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<br />(5) To foster greater economy and efficiencj, grantees and <br />subgrantees are encouraged to enter into State ~~d local <br />intergovernmental agreements <br /> <br />((Page 412J] <br /> <br />for procurement or use of common goods and ser/~ces. <br />(6) Grantees and subgrantees are encouraged :0 use Federal excess <br />and surplus property in lieu of purchasing ne~ e~uipment and property <br />whenever suc~ use is feasible and reduces project costs. <br />(7) Grantees and subgrantees are encouraged :0 use value engineering <br />clauses in contracts for construction projects :f sufficient size to <br />offer reasonable opportunities for cost reducticns. Value engineering is <br />a systematic and creative analysis of eac~ contract item or task to <br />ensure that its essential function is provided at the overall lower <br />cost. <br />(a) Grantees and subgrantees will make awards only to responsible <br />contractors possessing the ability to perform successfully under the <br />terms and conditions of a proposed procurement. Consideration will be <br />given to such matters as contractor integrity, compliance with public <br />policy, record of past performance, and financial and technical <br />resources. <br />(9) Grantees and subgrantees will maintain records sufficient to <br />detail the significant history of a procurement. These records will <br />include, but are not necessarily limited to the following: rationale for <br />the method of procurement, selection of contract type, contractor <br />selection or rejection, and the basis for the contract price. <br />(10) Grantees and subgrantees will use time and material type <br />contracts only-- <br />(i) After a determination that no other contract is suitable, and <br />(ii) If the contract includes a ceiling price that the contractor <br />exceeds at its own risk. <br />(ll) Grantees and subgrantees alone will be responsible, in <br />accordance with good administrative practice and sound business <br />judgment, for the settlement of all contractual and administrative <br />issues arising out of procurements. These issues include, but are not <br />limited to source evaluation, protests, disputes, and claims. These <br />standards do not relieve the grantee or subgrantee of any contractual <br />responsibilities under its contracts. Federal agencies will not <br />substitute their judgment for that of the grantee or subgrantee unless <br />the matter is primarily a Federal concern. Violations of law will be <br />referred to the local, State, or Federal authority having proper <br />jurisdiction. <br />(12) Grantees and subgrantees will have protest procedures to handle <br />and resolve disputes relating to their procurements and shall in all <br />instances disclose information regarding the protest to the awarding <br />agency. A protestor must exhaust all administrative remedies with the <br />grantee and subgrantee before pursuing a protest with the Federal <br />agency. Reviews of protests by the Federal agency will be limited to: <br />(i) Violations of Federal law or regulations and the standards of <br />this section (violations of State or local law will be under the <br />jurisdiction of State or local authorities) and <br />(ii) Violations of the grantee's or subgrantee's protest procedures <br />for failure to review a complaint or protest. Protests received by the <br />Federal agency other than those specified above will be referred to the <br />grantee or subgrantee. <br />(c) Competition. (1) All procurement transactions will be conducted <br />in a manner providing full and open competition consistent with the <br />standards of Sec. 85.36. Some of the situations considered to be <br />restrictive of competition include but are not limited to: <br />(i) Placing unreasonable requirements on fi~s in order for them to <br /> <br />, "f S <br /> <br />"', \: 'D ~ ~ <br />