[Code of Federal Regulations]

[Title 42, Volume 1]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR51c.504]



[Page 186-188]

 

                         TITLE 42--PUBLIC HEALTH

 

    CHAPTER I--PUBLIC HEALTH SERVICE, DEPARTMENT OF HEALTH AND HUMAN 

                                SERVICES

 

PART 51c_GRANTS FOR COMMUNITY HEALTH SERVICES--Table of Contents

 

      Subpart E_Acquisition and Modernization of Existing Buildings

 

Sec.  51c.504  Project elements.



    (a) General requirements. A grantee which has received a grant under 

section 330 of the Act for a project which includes the acquisition and/

or modernization of an existing building must:

    (1) Assurances. Comply with the assurances provided pursuant to this 

subpart.

    (2) Approval of estimated cost. Not enter into any contract for the 

acquisition and/or modernization funded under this subpart where the 

cost of such acquisition and/or modernization exceeds the estimates in 

the application, without the prior approval of the Secretary.

    (3) Non-default. Make every effort to prevent any default on any 

loan secured by the building and, in the event of a default, promptly 

notify the Secretary of the default and make every effort on a timely 

basis to cure the default.

    (b) Requirements for acquisition grants. In addition to the 

requirements of paragraph (a) of this section, a grantee which has 

received a grant under section 330 of the Act for a project which 

includes the acquisition of an existing building must:

    (1) Bona-fide sale. Acquire or, in the case of a grant solely for 

amortization of principal and payment of interest on an existing loan, 

have acquired the existing building pursuant to a bona-fide sale 

involving an actual cost to the applicant and resulting in additional or 

improved facilities for the purposes of the project.

    (2) Standards of construction and equipment. Except in the case of a 

grant



[[Page 187]]



solely for amortization of principal and payment of interest on an 

existing loan, obtain a determination by the Secretary that the facility 

conforms (or upon completion of any necessary alteration and renovation 

or modernization will conform) to the standards set forth in Sec.  

51c.503(a)(7)(iii) of this subpart before entering into a final or 

unconditional contract for the acquisition. Where the Secretary finds 

that exceptions to or modifications of any such standards would be 

consistent with the purposes of the Act and of the program, he may 

authorize such exceptions or modifications.

    (3) Financing. Where the grantee will obtain a loan secured by the 

building in order to acquire the building, obtain such financing at the 

lowest current rate prevailing in the area for comparable loans on 

comparable facilities.

    (c) Requirements for modernization grants. In addition to the 

requirements of paragraph (a) of this section, a grantee which has 

received a grant under section 330 of the Act for a project which 

includes the modernization of an existing building must:

    (1) Costs in excess of approved costs. Finance all costs in excess 

of the estimated costs approved in the application and submit to the 

Secretary for prior approval any changes that substantially alter the 

scope of the function, utilities, or safety of the facility.

    (2) Competitive bids. (i) Obtain the approval of the Secretary 

before the project is advertised or placed on the market for bidding; 

such approval must include a determination by the Secretary that the 

final plans and specifications conform to the standards set forth in 

Sec.  51c.503(a)(7)(iii) of these regulations.

    (ii) Except as otherwise provided by State or local law, contract 

for construction (including the purchase and installation of built-in 

equipment) on a lump sum fixed-price basis, and award contracts on the 

basis of competitive bidding obtained by public advertising with award 

of the contracts to the lowest responsive and responsible bidders. The 

provision for exceptions based on State and local law shall not be 

invoked to give local contractors or suppliers a percentage preference 

over non-local contractors bidding for the same contract. Such practices 

are precluded by this paragraph.

    (3) Construction contracts. (i) Include the following conditions and 

provisions in all construction contracts for the modernization project:

    (A) The provisions set forth in ``DHHS Requirements for Federally 

Assisted Construction Contracts Regarding Labor Standards and Equal 

Employment Opportunities,'' Form DHHS 514 (rev. 7/76) (issued by the 

Office of Grants Administration Policy, U.S. Department of Health and 

Human Services) pertaining to the Davis-Bacon Act, the Contract Work 

Hours Standards Act, and the Copeland Act (Anti-Kickback) Regulations, 

except in the case of contracts in the amount of $2,000 or less; and 

pertaining to Executive Order 11246, 30 FR 12319 (September 24, 1965), 

as amended, relating to nondiscrimination in construction contract 

employment, except in the case of contracts in the amount of $10,000 or 

less;

    (B) That the contractor shall furnish performance and payment bonds 

each of which shall be in the full amount of the contract price, and 

shall maintain, during the life of the contract, adequate fire, 

workmen's compensation, public liability, and property damage insurance: 

Provided, however, That in the case of a State or local unit of 

government which enters into a construction contract of less than 

$100,000, State or local provisions with respect to performance and 

payment bonds shall be deemed to meet the requirements of this 

paragraph; and

    (C) That the Secretary shall have access at all reasonable times to 

work wherever it is in preparation or progress, and the contractor shall 

provide proper facilities for such access and inspection.

    (ii) Executive Order 11246. Comply with the applicable requirements 

of Executive Order 11246, 30 FR 12319 (September 24, 1965) as amended, 

relating to nondiscrimination in construction contract employment, and 

the applicable rules, regulations, and procedures prescribed pursuant 

thereto.

    (4) Modernization supervision. Provide and maintain competent and 

adequate



[[Page 188]]



architectural or engineering supervision and inspection at the 

modernization site to insure that the completed work conforms with the 

plans and specifications.

    (5) Completion responsibility. Complete the modernization in 

accordance with the grant application and the approved plans and 

specifications.

    (6) Progress reports. Furnish progress reports and such other 

information concerning the modernization as the Secretary may require.

    (d) The Secretary may at any time approve exceptions to the 

provisions of this section where he finds that such exceptions are not 

inconsistent with section 330 of the Act, other requirements of law, or 

the purposes of the program.



[41 FR 57000, Dec. 30, 1976, as amended at 43 FR 5352, Feb. 7, 1978]