Twentynine Palms City Council
October 11, 2022

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5. In arriving at the amount due the Contractor under this clause there shall be deducted in whole or in the appropriate part(s) if the termination is partial:
a. All unliquidated advances or other payments on account previously made to the Contractor, including without limitation all payments which are applicable to the terminated portion of the Contract Documents, b. Any claim the City may have against the Contractor in connection with the Work, and
c. The agreed price for, or proceeds of sale of, any materials, supplies, or other things kept by the Contractor and not otherwise recovered by or credited to the Owner.

These provisions are in addition to and not in limitation of any other rights or remedies available to the Owner.

37.3 SAVINGS CLAUSE
If City terminates Contractor for cause, and if it is later determined that the termination was wrongful, such default termination shall automatically be converted to and treated as a termination for convenience. In such event, Contractor shall be entitled to receive only the amounts payable under this section, and Contractor specifically waives any claim for any other amounts or damages, including, but not limited to, any claim for consequential damages or lost profits.

37.4 EXCEPTION
Notwithstanding any other provision of this Article, when immediate action is necessary to protect life and safety or to reduce significant exposure or liability, the City may immediately order Contractor to cease Work until such safety or liability issues are addressed to the satisfaction of the City or the Contract is terminated.

ARTICLE 38. WARRANTY AND GUARANTEE

1. Contractor warrants that all materials and equipment furnished under this Contract shall be new unless otherwise specified in the Contract Documents; and that all Work conforms to the Contract Document requirements and is free of any defect whether performed by the Contractor or any subcontractor or supplier.

2. Unless otherwise stated, all warranty periods shall begin upon the filing of the Notice of Completion. Unless otherwise stated, the warranty period shall be for one year.

3. The Contractor shall remedy at its expense any damage to City-owned or controlled real or personal property.

4. Contractor shall furnish the City with all warranty and guarantee documents prior to final acceptance of the Work by the City.

5. The City shall notify the Contractor, in writing, within a reasonable time after the discovery of any failure, defect, or damage. The Contractor shall within ten (10) Days after being notified commence and perform with due diligence all necessary Work to complete or correct the Work at issue. If the Contractor fails to promptly remedy any defect, or damage within this time; the City shall have the right to replace, repair, or otherwise remedy the defect, or damage at the Contractor’s expense.

6. In the event of any emergency constituting an immediate hazard to health, safety, property, when caused by Work of the Contractor not in accordance with the

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Contract requirements, the City may undertake at Contractor’s expense, and without prior notice, all actions necessary to correct such condition.

7. With respect to all warranties, express or implied, from subcontractors, manufacturers, or suppliers for Work performed and Materials furnished under this Contract, the Contractor shall:
a. Obtain for City all warranties that would be given in normal commercial practice or that are required in the Contract Documents; b. Require all warranties to be executed, in writing, for the benefit of the City; and
c. Enforce all warranties for the benefit of the City, unless otherwise directed in writing by the City.

This Article shall not limit the City’s rights under this Contract or with respect to latent defects, gross mistakes, or fraud. The City specifically reserves all rights related to defective work, including but not limited to the defect claims pursuant to California Code of Civil Procedure section 337.15.

ARTICLE 39. DOCUMENT RETENTION & EXAMINATION

1. In accordance with Government Code section 8546.7, records of both the City and the Contractor shall be subject to examination and audit by the State Auditor General for a period of three (3) years after final payment.

2. Contractor shall make available to the City any of the Contractor’s other documents related to the Work immediately upon request of the City.

3. In addition to the State Auditor’s rights described above, the City shall have the right to examine and audit all books, estimates, records, contracts, documents, bid documents, subcontracts, and other data of the Contractor (including electronic records, computations and projections) related to negotiating, pricing, or performing the Work in order to evaluate the accuracy and completeness of the cost or pricing data, for a period of four (4) years after final payment.

ARTICLE 40. SOILS INVESTIGATIONS
When a soils investigation report for the Site is available, such report shall not be a part of the Contract Documents. Any information obtained from such report as to subsurface soil condition, or to elevations of existing grades or elevations of underlying rock, is approximate only and is not guaranteed. Contractor acknowledges that any soils investigation report (including any borings) was prepared for purposes of design only and Contractor is required to examine the Site before submitting its bid and must make whatever tests it deems appropriate to determine the condition of the soil.

ARTICLE 41. SEPARATE CONTRACTS

1. The City reserves the right to let other contracts in connection with this Project or the Site. Contractor shall cooperate with and permit other contractors reasonable access and storage of their materials and execution of their work and shall properly connect and coordinate its Work with theirs.

2. To ensure proper execution of its subsequent Work, Contractor shall immediately inspect Work already in place and shall at once report to the City any problems with the Work in place or discrepancies with the Contract Documents.

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3. Contractor shall ascertain to its own satisfaction the scope of the Work and nature of any other contracts that have been or may be awarded by the City in prosecution of the Work to the end that Contractor may perform this Contract in the light of such other contracts, if any. Nothing herein contained shall be interpreted as granting to Contractor exclusive occupancy at the Site. Contractor shall not cause any unnecessary hindrance or delay to any other contractor working on the Work. If simultaneous execution of any contract for the Work is likely to cause interference with performance of some other contract or contracts, the City shall decide which contractor shall cease Work temporarily and which contractor shall continue or whether work can be coordinated so that contractors may proceed simultaneously. The City shall not be responsible for any damages suffered or for extra costs incurred by Contractor resulting directly or indirectly from award, performance, or attempted performance of any other contract or contracts on the Site.

ARTICLE 42. NOTICE AND SERVICE THEREOF
All notices shall be in writing and either served by personal delivery or mailed to the other party as designated in the Bid Forms. Written notice to the Contractor shall be addressed to Contractor’s principal place of business unless Contractor designates another address in writing for service of notice. Notice to City shall be addressed to the City as designated in the Notice Inviting Bids unless City designates another address in writing for service of notice. Notices shall be deemed to be received upon personal delivery to the addresses above; if sent by overnight delivery, upon delivery as shown by delivery service records; if sent by facsimile, upon receipt as confirmed by the sending facsimile equipment; if by United States Postal Service, five days after deposit in the mail.

ARTICLE 43. NOTICE OF THIRD PARTY CLAIMS
Pursuant to Public Contract Code section 9201, the City shall provide Contractor with timely notification of the receipt of any third-party claim relating to the Contract.

ARTICLE 44. STATE LICENSE BOARD NOTICE
Contractors are required by law to be licensed and regulated by the Contractors’ State License Board which has jurisdiction to investigate complaints against contractors if a complaint regarding a patent act or omission is filed within four (4) years of the date of the alleged violation. A complaint regarding a latent act or omission pertaining to structural defects must be filed within ten (10) years of the date of the alleged violation. Any questions concerning a contractor may be referred to the Registrar, Contractors’ State License Board, P.O. Box 26000, Sacramento, California 95826.

ARTICLE 45. INTEGRATION

1. This Contract, together with its incorporated documents, contains the entire, integrated agreement of the parties hereto, and supersedes any and all other prior or contemporaneous negotiations, understandings and oral or written agreements between the parties hereto. Each party acknowledges that no representations, inducements, promises or agreements have been made by any person which are not incorporated herein, and that any other agreements shall be void.

2. Any modification of this Contract shall only be effective if in writing signed by all parties hereto.

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3. No oral order, objection, direction, claim or notice by any party or person shall affect or modify any of the terms or obligations contained in the Contract Documents.

ARTICLE 46. ASSIGNMENT
Contractor shall not assign, transfer, convey, sublet, or otherwise dispose of this Contract or any part thereof including any claims, without prior written consent of the City. Any assignment without the written consent of the City shall be void. Any assignment of money due or to become due under this Contract shall be subject to a prior lien for services rendered or Material supplied for performance of Work called for under the Contract Documents in favor of all persons, firms, or corporations rendering such services or supplying such Materials to the extent that claims are filed pursuant to the Civil Code, the Code of Civil Procedure or the Government Code.

ARTICLE 47. CHANGE IN NAME AND NATURE OF CONTRACTOR’S LEGAL ENTITY
Should a change be contemplated in the name or nature of the Contractor’s legal entity, the Contractor shall first notify the City in order that proper steps may be taken to have the change reflected on the Contract and all related documents. No change of Contractor’s name or nature will affect City’s rights under the Contract, including but not limited to the bonds.

ARTICLE 48. ASSIGNMENT OF ANTITRUST ACTIONS
Pursuant to section 7103.5 of the Public Contract Code, in entering into a public works contract or subcontract to supply goods, services, or materials pursuant to a public works contract, Contractor or subcontractor offers and agrees to assign to the City all rights, title, and interest in and to all causes of action it may have under section 4 of the Clayton Act (15 U.S.C. section 15) or under the Cartwright Act (chapter 2 (commencing with section 16700) of part 2 of division 7 of the Business and Professions Code), arising from the purchase of goods, services, or materials pursuant to this Contract or any subcontract. This assignment shall be made and become effective at the time the City makes final payment to the Contractor, without further acknowledgment by the parties.

ARTICLE 49. PROHIBITED INTERESTS
No City official or representative who is authorized in such capacity and on behalf of the City to negotiate, supervise, make, accept, or approve, or to take part in negotiating, supervising, making, accepting or approving any engineering, inspection, construction or material supply contract or any subcontract in connection with construction of the Work, shall be or become directly or indirectly interested financially in the Contract.

ARTICLE 50. LAWS AND REGULATIONS

1. Contractor shall give all notices and comply with all federal, state and local laws, ordinances, rules and regulations bearing on conduct of work as indicated and specified by their terms. References to specific laws, rules or regulations in this Contract are for reference purposes only, and shall not limit or affect the applicability of provisions not specifically mentioned. If Contractor observes that drawings and specifications are at variance therewith, he shall promptly notify the City in writing and any necessary changes shall be adjusted as provided for in this Contract for changes in Work. If Contractor

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performs any Work knowing it to be contrary to such laws, ordinances, rules and regulations, and without such notice to the City, he shall bear all costs arising therefrom.

2. Contractor shall be responsible for familiarity with the Americans with Disabilities Act (“ADA”) (42 U.S.C. § 12101 et seq.). The Work will be performed in compliance with ADA laws, rules and regulations. Contractor shall comply with the Historic Building Code, including, but not limited to, as it relates to the ADA, whenever applicable.

3. Contractor acknowledges and understands that, pursuant to Public Contract Code section 20676, sellers of “mined material” must be on an approved list of sellers published pursuant to Public Resources Code section 2717(b) in order to supply mined material for this Contract.

ARTICLE 51. PATENT FEES OR ROYALTIES
The Contractor shall include in its bid amount the patent fees or royalties on any patented article or process furnished or used in the Work. Contractor shall assume all liability and responsibility arising from the use of any patented, or allegedly patented, materials, equipment, devices or processes used in or incorporated with the Work, and shall defend, indemnify and hold harmless the City, its officials, officers, agents, employees and representatives from and against any and all liabilities, demands, claims, damages, losses, costs and expenses, of whatsoever kind or nature, arising from such use.

ARTICLE 52. NOTICE OF TAXABLE POSSESSORY INTEREST
In accordance with Revenue and Taxation Code section 107.6, the Contract Documents may create a possessory interest subject to personal property taxation for which Contractor will be responsible.

END OF GENERAL CONDITIONS

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SECTION 700 – SPECIAL CONDITIONS

FEDERAL FUNDING REQUIREMENTS
This Project is receiving federal funding through the Highway Safety Improvement Program (HSIP) administered by the California Department of Transportation (Caltrans). A copy of the funding documents for the HSIP program is included in Attachment “A”, State and Federal Funding Documents and Related Agreements. Contractor shall comply with all conditions required by these funding sources including, but not limited to, the following:

For purposes of this section, “STATE” shall mean Caltrans, “ADMINISTERING AGENCY” shall mean the City, and “AGREEMENT” shall mean the master agreement between Caltrans and the City.

1. FISCAL PROVISIONS
a. All contractual obligations of STATE are subject to the appropriation of resources by the Legislature and the allocation of resources by the California Transportation Commission (CTC).
b. STATE’s financial commitment of Federal Funds will occur only upon the execution of this AGREEMENT, the authorization of the project-specific E-76 or E-76 (AMOD), the execution of each project-specific PROGRAM SUPPLEMENT, and STATE’s approved finance letter.
c. ADMINISTERING AGENCY may submit signed duplicate invoices in arrears for reimbursement of participating PROJECT costs on a monthly or quarterly progress basis once the project-specific PROGRAM SUPPLEMENT has been executed by STATE. d. ADMINISTERING AGENCY agrees, as a minimum, to submit invoices at least once every six (6) months commencing after the funds are encumbered on either the project-specific PROGRAM SUPPLEMENT or through a project-specific finance letter approved by STATE. STATE reserves the right to suspend future authorizations/obligations, and invoice payments for any on-going or future federal-aid project by ADMINISTERING AGENCY if PROJECT costs have not been invoiced by ADMINISTERING AGENCY for a six (6) month period.
e. Invoices shall be submitted on ADMINISTERING AGENCY letterhead that includes the address of ADMINISTERING AGENCY and shall be formatted in accordance with LOCAL ASSISTANCE PROCEDURES.
f. Invoices must have at least one copy of supporting backup documentation for costs incurred and claimed for reimbursement by ADMINISTERING AGENCY.

Acceptable backup documentation includes, but is not limited to, agency’s progress payment to the contractors, copies of cancelled checks showing amounts made payable to vendors and contractors, and/or a computerized summary of PROJECT costs. g. Payments to ADMINISTERING AGENCY can only be released by STATE as reimbursement of actual allowable PROJECT costs already incurred and paid for by ADMINISTERING AGENCY.
h. An Indirect Cost Rate Proposal and Central Service Cost Allocation Plan and related documentation are to be provided to STATE (Caltrans Audits & Investigations) annually for review and approval prior to ADMINISTERING AGENCY seeking reimbursement of indirect cost incurred within each fiscal year being claimed for federal reimbursement.

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i. Once PROJECT has been awarded, STATE reserves the right to de-obligate any excess Federal Funds from the construction phase of PROJECT if the contract award amount is less than the obligated amount, as shown on the PROJECT E-76 or E76 (AMOD).
j. STATE will withhold the greater of either two (2) percent of the total of all Federal Funds encumbered for each PROGRAM SUPPLEMENT or $40,000 until ADMINISTERING AGENCY submits the Final Report of Expenditures for each completed PROGRAM SUPPLEMENT PROJECT.
k. The estimated total cost of PROJECT, the amount of Federal Funds obligated, and the required matching funds may be adjusted by mutual consent of the PARTIES hereto with a finance letter, a detailed estimate, if required, and approved E-76 (AMOD).

Federal-aid funding may be increased to cover PROJECT cost increases only if such funds are available and FWHA concurs with that increase. l. When additional federal-aid funds are not available, ADMINISTERING AGENCY agrees that the payment of Federal Funds will be limited to the amounts authorized on the PROJECT specific E-76 / E-76 (AMOD) and agrees that any increase in PROJECT costs must be defrayed with ADMINISTERING AGENCY’s own funds. m. ADMINISTERING AGENCY shall use its own non-Federal Funds to finance the local share of eligible costs and all expenditures or contract items ruled ineligible for financing with Federal Funds. STATE shall make the determination of ADMINISTERING AGENCY’s cost eligibility for federal fund financing of PROJECT costs. n. ADMINISTERING AGENCY will reimburse STATE for STATE’s share of costs for work performed by STATE at the request of ADMINISTERING AGENCY. STATE’s costs shall include overhead assessments in accordance with section 8755.1 of the State Administrative Manual.
o. Federal and state funds allocated from the State Transportation Improvement Program (STIP) are subject to the timely use of funds provisions enacted by Senate Bill 45, approved in 1997, and subsequent STIP Guidelines and State procedures approved by the CTC and STATE.
p. Federal Funds encumbered for PROJECT are available for liquidation for a period of seven (7) years from the beginning of the State fiscal year the funds were appropriated in the State Budget. State funds encumbered for PROJECT are available for liquidation only for five (5) years from the beginning of the State fiscal year the funds were appropriated in the State Budget. Federal or state funds not liquidated within these periods will be reverted unless an Cooperative Work Agreement (CWA) is submitted by ADMINISTERING AGENCY and approved by the California Department of Finance (per Government Code section 16304). The exact date of fund reversion will be reflected in the STATE signed finance letter for PROJECT.
q. Payments to ADMINISTERING AGENCY for PROJECT-related travel and subsistence (per diem) expenses of ADMINISTERING AGENCY forces and its contractors and subcontractors claimed for reimbursement or as local match credit shall not exceed rates authorized to be paid rank and file STATE employees under current State Department of Personnel Administration (DPA) rules. If the rates invoiced by ADMINISTERING AGENCY are in excess of DPA rates, ADMINISTERING AGENCY is responsible for the cost difference, and any overpayments inadvertently paid by STATE shall be reimbursed to STATE by ADMINISTERING AGENCY on demand within thirty (30) days of such invoice.
r. ADMINISTERING AGENCY agrees to comply with Office of Management and Budget (OMB) Circular A-87, Cost Principles for State and Local Governments, and 49

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CFR, Part 18, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments.
s. ADMINISTERING AGENCY agrees, and will assure that its contractors and subcontractors will be obligated to agree that (a) Contract Cost Principles and Procedures, 48 CFR, Federal Acquisition Regulations System, Chapter 1, Part 31, et seq., shall be used to determine the allowability of individual PROJECT cost items and (b) those parties shall comply with federal administrative procedures in accordance with 49 CFR, Part 18, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments. Every subrecipient receiving PROJECT funds as a contractor or sub-contractor under this AGREEMENT shall comply with Federal administrative procedures in accordance with 49 CFR, Part 18, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments.
t. Any PROJECT costs for which ADMINISTERING AGENCY has received payment or credit that are determined by subsequent audit to be allowable under OMB Circular A-87, 48 CFR, Chapter 1, Part 31 or 49 CFR, Part 18, are subject to repayment by ADMINISTERING AGENCY to STATE. Should
ADMINISTERING AGENCY fail to reimburse moneys due STATE within thirty (30) days of demand, or within such other period as may be agreed in writing between the PARTIES hereto, STATE is authorized to intercept and withhold future payments due ADMINISTERING AGENCY from STATE or any third-party source, including but not limited to, the State Treasurer, the State Controller and the CTC. u. Upon written demand by STATE, any overpayment to ADMINISTERING AGENCY of amounts invoiced to STATE shall be returned to STATE. v. Should ADMINISTERING AGENCY fail to refund any moneys due STATE as provided hereunder or should ADMINISTERING AGENCY breach this AGREEMENT by failing to complete PROJECT without adequate justification and approval by STATE, then, within thirty (30) days of demand, or within such other period as may be agreed to in writing between the PARTIES, STATE, acting through the State Controller, the State Treasurer, or any other public entity or agency, may withhold or demand a transfer of an amount equal to the amount paid by or owed to STATE from future apportionments, or any other funds due ADMINISTERING AGENCY from the Highway Users Tax Fund or any other sources of funds, and/or may withhold approval of future ADMINISTERING AGENCY federal-aid projects.
w. Should ADMINISTERING AGENCY be declared to be in breach of this AGREEMENT or otherwise in default thereof by STATE, and if ADMINISTERING AGENCY is constituted as a joint powers authority, special district, or any other public entity not directly receiving funds through the State Controller, STATE is authorized to obtain reimbursement from whatever sources of funding are available, including the withholding or transfer of funds, pursuant to the provision above, from those constituent entities, to recover all funds provided by STATE hereunder. x. ADMINISTERING AGENCY acknowledges that the signatory party represents the ADMINISTERING AGENCY and further warrants that there is nothing within a Joint Powers Agreement, by which ADMINISTERING AGENCY was created, if any exists, that would restrict or otherwise limit STATE’s ability to recover State funds improperly spent by ADMINISTERING AGENCY in contravention of the terms of this AGREEMENT.

2. AUDITS, THIRD PARTY CONTRACTING, RECORDS RETENTION AND

REPORTS

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a. STATE reserves the right to conduct technical and financial audits of PROJECT work and records when determined to be necessary or appropriate and ADMINISTERING AGENCY agrees, and shall require its contractors and subcontractors to agree, to cooperate with STATE by making all appropriate and relevant PROJECT records available for audit and copying as required by paragraph three (3) of this Article. b. ADMINISTERING AGENCY, its contractors and subcontractors shall establish and maintain an accounting system and records that properly accumulate and segregate incurred PROJECT costs and matching funds by line item for the PROJECT. The accounting system of ADMINISTERING AGENCY, its contractors and all subcontractors shall conform to Generally Accepted Accounting Principles, enable the determination of incurred costs at interim points of completion, and provide support for reimbursement payment vouchers or invoices sent to or paid by STATE.
c. For the purpose of determining compliance with Title 21, California Code of Regulations, Chapter 21, section 2500 et seq., when applicable, and other matters connected with the performance of ADMINISTERING AGENCY’s contracts with third parties, ADMINISTERING AGENCY, ADMINISTERING
AGENCY’s contractors and subcontractors, and STATE shall each maintain and make available for inspection and audit all books, documents, papers, accounting records, and other evidence pertaining to the performance of such contracts, including, but not limited to, the costs of administering those various contracts.

All of the above referenced parties shall make such AGREEMENT and PROGRAM SUPPLEMENT materials available at their respective offices at all reasonable times during the entire PROJECT period and for three (3) years from the date of final payment to ADMINISTERING AGENCY under any PROGRAM SUPPLEMENT. STATE, the California State Auditor, or any duly authorized representative of STATE or the United States, shall each have access to any books, records, and documents that are pertinent to a PROJECT for audits, examinations, excerpts, and transactions and ADMINISTERING AGENCY shall furnish copies thereof if requested.
d. ADMINISTERING AGENCY is required to have an audit in accordance with the Single Audit Act of OMB Circular A-133 if it receives a total of $500,000 or more in Federal Funds in a single fiscal year. The Federal Funds received under a PROGRAM SUPPLEMENT are a part of the Catalogue of Federal Domestic Assistance (CFDA)

20.205, Highway Planning and Research.
e. ADMINISTERING AGENCY agrees to include all

PROGRAM
SUPPLEMENTS adopting the terms of this AGREEMENT in the schedule of projects to be examined in ADMINISTERING AGENCY’s annual audit and in the schedule of projects to be examined under its single audit prepared in accordance with OMB Circular A-133. f. ADMINISTERING AGENCY shall not award a construction contract over $10,000 or other contracts over $25,000 (excluding professional service contracts of the type which are required to be procured in accordance with Government Code sections 4525 (d), (e) and (f) on the basis of a noncompetitive negotiation for work to be performed under this AGREEMENT without the prior written approval of STATE. Contracts awarded by ADMINISTERING AGENCY, if intended as local match credit, must meet the requirements set forth in this AGREEMENT regarding local match funds.

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g. Any subcontract entered into by ADMINISTERING AGENCY as a result of this AGREEMENT shall contain all of the provisions of the preceding article (FISCAL PROVISION) and this article (AUDITS, THIRD-PARTY CONTRACTING RECORDS RETENTION AND REPORTS), and shall mandate that travel and per diem reimbursement and third-party contract reimbursement to subcontractors will be allowable as PROJECT costs only after those costs are incurred and paid for by the subcontractors.
h. To be eligible for local match credit, ADMINISTERING AGENCY must ensure that local match funds used for a PROJECT meet the fiscal provisions requirements outlined in the article below in the same manner as required of all other PROJECT expenditures.
i. In addition to the above, the pre-award requirements of third-party contractor/consultants with ADMINISTERING AGENCY should be consistent with LOCAL ASSISTANCE PROCEDURES.

3. FEDERAL LOBBYING ACTIVITIES CERTIFICATION
a. By execution of this Agreement, Contractor certifies, to the best of the signatory officer’s knowledge and belief, that:
i. No federal or state appropriated funds have been paid or will be paid, by or on behalf of Contractor, to any person for influencing or attempting to influence an officer or employee of any STATE or federal agency, a member of the State Legislature or United States Congress, an officer or employee of the Legislature or Congress, or any employee of a Member of the Legislature or Congress in connection with the awarding of any STATE or federal contract, including this AGREEMENT, the making of any STATE or federal loan, the entering into of any cooperative contract, and the extension, continuation, renewal, amendment, or modification of any STATE or federal contract, grant, loan, or cooperative contract.
ii. If any funds other than federal appropriated funds have been paid, or will be paid, to any person for influencing or attempting to influence an officer or employee of any federal agency, a member of Congress, an officer or employee of Congress or an employee of a member of Congress in connection with this AGREEMENT, grant, local, or cooperative contract, Contractor shall complete and submit Standard Form-LLL, “Disclosure Form to Rep Lobbying,” in accordance with the form instructions.
iii. This certification is a material representation of fact upon which reliance was placed when this AGREEMENT and each PROGRAM
SUPPLEMENT was or will be made or entered into. Submission of this certification is a prerequisite for making or entering into this Agreement imposed by Section 1352, Title 31, United States Code. Any party who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
b. Contractor also agrees by signing this Agreement that the language of this certification will be included in all lower tier sub-agreements which exceed $100,000 and that all such sub-recipients shall certify and disclose accordingly.

4. FAIR EMPLOYMENT PRACTICES

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a. In the performance of this Agreement, Contractor will not discriminate against any employee for employment because of race, color, sex, sexual orientation, religion, ancestry or national origin, physical disability, medical condition, marital status, political affiliation, family and medical care leave, pregnancy leave, or disability leave. Contractor will take affirmative action to ensure that employees are treated during employment without regard to their race, sex, sexual orientation, color, religion, ancestry, or national origin, physical disability, medical condition, marital status, political affiliation, family and medical leave, pregnancy leave, or disability leave. Such action shall include, but not be limited to, the following: employment; upgrading; demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Contractor shall post in conspicuous places, available to employees for employment, notices to be provided by STATE setting forth the provisions of this Fair Employment section. b. Contractor and all subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code section 1290-0 et seq.), and the applicable regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12900(a-f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are incorporated into this Agreement by reference and made a part hereof as if set forth in full. Contractor and all subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreements, as appropriate. c. Contractor shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under this Agreement.

5. DISADVANTAGED BUSINESS ENTERPRISES (DBE)
This Project has a DBE participation goal of 12%. Failure to meet or achieve this goal, or to demonstrate the performance of a Good Faith Effort to achieve this goal, is cause to have a bid deemed nonresponsive.

Under 49 CFR 26.13(b):

The contractor, subrecipient or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor shall carry out applicable requirements of 49 CFR part 26 in the award and administration of DOT-assisted contracts. Failure by the contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy as the recipient deems appropriate.

Take necessary and reasonable steps to ensure that DBEs have opportunity to participate in the contract (49 CFR 26).

To ensure equal participation of DBEs provided in 49 CFR 26.5, the Agency shows a goal for DBEs.

Make work available to DBEs and select work parts consistent with available DBE subcontractors and suppliers.

Meet the DBE goal shown elsewhere in these special provisions or demonstrate that you made adequate good faith efforts to meet this goal.

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It is your responsibility to verify that the DBE firm is certified as DBE at date of bid opening.

For a list of DBEs certified by the California Unified Certification Program, go to:
http://www.dot.ca.gov/hq/bep/find_certified.htm.

All DBE participation will count toward the California Department of Transportation’s federally mandated statewide overall DBE goal.

Credit for materials or supplies you purchase from DBEs counts towards the goal in the following manner:
• 100 percent counts if the materials or supplies are obtained from a DBE manufacturer. • 60 percent counts if the materials or supplies are obtained from a DBE regular dealer. • Only fees, commissions, and charges for assistance in the procurement and delivery of materials or supplies count if obtained from a DBE that is neither a manufacturer nor regular dealer. 49 CFR 26.55 defines "manufacturer" and "regular dealer." You receive credit towards the goal if you employ a DBE trucking company that performs a commercially useful function as defined in 49 CFR 26.55(d)(1) through (4) and (6). a. DBE Commitment Submittal
Submit the Exhibit 15-G Construction Contract DBE Commitment form, included in the Bid book. If the form is not submitted with the bid, remove the form from the Bid book before submitting your bid.

If the DBE Commitment form is not submitted with the bid, the apparent low bidder, the 2nd low bidder, and the 3rd low bidder must complete and submit the DBE Commitment form to the Agency. DBE Commitment form must be received by the Agency no later than 4:00 p.m. on the 4th business day after bid opening.

Other bidders do not need to submit the DBE Commitment form unless the Agency requests it. If the Agency requests you to submit a DBE Commitment form, submit the completed form within 4 business days of the request.

Submit written confirmation from each DBE stating that it is participating in the contract. Include confirmation with the DBE Commitment form. A copy of a DBE's quote will serve as written confirmation that the DBE is participating in the contract.

If you do not submit the DBE Commitment form within the specified time, the Agency will find your bid nonresponsive.
b. Good Faith Efforts Submittal
If you have not met the DBE goal, complete and submit the DBE Information - Good Faith Efforts, Exhibit 15-H, form with the bid showing that you made adequate good faith efforts to meet the goal. Only good faith efforts directed towards obtaining participation by DBEs will be considered. If good faith efforts documentation is not submitted with the bid, it must be received by the Agency no later than 4:00 p.m. on the 4th business day after bid opening.

If your DBE Commitment form shows that you have met the DBE goal or if you are required to submit the DBE Commitment form, you must also submit good faith efforts documentation within the specified time to

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protect your eligibility for award of the contract in the event the Agency finds that the DBE goal has not been met.

Good faith efforts documentation must include the following information and supporting documents, as necessary:
i. Items of work you have made available to DBE firms. Identify those items of work you might otherwise perform with your own forces and those items that have been broken down into economically feasible units to facilitate DBE participation. For each item listed, show the dollar value and percentage of the total contract. It is your responsibility to demonstrate that sufficient work to meet the goal was made available to DBE firms.
ii. Names of certified DBEs and dates on which they were solicited to bid on the project. Include the items of work offered. Describe the methods used for following up initial solicitations to determine with certainty if the DBEs were interested, and the dates of the follow-up. Attach supporting documents such as copies of letters, memos, facsimiles sent, telephone logs, telephone billing statements, and other evidence of solicitation. You are reminded to solicit certified DBEs through all reasonable and available means and provide sufficient time to allow DBEs to respond.
iii. Name of selected firm and its status as a DBE for each item of work made available. Include name, address, and telephone number of each DBE that provided a quote and their price quote. If the firm selected for the item is not a DBE, provide the reasons for the selection.
iv. Name and date of each publication in which you requested DBE participation for the project. Attach copies of the published advertisements. v. Names of agencies and dates on which they were contacted to provide assistance in contacting, recruiting, and using DBE firms. If the agencies were contacted in writing, provide copies of supporting documents. vi. List of efforts made to provide interested DBEs with adequate information about the plans, specifications, and requirements of the contract to assist them in responding to a solicitation. If you have provided information, identify the name of the DBE assisted, the nature of the information provided, and date of contact. Provide copies of supporting documents, as appropriate. vii. List of efforts made to assist interested DBEs in obtaining bonding, lines of credit, insurance, necessary equipment, supplies, and materials, excluding supplies and equipment that the DBE subcontractor purchases or leases from the prime contractor or its affiliate. If such assistance is provided by you, identify the name of the DBE assisted, nature of the assistance offered, and date assistance was provided. Provide copies of supporting documents, as appropriate.
viii. Any additional data to support demonstration of good faith efforts.

The Agency may consider DBE commitments of the 2nd and 3rd bidders when determining whether the low bidder made good faith efforts to meet the DBE goal. c. Exhibit 15-G - Construction Contract DBE Commitment
Complete and sign Exhibit 15-G Construction Contract DBE Commitment included in the contract documents regardless of whether DBE participation is reported.

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Provide written confirmation from each DBE that the DBE is participating in the Contract. A copy of a DBE's quote serves as written confirmation. If a DBE is participating as a joint venture partner, the Agency encourages you to submit a copy of the joint venture agreement.) d. Subcontractor and Disadvantaged Business Enterprise Records Use each DBE subcontractor as listed on Exhibit 12-B Bidder’s List of Subcontractors (DBE and NonDBE) and Exhibit 15-G Construction Contract DBE Commitment form unless you receive authorization for a substitution.

The Agency requests the Contractor to:
i. Notify the Engineer of any changes to its anticipated DBE participation ii. Provide this notification before starting the affected work iii. Maintain records including:
• Name and business address of each 1st-tier subcontractor • Name and business address of each DBE subcontractor, DBE vendor, and DBE trucking company, regardless of tier
• Date of payment and total amount paid to each business If you are a DBE contractor, include the date of work performed by your own forces and the corresponding value of the work.

Before the 15th of each month, submit a Monthly DBE Trucking Verification form.

If a DBE is decertified before completing its work, the DBE must notify you in writing of the decertification date. If a business becomes a certified DBE before completing its work, the business must notify you in writing of the certification date. Submit the notifications. On work completion, complete a Disadvantaged Business Enterprises (DBE) Certification Status Change, Exhibit 17-O, form. Submit the form within 30 days of contract acceptance.

Upon work completion, complete Exhibit 17-F Final Report – Utilization of Disadvantaged Business Enterprises (DBE), First-Tier Subcontractors. Submit it within 90 days of contract acceptance. The Agency will withhold $10,000 until the form is submitted. The Agency releases the withhold upon submission of the completed form.
e. Performance of Disadvantaged Business Enterprises
DBEs must perform work or supply materials as listed in the Exhibit 15-G Construction Contract DBE Commitment form, included in the Bid.

Do not terminate or substitute a listed DBE for convenience and perform the work with your own forces or obtain materials from other sources without authorization from the Agency.

The Agency authorizes a request to use other forces or sources of materials if it shows any of the following justifications:
i. Listed DBE fails or refuses to execute a written contract based on plans and specifications for the project.
ii. You stipulated that a bond is a condition of executing the subcontract and the listed DBE fails to meet your bond requirements.

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iii. Work requires a contractor's license and listed DBE does not have a valid license under Contractors License Law.
iv. Listed DBE fails or refuses to perform the work or furnish the listed materials.
v. Listed DBE's work is unsatisfactory and not in compliance with the contract.
vi. Listed DBE is ineligible to work on the project because of suspension or debarment.
vii. Listed DBE becomes bankrupt or insolvent.
viii. Listed DBE voluntarily withdraws with written notice from the Contract. ix.

Listed DBE is ineligible to receive credit for the type of work required. x. Listed DBE owner dies or becomes disabled resulting in the inability to perform the work on the Contract.
xi. Agency determines other documented good cause.

Notify the original DBE of your intent to use other forces or material sources and provide the reasons.

Provide the DBE with 5 days to respond to your notice and advise you and the Agency of the reasons why the use of other forces or sources of materials should not occur. Your request to use other forces or material sources must include:
i. One or more of the reasons listed in the preceding paragraph. ii. Notices from you to the DBE regarding the request.
iii. Notices from the DBEs to you regarding the request.

If a listed DBE is terminated or substituted, you must make good faith efforts to find another DBE to substitute for the original DBE. The substitute DBE must perform at least the same amount of work as the original DBE under the contract to the extent needed to meet the DBE goal.

The substitute DBE must be certified as a DBE at the time of request for substitution.

Unless the Agency authorizes (1) a request to use other forces or sources of materials or (2) a good faith effort for a substitution of a terminated DBE, the Agency does not pay for work listed on the Exhibit 15-G Construction Contract DBE Commitment form unless it is performed or supplied by the listed DBE or an authorized substitute.

6. BID RIGGING
The U.S. Department of Transportation (DOT) provides a toll-free hotline to report bid rigging activities.

Use the hotline to report bid rigging, bidder collusion, and other fraudulent activities. The hotline number is (800) 424-9071. The service is available 24 hours a day 7 days a week and is confidential and anonymous. The hotline is part of the DOT’s effort to identify and investigate highway construction contract fraud and abuse and is operated under the direction of the DOT Inspector General.

7. CONTRACTOR LICENSE
The Contractor must be properly licensed as a contractor from contract award through Contract acceptance (Public Contract Code § 10164).

8. BUY AMERICA

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Furnish steel and iron materials to be incorporated into the work with certificates of compliance. Steel and iron materials must be produced in the U.S. except:
a. Foreign pig iron and processed, pelletized, and reduced iron ore may be used in the domestic production of the steel and iron materials [60 Fed Reg 15478 (03/24/1995]; b. If the total combined cost of the materials does not exceed the greater of 0.1 percent of the total bid or $2,500, materials produced outside the U.S. may be used.

Production includes:
a. Processing steel and iron materials, including smelting or other processes that alter the physical form or shape (such as rolling, extruding, machining, bending, grinding, and drilling) or chemical composition;
b. Coating application, including epoxy coating, galvanizing, and painting, that protects or enhances the value of steel and iron materials.

9. QUALITY ASSURANCE
The Agency uses a Quality Assurance Program (QAP) to ensure a material is produced to comply with the Contract.

You may examine the records and reports of tests the Agency performs if they are available at the job site.

Schedule work to allow time for QAP.

10. FORM FWHA-1273 REQUIRED CONTRACT PROVISIONS
FHWA-1273 -- Revised May 1, 2012

REQUIRED CONTRACT PROVISIONS FEDERAL-AID CONSTRUCTION

CONTRACTS
I. General
II. Nondiscrimination
III. Nonsegregated Facilities
IV. Davis-Bacon and Related Act

V. Contract Work Hours and Safety
Standards Act Provisions
VI. Subletting or Assigning the
Contract
VII.Safety: Accident Prevention
VIII. False Statements Concerning
Highway Projects
IX. Implementation of Clean Air Act
and Federal Water Pollution Control Act
X. Compliance with Government
wide Provisions
Suspension and Debarment
Requirements
XI. Certification Regarding Use of
Contract Funds for Lobbying

ATTACHMENTS
A. Employment and Materials
Preference for Appalachian Development
Highway System or Appalachian Local

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Access Road Contracts (included
in
Appalachian contracts only)
I. GENERAL

1. Form FHWA-1273 must be physically
incorporated in each construction contract
funded under Title 23 (excluding emergency
contracts solely intended for debris removal).

The contractor (or subcontractor) must insert this
form in each subcontract and further require its
inclusion in all lower tier subcontracts (excluding
purchase orders, rental agreements and other
agreements for supplies or services).

The applicable requirements of
Form
FHWA-1273 are incorporated by reference for
work done under any purchase order, rental
agreement or agreement for other services. The
prime contractor shall be responsible for
compliance by any subcontractor, lower-tier
subcontractor or service provider.

Form FHWA-1273 must be included in all
Federal-aid design-build contracts, in all
subcontracts and in lower tier subcontracts
(excluding subcontracts for design services,
purchase orders, rental agreements and other
agreements for supplies or services). The
design-builder shall be responsible for
compliance by any subcontractor, lower-tier
subcontractor or service provider.

Contracting agencies may reference Form
FHWA-1273 in bid proposal or request for
proposal documents, however, the Form FHWA1273 must be physically incorporated (not referenced) in all contracts, subcontracts and
lower-tier subcontracts (excluding purchase
orders, rental agreements and other agreements
for supplies or services related to a construction
contract).

2. Subject to the applicability criteria noted
in the following sections, these contract
provisions shall apply to all work performed on
the contract by the contractor's own organization
and with the assistance of workers under the
contractor's immediate superintendence and to
all work performed on the contract by piecework,
station work, or by subcontract.

3. A breach of any of the stipulations
contained in these Required Contract Provisions
may be sufficient grounds for withholding of
progress payments, withholding of final payment,
termination of the contract, suspension /
debarment or any other action determined to be
appropriate by the contracting agency and
FHWA.

4. Selection of Labor: During the
performance of this contract, the contractor shall
not use convict labor for any purpose within the
limits of a construction project on a Federal-aid
highway unless it is labor performed by convicts
who are on parole, supervised release, or
probation. The term Federal-aid highway does
not include roadways functionally classified as
local roads or rural minor collectors.

II. NONDISCRIMINATION
The provisions of this section related to 23 CFR
Part 230 are applicable to all Federalaid
construction contracts and to all related
construction subcontracts of $10,000 or more.

The provisions of 23 CFR Part 230 are not
applicable to material supply, engineering, or
architectural service contracts.

In addition, the contractor and all subcontractors
must comply with the following policies:

Executive Order 11246, 41 CFR 60, 29 CFR
1625-1627, Title 23
USC Section 140, the Rehabilitation Act of 1973,
as amended (29 USC 794), Title VI of the Civil
Rights Act of 1964, as amended, and related
regulations including 49 CFR Parts 21, 26 and
27; and 23 CFR Parts 200, 230, and 633.

The contractor and all subcontractors must
comply with: the requirements of the Equal
Opportunity Clause in 41 CFR 60-1.4(b) and, for
all construction contracts exceeding $10,000, the
Standard Federal Equal

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Employment Opportunity Construction Contract
Specifications in 41 CFR 60-4.3.

Note: The U.S. Department of Labor has
exclusive authority to determine compliance with
Executive Order 11246 and the policies of the
Secretary of Labor including 41 CFR 60, and 29
CFR 1625-1627. The contracting agency and
the FHWA have the authority and the
responsibility to ensure compliance with Title 23
USC Section 140, the Rehabilitation Act of 1973,
as amended (29
USC 794), and Title VI of the Civil Rights Act of
1964, as amended, and related regulations
including 49 CFR Parts 21, 26 and 27; and 23
CFR Parts 200, 230, and 633.

The following provision is adopted from 23 CFR
230, Appendix A, with appropriate revisions to
conform to the U.S. Department of Labor (US
DOL) and FHWA requirements.

1. Equal Employment Opportunity: Equal
employment opportunity (EEO) requirements not
to discriminate and to take affirmative action to
assure equal opportunity as set forth under laws,
executive orders, rules, regulations (28 CFR 35,
29 CFR 1630, 29 CFR 1625-1627, 41 CFR 60
and 49 CFR 27) and orders of the Secretary of
Labor as modified by the provisions prescribed
herein, and imposed pursuant to 23 U.S.C. 140
shall constitute the EEO and specific affirmative
action standards for the contractor's project
activities under this contract. The provisions of
the Americans with Disabilities Act of 1990 (42
U.S.C. 12101 et seq.) set forth under 28 CFR 35
and 29 CFR 1630 are incorporated by reference
in this contract. In the execution of this contract,
the contractor agrees to comply with the
following minimum specific requirement activities
of EEO:
a. The contractor will work with the
contracting agency and the Federal Government
to ensure that it has made every good faith effort
to provide equal opportunity with respect to all of
its terms and conditions of employment and in
their review of activities under the contract.
b. The contractor will accept as its
operating policy the following statement::
"It is the policy of this Company to assure that
applicants are employed, and that employees
are treated during employment, without regard to
their race, religion, sex, color, national origin,
age or disability. Such action shall include:
employment, upgrading, demotion, or transfer;
recruitment or recruitment advertising; layoff or
termination; rates of pay or other forms of
compensation; and selection for training,
including
apprenticeship, preapprenticeship, and/or onthe-job training."

2. EEO Officer: The contractor will
designate and make known to the contracting
officers an EEO Officer who will have the
responsibility for and must be capable of
effectively administering and promoting an active
EEO program and who must be assigned
adequate authority and responsibility to do so

3. Dissemination of Policy: All members of
the contractor's staff who are authorized to hire,
supervise, promote, and discharge employees,
or who recommend such action, or who are
substantially involved in such action, will be
made fully cognizant of, and will implement, the
contractor's EEO policy and contractual
responsibilities to provide EEO in each grade
and classification of employment. To ensure that
the above agreement will be met, the following
actions will be taken as a minimum:
a. Periodic meetings of supervisory
and personnel office employees will be
conducted before the start of work and
then not less often than once every six
months, at which time the contractor's
EEO policy and its implementation will
be reviewed and explained. The
meetings will be conducted by the EEO
Officer.
b. All new supervisory or personnel
office employees will be given a
thorough indoctrination by the EEO
Officer, covering all major aspects of the
contractor's EEO obligations within thirty
days following their reporting for duty
with the contractor.
c. All personnel who are engaged
in direct recruitment for the project will
be instructed by the EEO Officer in the

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contractor's procedures for locating and
hiring minorities and women.
d. Notices and posters setting forth
the contractor's EEO policy will be
placed in areas readily accessible to
employees, applicants for employment
and potential employees.
e. The contractor's EEO policy and
the procedures to implement such policy
will be brought to the attention of
employees by means of meetings,
employee handbooks, or other
appropriate means.

4. Recruitment: When advertising for
employees, the contractor will include in all
advertisements for employees the notation: "An
Equal Opportunity Employer." All such
advertisements will be placed in publications
having a large circulation among minorities and
women in the area from which the project work
force would normally be derived.
a. The contractor will, unless
precluded by a valid bargaining
agreement, conduct systematic and
direct recruitment through public and
private employee referral sources likely
to yield qualified minorities and women.

To meet this requirement, the contractor
will identify sources of potential minority
group employees, and establish with
such identified sources procedures
whereby minority and women applicants
may be referred to the contractor for
employment consideration.
b. In the event the
contractor has a valid bargaining
agreement providing for exclusive hiring
hall referrals, the contractor is expected
to observe the provisions of that
agreement to the extent that the system
meets the contractor's compliance with
EEO contract provisions. Where
implementation of such an agreement
has the effect of discriminating against
minorities or women, or obligates the
contractor to do the
same, such implementation
violates Federal
nondiscrimination provisions.
c. The contractor will encourage its
present employees to refer minorities
and women as applicants for
employment. Information and
procedures with regard to referring such
applicants will be discussed with
employees.

5. Personnel Actions: Wages, working
conditions, and employee benefits shall be
established and administered, and personnel
actions of every type, including hiring, upgrading,
promotion, transfer, demotion, layoff, and
termination, shall be taken without regard to
race, color, religion, sex, national origin, age or
disability. The following procedures shall be
followed:
a. The contractor will conduct
periodic inspections of project sites to
insure that working conditions and
employee facilities do
not indicate discriminatory
treatment of project site personnel.
b. The contractor will periodically
evaluate the spread of wages paid within
each classification to determine any
evidence of discriminatory wage
practices.
c. The contractor will periodically
review selected personnel actions in
depth to determine whether there is
evidence of discrimination. Where
evidence is found, the contractor will
promptly take corrective action. If the
review indicates that the discrimination
may extend beyond the actions
reviewed, such corrective action shall
include all affected persons.
d. The contractor will promptly
investigate all complaints of alleged
discrimination made to
the contractor in connection with
its obligations under this contract, will
attempt to resolve such complaints, and
will take appropriate corrective action
within a reasonable time. If the
investigation indicates that the
discrimination may affect persons other
than the complainant, such corrective
action shall include such other
persons. Upon
completion of each
investigation, the contractor

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will inform every complainant of all of
their avenues of appeal.

6. Training and Promotion:
a. The contractor will assist in
locating, qualifying, and increasing the
skills of minorities and women who are
applicants for employment
or current employees.

Such efforts should be aimed at
developing full journey level
status employees in the type of
trade or job classification involved.
b. Consistent with the contractor's
work force requirements and as
permissible under Federal
and State regulations, the
contractor shall make full use of
training programs, i.e.,
apprenticeship, and on-the-job
training programs for the
geographical area of contract
performance. In the event a special
provision for training is provided under
this contract, this subparagraph
will be superseded as
indicated in the special provision. The
contracting agency may reserve training
positions for persons who receive
welfare assistance in accordance with
23 U.S.C. 140(a).
c. The contractor will advise
employees and
applicants for employment
of available training programs and
entrance requirements for each.
d. The contractor will periodically
review the training and
promotion potential of employees who
are minorities and women and will
encourage eligible employees to apply
for such training and promotion.

7. Unions: If the contractor relies in whole
or in part upon unions as a source of employees,
the contractor will use good faith efforts to obtain
the cooperation of such unions to increase
opportunities for minorities and women. Actions
by the contractor, either directly or through a
contractor's association acting as agent, will
include the procedures set forth below:
a. The contractor will use good
faith efforts to develop, in cooperation
with the unions, joint training programs
aimed toward qualifying more minorities
and women for membership in the
unions and increasing the skills of
minorities and women so that they may
qualify for higher paying employment.
b. The contractor will use good
faith efforts to incorporate an EEO
clause into each union agreement to the
end that such union will be contractually
bound to refer applicants without regard
to their race, color, religion, sex, national
origin, age or disability.
c. The contractor is to obtain
information as to the referral practices
and policies of the labor union except
that to the extent such information is
within the exclusive possession of the
labor union and such labor union refuses
to furnish such information to the
contractor, the contractor shall so certify
to the contracting agency and shall set
forth what efforts have been made to
obtain such information.
d. In the event the union is unable
to provide the contractor with a
reasonable flow of referrals within the
time limit set forth in the collective
bargaining agreement, the contractor
will, through independent recruitment
efforts, fill the employment vacancies
without regard to race, color, religion,
sex, national origin, age or disability;
making full efforts to obtain qualified
and/or qualifiable minorities and women.

The failure of a union to provide
sufficient referrals (even though it is
obligated to provide exclusive referrals
under the terms of a collective
bargaining agreement) does not relieve
the contractor from the requirements of
this paragraph. In the event the union
referral practice prevents the contractor
from meeting the obligations pursuant to
Executive Order 11246, as amended,
and these special provisions, such
contractor shall immediately notify the
contracting agency.

8. Reasonable Accommodation for Applicants /
Employees with Disabilities: The contractor

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must be familiar with the requirements for and
comply with the Americans with Disabilities Act
and all rules and regulations established there
under. Employers must provide reasonable
accommodation in all employment activities
unless to do so would cause an undue hardship.

9. Selection of Subcontractors,
Procurement of Materials and Leasing of
Equipment: The contractor shall not discriminate
on the grounds of race, color, religion, sex,
national origin, age or disability in the selection
and retention of subcontractors, including
procurement of materials and leases of
equipment. The contractor shall take all
necessary and reasonable steps to ensure
nondiscrimination in the administration of this
contract.
a. The contractor shall notify all
potential subcontractors and suppliers
and lessors of their
EEO obligations under this
contract.
b. The contractor will use good
faith efforts to ensure subcontractor
compliance with their EEO obligations.

10. Assurances Required by 49 CFR

26.13(b):
a. The requirements of 49 CFR
Part 26 and the State DOT’s U.S. DOTapproved DBE program are incorporated by reference.
b. The contractor or
subcontractor shall not discriminate on
the basis of race, color, national origin,
or sex in the performance of this
contract. The contractor shall
carry out applicable
requirements of 49 CFR Part 26 in the
award and administration of DOTassisted contracts. Failure by the contractor to carry out these
requirements is a material breach of this
contract, which may result in the
termination of this contract or such other
remedy as the contracting agency
deems appropriate.

11. Records and Reports: The contractor
shall keep such records as necessary to
document compliance with the EEO
requirements. Such records shall be retained for
a period of three years following the date of the
final payment to the contractor for all contract
work and shall be available at reasonable times
and places for inspection by authorized
representatives of the contracting agency and
the FHWA.
a. The records kept by the
contractor shall document the following:
(1) The number
and work hours of minority and nonminority
group members and women employed in each
work classification on the project;
(2) The progress
and efforts being made in cooperation with
unions, when applicable, to increase
employment opportunities for minorities and
women; and
(3) The progress
and efforts being made in locating, hiring,
training, qualifying, and upgrading minorities and
women;
b. The contractors and
subcontractors will submit an annual
report to the contracting agency each
July for the duration of the project,
indicating the number of minority,
women, and nonminority group
employees currently engaged in each
work classification required by the
contract work. This information is to be
reported on Form FHWA-1391. The
staffing data should represent the project
work force on board in all or any part of
the last payroll period preceding the end
of July. If on-the-job training is being
required by special provision, the
contractor will be required to collect and
report training data. The employment
data should reflect the work force on
board during all or any part of the last
payroll period preceding the end of July.

III. NONSEGREGATED

FACILITIES

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This provision is applicable to all Federalaid
construction contracts and to all related
construction subcontracts of $10,000 or more.

The contractor must ensure that facilities
provided for employees are provided in such a
manner that segregation on the basis of race,
color, religion, sex, or national origin cannot
result. The contractor may neither require such
segregated use by written or oral policies nor
tolerate such use by employee custom. The
contractor's obligation extends further to ensure
that its employees are not assigned to perform
their services at any location, under the
contractor's control, where the facilities are
segregated. The term "facilities" includes waiting
rooms, work areas, restaurants and other eating
areas, time clocks, restrooms, washrooms,
locker rooms, and other storage or dressing
areas, parking lots, drinking fountains, recreation
or entertainment areas, transportation, and
housing provided for employees. The contractor
shall provide separate or single-user restrooms
and necessary dressing or sleeping areas to
assure privacy between sexes.

IV. DAVIS-BACON AND RELATED

ACT PROVISIONS
This section is applicable to all Federal-aid
construction projects exceeding $2,000 and to all
related subcontracts and lower-tier subcontracts
(regardless of subcontract size). The
requirements apply to all projects located within
the right-of-way of a roadway that is functionally
classified as Federal-aid highway. This excludes
roadways functionally classified as local roads or
rural minor collectors, which are exempt.

Contracting agencies may elect to apply these
requirements to other projects.

The following provisions are from the U.S.

Department of Labor regulations in 29 CFR 5.5
“Contract provisions and related matters” with
minor revisions to conform to the FHWA-1273
format and FHWA program requirements.

1. Minimum wages
a. All laborers and mechanics
employed or working upon the site of the work,
will be paid unconditionally and not less often
than once a week, and without subsequent
deduction or rebate on any account (except such
payroll deductions as are permitted by
regulations issued by the Secretary of Labor
under the Copeland Act (29 CFR part 3)), the full
amount of wages and bona fide fringe benefits
(or cash equivalents thereof) due at time of
payment computed at rates not less than those
contained in the wage determination of the
Secretary of Labor which is attached hereto and
made a part hereof, regardless of any
contractual relationship which may be alleged to
exist between the contractor and such laborers
and mechanics.

Contributions made or costs reasonably
anticipated for bona fide fringe benefits under
section 1(b)(2) of the Davis-Bacon Act on behalf
of laborers or mechanics are considered wages
paid to such laborers or mechanics, subject to
the provisions of paragraph 1.d. of this section;
also, regular contributions made or costs
incurred for more than a weekly period (but not
less often than quarterly) under plans, funds, or
programs which cover the particular weekly
period, are deemed to be constructively made or
incurred during such weekly period. Such
laborers and mechanics shall be paid the
appropriate wage rate and fringe benefits on the
wage determination for the classification of work
actually performed, without regard to skill, except
as provided in 29 CFR 5.5(a)(4). Laborers or
mechanics performing work in more than one
classification may be compensated at the rate
specified for each classification for the time
actually worked therein: Provided, That the
employer's payroll records accurately set forth
the time spent in each classification in which
work is performed. The wage determination
(including any additional classification and wage
rates conformed under paragraph 1.b. of this
section) and the Davis-Bacon poster (WH–1321)
shall be posted at all times by the contractor and
its subcontractors at the site of the work in a
prominent and accessible place where it can be
easily seen by the workers.
b. (1) The
contracting officer shall require that any class of
laborers or mechanics, including helpers, which

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is not listed in the wage determination and which
is to be employed under the contract shall be
classified in conformance with the wage
determination. The contracting officer shall
approve an additional classification and wage
rate and fringe benefits therefore only when the
following criteria have been met:
(i) The
work to be performed by the classification
requested is not performed by a classification in
the wage determination; and (ii) The
classification is utilized in the area by the
construction industry; and
(iii) The proposed wage rate, including any
bona fide fringe benefits, bears a reasonable
relationship to the wage rates contained in the
wage determination.
(2) If the contractor and the laborers
and mechanics to be employed in the
classification (if known), or their
representatives, and the contracting
officer agree on the classification and
wage rate (including the amount
designated for fringe benefits where
appropriate), a report of the action taken
shall be sent by the contracting officer to
the Administrator of the Wage and Hour
Division, Employment Standards
Administration, U.S. Department of
Labor, Washington, DC 20210. The
Administrator, or an authorized
representative, will approve, modify, or
disapprove every additional classification
action within 30 days of receipt and so
advise the contracting officer or will
notify the contracting officer within the
30-day period that additional time is
necessary.
(3) In the event the contractor, the
laborers or mechanics to be employed in
the classification or their representatives,
and the contracting officer do not agree
on the proposed classification and wage
rate (including the amount designated
for fringe benefits, where appropriate),
the contracting officer shall refer the
questions, including the views of all
interested parties and the
recommendation of the contracting
officer, to the Wage and Hour
Administrator for determination. The
Wage and Hour Administrator, or an
authorized representative, will issue a
determination within 30 days of receipt
and so advise the contracting officer or
will notify the contracting officer within
the 30-day period that additional time is
necessary.
(4) The wage rate (including fringe
benefits where appropriate) determined
pursuant to paragraphs 1.b.(2) or 1.b.(3)
of this section, shall be paid to all
workers performing work in the
classification under this contract from the
first day on which work is performed in
the classification.
c. Whenever the minimum wage rate
prescribed in the contract for a class of laborers
or mechanics includes a fringe benefit which is
not expressed as an hourly rate, the contractor
shall either pay the benefit as stated in the wage
determination or shall pay another bona fide
fringe benefit or an hourly cash equivalent
thereof.
d. If the contractor does not make
payments to a trustee or other third person, the
contractor may consider as part of the wages of
any laborer or mechanic the amount of any costs
reasonably anticipated in providing bona fide
fringe benefits under a plan or program,
Provided, That the Secretary of Labor has found,
upon the written request of the contractor, that
the applicable standards of the Davis-Bacon Act
have been met. The Secretary of Labor may
require the contractor to set aside in a separate
account assets for the meeting of obligations
under the plan or program.

2. Withholding
The contracting agency shall upon its own action
or upon written request of an authorized
representative of the Department of Labor,
withhold or cause to be withheld from the
contractor under this contract, or any other
Federal contract with the same prime contractor,
or any other federallyassisted contract subject to
Davis-Bacon prevailing wage requirements,
which is held by the same prime contractor, so

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much of the accrued payments or advances as
may be considered necessary to pay laborers
and mechanics, including apprentices, trainees,
and helpers, employed by the contractor or any
subcontractor the full amount of wages required
by the contract. In the event of failure to pay any
laborer or mechanic, including any apprentice,
trainee, or helper, employed or working on the
site of the work, all or part of the wages required
by the contract, the contracting agency may,
after written notice to the contractor, take such
action as may be necessary to cause the
suspension of any further payment, advance, or
guarantee of funds until such violations have
ceased.

3. Payrolls and basic records
a. Payrolls and basic records
relating thereto shall be maintained by the
contractor during the course of the work and
preserved for a period of three years
thereafter for all laborers
and mechanics working at the site of the
work. Such records shall contain the name,
address, and social security number of each
such worker, his or her correct classification,
hourly rates of wages paid (including rates of
contributions or costs anticipated for bona fide
fringe benefits or cash equivalents thereof of the
types described in section 1(b)(2)(B) of the
Davis-Bacon Act), daily and weekly number of
hours worked, deductions made and actual
wages paid. Whenever the Secretary of Labor
has found under 29 CFR 5.5(a)(1)(iv) that the
wages of any laborer or mechanic include the
amount of any costs reasonably anticipated in
providing benefits under a plan or program
described in section 1(b)(2)(B) of the
DavisBacon Act, the contractor shall maintain
records which show that the commitment to
provide such benefits is enforceable, that the
plan or program is financially responsible, and
that the plan or program has been
communicated in writing to the laborers or
mechanics affected, and records which show the
costs anticipated or the actual cost incurred in
providing such benefits. Contractors employing
apprentices or trainees under approved
programs shall maintain written evidence of the
registration of apprenticeship programs and
certification of trainee programs, the registration
of the apprentices and trainees, and the ratios
and wage rates prescribed in the applicable
programs.
b. (1) The contractor shall submit
weekly for each week in which any contract work
is performed a copy of all payrolls to the
contracting agency. The payrolls submitted
shall set out accurately and completely all of the
information required to be maintained under 29
CFR 5.5(a)(3)(i), except that full social security
numbers and home addresses shall not be
included on weekly transmittals. Instead the
payrolls shall only need to include an individually
identifying number for each employee ( e.g. , the
last four digits of the employee's social security
number). The required weekly payroll information
may be submitted in any form desired. Optional
Form WH–347 is available for this purpose from
the Wage and Hour Division Web site
at
http://www.dol.gov/esa/whd/forms/wh347in
str.htm or its successor site. The prime
contractor is responsible for the submission of
copies of payrolls by all subcontractors.

Contractors and subcontractors shall maintain
the full social security number and current
address of each covered worker, and shall
provide them upon request to the contracting
agency for transmission to the State DOT, the
FHWA or the Wage and Hour Division of the
Department of Labor for purposes of an
investigation or audit of compliance with
prevailing wage requirements. It is not a violation
of this section for a prime contractor to require a
subcontractor to provide addresses and social
security numbers to the prime contractor for its
own records, without weekly submission to the
contracting agency.
(2) Each payroll submitted shall
be accompanied by a “Statement of
Compliance,” signed by the contractor or
subcontractor or his or her agent who
pays or supervises the payment of the
persons employed under the contract
and shall certify the following:
(i) That

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the payroll for the payroll period contains the
information required to be provided under §5.5
(a)(3)(ii) of Regulations, 29 CFR part 5, the
appropriate information is being maintained
under §5.5 (a)(3)(i) of Regulations, 29 CFR part
5, and that such information is correct and
complete;
(ii) That
each laborer or mechanic (including each helper,
apprentice, and trainee) employed on the
contract during the payroll period has been paid
the full weekly wages earned, without rebate,
either directly or indirectly, and that no
deductions have been made either directly or
indirectly from the full wages earned, other than
permissible deductions as set forth in
Regulations, 29
CFR part 3;
(iii) That
each laborer or mechanic has been paid not less
than the applicable wage rates and fringe
benefits or cash equivalents for the classification
of work performed, as specified in the applicable
wage determination incorporated into the
contract.
(3) The weekly submission
of a properly
executed certification set forth
on the reverse side of Optional Form
WH–347 shall satisfy the requirement for
submission of the “Statement of
Compliance” required by paragraph

3.b.(2) of this section.
(4) The
falsification of any of the above certifications may
subject the contractor or subcontractor to civil or
criminal prosecution under section 1001 of title
18 and section 231 of title 31 of the United
States Code.
c. The contractor or subcontractor
shall make the records required
under paragraph 3.a. of this section available
for inspection, copying,
or transcription by authorized
representatives of the contracting agency, the
State DOT, the FHWA, or the Department of
Labor, and shall permit such representatives to
interview employees during working hours on the
job. If the contractor or subcontractor fails to
submit the required records or to make them
available, the FHWA may, after written notice
to the contractor, the
contracting agency or the State DOT, take such
action as may be necessary to cause the
suspension of any further payment, advance, or
guarantee of funds. Furthermore, failure to
submit the required records upon request or to
make such records available may be grounds for
debarment action pursuant to 29 CFR 5.12.

4. Apprentices and trainees
a. Apprentices
(programs of the USDOL).

Apprentices will be permitted to work at less than
the predetermined rate for the work they
performed when they are employed pursuant to
and individually registered in a bona fide
apprenticeship program registered with the U.S.

Department of Labor, Employment and Training
Administration, Office of Apprenticeship
Training,
Employer and Labor Services, or with a State
Apprenticeship Agency recognized by the Office,
or if a person is employed in his or her first 90
days of probationary employment as an
apprentice in such an apprenticeship program,
who is not individually registered in the program,
but who has been certified by the Office of
Apprenticeship Training, Employer and
Labor Services or a State Apprenticeship Agency
(where appropriate) to be eligible for
probationary employment as an apprentice.

The allowable ratio of apprentices to journeymen
on the job site in any craft classification shall not
be greater than the ratio permitted to the
contractor as to the entire work force under the
registered program. Any worker listed on a
payroll at an apprentice wage rate, who is not
registered or otherwise employed as stated

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above, shall be paid not less than the applicable
wage rate on the wage determination for the
classification of work actually performed. In
addition, any apprentice performing work on the
job site in excess of the ratio permitted under the
registered program shall be paid not less than
the applicable wage rate on the wage
determination for the work actually performed.

Where a contractor is performing construction on
a project in a locality other than that in which its
program is registered, the ratios and wage rates
(expressed in percentages of the journeyman's
hourly rate) specified in the contractor's or
subcontractor's registered program shall be
observed.

Every apprentice must be paid at not less than
the rate specified in the registered program for
the apprentice's level of progress, expressed as
a percentage of the journeymen hourly rate
specified in the applicable wage determination.

Apprentices shall be paid fringe benefits in
accordance with the provisions of the
apprenticeship program. If the apprenticeship
program does not specify fringe benefits,
apprentices must be paid the full amount of
fringe benefits listed on the wage determination
for the applicable classification. If the
Administrator determines that a different practice
prevails for the applicable apprentice
classification, fringes shall be paid in accordance
with that determination.

In the event the Office of Apprenticeship
Training, Employer and Labor Services, or a
State Apprenticeship Agency recognized by the
Office, withdraws approval of an apprenticeship
program, the contractor will no longer be
permitted to utilize apprentices at less than the
applicable predetermined rate for the work
performed until an acceptable program is
approved.
b. Trainees (programs of
the USDOL).

Except as provided in 29 CFR 5.16, trainees will
not be permitted to work at less than the
predetermined rate for the work performed
unless they are employed pursuant to and
individually registered in a program which has
received prior approval, evidenced by formal
certification by the U.S. Department of Labor,
Employment and Training
Administration.

The ratio of trainees to journeymen on the job
site shall not be greater than permitted under the
plan approved by the Employment and Training
Administration.

Every trainee must be paid at not less than the
rate specified in the approved program for the
trainee's level of progress, expressed as a
percentage of the journeyman hourly rate
specified in the applicable wage determination.

Trainees shall be paid fringe benefits in
accordance with the provisions of the trainee
program. If the trainee program does not
mention fringe benefits, trainees shall be paid
the full amount of fringe benefits listed on the
wage determination unless the Administrator of
the Wage and Hour Division determines that
there is an apprenticeship program associated
with the corresponding journeyman wage rate on
the wage determination which provides for less
than full fringe benefits for apprentices. Any
employee listed on the payroll at a trainee rate
who is not registered and participating in a
training plan approved by the Employment and
Training Administration shall be paid not less
than the applicable wage rate on the wage
determination for the classification of work
actually performed. In addition, any trainee
performing work on the job site in excess of the
ratio permitted under the registered program
shall be paid not less than the applicable wage
rate on the wage determination for the work
actually performed.

In the event the Employment and Training
Administration withdraws approval of a training
program, the contractor will no longer be
permitted to utilize trainees at less than the
applicable predetermined rate for the work
performed until an acceptable program is
approved.
c. Equal employment opportunity. The
utilization of apprentices, trainees and
journeymen under this part shall be in conformity

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with the equal employment opportunity
requirements of Executive Order
11246, as amended, and 29 CFR part 30.
d. Apprentices and
Trainees (programs of the U.S. DOT).

Apprentices and trainees working under
apprenticeship and skill training programs which
have been certified by the Secretary of
Transportation as promoting EEO in connection
with Federal-aid highway construction programs
are not subject to the requirements of paragraph
4 of this Section IV. The straight time hourly
wage rates for apprentices and trainees under
such programs will be established by the
particular programs. The ratio of apprentices and
trainees to journeymen shall not be greater than
permitted by the terms of the particular program.

5. Compliance with Copeland Act
requirements. The contractor shall comply with
the requirements of 29 CFR part 3, which are
incorporated by reference in this contract.

6. Subcontracts. The contractor or
subcontractor shall insert Form FHWA1273 in
any subcontracts and also require the
subcontractors to include Form FHWA1273 in
any lower tier subcontracts. The prime contractor
shall be responsible for the compliance by any
subcontractor or lower tier subcontractor with all
the contract clauses in 29 CFR 5.5.

7. Contract termination: debarment. A
breach of the contract clauses in 29 CFR 5.5
may be grounds for termination of the
contract, and for debarment
as a contractor and
a subcontractor as provided in 29 CFR

5.12. 8. Compliance with Davis-Bacon and
Related Act requirements. All rulings and
interpretations of the DavisBacon and Related
Acts contained in 29 CFR parts 1, 3, and 5 are
herein incorporated by reference in this contract.

9. Disputes concerning labor standards.

Disputes arising out of the labor standards
provisions of this contract shall not be
subject to the general disputes clause of this
contract. Such disputes shall be resolved in
accordance with the procedures of the
Department of Labor set forth in 29 CFR
parts 5, 6, and 7. Disputes within the
meaning of this clause include disputes
between the contractor (or any of its
subcontractors) and the contracting agency,
the U.S. Department of Labor, or the
employees or their representatives.

10. Certification of eligibility.
a. By entering into this contract,
the contractor certifies that neither it
(nor he or she) nor any person or
firm who has an interest in the
contractor's firm is a person or firm
ineligible to be awarded Government
contracts by virtue of section
3(a) of the Davis-Bacon Act or 29 CFR

5.12(a)(1).
b. No part of this
contract shall be subcontracted to
any person or firm ineligible for
award of a Government contract by
virtue of section 3(a) of the DavisBacon Act or 29 CFR 5.12(a)(1). c. The penalty for making false
statements is prescribed in the U.S.

Criminal Code, 18 U.S.C. 1001.

V. CONTRACT WORK HOURS AND

SAFETY STANDARDS
ACT
The following clauses apply to any Federalaid
construction contract in an amount in excess of
$100,000 and subject to the overtime provisions
of the Contract Work Hours and Safety
Standards Act. These clauses shall be inserted
in addition to the clauses required by 29 CFR

5.5(a) or 29 CFR 4.6. As used in this paragraph,
the terms laborers and mechanics include
watchmen and guards.

1. Overtime requirements. No contractor
or subcontractor contracting for any part of the
contract work which may require or involve the
employment of laborers or mechanics shall
require or permit any such laborer or mechanic
in any workweek in which he or she is employed

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on such work to work in excess of forty hours in
such workweek unless such laborer or mechanic
receives compensation at a rate not less than
one and one-half times the basic rate of pay for
all hours worked in excess of forty hours in such
workweek.

2. Violation; liability for unpaid wages;
liquidated damages. In the event of any violation
of the clause set forth in paragraph (1.) of this
section, the contractor and any subcontractor
responsible therefor shall be liable for the unpaid
wages. In addition, such contractor and
subcontractor shall be liable to the United States
(in the case of work done under contract for the
District of Columbia or a territory, to such District
or to such territory), for liquidated damages.

Such liquidated damages shall be computed with
respect to each individual laborer or mechanic,
including watchmen and guards, employed in
violation of the clause set forth in paragraph (1.)
of this section, in the sum of $10 for each
calendar day on which such individual was
required or permitted to work in excess of the
standard workweek of forty hours without
payment of the overtime wages required by the
clause set forth in paragraph (1.) of this section.

3. Withholding for unpaid wages and
liquidated damages. The FHWA or the
contacting agency shall upon its own action or
upon written request of an authorized
representative of the Department of Labor
withhold or cause to be withheld, from any
moneys payable on account of work performed
by the contractor or subcontractor under any
such contract or any other Federal contract with
the same prime contractor, or any other
federally-assisted contract subject to the
Contract Work Hours and Safety Standards Act,
which is held by the same prime contractor, such
sums as may be determined to be necessary to
satisfy any liabilities of such contractor or
subcontractor for unpaid wages and liquidated
damages as provided in the clause set forth in
paragraph (2.) of this section.

4. Subcontracts. The contractor or
subcontractor shall insert in any subcontracts the
clauses set forth in paragraph (1.) through (4.) of
this section and also a clause requiring the
subcontractors to include these clauses in any
lower tier subcontracts. The prime contractor
shall be responsible for compliance by any
subcontractor or lower tier subcontractor with the
clauses set forth in paragraphs (1.) through (4.)
of this section.

VI. SUBLETTING OR ASSIGNING

THE CONTRACT
This provision is applicable to all Federal aid
construction contracts on the National Highway
System.

1. The contractor shall perform with its own
organization contract work amounting to not less
than 30 percent (or a greater percentage if
specified elsewhere in the contract) of the total
original contract price, excluding any specialty
items designated by the contracting agency.

Specialty items may be performed by
subcontract and the amount of any such
specialty items performed may be deducted from
the total original contract price before computing
the amount of work required to be performed by
the contractor's own organization (23 CFR
635.116).
a. The term “perform work with its
own organization” refers to workers
employed or leased by the prime
contractor, and equipment owned or
rented by the prime contractor, with or
without operators. Such term does not
include employees or equipment of a
subcontractor or lower tier
subcontractor, agents of the prime
contractor, or any other assignees. The
term may include payments for the costs
of hiring leased employees from an
employee leasing firm meeting all
relevant Federal and State regulatory
requirements. Leased employees may
only be included in this term if the prime
contractor meets all of the following
conditions:
(1) the prime contractor
maintains control
over the supervision
of the day-to-day activities of the
leased employees;
(2) the prime contractor
remains responsible for the
quality of the work of the leased
employees;

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(3) the prime
contractor retains all power to accept or exclude
individual employees from work on the project;
and
(4) the prime
contractor remains ultimately responsible for the
payment of predetermined minimum wages, the
submission of payrolls, statements of compliance
and all other Federal regulatory requirements.
b. "Specialty Items" shall be
construed to be limited to work that
requires highly specialized
knowledge, abilities, or
equipment not
ordinarily available in
the type of
contracting organizations
qualified and expected to bid or propose
on the contract as a whole and in
general are to be
limited to minor
components of the overall contract.

2. The contract amount upon which the
requirements set forth in paragraph (1) of
Section VI is computed includes the cost of
material and manufactured products which are to
be purchased or produced by the contractor
under the contract provisions.

3. The contractor shall furnish (a) a
competent superintendent or supervisor who is
employed by the firm, has full authority to direct
performance of the work in accordance with the
contract requirements, and is in charge of all
construction operations (regardless of who
performs the work) and (b) such other of its own
organizational resources (supervision,
management, and engineering services) as the
contracting officer determines is necessary to
assure the performance of the contract.

4. No portion of the contract shall be
sublet, assigned or otherwise disposed of except
with the written consent of the contracting officer,
or authorized representative, and such consent
when given shall not be construed to relieve the
contractor of any responsibility for the fulfillment
of the contract. Written consent will be given
only after the contracting agency has assured
that each subcontract is evidenced in writing and
that it contains all pertinent provisions and
requirements of the prime contract.

5. The 30% self-performance requirement
of paragraph (1) is
not applicable to design-build
contracts; however, contracting agencies
may establish their own self-performance
requirements.

VII. SAFETY: ACCIDENT

PREVENTION
This provision is applicable to all Federal aid
construction contracts and to all related
subcontracts.

1. In the performance of this contract the
contractor shall comply with all applicable
Federal, State, and local laws governing safety,
health, and sanitation (23 CFR 635). The
contractor shall provide all safeguards, safety
devices and protective equipment and take any
other needed actions as it determines, or as the
contracting officer may determine, to be
reasonably necessary to protect the life and
health of employees on the job and the safety of
the public and to protect property in connection
with the performance of the work covered by the
contract.

2. It is a condition of this contract, and shall
be made a condition of each subcontract, which
the contractor enters into pursuant to this
contract, that the contractor and any
subcontractor shall not permit any employee, in
performance of the contract, to work in
surroundings or under conditions which are
unsanitary, hazardous or dangerous to his/her
health or safety, as determined under
construction safety and health standards (29
CFR 1926) promulgated by the Secretary of
Labor, in accordance with Section 107 of the
Contract Work Hours and Safety Standards Act
(40 U.S.C. 3704).

3. Pursuant to 29 CFR 1926.3, it is a
condition of this contract that the Secretary of
Labor or authorized representative thereof, shall
have right of entry to any site of contract
performance to inspect or investigate the matter
of compliance with the construction safety and

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Neighborhood Safety Project
health standards and to carry out the duties of
the Secretary under Section 107 of the Contract
Work Hours and Safety Standards Act (40
U.S.C.3704).

VIII. FALSE STATEMENTS

CONCERNING HIGHWAY

PROJECTS
This provision is applicable to all Federal aid
construction contracts and to all related
subcontracts.

In order to assure high quality and durable
construction in conformity with approved plans
and specifications and a high degree of reliability
on statements and representations made by
engineers, contractors, suppliers, and workers
on Federal-aid highway projects, it is essential
that all persons concerned with the project
perform their functions as carefully, thoroughly,
and honestly as possible. Willful falsification,
distortion, or misrepresentation with respect to
any facts related to the project is a violation of
Federal law. To prevent any misunderstanding
regarding the seriousness of these and similar
acts, Form FHWA-1022 shall be posted on each
Federal-aid highway project (23 CFR 635) in one
or more places where it is readily available to all
persons concerned with the project:
18 U.S.C. 1020 reads as follows:
"Whoever, being an officer, agent, or employee
of the United States, or of any State or Territory,
or whoever, whether a person, association, firm,
or corporation, knowingly makes any false
statement, false representation, or false report
as to the character, quality, quantity, or cost of
the material used or to be used, or the quantity
or quality of the work performed or to be
performed, or the cost thereof in connection with
the submission of plans, maps, specifications,
contracts, or costs of construction on any
highway or related project submitted for approval
to the
Secretary of Transportation; or
Whoever knowingly makes any false statement,
false representation, false report or false claim
with respect to the character, quality, quantity, or
cost of any work performed or to be performed,
or materials furnished or to be furnished, in
connection with the construction of any highway
or related project approved by the Secretary of
Transportation; or
Whoever knowingly makes any false statement
or false representation as to material fact in any
statement, certificate, or report submitted
pursuant to provisions of the Federal-aid Roads
Act approved July 1, 1916, (39 Stat. 355), as
amended and supplemented;
Shall be fined under this title or imprisoned not
more than 5 years or both.”
IX. IMPLEMENTATION OF CLEAN

AIR ACT AND FEDERAL

WATER POLLUTION CONTROL ACT
This provision is applicable to all Federal aid
construction contracts and to all related
subcontracts.

By submission of this bid/proposal or the
execution of this contract, or subcontract, as
appropriate, the bidder, proposer, Federal aid
construction contractor, or subcontractor, as
appropriate, will be deemed to have stipulated as
follows:

1. That any person who is or will be utilized
in the performance of this contract is not
prohibited from receiving an award due to a
violation of Section 508 of the Clean Water Act
or Section 306 of the Clean Air Act.

2. That the contractor agrees to include or
cause to be included the requirements of
paragraph (1) of this Section X in every
subcontract, and further agrees to take such
action as the contracting agency may direct as a
means of enforcing such requirements.

X. CERTIFICATION REGARDING

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DEBARMENT, SUSPENSION,

INELIGIBILITY AND

VOLUNTARY EXCLUSION
This provision is applicable to all Federalaid
construction contracts, design-build contracts,
subcontracts, lower-tier subcontracts, purchase
orders, lease agreements, consultant contracts
or any other covered transaction requiring FHWA
approval or that is estimated to cost $25,000 or
more – as defined in 2 CFR Parts 180 and
1200.

1. Instructions for Certification – First Tier
Participants:
a. By signing and submitting this
proposal, the prospective first tier
participant is providing
the certification set out below.
b. The inability of a person to provide the
certification set out below will not necessarily
result in denial of participation in this covered
transaction. The prospective first tier participant
shall submit an explanation of why it cannot
provide the certification set out below. The
certification or explanation will be considered in
connection with the department or agency's
determination whether to enter into this
transaction. However, failure of
the prospective first tier participant to
furnish a certification or an
explanation shall disqualify such a
person from participation in this transaction.
c. The certification in this clause is a
material representation of fact upon which
reliance was placed when the contracting
agency determined to enter into this transaction.

If it is later determined that the prospective
participant knowingly rendered an erroneous
certification, in addition to other remedies
available to the Federal Government, the
contracting agency may terminate this
transaction for cause of default.
d. The prospective first tier participant shall
provide immediate written notice to the
contracting agency to whom this proposal is
submitted if any time the prospective first tier
participant learns that its certification was
erroneous when submitted or has become
erroneous by reason of changed circumstances.
e. The terms "covered transaction,"
"debarred," "suspended,"
"ineligible," "participant," "person,"
"principal," and "voluntarily excluded," as used in
this clause, are defined in 2 CFR Parts 180 and
1200. “First Tier Covered Transactions”
refers to any covered
transaction between a grantee or subgrantee of
Federal funds and a participant (such as the
prime or general contract). “Lower Tier Covered
Transactions” refers to any covered transaction
under a First Tier Covered Transaction (such as
subcontracts). “First Tier Participant” refers to
the participant who has entered into a covered
transaction with a grantee or subgrantee of
Federal funds (such as the prime or general
contractor). “Lower Tier Participant” refers any
participant who has entered into a covered
transaction with a First Tier Participant or other
Lower Tier Participants (such as subcontractors
and suppliers).
f. The prospective first tier participant
agrees by submitting this proposal that, should
the proposed covered transaction be entered
into, it shall not knowingly enter into any lower
tier covered transaction with a person who is
debarred, suspended, declared ineligible, or
voluntarily excluded from participation in this
covered transaction, unless authorized by the
department or agency entering into this
transaction.
g. The prospective first tier participant
further agrees by submitting this proposal that it
will include the clause titled "Certification
Regarding Debarment, Suspension, Ineligibility
and Voluntary
Exclusion-Lower Tier Covered
Transactions," provided by the department or
contracting agency, entering into this covered
transaction, without modification, in all lower tier
covered transactions and in all solicitations for
lower tier covered transactions exceeding the
$25,000 threshold.
h. A participant in a covered transaction
may rely upon a certification of a prospective
participant in a lower tier covered transaction

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that is not debarred, suspended,
ineligible, or voluntarily excluded
from the covered transaction, unless it knows
that the certification is erroneous. A participant
is responsible for ensuring that its principals are
not suspended, debarred, or otherwise ineligible
to participate in covered
transactions. To verify the eligibility of its
principals, as well as the eligibility of any lower
tier prospective participants, each participant
may, but is not required to, check the Excluded
Parties List System website
(https://www.epls.gov/), which is compiled by the
General Services Administration.
i. Nothing contained in the foregoing shall
be construed to require the establishment of a
system of records in order to render in good faith
the certification required by this clause. The
knowledge and information of the prospective
participant is not required to exceed that which is
normally possessed by a prudent person in the
ordinary course of business dealings.
j. Except for transactions authorized
under paragraph (f) of these instructions, if a
participant in a covered transaction knowingly
enters into a lower tier covered transaction with a
person who is suspended, debarred, ineligible,
or voluntarily excluded from participation in this
transaction, in addition
to other remedies available
to the Federal Government,
the department or agency may terminate this
transaction for cause or default.
* * * * *

2. Certification Regarding Debarment,
Suspension, Ineligibility and Voluntary Exclusion
– First Tier
Participants:
a. The prospective first tier participant
certifies to the best of its knowledge and belief,
that it and its principals:
(1) Are not
presently debarred, suspended, proposed for
debarment, declared ineligible, or voluntarily
excluded from participating in covered
transactions by any Federal department or
agency;
(2) Have not within a three-year
period preceding this proposal been
convicted of or had a civil judgment
rendered against them
for commission of fraud or a
criminal offense in connection with
obtaining, attempting to obtain, or
performing a public (Federal, State or
local) transaction or contract under a
public transaction; violation of Federal or
State antitrust statutes or commission of
embezzlement, theft, forgery,
bribery, falsification or
destruction of records, making false
statements, or receiving stolen property;
(3) Are not presently indicted
for or otherwise
criminally or civilly charged
by a governmental entity
(Federal, State or local) with commission
of any of the offenses enumerated in
paragraph (a)(2) of this certification; and
(4) Have not within a three-year
period preceding this
application/proposal had one or more
public transactions (Federal,
State or local)
terminated for cause or default.
b. Where the prospective participant is
unable to certify to any of the statements
in this certification, such
prospective participant shall attach an
explanation to this proposal.

3. Instructions for Certification - Lower Tier
Participants:
(Applicable to all subcontracts, purchase orders
and other lower tier transactions requiring prior
FHWA approval or estimated to cost $25,000 or
more - 2 CFR Parts 180 and 1200)
a. By signing and submitting this
proposal, the prospective lower tier is providing
the certification set out below.
b. The certification in this clause is a
material representation of fact upon which
reliance was placed when this transaction was

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entered into. If it is later determined that the
prospective lower tier participant knowingly
rendered an erroneous certification, in addition to
other remedies available to the Federal
Government, the department, or agency with
which this transaction originated may pursue
available remedies, including
suspension and/or debarment.
c. The prospective lower tier participant
shall provide immediate written notice to the
person to which this proposal is submitted if at
any time the prospective lower tier participant
learns that its certification was erroneous by
reason of changed circumstances.
d. The terms "covered transaction,"
"debarred," "suspended,"
"ineligible," "participant," "person,"
"principal," and "voluntarily excluded," as used in
this clause, are defined in 2 CFR Parts 180 and
1200. You may contact the person to which this
proposal is submitted for assistance in obtaining
a copy of those regulations. “First
Tier Covered Transactions” refers
to any covered transaction
between a grantee or subgrantee of Federal
funds and a participant (such as the prime or
general contract). “Lower Tier Covered
Transactions” refers to any covered transaction
under a First Tier Covered Transaction (such as
subcontracts). “First Tier Participant” refers to
the participant who has entered into a covered
transaction with a grantee or subgrantee of
Federal funds (such as the prime or general
contractor). “Lower Tier Participant” refers any
participant who has entered into a covered
transaction with a First Tier Participant or other
Lower Tier Participants (such as subcontractors
and suppliers).
e. The prospective lower tier participant
agrees by submitting this proposal that, should
the proposed covered transaction be entered
into, it shall not knowingly enter into any lower
tier covered transaction with a person who is
debarred, suspended, declared
ineligible, or voluntarily excluded
from participation in this covered transaction,
unless authorized by the department or agency
with which this transaction originated.
f. The prospective lower tier participant
further agrees by submitting this proposal that it
will include this clause titled "Certification
Regarding Debarment, Suspension, Ineligibility
and Voluntary
Exclusion-Lower Tier Covered
Transaction," without modification, in all lower
tier covered transactions and in all solicitations
for lower tier covered transactions exceeding the
$25,000 threshold.
g. A participant in a covered transaction
may rely upon a certification of a prospective
participant in a lower tier covered transaction
that is not debarred, suspended,
ineligible, or voluntarily excluded
from the covered transaction, unless it knows
that the certification is erroneous. A participant is
responsible for ensuring that its principals are
not suspended, debarred, or otherwise ineligible
to participate in covered
transactions. To verify the eligibility of its
principals, as well as the eligibility of any lower
tier prospective participants, each participant
may, but is not required to, check the Excluded
Parties List System website
(https://www.epls.gov/), which is compiled by the
General Services Administration.
h. Nothing contained in the foregoing shall
be construed to require establishment of a
system of records in order to render in good faith
the certification required by this clause. The
knowledge and information of participant is not
required to exceed that which is normally
possessed by a prudent person in the ordinary
course of business dealings.
i. Except for transactions authorized
under paragraph e of these instructions, if a
participant in a covered transaction knowingly
enters into a lower tier covered transaction with a
person who is suspended, debarred, ineligible,
or voluntarily excluded from participation in this
transaction, in addition to other remedies
available to the Federal Government, the
department or agency with which this transaction
originated may pursue available remedies,
including suspension and/or debarment.
* * * * *

CERTIFICATION REGARDING

DEBARMENT, SUSPENSION,

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INELIGIBILITY AND VOLUNTARY

EXCLUSION--LOWER TIER
PARTICIPANTS:

1. The prospective lower tier participant
certifies, by submission of this proposal, that
neither it nor its principals is presently debarred,
suspended, proposed for debarment, declared
ineligible, or voluntarily excluded from
participating in covered transactions by any
Federal department or agency.

2. Where the prospective lower tier
participant is unable to certify to any of the
statements in this certification, such prospective
participant shall attach an explanation to this
proposal.
* * * * *
XI. CERTIFICATION REGARDING

USE OF CONTRACT FUNDS

FOR LOBBYING
This provision is applicable to all Federal aid
construction contracts and to all related
subcontracts which exceed $100,000 (49 CFR
20).

1. The prospective participant certifies, by
signing and submitting this bid or proposal, to the
best of his or her knowledge and belief, that:
a. No Federal appropriated
funds have been paid or will be paid, by
or on behalf of the undersigned, to any
person for influencing or attempting to
influence an officer or employee of any
Federal agency, a Member of Congress,
an officer or employee of Congress, or
an employee of a Member of Congress
in connection with the awarding of any
Federal contract, the making of any
Federal grant, the making of any Federal
loan, the entering into of any cooperative
agreement, and the extension,
continuation, renewal,
amendment, or modification of any
Federal contract, grant, loan,
or cooperative agreement.
b. If any funds other than Federal
appropriated funds have been paid or
will be paid to any person for influencing
or attempting to influence an officer or
employee of any Federal agency, a
Member of Congress, an officer or employee of
Congress, or an employee of a Member of
Congress in connection with this Federal
contract, grant, loan, or cooperative agreement,
the undersigned shall complete and submit
Standard Form-LLL, "Disclosure Form to Report
Lobbying," in accordance with its instructions.

2. This certification is a material
representation of fact upon which reliance was
placed when this transaction was made or
entered into. Submission of this certification is a
prerequisite for making or entering into this
transaction imposed by 31 U.S.C. 1352. Any
person who fails to file the required certification
shall be subject to a civil penalty of not less than
$10,000 and not more than $100,000 for each
such failure.

3. The prospective participant also agrees
by submitting its bid or proposal that the
participant shall require that the language of this
certification be included in all lower tier
subcontracts, which exceed $100,000 and that
all such recipients shall certify and disclose
accordingly.

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11. USE OF UNITED STATES-FLAG VESSELS:

The CONTRACTOR agrees:
a. To utilize privately owned United States-flag commercial vessels to ship at least 50 percent of the gross tonnage (computed separately for dry bulk carries, dry cargo liners, and tankers) involved, whenever shipping any equipment, material, or commodities pursuant to this contract, to the extent such vessels are available at fair and reasonable rates for United States-flag commercial vessels. b. To Furnish within 20 days following the date of loading for shipments originating within the United State or within 30 working days following the date of loading for shipments originating outside the United States, a legible copy of a rated “onboard” commercial ocean bill-of-lading in English for each shipment of cargo described in paragraph (1) of this section to both the Contracting Officer (through the prime contractor in the case of subcontractor bills-of-lading) and to the Division of National Cargo, Office of Market Development, Maritime Administration, Washington, DC 20590. c. To insert the substance of the provisions of this clause in all subcontracts issued pursuant to this contract.

12. FEMALE AND MINORITY GOALS
To comply with comply with Section II, “Nondiscrimination,” of “Required Contract Provisions Federal-Aid Construction Contracts,” the following are goals for female and minority utilization goals for Federal-aid construction contracts and subcontracts that exceed $10,000:
a. The nationwide goal for female utilization is 6.9% percent. b. The goal for minority utilization is 19.0 percent.

For the last full week July during which work is performed under the contract, you and each non-materialsupplier subcontractor with a subcontract of $10,000 or more must complete Form FHWA PR-1391 (Appendix C to 23 CFR 230). Submit the forms by August 15.

13. FEDERAL TRAINEE PROGRAM
For the Federal training program, the number of trainees or apprentices is 0.

This section applies if a number of trainees or apprentices are specified in the special provisions.

As part of your equal opportunity affirmative action program, provide on-the-job training to develop full journeymen in the types of trades or job classifications involved.

You have primary responsibility for meeting this training requirement.

If you subcontract a contract part, determine how many trainees or apprentices are to be trained by the subcontractor.

Include these training requirements in your subcontract.

Where feasible, 25 percent of apprentices or trainees in each occupation must be in their 1st year of apprenticeship or training.

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Distribute the number of apprentices or trainees among the work classifications on the basis of your needs and the availability of journeymen in the various classifications within a reasonable recruitment area.

Before starting work, submit to the City of Twentynine Palms:
c. Number of apprentices or trainees to be trained for each classification d. Training program to be used
e. Training starting date for each classification
Obtain the City of Twentynine Palms’ approval for this submitted information before you start work. The City of Twentynine Palms credits you for each apprentice or trainee you employ on the work who is currently enrolled or becomes enrolled in an approved program.

The primary objective of this section is to train and upgrade minorities and women toward journeymen status. Make every effort to enroll minority and women apprentices or trainees, such as conducting systematic and direct recruitment through public and private sources likely to yield minority and women apprentices or trainees; to the extent they are available within a reasonable recruitment area. Show that you have made the efforts. In making these efforts, do not discriminate against any applicant for training.

Do not employ as an apprentice or trainee an employee:
a. In any classification in which the employee has successfully completed a training course leading to journeyman status or in which the employee has been employed as a journeyman
b. Who is not registered in a program approved by the US Department of Labor, Bureau of Apprenticeship and Training
Ask the employee if the employee has successfully completed a training course leading to journeyman status or has been employed as a journeyman. Your records must show the employee’s answers to the questions.

In your training program, establish the minimum length and training type for each classification. The City of Twentynine Palms and the FHWA approves a program if one of the following is met:
a. It is calculated to:
(1) Meet your equal employment opportunity responsibilities (2) Qualify the average apprentice or trainee for journeyman status in
the classification involved by the end of the training period b. It is registered with the U.S. Department of Labor, Bureau of Apprenticeship and Training, and it is administered in a way consistent with the equal employment responsibilities of Federalaid highway construction contracts Obtain the State’s approval for your training program before you start work involving the classification covered by the program.

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Provide training in the construction crafts, not in clerk-typist or secretarial-type positions. Training is allowed in lower level management positions such as office engineers, estimators, and timekeepers if the training is oriented toward construction applications. Training is allowed in the laborer classification if significant and meaningful training is provided and approved by the division office. Off-site training is allowed if the training is an integral part of an approved training program and does not make up a significant part of the overall training.

The City reimburses you 80 cents per hour of training given an employee on this contract under an approved training program:
a. For on-site training
b. For off-site training if the apprentice or trainee is currently employed on a Federal-aid project and you do at least one of the following:
(1) Contribute to the cost of the training
(2) Provide the instruction to the apprentice or trainee (3) Pay the apprentice’s or trainee’s wages during the off-site training period
a. If you comply this section.

Each apprentice or trainee must:
a. Begin training on the project as soon as feasible after the start of work involving the apprentice’s or trainee’s skill
b. Remain on the project as long as training opportunities exist in the apprentice’s or trainee’s work classification or until the apprentice or trainee has completed the training program
Furnish the apprentice or trainee:
a. Copy of the program you will comply with in providing the training Certification showing the type and length of training satisfactorily completed b. Certification showing the type and length of training satisfactorily completed

14. TITLE VI ASSURANCES
During the performance of this Agreement, the contractor, for itself, its assignees and successors in interest (hereinafter collectively referred to as CONTRACTOR) agrees as follows:
c. Compliance with Regulations: CONTRACTOR shall comply with the regulations relative to nondiscrimination in federally assisted programs of the Department of Transportation, Title 49, Code of Federal Regulations, Part 21, as they may be amended from time to time, (hereinafter referred to as the REGULATIONS), which are herein incorporated by reference and made a part of this agreement.
d. Nondiscrimination: CONTRACTOR, with regard to the work performed

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by it during the AGREEMENT, shall not discriminate on the grounds of race, color, sex, national origin, religion, age, or disability in the selection and retention of sub-applicants, including procurements of materials and leases of equipment. CONTRACTOR shall not participate either directly or indirectly in the discrimination prohibited by Section 21.5 of the Regulations, including employment practices when the agreement covers a program set forth in Appendix B of the Regulations. e. Solicitations for Sub-agreements, Including Procurements of Materials and Equipment: In all solicitations either by competitive bidding or negotiation made by CONTRACTOR for work to be performed under a Sub-agreement, including procurements of materials or leases of equipment, each potential sub-applicant or supplier shall be notified by CONTRACTOR of the CONTRACTOR’S obligations under this Agreement and the
Regulations relative to nondiscrimination on the grounds of race, color, or national origin. f. Information and Reports: CONTRACTOR shall provide all information and reports required by the Regulations, or directives issued pursuant thereto, and shall permit access to its books, records, accounts, other sources of information and its facilities as may be determined by the California Department of Transportation or FHWA to be pertinent to ascertain compliance with such Regulations or directives. Where any information required of CONTRACTOR is in the exclusive possession of another who fails or refuses to furnish this information, CONTRACTOR shall so certify to the California Department of Transportation or the FHWA as appropriate, and shall set forth what efforts CONTRACTOR has made to obtain the information.
g. Sanctions for Noncompliance: In the event of CONTRACTOR’s noncompliance with the nondiscrimination provisions of this agreement, the California Department of Transportation shall impose such agreement sanctions as it or the FHWA may determine to be appropriate, including, but not limited to:
(1) withholding of payments to CONTRACTOR under the
Agreement within a reasonable period of time, not to exceed 90 days; and/or
(2) cancellation, termination or suspension of the Agreement, in whole or in part.
h. Incorporation of Provisions: CONTRACTOR shall include the provisions of paragraphs (1) through (6) in every sub-agreement, including procurements of materials and leases of equipment, unless exempt by the Regulations, or directives issued pursuant thereto.

CONTRACTOR shall take such action with respect to any sub-agreement or procurement as the California Department of Transportation or FHWA may direct as a means of enforcing such provisions including sanctions for noncompliance, provided, however, that, in the event CONTRACTOR becomes involved in, or is threatened with, litigation with a sub-applicant or supplier as a result of such direction, CONTRACTOR may request the California Department of Transportation enter into such litigation to protect the interests of the State, and, in addition, CONTRACTOR may request the United States to enter into such litigation to protect the interests of the United States.

Maintain records and submit reports documenting your performance under this section.

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ATTACHMENT A

TECHNICAL SPECIAL PROVISIONS
Technical Special Provisions to be used with the Caltrans Standard Specifications dated 2018.

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ATTACHMENT B

PLANS AND DRAWINGS
Project Plans for Construction in
San Bernardino County in Twentynine Palms
Neighborhood Safety Project
HSIPL-5448(009)
to be supplemented by Caltrans standard plans dated 2018

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ATTACHMENT C

STATE AND FEDERAL FUNDING DOCUMENTS AND RELATED AGREEMENTS

1. Exhibit 15-G Construction Contract DBE Commitment

2. Exhibit 15-H DBE Information – Good Faith Efforts

3. FHWA-1273

4. Federal Wage Rates

STATE OF CALIFORNIA

CITY OF TWENTYNINE PALMS
________________________________________________________

TECHNICAL SPECIAL PROVISIONS

FOR CONSTRUCTION OF

NEIGHBORHOOD SAFETY PROJECT
HSIPL-5448(009)
IN THE

CITY OF TWENTYNINE PALMS
__________________________________________________
For use in connection with California Department of Transportation, Standard Specifications Dated 2018, Caltrans Revised Standard Specifications, Caltrans Standard Plans Dated 2018, Caltrans Revised Standard Plans, Labor Surcharge And Equipment Rental Rates, and the Director of Industrial Relations General Prevailing Wage Rates. __________________________________________________

CITY OF TWENTYNINE PALMS

NEIGHBORHOOD SAFETY PROJECT
HSIPL-5448(009)
The various portions of the Contract Documents have been prepared under the direction of the following licensed Civil Engineers, in accordance with California Business and Professions Code §6735.

STREET IMPROVEMENTS, SIGNING AND STRIPING
2-1-22
___________________________________________________________________________________________________________________________ Registered Civil Engineer Date

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TABLE OF CONTENTS
STANDARD PLANS LIST.............................................................................................................................2 ORGANIZATION ..........................................................................................................................................3 DIVISION I GENERAL PROVISIONS .........................................................................................................4 5 CONTROL OF WORK..............................................................................................................................4 DIVISION II GENERAL CONSTRUCTION..................................................................................................5 12 TEMPORARY TRAFFIC CONTROL ......................................................................................................5 DIVISION IX TRAFFIC CONTROL DEVICES.............................................................................................8 84 MARKINGS.............................................................................................................................................8

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STANDARD PLANS LIST
The standard plan sheets applicable to this Contract include those listed below. The applicable revised standard plans (RSPs) listed below are included in the project plans.

ABBREVIATIONS, LINES, SYMBOLS, AND LEGEND
A3A Abbreviations (Sheet 1 of 3)
A3B Abbreviations (Sheet 2 of 3)
A3C Abbreviations (Sheet 3 of 3)
A10A Legend - Lines and Symbols (Sheet 1 of 5)
RSP A10B Legend - Lines and Symbols (Sheet 2 of 5)
A10C Legend - Lines and Symbols (Sheet 3 of 5)
A10D Legend - Lines and Symbols (Sheet 4 of 5)
A10E Legend - Lines and Symbols (Sheet 5 of 5)

PAVEMENT MARKERS, TRAFFIC LINES, AND PAVEMENT MARKINGS
RSP A20A Pavement Markers and Traffic Lines - Typical Details RSP A20B Pavement Markers and Traffic Lines - Typical Details RSP A20C Pavement Markers and Traffic Lines - Typical Details RSP A20D Pavement Markers and Traffic Lines - Typical Details RSP A20E Pavement Markers and Traffic Lines - Typical Details for Contrast Striping A24A Pavement Markings - Arrows
A24B Pavement Markings - Arrows and Symbols
A24C Pavement Markings - Symbols and Numerals
A24D Pavement Markings - Words
A24E Pavement Markings - Words, Limit and Yield Lines
A24F Pavement Markings - Crosswalks

OBJECT MARKERS, DELINEATORS, CHANNELIZERS, AND BARRICADES A73A Object Markers
A73B Markers
A73C Delineators, Channelizers and Barricades

ROADSIDE SIGNS
RS1 Roadside Signs - Typical Installation Details No. 1 RS2 Roadside Signs - Wood Post - Typical Installation Details No. 2 RS4 Roadside Signs - Typical Installation Details No. 4

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ORGANIZATION
Special provisions are under headings that correspond with the main-section headings of the Caltrans 2018 Standard Specifications. A main-section heading is a heading shown in the table of contents of the Standard Specifications.

Each special provision begins with a revision clause that describes or introduces a revision to the Caltrans 2018 Standard Specifications as revised by any revised standard specification.

Any paragraph added or deleted by a revision clause does not change the paragraph numbering of the Standard Specifications for any reference to a paragraph of the Standard Specifications.

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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

DIVISION I GENERAL PROVISIONS
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
5 CONTROL OF WORK
Add to the end of section 5-1.32:

Personal vehicles of your employees must not be parked on the traveled way or shoulders, including sections closed to traffic.

Replace Section 5-1.26 with:
5-1.26 CONSTRUCTION SURVEYS
You must set construction stakes and markers to establish the lines and grades required for the completion of the work on the plans and as specified in the Standard Specifications and these special provisions and as necessary for the Engineer to check lines, grades, alignment and elevations.

All procedures, methods, and typical stake markings shall be in accordance with Chapter 12, Construction Surveys, of the Caltrans “Survey Manual.” Copies of the “Survey Manual” may be purchased from Caltrans Publications Unit, 1900 Royal Oaks Drive, Sacramento, and California 95815, (916) 445- 3520.

Staking must be performed under the direction of a licensed surveyor or registered civil engineer with the authority to perform land surveying.

Modify Section 5-1.36C(1)
Replace “Engineer” with “City of Twentynine Palms.”
Add to the end of section 5-1.32:

Personal vehicles of your employees must not be parked on the traveled way or shoulders, including sections closed to traffic.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

DIVISION II GENERAL CONSTRUCTION
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
12 TEMPORARY TRAFFIC CONTROL
Add to the beginning of the RSS for section 12-3.32C:

Place PCMSs at the locations shown and in advance of the 1st warning sign for each:

1. Stationary lane closure

2. Shoulder closure
Add between the 9th and 10th paragraphs of the RSS for section 12-3.32C:

Start displaying the message on the sign 30 minutes before closing the lane or shoulder or when directed by the Engineer.

Add between the 4th and 5th paragraphs of section 12-4.02C(1):

Add to the end of section 12-4.02C(1):

Keep the full width of the traveled way open to traffic when no active construction activities are occurring in the traveled way or within 6 feet of the traveled way and on:

1. Friday after 3:00 p.m.

2. Saturday

3. Sunday

4. Designated holidays
During non-working hours, equipment may not be parked within 15 feet of a traffic lane, unless separated by temporary railing.

Cross streets and driveways must remain open at all times, except as described. Driveways with half widths of less than 12 feet may be closed during construction for no more than one work shift at a time; however, access to businesses and residences must be maintained at all times. When two driveways access the same property, only one driveway may be closed at a time. Notify business owners and residents a minimum of 5 days prior to beginning any construction adjacent to a property.

Add to the end of section 12-4.02C(3)(a):

If you use an impact attenuator vehicle as a shadow vehicle, you are not required to close the adjacent traffic lane for the following activities:

1. Grinding

2. Installing loop detectors
If work vehicles or equipment are parked on the shoulder within 6 feet of a traffic lane at, close the shoulder area with fluorescent-orange traffic cones or portable delineators. Place the cones or delineators on a taper in advance of the parked vehicles or equipment and along the edge of the traveled way at 25- foot intervals to a point not less than 25 feet past the last vehicle or piece of equipment. Use at least 9 cones or delineators for the taper. Place advance warning signs as specified in section 12-4.02C(8).

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Replace Reserved in section 12-4.02C(3)(f) with:

Closure restrictions for designated holidays and special days are shown in the following table:

Lane Closure Restrictions For Designated Holidays And Special Days Thu Fri Sat Sun Mon Tues Wed Thu Fri Sat Sun Mon
x
H
xx xx xx
SD
xx
x xx
H
xx xx
SD
xx
x xx
H
xx xx
SD
xx
x xx xx
H
xx xxx
x xx xx
SD
xx xxx
x
H
xx
x
SD
xx
x
H
xx
SD
xx
x
H
xx xx xx xx
SD
xx
Legend:

Refer to lane requirement charts.
x The full width of the traveled way must be open for use by traffic after 0600. xx The full width of the traveled way must be open for use by traffic. xxx The full width of the traveled way must be open for use by traffic until 1800.

H Designated holiday
SD Special day
Add to the end of the 1st paragraph of section 12-4.02C(7)(a):
except you may use a moving closure during traffic striping and pavement marker placement using a bituminous adhesive. Do not use a moving lane closure when grinding for recessed striping and recessed markers.

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Add to the end of section 12-4.02C(7)(a):

Except where prohibited, use an impact attenuator vehicle:

1. To follow behind equipment and workers who are placing and removing components of a closure.

Operate the flashing arrow sign in the arrow or caution mode during this activity, whichever applies.

Follow at a distance that prevents intrusion into the work space from passing traffic.

2. As a shadow vehicle in a moving lane closure.

After placing components of a stationary traffic control system, you may place the impact attenuator vehicle in advance of the work area or at another authorized location to protect traffic and workers. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

DIVISION IX TRAFFIC CONTROL DEVICES
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
82 SIGNS AND MARKERS
Add to section 82-9.03A:

All removed signs shall be salvaged and returned to the City. Coordinate with City’s maintenance division on the return location.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
84 MARKINGS
Add to section 84-2.04:

Payment for pavement markers in included in the payment for traffic stripes, of the various types shown. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ SECTION 302 ROADWAY SURFACING
2018 STANDARD SPECIFICATIONS FOR PUBLIC WORKS

CONSTRUCTION
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Add to section 302-2.1:

The type of chip seal screenings to be spread shall conform to “Medium fine” 5/16” rock per table 200-

1.2.2.2. Replace paragraph beginning with “Unless otherwise specified” in section 302-2.2.1 with:

Emulsified asphalt shall be of a rapid setting type, medium fine, cationic, and shall conform to the requirements of CRS-2H of Section 203-3 and shall be applied by distributing equipment per Section 203-

2.5 of the Standard Specifications.

Replace the sentence beginning with “The diluted application rate” in section 302-2.8.2 with:

The diluted application rate shall be 0.18 gallons per square yard.

Remove from section 302-2.8.2:

The exact application rate will be determined by the Engineer. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

STAFF REPORT
TO: City Council
FROM: Community Development Director
FOR MEETING: Oct 11 2022
SUBJECT: Business Loan Improvement Program Expansion.

RECOMMENDATION:

The City Council direct Staff to update application forms and other materials related to the Business Loan Improvement Program to expand the boundaries, and to publish said documents to solicit participation in the Program.

ORDER OF PROCEDURE:

Request Staff Report (Community Development
Director Presenting)
Council Questions of Staff
Motion/Second
Discussion on Motion
Call the Question
ATTACHMENTS:
• Business Loan Expansion
Area
• 29 Palms Building
Improvement Loan Program -
Application
BACKGROUND:

Last year (2021), the City Council established the Business Improvement Loan Program for those commercial properties in the Downtown Specific Plan that were in need of physical improvements. The four objectives for this plan are as follows:

OBJECTIVE 1: Facilitate the physical improvement of downtown buildings to compliment the investment made by the City in infrastructure through a Building Improvement Loan Program (Program) OBJECTIVE 2: Provide incentives for property owners to clean up, beautify, improve, and maintain the exterior appearance of their property
OBJECTIVE 3: Attract further private investment in Downtown Twentynine Palms by matching private investment with Program loan funds
OBJECTIVE 4: Encourage the use of outdoor spaces both on private property and within public areas such as the Paseo for outdoor dining, entertainment, and socializing.

To be eligible for the Program, potential applicants had to either own property or lease property in the Downtown Specific Plan.

The use of funds distributed by the Program are to be used for external improvements and rehabilitation only – no interior uses are allowed. Examples of what the funds could be used for include: exterior rehabilitation of facades, installation or repair of signs, new / repair of awnings, installation of new windows or doors, installation of outdoor dining areas, landscaping improvements, improvements related to ADA compliance, and installation of artwork.

The Program requires a 50% match from the property owner or business owner. The minimum loan amount is $5,000 and the maximum is $40,000. Thus, a $60,000 improvement project would require a $30,000 match from the applicant and be awarded $30,000 in matching loan funds. Repayment terms is 3% over ten years.

As of this writing, there have been four applicants that have participated in the Program, with one improvement actually completed. A total of $160,000 has been applied for through the Program, and $40,000 has been distributed. A total of $350,000 has been allotted for the Program. Staff sent out letters to over 340 separate properties reminding potential applicants of the Program on August 8 of this year.

Given the remaining funds in the Program and the limited participation thus far, on September 27, 2022, City Council provided Staff direction to expand those areas eligible for the Business Loan Program to commerciallyzoned properties on Adobe Road from Amboy Road on the north to Sullivan Road in the south; and on Highway 62 from Encelia in the west to Cienega Road to the east.

The exhibit attached shows the area that would be eligible for implementation of the Program.

Staff is seeking direction as to whether the areas shown on the exhibit reflects the City Council’s wishes to expand the area subject to the Program.

ALTERNATIVES:

The City Council could choose to provide alternative boundaries for the Loan Program.

FISCAL IMPACT:

None, provided the funds distributed in accordance with the Program are repaid in accordance with the loan agreements.

City of Twentynine Palms
Building Improvement Loan Program

-iTABLE OF CONTENTS
Contents
I. PROGRAM GOAL AND OBJECTIVES ................................................................................... 1 II. ELIGIBILE APPLICANTS........................................................................................................ 1 III. ELIGIBLE USES OF FUNDS ................................................................................................... 2 IV. INELIGIBLE USES OF FUNDS................................................................................................ 3 V. PROGRAM LOAN TERMS.................................................................................................... 3 VI. PROJECT SELECTION CRITERIA ........................................................................................... 4 VII. APPLICATION PROCESS ...................................................................................................... 5 VIII. MAP OF DOWNTOWN PLAN AREA.................................................................................... 6 IX. APPLICATION FORMS ......................................................................................................... 7

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I. PROGRAM GOAL AND OBJECTIVES
A. GOAL: To develop Downtown Twentynine Palms into an economically vibrant and attractive area with thriving businesses.

OBJECTIVE 1: Facilitate the physical improvement of downtown buildings to compliment the investment made by the City in infrastructure through a Building Improvement Loan Program (Program)
OBJECTIVE 2: Provide incentives for property owners to clean up, beautify, improve, and maintain the exterior appearance of their property
OBJECTIVE 3: Attract further private investment in Downtown Twentynine Palms by matching private investment with Program loan funds
OBJECTIVE 4: Encourage the use of outdoor spaces both on private property and within public areas such as the Paseo for outdoor dining, entertainment, and socializing.

II. ELIGIBILE APPLICANTS
In order to be eligible to participate in the Program, an applicant must satisfy the criteria in 1 and 2 below:

1. Must be one of the following:
a. The owner of commercially-zoned real property, as evidenced by a title search or deed, located within the boundaries of the Twentynine Palms Downtown Specific Plan area. A map of the Downtown Specific Plan area is attached; or b. A business owner and tenant with a leasehold interest in real property located within the Downtown Specific Plan area. The business owner/tenant must provide written permission from the property owner to participate in the Program, and a copy of their written lease agreement.

2. Submit a complete application to the City meeting the requirements of the Program

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III. ELIGIBLE USES OF FUNDS
The following exterior rehabilitation improvements are eligible to be reimbursed or paid for with Program funds:
1) Exterior rehabilitation of building facades including exterior painting, stucco applications, repair of stucco, tile, stone, or brick, and other architectural features; 2) Exterior signs including new or repaired signs that are legally installed, or corrections to non-conforming signs;
3) Awnings, canopies, porches, and sunshades that will provide shade from the sun; 4) Installation of glazing including windows and doors such as the installation of plate glass and roll-up windows;
5) Development of patios and other outdoor spaces that will provide outdoor dining areas, including the installation of concrete, pavers, fencing, and fountains. Upon request, the City will provide samples of colored concrete and pavers that are being used in the Project Phoenix area for matching purposes. Further, upon request, the City will make available its concrete stamps that are being used in the Project Phoenix area.
6) Installation or enhancement of landscaping and associated irrigation using the City GoNative! Plant palette of drought tolerant, native plant materials; 7) Installation of sidewalks pedestrian paths and ramps, including improvements to provide an ADA path of travel to entrances;
8) Installation of artwork, including sculptures, signage, and murals in the private patio areas or on the exterior walls of the buildings;
9) Installation of outdoor climate control devices such as misting systems or gas heaters that can extend the time of use of outdoor spaces;
10) Outdoor lighting that has the Dark Sky seal of approval; 11) Architectural or engineering fees for plans, drawings, renderings, and specifications needed to construct the improvements;
12) Fees required by local agencies in the permitting process, including City Building Permits, Fire Department Permits, and Health Department Permits; and

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13) Other exterior improvements deemed appropriate by City staff.

IV. INELIGIBLE USES OF FUNDS
The following items are NOT eligible for reimbursement or payment from Program funds:
1) Any interior improvements beyond the windows and doors; 2) Vinyl lettering in windows;
3) Portable signs that are not mounted, such as sandwich boards or A-frame sgns; 4) Flags or banners;
5) Benches, tables, chairs, trash receptacles or other “movable” items that are not affixed to, or a permanent part of, the structure; and
6) Asphalt paving.

V. PROGRAM LOAN TERMS
The Program requires a 50% matching requirement. Thus for a Program loan of $5,000, the applicant would be required to contribute $5,000 in their own funds. The applicant’s matching funds may be used to fund costs of the overall rehabilitation project that are ineligible for reimbursement or payment from Program funds. The loan and repayment terms and requirements are as follows.
1) Match requirement: 50% of total project amount.
2) Minimum loan amount $5,000.
3) Maximum loan amount: $40,000.
4) Loan disbursement:
a. No disbursements shall occur until the following conditions have been satisfied:
(i) City approval of the application and design, (ii) the applicant’s obtainment of any approvals and/or permits required by the City or other governmental agency with jurisdiction over the property or rehabilitation project, and (iii) the applicant’s execution of Program loan documents.

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b. Portions of the Loan amount will be released to the applicant or the applicant’s contractor on a construction draw basis as receipts or invoices from contractors, vendors, or materials are submitted to the City. The City will endeavor to disburse the funds within fifteen (15) days after City determination that the receipts or invoices are for eligible portions of work related to the approved rehabilitation project; and
5) Interest rate: 3% simple interest;
a. Repayment Term: 10 years. Repayment will be made in ten equal annual installments, commencing on the first anniversay of the date the project is completed, as evidenced by City’s issuance of a certificate of occupncy or other applicable City approval for final inspection/sign-off. 6) Permits: Applicants are solely responsible for obtaining all required approvals and permits for the project, including the payment of all required fees to the City and any other governmental entities having jurisdiction over the project. 7) Hiring of Contractors:
a. The applicant shall have the sole responsibility of hiring a contractor to perform the project.
b. All work for which the applicant seeks reimbursement or payment under the Program shall be from a licensed contractor or as an owner-builder. 8) Eligible Costs: Costs incurred for the improvements described in Part III above; 9) Inspections: Applicant agrees to periodic inspections of the work by City staff to ensure that the project is in substantial conformance with the approved design, except as otherwise approved by the City.
10) Construction Signage: Upon completion of the project, for a period of one year, the applicant agrees to display a 8.5” x 11” placard provided by the City with the statement “Project Funded by the City of Twentynine Palms Building Improvement Loan Program”.

VI. PROJECT SELECTION CRITERIA
Projects will be selected that contribute to the overall beautification and enhancement of Downtown Twentynine Palms. The key criteria for project selection will be the overall impact to the property and quality of design. The project should complement the streetscape and public improvements being constructed by the City. It should create an inviting presence from the street and generate traffic to the business as well as nearby businesses. The project

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should respect the architectural character of the structure and include local architectural elements of Hi-Desert Adobe, Frontier, Mission, or other local styles as appropriate.

Projects will be selected by a review committee consisting of the City Manager, Community Development Director, and a member of the Action 29 Council (Review Committee).

VII. APPLICATION PROCESS
1) Applicants will complete the application form and checklist as provided in this document, and submit to the Community Development Department of the City of Twentynine Palms at:

Community Development Department
City of Twentynine Palms
6136 Adobe Road
Twentynine Palms, CA 92277
Applications may also be emailed to Travis Clark at [email protected] 2) Applications will be processed in the order in which they are received, and will be approved or denied by the Review Committee established for this purpose. The City may condition its approval on modifications to the project design that are necessary to conform with the Program requirements.
3) Funding for the Program is limited; applicants are encouraged to apply early. Once all Program funds have been committed to eligible projects, no further applications will be accepted or approved.

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VIII. MAP OF DOWNTOWN PLAN AREA

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IX. APPLICATION FORMS

1 BUILDING IMPROVEMENT

LOAN PROGRAM APPLICATION

APPLICATION INFORMATION
Business Name
Business Address
Applicant’s Name
Applicant’s Address
Applicant’s Phone Number
Applicant’s Email
Assessor’s Parcel Number
Is the Applicant also the
Property Owner?
Yes No
PROPERTY OWNER INFORMATION (if different from Applicant) Property Owner
Name
Property Owner
Address
Property Owner
Phone Number
Property Owner
Email

SIGNATURES
Applicant Date
Property Owner Date

2 PROJECT DESCRIPTION
Brief Description of Proposed Improvements
Amount of Loan Request
(not to exceed $40,000)

3 APPLICATION CHECKLIST
The following information is required to be provided at the time of application:
• Application (completed and signed by Applicant and Property Owner) • Verification of Property Ownership (Title Report or Grant Deed) • Copy of Applicant’s Lease with Property Owner (if Applicant and Property Owner are different)
• Project Description
• Proposal, Estimate, or Bid from qualified contractor(s) to conduct the work – if available • Copy of Valid City of Twentynine Palms Business License • If applicable, list of required permits from the City of Twentynine Palms, Caltrans, or other government agency
• Pictures, drawings or other graphical information illustrating the location of the proposed improvements, as well as the type of improvements to be made Email, mail, or deliver the completed application with copies of the required documents to:

Community Development Department
City of Twentynine Palms
6136 Adobe Road
Twentynine Palms, CA 92277
[email protected]

16956497.2 -1-

LOAN AGREEMENT

CITY OF TWENTYNINE PALMS BUILDING IMPROVEMENT LOAN PROGRAM

THIS LOAN AGREEMENT (CITY OF TWENTYNINE PALMS BUILDING
IMPROVEMENT LOAN PROGRAM) (the “Agreement”) is made and entered into this _____ day of ______________, 202_ (the “Effective Date”), by and between the CITY OF TWENTYNINE PALMS, a California municipal corporation (the “City”), and ______________________, a _________________________ (the “Participant”), the owner of a business located at ___________________________, Twentynine Palms, California (the “Property”).

R E C I T A L S
A. City has established the City of Twentynine Palms Building Improvement Loan Program (the “Program”) to assist business owners in the Downtown Specific Plan area with exterior rehabilitation and beautification improvements. Under the Program the City provides financial assistance, in the form of loans, to local businesses to assist such businesses in performing eligible rehabilitation work.

B. Participant applied for and received approval to participate in the Program, and City is prepared to loan Participant the funds identified below on the terms set forth in this Agreement.

A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and promises hereinafter contained, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Recitals and Program Rules Incorporated. The foregoing Recitals and the rules and regulations of the Program (the “Program Rules”) are incorporated herein by this reference and made a part hereof.

2. Participant’s Interest in the Property. Participant hereby represents and warrants to City that Participant owns and operates the business located on the Property, and (check applicable statement regarding property interest):
a. ___ owns the Property in fee; or
b. ___ has entered into a written lease agreement with the owner of the Property for operation of Participant’s business, and has obtained written authorization of the fee owner of the Property to participate in the Program.

3. City Loan. City hereby agrees to loan to Participant the sum of _______________ _______________ Dollars ($_____________) (the “City Loan”) to be used for the purposes and the improvements described on Participant’s approved Program application (the “Improvements”) subject to the terms and conditions of the Program Rules and any conditions attached to such approval, including, without limitation, that the City Loan may

16956497.2 -2-
only be used to reimburse Participant for the costs Participant incurs in connection with the Improvements that are eligible for reimbursement under the Program, as set forth in Exhibit “A” hereto, which is incorporated herein by this reference. The City Loan shall be disbursed to Participant in accordance with the terms of a promissory note in the form attached hereto and incorporated herein as Exhibit “B” (the “Note”). Repayment of the City Loan shall be in accordance with the terms of the Note.

4. Construction Schedule. Participant shall satisfy all conditions for disbursement of the City Loan and commence construction of the Improvements within thirty (30) days after the Effective Date, and shall complete construction of the Improvements within six (6) months following City’s first disbursement of City Loan funds to Participant.

5. Bodily Injury, Property Damage and Workers’ Compensation Insurance; Indemnification. On or prior to, and as a condition of, City’s disbursement of any portion of the City Loan, Participant shall furnish or cause to be furnished to City, and shall obtain approval from the Twentynine Palms’ City Manager (“City Manager”) (which approval shall not be unreasonably withheld) of duplicate originals of policies and endorsements, or appropriate certificates thereof, of bodily injury and broad form property damage insurance policies in the amount of at least One Million Dollars ($1,000,000), combined single limits, for death or injury to any person and property damage, naming the City and the City’s officers, officials, members, employees, agents, and representatives (hereinafter, collectively, “City and City Personnel”) as additional insureds. In addition, all such insurance:
a. shall be primary insurance and not contributory with any other insurance City and City Personnel, or any of them, may have;
b. shall contain no special limitations on the scope of protection afforded to City and City Personnel;
c. shall be “date of occurrence” and not “claims made” insurance; d. shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability; e. shall provide that the policy (i) shall not be cancelled by the insurer or Participant unless there is a minimum of thirty (30) days prior written notice to City, and (ii) shall not be non-renewed by the insurer or Participant unless there is a minimum of thirty (30) days prior written notice to City; and
f. shall be written by a California admitted insurer with a Best rating of not less than B+, Class X; and
None of the above described policies shall require Participant to meet a deductible or self-insured retention amount of more than Ten Thousand Dollars ($10,000) unless approved in writing by the City Manager of the City in his/her sole and absolute discretion.

Participant shall also furnish or cause to be furnished to City evidence reasonably satisfactory to City that any contractor with whom Participant has contracted for the performance of work on the Property carries workers’ compensation insurance as required by the State of California Labor Code. Such insurance shall (i) be endorsed to include a waiver of subrogation rights against City and City Personnel, and (ii) shall provide for notice of

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cancellation as described in subparagraph (e) above. Such policies shall be written by a California licensed insurer with a Best rating of not less than B+, Class X.

Prior to the date Participant commences development of the Improvements, Participant shall furnish to City evidence reasonably satisfactory to the City Manager that Participant has Builder’s Risk Coverage which shall be maintained in force throughout the development of the Improvements. Such coverage shall include limits sufficient to cover at least ninety percent (90%) of the replacement cost of all of the improvements and betterments on the subject property (or such lessor percentage of the replacement cost as approved by the City Manager in his/her sole discretion). Furthermore, such policy/ies shall conform to the requirements set forth in subparagraphs (e) and (f) above.

The foregoing insurance obligations shall remain in effect until full repayment of the City Loan.

6. Compliance with Laws. Participant shall carry out the design and construction of the Improvements in conformity with all applicable laws, including the City zoning and development standards, building, plumbing, mechanical, fire, and electrical codes, and all other provisions of City’s Municipal Code, all applicable disabled and handicapped access requirements, and all environmental mitigation measures imposed as conditions of approval of the Improvements. In addition, Participant shall carry out the construction of the Improvements in conformity with all applicable federal and state labor laws, including, without limitation, if applicable, the requirement under California law to pay prevailing wages and hire apprentices.

Participant acknowledges and agrees that it shall be independently responsible for reviewing the applicable laws with respect to development of the Improvements on the Property and complying therewith. Notwithstanding the foregoing, in addition to any other Participant indemnifications of City set forth in this Agreement, Participant shall indemnify, defend, and hold the City and City Personnel harmless from and against any liability, loss, damage, cost or expenses (including, without limitation, reasonable attorneys’ fees, expert witness fees, court costs, and costs incurred related to any inquiries or proceedings) which, in connection with the development or construction by or under the direction of Participant, arises from or is related to (a) the noncompliance by Participant of any applicable law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages and hire apprentices); (b) the implementation of Section 1781 of the Labor Code, as the same may be amended from time to time, or any other similar law; and/or (c) failure by Participant to provide any required disclosure or identification as required by Labor Code Section 1781, as the same may be amended from time to time, or any other similar law. It is agreed by the parties that, in connection with the Participant’s development and construction of the Improvements on the Property, Participant shall bear all risks of payment or non-payment of prevailing wages under California law and/or the implementation of Labor Code Section 1781, as the same may be amended from time to time, and/or any other similar law. “Increased costs,” as used in this Section 6, shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be amended from time to time. Participant shall be solely responsible for determining and effectuating compliance with such laws. Participant hereby expressly acknowledges and agrees that City has not previously affirmatively represented to Participant or its contractor(s) for the construction or development of the Improvements, in writing or otherwise, in a call for bids or otherwise, that the construction or development of the Improvements as required by this Agreement is not a “public work,” as defined in Section 1720 of the Labor Code.

16956497.2 -4-

7. Default. Participant shall be deemed in default of this Agreement and the City Loan shall be immediately due and payable if (i) Participant fails to make any payment due under the Note within ten (10) days of the date such payment is due; or (ii) Participant is in material breach of any of Participant’s obligations under this Agreement, the Note, the Program, or the Program Rules.

8. Enforced Delay; Extensions for Times of Performance. In addition to specific provisions of this Agreement, performance by either party (who is not then otherwise in material default) shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, casualties, supernatural causes, acts of the public enemy, terrorism, epidemics, pandemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, materials or tools, delays of any contractor, subcontractor or supplies, acts of the other party, acts or failure to act of City or any other public or governmental agency or entity, including, without limitation, unreasonable delays in the processing and issuance of required permits for the Improvements (except that any act or failure to act of City shall not excuse performance by City) or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform, for up to a maximum cumulative period of ninety (90) days. Notwithstanding the foregoing, inability to secure satisfactory financing, or market and economic conditions shall not entitle Participant to an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within ten (10) days of knowledge of the commencement of the cause. In addition, times of performance under this Agreement may be extended by mutual written agreement by City and Participant.

9. Additional Terms Applicable to this Agreement.
a. Upon full repayment of the City Loan, to the extent required pursuant to the Note, this Agreement, except for the indemnification provision set forth in Section 6 and Section 14, shall be of no further force or effect.
b. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply.
c. The person(s) signing this Agreement on behalf of Participant represent and warrant that he/she/they is/are authorized to do so and that Participant is thereby bound to the terms of this Agreement.

10. Notices. Formal notices, demands, and communications between City and Participant shall be sufficiently given if delivered to the addresses indicated below by (i) registered or certified mail, postage prepaid, return receipt requested, or (ii) by reputable sameday or overnight courier or delivery service that provides a receipt showing the date and time of delivery. Notices delivered by same-day or overnight courier or delivery service shall be effective upon receipt. Notices delivered by mail shall be effective upon the earlier of (i) receipt or (ii) Noon on the second business day following deposit with the United States Postal Service.

Notices shall be addressed as follows:

If to Participant: ___________________________

16956497.2 -5-
___________________________
___________________________
If to City: City of Twentynine Palms
6136 Adobe Rd.

Twentynine Palms, CA 92277
Attention: City Manager
Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by notice delivered as provided in this Paragraph.

11. Administration of Agreement. City shall maintain authority of this Agreement and the authority to implement this Agreement through its City Manager (or his or her duly authorized representative). The City Manager shall have the authority to make approvals, issue interpretations, execute documents, waive provisions, and/or enter into certain amendments of this Agreement on behalf of City so long as such actions do not materially or substantially change the uses or development permitted on the Property or materially add to the costs incurred or to be incurred by City as specified herein.

12. Litigation. This Agreement shall be governed by and construed under the laws of the State of California. The parties agree that in any litigation between the parties arising out of this Agreement, the Superior Court of the State of California in and for the County of San Bernardino shall have exclusive jurisdiction. The prevailing party in any litigation between the parties arising out of or connected to this Agreement, in addition to whatever other relief to which the prevailing party is entitled, shall also be entitled to reasonable attorney’s fees, including fees and costs for discovery, expert witness fees, and any fees and costs for appeal.

Notwithstanding anything herein to the contrary, in the event of any legal action between the parties, Participant shall not be entitled to damages of any kind from City, including (but not limited to) damages for economic loss, lost profits, or any other economic or consequential damages of any kind and Participant’s sole legal remedy shall be an action for specific performance to compel City to disburse the City Loan. In the event of any such legal action, service of process on City shall be made in such manner as provided by law for service on a California public entity; service of process on Participant shall be made in such manner as may be provided for by law, and shall be valid whether made within or without the State of California.

13. Non-liability of City Officers. No member, official, officer, employee, agent, or representative of City shall be personally liable to Participant in the event of any default or breach by City or for any amounts which may become due to Participant or on any obligation under the terms of this Agreement.

14. City Indemnified. Participant agrees to and shall indemnify, defend, and hold City harmless from and against any and all claims, liabilities, losses, damages, costs, and expenses, including reasonable attorney’s fees and costs (which shall include fees and expenses related to investigating the action, conducting discovery, retaining expert witnesses, prosecuting the action, and appeal), that is in any way related to (i) the Program, (ii) this Agreement or (iii) Participant’s and/or Participant’s employees’, agents, contractors’ or subcontractors’ development and/or construction of the Improvements pursuant to the Program, that arises from or is the result of (A) the death or injury to any person, (B) any accident, injury, loss, or damages to any person or to the property of any person, (C) the failure of Participant to

16956497.2 -6-
timely make any payment due by Participant to any person, or (D) Participant’s failure to comply with the terms of this Agreement and/or any applicable law, ordinance, or regulation.

15. Covenant Against Discrimination. Participant covenants by and for itself, its heirs, successors and assigns, and all persons claiming under or through them that there shall be no discrimination against any person on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the performance of this Agreement.

16. Participant’s Maintenance of Improvements. During the term of this Agreement, and for so long as any portion of the City Loan remains outstanding and unpaid, Participant shall maintain the Property and the Improvements in a first class condition.

17. Time of Essence. Time is of the essence in this Agreement.

18. Entire Agreement, Amendments; Waivers; Counterparts; Attachments. a. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof.
b. This Agreement may not be amended except by an instrument in writing signed by the appropriate authorities of City and Participant. c. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of City and Participant.
d. Except as otherwise expressly provided, in any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld.
e. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, successors and assigns.
f. This Agreement may be executed in counterparts, each of which, when this Agreement has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. g. Notwithstanding Section 18a above, Participant’s approved application and all of the exhibits hereto are incorporated herein and made a part hereof. [end - signatures on next page]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
“PARTICIPANT”
___________________________________
BY: ________________________________
Signature
______________________________
Printed Name
“CITY”
CITY OF TWENTYNINE PALMS, a California
municipal corporation
By: ______________________________
Frank Luckino
City Manager
ATTEST:
__________________________________
Cindy Villescas, City Clerk

16956497.2
EXHIBIT “A”

ELIGIBLE PROGRAM COSTS
[to be inserted]

16956497.2
EXHIBIT “B”

PROMISSORY NOTE

TWENTYNINE PALMS BUSINESS IMPROVEMENT LOAN PROGRAM
___________________, _____ (“Note Date”)
FOR VALUE RECEIVED, the undersigned,
___________________________________, a
_____________________________________, hereinafter referred to as “Borrower,” promises to pay to the CITY OF TWENTYNINE PALMS, a California municipal corporation, hereinafter referred to as “City,” so much principal as may be outstanding in accordance with the terms of this Promissory Note (“Note”), not exceeding _____________________________ DOLLARS ($____________), plus accrued interest on the unpaid principal, plus such other costs, charges, and fees which may be owing from time to time, all subject to the terms, conditions, and provisions hereinafter set forth.

Reference is made to:
(i) City’s Building Improvement Loan Program, pursuant to which City provides financial assistance to local businesses located within the Twentynine Palms Downtown Specific Plan area for use in performing exterior rehabilitation work (the “Program”) and the rules and regulations of the Program (the “Program Rules”). (ii) The Loan Agreement by and between Borrower and City, dated on or about the same date hereof (the “Agreement”), which sets forth terms and conditions for Borrower’s proposed rehabilitation improvement project, as described in Borrower’s approved Program application The Agreement is incorporated herein by reference as though fully set forth herein.

1. Principal Amount; Interest Amount. The principal amount of the City’s loan to Borrower is ________________________________ DOLLARS ($___________) (“Loan Amount”), which City shall disburse to Borrower in accordance with the terms set forth in Section 2 below. Simple Interest shall accrue on the outstanding principal balance at a rate of three percent (3%) per annum, commencing on the date the first disbursement is provided to Borrower. Interest shall accrue as set forth in Paragraph 4 in the event of a Borrower default.

2. Disbursement of City Loan. The City Loan shall be disbursed in accordance with the terms of this Section 2:
a. Upon Borrower’s completion of some or all of the
“Improvements” (as that term is described in the Agreement), and provided all conditions precedent to disbursement set forth below have been satisfied,

16956497.2
[EXHIBIT B -
PAGE 1]
Borrower may obtain disbursement of the City Loan, or portion thereof, by (i) notifying the City of Twentynine Palms City Manager (“City Manager”) in writing of the amount required; (ii) providing City with supporting documentation showing the work performed and the actual cost thereof; and (iii) providing City with unconditional waiver and releases in the form set forth in Civil Code Section 3262. If the requested disbursement is permitted under the terms of this Note, the City Manager shall promptly, but in no event later than fifteen (15) days after City’s receipt of all of the items listed in (i)-(iii) above, effect payment directly to Borrower, to Borrower’s contractor, or to the applicable public agency (for City Loan amounts which are to be used to pay for public fees), by check.

Notwithstanding anything herein to the contrary, the Borrower shall not be entitled to disbursements for any particular category of Improvements in an amount exceeding the amount set forth for such category in Borrower’s list of “Eligible Program Costs”, which is attached to the Agreement as Exhibit “A”.

All of the following shall be conditions precedent to
disbursement of any portion of the City Loan:
a. Borrower shall have obtained approval from
City of all plans prepared and/or required for the Improvements; b. Borrower shall have timely obtained all building
permits for the Improvements;
c. Borrower shall have submitted to the City
Manager and obtained approval from the same, of Borrower’s evidence of insurance;
d. Borrower shall have signed this Note and
delivered the same to City;
e. Borrower shall have completed construction of
all or a portion of the Improvements;
f. Borrower shall not be in default of its
obligations under this Note or under the Agreement.

3. Term of Note; Repayment. Repayment of the City Loan shall be made in accordance with the terms of this Section 3.
a. Subject to Section 4 hereof, Borrower shall repay the City Loan, plus all accrued interest, in ten (10) equal annual installments (each, an “Installment Payment”), commencing on the date that is one (1) year following the date Borrower commences completion of the Improvements, as evidenced by City’s issuance of a certificate of occupancy or other applicable City approval for final inspection/sign-off of the work. City shall calculate, and shall notify

16956497.2
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Borrower, of the amount of the annual Installment Payments prior to the due date of the first Installment Payment.
b. Notwithstanding the foregoing, however, Borrower shall have the right to prepay all or any portion of this Note at any time without penalty.

4. Default; Acceleration; Cross-Default. In the event:
a. Borrower fails to timely make a payment required by this Note or the Agreement within ten (10) days following the due date of any payment due hereunder or thereunder; or
b. Borrower is in material default of any of the covenants, terms, or provisions of this Note, the Program Rules, or the Agreement, and Borrower fails to timely cure such default under the terms of the applicable document, it being understood and agreed by Borrower that a default of this Note or of the Program Rules or of the Agreement shall be a default of all of the foregoing listed documents;
then Borrower shall be in default of this Note, and the Loan Amount and all accrued interest thereon shall become immediately due and payable. The rate of interest applicable to periods of default for the defaults set forth in this Paragraph 4 shall be calculated at the lesser of ten percent (10%) per annum or the maximum legal rate, and shall accrue as of the date such payment was originally due.

5. Additional Terms.
a. All payments shall be first credited to accrued interest, next to costs, charges, and fees which may be owing from time to time, and then to principal. All payment shall be made in lawful money of the United States.

Payments shall be made to City at the address set forth in Paragraph 8 herein or at such other address as City or the holder of this Note may direct pursuant to notice delivered to Borrower in accordance with Paragraph 8. b. Borrower agrees to pay the following costs, expenses, and reasonable attorney’s fees paid or incurred by City, or adjudged by the court, in the collection of amounts in default or other costs incurred as a result of a default by Borrower: (i) reasonable costs of collections, costs and expenses, and attorney’s fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed, and (ii) costs of suit and such sums as the court may adjudge as attorney’s fees in any action to enforce payment of this Note or any part of it if City prevails in such suit.

6. Non-assumability. This Note shall not be assumable without the prior, express, written consent of the City Manager.

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7. Presentment, Etc. Notwithstanding any other provision herein to the contrary, to the extent permitted by law Borrower hereby waives the following: (a) notice of default or delinquency, (b) notice of acceleration, (c) notice of nonpayment, (d) notice of costs, expenses and losses and interest thereon, (e) notice of interest on interest and late charges, (f) diligence in taking any action to collect any sums owing under this Note or in proceeding against any of the rights and presentment for payment, demand, protest, and notices of dishonor and/or protest; (g) the benefits of all waivable exemptions; and (h) all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice.

8. Notices. Any notices required by law or this Agreement shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested.

Notices to Borrower shall be addressed to:
______________________________
______________________________
______________________________
Attn: _________________________
Notices to City shall be addressed to:

City of Twentynine Palms
6136 Adobe Rd.

Twentynine Palms, CA 92277
Attention: City Manager
Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed shall be deemed effective on the second business day following deposit in the United States mail. Either party may designate that notices be sent to other or additional addresses by complying with the requirements of this section.

9. Litigation. This Note shall be governed by and construed under the laws of the State of California. The parties agree that in any litigation between the parties arising out of this Note, Superior Court of the State of California in and for the County of San Bernardino shall have exclusive jurisdiction. The prevailing party in any litigation between the parties arising out of or connected to this Note, in addition to whatever other relief to which the prevailing party is entitled, shall also be entitled to reasonable attorney’s fees, including fees and costs for discovery, and any fees and costs for appeal. In the event of such legal action, service of process on City shall be made in such manner as provided by law for service on a California public entity;

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service of process on Borrower shall be made in such manner as may be provided for by law, and shall be valid whether made within or without the State of California.

10. Waiver. No waiver of any breach, default, or failure of condition under the terms of this Note, or the obligations secured hereby, shall be implied from any failure of City to take, or any delay by the City in taking, action with respect to such breach, default, or failure from any previous waiver or any similar or unrelated breach, default, or failure; and a waiver of any term of this Note must be made in writing and shall be limited to the express written terms of such waiver.

11. Time of Essence. Time is of the essence in this Note.

12. Severability. In the event that any term or provision of this Note is held to be unenforceable, the remainder of this Note shall remain in full force and effect to the fullest extent without inclusion of the unenforceable term or provision.

13. Interpretation. In the event of any conflict between this Note and the Agreement, this Note shall apply. The terms of this Note shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Note or any other rule of construction which might otherwise apply. The paragraph headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Note.

14. Assignment. City, at its option, may assign its right to receive payment under this Note without obtaining the consent of the Borrower or the holder or beneficiary of the lien of any deed of trust or other security instrument, whether recorded or unrecorded. Borrower shall not be permitted to assign or transfer this Note or any portion thereof without the prior express written consent of the City Manager, which consent may be given or withheld in the City Manager’s sole discretion.

IN WITNESS WHEREOF, Borrower has executed this Note as of the Note Date. “Borrower”___________________________________
By: ________________________________________
Its:______________________________________

16958394.2

PROMISSORY NOTE

TWENTYNINE PALMS BUSINESS IMPROVEMENT LOAN PROGRAM
___________________, _____ (“Note Date”)
FOR VALUE RECEIVED, the undersigned,
___________________________________, a
_____________________________________, hereinafter referred to as “Borrower,” promises to pay to the CITY OF TWENTYNINE PALMS, a California municipal corporation, hereinafter referred to as “City,” so much principal as may be outstanding in accordance with the terms of this Promissory Note (“Note”), not exceeding _____________________________ DOLLARS ($____________), plus accrued interest on the unpaid principal, plus such other costs, charges, and fees which may be owing from time to time, all subject to the terms, conditions, and provisions hereinafter set forth.

Reference is made to:
(i) City’s Business Improvement Loan Program, pursuant to which City provides financial assistance to local businesses located within the Twentynine Palms Downtown Specific Plan area for use in performing exterior rehabilitation work (the “Program”) and the rules and regulations of the Program (the “Program Rules”). (ii) The Loan Agreement by and between Borrower and City, dated on or about the same date hereof (the “Agreement”), which sets forth terms and conditions for Borrower’s proposed rehabilitation improvement project, as described in Borrower’s approved Program application The Agreement is incorporated herein by reference as though fully set forth herein.

1. Principal Amount; Interest Amount. The principal amount of the City’s loan to Borrower is ________________________________ DOLLARS ($___________) (“Loan Amount”), which City shall disburse to Borrower in accordance with the terms set forth in Section 2 below. Simple Interest shall accrue on the outstanding principal balance at a rate of three percent (3%) per annum, commencing on the date the first disbursement is provided to Borrower. Interest shall accrue as set forth in Paragraph 4 in the event of a Borrower default.

2. Disbursement of City Loan. The City Loan shall be disbursed in accordance with the terms of this Section 2:
a. Upon Borrower’s completion of some or all of the
“Improvements” (as that term is described in the Agreement), and provided all conditions precedent to disbursement set forth below have been satisfied,

16958394.2 -2-
Borrower may obtain disbursement of the City Loan, or portion thereof, by (i) notifying the City of Twentynine Palms City Manager (“City Manager”) in writing of the amount required; (ii) providing City with supporting documentation showing the work performed and the actual cost thereof; and (iii) providing City with unconditional waiver and releases in the form set forth in Civil Code Section 3262. If the requested disbursement is permitted under the terms of this Note, the City Manager shall promptly, but in no event later than fifteen (15) days after City’s receipt of all of the items listed in (i)-(iii) above, effect payment directly to Borrower, to Borrower’s contractor, or to the applicable public agency (for City Loan amounts which are to be used to pay for public fees), by check.

Notwithstanding anything herein to the contrary, the Borrower shall not be entitled to disbursements for any particular category of Improvements in an amount exceeding the amount set forth for such category in Borrower’s list of “Eligible Program Costs”, which is attached to the Agreement as Exhibit “A”.

All of the following shall be conditions precedent to
disbursement of any portion of the City Loan:
a. Borrower shall have obtained approval from
City of all plans prepared and/or required for the Improvements; b. Borrower shall have timely obtained all building
permits for the Improvements;
c. Borrower shall have submitted to the City
Manager and obtained approval from the same, of Borrower’s evidence of insurance;
d. Borrower shall have signed this Note and
delivered the same to City;
e. Borrower shall have completed construction of
all or a portion of the Improvements;
f. Borrower shall not be in default of its
obligations under this Note or under the Agreement.

3. Term of Note; Repayment. Repayment of the City Loan shall be made in accordance with the terms of this Section 3.
a. Subject to Section 4 hereof, Borrower shall repay the City Loan, plus all accrued interest, in ten (10) equal annual installments (each, an “Installment Payment”), commencing on the date that is one (1) year following the date Borrower commences completion of the Improvements, as evidenced by City’s issuance of a certificate of occupancy or other applicable City approval for final inspection/sign-off of the work. City shall calculate, and shall notify Borrower, of the amount of the annual Installment Payments prior to the due date of the first Installment Payment.

16958394.2 -3-
b. Notwithstanding the foregoing, however, Borrower shall have the right to prepay all or any portion of this Note at any time without penalty.

4. Default; Acceleration; Cross-Default. In the event:
a. Borrower fails to timely make a payment required by this Note or the Agreement within ten (10) days following the due date of any payment due hereunder or thereunder; or
b. Borrower is in material default of any of the covenants, terms, or provisions of this Note, the Program Rules, or the Agreement, and Borrower fails to timely cure such default under the terms of the applicable document, it being understood and agreed by Borrower that a default of this Note or of the Program Rules or of the Agreement shall be a default of all of the foregoing listed documents;
then Borrower shall be in default of this Note, and the Loan Amount and all accrued interest thereon shall become immediately due and payable. The rate of interest applicable to periods of default for the defaults set forth in this Paragraph 4 shall be calculated at the lesser of ten percent (10%) per annum or the maximum legal rate, and shall accrue as of the date such payment was originally due.

5. Additional Terms.
a. All payments shall be first credited to accrued interest, next to costs, charges, and fees which may be owing from time to time, and then to principal. All payment shall be made in lawful money of the United States.

Payments shall be made to City at the address set forth in Paragraph 8 herein or at such other address as City or the holder of this Note may direct pursuant to notice delivered to Borrower in accordance with Paragraph 8. b. Borrower agrees to pay the following costs, expenses, and reasonable attorney’s fees paid or incurred by City, or adjudged by the court, in the collection of amounts in default or other costs incurred as a result of a default by Borrower: (i) reasonable costs of collections, costs and expenses, and attorney’s fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed, and (ii) costs of suit and such sums as the court may adjudge as attorney’s fees in any action to enforce payment of this Note or any part of it if City prevails in such suit.

6. Non-assumability. This Note shall not be assumable without the prior, express, written consent of the City Manager.

7. Presentment, Etc. Notwithstanding any other provision herein to the contrary, to the extent permitted by law Borrower hereby waives the following: (a) notice of default or delinquency, (b) notice of acceleration, (c) notice of nonpayment, (d)

16958394.2 -4-
notice of costs, expenses and losses and interest thereon, (e) notice of interest on interest and late charges, (f) diligence in taking any action to collect any sums owing under this Note or in proceeding against any of the rights and presentment for payment, demand, protest, and notices of dishonor and/or protest; (g) the benefits of all waivable exemptions; and (h) all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice.

8. Notices. Any notices required by law or this Agreement shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested.

Notices to Borrower shall be addressed to:
______________________________
______________________________
______________________________
Attn: _________________________
Notices to City shall be addressed to:

City of Twentynine Palms
6136 Adobe Rd.

Twentynine Palms, CA 92277
Attention: City Manager
Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed shall be deemed effective on the second business day following deposit in the United States mail. Either party may designate that notices be sent to other or additional addresses by complying with the requirements of this section.

9. Litigation. This Note shall be governed by and construed under the laws of the State of California. The parties agree that in any litigation between the parties arising out of this Note, Superior Court of the State of California in and for the County of San Bernardino shall have exclusive jurisdiction. The prevailing party in any litigation between the parties arising out of or connected to this Note, in addition to whatever other relief to which the prevailing party is entitled, shall also be entitled to reasonable attorney’s fees, including fees and costs for discovery, and any fees and costs for appeal. In the event of such legal action, service of process on City shall be made in such manner as provided by law for service on a California public entity; service of process on Borrower shall be made in such manner as may be provided for by law, and shall be valid whether made within or without the State of California.

16958394.2 -5-

10. Waiver. No waiver of any breach, default, or failure of condition under the terms of this Note, or the obligations secured hereby, shall be implied from any failure of City to take, or any delay by the City in taking, action with respect to such breach, default, or failure from any previous waiver or any similar or unrelated breach, default, or failure; and a waiver of any term of this Note must be made in writing and shall be limited to the express written terms of such waiver.

11. Time of Essence. Time is of the essence in this Note.

12. Severability. In the event that any term or provision of this Note is held to be unenforceable, the remainder of this Note shall remain in full force and effect to the fullest extent without inclusion of the unenforceable term or provision.

13. Interpretation. In the event of any conflict between this Note and the Agreement, this Note shall apply. The terms of this Note shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Note or any other rule of construction which might otherwise apply. The paragraph headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Note.

14. Assignment. City, at its option, may assign its right to receive payment under this Note without obtaining the consent of the Borrower or the holder or beneficiary of the lien of any deed of trust or other security instrument, whether recorded or unrecorded. Borrower shall not be permitted to assign or transfer this Note or any portion thereof without the prior express written consent of the City Manager, which consent may be given or withheld in the City Manager’s sole discretion.

IN WITNESS WHEREOF, Borrower has executed this Note as of the Note Date. “Borrower”___________________________________
By: ________________________________________
Its:______________________________________