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(d) Charges for operation and maintenance for extraneous flows. The user charge system shall provide that the costs of operation and maintenance for all flow not directly attributable to users (i.e., infiltration/inflow) be distributed among all users of the grantee's treatment works system based upon either of the following:
(1) In the same manner that it distributes the costs of operation and maintenance among users (or user classes) for their actual use, or
(2) Under a system which uses one of any combination of the following factors on a reasonable basis:
(i) Flow volume of the users;
(ii) Land area of the users;
(iii) Number of hookups or discharges to the users;
(iv) Property valuation of the users, if the grantee has a user charge system based on ad valorem taxes approved under §35.929–1(b).
(e) Adoption of system. One or more municipal legislative enactments or other appropriate authority must incorporate the user charge system. If the project is a regional treatment system accepting wastewaters from other municipalities, the subscribers receiving waste treatment services from the grantee shall adopt user charge systems in accordance with section 204(b)(1)(A) of the Act and §§35.929 through 35.929–3. These user charge systems shall also be incorporated in appropriate municipal legislative enactments or other appropriate authority of all municipalities contributing wastes to the treatment works. The public shall be informed of the financial impact of the user charge system on them and shall be consulted prior to adoption of the system, in accordance with 40 CFR part 25.
(f) Notification. Each user charge system must provide that each user be notified, at least annually, in conjunction with a regular bill, of the rate and that portion of the user charges or ad valorem taxes which are attributable to waste water treatment services.
(g) Inconsistent agreements. The grantee may have preexisting agreements which address: (1) The reservation of capacity in the grantee's treatment works, or (2) the charges to be collected by the grantee in providing wastewater treatment services or reserving capacity. The user charge system shall take precedence over any terms or conditions of agreements or contracts between the grantee and users (including industrial users, special districts, other municipalities, or Federal agencies or installations) which are inconsistent with the requirements of section 204(b)(1)(A) of the Act and these regulations.
(h) Costs of pretreatment program. A user charge system submitted by a municipality with an approved pretreatment program shall provide that the costs necessary to carry out the program and to comply with any applicable requirements of section 405 of the Act and related regulations are included within the costs of operation and maintenance of the system and paid through user charges, or are paid in whole or in part by other identified sources of funds.
[43 FR 44049, Sept. 27, 1978, as amended at 44 FR 10304, Feb. 16, 1979]
§ 35.929-3 Implementation of the user charge system.
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(a) When a grantee's user charge system is approved, implementation of the approved system shall become a condition of the grant.
(b) The grantee shall maintain such records as are necessary to document compliance with these regulations.
(c) Appendix B to this subpart contains guidelines with illustrative examples of acceptable user charge systems.
(d) The Regional Administrator may review, no more often than annually, a grantee's user charge system to assure that it continues to meet the requirements of §§35.929–1 through 35.929–3.
§ 35.930 Award of grant assistance.
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The Regional Administrator's approval of an application or amendments to it through execution of a grant agreement (including a grant amendment), in accordance with §30.345 of this subchapter, shall constitute a contractual obligation of the United States for the payment of the Federal share of the allowable project costs, as determined by the Regional Administrator. Information about the approved project furnished in accordance with §35.920–3 shall be considered incorporated in the grant agreement.
§ 35.930-1 Types of projects.
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(a) The Regional Administrator is authorized to award grant assistance for the following types of projects:
(1) Step 1. A facilities plan and related step 1 elements (see §35.920–3(b)), if he determines that the applicant has submitted the items required under §35.920–3(a); (In the case of grant assistance awarded solely for the acquisition of eligible land, the following provisions are deferred until the award of the ensuing step 3 assistance for the construction of facilities: §§35.925–10, 35.925–11(b), 35.935–12 (c) and (d), 35.935–13(c), 35.935–15(c), 35.935–16 (b) and (c));
(2) Step 2. Construction drawings and specifications, if he determines that the applicant has submitted the items required under §35.920–3(b);
(3) Step 3. Building and erection of a treatment works, if he determines that the applicant has submitted the items required under §35.920–3(c); or
(4) Steps 2 and 3. A combination of design (step 2) and construction (step 3) for a treatment works (see §35.909) if he determines that the applicant has submitted the items required under §35.920–3(d).
(b) The Regional Administrator may award Federal assistance by a grant or grant amendment from any allotment or reallotment available to a State under §35.910 et seq. for payment of 100 percent of the cost of construction of treatment works required to train and upgrade waste treatment works operations and maintenance personnel and for the costs of other operator training programs. Costs of other operator training programs are limited to mobile training units, classroom rental, specialized instructors, and instructional material, under section 109(b) of the Act.
(1) Where a grant is made to serve two or more States, the Administrator is authorized to make an additional grant for a supplemental facility in each State. The Federal funds awarded under section 109(b) to any State for all training facilities or programs shall not exceed $500,000.
(2) Any grantee who received a grant under section 109(b) before December 27, 1977, is eligible to have the grant increased by funds made available under the Act, not to exceed 100 percent of eligible costs.
[43 FR 44049, Sept. 27, 1978, as amended at 44 FR 39340, July 5, 1979]
§ 35.930-2 Grant amount.
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The grant agreement shall set forth the amount of grant assistance. The grant amount may not exceed the amount of funds available from the State allotments and reallotments under §35.910 et seq. Grant payments will be limited to the Federal share of allowable project costs incurred within the grant amount or any increases effected through grant amendments (see §35.955).
§ 35.930-3 Grant term.
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The grant agreement shall establish the period within which the project must be completed, in accordance with §30.345–1 of this chapter. This time period is subject to extension for excusable delay, at the discretion of the Regional Administrator.
§ 35.930-4 Project scope.
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The grant agreement must define the scope of the project for which Federal assistance is awarded under the grant. The project scope must include a step or an identified segment. Grant assistance may be awarded for a segment of step 3 treatment works construction, when that segment in and of itself does not provide for achievement of applicable effluent discharge limitations, if:
(a) The segment is to be a component of an operable treatment works which will achieve the applicable effluent discharge limitations; and
(b) A commitment for completion of the entire treatment works is submitted to the Regional Administrator and that commitment is reflected in a special condition in the grant agreement.
§ 35.930-5 Federal share.
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(a) General. The grant shall be 75 percent of the estimated total cost of construction that the Regional Administrator approves in the grant agreement, except as otherwise provided in paragraphs (b) and (c) of this section and in §§35.925–15, 35.925–16, 35.925–17, 35.930–1(b), and paragraph 10 of appendix A.
(b) Innovative and alternative technology. In accordance with §35.908(b), the amount of any step 2, step 3, or step 2=3 grant assistance awarded from funds allotted for fiscal years 1979, 1980, and 1981 shall be 85 percent of the estimated cost of construction for those eligible treatment works or significant portions of them that the Regional Administrator determines meet the criteria for innovative or alternative technology in appendix E. These grants depend on the availability of funds from the reserve under §35.915–1(b). The proportional State contribution to the non-Federal share of construction costs for 85-percent grants must be the same as or greater than the proportional State contribution (if any) to the non-Federal share of eligible construction costs for all treatment works which receive 75-percent grants in the State.
(c) Modification and replacement of innovative and alternative projects. In accordance with §35.908(c) and procedures published by EPA, the Regional Administrator may award grant assistance to fund 100 percent of the eligible costs of the modification or replacement of any treatment works constructed with grant assistance based upon a Federal share of 85 percent under paragraph (b) of this section.
§ 35.930-6 Limitation on Federal share.
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The grantee must exert its best efforts to perform the project work as specified in the grant agreement within the approved cost ceiling. If at any time the grantee believes that the costs which it expects to incur in the performance of the project will exceed or be substantially less than the previously approved estimated total project costs, the grantee must notify the Regional Administrator and the State agency promptly in writing. As soon as practicable, the grantee must give the revised estimate of total cost for the performance of the project (see §30.900 of this subchapter). Delay in submission of the notice and excess cost information may prejudice approval of an increase in the grant amount. The United States shall not be obligated to pay for costs incurred in excess of the approved grant amount or any amendment to it until the State has approved an increase in the grant amount from available allotments under §35.915 and the Regional Administrator has issued a written grant amendment under §35.955.
§ 35.935 Grant conditions.
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In addition to the EPA general grant conditions (subpart C and appendix A to part 30 of this subchapter), each treatment works grant shall be subject to the following conditions:
§ 35.935-1 Grantee responsibilities.
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(a) Review or approval of project plans and specifications by or for EPA is for administrative purposes only and does not relieve the grantee of its responsibility to design, construct, operate, and maintain the treatment works described in the grant application and agreement.
(b) By its acceptance of the grant, the grantee agrees to complete the treatment works in accordance with the facilities plan, plans and specifications, and related grant documents approved by the Regional Administrator, and to maintain and operate the treatment works to meet the enforceable requirements of the Act for the design life of the treatment works. The Regional Administrator is authorized to seek specific enforcement or recovery of funds from the grantee, or to take other appropriate action (see §35.965), if he determines that the grantee has failed to make good faith efforts to meet its obligations under the grant.
(c) The grantee agrees to pay, pursuant to section 204(a)(4) of the Act, the non-Federal costs of treatment works construction associated with the project and commits itself to complete the construction of the operable treatment works and complete waste treatment system (see definitions in §35.905) of which the project is a part.
(d) The Regional Administrator may include special conditions in the grant or administer this subpart in the manner which he determines most appropriate to coordinate with, restate, or enforce NPDES permit terms and schedules.
§ 35.935-2 Procurement.
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The grantee and party to any subagreement must comply with the applicable provisions of §§35.935 through 35.939 with respect to procurement for step 1, 2, or 3 work. The Regional Administrator will cause appropriate review of grantee procurement to be made.
§ 35.935-3 Property.
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(a) The grantee must comply with the property provisions of §30.810 et seq. of this subchapter with respect to all property (real and personal) acquired with project funds.
(b) With respect to real property (including easements) acquired in connection with the project, whether such property is acquired with or in anticipation of EPA grant assistance or solely with funds furnished by the grantee or others:
(1) The acquisition must be conducted in accordance with part 4 of this chapter;
(2) Any displacement of a person by or as a result of any acquisition of the real property shall be conducted under the applicable provisions of part 4 of this chapter; and
(3) The grantee must obtain (before initiation of step 3 construction), and must thereafter retain, a fee simple or such estate or interest in the site of a step 3 project, and rights of access, as the Regional Administrator finds sufficient to assure undisturbed use and possession for the purpose of construction and operation for the estimated life of the project. If a step 3 project serves more than one municipality, the grantee must insure that the participating municipalities have, or will have before the initiation of step 3 construction, such interests or rights in land as the Regional Administrator finds sufficient to assure their undisturbed utilization of the project site for the estimated life of the project.
(c) With respect to real property acquired with EPA grant assistance, the grantee must defer acquisition of such property until approval of the Regional Administrator is obtained under §35.940–3.
§ 35.935-4 Step 2+3 projects.
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A grantee which has received step 2=3 grant assistance must make submittals required by §35.920–3(c), together with approvable user charge and industrial cost recovery systems and a preliminary plan of operation. The Regional Administrator shall give written approval of these submittals before advertising for bids on the step 3 construction portion of the step 2=3 project. The cost of step 3 work initiated before such approval is not allowable. Failure to make the above submittals as required is cause for invoking sanctions under §35.965.
§ 35.935-5 Davis-Bacon and related statutes.
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Before soliciting bids or proposals for step 3-type work, the grantee must consult with the Regional Administrator concerning compliance with Davis-Bacon and other statutes referenced in §30.415 et seq. of this subchapter.
§ 35.935-6 Equal employment opportunity.
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Contracts involving step 3-type work of $10,000 or more are subject to equal employment opportunity requirements under Executive Order 11246 (see part 8 of this chapter). The grantee must consult with the Regional Administrator about equal employment opportunity requirements before issuance of an invitation for bids where the cost of construction work is estimated to be more than $1 million or where required by the grant agreement.
§ 35.935-7 Access.
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The grantee must insure that EPA and State representatives will have access to the project work whenever it is in preparation or progress. The grantee must provide proper facilities for access and inspection. The grantee must allow the Regional Administrator, the Comptroller General of the United States, the State agency, or any authorized representative, to have access to any books, documents, plans, reports, papers, and other records of the contractor which are pertinent to the project for the purpose of making audit, examination, excerpts, copies and transcriptions. The grantee must insure that a party to a subagreement will provide access to the project work, sites, documents, and records. See §§30.605 and 30.805 of this subchapter, clause 9 of appendix C–1 to this subpart, and clause 10 of appendix C–2 to this subpart.
§ 35.935-8 Supervision.
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In the case of any project involving Step 3, the grantee will provide and maintain competent and adequate engineering supervision and inspection of the project to ensure that the construction conforms with the approved plans and specifications.
§ 35.935-9 Project initiation and completion.
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(a) The grantee agrees to expeditiously initiate and complete the step 1, 2, or 3 project, or cause it to be constructed and completed, in accordance with the grant agreement and application, including the project progress schedule, approved by the Regional Administrator. Failure of the grantee to promptly initiate and complete step 1, 2, or 3 project construction may result in annulment or termination of the grant.
(b) No date reflected in the grant agreement, or in the project completion schedule, or extension of any such date, shall modify any compliance date established in an NPDES permit. It is the grantee's obligation to request any required modification of applicable permit terms or other enforceable requirements.
(c) The invitation for bids for step 3 project work is expected to be issued promptly after grant award. Generally this action should occur within 90 to 120 days after award unless compliance with State or local laws requires a longer period of time. The Regional Administrator shall annul or terminate the grant if initiation of all significant elements of step 3 construction has not occurred within 12 months of the award for the step 3 project (or approval of plans and specifications, in the case of a step 2=3 project). (See definition of “initiation of construction” under “construction” in §35.905.) However, the Regional Administrator may defer (in writing) the annulment or termination for not more than 6 additional months if:
(1) The grantee has applied for and justified the extension in writing to the Regional Administrator;
(2) The grantee has given written notice of the request for extension to the NPDES permit authority;
(3) The Regional Administrator determines that there is good cause for the delay in initiation of project construction; and
(4) The State agency concurs in the extension.
§ 35.935-10 Copies of contract documents.
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In addition to the notification of project changes under §30.900 of this chapter, a grantee must promptly submit to the Regional Administrator a copy of any prime contract or modification of it and of revisions to plans and specifications.
§ 35.935-11 Project changes.
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(a) In addition to the notification of project changes required under §30.900–1 of this chapter, the Regional Administrator's and (where necessary) the State agency's prior written approval is required for:
(1) Project changes which may—
(i) Substantially alter the design and scope of the project;
(ii) Alter the type of treatment to be provided;
(iii) Substantially alter the location, size, capacity, or quality of any major item of equipment; or
(iv) Increase the amount of Federal funds needed to complete the project.
However, prior EPA approval is not required for changes to correct minor errors, minor changes, or emergency changes; and
(2) Subagreement amendments amounting to more than $100,000 for which EPA review is required under §§35.937–6(b) and 35.938–5 (d) and (g).
(b) No approval of a project change under §30.900 of this chapter shall obligate the United States to any increase in the amount of the grant or grant payments unless a grant increase is also approved under §35.955. This does not preclude submission or consideration of a request for a grant amendment under §30.900–1 of this chapter.
§ 35.935-12 Operation and maintenance.
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(a) The grantee must make provision satisfactory to the Regional Administrator for assuring economic and effective operation and maintenance of the treatment works in accordance with a plan of operation approved by the State water pollution control agency or, as appropriate, the interstate agency.
(b) As a minimum, the plan shall include provision for:
(1) An operation and maintenance manual for each facility;
(2) An emergency operating and response program;
(3) Properly trained management, operation and maintenance personnel;
(4) Adequate budget for operation and maintenance;
(5) Operational reports;
(6) Provisions for laboratory testing and monitoring adequate to determine influent and effluent characteristics and removal efficiencies as specified in the terms and conditions of the NPDES permit;
(7) An operation and maintenance program for the sewer system.
(c) Except as provided in paragraphs (d) and (e) of this section, the Regional Administrator shall not pay—
(1) More than 50 percent of the Federal share of any step 3 project unless the grantee has furnished a draft of the operation and maintenance manual for review, or adequate evidence of timely development of such a draft; or
(2) More than 90 percent of the Federal share unless the grantee has furnished a satisfactory final operation and maintenance manual.
(d) In projects where segmenting of an operable treatment works has occurred, the Regional Administrator shall not pay—
(1) More than 50 percent of the Federal share of the total of all interdependent step 3 segments unless the grantee has furnished a draft of the operation and maintenance manual for review, or adequate evidence of timely development of such a draft, or
(2) More than 90 percent of the Federal share of the total of all interdependent step 3 segments unless the grantee has furnished a satisfactory final operation and maintenance manual.
(e) In multiple facility projects where an element or elements of the treatment works are operable components and have been completely constructed and placed in operation by the grantee, the Regional Administrator shall not make any additional step 3 payment unless the operation and maintenance manual (or those portions associated with the operating elements of the treatment works) submitted by the grantee has been approved by the Regional Administrator.
§ 35.935-13 Submission and approval of user charge systems.
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The grantee shall obtain the approval of the Regional Administrator of its system of user charges. (See also §35.929 et seq.)
(a) Step 3 grant assistance awarded under regulations promulgated on February 11, 1974, (1) Except as paragraph (a)(2) of this section provides, the grantee must obtain the Regional Administrator's approval of its system of user charges based on actual use which complies with §35.929–1(a). The Regional Administrator shall not pay more than 50 percent of the Federal share of any step 3 project unless the grantee has submitted adequate evidence of timely development of its system of user charges nor shall the Regional Administrator pay more than 80 percent of the Federal share unless he has approved the system.
(2) A grantee which desires approval of a user charge system based on ad valorem taxes in accordance with §35.929–1(b) shall submit to the Regional Administrator by July 24, 1978, evidence of compliance of its system with the criteria in §35.929–1 (b)(1) through (b)(3). As soon as possible, the Regional Administrator shall advise the grantee if the system complies with §35.929–1 (b)(1). The Regional Administrator's determination may be appealed in accordance with subpart J, “Disputes,” of part 30 of this subchapter.
(i) Grantees whose ad valorem tax systems meet the criteria of §35.929–1 (b)(1) through (b)(3). Any step 3 payments held by the Regional Administrator at 50 percent or 80 percent for failure to comply with the requirement for development of a user charge system shall be released. However, the grantee shall obtain approval of its user charge system by June 30, 1979 or no further payments will be made until the sytem is approved and the grants may be terminated or annulled.
(ii) Grantees whose ad valorem tax systems do not meet the criteria of §35.929–1 (b)(1) through (b)(3). Step 3 grants will continue to be administered in accordance with paragraph (a)(1) of this section.
(b) Step 3 grant assistance awarded after April 24, 1978, but before July 1, 1979. The grantee must obtain approval of its user charge system based on actual use or ad valorem taxes before July 1, 1979. The Regional Administrator may not make any payments on these grants, may terminate or annul these grants, and may not award any new step 3 grants to the same grantee after June 30, 1979, if the user charge system has not been approved. The Regional Administrator shall approve the grantee's user charge or ad valorem tax rates and the ordinance required under §35.929–2(e) and the grantee shall enact them before the treatment works constructed with the grant are placed in operation.
(c) Step 3 grant assistance awarded after June 30, 1979. The Regional Administrator may not award step 3 grant assistance unless he has approved the user charge system based on actual use or ad valorem taxes. The Regional Administrator shall approve the grantee's user charge or ad valorem tax rates and the ordinance required under §35.929–2(e) and the grantee shall enact them before the treatment works constructed with the grant are placed in operation.
§ 35.935-14 Final inspection.
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The grantee shall notify the Regional Administrator through the State agency of the completion of step 3 project construction. The Regional Administrator shall cause final inspection to be made within 60 days of the receipt of the notice. When final inspection is completed and the Regional Administrator determines that the treatment works have been satisfactorily constructed in accordance with the grant agreement, the grantee may make a request for final payment under §35.945(e).
§ 35.935-15 Submission and approval of industrial cost recovery system.
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The grantee shall obtain the approval of the Regional Administrator of its system of industrial cost recovery. (See also §35.928 et seq.)
(a) Step 3 grant assistance awarded under regulations promulgated on February 11, 1974. (1) The grantee must obtain the approval of the Regional Administrator for the system of industrial cost recovery (see §35.928 et seq.). The Regional Administrator shall not pay more than 50 percent of the Federal share of any step 3 project unless the grantee has submitted adequate evidence of timely development of its system of industrial cost recovery nor shall the Regional Administrator pay more than 80 percent of the Federal share unless he has approved the system.
(2) Payments of grantees held under paragraph (a)(1) of this section shall be released after April 25, 1978. However, the grantee shall obtain approval of its industrial cost recovery system by June 30, 1979, or no further payments will be made until the system is approved.
(b) Step 3 grant assistance awarded after April 24, 1978, but before July 1, 1979. The grantee must obtain approval of its industrial cost recovery system under these regulations, except for the ordinance and rates, before July 1, 1979. The Regional Administrator shall not make any payments on these grants and shall not award any new step 3 grants to the same grantee after June 30, 1979, if the industrial cost recovery system, except for the ordinance and rates, has not been approved. The grantee shall enact the ordinance required under §35.928–1(h) and submit the ordinance and industrial cost recovery system rates to the Regional Administrator who must approve the ordinance before the treatment works are placed in operation.
(c) Step 3 grant assistance awarded after June 30, 1979. The grantee must obtain the Regional Administrator's approval of the industrial cost recovery system under these regulations, except for the ordinance and rates, before grant award. The grantee shall enact the ordinance required under §35.928–1(h) and submit the ordinance and industrial cost recovery system rates to the Regional Administrator who must approve the ordinance before the treatment works are placed in operation.
§ 35.935-16 Sewer use ordinance and evaluation/rehabilitation program.
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(a) The grantee must obtain the approval of the Regional Administrator of its sewer use ordinance under §35.927–4.
(b) Except as provided in paragraphs (c) and (d) of this section, the Regional Administrator shall not pay more than 80 percent of the Federal share of any step 3 project unless he has approved the grantee's sewer use ordinance, and the grantee is complying with the sewer system evaluation and rehabilitation schedule incorporated in the grant agreement under §35.927–5.
(c) In projects where segmenting of an operable treatment works has occurred, the Regional Administrator shall not pay more than 80 percent of the Federal share of the total of all interdependent step 3 segments unless he has approved the grantee's sewer use ordinance and the grantee is complying with the sewer system evaluation and rehabilitation schedule incorporated in the grant agreement under §35.927–5.
(d) In mulitple facility projects where an element or elements of the treatment works are operable components and have been completely constructed and placed in operation by the grantee, the Regional Administrator shall not make any additional step 3 payment unless he has approved the grantee's sewer use ordinance and the grantee is complying with the sewer system evaluation and rehabilitation schedule incorporated in the grant agreement under §35.927–5.
§ 35.935-17 Training facility.
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If assistance has been provided for the construction of a treatment works required to train and upgrade waste treatment personnel under §§35.930–1(b) and 35.920–3(e), the grantee must operate the treatment works as a training facility for a period of at least 10 years after construction is completed.
§ 35.935-18 Value engineering.
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A grantee must comply with the applicable value engineering requirements of §35.926.
§ 35.935-19 Municipal pretreatment program.
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The grantee must obtain approval by the Regional Administrator of the municipal pretreatment program in accordance with part 403 of this chapter. Prior to granting such approval, the Regional Administrator shall not pay more than 90 percent of the Federal share of any step 3 project or cost of step 3 work under a step 2=3 project awarded after October 1, 1978, except that for any such grant assistance awarded before December 31, 1980, the Regional Administrator may continue grant payments if he determines that significant progress has been made (and is likely to continue) toward the development of an approvable pretreatment program and that withholding of grant payments would not be in the best interest of protecting the environment.
§ 35.935-20 Innovative processes and techniques.
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If the grantee receives 85-percent grant assistance for innovative processes and techniques, the following conditions apply during the 5-year period following completion of construction:
(a) The grantee shall permit EPA personnel and EPA designated contractors to visit and inspect the treatment works at any reasonable time in order to review the operation of the innovative processes or techniques.
(b) If the Regional Administrator requests, the grantee will provide EPA with a brief written report on the construction, operation, and costs of operation of the innovative processes or techniques.
§ 35.936 Procurement.
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(a) Sections 35.936 through 35.939 set forth policies and minimum standards for procurement of architectural or engineering services as defined in §35.937 and construction contracts as described in §35.938 by grantees under all steps of grants for construction of treatment works. Acquisition of real property shall be conducted in accordance with part 4, subpart F of this chapter. Other procurements of goods and services shall be conducted in accordance with the provisions of part 33 of this subchapter.
(b) This subpart does not apply to work beyond the scope of the project for which grant assistance is awarded (i.e., ineligible work).
§ 35.936-1 Definitions.
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As used in §§35.936 through 35.939, the following words and terms shall have the meaning set forth below. All terms not defined herein shall have the meaning given to them in §30.135 of this subchapter, and in §35.905.
(a) Grant agreement. The written agreement and amendments thereto between EPA and a grantee in which the terms and conditions governing the grant are stated and agreed to by both parties under §30.345 of this subchapter.
(b) Subagreement. A written agreement between an EPA grantee and another party (other than another public agency) and any tier of agreement thereunder for the furnishing of services, supplies, or equipment necessary to complete the project for which a grant was awarded, including contracts and subcontracts for personal and professional services, agreements with consultants and purchase orders, but excluding employment agreements subject to State or local personnel systems. (See §§35.937–12 and 35.938–9 regarding subcontracts of any tier under prime contracts for architectural or engineering services or construction awarded by the grantee—generally applicable only to subcontracts in excess of $10,000.)
(c) Contractor. A party to whom a subagreement is awarded.
(d) Grantee. Any municipality which has been awarded a grant for construction of a treatment works under this subpart. In addition, where appropriate in §§35.936 through 35.939, grantee may also refer to an applicant for a grant.
§ 35.936-2 Grantee procurement systems; State or local law.
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(a) Grantee procurement systems. Grantees may use their own procurement systems and procedures which meet applicable requirements of State, territorial, or local laws and ordinances to the extent that these systems and procedures do not conflict with the minimum requirements of this subchapter.
(b) State or local law. The Regional Administrator will generally rely on a grantee's determination regarding the application of State or local law to issues which are primarily determined by such law. The Regional Administrator may request the grantee to furnish a written legal opinion adequately addressing any such legal issues. The Regional Administrator will accept the grantee's determination unless he finds that it does not have a rational basis.
(c) Preference. State or local laws, ordinances, regulations or procedures which effectively give local or in-State bidders or proposers preference over other bidders or proposers shall not be employed in evaluating bids or proposals for subagreements under a grant.
§ 35.936-3 Competition.
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EPA's policy is to encourage free and open competition appropriate to the type of project work to be performed.
§ 35.936-4 Profits.
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Only fair and reasonable profits may be earned by contractors in subagreements under EPA grants. See §35.937–7 for discussion of profits under negotiated subagreements for architectural or engineering services, and §35.938–5(f) for discussion of profits under negotiated change orders to construction contracts. Profit included in a formally advertised, competitively bid, fixed price construction contract awarded under §35.938 is presumed reasonable.
§ 35.936-5 Grantee responsibility.
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(a) The grantee is responsible for the administration and successful accomplishment of the project for which EPA grant assistance is awarded. The grantee is responsible for the settlement and satisfaction of all contractual and administrative issues arising out of subagreements entered into under the grant (except as §35.936–6 provides) in accordance with sound business judgment and good administrative practice. This includes issuance of invitations for bids or requests for proposals, selection of contractors, award of contracts, protests of award, claims, disputes, and other related procurement matters.
(b) With the prior written approval of the Regional Administrator, the grantee may retain an individual or firm to perform these functions. Such an agent acts for the grantee and is subject to the provisions of this subpart which apply to the grantee.
(c) In accordance with §35.970, a grantee may request technical and legal assistance from the Regional Administrator for the administration and enforcement of any contract related to treatment works that are assisted by an EPA grant. The Regional Administrator's assistance does not release the grantee from those responsibilities identified in paragraph (a) of this section.
§ 35.936-6 EPA responsibility.
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Generally, EPA will only review grantee compliance with Federal requirements applicable to a grantee's procurement. However, where specifically provided in this chapter (e.g., §§8.8(j) and 35.939), EPA is responsible for determining compliance with Federal requirements.
§ 35.936-7 Small and minority business.
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Grantees shall make positive efforts to use small business and minority-owned business sources of supplies and services. Such efforts should allow these sources the maximum feasible opportunity to compete for subagreements to be performed using Federal grant funds.
§ 35.936-8 Privity of contract.
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Neither EPA nor the United States shall be a party to any subagreement (including contracts or subcontracts), nor to any solicitation or request for proposals. (See §§35.937–9(a), 35.938–4(c)(5), and appendices C–1 and C–2 to this subpart for the required solicitation statement and contract provisions.) However, in accordance with §35.970 the Regional Administrator, if a grantee requests, may provide technical and legal assistance in the administration and enforcement of any contract related to treatment works for which an EPA grant was made.
§ 35.936-9 Disputes.
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Only an EPA grantee may initiate and prosecute an appeal to the Administrator under the disputes provision of a grant with respect to its subagreements (see subpart J of part 30 of this subchapter). Neither a contractor nor a subcontractor may prosecute an appeal under the disputes provisions of a grant in its own name or interest.
§ 35.936-10 Federal procurement regulations.
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Regulations applicable to direct Federal procurement shall not be applicable to subagreements under grants except as stated in this subchapter.
§ 35.936-11 General requirements for subagreements.
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Subagreements must:
(a) Be necessary for and directly related to the accomplishment of the project work;
(b) Be in the form of a bilaterally executed written agreement (except for small purchases of $10,000 or less);
(c) Be for monetary or in-kind consideration; and
(d) Not be in the nature of a grant or gift.
§ 35.936-12 Documentation.
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(a) Procurement records and files for purchases in excess of $10,000 shall include the following:
(1) Basis for contractor selection;
(2) Justification for lack of competition if competition appropriate to the type of project work to be performed is required but is not obtained; and
(3) Basis for award cost or price.
(b) The grantee or contractors of the grantee must retain procurement documentation required by §30.805 of this subchapter and by this subpart, including a copy of each subagreement, for the period of time specified in §30.805. The documentation is subject to all the requirements of §30.805. A copy of each subagreement must be furnished to the project officer upon request.
§ 35.936-13 Specifications.
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(a) Nonrestrictive specifications. (1) No specification for bids or statement of work in connection with such works shall be written in such a manner as to contain proprietary, exclusionary, or discriminatory requirements other than those based upon performance, unless such requirements are necessary to test or demonstrate a specific thing or to provide for necessary interchangeability of parts and equipment, or at least two brand names or trade names of comparable quality or utility are listed and are followed by the words “or equal.” If brand or trade names are specified, the grantee must be prepared to identify to the Regional Administrator or in any protest action the salient requirements (relating to the minimum needs of the project) which must be met by any offeror. The single base bid method of solicitation for equipment and parts for determination of a low, responsive bidder may not be utilized. With regard to materials, if a single material is specified, the grantee must be prepared to substantiate the basis for the selection of the material.
(2) Project specifications shall, to the extent practicable, provide for maximum use of structures, machines, products, materials, construction methods, and equipment which are readily available through competitive procurement, or through standard or proven production techniques, methods, and processes, except to the extent that innovative technologies may be used under §35.908 of this subpart.
(b) Sole source restriction. A specification shall not require the use of structures, materials, equipment, or processes which are known to be available only from a sole source, unless the Regional Administrator determines that the grantee's engineer has adequately justified in writing that the proposed use meets the particular project's minimum needs or the Regional Administrator determines that use of a single source is necessary to promote innovation (see §35.908). Sole source procurement must be negotiated under §33.500 et seq., including full cost review.
(c) Experience clause restriction. The general use of experience clauses requiring equipment manufacturers to have a record of satisfactory operation for a specified period of time or of bonds or deposits to guarantee replacement in the event of failure is restricted to special cases where the grantee's engineer adequately justifies any such requirement in writing. Where such justification has been made, submission of a bond or deposit shall be permitted instead of a specified experience period. The period of time for which the bond or deposit is required should not exceed the experience period specified. No experience restriction will be permitted which unnecessarily reduces competition or innovation.
(d) Buy American—(1) Definitions. As used in this subpart, the following definitions apply:
(i) Construction material means any article, material, or supply brought to the construction site for incorporation in the building or work.
(ii) Component means any article, material, or supply directly incorporated in construction material.
(iii) Domestic construction material means an unmanufactured construction material which has been mined or produced in the United States, or a manufactured construction material which has been manufactured in the United States if the cost of its components which are mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components.
(iv) Nondomestic construction material means a construction material other than a domestic construction material.
(2) Domestic preference. Domestic construction material may be used in preference to nondomestic materials if it is priced no more than 6 percent higher than the bid or offered price of the nondomestic materials including all costs of delivery to the construction site, any applicable duty, whether or not assessed. Computations will normally be based on costs on the date of opening of bids or proposals.
(3) Waiver. The Regional Administrator may waive the Buy American provision based upon those factors that he considers relevant, including:
(i) Such use is not in the public interest;
(ii) The cost is unreasonable;
(iii) The Agency's available resources are not sufficient to implement the provision, subject to the Deputy Administrator's concurrence;
(iv) The articles, materials, or supplies of the class or kind to be used or the articles, materials, or supplies from which they are manufactured are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities or satisfactory quality for the particular project; or
(v) Application of this provision is contrary to multilateral government procurement agreements, subject to the Deputy Administrator's concurrence.
(4) Contract provision. Notwithstanding any other provision of this subpart, bidding documents and construction contracts for any step 3 project for which the Regional Administrator receives an application after February 1, 1978, shall contain the “Buy American” provision which requires use of domestic construction materials in preference to nondomestic construction materials.
(5) Substitution. If a nondomestic construction material or component is proposed for use, a bidder or contractor may substitute an approved domestic material or component (at no change in price), if necessary to comply with this subsection.
(6) Procedures. The Regional Administrator may use the appropriate procedures of §35.939 in making the determinations with respect to this subsection. He shall generally observe the Buy American procedures, regulations, precedents, and requirements of other Federal departments and agencies.
[43 FR 44049, Sept. 27, 1978, as amended at 44 FR 37596, June 27, 1979; 44 FR 39340, July 5, 1979]
§ 35.936-14 Force account work.
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(a) A grantee must secure the project officer's prior written approval for use of the force account method for (1) any step 1 or step 2 work in excess of $10,000; (2) any sewer rehabilitation work in excess of $25,000 performed during step 1 (see §35.927–3(a)); or (3) any step 3 work in excess of $25,000; unless the grant agreement stipulates the force account method.
(b) The project officer's approval shall be based on the grantee's demonstration that he possesses the necessary competence required to accomplish such work and that (1) the work can be accomplished more economically by the use of the force account method, or (2) emergency circumstances dictate its use.
(c) Use of the force account method for step 3 construction shall generally be limited to minor portions of a project.
§ 35.936-15 Limitations on subagree-ment award.
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No subagreement shall be awarded:
(a) To any person or organization which does not meet the responsibility standards in §30.340–2 (a) through (d) and (g) of this subchapter;
(b) If any portion of the contract work not exempted by §30.420–3(b) of this subchapter will be performed at a facility listed by the Director, EPA Office of Federal Activities, in violation of the antipollution requirements of the Clean Air Act and the Clean Water Act, as set forth in §30.420–3 of this subchapter and 40 CFR part 15 (Administration of the Clean Air Act and the Federal Water Pollution Control Act with respect to Federal contracts, grants, or loans); or
(c) To any person or organization which is ineligible under the conflict of interest requirements of §30.420–4 of this subchapter.
§ 35.936-16 Code or standards of conduct.
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(a) The grantee must maintain a code or standards of conduct which shall govern the performance of its officers, employees, or agents in the conduct of project work, including procurement and expenditure of project funds. The grantee's officers, employees, or agents shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or potential contractors. The grantee must avoid personal or organizational conflicts of interest or noncompetitive procurement practices which restrict or eliminate competition or otherwise restrain trade.
(b) To the extent permissible by State or local law or formal institutional requirements and procedures, the standards shall provide for penalties, sanctions, or other adequate disciplinary actions to be instituted for project-related violations of law or of the code or standards of conduct by either the grantee officers, employees, or agents, or by contractors or their agents.
(c) The grantee must inform the project officer in writing of each serious allegation of a project-related violation and of each known or proven project-related violation of law or code or standards of conduct, by its officers, employees, contractors, or by their agents. The grantee must also inform the project officer of the prosecutive or disciplinary action the grantee takes, and must cooperate with Federal officials in any Federal prosecutive or disciplinary action. Under §30.245 of this subchapter, the project officer must notify the Director, EPA Security and Inspection Division, of all notifications from the grantee.
(d) EPA shall cooperate with the grantee in its disciplinary or prosecutive actions taken for any apparent project-related violations of law or of the grantee's code or standards of conduct.
§ 35.936-17 Fraud and other unlawful or corrupt practices.
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All procurements under grants are covered by the provisions of §30.245 of this subchapter relating to fraud and other unlawful or corrupt practices.
§ 35.936-18 Negotiation of subagree-ments.
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(a) Formal advertising, with adequate purchase descriptions, sealed bids, and public openings shall be the required method of procurement unless negotiation under paragraph (b) of this section is necessary to accomplish sound procurement.
(b) All negotiated procurement shall be conducted in a manner to provide to the maximum practicable extent open and free competition appropriate to the type of project work to beperformed. The grantee is authorized to negotiate subagreements in accordance with the applicable procedures of this subchapter (see §§35.937 et seq. and 35.500 et seq.) if any of the following conditions exist: (continued)