Introduction

Supreme Court decisions have upheld the validity of four essential components of a contract, as published by the American Law Institute. These four elements are: 1) manifestation of mutual assent, 2) consideration, 3) legality of object, and 4) capacity of the parties. Though not specifically required by federal regulations, each of these components must be present for the existence of a valid contract. The federal, state and agency requirements for contracts of federal or state funds are compiled in this chapter. In the event of conflict between these standards and federal statute or regulation, federal statute or regulation will apply.

Record retention and access requirements are provided in Appendix K to this manual. All financial and programmatic records, supporting documents, statistical records, and other records pertaining to an award of federal or state funds must be retained and made available to authorized entities or their representatives in accordance with applicable administrative requirements.

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Contract Types

The cost plus a percentage of cost and cost plus a percentage of construction methods shall not be used in contracting of federal or state funds. The type of contract used should coincide with 1) the degree and timing of responsibility assumed by the subcontractor for costs, and 2) the amount and nature of the profit incentive offered for achieving or exceeding specified standards or goals (if applicable).

Contractors may choose from a wide variety of contracts to acquire goods and services. This section conforms to the Federal Acquisition Regulation in that it groups these contracts into two broad categories: fixed price and cost reimbursement contracts. Specific contract types within these categories range from firm-fixed-price to cost-plus-fixed-fee contracts. These two broad categories also include incentive type contracts.

With the exception of fixed unit price performance based contracts and fixed unit price non-performance base contracts, this manual does not describe the specific types of contracts that fall within these two broad categories. Instead it addresses general requirements applicable to these two categories of contracts.

Cost Reimbursement Contracts

Under a cost reimbursement contract, the Contractor compensates its subcontractor for performing at a certain level of effort, regardless of the level of output achieved. Since compensation is made on a level of effort basis, payments are earned based on actual allowable costs incurred and reported by the subcontractor (up to a negotiated ceiling; i.e., budget). Compensating a subcontractor at cost does not provide an incentive for the subcontractor to control costs or to provide goods or services in the most effective manner. Thus, the Contractor, as the paying entity, bears the primary risk under this type of contract. Types of cost reimbursement contracts include: cost contracts, cost sharing contracts, cost-plus-incentive-fee contracts, cost-plus-award-fee contracts, and cost-plus-fixed-fee contracts.

The Agency requires that cost reimbursement contracts be used for contracts between units of state and local governments, and contracts between a Contractor and their administrative entity. A cost reimbursement contract may also be used with other types of subcontractors. In general, a cost reimbursement contract is used:

  • When the work desired cannot be precisely detailed as to permit the expectation of a common understanding of results
  • Where it might be considered unwise to attempt to characterize or prescribe details of an outcome (such as research and development tasks or work experience programs)

The Agency requires that cost reimbursement contracts identify the number of participants covered by the agreement, if applicable; and include a line-item budget showing the planned costs by cost category. In satisfying the budget requirement, the resources (i.e. personnel, space, travel, etc.) needed to undertake the work are to be listed, priced, and allocated among applicable cost categories. The contract may include the line item budget that was submitted in the selected proposal or bid by reference to that proposal or bid, if it was not changed by contract negotiations. However, if changes were negotiated from the budget that was in the proposal or bid, the budget should be revised to reflect the changes and should be included in the contract.

Where cost reimbursement contracts are used, the subcontractor’s accounting system must be adequate for determining costs applicable to the contract. Monitoring performed by the Contractor during the contract period should provide reasonable assurance that efficient methods and effective cost controls are used by the subcontractor. A cost reimbursement contract is not suitable for the purchase of commercial items.

Fixed Price

Under a fixed price contract, the price of the contract is not subject to change as a result of a difference between the subcontractor’s planned and actual costs. Responsibility for costs and the resulting profit or loss is the full responsibility of the subcontractor. Thus, a fixed price contract provides a built-in incentive for the contractor to control costs and to perform effectively under the award. A fixed price contract may be used in conjunction with an award-fee incentive and performance or delivery incentives when the award fee or incentive is based solely on factors other than cost. A fixed price contract is suitable for the purchase of commercial items.

Two types of fixed price contracts that are commonly used in the provision of workforce related services are fixed unit price non-performance based contracts and fixed unit price performance based contracts. These types of contracts are described further below.

Fixed Unit Price Non-Performance Based Contracts. These contracts are used when the output can be clearly defined, such as the completion of an educational or training course. Fixed unit price non-performance based contracts are typically used for tuition and child care.

In contracts involving tuition, the provider of the service normally provides no guarantee of outcome. In a fixed unit price non-performance based contract, the training provider earns compensation for the training it provides, regardless of whether the participant fails tests, completes the course or semester, or is subsequently employed. Thus, the risk is primarily with the paying entity, in terms of receiving an ultimate benefit and achieving reasonable pricing.

The Agency requires that the following elements are present in fixed unit price non-performance based contracts:

  • The contract must relate to the goals and target groups developed by the Contractor.
  • The reasonableness of cost/price standards applied to the contract must be in terms of other contracts let, the local market, and contract specifications.
  • A line item budget must be included if the price is not based on standard fees published in a catalog.
  • If the subcontractor is a governmental entity, educational institution, or non-profit organization, the contract must include language on program income which is sufficiently clear and procedurally adequate to communicate the subcontractor’s responsibilities in relation to program income.
  • If the contract authorizes interim payments, cost data must establish that payments do not exceed the cost incurred to date.

Fixed unit price non-performance based contracts may be used for:

  • Individual referrals
  • Purchases of merchandise, including training software packages
  • Child care services
  • Insurance services
  • Equipment maintenance
  • Leases
  • Assessment services

Fixed Unit Price Performance Based Contracts. These contracts require the subcontractor to successfully meet measurable performance standards or provide specified deliverables. Unless there is satisfactory delivery of the predetermined outcome or result (i.e. performance of a deliverable), compensation is not earned. Thus, the risk is primarily with the subcontractor or service provider.

The Agency requires that the price valuation must be reasonable, and that the contract costs must be allocated across applicable cost categories when the Contractor bills or reports expenditures to the Agency. The Agency also requires that all services purchased under fixed unit price, performance based contracts, including education and/or training services, must require documentation of measurable achievements or completed deliverables before payments are made. The requirement for verification of delivery must be stated clearly and consistently within the contract’s other sections.

In addition to the requirements above, fixed unit price, performance based contracts for education and/or training services must also meet the following Agency requirements:

  • The contract shall not provide for earned payments simply on the basis of enrollment or the time the participant has remained in the training program, or without regard for demonstrated participant achievement.
  • The contract must provide for tiered payments, payment points, or a method to reduce payment in cases where individuals do not complete the training but are placed successfully in an occupation specified, or complete the training but are placed below the specified wage level.
  • If using payment points, they must be defined both by requirements for demonstrated participant achievement and by standard time requirements to achieve participant performance levels.
  • The contract must describe curriculum components, curriculum length, specific skill acquisition standards referenced to payment points, and the tests/measures criteria by which participant achievement will be determined.
  • The contract shall not provide for payment of the full completion price without participants demonstrating contractually required achievement. Proxies, such as placement, shall not be used to justify completion payments short of full performance.
  • Payment reductions allowed for less than full success (low wage, non-completion) must be reasonable in proportion to the value lost by the Contractor.
  • The contract shall not allow placement payments based on an average of all participant wages.
  • The contract must provide for appropriate control of the selection of program participants to avoid subcontractor selection of trainees who already have the required skills.

The Agency also recommends that all fixed unit price, performance based contracts contain a description of the nature of the work and results to be obtained with sufficient precision to evaluate the subcontractor’s performance. The Agency also recommends that fixed unit price, performance based contracts for services including education and training services, contain standard benchmark payment terms which take into consideration the total length of the program and the costs projected to be incurred by the subcontractor to reach that benchmark point.

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Contract Elements

All contracts must contain necessary elements to ensure that all parties understand the terms of the agreement.

Agreements must satisfy the legal requirements that create contractual relationships: 1) manifestation of mutual assent, 2) consideration, 3) legality of object, and 4) capacity of the parties. All subcontracted services must be secured by a written contract. Larger contracts containing multiple sections should include a table of contents to ensure nothing is omitted. The Agency requires that contract instruments contain the structural elements described below, as appropriate. In addition, the Agency recommends that all Contractors and subcontractors implement a contract review process and procedures to ensure that all contracts include required provisions and assurances.

Signature or Cover Page

All contracts, including modifications, must be written and properly signed by authorized representatives of the contracting parties. At a minimum, the signature or cover page must include the following elements:

  • A purpose statement
  • Names, titles and addresses of the responsible parties to the contract
  • Beginning and ending dates for the contract
  • Type of contract (i.e. cost reimbursement or fixed unit price)
  • Total obligated dollar amount of the contract
  • Funding source(s)
  • Federal ID number
  • Signatures and date blocks, including typed names and titles

Definition of Key Terms

This section must define terms, conditions, acronyms and terminology used throughout the contract. These terms may be general or specific to the funding agency or award.

Statement of Work or Deliverables

Each contract must contain an adequate narrative description of the quantity and quality of work to be performed or goods to be received under the contract. This clause may refer to a negotiated statement of work or deliverables, based on the selected proposal or bid. At a minimum, the statement of work or deliverables must contain the following, as applicable:

  • A specific description of services or goods to be provided, the dates the contracted work is to begin and end, start and ending date of merchandise delivery, start-up and closeout dates
  • Key elements of service package (services only), for example, assessment, case management, counseling, placement, frequency of client contact, follow-up, etc.
  • Length of service activities (services only), for example, curriculum must include subject areas and number of hours/weeks of attendance, and defined number and dates of each training/education cycle
  • Expected outcome(s) (services only) and description of how the outcome will be measured and documented
  • List of barriers (training and education services only) to be addressed, participant selection criteria, and methods of removing barriers, if applicable
  • Expenditure schedule
  • Requirement to maintain records of participant information
  • Performance standards defining the minimum levels of performance according to the type of contract. Such minimum performance levels must be quantifiable and stated in unambiguous terms.

Payment Provisions

This section must outline when and how payments will be made to the subcontractor based on satisfactory program implementation or delivery of items/goods. These provisions must include, at a minimum, the:

  • Maximum amount payable
  • Methods of payment and/or payment schedule
  • Definition of the types of payments and invoicing procedures, such as format and due dates according to the type of contract
  • Provisions for advancing of funds, if relevant
  • Liquidation of advances and recovery in the event of nonperformance

Compliance with Laws and Regulations

The contract must include clauses or statements that require compliance with applicable laws and regulations. Note, such clauses or statements alone are not sufficient to protect the Contractor in a legal dispute. The contract should outline the conditions and manner under which the contract may be terminated and the basis for settlement (see also Chapter 21 of this manual). The following provisions must be included in all contracts as applicable.

  • Termination for Default — gives both parties the right to terminate the contract for either party’s failure to perform its obligations under the contract. For example, if the subcontractor does not perform the services required, the Contractor may terminate; or if the Contractor does not pay the subcontractor, the subcontractor may terminate. This provision must be included in all contracts in excess of $10,000 for contracts administered by governmental entities, and all contracts in excess of the simplified acquisition threshold for contracts administered by nongovernmental entities.

    As both situations represent breaches of contract, this section must describe the administrative, contractual, or legal remedies available to the parties, including possible sanctions and penalties as may be appropriate (see also Chapter 21 of this manual). This provision may be excluded from contracts resulting from small purchase procurements.

    [See OMB Circular A-110 §__.48(a)-(b), 29 CFR §97.36(i)(1)-(2), 45 CFR §92.36(i)(1)-(2), 7 CFR §3015.124(a), and UGMS Part III Subpart C §__.36(i)(1)-(2)MS Word.]
  • Termination for Convenience — allows the Contractor or subcontractor to terminate the contract unilaterally without becoming liable for breach. It sets forth the procedures to be followed by the subcontractor upon receipt of the notice of termination and provides a right of appeal to an administrative board or other cure process. Inclusion of any appeal or cure process does not prevent a unilateral termination settlement by the contracting authority if the parties cannot negotiate a settlement pursuant to the dispute process (see also Chapter 21 of this manual). This provision must be included in all contracts in excess of $10,000 for contracts administered by governmental entities, and all contracts in excess of the small purchase threshold for contracts administered by nongovernmental entities.

    [See OMB Circular A-110 Subpart C §__.48(b), 29 CFR §97.36(i)(2), 45 CFR §92.36(i)(2), 7 CFR §3015.124(b), and UGMS Part III Subpart C §__.36(i)(2)MS Word.]
  • Change/Modifications — the Agency requires this provision, which describes the methods and circumstances required for contract modifications. At a minimum, this clause should describe a process for changing the contract in the event of funding increases or reductions.
  • Access to Records — requires the Contractor or subcontractor to provide access to records in accordance with applicable administrative requirements (see Appendix K to this manual). This provision must be included in all contracts awarded by a governmental entity. Nongovernmental entities are not required to include the provision in contracts that are less than the small purchase threshold.

    Contractors and subcontractors must ensure that all information collected, assembled or maintained by the applicant relative to a project will be available to the public during normal business hours in compliance with Texas Government Code, Chapter 552, Vernon’s 1994, unless expressly prohibited by law.

    [See OMB Circular A-110 §__.48(d), 29 CFR §97.36(i)(10), 45 CFR §92.36(i)(10), 7 CFR §3015.183(c), Texas Government Code, Chapter 552, UGMS Part III Subpart B §__.14(a)(2)MS Word and UGMS Part III Subpart C §__.36(i)(10)MS Word.]
  • Record Retention — requires compliance with applicable record retention requirements. See Appendix K to this manual for more information on record retention. This provision must be included in all contracts.

    [See 29 CFR §97.36(i)(11), 45 CFR §92.36(i)(11), 7 CFR §3015.183(b) and UGMS Part III Subpart C §__.36(i)(11)MS Word.]
  • Provision against Assignment — the Agency requires a provision against assignment to ensure that the subcontractor will not assign its interest in the contract to another party without prior written approval from the Contractor. Prior to granting written approval, the Contractor is responsible for performing an analysis to evaluate the subcontractor’s ability to perform successfully under the terms and conditions of the contract. Approval for assignment shall not be given if the Contractor determines that the subcontractor is unable to perform successfully under the terms and conditions of the contract.
  • Program Income — the Agency requires a provision requiring that program income earned from publicly funded programs will be reported and used in accordance with the contract, and federal and state laws and regulations.
  • Disputes/Claims — the Agency requires a provision that describes how disputes and/or claims between the Contractor and the subcontractor may be resolved. Applicable state and local requirements should also be included in this element (see also Chapter 21 to this manual).
  • Duplicate Funding — the Agency requires this provision which requires the subcontractor to allocate costs among benefited funding sources, and prohibits the subcontractor from charging the contract for costs that are charged to other funding sources. The subcontractor should inform the Contractor if it receives funds that affect the cost or performance of work. The Contractor may want to insert a clause that would give them the right to renegotiate the contract relative to changed costs.
  • Subcontracting — the Agency requires this provision to define the circumstances, if any, under which the subcontractor may subcontract program activities, services, or responsibilities. If subcontracting is permitted, the clause should, at a minimum, require prior written approval from the Contractor.
  • Conflict of Interest — the Agency requires a provision that no employee, officer or agency of the subcontractor shall participate in the award, or administration of a contract supported by public funds if a conflict of interest or apparent conflict of interest would be involved. The statement should also require the subcontractor to notify the Contractor when any potential or actual conflict of interest situation exists.

    [See UGMS Part III Subparts B §__.14(a)(1)MS Word.]
  • Reporting — details the appropriate reporting requirements, such as proper format and due dates.

    [See 29 CFR §97.36(i)(7), 45 CFR §92.36(i)(7), 7 CFR §3015.61(a) and UGMS Part III Subpart C §__.36(i)(7)MS Word.]
  • Patent, Copyrights and Rights in Data — allows the Contractor to retain the entire right, title and interest to each invention developed under the project, except that the federal and/or state government shall be granted a “nonexclusive, nontransferable, irrevocable, paid-up license” to use the invention. Property requirements are discussed further in Chapter 13 to this manual. This clause should be included in all award agreements.

    [See OMB Circular A-110, Appendix A, (5), 29 CFR §97.36(i)(8, 9), 45 CFR §92.36(i)(8, 9) and UGMS Part III Subpart C §__.36(i)(8, 9).]
  • Debarment and Suspension Certification — requires Contractors to certify, in accordance with the regulatory citations in Exhibit 15.2-1 of this manual, that they are not debarred or suspended or otherwise excluded from or ineligible for participation in federal assistance programs. Certification is required for subcontracts exceeding the small purchase threshold or for persons having critical influence over the contract.

    [See OMB Circular A-110, Appendix A, (8) and UGMS Part III Subpart B §__.14(a)(24)MS Word.]
  • Drug-Free Workplace Certification — the Drug-Free Workplace Act (Public Law 100-690, Subtitle D codified at 41 U.S.C §§701-707) requires Contractors to certify that they will provide a drug-free workplace as a precondition of receiving an award. Regulatory citations are listed in Exhibit 15.2-1 of this manual. Agency policies require the completion of this certification for all contracts exceeding the small purchase threshold. Although not required, Contractors are encouraged to develop local policies requiring Drug-Free Certification for various categories of subcontractors.

    [See Drug Free Workplace Act, Public Law 100-690 (41 U.S.C. §§701-707)PDF.]
  • Anti-Lobbying — requires compliance with the requirements of certification and disclosure imposed by the appropriate citation in Exhibit 15.2-1 of this manual. This clause prohibits the subcontractor from using public funds to attempt to influence a politician to favor or oppose any federal, state or local legislation or appropriation. Nongovernmental organizations are specifically required to include a provision for compliance with the Byrd Anti-Lobbying Amendment (13 U.S.C. §1352).

    [See OMB Circular A-110, Appendix A, (7) and 7 CFR §3015.205(b)(17).]

    Exhibit 15.2-1: Regulatory Citations for Federal Certifications

    Regulation Agriculture Labor Education Health and Human Services
    Drug-Free Workplace 7 CFR 3017 29 CFR 98 34 CFR 85 45 CFR 76
    Debarment / Suspension 7 CFR 3017 29 CFR 98 34 CFR 84 45 CFR 76
    Lobbying 7 CFR 3018 29 CFR 93 34 CFR 82 45 CFR 93
  • Audit Rights and Requirements — the Agency requires this provision on the basis of state statute and Agency policies, which gives the Contractor, the Agency, and others with statutory audit rights reasonable access to examine documents pertaining to contract performance during normal business hours. If state (non-federal) funds are contracted, the statement in Texas Government Code §2261.203 must be included.

    [See Texas Government Code §2261.203, OMB Circular A-133 Subpart B and UGMS Part IV Subpart B.]
  • Equal Employment Opportunity — requires compliance with Executive Order (EO) 11246 of September 24, 1965 entitled “Equal Employment Opportunity,” as amended by EO 11375 of October 13, 1967 and as supplemented in U.S. Department of Labor regulations (41 CFR Part 60). This provision must be included in all construction contracts awarded in excess of $10,000 that are administered by governmental entities, and in all contracts administered by nongovernmental entities.

    [See OMB Circular A-110, Appendix A, (1), 29 CFR §97.36(i)(3), 45 CFR §92.36(i)(3), 7 CFR §3015.184 and UGMS Part III Subpart C §__.36(i)(3)MS Word.]
  • Copeland Anti-Kickback Act — requires compliance with the Copeland “Anti-Kickback” Act (18 U.S.C. §874) as supplemented in U.S. Department of Labor regulations (29 CFR Part 3). This provision must be included in all contracts and subgrants for construction or repair that are administered by governmental entities, and all contracts in excess of $2,000 for construction or repair that are administered by nongovernmental entities.

    [See OMB Circular A-110 Appendix A, (2), 29 CFR §97.36(i)(4), 45 CFR §92.36(i)(4), UGMS Part III Subpart B §__.14(a)(10)MS Word and UGMS Part III Subpart C §__.36(i)(4)MS Word.]

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Assurances

The contracting entity must ensure that all applicable assurances are included and that the legal instrument is consistent with the standards in this section.

Federal and state laws require a number of assurances from applicants for federal pass-through or other state-appropriated funds. The following assurances will not all be required for any one contract or grant; however, all applicable assurances must be included in contracts either in their entirety or by reference.

  • Contract Work Hours and Safety Standards Act. Must be included in all construction contracts that exceed $2,000 and in all other contracts involving the employment of mechanics or laborers that exceed $2,500. The provision requires compliance with Sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. §§327-330) as supplemented by U.S. Department of Labor Regulations at 29 CFR Part 5. The Contract Work Hours and Safety Standards Act requires Contractors 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 ½ times the basic rate of pay for all hours worked in excess of 40 hours in the work week. Section 107 of the 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.

    [See OMB Circular A-110 Appendix A, (4), 29 CFR §97.36(i)(6), 45 CFR §92.36(i)(6), UGMS Part III §__.14(a)(10)MS Word and UGMS Part III §__.36(i)(6)MS Word.]
  • Davis-Bacon Act. Must be included in all construction contracts that exceed $2,000 when required by federal grant program legislation. The provision requires compliance with the Davis-Bacon Act (40 U.S.C. §276a to a-7) as supplemented by U.S. Department of Labor regulations at 29 CFR Part 5. The Davis-Bacon Act requires Contractors 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 are required to pay wages not less than once a week. The Contractor must include a copy of the current prevailing wage determination issued by the U.S. Department of Labor in each solicitation and the award of a contract must be conditioned upon the acceptance of the wage determination. The Contractor must report all suspected or reported violations to the Agency, and the Agency must report the violation to the federal awarding agency.

    [See OMB Circular A-110 Appendix A, (3), 29 CFR §97.36(i)(5), 45 CFR §92.36(i)(5), UGMS Part III §__.14(a)(10)MS Word and UGMS Part III §__.36(i)(5)MS Word.]
  • Child Support. Requires compliance with Section 231.006, Texas Family Code, which prohibits payments to a person who is in arrears on child support payments.

    [See UGMS Part III §__.14(a)(4)MS Word.]
  • Child Abuse. Subcontractors must comply with the Texas Family Code §261.101, which requires reporting of all suspected cases of child abuse to local law enforcement authorities and to the Texas Department of Family and Protective Services. Contractors or subcontractors shall also ensure that all program personnel are properly trained and aware of this requirement.

    [See UGMS Part III §__.14(a)(8)MS Word.]
  • Federal statutes relating to nondiscrimination. These include but are not limited to: [See 7 CFR §3015.205(b)(6), (13)-(15) and UGMS Part III §__.14(a)(9)MS Word.]
  • Minimum Wage and Maximum Hours. Contractors must comply with the minimum wage and maximum hours provisions of the Federal Fair Labor Standards Act and the Intergovernmental Personnel Act of 1970, as applicable.

    [See UGMS Part III §__.14(a)(13)MS Word.]
  • Nepotism. Contractors must comply with Texas Government Code, Chapter 573, which requires that no officer, employee, or member of the applicant’s governing body or of the applicant’s Contractor shall vote or confirm the employment of any person related within the second degree of affinity or the third degree of consanguinity to any member of the governing body or to any other officer or employee authorized to employ or supervise such person. This prohibition shall not prohibit the employment of a person who shall have been continuously employed for a period of two years, or such other period stipulated by local law, prior to the election or appointment of the officer, employee, or governing body member related to such person in the prohibited degree.

    [See Texas Government Code, Chapter 573 and UGMS Part III §__.14(a)(1)MS Word.]
  • Open Meetings. Requires compliance with the Texas Government Code, Chapter 551, which requires all regular, special or called meeting of governmental bodies to be open to the public, except as otherwise provided by law or specifically permitted in the Texas Constitution.

    [See UGMS Part III §__.14(a)(3)MS Word.]
  • Contract Administration System. When incorporated into a contract, standard assurances contained in the application package become terms or conditions for receipt of grant funds. Contractors must maintain an appropriate contract administration system to ensure that all terms, conditions, and specifications are met.

    [See UGMS Part III §__.14(a)(7)MS Word.]
  • Hatch Political Activity Act (5 U.S.C. §7321-29). Limits the political activity of employees whose principal employment activities are funded in whole or in part with federal funds.

    [See UGMS, Part III Subpart B §__.14(a)(12)MS Word.]
  • Environmental Standards. Requires the recipient to agree to comply with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act 42 U.S.C. §§7401 et seq.) and the Federal Water Pollution Control Act as amended (33 U.S.C. §§1251 et seq.). The subcontractor will notify the federal grantor agency of the receipt of any communication from the Director of the Environmental Protection Agency (EPA) Office of Federal Activities indicating that a facility to be used in the project is under consideration for listing by the EPA (EO 11738). This provision must be included in all contracts in excess of $100,000.

    [See OMB Circular A-110 Appendix A, (6), 29 CFR §97.36(i)(12), (14), 45 CFR §92.36(i)(12), (14) and UGMS Part III §__.36(i)(12), (14)MS Word.]
  • Flood Disaster Protection Act of 1973 (Public Law 93-234). Contractors must comply with the flood insurance purchase requirements of §102(a) of the Flood Disaster Protection Act of 1973. Section 102(a) requires the purchase of flood insurance in communities where such insurance is available as a condition for the receipt of any federal financial assistance for construction or acquisition proposed for use in any area that has been identified by the Secretary of the U.S. Department of Housing and Urban Development as an area having special flood hazards.

    [See UGMS Part III §__.14(a)(15)MS Word.]
  • Lead-Based Paint Poisoning Prevention Act (42 U.S.C. §§4801 et seq). Prohibits the use of lead-based paint in construction or rehabilitation of residential structures.

    [See UGMS Part III §__.14(a)(20)MS Word.]
  • Pro-Children Act of 1994 (Public Law 103-277). Prohibits smoking within any portion of any indoor facility used for the provision of services for children as defined by the Pro-Children Act of 1994.

    [See UGMS Part III §__.14(a)(21)MS Word.]
  • HIV/AIDS Work Place Guidelines. Contractors must adopt and implement applicable provisions of the model HIV/AIDS work place guidelines of the Texas Department of Health as required by the Texas Health and Safety Code, Ann., Sec. 85.001, et seq.

    [See UGMS Part III §__.14(a)(25)MS Word.]
  • Tax Laws. Subcontractors will comply with all federal tax laws and are solely responsible for filing all required state and federal tax forms.

    [See UGMS Part III §__.14(a)(22)MS Word.]
  • Laws and Regulations. Subcontractors will comply with all applicable requirements of federal and state laws, executive orders, regulations and policies.

    [See UGMS Part III §__.14(a)(23)MS Word.]
  • Energy Policy and Conservation Act. Requires compliance with mandatory standards and policies relating to efficiency which are contained in the state energy plan issued in compliance with the Energy Policy and Conservation Act (Public Law 94-163).

    [See 29 CFR §97.36(i)(13), 45 CFR §92.36(i)(13) and UGMS Part III §__.36(i)(13)MS Word.]

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Board Contracting Guidelines

Boards’ contracting procedures must be consistent and ensure compliance with provisions for the integrity of the workforce system in Agency rules at 40 TAC §802.21.

Boards shall ensure that contracts with workforce service providers comply with Agency rules at 40 TAC §802.21, which are enacted to implement Texas Government Code, Sections 2308.264 and 2308.267. The purpose of such rule guidelines is to establish standards of conduct and disclosure requirements for Boards' contracted service providers, and methods of ensuring fiscal accountability, including assurances that Boards do not perform direct delivery of services.

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