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measures necessary to ensure that all Project participants comply with applicable Federal and State
<br />laws, regulations, and directives affecting their performance, except to the extent the Department
<br />determines otherwise in writing.
<br />(2) Documents Affected. The applicability provisions of Federal and State laws,
<br />regulations, and directives determine the extent to which their provisions affect a Project participant.
<br />Thus, the Contractor agrees to include adequate provisions to ensure that each Project participant
<br />complies with those Federal and State laws, regulations, and directives, except to the extent that the
<br />Department determines otherwise in writing. In addition, the Contractor also agrees to require its third
<br />party contractors, subrecipients, and lessees to include adequate provisions to ensure compliance with
<br />applicable Federal and State laws, regulations, and directives in each lower tier subcontract and
<br />subagreement for the Project, except to the extent that the Department determines otherwise in writing.
<br />Additional requirements include the following:
<br />(a) Third Party Contracts. Because Project activities performed by a third
<br />party contractor must comply with all applicable Federal and State laws, regulations, and directives,
<br />except to the extent the Department determines otherwise in writing, the Contractor agrees to include
<br />appropriate clauses in each third party contract stating the third party contractor's responsibilities under
<br />Federal and State laws, regulations, and directives, including any provisions directing the third party
<br />contractor to extend applicable requirements to its subcontractors at the lowest tier necessary. When
<br />the third party contract requires the third party contractor to undertake responsibilities for the Project
<br />usually performed by the Contractor, the Contractor agrees to include in that third party contract those
<br />requirements applicable to the Contractor imposed by the Grant Agreement for the Project or the FTA
<br />Master 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 contained in
<br />the FTA's "Best Practices Procurement Manual." FTA and the Department caution, however, that
<br />FTA's "Best Practices Procurement Manual" focuses mainly on third party procurement processes and
<br />may omit certain other Federal requirements applicable to the work to be performed.
<br />(b) Subaareements. Because Project activities performed by a
<br />subcontractor/ subrecipient must comply with all applicable Federal and State laws, regulations, and
<br />directives except to the extent that the Department determines otherwise in writing, the Contractor
<br />agrees as follows:
<br />1 Written subagreement. The Contractor agrees to enter into a
<br />written agreement with each subrecipient (subagreement) stating the terms and conditions of
<br />assistance by which the Project will be undertaken and completed.
<br />2 Compliance with Federal Requirements. The Contractor agrees
<br />to implement the Project in a manner that will not compromise the Contractor's compliance with Federal
<br />and State laws, regulations, .and directives applicable to the Project and the Contractor's obligations
<br />under this Agreement for the Project and the FTA Master Agreement. Therefore, the Contractor agrees
<br />to include in each subagreement appropriate clauses directing the subrecipient to comply with those
<br />requirements applicable to the Contractor imposed by this Agreement for the Project or the FTA Master
<br />Agreement and extend those requirements as necessary to any lower level subagreement or any third
<br />party contractor at each tier, except as the Department determines otherwise in writing.
<br />f. No Federal/State Government Obligations to Third Parties. In connection with
<br />performance of the Project, the Contractor agrees that, absent the Federal/State Government's express
<br />written consent, the Federal/State Government shall not be subject to any obligations or liabilities to
<br />any subrecipient, third party contractor, lessee or other person or entity that is -not a party to this
<br />Agreement for the Project. Notwithstanding that the Federal/State Government may have concurred in
<br />or approved any solicitation, subagreement, or third party contract, the Federal/State Govemment has
<br />no obligations or liabilities to such entity, including any subrecipient, third party contractor, or lessee.
<br />g. Changes in Project Performance (i.e., Disputes, Breaches, Defaults, or Liti ation .
<br />The Contractor agrees to notify the Department immediately, in writing, of any change in local law,
<br />conditions (including its legal, financial, or technical capacity), or any other event that may adversely
<br />affect the Contractor's ability to perform the Project as provided in this Agreement for the Project. The
<br />Contractor also agrees to notify the Department immediately, in writing, of any current or prospective
<br />major dispute, breach, default, or litigation that may adversely affect the Federal/State Government's
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