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(b) Subagreements. Because Project activities performed by a
<br />subcontractor/ subrecipient must comply with all applicable Federal and State laws,
<br />regulations, and directives except to the extent that the Department determines .otherwise in
<br />writing, the Contractor agrees as follows:
<br />1. Written subagreement. The Contractor agrees to enter
<br />into a written agreement with each subrecipient (subagreement) stating the terms and
<br />conditions of assistance by which the Project will be undertaken and completed.
<br />2. Compliance with Federal Requirements. The Contractor
<br />agrees to implement the Project in a manner that will not compromise the Contractor's
<br />compliance with Federal and State laws, regulations, and directives applicable to the Project
<br />and the Contractor's obligations under this Agreement for the Project and the FTA Master
<br />Agreement. Therefore, the Contractor agrees to include in each subagreement appropriate
<br />clauses directing the subrecipient to comply with those requirements applicable to the
<br />Contractor imposed by this Agreement for. the Project or the FTA Master Agreement and
<br />extend those requirements as necessary to any lower level subagreement or any third party
<br />contractor at each tier, except as the Department determines otherwise in writing.
<br />i. No Federal/State Government Obligations to Third Parties. In connection
<br />with performance of the Project, the Contractor agrees that, absent the Federal/State
<br />Government's express written consent, the Federal/State Government shall not be subject to
<br />any obligations or liabilities to any subrecipient, third party contractor, lessee, or other person
<br />or entity that is not a party to this Agreement for the Project. Notwithstanding that the
<br />Federal/State Government may have concurred in or approved any solicitation, subagreement,
<br />or third party contract, the Federal/State Government has no obligations or liabilities to such
<br />entity, including any subrecipient, third party contractor, or lessee.
<br />j. Changes in Project Performance li.e., Disputes, Breaches, Defaults, or
<br />Liti ation . The Contractor agrees to notify the Department immediately, in writing, of any
<br />change in local law, conditions (including its legal, financial, or technical capacity), or any other
<br />event that may adversely affect the Contractor's ability to perform the Project as provided in
<br />this Agreement for the Project. The Contractor also agrees. to notify the Department
<br />immediately, in writing, of any current or prospective major dispute, breach, default, or litigation
<br />that may adversely affect the .Federal/State Government's interests in the Project or the
<br />Federal/State Government's administration or enforcement of Federal/State laws or
<br />regulations; and agrees to inform the Department, also in writing, before naming the Federal or
<br />State Government as a party to litigation for any reason, in any forum.
<br />k. Limitations of Agreement. This Agreement shall be subject to the availability
<br />of State funds and contingent upon the terms and conditions of the Master Agreement
<br />between the FTA and the Department.
<br />Section 3. Ethics.
<br />a. Code of Ethics. The Contractor agrees to maintain a written code or
<br />standards of conduct that shall govern the actions of its officers, employees, board members,
<br />or agents engaged in the award or administration of third party contracts, subagreements, or
<br />leases financed with Federal/State assistance. The Contractor agrees that its code or
<br />standards of conduct shall specify that its officers, employees, board members, or agents may
<br />neither solicit nor accept gratuities, favors, or anything of monetary value from any present or
<br />potential third party contractor at any tier, any subrecipient at any tier or agent thereof, or any
<br />lessee. Such a conflict would arise when an employee, officer, board member, or agent,
<br />including any member of his or her immediate family, partner, or organization that employs, or
<br />intends to employ, any of the parties listed herein has a financial interest in the firm selected
<br />for award. The Contractor may set de minimis rules where the financial interest is not
<br />substantial, or the gift is an unsolicited item of nominal intrinsic value. The Contractor agrees
<br />NCDOT/PTD/FM
<br />Revised 8/4/2008 Page 5 of 28
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