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(c1) U.S. OMB Guidance for Grants and Agreements "Cost Principles
<br />for Non-profit Organizations (OMB Circular A-122)," 2 C.F.R. Part 230, applies to Project costs
<br />incurred by a Contractor that is a private nonprofit organization.
<br />(d1) FAR, at 48 C.F.R., Subpart 31.2, "Contracts with Commercial
<br />Organizations" applies to Project costs incurred by a Contractor that is afor-profit organization.
<br />Section 6. Reporting, Record Retention, and Access.
<br />a. Re orts. The Contractor shall advise the Department regarding the
<br />progress of the Project at a minimum quarterly and at such time and in such a manner as
<br />the Department may require. Such reporting and documentation may include, but not be
<br />limited to: operating statistics, equipment usage, meetings, progress reports, and monthly
<br />performance reports. The Contractor shall collect and submit to the Department such
<br />financial statements, data, records, contracts, and other documents related to the Project as
<br />may be deemed necessary by the Department. Such reports shall include narrative and
<br />financial statements of sufficient substance to be in conformance with the reporting .
<br />requirements of the Department. Progress reports throughout the useful life of the project
<br />equipment shall be used, in part, to document utilization of the project equipment. Failure to
<br />fully utilize the project equipment in the manner directed by the Department shall constitute a
<br />breach of contract, and after written notification by the Department, may result in termination of
<br />the Agreement or any such remedy as the Department deems appropriate.
<br />The Contractor will be responsible for having an adequate cost accounting system,
<br />and the ongoing burden of proof of adequacy for such system shall be upon the Contractor.
<br />The Department will determine whether or not the Contractor has an adequate cost accounting
<br />system. Such determination shall be documented initially prior to payment of any invoices
<br />pursuant to the Agreement, and from time to time as deemed necessary by the Department.
<br />In the event of a negative finding during such determining proceedings, the Department may
<br />suspend, revoke, or place conditions upon its determination, and/or may recommend or require
<br />remedial actions as appropriate.
<br />b. Record Retention. The Contractor and its third party contractors shall retain
<br />all records pertaining to this Project for a period of five (5) years from the date of final payment
<br />to the Contractor, or until all audit exceptions have been resolved, whichever is longer, in
<br />accordance with "Records Retention and Disposition Schedule - Public Transportation
<br />Systems and Authorities, April 1, 2006," at (http://www.ah.dcr.state.nc.us/records/local/).
<br />c. .Access to Records of Contractor and Subcontractors. The Contractor shall
<br />permit and shall require its third party contractors to permit the Department or its authorized
<br />representatives to inspect all work, materials, payrolls, and other data and records with regard
<br />to the Project, and to audit the books, records, and accounts of the Contractor pertaining to the
<br />Project. The Department shall reserve the right to reject any and all materials and
<br />workmanship for defects and incompatibility with Project Description or excessive cost. The
<br />Department shall notify the Contractor, in writing, if materials and/or workmanship are found to
<br />be unacceptable. The Contractor shall have ninety (90) days from notification to correct
<br />defects or to provide acceptable materials and/or workmanship. Failure by the Contractor to
<br />provide acceptable materials and/or workmanship, or to correct noted defects, shall constitute
<br />a breach of contract.
<br />d. Proiect Closeout. The Contractor agrees that Project closeout does not alter
<br />the reporting and .record retention requirements of this Section 6 of this Agreement.
<br />Section 7. Proiect Completion, Audit, Settlement, and Closeout.
<br />a. Proiect Completion. Within ninety (90) calendar days following Project
<br />completion, the end of the Project's period of performance, or termination by the Department,
<br />NCDOT/PTD/FM
<br />Revised 8/4/2008 Page 10 of 28
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