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Contractor agrees that it, rather than the subcontractor, is ultimately responsible for compliance <br />with atl applicable Federal and State laws, regulations, and directives, except to the extent that <br />the Department determines otherwise in writing. <br />h. Contractor's Responsibility to Extend- Federal and State Requirements to <br />Other Entities. <br />(7) 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 and subrecipients to include <br />adequate provisions to ensure compliance with applicable Federal and State laws, regulations, <br />and directives in each lower tier subcontract and subagreement for the Project, except to the <br />extent that the Department determines otherwise in writing. Additional requirements include the <br />following: <br />(a) Third Part~r Contracts. Because Project activities performed by a <br />third party contractor must comply with alt 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 />Project 07-US-056 Page 6 of 49 <br />Orange County <br />