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(1) Significant Participation by a Third Party Contractor. Although the
<br />Contractor may enter into a third party contract, after obtaining approval from the Department, in
<br />which the third party contractor agrees to provide property or services in support of the Project,
<br />or even carry out Project activities normally performed by the Contractor (such as in a turnkey
<br />contract), the Contractor agrees that it, rather than the third party contractor, is ultimately
<br />responsible to the Department for compliance with all applicable Federal and State laws,
<br />regulations, and directives, except to the extent that the Department determines otherwise in
<br />writing.
<br />(2) Significant Participation by a Subcontractor. Although the Contractor
<br />may delegate any or almost all Project responsibilities to one or more subcontractors, the
<br />Contractor agrees that it, rather than the subcontractor, is ultimately responsible for compliance
<br />with all applicable Federal and State laws, regulations, and directives, except to the extent that
<br />the Department determines otherwise in writing.
<br />(3) Significant Participation by a Lessee of a Contractor. Although the
<br />contractor may lease project property and delegate some or many project responsibilities to one
<br />or more lessees, the Contractor agrees that it, rather than any lessee, is ultimately responsible
<br />for compliance with all applicable Federal laws, regulations, and directives, except to the extent
<br />that FTA determines otherwise in writing.
<br />h. Contractor's Responsibility to Extend Federal and State Requirements to
<br />Other Entities.
<br />(1) Entities Affected. Only entities that are signatories to this Agreement
<br />for the Project are parties to this agreement. To achieve compliance with certain Federal and
<br />State laws, regulations, or directives, however, other Project participants, such as subrecipients
<br />and third party contractors, will necessarily be involved. Accordingly, the Contractor agrees to
<br />take the appropriate measures necessary to ensure that all Project participants comply with
<br />applicable Federal and State laws, regulations, and directives affecting their performance,
<br />except to the extent the Department determines otherwise in writing.
<br />(2) Documents Affected. The applicability provisions of Federal and State
<br />laws, regulations, and directives determine the extent to which their provisions affect a Project
<br />participant. Thus, the Contractor agrees to include adequate provisions to ensure that each
<br />Project participant complies with those Federal and State laws, regulations, and directives,
<br />except to the extent that the Department determines otherwise in writing. In addition, the
<br />Contractor also agrees to require its third party contractors, subrecipients, and lessees to
<br />include adequate provisions to ensure compliance with applicable Federal and State laws,
<br />regulations, and directives in each lower tier subcontract and subagreement for the Project,
<br />except to the extent that the Department determines otherwise in writing. Additional
<br />requirements include the following:
<br />(a) Third Party Contracts. Because Project activities performed by a
<br />third party contractor must comply with all applicable Federal and State laws, regulations, and
<br />directives, except to the extent the Department determines otherwise in writing, the Contractor
<br />agrees to include appropriate clauses in each third party contract stating the third party
<br />contractor's responsibilities under Federal and State laws, regulations, and directives, including
<br />any provisions directing the third party contractor to extend applicable requirements to its
<br />subcontractors at the lowest tier necessary. When the third party contract requires the third
<br />party contractor to undertake responsibilities for the Project usually performed by the
<br />Contractor, the Contractor agrees to include in that third party contract those requirements
<br />applicable to the Contractor imposed by the Grant Agreement for the Project or the FTA Master
<br />Agreement and extend those requirements throughout each tier except as the Department
<br />determines otherwise in writing. Additional guidance pertaining to third party contracting is
<br />contained in the FTA's "Best Practices Procurement Manual." FTA and the Department caution,
<br />however, that FTA's "Best Practices Procurement Manual" focuses mainly on third party
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