GRANTS

SUBPART A: INTRODUCTION

Section

871.101

Purpose

871.102

Definitions

871.103

Severability

SUBPART B: LIABILITIES AND REMEDIES FOR FAILURE TO COMPLY WITH

GRANT CONDITIONS

Section

871.201

Noncompliance with Grant Conditions

871.202

Stop-Work Order

871.203

Termination

871.204

Waiver of Conditions

871.205

Covenant Against Contingent Fees

871.206

Statutory Conditions

SUBPART C: REQUIREMENTS APPLICABLE TO SUBAGREEMENTS OF

GRANTEE

Section

871.301

General Conditions for all Subagreements

871.302

Contracts for Personal and Professional Services - Professional

Consultant Agreements

871.303

Compliance with Procurement Requirements

871.304

Disputes

871.305

Indemnity

SUBPART D: REQUIREMENTS APPLICABLE TO INITIATION AND

AMENDMENT

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Section

871.401

Project Initiation

871.402

Project Changes

871.403

Termination of Delegation Agreement

SUBPART E: REQUIREMENTS APPLICABLE TO ACCESS, AUDITING, AND

RECORDS

Section

871.501

Access

871.502

Audit and Records

871.503

Reports

SUBPART F: REQUIREMENTS APPLICABLE TO PAYMENT OF GRANTS

Section

871.601

Determination of Allowable Costs

871.602

Amount of Grant-Percentage of Approved Allowable Costs

871.603

Use of Grant and Payment of Unallowable Costs

871.604

Grant Payment Schedule (Repealed)

871.605

Other Federal or State Grants

APPENDIX A

Required Provisions-- Professional Contractor Agreements

APPENDIX B

Procedures for Determination of Indirect Costs and Indirect Cost

Rates

AUTHORITY

: Implementing and authorized by Section 22.15 of the Environmental

Protection Act [415 ILCS 5/22.15].

SOURCE

: Adopted at 11 Ill. Reg. 18158, effective October 23, 1987; amended at 14

Ill. Reg. 17201, effective October 9, 1990; amended at 19 Ill. Reg. 11821, effective

August 3, 1995.

Section 871.101 Purpose

a) Section 22.15 of the Environmental Protection Act [415 ILCS 5/22.15]

authorizes the Agency to:

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1)

Provide financial assistance to units of local government in

planning for the management of nonhazardous solid waste or

municipal waste

 

where alternatives to disposal of nonhazardous

solid waste

 

or municipal waste

 

in a sanitary landfill will receive

full evaluation and consideration in the planning process

 

or in

plans prepared pursuant to the Local Solid Waste Disposal Act or

the Solid Waste Planning and Recycling Act

(Section 22.15(g) of

the Act); and

2)

To provide financial assistance to units of local government for

the performance of inspecting, investigating and enforcement

activities pursuant to Section 4(r) at nonhazardous solid waste

or

municipal waste

disposal sites

. (Section 22.15(h) of the Act)

b) The rules set forth in this Part constitute conditions which apply to any

agreement through which the Agency provides the financial assistance

described in subsection (a) above for:

1) Planning for the management of municipal waste in accordance

with Section 22.15(g) of the Environmental Protection Act [415

ILCS 5/22.15(g)]; and

2) Inspection, investigation and enforcement activities at

nonhazardous solid waste or municipal waste disposal sites in

accordance with Section 22.15(h) of the Environmental

Protection Act [415 ILCS 5/22.15(h)].

 

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.102 Definitions

a) For purposes of this Part, the words and terms used in this Part shall

have the meanings below. Words and terms not defined in this Part shall

have the meanings set forth in 35 Ill. Adm. Code 870. Words and terms

not defined in this Part and not defined in 35 Ill. Adm. Code 870 shall

have the meanings as defined in the Environmental Protection Act [415

ILCS 5].

b) For purposes of this Part, the following definitions apply. "Act" or

"Environmental Protection Act" means the Environmental Protection Act

[415 ILCS 5].

"Applicant" means the unit of local government that is applying for a

municipal waste planning or nonhazardous solid or municipal waste

enforcement grant under Section 22.15 of the Act.

"Contractor" means the person, as defined by Section 3.26 of the Act, to

whom a subagreement is awarded.

"Delegation agreement" means an agreement authorized by Section 4(r)

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of the Act [415 ILCS 5/4(r)], under which the Agency may delegate

inspection, investigation and enforcement authority at nonhazardous solid

waste or municipal waste facilities or sites to a unit of local government.

"Enforcement grant" means a grant issued pursuant to Section 22.15(h)

of the Act for inspection, investigation and enforcement activities at

nonhazardous solid waste or municipal waste disposal sites. (Referred to

as "SMWE Grant" in 35 Ill. Adm. Code 870.)

"Generally accepted accounting principles" means procedures outlined by

the Financial Accounting Standards Board (High Ridge Park, Stamford,

Connecticut 06905, June 1, 1987).

"Grant agreement" means the written agreement and amendments thereto

between the Agency and a grantee in which the terms and conditions

governing the grant are stated and agreed to by both parties.

"Grantee" means the unit of local government that has been awarded a

grant for municipal waste planning or nonhazardous solid or municipal

waste enforcement under Section 22.15 of the Act.

"Phase I MWP Grant" means a Municipal Waste Needs Assessment

Grant issued pursuant to Section 22.15(g) of the Act and 35 Ill. Adm.

Code 870.204(b).

"Phase II MWP Grant" means a Municipal Waste Planning Grant issued

pursuant to Section 22.15(g) of the Act and 35 Ill. Adm. Code

870.204(c).

"Phase III MWP Grant" means a Municipal Waste Implementation

Planning Grant issued pursuant to Section 22.15(g) of the Act and 35 Ill.

Adm. Code 870.204(d).

"Planning grant" means a grant issued pursuant to Section 22.15(g) of

the Act for the planning of municipal waste management.

"State" means the State of Illinois.

"Subagreement" means a written agreement between the grantee and

another party, such as a contractor, 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

for personal and professional services and purchase orders.

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(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.103 Severability

If any provision of this Part or the application thereof to any person or in any

circumstance is adjudged invalid, such adjudication shall not affect the validity of this

Part as a whole or any provision thereof not adjudged invalid.

SUBPART B: LIABILITIES AND REMEDIES FOR FAILURE TO COMPLY

Section 871.201 Noncompliance with Grant Conditions

a) In the event of noncompliance with any condition or obligation imposed

pursuant to a grant made under Section 22.15 of the Act, the Agency

may take one or more of the following actions:

1) Commence legal action in a court of competent jurisdiction (e.g.,

to obtain an injunction or to recover in fraud);

2) Annul the grant and recover all grant funds pursuant to the

Illinois Grant Funds Recovery Act [30 ILCS 705];

3) Terminate the grant pursuant to Section 871.203 of this Part;

4) Suspend all or part of the project work pursuant to Section

871.202 of this Part; or

5) Take other actions, such as reducing the amount of the grant by

the amount of misused funds, or disallowing costs in accordance

with Section 871.601 of this Part.

b) No action shall be taken under this Part without prior consultation with

the grantee.

c) In determining whether to take action and which action to take when the

Agency is empowered to act under this Part, the Agency shall consider

factors such as the severity of the violation(s); the number of violations

by the grantee; whether the violation is a continuing one; whether the

grantee can remedy the violation; and whether the grantee and any

subagreements remain capable of complying with the approved work

project (see Subpart C of this Part).

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.202 Stop-Work Order

a) The Agency may, for any violation of this Part, by written order to the

grantee, require the grantee to stop all or any part of the project work

for a period of not more than 30 days after the date of the order, and for

any further period to which the parties may agree. Any such order shall

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be specifically identified as a stop-work order issued pursuant to this

Section. Any such order shall include a list of the project activities to

which the stop-work order shall apply. Upon receipt of such an order,

the grantee shall forthwith comply with its terms and take all reasonable

steps to minimize the incurrence of costs allocable to the work covered

by the order during the period of work stoppage. Within a period of not

more than 30 days of the date of the stop-work order, or within any

extension of that period to which the parties shall have agreed, the

Agency shall either:

1) Cancel the stop-work order upon the resolution of the violations

leading to that stop-work order; or

2) Terminate the work covered by such order as provided in Section

871.203 of this Part.

b) If a stop-work order issued under this condition is canceled or the period

of the order or any extension there of expires, the grantee shall resume

work. An equitable adjustment shall be made in the grant period, the

project period, or grant amount, or all of these, and the grant instrument

shall be amended accordingly, if:

1) The stop-work order results either in an increase in the time

required to complete the project, or an increase in the grantee's

cost properly allocable to the performance of any part of the

project; and

2) The grantee asserts a written claim for such adjustment within 30

days after the end of the period of work stoppage. Such claim

must be submitted prior to final payment under the grant.

c) Costs incurred by the grantee after the receipt of a stop-work order, or

within any extension of the stop-work order period to which the Agency

and the grantee shall have agreed, shall be allowable costs only if so

defined by Section 871.601 of this Part.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.203 Termination

a) Grant Termination by Agency The Agency, by written notice and after

consultation with the grantee, may terminate the grant, in whole or in

part. Cause for termination shall include, but not be limited to: default

by the grantee, failure by the grantee to comply with the terms and

conditions of the grant, realignment of programs, change in program

requirements or priorities, lack of adequate funding, or advancements in

the state of the art.

b) Project Termination by Grantee The grantee may not terminate a project

for which the grant has been awarded, except for good cause. Good

cause for termination shall include, but not be limited to: realignment of

programs, change in program requirements or priorities, lack of

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adequate funding, or advancements in the state of the art. If the Agency

finds that there is good cause for the termination of all or any portion of

a project for which the grant has been awarded, it shall enter into a

termination agreement or unilaterally terminate the grant, effective with

the date of termination of the project by the grantee. If the Agency finds

that the grantee has terminated the project without good cause, then the

grant shall be annulled and all grant funds previously paid or owing to

the grantee shall be returned to the State of Illinois Solid Waste

Management Fund as final settlement.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.204 Waiver of Conditions

The Director of the Agency may waive any or all of the conditions required by this

Part, with respect to any grant offer, by a statement made in writing to the grantee,

either as a special condition of the grant offer or otherwise (and the waiver made

subject to such additional conditions as the Director may deem necessary), if the

purpose of the requirement has been accomplished or if the requirement waived is not

considered by the Director to be necessary to insure the integrity of the project.

Section 871.205 Covenant Against Contingent Fees

The grantee warrants that no person or agency has been employed or retained to solicit

or secure this grant upon an agreement or understanding for a commission, percentage,

brokerage, or contingent fee. For breach or violation of this warranty, the Agency

shall have the right to annul this grant without liability or in its discretion to deduct

from the grant award, or otherwise recover, the full amount of such commission,

percentage, brokerage, or contingent fee.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.206 Statutory Conditions

The grantee is solely responsible for assuring compliance with all statutory

requirements.

SUBPART C: REQUIREMENTS APPLICABLE TO SUBAGREEMENTS OF

Section 871.301 General Conditions for all Subagreements

a) Scope of Application

The following conditions shall apply to all subagreements entered into

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between the grantee and any other party and any tier of agreement

thereunder for the furnishing of services, supplies, or equipment

necessary to complete the project for which the grant is awarded,

including contracts and subcontracts for personal and professional

services.

b) Local Preference

Local laws, ordinances, regulations or procedures which are designed or

operate to 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.

c) Competition

It is the policy of the Agency to encourage free and open competition

appropriate to the type of project work to be performed.

d) Profits

Only fair and reasonable profits approved by the Agency may be earned

by contractors in subagreements under Agency grants. Factors to be

considered in determining a fair and reasonable profit shall include, but

not be limited to, material acquisition, labor costs, associated

management costs, contract risks, capital investments, degree of

independent development, and cost control and record keeping efforts.

The determination of a fair and reasonable profit shall not be based upon

the application of a predetermined percentage factor.

e) Travel

The grantee is responsible for ensuring that reimbursement for travel

expenses accrued by contractors conducting grant eligible activities does

not exceed the travel limits established by 80 Ill. Adm. Code 3000

(effective July 1, 1990), and rules promulgated thereunder. The Agency

will not reimburse grantees for any contractors' travel expenses

exceeding State travel limits for mileage, transportation, lodging, per

diem, parking, tolls, and other eligible travel costs.

f) Grantee Responsibility

The grantee is responsible for the administration and successful

accomplishment of the project for which the Agency grant 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. This includes, but is not limited to,

issuance of invitations for bids or requests for proposals, selection and

oversight of contractors, award of contracts, protests of award, claims,

disputes, and other procurement matters. These functions may be

performed for the grantee by an individual or firm retained by the

grantee for that purpose. Such an agent acts for the grantee and is

subject to all the provisions of the grant agreement, including the

requirements contained in this Part, that apply to the grantee. Ultimate

responsibility for the project will continue to remain with the grantee.

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Costs incurred by a unit of local government will be eligible for grant

reimbursement only after the grant is executed.

g) Privity of contract

Neither the Agency nor the State of Illinois shall be a party to any

subagreement (including contracts), nor to any solicitation or request for

proposals therefor.

h) General Requirements

Subagreements shall:

1) Be directly related to the accomplishment of the grantee's

approved work program;

2) Be in the form of a bilaterally executed written agreement;

3) Be for monetary or in-kind consideration; and

4) Not be in the nature of a grant or gift.

i) Documentation

1) Procurement records and files for contracts shall include the

following:

A) Basis for contractor selection; and

B) Basis for award cost or price.

2) Procurement documentation as described in subsection (i)(1)

above shall be retained by the grantee or contractors of the

grantee for the period of time required by Section 871.502.

j) In-kind Work

1) The grantee must secure prior written approval of the Agency for

utilization of in-kind contributions for work on planning grants in

excess of $10,000 for Phase I activities and $25,000 for Phase II

activities unless otherwise stipulated in the Grant Agreement.

2) The Agency's approval of in-kind contributions shall be based on

its determination that:

A) The grantee has trained manpower and supervisory

personnel whose expertise and current responsibilities

would enable them to accomplish the project work and to

maintain records of such work in accordance with this

Part; and

B) The use of in-kind contributions will effect savings in cost

over those that would be incurred under

technical/professional service contracting methods.

k) The Agency retains the right to review, approve or disapprove in

accordance with this Part all subagreements to be entered into by the

grantee prior to execution of all such agreements. The Agency shall not

approve the awarding of any subagreements to any person or

organization which does not:

1) Have adequate resources, or the ability to obtain such resources

prior to project initiation, to satisfactorily complete the project,

including financial, organizational, and technical qualifications;

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2) Have experience, or the ability to obtain such experience prior to

the project's initiation, in nonhazardous solid waste or municipal

waste planning, data collection and interpretation, and report

preparation; and have a proven record of meeting schedules and

budgets;

3) Have staffing sufficient to comply with the proposed or required

completion schedule for the project;

4) Have a satisfactory record of integrity, judgment, and

performance, including, in particular, any prior performance

under grants and contracts with federal or State government;

5) Have an adequate financial management system and audit

procedure which complies with generally accepted accounting

procedures and with American Institute of Certified Public

Accountant's Professional Standards (666 Fifth Avenue, N.Y.,

N.Y. 10019, June 1, 1987). (This incorporation contains no

later amendments or editions.);

6) Maintain a standard of procurement in accordance with this Part;

7) Maintain a property management system that provides adequate

procedures for the acquisition, maintenance, safeguarding, and

disposition of all property; or

8) Conform to the civil rights, equal employment opportunity, and

labor law requirements of the State of Illinois.

l) Fraud and Other Unlawful or Corrupt Practices

1) The award and administration of grants by the State of Illinois,

and of subagreements awarded by grantees under those grants,

must be accomplished free from bribery, graft, kickbacks, and

other corrupt practices. The grantee bears the primary

responsibility for prevention and detection of such conduct and

for cooperation with appropriate authorities in the prosecution of

any such conduct.

2) The grantee shall effectively pursue available State or local legal

and administrative remedies and shall take appropriate remedial

action with respect to any allegations or evidence of such

illegality or corrupt practices which are brought to its attention.

The grantee shall advise the Agency immediately when any such

allegation or evidence comes to its attention and shall periodically

advise the Agency of the status and ultimate disposition of any

such matter.

m) Negotiation of Subagreements

Negotiation of subagreements (i.e., award of subagreements by any

method other than formal advertising) is authorized if it is impracticable

and infeasible to use formal advertising. Negotiated contracts must be

competitively awarded to the maximum practicable extent.

Procurements may be negotiated by the grantee if:

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1) Public exigency as evidenced by governmental declaration will

not permit the delay in advertising (e.g., an emergency

procurement);

2) The aggregate amount involved does not exceed $2,500;

3) The material or service to be procured is available from only one

person or firm (and, if the procurement is expected to aggregate

more than $10,000, the Agency has given prior approval in

writing);

4) The procurement is for personal or professional services, or for

any service to be rendered by a university or other educational

institution; or

5) No responsive bids at acceptable price levels have been received

after formal advertising, and the Agency has given advance

written approval of the negotiated contract. The Agency shall

give such approval upon a showing by the grantee that no

responsive bids were received.

n) Small Purchases

1) A small purchase is the procurement of materials, supplies, and

services when the aggregate amount involved in any one

transaction does not exceed $10,000. The small purchase

limitation of $10,000 applies to the aggregate total of an order,

including all estimated overhead and profit to be paid under the

order. In arriving at the aggregate amount involved in any one

transaction, there must be included all items which should

properly be grouped together. Reasonable competition shall be

obtained and shall be evidenced by submission of price

quotations.

2) Subagreements for small purchases need not be in the form of a

bilaterally executed written agreement. Where appropriate,

unilateral purchase orders, sales slips, memoranda of oral price

quotations, and the like may be utilized in the interest of

minimizing paperwork. Retention in the purchase files of these

documents and of written quotations received, or references to

written catalogs or printed price lists used, will suffice as the

record supporting the price paid.

o) Agency Review of Subagreements

1) The Agency retains the right to review, approve, or disapprove in

accordance with this Part all subagreements to be entered into by

the grantee in furtherance of the administration of the grant prior

to execution of that subagreement. The Agency shall approve a

subagreement only if the grantee demonstrates that the

subagreement is in conformance with subsection(k) above.

2) If, at any time during the project, the Agency determines that the

grantee's subcontractors are not successfully accomplishing

project activities in accordance with the grant award, the Agency

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may take one or more actions presented in Section 871.201 of

this Part. If the determination is due to the failure of the

grantee's subcontractors to successfully accomplish the project

work, the Agency shall notify the grantee in a timely manner of

the determination and its recommendations for resolving the

project deficiencies.

p) Award of Subagreement

After review and approval by the Agency, the grantee may award the

contract. The Agency shall notify the grantee in writing of disapproved

subagreements. Unsuccessful candidates shall be notified promptly.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.302 Contracts for Personal and Professional Services - Professional

Consultant Agreements

a) Scope of Application

The provisions of subsections (a) through(i) of this Section apply to all

subagreements of grantees for consulting services. When $10,000 or

less of services (e.g., for consultant or consultant subcontract services) is

required, the provisions of Section 871.301 (n) of this Part (Small

Purchases) shall apply.

b) Type of Contract (Subagreement)

1) General

Cost reimbursement or fixed price contracts may be negotiated

for consulting services. A fixed price contract is generally used

only when the scope and extent of work to be performed are

clearly defined. In most other cases, a cost reimbursement type

of contract is more appropriate.

2) Cost reimbursement contracts

Each cost reimbursement contract must clearly establish a cost

ceiling that may not be exceeded without formally amending the

contract and a fixed dollar profit which may not be increased

except in case of a contract amendment that increases the scope

of the work.

3) Fixed price contracts

An acceptable fixed price contract is one that establishes a

guaranteed maximum price which may not be increased except to

the extent that a contract amendment increases the scope of work.

4) Contracts prohibited

The cost-plus-percentage-of-cost type of contract is prohibited.

5) Compensation procedures

If, under either a cost reimbursement or fixed price contract, the

grantee desires to utilize a multiplier type of compensation, all of

the following must apply:

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A) The multiplier and the portions of the multiplier allocable

to overhead and allocable to profit have been specifically

negotiated;

B) The portion of the multiplier allocable to overhead

includes only allowable items of cost under the cost

principles contained in Section 871.601 of this Part; and

C) The portions of the multiplier allocable to profit and

allocable to overhead have been separately identified in

the contract.

c) Evaluation and Qualifications

1) The grantee shall review and uniformly evaluate the qualifications

of candidate firms.

2) Qualifications shall be evaluated by an objective process such as

by the appointment of a board or committee, which, to the extent

practicable, should include persons with technical skills.

3) Criteria that shall be considered in the evaluation of candidates

for submission of proposals include, but are not limited to:

A) Specialized experience and technical competence of the

candidate or firm and its personnel (including a joint

venture, association or professional subcontract) in

connection with the type of services required and the

complexity of the project;

B) Past record of performance on contracts with the grantee,

other government agencies or public bodies, and private

industry, including such factors as control of costs, quality

of work, and ability to meet schedules;

C) Capacity of the candidate to perform the work (including

any specialized services) within the time limitations,

taking into consideration the current and planned

workload of the firm; and

D) Avoidance of personal and organizational conflicts of

interest prohibited under State and local law.

d) Solicitation and Evaluation of Proposals

1) Requests for professional services proposals must be in writing

and must contain the information necessary to enable a

prospective offeror to prepare a proposal properly. The request

for proposals must inform offerors of the evaluation criteria,

including all those in subsection (c)(3) of this Section, and of the

relative importance attached to each criterion (a numerical

weighted formula need not be utilized).

2) All proposals submitted in response to the request for

professional services proposals must be uniformly evaluated.

Evaluation criteria shall include, at a minimum, all criteria stated

in subsection (c)(3) of this Section. The grantee shall also

evaluate the candidate's proposed method to accomplish the work

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required, including, where appropriate, demonstrated capability

to explore and develop innovative or advanced techniques and

designs.

3) Proposals shall be evaluated by an objective process such as the

appointment of a board or committee that, to the extent

practicable, includes persons with technical skills. Oral

(including telephone) or written interviews shall be conducted

with top rated proposers, and information derived therefrom shall

be treated as confidential, except as required to be disclosed

pursuant to State or local law or to the Agency pursuant to

subsection (f) below.

4) At no point during the entire procurement process shall

information be conveyed to any candidate that would specify bid

deficiencies and corrective actions, indicate the contents of

competing bids, or otherwise provide an unfair competitive

advantage.

e) Negotiation

1) Grantees are responsible for negotiation of their contracts for

consulting services. Contract procurement including negotiation

may be performed by the grantee directly or by another non-state

governmental body, person or firm retained for the purpose.

2) Negotiation shall be conducted in accordance with State or local

procedures. If such procedures conflict with this Part, State

procedures shall have precedence over this Part. This Part shall

have precedence over local procedures.

3) The object of negotiations with any candidate shall be to reach

agreement on the provisions of the proposed contract. The

grantee and the candidate shall discuss, at a minimum:

A) The scope and extent or work;

B) Identification of the personnel and facilities to accomplish

the work within the required time, including, where

needed, employment of additional personnel,

subcontracting, joint ventures, etc.;

C) Availability of the required technical services in

accordance with regulations and criteria established for the

project; and

D) A fair and reasonable price for the required work, to be

determined in accordance with the cost and profit

considerations set forth in subsections (f) and (g) below,

and payment provisions.

f) Cost and Price Considerations

1) General

It is the policy of the Agency that the cost or price of all

subagreements and amendments thereto must be considered. For

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each subagreement, grantees shall use the procedures described in

subsection (f)(2) below or equivalent process.

2) Cost Review

A) A review of proposed subagreement costs shall be made

by the grantee.

B) At a minimum, proposed subagreement costs shall be

presented on forms prescribed and provided by the

Agency and shall be supported by a certification executed

by the selected contractor that proposed costs reflect

complete, current and accurate cost and pricing data

applicable to the date of anticipated subagreement award.

C) In addition to the specific elements of cost, the estimated

amount of profit shall be set forth separately in the cost

summary for fixed price contracts and a maximum total

dollar amount of profit shall be set forth separately in the

cost summary for cost reimbursement contracts.

D) More detailed cost data than that required by the summary

format may be required by the grantee or the Agency to

substantiate the reasonableness of proposed subagreement

costs. Such detailed documentation is required by the

Agency only when the selected contractor is unable to

certify that the cost and pricing data used are complete,

current and accurate or when evidence of fraud or

misconduct has arisen. The Agency may, on a selected

basis, perform a pre-award cost analysis on any

subagreement. Circumstances under which such an

analysis would be conducted include amendments to

subagreements or evidence of cost inflation to meet costs.

A provisional overhead rate will be agreed upon prior to

contract award.

E) The contractor's actual costs, direct and indirect,

allowable for State participation shall be determined in

accordance with the terms and conditions of the

subagreement and this Part.

F) The contractor shall have an accounting system that

accounts for costs in accordance with generally accepted

accounting principles. This system shall provide for the

identification, accumulation and segregation of allowable

and unallowable project costs among projects. The

contractor must propose and account for costs in a manner

consistent with normal accounting procedures.

G) Subagreements awarded on the basis of review of a cost

element summary and a certification of complete, current

and accurate cost, and pricing data shall be subject to

downward renegotiation or recoupment of funds where the

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Agency determines that such certification was not based

on complete, current and accurate cost and pricing data or

not based on costs allowable under the appropriate

Agency cost principles at the time of award.

g) Profit

The objective of negotiations shall be the determination of a fair and

reasonable profit as described in Section 871.301(d) of this Part. For

the purpose of subagreements under State grants, profit is defined as the

net proceeds obtained by deducting all allowable costs (direct and

indirect) from the price. Profit on a subagreement and each amendment

to a subagreement under a grant should be sufficient to attract

contractors who possess talents and skills necessary to accomplish project

objectives, and to stimulate efficient and expeditious completion of the

project. Where cost review is performed, the estimate of profit shall be

reviewed by the grantee and the Agency as will all other elements of

price.

h) Required Subagreement Provisions

1) Content of subagreement

A) Each subagreement must define, at a minimum:

i) The scope and extent of project work;

ii) The time for performance and completion of the

contract work, including where appropriate, dates

for completion of significant project tasks;

iii) Personnel and facilities necessary to accomplish

the work within the required time; and

iv) The extent of subcontracting and contractor

agreements, including all costs to be incurred

under each subagreement.

B) If any of these elements cannot be defined for later tasks

or steps at the time of contract execution, the subsequent

tasks or steps shall be included in the contract at a time

specified in the contract.

2) Required subagreement provisions Each consulting services

contract must include the provisions set forth in Appendix A of

this Part, and shall state that Appendix A provisions will

supersede all others.

i) Subcontracts Under Subagreements for Consulting Services

1) The award or execution of subcontracts under a prime contract

for consulting services awarded to a contractor by a grantee, and

the procurement and negotiation procedures used by the

contractor in awarding such subcontracts, are required to comply

with all provisions, selection procedures, policies and principles

set forth in Section 871.301 and Section 871.302 of this Part.

2) The award or execution of subcontracts in excess of $10,000

under a prime contract for consulting services and the

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procurement procedures used by the contractor in awarding such

subcontracts must comply with the following:

A) Section 871.301(b) of this Part (Local Preference);

B) Section 871.302(f) of this Part (Cost and Price

Considerations); and

C) Section 871.302(g) of this Part (Profit).

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.303 Compliance With Procurement Requirements

a) Grantee Responsibility

The grantee is responsible for selecting the low, responsive bidder or

other contractor in accordance with applicable requirements of State or

local laws or ordinances, as well as the specific requirements of State

and federal law or the grant agreement directly affecting the procurement

(for example, the non-restrictive specification requirement or the equal

employment opportunity requirement) and for the initial resolution of

complaints based upon alleged violations. If complaint is made to the

Agency concerning an alleged violation of any law or of this grant

agreement in the procurement of services or materials for a project, the

complaint will be referred to the grantee for resolution. The grantee

shall promptly determine each such complaint upon its merits permitting

the complaining party as well as any other interested party who may be

adversely affected, including bidders on the contract in question, to state

in writing or at a conference the basis for views concerning the proposed

procurement. The grantee must promptly furnish to the complaining

party and to other affected parties who participated in the conference or

submitted written comments, by certified mail, a written summary of its

determination, substantiated by an engineering and legal opinion,

providing a justification for its determination.

b) Arbitration

Disputes between the grantee and any party adversely affected by the

determination of the grantee made pursuant to subsection (a) above shall

be resolved by binding arbitration by a single arbitrator, in accordance

with the Construction Industry Arbitration Rules of the American

Arbitration Association (140 W. 51st Street, N.Y., N.Y. 10020, 1986).

(This incorporation contains no further amendments or editions.) This

agreement to arbitrate shall be specifically enforceable under the

Uniform Arbitration Act [710 ILCS 5]. The award rendered by the

arbitrator shall be final, and judgment may be entered upon it in any

court having jurisdiction thereof. A copy of the arbitration award shall

be provided to the Agency immediately upon its issuance.

c) Time Limitations

Complaints pursuant to subsection (a) above shall be made as early as

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possible during the procurement process, preferably prior to issuance of

an invitation for bids to avoid disruption of the procurement process,

provided that a complaint authorized by subsection (a) above must be

mailed by certified mail (return receipt requested), or delivered, no later

than five working days after the bid opening. A request for arbitration

pursuant to subsection (b) above must be made to the American

Arbitration Association within one week after the complaining party

received the grantee's adverse determination.

d) Deferral of Procurement Action

Where the grantee has received a written complaint pursuant to

subsection (a) above, it must defer issuance of its solicitation or award or

notice to proceed under the contract (as appropriate) for ten days after

mailing or delivery of any written adverse determination. If a

determination is made by either the grantee or the arbitrator which is

favorable to the complainant, the terms of the solicitation must be

revised or the contract must be awarded (as appropriate) in accordance

with such determination.

e) Enforcement

Noncompliance with the provisions of this grant affecting procurement

will result in:

1) Total or partial termination of the grant pursuant to Section

871.203;

2) Ineligibility for grant assistance which could otherwise be

awarded under this grant; or

3) Disallowance of project costs incurred in violation of the

provisions of this grant offer or applicable laws, as determined by

the Agency.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.304 Disputes

a) Only the grantee may appeal to the Agency under this provision with

respect to its subagreements thereunder in its own name and for its own

benefit. Neither a contractor nor a subcontractor of a grantee may

prosecute an appeal under the disputes provision of a grant in its own

name or interest.

b) Any dispute arising under this grant which is not disposed of by

agreement shall be decided by the Agency. A written decision shall be

mailed or otherwise furnished to the grantee. The decision of the

Agency shall be final and conclusive.

c) This "disputes" clause does not preclude consideration of questions of

law in connection with decisions provided for in subsection (b) above.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

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Section 871.305 Indemnity

The grantee shall assume the entire risk, responsibility and liability for any and all loss

or damage to property owned by the grantee, the Agency or third persons, and any

injury to or death of any persons (including employees of the grantee) caused by,

arising out of, or occurring in connection with the execution of any work, contract or

subcontract arising out of this grant, and the grantee shall indemnify, save harmless and

defend the State of Illinois and the Agency from all claims for any such loss, damage,

injury or death whether caused by the negligence of the State of Illinois, the Agency,

their agents or employees or otherwise consistent with the provisions of Construction

Contract Indemnification for Negligence Act [740 ILCS 35]. The grantee shall require

that any and all contractors or subcontractors engaged by the grantee shall agree in

writing that they shall look solely to the grantee for performance of such contract or

satisfaction of any and all claims arising thereunder.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

SUBPART D: REQUIREMENTS APPLICABLE TO INITIATION AND

Section 871.401 Project Initiation

Any obligation of the State of Illinois and the Agency to make any payment of grant

funds shall terminate absolutely unless the grantee initiates performance of its

obligations under the grant no later than one calendar year from the date of acceptance

by the grantee of a Planning Grant offer or not later than 3 months from the date of

acceptance of an Enforcement Grant offer or as otherwise provided by the grant

agreement. Performance of obligations under the grant shall be deemed to have been

initiated on the execution of an agreement or contract for any element of project work;

or, if an agreement or contract covering an element of the work has previously been

entered into, upon the issuance of a notice to proceed with that work.

Section 871.402 Project Changes

a) Prior approval by the Agency is required for project changes that may:

1) Alter the scope of the project by changing the methodologies or

personnel to be used, as agreed to at the time of the grant award;

2) Extend any contractual or grant completion date for the project;

subject to the provisions required by Section 870.207(e); or

3) Re-allocate budget amounts by category through line-item

revisions, provided that the total grant amount does not change.

b) The grantee shall notify the Agency of project changes pursuant to

subsection (a) above in writing 30 days prior to the effective date of all

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proposed project changes. Failure on the part of the grantee to give

timely notice of proposed project changes pursuant to subsection (a) of

this Section may, in accordance with Section 871.201 of this Part, result

in:

1) Disallowance of costs incurred that are attributable to the change;

or

2) Termination of the grant.

c) The Agency shall disapprove proposed project changes by written notice

to the grantee within 30 days after receipt of a written notice from the

grantee of a proposed change pursuant to subsection (a) of this Section.

If the Agency fails to notify the grantee within 30 days after receipt of

project changes pursuant to subsection (a) of this Section, these changes

shall be deemed to be approved. Neither approval nor failure to

disapprove a project change shall commit or obligate the State of Illinois

or the Agency to any increase in the amount of the grant or payments

thereunder and nothing herein shall operate to increase the amount of the

grant. The total cost for all changes allowable under this provision shall

not exceed one-half of one percent of the total grant offer.

d) In addition to the notification of project changes pursuant to subsections

(a) through (c) of this Section, a copy of any prime contract or

modification thereof and of revisions to specifications must be submitted

to the Agency for approval within one week of execution; however,

neither approval nor disapproval of any prime contract or modification

thereof or revisions to specifications shall commit or obligate the State of

Illinois or the Agency to any increase in the amount of the grant or

payments thereunder.

e) The Agency will approve project changes if the grantee can make a

showing that:

1) Amendments to State statutes affect the project cost;

2) A project element was inadvertently omitted; or

3) An approved project element was found to be unnecessary.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.403 Termination of Delegation Agreement

Any obligation of the State of Illinois and the Agency to make any payment of funds

pursuant to a Nonhazardous Solid Waste or Municipal Waste Enforcement Grant shall

terminate upon the termination of the delegation agreement under which the grantee is

authorized to perform the activities subsidized by the grant.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

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SUBPART E: REQUIREMENTS APPLICABLE TO ACCESS, AUDITING, AND

Section 871.501 Access

a) The Agency and any persons designated by the Agency shall have access

to the premises where any portion of the work for which the grant was

awarded is being performed during normal business hours and any other

time at which the work is being performed. Subsequent to cessation of

grant support, Agency personnel or any authorized representative shall

have access to the project records as defined in Section 871.502 of this

Part to the full extent of the grantee's right to access, during normal

business hours.

b) Any contract entered into by the grantee for work, and any

subagreement thereunder, shall provide that the representatives of the

Agency will have access to the work as described in subsection (a) above

and that the contractor or subcontractor will provide proper facilities for

such access and inspection. Such contract or subagreement must also

provide that the Agency or any authorized representative shall have

access to any books, documents, papers, and records of the contractor or

subcontractor that are pertinent to the project for the purpose of making

audit, examination, excerpts, and transcriptions thereof.

c) Any failure by the grantee or any contractor or subcontractor of the

grantee to provide access, as provided herein, after 10 days' written

notice from the Agency, shall be cause for termination of the grant

pursuant to Section 871.203 of this Part and refund to the State of

Illinois Solid Waste Management Fund of any grant funds previously

expended by the grantee, contractor, or subcontractor found in

noncompliance with this Section.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.502 Audit and Records

a) The grantee shall maintain books, records, documents, reports, and other

evidentiary material and accounting procedures and practices that

conform to generally accepted accounting principles to properly account

for:

1) The receipt and disposition by the grantee of all assistance

received for the project, including both State assistance and any

matching share or cost sharing; and

2) The costs of the project, including all direct and indirect costs of

whatever nature incurred for the performance of the project for

which the grant has been awarded. The foregoing constitute

"records" for the purposes of this condition.

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b) The grantee's facilities, or such facilities as may be engaged in the

performance of the project for which the grant has been awarded, and

the grantee's records shall be subject to inspection and audit by the

Agency or any authorized representative at the times specified in Section

871.501 of this Part.

c) The grantee shall preserve and make his records available to the Agency

or any authorized representative:

1) Until expiration of 3 years from the date of final payment under

this grant; and

2) For such longer period, if any, as is required by applicable

statute or lawful requirement, or by subsection (d) or (e) below.

d) If this grant is terminated completely or partially, the records relating to

the work terminated shall be preserved and made available for a period

of 3 years from the date of any resulting final termination settlement.

e) Records that relate to appeals under Section 871.304 of this Part,

litigation, the settlement of claims arising out of the performance of the

project for which this grant was awarded, or costs and expenses of the

project to which exception has been taken by the Agency or any of its

duly authorized representatives shall be retained until final disposition of

such appeals, litigation, claims, or exceptions.

f) Any failure by the grantee or any contractor or subcontractor of the

grantee to make records available to the Agency as required by this

Section after 10 days' written notice from the Agency shall be cause for

termination of the grant pursuant to Section 871.203 of this Part, and

refund to the State of Illinois Solid Waste Management Fund of any

grant funds previously expended by the grantee, contractor or

subcontractor found in noncompliance with this Section.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.503 Reports

The grantee shall prepare and file with the Agency a final report containing the

information required by 35 Ill. Adm. Code 870.207 and all financial requests required

by Section 870.209. Failure to timely submit reports required by this grant offer may

result in:

a)

Withholding of grant funds;

b)

Suspension of the grant pursuant to Section 871.202;

c)

Termination of the grant pursuant to Section 871.203; or

d)

Such other action as the Agency may be authorized to take.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

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Section 871.601 Determination of Allowable Costs

a) The grantee will be paid, upon request, for the State share of all

necessary costs within the scope of the approved project not to exceed

the total grant offer and determined to be allowable in accordance with

the criteria listed below. Allocable project costs of the grantee which are

reasonable and necessary are allowable. Necessary costs may include,

but are not limited to:

1) Costs of salaries, benefits, and expendable material incurred by

the grantee for the project, except as provided in subsection

(b)(7) below;

2) Professional and consultant services;

3) Project feasibility and engineering reports; and

4) Materials acquired, consumed, or expended specifically for the

project.

b) Unallowable Costs Costs which exceed the total amount of the grant

offer or which are not necessary for completion of the work required by

the Grant Agreement are unallowable. Such costs include, but are not

limited to:

1) Area wide planning or enforcement not directly related to the

project;

2) Bonus payments not legally required for completion of the

project;

3) Personal injury compensation or damages arising out of the

project, whether determined by adjudication, arbitration,

negotiation, or otherwise;

4) Fines and penalties resulting from violations of, or failure to

comply with, federal, State, or local laws;

5) Costs outside the scope of the approved planning or enforcement

project;

6) Interest on bonds or any other form of indebtedness required to

finance the project costs;

7) Ordinary operating expenses of local government, such as salaries

and expenses of a mayor, city council members, or city attorney,

except as provided in subsection (d) below;

8) Site acquisition (for example, sanitary landfills and sludge

disposal areas);

9) Costs for which payment has been or will be received under

another State or federal assistance program;

10) Costs of equipment or material procured in violation of any

provisions of these General Conditions;

11) Costs of special funds (i.e., industry advancement funds, funds to

reimburse bidding costs to unsuccessful offerors, etc.) financed

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by contractors, contributions in the industry for methods and

materials research, public and industry relations, market

development, labor-management matters, wage negotiations,

jurisdictional disputes, defraying of all or part of unsuccessful

offerors bidding costs, or similar purposes;

12) Costs under contracts that are incurred after the expiration of the

applicable contractual completion date, even if the contractual

completion date is subsequently extended by the grantee, unless

such extension has been approved by the Agency in accordance

with Section 871.402;

13) Personal and professional consultant services costs arising under a

cost-plus-percentage-of-cost type of agreement (including the

multiplier contract where profit is included in the multiplier);

14) Personal and professional consultant services costs when the

Agency has been refused access to the books and records of the

contractor or the contractor has refused to renegotiate a personal

or professional services contract in accordance with the

provisions of Section 871.302; and

15) Increases in personal and professional consultant services contract

fees which are based solely on a percentage of an increased

construction cost notwithstanding the contractual liabilities of the

grantee under such contract.

c) Indirect Costs Indirect costs of the grantee shall be allowable in

accordance with an indirect cost agreement negotiated and incorporated

in the grant agreement. An indirect cost agreement must identify those

cost elements allowable pursuant to subsection (a) above. Where the

benefits derived from an applicant's indirect services cannot be readily

determined, a lump sum for overhead may be negotiated based upon a

determination that such amount will be approximately the same as the

actual indirect costs that may be incurred. Procedures for development

of an indirect cost agreement are included as Appendix B to this Part.

d) Disputes Concerning Allowable Costs The grantee shall seek to resolve

any questions relating to cost allowability or allocation at its earliest

opportunity (if possible, prior to execution of the grant agreement).

Final determinations by the Agency concerning the allowability of costs

shall be conclusive unless appealed within 30 days in accordance with

Section 871.304.

e) Limitation on Project Costs Incurred Prior to Grant Award Payment will

not be authorized for costs incurred prior to the date of the grant award.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.602 Amount of Grant-Percentage of Approved Allowable Costs

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a) The commitment and obligation of the State of Illinois and the Agency to

the grantee by this grant for the project is limited to and shall not exceed

the total amount of the grant. Nothing herein, including the provisions

of Section 871.402 of this Part, shall operate to commit or obligate the

State of Illinois or the Agency to any increase in the total amount or

percentage of the grant or of the grant offer.

b) The amount of the grant shall not exceed the State share of the approved

allowable cost of the project as set forth in the grant offer and special

conditions thereof. In the event the actual allowable cost of the project,

as determined by the Agency pursuant to periodic audit, is less than the

estimated allowable cost, such actual eligible cost shall be used to

determine the amount of the grant and the grant shall be reduced as

necessary to conform with the limitations described above.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.603 Use of Grant and Payment of Unallowable Costs

a) The grant shall be expended solely for approved allowable costs incurred

in the municipal waste planning or nonhazardous solid waste or

municipal waste enforcement activities authorized by the terms of the

grant.

b) The grantee agrees to pay the unallowable costs associated with the

project and all allowable costs of the project which exceed the amount of

the grant offer.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.604 Grant Payment Schedule (Repealed)

(Source: Repealed at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.605 Other Federal or State Grants

If the grantee becomes eligible for a grant of federal funds or State funds for this

project from other than the Solid Waste Management Fund, the grantee shall repay to

the State of Illinois, for deposit in the Solid Waste Management Fund, any funds

received under this offer if the total federal or State funds received exceed 70 percent

of the approved allowable cost under a planning grant or enforcement grant, as defined

by the Agency in accordance with the conditions of this grant. The grantee shall take

any and all actions as may be directed by the Agency to perfect and preserve such

eligibility and to obtain such grant of federal funds or State funds from other than the

Solid Waste Management Fund or to reimburse to the Solid Waste Management Fund

such amounts as might have been returned to it under this condition but for failure of

the grantee to take timely action as directed.

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(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.APPENDIX A Required Provisions -- Professional Contractor

Agreements

1) General

A) The grantee and the contractor agree that the following provisions shall apply to

the work to be performed under this agreement and that such provisions shall

supersede any conflicting provisions of this agreement.

B) This agreement is funded in part by a grant from the Illinois Environmental

Protection Agency (Agency). Neither the State of Illinois nor the Agency is a

party to this agreement.

2) Responsibility of the Contractor

A) The contractor shall be responsible for the professional quality, technical

accuracy, timely completion, and the coordination of all designs, drawings,

specifications, reports, and other services furnished by the contractor under this

agreement. The contractor shall, without additional compensation, correct or

revise any errors or deficiencies in designs, drawings, specifications, reports and

other services.The contractor shall perform such professional services as may be

necessary to accomplish the work required to be performed under this agreement,

in accordance with this agreement and 35 Ill. Adm. Code 871.

B) Approval by the grantee or Agency of drawings, designs, specifications, reports,

and incidental consulting work or materials furnished hereunder shall not in any

way relieve the contractor of responsibility for the technical adequacy of the

work. Neither the grantee's nor Agency's review, approval or acceptance of, nor

payment for, any of the services shall be construed to operate as a waiver of any

rights under this agreement or of any cause of action arising out of the

performance of this agreement, and the contractor shall be and remain liable in

accordance with applicable law for all damages to the grantee or Agency caused

by the contractor's negligent performance of any of the services furnished under

this agreement.

C) The rights and remedies of the grantee provided for under this agreement are in

addition to any other rights and remedies provided by law.

3) Scope of Work

Except as may be otherwise specifically limited in this agreement, the services to be

rendered by the contractor shall include all services required to complete the task or

step in accordance with 35 Ill. Adm. Code 871.

4) Changes

A) The grantee may, at any time, by written order, make changes within the general

scope of this agreement in the services or work to be performed. If such changes

cause an increase or decrease in the contractor's cost of, or time required for,

performance of any services under this agreement, whether or not changed by any

order, an equitable adjustment shall be made and this agreement shall be modified

in writing accordingly. Any claim of the contractor for adjustment under this

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clause must be asserted in writing within 30 days from the date of receipt by the

contractor of the notification of change unless the grantee grants a further period

of time before the date of final payment under this agreement.

B) If additional compensation will be charged by the contractor for its services, prior

written authorization must be obtained from the grantee.

5) Termination

A) This agreement may be terminated in whole or in part in writing by either party

in the event of failure by the other party to fulfill its obligations under this

agreement through no fault of the terminating party, provided that no such

termination may be effected unless the other party is given: (1) not less than ten

(10) days' written notice (delivered by certified mail, return receipt requested) of

intent to terminate; and (2) an opportunity for consultation with the terminating

party prior to termination.

B) If termination for default is effected by the grantee, an equitable adjustment in

the price provided for in this agreement shall be made, but: (1) no amount shall

be allowed for anticipated profit on unperformed services or other work; and (2)

any payment due to the contractor at the time of termination shall be adjusted to

reflect any additional costs occasioned to the grantee by reason of the contractor's

default. If termination for default is effected by the contractor, or if termination

for convenience is effected by the grantee, the equitable adjustment shall include

a reasonable profit, as defined in Section 871.301(d) of this Part, for services or

other work performed. The equitable adjustment for any termination shall

provide for payment to the contractor for services rendered and expenses incurred

prior to the termination, in addition to termination settlement costs reasonably

incurred by the contractor relating to commitments which are contractually

obligated prior to the termination.

C) Upon receipt of the termination action pursuant to paragraphs (a) or (b) of this

clause, the contractor shall: (1) promptly discontinue all services affected (unless

the notice directs otherwise); and (2) deliver or otherwise make available to the

grantee all data, drawings, specifications, reports, estimates, summaries, and such

other information and materials as may have been accumulated by the contractor

in performing this agreement, whether completed or in process.

D) Upon termination pursuant to paragraphs (a) or (b) of this clause, the grantee

may take over the work and prosecute the same to completion by agreement with

another party or otherwise.

E) If, after termination for failure of the contractor to fulfill contractual obligations,

it is determined that the contractor had not so failed, the termination shall be

deemed to have been effected for the convenience of the grantee. In such event,

adjustment of the price provided for in this agreement shall be made as provided

in paragraph (b) of this clause.

F) The rights and remedies of the grantee and the contractor provided in this clause

are in addition to any other rights and remedies provided by law or under this

agreement.

6) Remedies

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A) Except as may be otherwise provided in this agreement, or as the parties hereto

may otherwise agree, all claims, counterclaims, disputes and other matters in

question between the grantee and the contractor arising out of or relating to this

agreement or the breach thereof will be decided by arbitration in accordance with

the Construction Industry Arbitration Rules of the American Arbitration

Association, subject to the limitations stated in paragraphs (c) and (d) of this

clause. This agreement, and any other agreement or consent to arbitrate entered

into in accordance therewith as provided below, will be specifically enforceable

under the prevailing law of any court having jurisdiction.

B) Notice of demand for arbitration must be filed in writing with the other party to

this Agreement, with the Agency, and with the American Arbitration Association.

The demand must be made within a reasonable time after the claim, dispute or

other matter in question has arisen. In no event may the demand for arbitration

be made after the time when institution of legal or equitable proceedings based on

such claim, dispute or other matter in question would be barred by the applicable

statute of limitations.

C) All demands for arbitration and all answering statements thereto which include

any monetary claim must contain a statement that the total sum or value in

controversy as alleged by the party making such demand or answering statement

is not more than $200,000 (exclusive of interest and costs). The arbitrators will

not have jurisdiction, power or authority to consider, or make findings (except in

denial of their own jurisdiction) concerning any claim, counterclaim, dispute or

other matter in question where the amount in controversy thereof is more than

$200,000 (exclusive of interest and costs) or to render a monetary award in

response thereto against any party which totals more than $200,000 (exclusive of

interest and costs).

D) No arbitration arising out of, or relating to, this agreement may include, by

consolidation, joinder or in any other manner, any additional party not a party to

this agreement.

E) By written consent signed by all the parties to this agreement and containing a

specific reference hereto, the limitations and restrictions contained in paragraphs

(c) and (d) of this clause may be waived in whole or in part as to any claim,

counterclaim, dispute or other matter specifically described in such consent. No

consent to arbitration in respect of a specifically described claim, counterclaim,

dispute or other matter in question will constitute consent to arbitrate any other

claim, counterclaim, dispute or other matter in question which is not specifically

described in such consent or in which the sum or value in controversy exceeds

$200,000 (exclusive of interest and costs) or which is with any party not

specifically described therein.

F) The award rendered by the arbitrators will be final, not subject to appeal, and

judgment may be entered upon it in any court having jurisdiction thereof.

7) Payment

A) The contractor shall submit payment requests to the grantee in accordance with

the schedule in the project scope of work. Such requests shall be based upon the

value of the work and services performed by the contractor under this agreement,

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and shall be prepared by the contractor and supplemented or accompanied by such

supporting data as may be required by the grantee or the Agency. The contractor

shall also submit progress reports to the grantee on forms prescribed and provided

by the Agency in accordance with the schedule in the project scope of work.

These reports shall document work completed and costs incurred during the

reporting period and to date.

B) Upon approval of such payment request by the grantee, payment shall be made to

the contractor as soon as practicable of ninety percent of the amount as

determined above.

C) Upon satisfactory completion by the contractor of the work called for under the

terms of this agreement, and upon acceptance of such work by the grantee, the

contractor will be paid the unpaid balance of any money due for such work,

including the retained percentages relating to this portion of the work.

D) Upon satisfactory completion of the work performed hereunder, and prior to

final payment under this agreement for such work, or prior to settlement upon

termination of the agreement, and as a condition precedent thereto, the contractor

shall execute and deliver to the grantee a release of all claims against the grantee

arising under or by virtue of this agreement, other than such claims, if any, as

may be specifically exempted by the contractor from the operation of the release

in stated amounts to be set forth therein.

8) Audit and Access to Records

A) The contractor shall maintain books, records, documents and other evidence

directly pertinent to performance on Agency grant work under this agreement in

accordance with generally accepted accounting principles and in accordance with

Sections 871.501 and 871.502 of this Part. The contractor shall also maintain the

financial information and data used by the contractor in the preparation or support

of the cost submission required pursuant to this Part for subagreements over

$100,000 and a copy of the grant cost summary submitted to the grantee. The

Agency or any of its duly authorized representatives shall have access to such

books, records, documents and other evidence for the purpose of inspection, audit

and copying. The contractor will provide proper facilities for such access and

inspection.

B) The contractor agrees to include paragraphs (a) through (e) of this clause in all

contracts and all tier subcontracts directly related to project performance which

are in excess of $10,000.

C) Audits conducted pursuant to this provision shall be in accordance with the

American Institute of Certified Public Accountants' Professional Standards.

D) The contractor agrees to the disclosure of all information and reports resulting

from access to records pursuant to paragraphs

E) and (b) of this clause, to the Agency. Where the audit concerns the contractor,

the auditing agency will afford the contractor an opportunity for an audit exit

conference and an opportunity to comment on the pertinent portions of the draft

audit report. The final audit report will include the written comments, if any, of

the audited parties.

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F) Records under paragraphs (a) and (b) of this clause shall be maintained and made

available during performance on Agency grant work under this agreement and

until three years from date of final Agency grant payment for the project. In

addition, those records that relate to any "dispute" appeal under an Agency grant

agreement, or litigation, or the settlement of claims arising out of such

performance, or costs or items to which an audit exception has been taken, shall

be maintained and made available until three years after the date of resolution of

such appeal, litigation, claim or exception.

9) Price Reduction for Defective Cost or Pricing Data for Agreements Exceeding

$100,000

A) If the Agency determines that any price, including profit negotiated in connection

with this agreement or any cost reimbursable under this agreement was increased

because the contractor furnished incomplete or inaccurate cost or pricing data or

data not current as certified in his certification of current cost or pricing data,

then such price, cost, or profit shall be reduced accordingly, and the agreement

shall be modified in writing to reflect such reduction.

B) Failure to agree on a reduction shall be subject to the "Remedies" clause of 35

Ill. Adm. Code 871.Appendix A(6) of this Part. (Note: Since the agreement is

subject to reduction under this clause by reason of defective cost or pricing data

submitted in connection with certain subcontracts, the contractor may wish to

include a clause in each such subcontract requiring the subcontractor to

appropriately indemnify the contractor. It is also expected that any contractor

subject to such indemnification will generally require substantially similar

identification for defective cost or pricing data required to be submitted by his

lower tier subcontractors.)

10) Subcontractors

A) Any subcontractors and outside associates or consultants hired by the contractor

in connection with the services covered by this agreement will be limited to such

individuals or firms as were specifically identified and agreed to during

negotiations, or as are specifically approved by the grantee during the

performance of this agreement. Any substitution of subcontractors, associates, or

consultants will be subject to the prior written approval of the Agency and the

grantee.

B) Except as otherwise provided in this agreement, the contractor may not

subcontract services in excess of thirty percent (30%) of the contract price to

subcontractors or consultants without prior written approval of the grantee.

11) Equal Employment Opportunity

The contractor agrees to not discriminate against any employee or applicant for

employment because of race, religion, color, sex, age, or national origin.

12) Covenant Against Contingent Fees

The contractor warrants that no person or selling agency has been employed or

retained to solicit or secure this contract upon an agreement or understanding for a

commission, percentage, brokerage, or contingent fee, except bona fide employees.

For breach or violation of this warranty the grantee shall have the right to annul this

agreement without liability or in its discretion to deduct from the contract price or

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consideration or otherwise recover, the full amount of such commission percentage

or otherwise recover, the full amount of such commission, percentage, brokerage, or

contingent fee.

13) Gratuities

A) The grantee may, by written notice to the contractor, terminate the right of the

contractor to proceed under this agreement if it is found, after notice and hearing,

by the grantee that gratuities (in the form of entertainment, gifts, or otherwise)

were offered or given by the contractor, or any agent or representative of the

contractor, to any official or employee of the grantee or of the Agency with a

view toward securing a contract or securing favorable treatment with respect to

the awarding or amending, or the making of any determination with respect to the

performance of this agreement, provided that the existence of the facts upon

which the grantee makes such findings shall be in issue and may be reviewed in

proceedings pursuant to clause 6 (Remedies) of this agreement.

B) In the event this agreement is terminated as provided in paragraph (a) of this

clause, the grantee shall be entitled: (1) to pursue the same remedies against the

contractor as it could pursue in the event of a breach of the contract by the

contractor; and (2) as a penalty in addition to any other damages to which it may

be entitled by law, to exemplary damages in an amount (as determined by the

grantee) which shall be not less than three nor more than ten times the costs

incurred by the contractor in providing any such gratuities to any such officer or

employee.

C) The rights and remedies of the grantee provided in this clause shall not be

exclusive and are in addition to any rights and remedies provided by law or under

this agreement.

14) Conflict of Interest

Contractor, by signing this agreement, covenants that contractor has no public or

private interest, direct or indirect, and shall not acquire directly or indirectly any

such interest which does or may conflict in any manner with the performance of

contractor's services and obligations under this agreement. Any such conflict shall

be disclosed to the grantee and the grantee shall determine whether such conflict is

cause for the non-execution or termination of this agreement. Contractor further

covenants that, in the performance of this agreement, no person having such interest

shall be employed by contractor.

15) Americans with Disabilities Act

Contractor certifies that it shall comply with the provisions of the Americans with

Disabilities Act (42 USC Section 12101 et seq.) as it may apply to the services,

programs or activities that are to be provided under this agreement.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)

Section 871.APPENDIX B Procedures for Determination of Indirect Costs and

Indirect Cost Rates

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a) Definition

Indirect costs are those costs incurred for a common or joint purpose but benefiting

more than one cost objective, and not readily identifiable to the cost objectives

specifically benefited. The term indirect cost, as used herein, applies to costs of this

type occurring in the grantee department (or other relevant organizational unit

responsible for project performance), as well as those central service support costs

incurred by other departments in supplying goods, services, and facilities to the

grantee department when such cost can be assigned to the departmental indirect cost

pool as a result of an approved cost allocation plan.

b) General

1) Indirect costs of the grantee shall be allowable in accordance with

an indirect cost agreement incorporated in the grant agreement.

Indirect cost rates and indirect costs as determined below shall be

used in the grant agreement but shall be considered to be

estimates; the final amount of eligible indirect costs will be based

on audited actual costs.

2) Indirect cost rates are not retroactive and may not be changed

during the period of the grant agreement.

c) Grantees with Existing State or Federal Grants

1) If the grantee has a current grant from a State or federal agency,

the most recently established indirect cost rate in that grant will

be used by the Agency, provided that the rate was established in

accordance with 40 CFR 30.410 and 40 CFR 30.412 (July 1,

1986). (This incorporation contains no later amendments or

editions.)

2) If the grantee has a current State or federal grant that shows a

zero indirect cost rate or that specifies that there is no indirect

cost rate, it is not eligible to establish an indirect cost rate for a

planning grant.

3) To establish an indirect cost rate, the Agency will require:

A) copies of all executed grants currently in effect between

the grantee and State or federal agencies, certified by the

clerk or other appropriate official of the grantee; and

B) a letter from an appropriate official of the grantee,

authorizing representatives of the Agency to have access

to the federal audit which served as the basis of the

indirect cost rate in the State or federal grants.

4) If the grantee has more than one currently effective State or

federal grant with differing indirect cost rates, the Agency will

determine which of the approved indirect cost rates is most

appropriate for use on the State planning or enforcement grant.

The most appropriate indirect cost rate is that rate derived from

the prior existing project which was most similar in scope,

objectives, methodology and personnel to the project for which

the enforcement or planning grant is sought.

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d) Grantees without Existing State or Federal Grants

For grantees that do not have existing current State or federal grants, either of the

following procedures may be used to establish an indirect cost rate:

1) A negotiated lump sum for overhead may be established, based

on the grantee's submission of evidence of estimated charges to

be incurred. The provisions of applicable federal regulations will

be used as guidance in establishing such a lump sum. Lump sum

indirect costs negotiated under this provision may not exceed one

percent of the total project cost; or

2) A negotiated indirect cost rate may be established in accordance

with the following procedures: the grantee shall follow the

Agency's criteria in determining eligibility of specific items used

in establishing an indirect cost rate, submit the completed indirect

cost rate determination to the Agency with calculations and

assumptions made within the calculations, and provide a

certification from an appropriate official of the grantee that the

information submitted is, to the best of its knowledge, true and

accurate. Total indirect costs may not exceed five percent of the

total estimated project cost.

e) Disputes

The grantee will be notified in writing of Agency approval or disapproval of a

proposed indirect cost rate. If the Agency disapproves the proposed rate, its reasons

for disapproval shall be stated, together with a more appropriate method of

determination. If the grantee does not accept the Agency's determination of a more

appropriate method, it may contest it pursuant to the provisions of Section 871.304

of this Part.

(Source: Amended at 19 Ill. Reg. 11821, effective August 3, 1995)