[Code of Federal Regulations]
[Title 34, Volume 1]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR74.48]

[Page 122-123]
 
                           TITLE 34--EDUCATION
 
PART 74_ADMINISTRATION OF GRANTS AND AGREEMENTS WITH INSTITUTIONS OF 
 
                    Subpart C_Post-Award Requirements
 
Sec. 74.48  Contract provisions.

    The recipient shall include, in addition to provisions to define a 
sound and complete agreement, the following provisions in all contracts. 
The following provisions must also be applied to subcontracts:
    (a) Contracts in excess of the small purchase threshold shall 
contain contractual provisions or conditions that allow for 
administrative, contractual, or legal remedies in instances in which a 
contractor violates or breaches the contract terms, and provide for 
remedial actions as may be appropriate.
    (b) All contracts in excess of the small purchase threshold shall 
contain suitable provisions for termination by the recipient, including 
the manner by which termination shall be effected and the basis for 
settlement. In addition, contracts must describe conditions under which 
the contract may be terminated for default, as well as conditions where 
the contract may be terminated because of circumstances beyond the 
control of the contractor.
    (c) Except as otherwise required by statute, an award that requires 
the contracting (or subcontracting) for

[[Page 123]]

construction or facility improvements must provide for the recipient to 
follow its own requirements relating to bid guarantees, performance 
bonds, and payment bonds unless the construction contract or subcontract 
exceeds $100,000. For those contracts or subcontracts exceeding 
$100,000, the Secretary may accept the bonding policy and requirements 
of the recipient, provided the Secretary has made a determination that 
the Federal Government's interest is adequately protected. If a 
determination has not been made, the minimum requirements are as 
follows:
    (1) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' must consist of a firm commitment 
such as a bid bond, certified check, or other negotiable instrument 
accompanying a bid as assurance that the bidder shall, upon acceptance 
of his bid, execute contractual documents as may be required within the 
time specified.
    (2) A performance bond on the part of the contractor for 100 percent 
of the contract price. A ``performance bond'' is one executed in 
connection with a contract to secure fulfillment of all the contractor's 
obligations under a contract.
    (3) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract to assure payment as required by statute of all persons 
supplying labor and material in the execution of the work provided for 
in the contract.
    (4) Where bonds are required, the bonds must be obtained from 
companies holding certificates of authority as acceptable sureties 
pursuant to 31 CFR Part 223--Surety Companies Doing Business with the 
United States.
    (d) All negotiated contracts (except those for less than the small 
purchase threshold) awarded by recipients must include a provision to 
the effect that the recipient, ED, the Comptroller General of the United 
States, or any of their duly authorized representatives, must have 
access to any books, documents, papers and records of the contractor 
which are directly pertinent to a specific program for the purpose of 
making audits, examinations, excerpts and transcriptions.
    (e) All contracts, including small purchases, awarded by recipients 
and their contractors must contain the procurement provisions of 
appendix A to this part, as applicable.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

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