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procurement processes and may omit certain other Federal requirements applicable to the work
<br />to be performed.
<br />(b) Subagreements. Because Project activities performed by a
<br />subcontractor/ subrecipient must comply with all applicable Federal and State laws, regulations,
<br />and directives except to the extent that the Department determines otherwise in writing, the
<br />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 extend
<br />those requirements as necessary to any lower level subagreement or any third party contractor
<br />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 or
<br />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 Proiect Performance (i.e., Disputes, Breaches Defaults or
<br />Litigation). 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 this
<br />Agreement for the Project. The Contractor also agrees to notify the Department immediately, in
<br />writing, of any current or prospective major dispute, breach, default, or litigation that may
<br />adversely affect the Federal /State Government's interests in the Project or the Federal /State
<br />Government's administration or enforcement of Federal /State laws or regulations; and agrees to
<br />inform the Department, also in writing, before naming the Federal or State Government as a
<br />party to litigation for any reason, in any forum.
<br />k. Limitations of Agreement. This Agreement shall be subject to the availability
<br />of Federal and State funds, and contingent upon the terms and conditions of the Master
<br />Agreement 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, or
<br />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 for
<br />award. The Contractor may set de minimis rules where the financial interest is not substantial,
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