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<br />SECTION 11. <br /> <br />SUBCONTRACTS <br /> <br />A. Except for subcontracts to which the federal labor standards requirements <br />apply, Contractor may subcontract for performances described in this contract <br />without obtaining Department's prior written approval. Contractor shall only <br />subcontract for performances described in this contract to which the federal <br />labor standards requirements apply after Contractor has submitted a <br />Subcontractor Eligibility form, as specified by Department, for each such <br />proposed subcontract, and Contractor has obtained Department's prior written <br />approval, based on the information submitted, of Contractor's intent to enter <br />into such proposed subcontract. Contractor, in subcontracting for any <br />performances described in this contract, expressly understands that in <br />entering into such subcontracts, Department is in no way liable to <br />Contractor's subcontractor(s). <br /> <br />B. In no event shall any provision of this Section 11, specifically the <br />requirement that Contractor obtain Department's prior written approval of a <br />subcontractor's eligibility, be construed as relieving Contractor of the <br />responsibility for ensuring that the performances rendered under all <br />subcontracts are rendered so as to comply with all of the terms of this <br />contract, as if such performances rendered were rendered by Contractor. <br /> <br />C. Department's approval under Section 11 does not constitute adoption, <br />ratification, or acceptance of Contractor's or subcontractor's performance <br />hereunder. Department maintains the right to insist upon Contractor's full <br />compliance with the terms of this contract, and by the act of approval under <br />Section 11, Department does not waive any right of action which may exist or <br />which may subsequently accrue to Department under this contract. <br /> <br />D. Contractor shall comply with all applicable federal, state, and local <br />laws, regulations, and ordinances for making procurements under this contract. <br /> <br />E. Department shall maintain an escrow retainage in the amount of five <br />percent (5%) of each construction or rehabilitation subcontract entered into <br />by Contractor until Department determines that the Federal labor standards <br />requirements applicable to each such subcontract have been satisfied. <br /> <br />SECTION 12. <br /> <br />CONFLICT OF INTEREST <br /> <br />A. Contractor covenants that neither it nor any member of its governing body <br />presently has any interest or shall acquire any interest, direct or indirect, <br />which would conflict in any manner or degree with the performance of this <br />contract. Contractor further covenants that in the performance of this <br />contract no person having such interest shall be employed or appointed by <br />Contractor. <br /> <br />B. Contractor shall ensure that no employee, officer, or agent of Contractor <br />shall participate in the selection, or in the award or administration of a <br />subcontract supported by funds provided hereunder if a conflict of interest, <br />real or apparent, would be involved. Such conflict of interest would arise <br />when: 1) The employee, officer, or agent; 2) any member of his or her <br /> <br />Page 6 of 13 Pages <br />