quality and quantity as called for in the Grant Agreement). Disbursement of grant funds by phases must be approved by EDA. Such approvals will be given only if the Recipient can demonstrate that a severe hardship will result if such approval is not given and there are compelling reasons why all phases cannot be contracted for at the same time. The recipient must be capable of meeting incurred costs prior to the first disbursement of EDA grant funds.

8. Recipient Furnished Equipment and/or Materials

The Recipient may wish to incorporate into the project equipment and/or materials which it will secure through its own efforts. It is the responsibility of the Recipient to assure that such equipment and/or materials are adequate for the proposed use. The use of such equipment and materials must be approved by EDA to be eligible for EDA financial participation. The Recipient must be prepared to show that the cost claimed for such equipment and/or materials is competitive with local market costs. Acquisitions of Recipient furnished equipment and/or materials under this section are subject to the requirements of 15 CFR Part 24 or15 CFR Part 14. The Recipient shall be required to submit with its request for approval either a paid invoice or current quotes from not less than three suppliers who normally distribute such equipment and/or materials. EDA may require that major equipment items be subject to a lien in favor of EDA and may also require a statement from the Recipient regarding expected useful life and salvage value.

9. Services Performed by the Recipient's Own Forces

A. The Recipient may have a portion or all of the design, construction, inspection, legal services, or other work and/or services in connection with the project performed by personnel who are employed by the Recipient either full-time or part-time (in-house), subject to the following conditions:

(1) EDA must review and approve the Recipient's plan if this method is to be elected by the Recipient.

(2) Such work or services performed by in-house personnel may be considered an eligible cost for EDA reimbursement if in conformance with Office of Management and Budget Circulars A-87, A-21 or A-122, as appropriate.

(3) If a portion of the architect/engineer services is to be performed by in-house forces, the Recipient will submit a statement listing the services to be so performed. This statement should accompany the architect/engineer agreement when it is submitted to EDA for approval.

B. Due to the difficulty in monitoring in-house construction and the limited EDA staff available to perform the monitoring, in-house construction is strongly discouraged. The in-house method of construction may be approved only if:

(1) The Recipient has a special skill required for the construction, e.g., construction of unique Indian structures, or

(2) Substantial cost savings can be demonstrated, or

(3) The Regional Office is satisfied that the Recipient has made all reasonable efforts to obtain a contractor, but has failed to do so because of uncontrollable factors, such as the remoteness of the site combined with a small contract or an overabundance of construction work in the project area, or

(4) It has been determined by EDA that special circumstances require its use to successfully complete the project.

C. If EDA approves the use of the Recipient’s in-house forces to construct all or part of the EDA assisted project and the in-house forces are to be augmented by personnel hired specifically for the EDA assisted project, the hourly wages to be paid to such personnel shall be the same as the hourly wages paid to full time personnel of the Recipient doing the same or similar work If the nature of the work is not similar and/or there is not an established wage scale, the prevailing state or county hourly wage for public employees shall be obtained from the appropriate state or county agency and used for the newly established position. However, non-profit recipients must pay all personnel employed for the construction of the EDA assisted project the prevailing hourly wages for the area as established by the U.S. Department of Labor.

10. Construction Management Services

A. For the purposes of this document, Construction Management is defined as the services of a firm with competent and experienced staff to act as the Recipient's agent to perform all or part of the following:

(1) Aid the project designer to find expedited or less costly methods of construction (Value Engineering).

(2) Monitor the contracting process. This may vary in scope from giving advice to the Recipient to complete control of the contracting process.

(3) Inspection or supervision of inspection of the construction work.

(4) Controlling the expenditure of project funds on a multi-faceted or highly complex project.

(5) Controlling unusual methods of contracting such as "fast track" or “turn-key”.

B. EDA will not normally approve the use of a Construction Management firm for projects costing less than $5 million.

C. If the Recipient wishes to use a Construction Manager, EDA will participate in such costs only if EDA approves the proposed or actual contract for such services between the Recipient and the Construction Manager.

D. The compensation for Construction Management services is subject to the same rules as those for architect/engineer services.

E. The Construction Management Agreement must spell out who is responsible for construction inspection, approval of construction and supply contracts, change orders and other areas of possible conflicts (i.e., the division of responsibility and authority between the Recipient, the Architect/Engineer and the Construction Manager).

11. Certification of Acquisition of Land, Easements and Rights-of-Way

A. As required in the Financial Assistance Award the Recipient must furnish evidence satisfactory to the EDA that it has good and merchantable title to the tracts or parcels of land on which buildings, structures, or other project improvements will be located, with any liens or encumbrances noted, and that it has obtained all necessary easements, permits, rights-of-way, franchises, condemnations, and all Federal, State and local approvals necessary to the completion of the project.

B. To aid EDA in making its determination, the Recipient must furnish a description of the sites and rights-of-way on which the project will be located. Exhibit C of this document is a "Certificate as to Project Site, Rights-of-Way, and Easements," which is a format acceptable to EDA as evidence of the Recipient's title to the real property necessary for the project. The Recipient has the option to prepare the title opinion in a format that meets local law or custom. Any title opinion submitted must be approved by EDA. EDA may require additional documentation.

C. If land acquisition is a part of the project, the EDA project file must be documented to show the basis for determining that the amount of land acquired and the cost of the land is reasonable. If an appraisal is required, a professional appraiser(s) should perform the service. An appraiser registered with a national society and/or licensed by the State will normally be required.

D. Any significant change in the amount and cost of land from that upon which the project approval was based must be approved by EDA to be eligible for EDA reimbursement.

E. No financial assistance under the Act will be approved for a project involving public or privately owned land adjacent to or in the vicinity of a federally owned or operated airfield, unless the Recipient can demonstrate that the proposed project is compatible with the airfield land use plan prepared for that facility.

12. Relocation Assistance

The provisions of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (P.L. 91-646), as amended, are applicable to all States and political subdivisions of States and non-profits, which are recipients of EDA funding assistance. This Act requires financial and other assistance to persons, businesses, or farm operations displaced from real property acquired for a project financed wholly or in part with Federal funds. It also requires compliance with specific guidelines pertaining to reimbursable costs incidental to such land acquisition. Recipients are required to comply fully with the intent of this Act.

13. Clean Water Act Compliance Procedures

A. The National Environmental Policy Act (NEPA) requires all federally funded actions to be compliant with all Federal environmental regulations and Executive Orders, including the Clean Water Act. The Clean Water Act prohibits anyone from discharging pollutants without a National Pollutant Discharge Elimination System (NPDES) permit, or from knowingly violating an existing NPDES permit as the result of a connection to an existing sewage treatment plant. These permits contain limits on discharge, as well as monitoring and reporting requirements tailored to the regulated facility.

B. The U.S. Environmental Protection Agency (EPA) has delegated NPDES permitting authority to 43 states (as of March 1999). In most states the NPDES permits are issued from the state environmental protection agency. NPDES permits for the remaining 7 states, territories, Federal Indian Reservations, and the District of Columbia are issued from the appropriate EPA regional office. In the states that do not have delegated NPDES authority, a state water quality permit must also be obtained in addition to the EPA NPDES clearance.

C. EDA will not disburse any funds for a facility requiring a NPDES permit or an amendment to an existing permit, prior to the issuance of the permit and prior to the start of construction. However, EDA may pay its share of engineering design costs, and costs associated with any other element of the project unrelated to the regulated pollutant discharge prior to obtaining the NPDES permit.

14. Project Financing

Prior to obtaining EDA approval of the project's final plans and specifications, the Recipient should furnish evidence to the EDA Project Manager that the Recipient has its share of matching funds either on hand or firmly committed. Any change in the amount or availability of the Recipient's share must be made known to EDA at this time. This is equally true of the interim financing amount and availability.

15. Safeguarding Funds

A. Checks drawn to pay project costs will be signed by the Authorized Representative of the Recipient and may be counter-signed by other representatives of the Recipient if he/she so designates. The Recipient shall retain all bank statements, deposit slips, canceled checks, and related invoices pertaining to these project costs to facilitate final audit.

B. Consistent with the national goal of expanding the opportunities for minority business enterprises, Recipients are encouraged to use minority banks as the depository for project funds.

C. Although a separate bank account is not required by EDA, the Recipient is urged to use one for the EDA project as it will be helpful to the audit of the project costs claimed by the Recipient at project closeout.

D. For non-governmental Recipients, EDA recommends that the Recipient have the custodian of the project funds bonded in an amount not less than the amount of the EDA grant.

16. Department of Commerce Metric Program

Section 5164 of the Omnibus Trade and Competitiveness Act of 1988 (P.L. 100-418) designates the metric system of measurement as the preferred system of weights and measures for U.S. trade and commerce.

17. Seasonality

It is EDA policy to promote construction of projects continuously throughout the year. Recipients and their Architect/Engineers are encouraged to design projects so that construction will not be unreasonably curtailed by weather.

18. Design for the Handicapped

A. Any building or facility financed in whole or in part with assistance under the Act must be designed, constructed, or altered, so as to insure ready access to, and use of, such building or facility by the physically handicapped, as required by P.L. 90-480 (42 U.S.C. 4151-4156) and the regulations promulgated there under (41 CFR Subpart 101-19.6).

B. Except as otherwise provided in paragraph (C) of this section, every building, except a residential structure, shall be designed, constructed, or altered in accordance with the minimum standards contained in the "American National Standard Specifications for Making Buildings and Facilities Accessible to, and Usable by, the Physically Handicapped," Number A 117.1 (1971) approved by and available from the American National Standards Institute, Inc., 1430 Broadway, New York, NY 10018.

C. The standards established in paragraph (B) of this section shall not apply to:

(1) The design, construction, or alteration of any portion of a building or facility which need not, because of its intended use, be made accessible to, or usable by, the public or by physically handicapped persons;

(2) The alteration of an existing building if the alteration does not involve the installation of, or work on, existing stairs, doors, elevators, toilets, entrances, drinking fountains, floors, telephone locations, curbs, parking areas, or any other facilities susceptible of installations or improvements to accommodate the physically handicapped;

(3) The alteration of an existing building or facility, or of such portions thereof, to which application of the standards is not structurally possible.

D. The standards established in paragraph (B) of this section may be modified or waived on a case-by-case basis, provided that the Administrator of the General Services Administration determines that such waiver or modification is clearly necessary.

19. Reporting of Project Progress

A. Recipients are required to constantly monitor project progress to assure that time schedules are being met, project work units by time periods are being accomplished, and other performance goals are being achieved. This review shall be made for each program, function, or activity as set forth in the approved grant application.

B. The Recipient is required to submit a project performance report for each calendar quarter. The report will cover the following for each program, function, or activity involved:

(1) A comparison of actual accomplishments to the timetable established in the Grant Award;

(2) Reasons for delays in those cases where the timetable approved by EDA was not met;

(3) Any change to the purpose, nature, location, bona-fide need, neighborhood served, size, funding, or cost of the project;

(4) All change orders issued up to the date of the report and not previously reported to EDA; and

(5) Other pertinent information including, when appropriate, an analysis and explanation of cost overruns or high unit costs.

C. The project performance report will be due not later than January 15, April 15, July 15 and October 15 for the immediate previous quarter year. This requirement shall begin with the Recipient's acceptance of the EDA Grant Award and shall end when EDA approves the final grant disbursement.

D. Between the required performance reporting dates, events may occur which have significant impact upon the project or program. In such cases, the Recipient will be required to inform EDA as soon as the following types of conditions become known:

(1) Problems, delays, or adverse conditions, which will materially affect the ability of the Recipient to attain program objectives, prevent the meeting of time schedules and goals, or preclude the attainment of project work by established time periods. This disclosure shall be accomplished by a statement of the action taken, or contemplated, and any Federal assistance needed to resolve the situation.

(2) Favorable developments or events which enable meeting time schedules and goals sooner than anticipated or producing more work than originally projected; or

(3) If any performance review conducted by the Recipient discloses the need for change in the budget estimates, the Recipient is required to submit a request for budget revision.

E. A sample format for the required project performance report is included herein as Exhibit J. The report will be sent to the EDA Regional Office. The Recipient may use a format other than the EDA sample, provided that the information called for in this section is furnished.

F. EDA does not normally permit grant advances. However, where EDA determines that grant advances are necessary and in the best interest of the Government and the Recipient, the Recipient will be required to submit with the project performance report a Report of Federal Cash Transactions. The EDA Regional Office shall furnish the required forms for this report.

G. EDA will not process any requests for grant disbursement from Recipients with delinquent performance reports.

20. Environmental Requirements

A. EDA is required by law to insure that proper environmental review of its actions takes place; that there is a proper balance between the goals of economic development and environmental enhancement in its actions; and, that adverse environmental impacts from its actions are mitigated or avoided to the extent possible.

B. Environmental assessments of EDA actions are conducted in accordance with the National Environmental Policy Act of 1969, as amended (NEPA) (42 U.S.C. 4321 et. seq.), the Environmental Quality Improvement Act (42 U.S.C. 4371 et. seq.), The Clean Air Act, as amended (42 U.S.C. 7401 et. seq.), the National Historic Preservation Act of 1966 (16 U.S.C. 470 et. seq.), The Wild and Scenic Rivers Act, as amended (16 U.S.C. 1271 et. seq.), the Flood Disaster Protection Act of 1973, as amended (42 U.S.C. 4002 et. seq.), the Federal Water Pollution Control Act, as amended (33 U.S.C. 1251 et. seq.), and the Council on Environmental Quality (CEQ) Regulations (40 CFR Section 1500-1508), as specified in EDA Directives 17.02-2, 17.02-7, and 17.04, as hereafter amended or superseded. Directives are available from any EDA office.

C. EDA recipients are subject to Federal, state and local requirements concerning hazardous substances, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), Public Law 96-510 (1980), as amended by Public Law 99-499 (1986), 42 U.S.C. 9601-9675; and the Resource Conservation and Recovery Act (RCRA), Public Law 89-272 (1965), as amended by Public Law 94-580 (1976), Public Law 96-482 (1980) and Public Law 98-616 (1984), 42 U.S.C. 6901-6991.

21. Project Revisions

After Recipient acceptance of the EDA grant award, any change to the project as described in the grant award must be reviewed and approved by EDA. To be eligible for EDA financial participation the proposed revision must meet certain conditions. See Section V of this document for guidelines on securing EDA approval of proposed project revisions.

1. Contracting Standards

A. For States: If a State is the recipient of the EDA grant award, the State may follow the same policies and procedures it uses for procurements from its non-Federal funds provided that the State will ensure that every purchase order or other contract includes any clauses required by Federal statutes and Executive Orders and their implementing regulations. For reimbursable cost determinations, OMB Circular A-87 will be applicable.

B. For Other than States: Recipients of EDA grants other than States may use their own procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards contained in these “Requirements for Approved Construction Projects”. Recipients may request EDA to approve self-certification of their procurement system. Such self-certification shall not limit EDA’s right to survey the system. The Recipient must cite specific procedures, regulations, standards, etc. as being in compliance with EDA and other Federal requirements and have its system available for review. In the absence of written procurement regulations issued by the Recipient, which meet the following requirements, applicable Federal procurement standards shall govern.

C. Contract Administration System: Recipients will maintain a contract administration system, which ensures that contractors perform in accordance with the terms, conditions and specifications of their contracts or purchase orders.

D. Standards of Conduct: Recipients shall maintain a written code or standards of conduct, which shall govern the performance of their officers, employees or agents engaged in the award and administration of contracts supported by Federal funds. No employee, officer or agent of the Recipient shall participate in selection, or in the award or administration of a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when any of the following has a financial or other interest in the firms elected for award:

(1) An employee, officer or agent

(2) Any member of his/her immediate family

(3) His or her partner

(4) An organization, which employs, or is about to employ, any of the above.

The Recipient's officers, employees or agents shall neither solicit nor accept gratuities, favors or anything of monetary value from contractors, potential contractors, or parties to subagreements except that Recipients may set minimum rules where the financial interest is not substantial or the gift is an unsolicited item of nominal intrinsic value. To the extent permitted by State or local law or regulations, such standards of conduct shall provide for penalties, sanctions, or other disciplinary actions for violations of such standards by the Recipient's officers, employees, or agent, or by contractors or their agents.

E. State and Local Agreements: To foster greater economy and efficiency, Recipients are encouraged to enter into State and local intergovernmental agreements for procurement or use of common goods and services.

F. Surplus Property: Recipients are encouraged to use Federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs.

G. Value Engineering: Recipients are encouraged to use value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. EDA will not normally approve value engineering costs for construction contracts with estimated costs of less than $1,000,000. Value engineering is defined for the purposes of this paragraph as a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost. Value engineering, as a function, is done separately from the architect/engineer design by a person or firm not controlled by the architect/engineer.

H. Awards to Responsible Contractors: Recipients will make awards only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance and financial and technical resources.

I. Maintenance of Records: Recipients will maintain records sufficient to detail the significant history of each procurement affecting the EDA assisted project. These records will include, but are not necessarily limited to, the rationale for method of procurement, selection of contract type, contractor selection or rejection, and the basis for contract price.

J. Time and Material Contracts: Recipients will use time and material type contracts only:

(1) After a determination that no other type of contract is suitable, and

(2) If the contract includes a ceiling price that the contractor exceeds at its own risk.

K. Settlement of Issues: Recipients alone will be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to source evaluation, protests, disputes and claims. These standards do not relieve the Recipient of any contractual responsibilities under its contracts. EDA will not substitute its judgment for that of the Recipient unless the matter is primarily a Federal concern. Violations of law will be referred to the local, State, or Federal authority having proper jurisdiction.

L. Protest Procedures: Recipients will have protest procedures to handle and resolve disputes relating to their procurements and shall in all instances disclose information regarding the protest to EDA. A protestor must exhaust all administrative remedies with the Recipient before pursuing a protest with EDA. Reviews of protests by EDA will be limited to:

(1) Violations of Federal law or regulations (violations of State or local law will be under the jurisdiction of State or local authorities); and

(2) Violations of the Recipient's protest procedures for failure to review a complaint or protest. Protests received by EDA other than those specified above will be referred to the Recipient for resolution.

2. Competition in Procurement

A. All procurement transactions affecting the EDA project will be conducted in a manner providing full and open competition consistent with the standards contained herein. Some of the situations considered to be restrictive of competition include but are not limited to:

(1) Placing unreasonable requirements on firms in order for them to qualify to do business,

(2) Requiring unnecessary experience and excessive bonding,

(3) Noncompetitive pricing practices between firms or between affiliated companies,

(4) Noncompetitive awards to consultants that are on retainer contracts,

(5) Organizational conflicts of interest,

(6) Specifying only a "brand name" product instead of allowing "an equal" product to be offered and describing the performance of other relevant requirements of the procurement, and

(7) Any arbitrary action in the procurement process.

B. Recipients will conduct procurements in a manner that prohibits the use of statutorily or administratively imposed in-State or local geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in these Requirements for Approved Construction Projects preempts State licensing laws. When contracting for architectural and engineering (A/E) services, geographical location may be a selection criteria provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract.

C. Recipients will have written selection procedures for procurement actions. These procedures will ensure that all solicitations:

(1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such descriptions shall not, in competitive procurements, contain features, which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured, and when necessary, shall set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. 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. The specific features of the named brand which must be met by offerors shall be clearly stated; and

(2) Identify all requirements, which the offerors must fulfill, and all other factors to be used in evaluating bids or proposals.

D. Recipients will ensure that all lists of prequalified persons, firms or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, Recipients will not preclude potential bidders from qualifying during the solicitation period.

3. Acceptable Methods of Procurement

A. Procurement by Small Purchase Procedures: Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies or other property that do not cost more than the simplified acquisition threshold fixed at 41 U.S.C. 403(11) (currently set at $100,000) in the aggregate. If small purchase procurements are used, price or rate quotations will be obtained from an adequate number of qualified sources (normally at least three quotes will be required).

B. Procurement by Sealed Bids (formal advertising): Bids are publicly solicited and a firm-fixed-price contract (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. The sealed bid method is the preferred method for procuring construction. In order for sealed bidding to be feasible, the following conditions should be present:

(1) A complete, adequate and realistic specification or purchase description approved by EDA is available,

(2) Two or more responsible bidders are willing and able to compete effectively for the business, and

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

C. If sealed bids are used, the following requirements apply:

(1) The invitation for bids will be publicly advertised and bids shall be solicited from an adequate number of known suppliers, providing them sufficient time prior to the date set for the opening of bids.

(2) The invitation for bids, which will include any specifications and pertinent attachments, shall define the items or services in order for the bidder to properly respond.

(3) All bids will be publicly opened at the time and place prescribed in the invitation for bids.

(4) A firm-fixed-price contract award will be made in writing to the lowest responsive and responsible bidder. When specified in bidding documents, factors such as discounts, transportation costs and life cycle costs shall be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of.

(5) Any or all bids may be rejected if there is a sound and properly documented reason.

D. Procurement by Competitive Proposals: The technique of competitive proposals may be used on EDA projects to secure architect/engineer services and is conducted with more than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following requirements apply:

(1) Requests for proposals will be publicized and will identify all evaluation factors and their relative importance. Any response to publicized requests for proposals shall be honored to the maximum extent practical.

(2) Proposals will be solicited from an adequate number of qualified sources (normally EDA requires responses from at least three responsible firms).

(3) Recipients will have a method for conducting technical evaluations of the proposals received and for selecting awardees.

(4) Awards will be made to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered.

(5) Recipients may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potential source to perform the proposed effort.

E. Procurement by Noncompetitive Proposals: This technique requires EDA prior written concurrence and is conducted by solicitation of a proposal from only one source, or after solicitation of a number of sources, competition is determined inadequate. Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals and one of the following circumstances applies:

(1) The item is available only from a single source; or

(2) The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation; or

(3) After solicitation of a number of sources, competition is determined inadequate.

4. Unacceptable Method of Procurement

The cost-plus-a-percentage-of-cost method of contracting is unacceptable for use on EDA assisted projects. EDA grant funds may not be used to reimburse costs incurred under such a contract.

5. Contracting with Disadvantaged Firms

A. The Recipient shall make positive efforts to utilize small businesses, minority-owned firms, and women’s business enterprises, whenever possible. Recipients shall take all of the following steps to further this goal.

(1) Ensure that small businesses, minority-owned firms, and women’s business enterprises are used to the fullest extent practicable.

(2) Make information on forthcoming opportunities available and arrange time frames for purchases and contracts to encourage and facilitate participation by small businesses, minority-owned firms, and women’s business enterprises.

(3) Consider in the contract process whether firms competing for larger contracts intend to subcontract with small businesses, minority-owned firms, and women's business enterprises;

(4) Encourage contracting with consortiums of small businesses, minority-owned firms and women's business enterprises when a contract is too large for one of these firms to handle individually.

(5) Use the services and assistance, as appropriate, of such organizations as the Small Business Administration, and the Department of Commerce’s Minority Business Development Agency in the solicitation and utilization of small businesses, minority-owned firms and women’s business enterprises.

6. Contract Cost and Price Analysis

A. Recipients must perform a cost or price analysis in connection with every procurement action including contract modifications (change orders). The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation, but as a starting point, Recipients must make independent estimates before receiving bids or proposals. A cost analysis must be performed when the offeror is required to submit the elements of his estimated cost, e.g., under professional, consulting, and architectural/engineering services contracts. A cost analysis will be necessary when adequate price competition is lacking, and for sole source procurements, including contract modifications or change orders, unless price reasonableness can be established on the basis of a catalog or market price of a commercial product sold in substantial quantities to the general public or based on prices set by law or regulation. A price analysis will be used in all other instances to determine the reasonableness of the proposed contract price.

B. Recipients will negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration will be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor's investment, the amount of subcontracting, the quality of its record of past performance and industry profit rates in the surrounding geographical area for similar work.

C. Costs or prices based on estimated costs for contracts under grants will be allowable only to the extent that costs incurred or cost estimates included in negotiated prices are consistent with Federal cost principles (see OMB Circulars A-21, A-87 or A-122 as applicable). Recipients may reference their own cost principles that comply with the applicable Federal cost principles.

D. The cost-plus-a-percentage-of-cost and percentage of construction cost methods of contracting shall not be used.

7. Advertising for Bids

A. In the absence of State or local law to the contrary, the advertisement for bids should appear in publications of general circulation a minimum of four times within a 30-day period prior to the opening of bids.

B. Additional circulation of the invitation for bids is encouraged if it is needed to obtain the coverage necessary to secure competitive bids.

C. Generally, a minimum of 30 days should be allowed for submission of bids.

8. Bonding and Insurance Requirements

A. For construction or facility improvement contracts or subcontracts exceeding $100,000 the following minimum bonding requirements apply:

(1) The bonding company selected must be listed in U.S. Treasury Department Circular 570.

(2) 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 bid as assurance that the bidder will, upon acceptance of his bid, execute such contractual documents as may be required within the time specified.

(3) A performance bond on the part of the contractor for 100 percent of the contract price.

(4) A payment bond on the part of the contractor for 100 percent of the contract provisions.

B. The Recipient shall require that each construction contractor and all subcontractors maintain, during the life of its contract, Workmen's Compensation Insurance, Public Liability Insurance, and such other types of special coverage required by the nature of the work and State and local law. When appropriate, the Recipient shall require the prime contractor to provide Builder's Risk Insurance as part of the construction contract. In any case, the responsibility for seeing that coverage is obtained and kept in force remains with the Recipient. Such coverage is an eligible project cost, when obtained by the Recipient directly.

9. Bid Schedules for Alternative Materials

A. Should the Recipient, acting upon the advice of his/her consultant Architect/Engineer desire to obtain competitive prices for differing materials, such bids should be requested on the basis of "Bid Schedule A”, "Bid Schedule B", etc. Bid Schedules, as used herein, refer to the method used to obtain bids on more than one material to be used for the same purpose. As an example, if 2,000 linear feet of sewer line were to be installed, Bid Schedule A might call for the pipe material to be cast iron. Bid Schedule B might call for the pipe material to be ductile iron. Bid Schedule C might call for the material to be asbestos cement, etc.

B.  If bids are asked for on the basis of two or more Bid Schedules as set forth above, the bid documents must clearly set forth that the contract will be awarded to the bidder having proposed the lowest responsive bid within the amount of funds announced as available by the Recipient to finance the contract and including the Bid Schedule upon which that Contractor bid the lowest price.

C. If the Recipient wishes to use a bid material, which will result in increased cost, EDA may permit the use of the material chosen, but the amount of grant participation by EDA shall remain based on the lowest responsive bid. The contract must be awarded to the lowest bidder determined in accordance with the procedure described above unless a deviation is specifically allowed in applicable State and local law.

10. Non-EDA Work

A. If the Recipient plans to add work that is an addition to the approved EDA project, the following will apply:

(1) The advertisement for bids, all bid documents, and contract documents shall clearly define and separate the EDA portion of the work from the non- EDA portion.

(2) The Recipient may offer for bid and award work in addition to the EDA portion, provided:

a. The Recipient understands that EDA will participate in the EDA portion only;
b. The additional work does not adversely affect the original intent of the EDA project or its economic impact, as approved.

(3) Contracts shall be so drawn that the EDA-assisted portion of the work is clearly identifiable at all times during construction.

(4) Underruns in the EDA project cannot be applied to assist the Recipient in funding work, which is not a part of the EDA project. It is the responsibility of the Recipient to pay for all added work in full.

(5) In the event of an overrun on the EDA portion of the work, it is the Recipient's responsibility to supply the necessary additional funds and to deposit such funds in the project account. A revised project budget estimate will then be prepared which will clearly show the portion of project cost to be shared by EDA and the portion the Recipient must fund in its entirety. In addition, the overall percentage participation of EDA in the project shall be clearly identified.

B. When the EDA project is included with non-EDA assisted work, the Recipient will normally award to the lowest bidder on all the work. However, EDA participation will be based on the lowest bid for the EDA-assisted portion. When this occurs, the Recipient will prepare a memorandum to EDA, which will clearly present the details of the award.

11. EDA Review of Proposed Procurement Documents

A. EDA approval of plans, specifications, contract and related documents is to assure compliance with terms of the EDA grant award and does not attest to the accuracy or completeness of design, dimensions, details, proper selection of materials nor compliance with required codes or ordinances. This responsibility rests with the Recipient.

B. A pre-bid review of proposed construction bid documents by EDA is required if:

(1) The procurement is expected to exceed the simplified acquisition threshold (currently $100,000) and the Recipient’s procurement procedures and operations have not been certified by EDA and/or do not comply with the procurement standards of this document, or

(2) The scope of the work as approved in the EDA grant award has changed, or

(3) The proposed bid documents specify one or more “brand name” products.

C. A pre-award review by EDA is required if:

(1) The procurement is expected to exceed the simplified acquisition threshold (currently $100,000) and is to be awarded without competition after one bid or offer is received in response to a solicitation, or

(2) The proposed award is more than the simplified acquisition threshold and is to be awarded to other than the apparent low bidder under a sealed bid procurement, or

(3) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the simplified acquisition threshold, or

(4) The Recipient’s procurement procedures or operation fails to comply with the procurement standards in this Requirement for Approved Construction Projects, or

(5) The procurement, which is expected to exceed the simplified acquisition threshold, specifies a “brand name” product.

D. It will greatly expedite EDA’s review of the proposed bid documents if the Recipient completes the Checklist for Construction Contracts (Exhibit A-2), has it signed by the Recipient’s authorized representative and submits it to the EDA regional office with the proposed construction bid package for approval. EDA review and approval of the proposed contract documents will also be expedited if the Recipient uses standardized documents such as "Contract Documents for Construction of Federally Assisted Water and Sewer Projects" jointly prepared, endorsed by, and available from, the Environmental Protection Agency, Rural Development, the Department of Housing and Urban Development, the Associated General Contractors of America, the Consulting Engineers Council and the National Society of Professional Engineers. Standardized contract forms available from the American Institute of Architects are also acceptable to EDA.

E. Until EDA has reviewed and approved the Recipient's proposed contracts and related procurement documents, the Recipient will be proceeding at its own risk regarding the eligibility of costs incurred.

12. Construction and Services Contract Provisions

A. The proposed contract documents to be part of the invitation for bids should contain at least the following:

(1) An Index
(2) Advertisement for Bids
(3) Information for Bidders
(4) Bid Form
(5) Contract Form
(6) Bid Bond
(7) Performance Bond
(8) Payment Bond
(9) General Conditions
(10) "Supplemental General Conditions" (to be furnished by EDA)
(11) Technical Specifications
(12) Working Drawings
(13) Notice of Requirements for Affirmative Action to Ensure Equal Employment Opportunity (E.O. 11246 and 41 CFR 60-4) (Exhibit E)

B. The package sent to EDA should also contain a documentation of the estimated cost for the proposed contract (see Section II 6. of these “Requirements for Approved Construction Projects”).

C. The Recipient shall include the following contract provisions or conditions in all procurement contracts and subcontracts for the EDA assisted project.

(1) Contracts in excess of the simplified acquisition threshold (currently $100,000) shall contain 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 sanctions and penalties as may be appropriate.

(2) Contracts in excess of the simplified acquisition threshold shall contain suitable provisions for termination by the Recipient including the manner by which it will be effected and the basis for settlement. In addition, such contracts shall describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.

(3) All contracts awarded in excess of $10,000 by the Recipient and their contractors or subrecipients shall contain a provision requiring compliance with Executive Order 11246, entitled "Equal Employment Opportunity," as amended by Executive Order 11375, and as supplemented in Department of Labor regulations (41 CFR Part 60).

(4) All contracts and subgrants in excess of $2,000 for construction or repair shall include a provision for compliance with the Copeland "Anti-Kickback" Act (18 USC 874) as supplemented in Department of Labor regulations (29 CFR, Part 3). This Act provides that each contractor or subrecipient 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/she is otherwise entitled. The Recipient shall report all suspected or reported violations to EDA.

(5) All construction contracts in excess of $2,000 awarded by the Recipient and Subrecipients shall include a provision for compliance with the Davis- Bacon Act (40 USC 276a to a-7) as supplemented by Department of Labor regulations (29 CFR, Part 5). Under this Act 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 Recipient shall place a copy of the current prevailing wage determination issued for each solicitation and the award of a contract shall be conditioned upon the acceptance of the wage determination. The Recipient shall report all suspected or reported violations to EDA.

(6) Where applicable, all contracts awarded by the Recipients and Subrecipients 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 102 and 107 of the Contract Work Hours and Safety Standards Act (40 USC 327-330) as supplemented by Department of Labor regulations (29 CFR, Part 5). Under Section 102 of this Act, each contractor shall be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than 1-1/2 times the basic rate of pay for all hours worked in excess of 40 hours in the work week.

(7) 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. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.

(8) Contracts or agreements for the performance of experimental, developmental, or research work shall provide for the rights of the Federal Government and the Recipient in any resulting invention in accordance with 37 CFR Part 401, “Rights to Inventions made by Nonprofit Organizations and Small Business Firms under Grants, Contracts and Cooperative Agreements”.

(9) All negotiated contracts (except those awarded by small purchases procedures) awarded by the Recipient shall include a provision to the effect that the Recipient, EDA, the Office of Inspector General, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access for the purpose of audit and examination to any books, documents, papers, and records of the contractor which are directly pertinent to that specific contract.

(10) The Recipient shall require contractors to maintain all required records for three years after the Recipient makes final payments and all other pending matters are closed.

(11) Contracts and subgrants of amounts in excess of $100,000 shall contain a provision that requires the Recipient to agree to comply with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act (42 USC 7401 et seq.) and the Federal Water Pollution Control Act as amended (33 USC 1251 et seq.), Violations shall be reported to EDA and the regional office of the Environmental Protection Agency (EPA).

(12) Recipients and subrecipients must contain mandatory standards and policies relating to energy efficiency which are contained in the State energy conservation plan, where applicable, issued in compliance with the Energy Policy and Conservation Act (P.L. 94- 165).

(13) EDA may require changes, remedies, changed conditions, access and record retention and suspension of work clauses approved by the Office of Federal Procurement Policy.

(14) The EDA project number should appear on all drawings and on the face sheet of specification documents. In the case of a single sheet layout included in folders, the project number should be shown on the face of the sheet or at a point, which will be outside when folded. If the layout consists of two or more sheets, all sheets should be so identified.

(15) In all cases, a reasonable time must be allowed to perform the work and the contract documents should stipulate the number of calendar days allowed for completing the work.

(16) EDA urges that a liquidated damage provision be included in all construction contracts with a specific dollar amount of daily damage to be assessed against the Contractor for each calendar day beyond the stipulated completion date. The daily amount of damages shall be a reasonable and adequate amount based upon the circumstances and estimated dollar cost of the individual contract, or the revenue-producing capacity of the project. The liquidated damages provision provides the Recipient with a feasible means of securing compensation for damages for delays in completing the work. Without such a provision, the proving of such damage is difficult and usually entails court action. In the event that the Recipient objects to the inclusion of a liquidated damages provision in construction contracts, a statement of the reasons for objecting should be submitted with the proposed contract documents.

(17) The Architect/Engineer should be encouraged to use deductive alternates, which do not alter the scope of the project, affect the economic impact or project revenue, or change the project justification. Thus, should the bids exceed the cost estimate, deductive alternates may be used to reduce the cost to the extent necessary to come within the approved funds. Deductive alternates, where used, must be listed in the order to be used on the bid documents and must be taken in that order when awarding the contract. Deductive alternates should not be used for material. EDA recommends that unit price bidding based on quantities estimated by the Architect/Engineer so as to arrive at a total base bid be used to the greatest practical degree.

(18) The limiting of materials and/or equipment to a particular manufacturer or brand name ("sole source") must have EDA approval to be eligible for reimbursement from grant funds unless an "or equal" clause is included in the equipment specifications.

(19) EDA discourages the use of performance type specifications. If the Recipient or his/her Architect/Engineer wishes to use performance type specifications, written approval must be secured from EDA.

(20) See Section II, paragraph 8 of these “Requirements for Approved Construction Projects” for bonding and insurance requirements.

(21) Exhibit B, "Supplemental General Conditions" found in the Exhibits section of these "Requirements for Approved Construction Projects" must be made a part of the construction bid and contract documents unless all EDA and other Federal requirements contained therein are covered elsewhere.

(22) The bidding documents should stipulate that:

(a) The Recipient may consider any bid informal which is not prepared and submitted in accordance with the provision of the bid documents and may waive any informalities or reject any and all bids;

(b) Any bid may be withdrawn prior to the time scheduled for the opening of bids but not afterward; and

(c) Any bid received after the time and date specified for the bid opening shall not be considered.

(23) Stated allowances may be used for certain items such as door and/or window hardware with the approval of EDA.

(24) All of the above documents shall be included in the sets of bidding documents to be issued to prospective bidders, with any changes or additions recommended by EDA. The responsibility for complying with all State and local laws rests with the Recipient.

(25) Exhibit E to these “Requirements for Approved Construction Projects” is a notice, which provides goals and timetables for minority and female participation in construction work. This notice must be included in all invitations for bids for construction projects for which the prime contract and any related subcontracts are in excess of $10,000. EDA shall furnish the Recipient with the appropriate goals and timetables to be inserted in the above notice. In addition, the requirements of the above notice have been provided in the "Supplemental General Conditions” (Exhibit B) as the Standard Federal Equal Employment Opportunity Construction Contract Specifications.

(26) EDA approval of plans, specifications, contract and related documents is to assure compliance with terms of the Grant Agreement and does not imply nor attest to the accuracy or completeness of design, dimensions, details, proper selection of materials, nor compliance with required codes or ordinances. This responsibility rests with the Recipient.

(27) In the absence of State or local law to the contrary, the advertisement for bids will conform to the requirements of Section II 7 of these “Requirements for Approved Construction Projects”.

(28) Only complete sets of plans and specifications should be issued to prospective contractors and/or subcontractors.

(29) Generally, a minimum of 30 days should be allowed for submission of bids.

13. Wage Rates

A. Wage rates paid for labor must not be less than the prevailing area wages as determined by the Secretary of Labor and embodied in the construction contract, pursuant to the provisions of the Davis-Bacon act, as amended (40 USC 276a to 276a-7). EDA will secure the wage determination for the Recipient based on the following.

B. Most areas of the United States are covered by existing Department of Labor (DOL) wage decisions published and updated at irregular intervals. If the Recipient's project is in a covered area, the EDA Regional Office will supply copies of the applicable wage decision upon the Recipient's request. If the area is not covered by an existing wage decision the following procedure will apply. Between 45 and 60 days prior to the anticipated date of advertising for bids, the Recipient shall send to the EDA Regional Office a request for a wage determination (also referred to as a wage decision) defining the type of construction category (Building, Heavy or Highway) with each feature of work listed under the appropriate category. In addition, the crafts or skills needed for each category shall be listed and any pertinent wage information available submitted, such as statements from the secretaries of the Association of General Contractors and the Building Trades Council having jurisdiction. In isolated communities, certified copies of current contractors' payrolls for similar type work in the area concerned may accompany the request. When a State wage determination is required by State law, the Recipient must secure a schedule of rates from the State Labor Department and incorporate both State and Federal schedules of rates in the contract documents. The Recipient is responsible for seeing that the wage rates shown in the contract documents reflect not less than the higher of the Federal or State rate by trade. EDA will secure the wage decision from the appropriate Department of Labor Regional Administrator.

C. Each feature of work scheduled must call for Building, Heavy, or Highway wage rates, if applicable. Where a proposed contract involves only one type of construction, the specifications shall so state. Where more than one type of construction is involved, the specification shall identify, as specifically as possible, into which category of construction each work item falls. This decision, made by the Recipient in consultation with the Architect/Engineer, shall be based on local or area practice to insure fairness to all prospective bidders on construction contracts to be awarded.

D. Wage decisions are only valid for a 120-day period and extensions of wage decisions shall not be granted. If the decision expires without being superseded prior to award of contract, a new wage decision must be secured and included in the proposed contract documents prior to award. The request for a new wage decision shall be addressed to the EDA Regional Office. If the wage rate included in the Invitation for Bids is superseded, the new wage rate must be substituted if the new wage rate decision is dated over ten days prior to the bid openings; otherwise the old wage rate shall apply.

E. Contractors and subcontractors shall be advised that upon acceptance of their bids, they are obligated to pay not less than the established wage rate unless otherwise required by law. Wage rates need not be listed for non-manual workers, including executive, supervisory, administrative and clerical employees.

F. Wage rate schedules are generally not required for contracts between Recipients and railroads and other public utilities for construction services to the extent that the services are performed by personnel employed directly by the utility concerned and paid at rates prevailing for the type of work and utility concerned.

G. EDA or the Department of Labor may cause investigation to be made as may be necessary to assure compliance with the labor standard clauses required by the regulations contained in 29 CFR, Part 5 and the applicable statutes listed therein. Complaints made to, or which come to the attention of the Recipient, shall be called to the attention of the EDA Regional Office.

H. The Recipient shall require each contractor and subcontractor to submit, in compliance with the Davis-Bacon Act, a weekly payroll record. These records shall be retained for a period of three years from the date of completion of the contract and in a manner reasonably accessible. Such payroll records shall be made available at all times for inspection by EDA, the Department of Commerce Inspector General or their authorized representative, and by authorized representatives of the Department of Labor. The recipient shall file these records by contract number. If the Recipient wishes to use another system for maintaining these records, the EDA Regional Office shall be consulted to avoid any violations of the Privacy Act. The Recipient shall check the submitted payroll records to assure they contain the following:
 

(1) A properly completed payroll Form WH-347, or

(2) If another form is used, all the information required by Form WH-347, including the name, address, correct job classification, rate of pay, daily and weekly number of hours worked, deductions made, and actual wages paid for all employees; and the Statement of Compliance, properly executed as shown on the reverse side of Department of Labor Form WH-347, "Payroll Reporting Form" containing all of the information requirements including the Statement of Compliance. Copies are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402.

I. Where a construction contract has been awarded and work has commenced on the EDA approved project prior to acceptance of the Grant Award, wage rates and requirements listed herein shall be retroactive to the date of start of construction.

14. The Bid Opening

A. Whether or not an EDA representative or his/her designee is present at the bid opening, the Recipient will furnish the following to the EDA Regional Office:

(1) A statement signed by the Authorized Representative of the Recipient, certifying that all bids were received sealed and were opened in his/her presence;

(2) Copy of official minutes of the bid opening;

(3) A copy of the bid tabulation.

15. Overrun at the Bid Opening

A. If the lowest responsive bid received at the bid opening exceeds the amount of funds available to finance the contract:

(1) The Recipient may without taking deductive alternates:

(a) Reject all bids;

(b) Augment the funds available in an amount sufficient to enable award to the lowest responsive bidder.

(2) The Recipient may take deductive alternates in the order shown in the Invitation for Bids until at least one of the responsive bids less deductive alternates result in a price within the funds announced as available. Then award may be made to that bidder. It should be noted that this procedure may change the order of bidders and thus extra care must be exercised to insure that:

(a) All responsive bids are considered;

(b) Deductive alternates have been taken in the exact order shown in the Invitation for Bids; and

(c) Only sufficient deductive alternates have been taken to reduce at least one of the responsible bids to or below the amount of funds announced as available.

(3) In no event, however, should the Recipient negotiate with the low bidder or other bidders in order to reduce the cost within the funds available.

B. If the low bid less all deductive alternates exceeds the funds available, the Recipient may:

(1) Furnish the additional funds required. If the Recipient intends to finance the overrun from his/her own funds, he/she will furnish a written letter or statement to the EDA Regional Office affirming his/her intention to finance the overrun and indicating the source of funds. If such funds are to be borrowed an appropriate supplemental financial plan must be prepared by the Recipient; or

(2) Reject all bids and have the Architect/Engineer redesign the project, within the approved scope, to reduce the cost to, or below the approved amount and readvertise; or

(3) Request additional EDA financial assistance as a last resort. However, before the Regional Office can accept a request for additional EDA funds, it will be necessary for the Recipient to furnish the following documentation to the EDA Regional Office:

(a) A written statement from the Architect/Engineer giving his/her professional opinion that redesign of the project within the approved scope or using new or additional  deductive alternates cannot reasonably be expected to reduce the cost to within the available funds; and

(b) A written statement from the Authorized Representative or governing body of the Recipient that the Recipient cannot furnish the additional funds required, giving the reasons plus documentation and/or statistics relative to the financial condition of the Recipient.

16. Underrun Funds at the Bid Opening

A. If the total amount of construction contract awards is less than the approved line item for construction and/or any of the other line items in the EDA approved budget experiences an underrun such that the total expected actual cost will be less than the cost estimated in the EDA approved budget, EDA must be notified.

17. EDA Approval of the Contract Award

A. EDA must review and approve the award of all necessary contracts in order for the cost to be eligible for EDA reimbursement. However, pending EDA approval the Recipient may issue the Notice to Proceed permitting the work to go forward.

B. To obtain approval of the contract award, the Recipient shall submit to the EDA Regional Office:

(1) Those items listed in Section II, Paragraph 12.A and 12.B of these “Requirements for Approved Construction Projects”, if not furnished previously;
(2)  Evidence of bidder's qualification. Architect/Engineer must review and add his/her opinion of bidder's qualifications;

(3) Evidence of publication of advertisement for bids;

(4) Certified evidence of the Recipient's ability to provide the financial participation required by the Grant Agreement;

(5) Evidence of ability to provide construction financing;

(6) Evidence of ability to provide the movable equipment and furnishings necessary to make the project a usable facility;

(7) A resume of Resident Engineer's or Resident Inspector's qualifications for approval if not previously furnished;

(8) Evidence of establishing a project accounting system for the project; and

(9) Evidence of bonding of those persons authorized to draw upon the project funds as required by State and/or local law.

C. Prior to awarding any contract the Recipient should contact the EDA Regional Office so that the contractor can be checked against the list of contractors debarred, ineligible, or suspended from dealing with the Federal government or indebted to the United States. Costs for work done by such contractors are ineligible for EDA financial participation.

18. Executed Bid Award

A. After the bid award has been made, if EDA requests it, the Recipient will submit to EDA one set of bound executed contract documents. Each set shall consist of:

(1) All documents furnished the bidder prior to receipt of bids and upon which base bids were submitted;

(2) A signed or certified copy of the contract or agreement executed between the Recipient and the Contractor, including all addenda as issued, with necessary blanks completed;

(3) A copy of performance and payment bonds, dated the same date or subsequent to the date of the contract, supported by a properly signed and dated power of attorney, issued by the Surety. The Surety must be authorized to transact a fidelity and surety business in the State where the project is located and must be on the Treasury Department’s current Circular 570, as "Companies Holding Certificate of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies". The underwriting limitations provided for in the said Treasury Department listing shall be applicable. A bound set of final plans are to be submitted with each set of contract documents.

(4) Copies of insurance policies and/or certificates described in Section II, Paragraph 5.A of these “Requirements for Approved Construction Projects”.

19. Preconstruction Conference

Before the start of construction, an EDA representative may arrange to meet with the Recipient, the Architect/Engineer, and the Prime Contractor(s) to discuss EDA requirements on such matters as project supervision, on-site inspections, progress schedules, reports, payrolls, payments to contractors, contract change orders, insurance, safety, and other items pertinent to the project. At this conference, all parties shall be prepared to discuss any anticipated problems or issues that could affect the timely completion of the project.

1. Recipient Responsibilities
A. The Recipient is responsible for expeditiously prosecuting the project to completion, for monitoring project progress, for keeping EDA advised of project progress, for adequate construction inspection, for prompt payment of costs incurred for the project and for monitoring the contractor's compliance with local, State and Federal construction requirements.

B. The Recipient, with the assistance of its Architect/Engineer, is responsible for the accuracy and completeness of the plans, specifications and other contract documents. The Recipient, with the assistance of its Architect/Engineer, is responsible for the accuracy and completeness of the design, dimensions, details, proper selection of materials, and compliance with applicable building codes or ordinances. EDA review of proposed and/or final contract documents does not in any way relieve the Recipient of the foregoing responsibilities.

2. Employment of Local Labor

A. EDA encourages the maximum feasible employment of local labor in the construction of EDA assisted public works projects. The Recipient should supply a list of the successful bidder's anticipated labor requirements to the applicable Federal/State Employment Office far enough in advance of the start of construction so that the employment office may provide the contractor with the names of suitable local personnel from its rolls.

3. Construction Progress Schedule

A. If requested by EDA, the Recipient will secure from the contractor or Architect/Engineer, and furnish a copy to EDA, of the predicted construction progress chart and a schedule of amounts for contract payments.

B. The construction progress chart should be updated monthly by the Recipient, the Architect/Engineer or the contractor. A copy for each month will be attached to the Quarterly Performance Report. The EDA Regional Office will advise as to the content of the report. The report will be due quarterly throughout the construction of the project.

C. After a review of the project the EDA project manager may discuss with the Recipient, or the Recipient's representative, the appropriate type of progress chart. The bar graph type of chart will generally be acceptable but some type of network analysis may be more appropriate for projects with cost in excess of $1 million and with greater than average complexity. The cost for such network analysis may be an eligible project cost if EDA approves its use.

4. Construction Sign

A. The Recipient shall be responsible for the construction, erection, and maintenance in good condition throughout the construction period, of a sign or signs, (specifications for the sign are included as an exhibit to this document), at the project site in a conspicuous place indicating that the Federal government is participating in the project. EDA may require more than one sign if site conditions so warrant.

B. Project signs will not be erected on public highway rights-of-way.

C. Location and height of signs will be coordinated with the agency responsible for highway or street safety in the area if any possibility exists for obstruction to traffic line of sight.

D. Whenever EDA site sign recommended specifications conflict with State law or local ordinance, the Recipient may modify such conflicting recommended specifications so as to comply with the State law or local ordinance.

E. When appropriate, EDA may require that a bilingual project sign be used. Recommended specifications for such a sign are contained in this document in Exhibit B.

5. Inspection of Construction

T