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(1) Entities Affected. Only entities that are signatories to this Agreement for the
<br /> Project are parties to this agreement. To achieve compliance with certain Federal and State laws,
<br /> regulations, or directives, however, other Project participants, such as subrecipients and third party
<br /> contractors, will necessarily be involved. Accordingly, the Contractor agrees to take the appropriate
<br /> 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 contractors 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) Subagreements. 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 Contractors 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 Government 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 Litigation).
<br /> The Contractor agrees to notify the Department immediately, in writing, of any change in local law,
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