Cal. Code Regs. tit. 25 § 7971

Current through Register 2024 Notice Reg. No. 50, December 13, 2024

Section 7971 - Procedures and Requirements for Procuring Contracts for Services or Materials Under a Capital Development Grant

(a) Each grantee awarded a capital development grant shall ensure that the requirements of this section are complied with

(1) In all its contracts or subcontracts for services and materials to be paid for with grant proceeds; and

(2) By all its contractors and/or subcontractors providing or contracting for services and/or materials to be paid for with grant proceeds.

(b) Prior to the disbursement of grant funds for any contract for services or materials required for eligible activities under a capital development grant, all construction or service contractors or subcontractors shall provide evidence satisfactory to the Department, of compliance with the requirements of this section.

(1) The grantee shall provide to the Department copies of the proposals from consultants and/or contractors for the Department's review and approval.

(2) The Department's review and approval shall be based on the proposed budget, the applicant's experience, the price of the services, and related factors, and shall be completed within 15 days of receipt of complete information from the grantee.

(c) No contract or subcontract using EHAP funds in excess of $25,000 shall be awarded without the prior review of the Department and without written approval from the Department. The Department shall not unreasonably withhold approval of said contracts.

(d) Each grantee entering into contracts for construction or rehabilitation services or materials shall have:

(1) Written bidding procedures and shall have invited bids from as many prospective bidders as is practical;

(2) Awarded the contract to the lowest responsible bidder or shall have rejected all bids;

(3) Established a method of monitoring the contract; and

(4) Maintained and make available to the Department detailed records and accounts of contracts for services and or the purchase of materials.

(e) Each contract for construction or rehabilitation services or materials shall comply with all applicable program requirements and all applicable terms and provisions of the standard agreement.

(f) Each contract shall include a provision stating that the records of the contracting parties shall be subject to audit by the Department for a period of five years after the termination of the Standard Agreement.

(g) Each contract shall include a provision stating the method and schedule of payments and shall provide for the retention of an amount of not less than ten percent from each progress payment, until such time as the lien-free completion of the project is ensured.

(h) Each construction or rehabilitation contract of $25,000 or more shall include a security provision requiring the contractor to provide a performance and payment bond or an alternate, yet equivalent, form of security, such as a letter of credit.

(1) Any form of security, required of such a contractor and/or a subcontractor, other than a performance and payment bond, is subject to the prior review and approval of the Department.

(2) The security shall be in an amount equal to one-hundred percent of the amount of the successful bid.

(i) Each construction or service contractor or subcontractor shall be appropriately licensed by the California State Contractors Licensing Board and shall be insured as required by State law.

(j) The grantee shall establish procedures which ensure that disbursements are properly expended by, or on behalf of, the grantee. Such procedures shall include:

(1) Performing on-site inspections of the construction or rehabilitation work; and

(2) Using progress inspection reports as the basis for issuing payments to contractors or subcontractors.

Cal. Code Regs. Tit. 25, § 7971

1. New section filed 3-18-94 as an emergency; operative 3-18-94 (Register 94, No. 11). A Certificate of Compliance must be transmitted to OAL 7-18-94 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 7-8-94 as an emergency; operative 7-8-94 (Register 94, No. 27). A Certificate of Compliance must be transmitted to OAL by 11-7-94 or emergency language will be repealed by operation of law on the following day.
3. Repealer and new section refiled 10-31-94 as an emergency; operative 10-31-94 (Register 94, No. 44). A Certificate of Compliance must be transmitted to OAL by 2-28-95 or emergency language will be repealed by operation of law on the following day.
4. Repealer and new section refiled 2-15-95 as an emergency; operative 2-15-95 (Register 95, No. 7). A Certificate of Compliance must be transmitted to OAL by 6-15-95 or emergency language will be repealed by operation of law on the following day.
5. Repealer and new section refiled 6-15-95 as an emergency; operative 6-15-95 (Register 95, No. 24). A Certificate of Compliance must be transmitted to OAL by 10-13-95 or emergency language will be repealed by operation of law on the following day.
6. Certificate of Compliance as to 6-15-95 order including amendment of section transmitted to OAL 6-26-95 and filed 7-12-95 (Register 95, No. 28).

Note: Authority cited: Sections 50402, 50801.5 and 50806.5, Health and Safety Code. Reference: Section 50802.5, Health and Safety Code.