Section 663.610 Requirements for Subagreements

Section 663.610  Requirements for Subagreements

The intent of this Subpart is to provide for maximum open

and free competition in the procurement of materials, goods and services for

the construction of projects funded from the PWSLP. Any procurement method,

except as allowed under this Part, that significantly minimizes open and free

competition will be prohibited. The following procedures shall apply to

subagreements:

a)         Local

Preference

Local laws, ordinances,

regulations, or procedures that are designed to or operate to give local or

in-state bidders or proposers preference over other bidders or proposers shall

not be used in evaluating bids or proposals for subagreements under PWSLP

loans.

b)         Profits

Only fair and reasonable profits

may be earned by contractors in subagreements under PWSLP loans.  Profit

included in a formally advertised, competitively bid, fixed price construction

contract awarded pursuant to Section 663.620 (Construction Contracts) is

presumed to be reasonable.  If a subagreement is not competitively bid, the

loan recipient shall submit to the Agency its basis for determination of

reasonable profit.

c)         Loan

Recipient Responsibility

The loan recipient shall be

responsible for the administration and successful accomplishment of the project

for which PWSLP loan assistance is provided.  The loan recipient shall be

responsible for the settlement and satisfaction of all contractual and

administrative issues arising out of subagreements, including, but not limited

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

contractors, award of contracts, protests of award, claims, disputes, and other

procurement matters.  With the prior written consent of the Agency, these

functions may be performed for the loan recipient by an individual or firm

retained for that purpose

issues arising out of subagreements, including, but not limited

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

contractors, award of contracts, protests of award, claims, disputes, and other

procurement matters.  With the prior written consent of the Agency, these

functions may be performed for the loan recipient by an individual or firm

retained for that purpose.  The individual or firm shall be deemed the loan

recipient's agent and shall be subject to all the provisions of the loan

agreement and all the provisions of this Part that apply to the loan recipient.

d)         Privity

of Contract

Neither the Agency nor the State

of Illinois shall be a party to any subagreement (including contracts or

subcontracts) or to any solicitation or request for proposals under those

subagreements.

e)         Subagreements

shall:

1)         Be

directly related to the accomplishment of the loan recipient's approved work

program;

2)         Be in

the form of an executed written agreement (except for small purchases of $25,000

or less);

3)         Be for monetary or

in-kind consideration; and

4)         Not be in the nature of

a grant or gift.

f)         Documentation

1)         Procurement

records and files for purchases in excess of $25,000 shall include the

following:

A)        the

basis for contractor selection;

B)        the

justification for lack of competition if competition appropriate to the type of

project work to be performed is required but not obtained; and

C)        the basis for award cost

or price.

2)         Procurement

documentation as described in subsection (f)(1) shall be retained by the loan

recipient or contractors for the period required by Section 663.470 (Ongoing

Auditing and Monitoring Financial Capability)

r lack of competition if competition appropriate to the type of

project work to be performed is required but not obtained; and

C)        the basis for award cost

or price.

2)         Procurement

documentation as described in subsection (f)(1) shall be retained by the loan

recipient or contractors for the period required by Section 663.470 (Ongoing

Auditing and Monitoring Financial Capability).

g)         Subagreements

shall only be awarded to persons or organizations that:

1)         Have

adequate financial resources for performance;

2)         Have

the necessary experience, organization, technical qualifications, and

facilities, or a firm commitment, arrangement, or ability to obtain these

requirements;

3)         Have

the staffing sufficient to comply with the proposed or required completion

schedule for the project;

4)         Have a satisfactory

record of integrity, judgment, and performance;

5)         Have

an adequate financial management system and audit procedure that is consistent

with U.S. generally accepted auditing standards;

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; and

8)         Conform

to the civil rights, equal employment opportunity, and labor law requirements

of this Part.

h)         Fraud

and Other Unlawful or Corrupt Practices

1)         The

obtaining and administration of loans from the PWSLP, and of subagreements

awarded by loan recipients, shall be free from bribery, graft, kickbacks, and

other corrupt practices.  The loan recipient shall bear the primary

responsibility for prevention and detection of that conduct and for cooperation

with appropriate authorities in the prosecution of any such conduct

t Practices

1)         The

obtaining and administration of loans from the PWSLP, and of subagreements

awarded by loan recipients, shall be free from bribery, graft, kickbacks, and

other corrupt practices.  The loan recipient shall bear the primary

responsibility for prevention and detection of that conduct and for cooperation

with appropriate authorities in the prosecution of any such conduct.

2)         The

loan recipient shall effectively pursue available State or local legal and

administrative remedies and take appropriate remedial action with respect to

any allegations or evidence of illegality or corrupt practices brought to its

attention. The loan recipient shall advise the Agency immediately when any

allegation or evidence comes to its attention and shall periodically advise the

Agency of the status and ultimate disposition of any matter.

i)

Negotiation of Subagreements

All subagreements greater than

$25,000 shall be awarded by formal advertising unless the loan recipient

determines, and the Agency concurs, that it is impracticable and infeasible to

use formal advertising.  Negotiated contracts must be competitively awarded to

the maximum practicable extent and not be in conflict with other State

statutes.  Procurements may be negotiated by the loan recipient, if approved by

the Agency, for the following reasons:

1)         Public

exigency, as evidenced by governmental declaration, will not permit the delay

incident to advertising (e.g., an emergency procurement);

2)         The

aggregate amount of the contract to be competitively negotiated is allowed by

State law;

3)         The

materials or services to be procured are available from only one person or

firm;

4)         The

procurement is for personal or professional services, or for any services to be

rendered by an educational institution;

5)         No

responsive, responsible bids at acceptable price levels have been received

after formal advertising; or

6)         The

procurement is for material or services for which the pr

r services to be procured are available from only one person or

firm;

4)         The

procurement is for personal or professional services, or for any services to be

rendered by an educational institution;

5)         No

responsive, responsible bids at acceptable price levels have been received

after formal advertising; or

6)         The

procurement is for material or services for which the prices are established by

law; for technical items or equipment requiring standardization and

interchangeability of parts with existing equipment; for experimental,

developmental or research work; for highly perishable materials; for resale; or

for technical or specialized supplies requiring substantial initial investment

for manufacture.