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8�pW N pp COUNCIL AGENDA REPORT DATE: SEPTEMBER 4, 2013 TO: MAYOR AND TOWN COUNCIL FROM: GREG LARSON, TOWN MANAGER MEETING DATE: 09/16/13 r' SUBJECT: PPW PROJECT NO. 10 -10 — HIGHWAY 9 / UNIVERSITY AVENUE INTERSECTION IMPROVEMENT PROJECT 813 -0202 ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO EXECUTE AN ADMINISTERING AGENCY -STATE MASTER AGREEMENT AND THE PROGRAM SUPPLEMENT AGREEMENT UNDER THE MASTER AGREEMENT WITH THE STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION RECOMMENDATION: 1. Adopt resolution (Attachment 1) authorizing the Town Manager to execute an Administering Agency -State Master Agreement and the Program Supplement Agreement (Exhibit A) under the Master Agreement (Attachment 2) with the State of California Department of Transportation. BACKGROUND: The State of California Department of Transportation (Caltrans) processes and administers Federal and State grants to municipalities in California. Prior to the use of grant funding, Caltrans requires municipalities to execute agreements with the State to ensure compliance with regulations and standards. The Town has utilized State and Federal grants in the past such as through the Intermodal Surface Transportation Efficiency Act (ISTEA), the Regional Surface Transportation Program (RSTP), the Congestion Mitigation and Air Quality Improvement Program (CMAQ), the Transportation Enhancement Activities Program (TEA), Safe Routes to School (SR2S), and the Bridge Replacement and Rehabilitation Program (HBRR). PREPARED BY: BOB I S Interim Director of Parks and Public Works Reviewed by: Assistant Town Manager. Town Attorney finance PAGE 2 SEPTEMBER 4, 2013 MAYOR AND TOWN COUNCIL SUBJECT: PPW PROJECT NO. 10 -10 — HIGHWAY 9 / UNIVERSITY AVENUE INTERSECTION IMPROVEMENT PROJECT 813 -0202 DISCUSSION: The Highway 9 / University Avenue intersection improvement project will construct infrastructure enhancements to improve safety issues for vehicles, pedestrians and bicyclists. It is funded by the Federal Highway Safety Improvement Program (HSIP), which is administered through Caltrans. The release of ' State and Federal funds can only take place upon the signing of the Program Supplement Agreement by an authorized official. The authorized official and the project must be clearly identified in the Resolution approved by the Town Council, as required by Caltrans. Funds will be released to municipalities after the official resolution is presented to Caltrans. This can be done by signing the Master Agreement to apply towards the Program Supplement for the Highway 9 / University Avenue intersection improvement Federal Project Number HSIPL- 5067(017). A letter from the Department of Transportation includes the program supplement, special covenants or remarks, and Finance Letter. CONCLUSION: Staff recommends that the Town Council adopt a resolution (Attachment 1) authorizing the Town Manager to execute an Administering Agency -State Master Agreement and the Program Supplement Agreement (Exhibit A) under the Master Agreement (Attachment 2) with the State of California Department of Transportation. ENVIRONMENTAL ASSESSMENT: Council approval of the attached resolution is not a project defined under CEQA, and no further action is required. FISCAL IMPACT: The Town was awarded $900,000 through the Federal Highway Safety Improvement Program (HSIP). The required local match is included in the FY 2013/14 CIP. Attachments: 1. Resolution authorizing the Town Council to adopt a resolution (Attachment 1) authorizing the Town Manager to execute an Administering Agency -State Master Agreement and the Program Supplement Agreement (Exhibit A) under the Master Agreement (Attachment 2) with the State of California Department of Transportation. 2. Master Agreement PAGE SEPTEMBER 4, 2013 MAYOR AND TOWN COUNCIL SUBJECT: PPW PROJECT NO. 10 -10 — HIGHWAY 9 / UNIVERSITY AVENUE INTERSECTION IMPROVEMENT PROJECT 813 -0202 Distribution: Jesse Bhullar, Chief, Office of Project Implementation, State of California Department of Transportation, Division of Local Assistance, P. O. Box 942874, MS #1, Sacramento, CA 94274 -0001 THIS PAGE INTENTIONALLY LEFT BLANK RESOLUTION RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AUTHORIZING THE TOWN MANAGER TO EXECUTE A PROGRAM SUPPLEMENT AGREEMENT UNDER THE MASTER AGREEMENT WITH THE STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION FOR PPW JOB #10 -10 — HIGHWAY 9 / UNIVERSITY AVENUE INTERSECTION IMPROVEMENT PROJECT HSIPL- 5067(017) WHEREAS, the Town of Los Gatos (Town) is eligible to receive Federal and /or State funding for certain Transportation projects, through the California Department of Transportation; and WHEREAS, Master Agreements, Program Supplemental Agreements, Fund Exchange Agreements, and /or Fund Transfer Agreements need to be executed with the California Department of Transportation before such funds can be claimed; and WHEREAS, the Town wishes to delegate authorization to execute this program supplement agreement (Exhibit A) and any amendment thereto to the Greg Larson, Town Manager; and NOW, THEREFORE BE IT RESOLVED that Greg Larson, Town Manager be authorized to execute all Master Agreements, Program Supplemental Agreements, Fund Exchange Agreements, Fund Transfer Agreements and any amendment thereto with the California Department of Transportation. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 16th day of September, 2013, by the following vote: COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTACHMENT 1 THIS PAGE INTENTIONALLY LEFT BLANK PROGRAM SUPPLEMENT NO. N010 to ADMINISTERING AGENCY -STATE AGREEMENT FOR FEDERAL -AID PROJECTS NO 04 -5067R Adv Project ID Date: August 13, 2013 0413000307 Location: 04- SCL- 0 -LGTS Project Number: HSIPL- 5067(017) E.A. Number: 04- 925868 Locode: 5067 This Program Supplement hereby adopts and incorporates the Administering Agency -State Agreement for Federal Aid which was entered into between the Administering Agency and the State on 08/28/07 and is subject to all the terms and conditions thereof. This Program Supplement is executed in accordance with Article I of the aforementioned Master Agreement under authority of Resolution No. approved by the Administering Agency on (See copy attached). The Administering Agency further stipulates that as a condition to the payment by the State of any funds derived from sources noted below obligated to this PROJECT, the Administering Agency accepts and will comply with the special covenants or remarks set forth on the following pages. PROJECT LOCATION: SR9 /University Avenue Intersection Improvement TYPE OF WORK: Reconstruct Intersection, Upgrade Signals LENGTH: 0.0(MILES) Estimated Cost Federal Funds I Matching Funds MS30 $900,000.00 I LOCAL I I OTHER $1,175,000 $275,000. $0.00 CITY OF LOS GATOS STATE OF CALIFORNIA Department of Transportation By By Chief, Office of Project Implementation Title Division of Local Assistance Date Date Attest I hereby certify upon my personal knowledge that budgeted funds are available for this encumbrance: ----2 Accounting Officer / Date 1 f 14 1 $900,000.00 Program Supplement 04- 5067R -N010- ISTEA Page 1 of 3 Exhibit A UO/ 1014U 1 J HSIPL- 5067 (017) SPECIAL COVENANTS OR REMARKS 1. ADMINISTERING AGENCY agrees that it will only proceed with work authorized for specific phase(s) with an "Authorization to Proceed" and will not proceed with future phase(s) of this project prior to receiving an "Authorization to Proceed" from the STATE for that phase(s) unless no further State or Federal funds are needed for those future phase(s). 2. Any State and Federal funds that may have been encumbered for this project are available for disbursement for limited periods of time. For each fund encumbrance the limited period is from the start of the fiscal year that the specific fund was appropriated within the State Budget Act to the applicable fund Reversion Date shown on the State approved project finance letter. Per Government Code Section 16304, all project funds not liquidated within these periods will revert unless an executed Cooperative Work AgreemeInt extending these dates is requested by the ADMINISTERING AGENCY and approved by the California Department of Finance. ADMINISTERING AGENCY should ensure that invoices are submitted to the District Local Assistance Engineer at least 75 days prior to the applicable fund Reversion Date to avoid the lapse of applicable funds. Pursuant to a directive from the State Controller's Office and the.Department of Finance; in order for payment to be made, the last date the District Local Assistance Engineer can forward an invoice for payment to the Department's Local. Programs Accounting Office for reimbursable work for funds that are going to revert at the end of a particular fiscal year is May 15th of the particular fiscal year. Notwithstanding the unliquidated sums of project specific State and Federal funding remaining and available to fund project work, any invoice for reimbursement involving applicable funds that is not received by the Department's Local Programs Accounting Office at least 45 days prior to the.applicable fixed fund Reversion Date will not be paid. These unexpended funds will be irrevocably reverted by the Department's Division of Accounting on the applicable fund Reversion Date, 3. The ADMINISTERING AGENCY will advertise, award and administer this project in accordance with the current published Local Assistance Procedures Manual. 4. Award information shall be submitted by the ADMINISTERING AGENCY to the District Local Assistance Engineer within 60 days of project contract award and prior to' the submittal of the ADMINISTERING AGENCY'S first invoice for the construction contract. Failure to do so will cause a delay in the State processing invoices for the construction phase. Please refer to Section 15.7 "Award Package" of the Local Assistance Procedures Manual. 5, ADMINISTERING AGENCY agrees, as a minimum, to submit invoices at least once every six months commencing after the funds are encumbered for each phase by the execution of this Project Program Supplement Agreement, or by STATE's approval of an applicable Finance Letter. STATE reserves the right to suspend future authorizations /obligations for Federal aid projects, or encumberances for State funded projects, as well as to suspend invoice payments for any on- going or future project by ADMINISTERING AGENCY if Program Supplement 04- 5067R -N010- ISTEA Page 2 of 3 HSIPL- 5067(017) SPECIAL COVENANTS OR REMARKS . - I -1 - . J PROJECT costs have not been invoiced by ADMINISTERING AGENCY for a six -month period. If no costs have been invoiced for a six -month period, ADMINISTERING AGENCY agrees to submit for each phase a written explanation of the absence of PROJECT activity along with target billing date and target billing amount. ADMINISTERING AGENCY agrees to submit the final report documents that collectively constitute a "Report of Expenditures" within one hundred eighty (180) days of PROJECT completion. Failure of ADMINISTERING AGENCY to submit a "Final Report of Expenditures" within 180 days of PROJECT completion will result in STATE imposing sanctions upon ADMINISTERING AGENCY in accordance with the current Local Assistance Procedures Manual. 6. The Administering Agency shall not discriminate on the basis of race, religion, age, disability, color, national origin, or sex in the award and performance of any Federal - assisted contract or in the administration of its DBE Program Implementation Agreement. The Administering Agency shall take all necessary and reasonable steps under 49 CFR Part 26 to ensure nondiscrimination in the award and administration of Federal- assisted contracts. The Administering Agency's DBE Implementation Agreement is incorporated by reference in this Agreement. Implementation of the DBE Implementation Agreement, including but not limited to timely reporting of DBE commitments and utilization, is a legal obligation and failure to carry out its terms shall be treated as a violation of this Agreement. Upon notification to the Administering Agency of its failure to carry out its DBE Implementation Agreement, the State may impose sanctions as provided for under 49 CFR Part 26 and may, in appropriate cases, refer the matter for enforcement under 18 U.S.C. 1001 and /or the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801 et seq.). 7. As a condition for receiving federal -aid highway funds for the PROJECT, the Administering Agency certifies that NO members of the elected board, council, or other key decision makers are on the Federal Government Excluded Parties List System (EPLS). Program Supplement 04- 5067R -N010- ISTEA Page 3 of 3 STATE OF CALIFORNIA. DEPARTMENT OF TRANSPORTATION PROGRAM SUPPLEMENT AND CERTIFICATION FORM PSCF (REV. 01/2010) 1 of 1 TO: Claims Audits 3301 "C" Street, Rm 404 Sacramento, CA 95816 FROM: DEPARTMENT OF TRANSPORTATION SUBJECT: ENCUMBRANCE DOCUMENTS VENDOR/ CONTRACTOR: Town of Los Gatos CONTRACT AMOUNT: $900,000,00 1' LOCAL ASSISTANCE TE PREPARED: PROJECT NUMBER: 8/14/2013 0413000307 REQUISITION NUMBER / CONTRACT NUMBER: RQS -2660- 041400000168 I HEREBY CERTIFY UPON MY OWN PERSONAL KNOWLEDGE THAT BUDGETED FUNDS ARE AVAILABLE FOR THIS ENCUMBRANCE AND PURPOSE OF THE EXPENDITURE STATED ABOVE. ADA Notice For individuals with sensory disabilities, this document is available in alternate formats. For information, call (915) 654 -6410 of TDD (916) -3880 or write Records and Forms Management, 1120 N. Street, MS -89, Sacramento, CA 95814. MASTER. AGREEMENT ADMINISTERING AGENCY -STATE AGREEMENT FOR STATE - FUNDED PROJECTS 04 City of Los Gatos District Administering Agency Agreement 'No, 00340S This AGREEMENT, is entered into effective this day of , 2011, by and between the City of Los Gatos, hereinafter referred to as "ADMINISTERING. AGENCY," and the State of California, acting by and through its Departmeht of Transportation (Caltrans), ,hereinafter referred to as "STATE ", and together referred to as "PARTIES" or individually as a `PARTY," RECITALS: 1. WHEREAS, the Legislature of the State of California has enacted legislation by which certain State funds are made available for use on local transportation related projects of public entities qualified to act as recipients of these state funds; and 2. WHEREAS, ADMINISTERING AGENCY has applied to the California Transportation Commission (CTC) and /or STATE for funding from either the State Transportation Improvement Program (STIP), or other State- funded programs (herein referred to as STATE FUNDS), as .defined in the Local Assistance Program Guidelines '(LAPG), for use on local .authorized transportation related' projects as a local administered project(s), hereinafter referred to as "PROJECT "; and 3. WHEREAS, said PROJECT will not receive any federal funds; -and 4. WHEREAS, before STATE FUNDS will be made available for PROJECT, ADMINISTERING AGENCY and STATE are required to enter into an agreement to establish terms and conditions applicable to the ADMINISTERING AGENCY when receiving STATE FUNDS for a designated PROJECT facility and to the subsequent operation and maintenance of that completed facility. NOW., THEREFORE, the PARTIES agree as follows: Page 1 of 16 ATTACHAI;ENT 2 ,ARTME 1 - PROJECT ADMINISTRATION' I, This AGREEMENT shall have no force or effect with respect to any program project unless and until a project- specific Program Supplement to this AGREEMENT for state funded projects, hereinafter referred to as "PROGRAM SUPPLEMENT ", has been fully e.xecuted� by both STATE and ADMINISTERING AGENCY. 2. The State approved project - specific allocation letter designate the party responsible for implementing PROJECT, type of work, and location of PROJECT, 3, The PROGRAM SUPPLEMENT sets out special covenants as a condition for the ADMINISTERING AGENCY to receive STATE FUNDS from /throu.gh STATE for designated PROJECT, The PROGRAM SUPPLEMENT shall also ,show these STATE FUNDS that have been initially encumbered for PROJECT along with the snatching funds to be, provided by ADMINISTERING AGENCY and /or others. Execution of PROGRAM SUPPLEMENT by the PARTIES shall cause ADMINISTERING AGENCY to. ad'opt all of the terms of this AGREEMENT as though fully set forth therein in the PROGRAM SU- PPLEMENT. Unless otherwise expressly delegated. in a resolution by the governing: body of ADMINISTERING AGEN-CY,, and with written concurrence by STATE, the PROGRAM SUPPLEMENT shall be approved and managed by the governing body of ADMINISTERING AGENCY. 4. ADMIN'ISTERI'NG AGENCY agrees to execute and return each project- specific PROGRAM SUPPLEMENT within ninety (90) days of receipt. The PARTIES agree that STATE may suspend future allocations, encumbrances-'and invoice payments. for any, on- going or future STATE FUNDED PROJECT performed by.ADMiNISTERING AGENCY if any project-specific PROGRAM SUPPLEMENT is not returned within that ninety (90) day period unless otherwise agreed. by STATE in writing. 5. ADMINISTERING AGENCY further agrees, as a condition to the release and. payment of STATE FUNDS encumbered for the PROJ.E.CT described in each PROGRAM SUPPLEMENT, to comply with the terms and conditions of this AGREEMENT and all of the agreed -upon Special Covenants or Remarks incorporated within. the PROGRAM SUP'PLEM:ENT, and Cooperative /Contribution Agreement where appropriate, defining and identifying the nature of the specific PROJECT, 6. STATE FUNDS will not participate in. any portion of PROJ :ECT work .performed in advance of the effective date of the executed PROGRAM SUPPLEMENT for said PROJECT. 7, Projects allocated with STATE FU'N.DS from the STIP will be administered in accordance with the current CTC STIP' Guidelines, as adopted or amended and i.n accordance with: Chapter 23 of the Local Assistance Program Guidelines (LAPG) published.by STATE, 8, Projects allocated with STATE FUNDS not programmed in the STIP will be administered in accordance with the applicable chapter of the LAPG and /or any other instructions published by STATE, 9. ADMINISTERING AGENCY's eligible costs for preliminary eng- ineering work includes all preliminary. work directly related to PROJECT up to contract award for construction, including:, but not limited to, environmental studies and permits (E &P), preliminary surveys and reports, laboratory work, soil investigations, the preparation of plans, specifications and estimates (PS &E), advertising for bids, awarding of a contract and project development contract administration. Page 2 of 16' 10. ADMINISTERING AGENCY'S eligible costs for construction engineering includes actual inspection and su.pervisio:n of PROJECT construction work; construction staking; laboratory and field testing; and the preparation and processing of field reports, records, estimates., final reports, and allowable expenses of employees /consultants engaged in such activities, 11. Unless the PARTIES agree otherwise in writing, ADMINISTERING AGENCY's employees or its sub - contractor engineering consultant shall be responsible for all .PROJECT engineering work. 12. ADMINISTERING AGENCY shall not proceed with final design of PROJECT until final environmental approval of PROJECT. Final design entails the design work necessary to complete the 'PS &E and other work necessary for a construction contract but not required earlier for environmental clearance of that PROJECT. 13. If PROJECT is not on STATE - owned right -of -way, PROJECT shall be constructed in accordance with Chapter 11 of the Local Assistance. Procedures Manual (LAPM) that describes minimum statewide design standards for local agency streets and roads.. The design standards for projects off the National Highway System (NHS) allow STATE to accept either the STATE's minimum statewide design standards or the approved geometric design standards of ADMINISTERING AGENCY. Additionally, for projects off the NHS, 'STATE will accept ADMINISTERING AGENCY- approved standard specifications, standard plans, materials sampling and testing quality assurance programs that meet the conditions described in the then current Local Assistance Procedures Manual. 14, If PROJECT involves work within or partially within STATE -owned right -of -way, that PROJECT shall also be subject to compliance with the policies, procedures and standards of the STATE Project Development Procedures Manual and H-ighway Design Manual and where appropriate, an executed cooperative agreement between STATE and ADMINISTERING AGENCY that - outlines the PROJECT responsibilities and respective obligations of the .PARTIES, ADMINISTERING AGENCY and its' contractors shall each - obtain an encroachment permit through STATE prior to commencing any work within STATE rights of way or work which affects STATE facilities. 15. When PROJECT is not on the State Highway System (SHS) -but includes work to be performed by a railroad, the contract for such work shall be prepared by ADMINISTERING AGENCY or by STATE, as the PARTIES may hereafter agree. In either event, ADMINISTERING AGENCY -shall enter into an agreement with the railroad providing for future maintenance of protective devices or other facilities ,installed under the contract. 16. The Department of General Services, Division of the State Architect, or its designee, shall review the contract PS &E for the construction of buildings, structures, sidewalks, curbs and related facilities for accessibility and usability. ADMINISTERING AGENCY shall not award a PROJECT construction contract for these types of improvements until the State Architect has issued written approval stating that the PROJECT plans and specifications comply with the provisions of sections 4450 and 4454 of the California Government Code, if applicable. Further requirements and guidance are provided in Title 24 of the California Code of Regulations. 17. ADMINISTERING AGENCY shall provide or arrange for adequate supervision and inspection of each PROJECT. While consultants may perform supervision and inspection work for PROJECT with a fully qualified and licensed engineer, ADMINISTERING AGENCY shall provide a full -time employee to be in responsible charge of each-PROJECT. Page 3 of 16 18. Unless otherwise provided in the PROGRAM SUPPLEMENT, ADMINISTERING AGENCY shall advertise, award, a-nd administer the PROJECT construction contract or contracts. 19, The cost of maintenance, security, or protection performed by ADMINISTERING. AGENCY or contractor forces during any temporary suspension of PROJECT or at any other time may not be charged to the PROJECT. 20, ADMINISTERING AGENCY shall submit PROJECT- specific award information, using Exhibit 23 -A of the LAPG, to STATE's District Local Assistance Engineer, within sixty (60). days after contract award, A copy of Exhibit 23 -A shall also be included with the submittal of the first invoice for a construction contract by ADMINISTERING AGENCY to; Department of Transportation, Division of Accounting Local Programs Accounting Branch, M'S #33, PO Box 942874, Sacramento, California. 94274 - 000.1. 21, ADMINISTERING AGENCY shall submit the final report documents that collectively constitute a "Report of Expenditures." within one hundred. eighty (180) days of PROJECT completion. Failure by ADMINISTERING AGENCY to submit a "Report of Expenditures" within 180 days of project completion will, result in STATE imposing sanctions upon ADMINISTERING AGENCY in accordance Chapters 17 a.nd 19 of the Local Assistance Procedures Manual. 22, ADMINISTERING AGENCY shall comply with the Americans with Disabilities Act (ADA) of 1990 that prohibits discrimination on the basis of disability and all applicable regulations and guidelines issued pursuant to the ADA. 23, The Governor, and the Legislature of the State of California, each within their respective jurisdictions, have prescribed certain nondiscrimination requirements with respect to contract and other work financed with public funds. ADMINISTERING AGENCY agrees to comply with the requirements of the FAIR EMPLOYMENT PRACTICES ADDENDUM, attached hereto. as Exhibit A and further agrees that any agreement entered into by ADM.INISTER'ING AGENCY with a third party for performance of work connected with. PROJECT shall incorporate Exhibit A (with third party's name replacing ADMINISTERING AGENCY) as parts of such agreement. 24.. ADMINISTERING AGENCY shall include in all subcontracts awarded when applicable, 'a clause that req.ui`res each subcontractor to comply with California Labor Code requirements that all workers employed on public works aspects of any :project (as defined in California Labor Code sections 1720- 1815) be paid not less than the general prevailing wage rates predetermined by the Department of Industrial Relations as effective at the date of contract award by the ADMINISTERING AGENCY. Page 4 of 16 ARTICLE II - RIGHTS OF WAY 1. :No contract for the construction of a STATE FUNDED PROJECT shall be awarded until all necessary rights of way have been secured, Prior to the advertising for construction of PROJECT, ADMINISTERING .AGENCY shall certify and, upon request, shall furnish STATE with evidence that all necessary rights -of -way are available for construction purposes or will be available by the time of award of the construction contract. 2. The furnishing of rights-of way by ADMINISTERING AGENCY as provided for herein includes, and is limited to, the following, unless the PROGRAM SUPPLEMENT provides otherwise, (a) Expenditures to purchase all real p.raperty required for PROJECT free-and clear of liens, conflicting easements, obstructions and. encumbrances, after crediting PROJECT with the fair market value of any excess property retained and -not disposed of by ADMINISTERING AGENCY. (b) The cost of furnishing of right -of -way as provided for herein includes,. in .addition to real property required for the PROJECT, title free and clear of obstructions and .encumbrances affecting PROJECT and the payment, as required by applicable law., of damages to owners of remainder real property not .actually taken but injuriously affected by PROJECT. (c) The cost of relocation payments and services provided to owners and occupants pursuant to Government Code sections 7260 -7277 when PROJECT displaces an individual, family, business., farm operation or nonprofit organization. (d) The cost of demolition and /or the sale of all improvements on the right -of -way after credit is recorded for sale proceeds used to offset PROJECT casts, (e) The cost of all unavoidable utility relocation, protection or removal. (f) The cost of all necessary hazardous -material and hazardous waste treatment, encapsulation or removal and protective storage for which ADMINISTERING AGENCY accepts responsibility and where the actual generator cannot be identified and recovery made. 3. ADMINISTERING AGENCY agrees to indemnify and hold STATE harmless from any liability that may result in the event the right -of -way for a PROJECT., :including, but not limited to, being clear as certified or if said. right-of-way is found to contain hazardous materials requiring treatment or removal to remediate in accordance with Federal and State laws. ADMINISTERING AGENCY shall pay, from its own non- matching funds, any costs which arise out of delays to the construction of PROJECT because utility facilities have not been timely removed or relocated, or because rights -of -way were not available 'to ADMINISTERING AGENCY for the orderly prosecution of PROJECT work. Page 5 of 1'6 ARTICLE III. - MAINTENANCE AND MANAGEMENT 1, ADMINISTERING AGENCY will maintain and operate the property acquired, developed, constructed, rehabilitated, or restored by PROJECT for its intended public use until such time as the parties might amend this AGREEMENT to otherwise provide, With the approval of STATE, ADMINISTERING AGENCY or its successors in interest in the- PROJECT property, may transfer this obligation and responsibility to maintain and operate PROJECT property for that intended public purpose to another public entity. 2. Upon ADMINISTERING AGENCY's acceptance of the completed construction contract or upon contractor being relieved of the responsibility for maintaining and protecting PROJECT, ADMINISTERING AGENCY will be responsible for the maintenance, ownership, liability, and the expense thereof, for PROJECT in a manner sati-sfactory to the authorized representatives of STATE and if PROJECT falls within the jurisdictional ; limits of another Agency or Agencies, it is the duty of ADMY'NISTERI.NG AGENCY to facilitate a separate maintenance agreement(s) between itself and the other jurisdictional: Agency or Agencies providing for the operation, maintenance, ownership and liability- of PROJECT. Until those agreements are executed, ADMINISTERING AGENCY will be responsible for all PROJECT operations, maintenance, ownership and liability in a manner satisfactory to the authorized representatives of STATE. If, within ninety (90) days after receipt of notice from STATE that a PROJECT, or any portion thereof, is not being properly operated and maintained and ADMINISTERING AGENCY has not satisfactorily remedied the conditions complained of, the approval of future STATE FUNDED PROJECTS of ADMINISTERING AGENCY will be withheld; until the. PROJECT shall have- been put in a condition of operation and` maintenance satisfactory -to STATE. The provisions of this section shall not apply to a PROJECT . that has been vacated through. due process of law with STATE's concurrence. 3. PROJECT and its facilities shall be maintained by an. adequate and well- trained staff of engineers and /or such other professionals and, technicians as PROJECT reasonably requires. Said operations and maintenance staff may be employees of ADMINISTERING AGENCY,. another unit of government, or a contractor under agreement with ADMINISTERING AGENCY. All maintenance will be performed at regular intervals or as required for efficient operation of the complete PROJECT improvements. Page '6 of 16 ARTICLE IV - FISCAL PROVISIONS 1. All contractual obligations of STATE are subject to the appropriation of resources by the Legislature and the .allocation of resou.roes by the CTC, 2, STATE'S financial commitment of STATE FUNDS will occur only upon the execution of this AGREEMENT, the execution of each :project- specific PROGRAM SUPPLEMENT and/or STATE's approved finance'letter. 1 ADMINISTERING AGENCY may submit signed duplicate invoices. in arrears for :reimburse:ment of allowable PROJECT costs on a monthly or quarterly progress basis once the project- specific PROGRAM SUPPLEMENT has been executed by STATE. 4: ADMINISTERING AGENCY agrees, as a minimum, to submit invoices at least once every six months commencing after the STATE FUNDS are encumbered on either the project- specific PROGRAM SUPPLEMENT or through a - project - specific finance Fetter approved by STATE. STATE reserves the right to suspend future allocations and invoice payments for any on -going or future STATE FUNDED project performed -by ADMINISTERING AGENCY if PROJECT costs have not been invoiced by ADMINISTERING AGENCY for a six -month period 5. :Invoices shall be submitted on ADMINISTERING AGENCY letterhead that includes the address �of ADMINISTERING AGENCY and. shall be formatted in accordance with Chapter 5 of the LAPM. 6, Invoices must have at least one copy of supporting backup documentation for allowable costs incurred and claimed for reimbursement by ADMINISTERING AGENCY. Acceptable backup documentation includes., but is not limited to, agency's progress payment to the 'contractors, copies of cancelled checks showing amounts made payable to vendors and contractors, and /or a computerized summary of PROJECT costs. 7. Payments to ADMINISTERING AGENCY can only be released by STATE' as reimbursements of actual allowable PROJECT costs already incurred and paid for by ADMINISTERING AGENCY. 8. An indirect cost allocation plan a:nd related documentation .are to be provided to STATE (Caltrans Audits ,& investigations) annually for review and approval prior to ADMINISTERING AGENCY seeking reimbursement of indirect cost incurred within each fiscal year being claimed for reimbursement.. - The indirect cost allocation plan must be prepared in accordance with the requirements set forth in Office of Management and Budget Circular A -87 and Chapter 4 of the Local Assistance Procedures Manual, 9. STATE will withhold the greater of either two (2) percent of the total of all STATE .FUNDS encumbered for each PROGRAM SUPPLEMENT or $40,000 until ADMINISTERING AGENCY submits the Final Report of Expenditures for each completed PROGRAM SUPPLEMENT PROJECT. 10. The estimated total cost of PROJECT, the amount of STATE FUNDS obligated, and the required matching funds may be adjusted by mutual consent of the PARTIES with an allocation letter and finance Letter. STATE FUNDING may be increased to cover PROJECT cost increases only if such additional funds are available and the CTC a.nd /or STATE concurs with that increase in the form of an allocation and finance letter, Page 7 of 16 11, When such additional STATE FUNGUS are not available, ADMINISTERING AGENCY agrees that any increases in PROJECT costs must be defrayed with ADMINISTERING AGENCY's own funds, 12. ADMINISTERING AGENCY shall use its own non STATE FUNDS to finance the local share of eligible costs and all: PROJECT expenditures or contract items ruled ineligible for financing with STATE FUNDS, STATE shall make the final determination of ADMINISTERING AGENCY's cost eligibility for STATE FUNDED financing with respect to claimed PROJECT costs. 13. ADMINISTERING AGENCY will reimburse STATE for STATE's share of costs for work performed by STATE .at the. request of ADMINISTERING AGENCY. STATE's costs shall include overhead assessments in accordance with section 8755.1 of the State Administrative Manual. 14, STATE FUNDS allocated from the STIP are subject to the timely use of funds provisions enacted by Senate Bill 45, approved in 1997, and subsequent STIP Guidelines and State - procedures approved by the CTC and STATE. 15. STATE FUNDS encumbered for PROJECT are avail -able for liquidation only for five (5) years from the beginning of the State fiscal year when those funds were appropriated in the State Budget. STATE' FUNDS not liquidated within these periods will be reverted unless. a Cooperative Work Agreement (CWA) is submitted by ADMINISTERING AGENCY and, approved by the California Department of Finance in accordance with Government Code section 16304. The exact date of fund reversion will be reflected in the STATE signed PROJECT finance letter. 16, Payments to ADMINI•STERI:NG AGENCY for PROJECT- related travel, and subsistence (per diem) expenses of ADMINISTERING AGENCY forces and its contractors and subcontractors claimed for reimbursement. or as local match credit shall not exceed rates. authorized to be paid to rank anal. file STATE emiployees under current State Department of Personnel Administration. (DPA) rules. If the rates invoiced by ADMINISTERING AGENCY are in excess of ,DPA rates, ADMINISTERING AGENCY is responsible for the cost difference, and any overpayments .inadvertently paid by STATE -shaIl be reimbursed: to STATE by ADMINISTERING AGENCY on demand, 17, ADM'INISTERIN'G AGENCY agrees to comply with Office of Management and Budget (OMB) Circular A -87, Cost Principles for State and Local Governments, and 49 CFR, Part 18, Uniform- Administrative Requirements for Grants and Cooperative Agreements to , State and Local Governments, 18, ADMINISTERING AGENCY, agrees,, and will assure that its contractors and subcontractors will .be obligated to agree that (a) Contract Cost Principles and Procedures, - 48 CFR, Federal Acquisition Regulations System, Chapter 1, Part 31, et seq., shall be used to determine the allowability of individual PROJECT cost items and (b) those parties shall comply with federal administrative- procedures in accordance with 49 CFR,, Part 18', Uniform Administrative Requirements for Grants and Cooperative Agreements to State and .Local Governments. Every sub - recipient receiving; PROJECT funds as a contractor or sub - contractor under this AGREEMENT shall comply withr Federal administrative procedures in accordance with 49 CFR, Part 18, Uniform Administrative Requirements for Grants. and Cooperative Agreements to State and Local; Governments. ADMINISTERING AGENCY agrees to comply with the provisions set Page 8 of 16 forth in 23 CFR Parts 140, 645 and 646 when contracting with railroad and utility cornpanies 19. Any PROJECT costs for which ADMINISTERING AGENCY has received payment or credit that are determined by subsequent audit to be unallowable under OMB Circular A -87, 48 CFR, Chapter 1, Part 31, 23 CFR Parts 140, 645 and 646 or 49 CFR, Part 18, are subject to repayment by ADMINISTERING AGENCY to STATE. 20. Upon written demand by STATE, any overpayment to ADMINISTERING AGENCY of.amounts invoiced to STATE shall be returned to STATE. 21. Should ADMINISTERING AGENCY fail to refund any moneys due STATE as provided herein or should ADMINISTERING AGENCY breach this AGREEMENT by failing to complete PROJECT without adequate justification and approval by STATE, then., within thirty (30) days of demand., or within such other period as may be agreed to in writing between the PARTIES hereto, STATE, acting through the State Controller, the State Treasurer, the CTC or any other public entity or agency, may intercept, withhold and demand the transfer of an amount eq.ual to the amount paid by or owed to STATE for each PROJECT, from future .apportionments, or any other funds due ADMINISTERING AGENCY from the Highway Users Tax Fund or any other sources of funds, and /or may also withhold approval of future STATE FUNDED projects proposed by ADMINISTERING AGENCY, 22. Should AD'MINIST'ERING AGENCY be declared to be in breach of th:1s AGREEMENT or otherwise in default thereof by STATE, and if ADMINISTERING AGENCY is constituted as a joint powers authority, special district, or any other'pu:blic entity not directly receiving funds through the State Controller., STATE is authorized to obtain reimbursement from whatever sources of funding are - available, including the withholding or transfer of funds, pursuant to Article 1V - 21, from those constituent entities .comprising a joint powers authority or by bringing of an .action against ADMINISTERING AGENCY or its constituent .member entities, to recover all funds provided by STATE hereunder. 23. ADMINISTERING AGENCY acknowledges that the signatory party represents the ADMINISTERING AGENCY and further warrants that there is nothing within a Joint Powers Agreement, by which ADMINISTERING AGENCY was created, if any exists, that would .restrict or otherwise limit STATE's ability to recover STATE FUNDS improperly spent by ADMINISTERING AGENCY in contravention,of the terms of this AGREEMENT. Page 9of -16 ARTICLE V AUDITS, THIRD PARTY CONTRACTING, RECORDS RETENTION AND REPORTS 1. STATE reserves the right to conduct technical and financial audits of PROJECT work and records when determined to be necessary or appropriate and ADMINISTERING AGENCY agrees, and shall require its contractors and subcontractors, to agree, to cooperate with STATE by making all appropriate and relevant PROJECT records available for audit and copying as required by paragraph three (3) of Article V. 2, ADMINISTERING AGENCY, its contractors and subcontractors shall establish and maintain an accounting. system- and records that properly accumulate and segregate incurred PROJECT costs and matching funds by line item for the PROJECT.. The accounting system of ADMINISTERING AGENCY, its contractors and all subcontractors shall conform to Generally Accepted Accounting Principles, unable the determination of incurred costs at interim points of completion, and provide support for reimbursement payment vouchers or invoices sent to. or paid by STATE. 3. For the purpose of determining compliance with Title 21,, California Code of Regulations,. Chapter 21, section 25'00 et seq., when applicable, and other matters connected with the performance and costs of ADMINISTERI.NG AGENCY's. contracts with third parties pursuant to Government Code section 8546.7, ADM- INISTERING AGENCY, ADMINISTERING AGENCY's contractors and subcontractors, and STATE shall each maintain and make available for inspection and: audit all books, documents,. papers, accounting records, and'other evidence pertaining to the performance of such contracts, including, but not limited to, the costs of administering those various contracts. All of the above-referenced parties shall make such AGREEMENT and PROGRAM SUPPLEMENT materials available at their respective offices at all reasonable times during the entire PROJECT period and for three (3) years from: the date of final payment to ADM'I`NISTERING. AGENCY under any PROGRAM SUPPLEMENT. STATE,. the California State Auditor, or any duly authorized representative of STATE or the United States, shall each have access to any books, records, and documents that are pertinent to a PROJECT for audits, examinations, excerpts, and transactions and ADMINISTERING AGENCY shall furnish copies thereof if requested. 4. A.DM:INISTERfNG AGENCY is required to have an audit in accordance with the Single Audit Act of OMB Circular A -133 if it receives a total of $500,000 or snore in STATE FUNDS in a single fiscal. year. The STATE FUNDS -received under PROGRAM SUPPLEMENT are a part of the Catalogue of Fe.d.eral Domestic Assistance (CFDA) 20.205, Highway Planning and Research. 5, ADMINISTERING AGENCY agrees to include all PROGRAM SUPPLEMENTS adopting the terms of this AGREEMENT In the schedule of projects to be examined in ADMINISTERING AGENCY'S' annual audit and in the schedule of projects to be examined under its single audit prepared i:n accordance with OMB Circular A -133, 6, ADMINISTERING AGENCY shall not award a construction contract over $10,000 or other contracts over, $25,000 [excluding professional service contracts of the type which are required to b& procured in accordance with Government Code sections 4525 (d), (e) and (f)] on the basis of a noncompetitive negotiation for work to be performed under this AGREEMENT without the prior written approval of STATE. All contracts awarded by ADMINISTERING AGENCY intended or used as local match credit must meet the requirements set forth in this AGREEMENT regarding local match funds. Page 10 of 16 7. Any subcontract entered into by ADMINISTERING AGENCY as a result of this AGREEMENT shall contain all of the provisions of Article IV, FISCAL PROVISIONS, and this ARTICLE V, AUDITS; THIRD- PARTY ,CONTRACTING., RECORDS RETENTION AND REPORTS and shall mandate that travel and per diem reimbursements and third -party contract reimbursements to subcontractors will be allowable as PROJECT costs on-ly after those costs are incurred and paid for by the subcontractors. 8. To be' eligible for :Local match credit, ADMINISTE-RING AGENCY must ansu.re that local match funds used for a PROJECT meet the fiscal provisions requirements outlined in ARTICLE IV in the same manner that is required of all other PROJECT expenditures. 9. 'In addition to the above, the ,pre -award requirements of third -party contractor /consultants with ADMINISTERING AGENCY should be consistent with LOCAL ASSISTANCE PROCEDURES.. Page 11 of 16 ARTICLE VI - MISCELLANEOUS PROVISIONS 1. ADMINISTERING AGENCY agrees to use all PROJECT funds reimbursed hereunder only for transportation purposes that' are in conformance with Article XIX of the California State Constitution and other California laws. 2. ADMINISTERING AGENCY shall conform to all applicable State and Federal statutes and regulations, and the Local Assistance Program Guidelines and Local Assistance. Procedures Manual as published by STATE and incorporated: herein, including all subsequent approved revisions thereto, applicable to PROJECT unless otherwise designated in the project- specific executed PROJECT SUPPLEMENT. 3, This AGREEMENT is subject to any additional restrictions, limitations, conditions, or any statute enacted by the State Legislature or adopted by the CTC that may affect the provlsi.ons,. terms, or funding- of this AGREEMENT in any manner. 4. ADMINISTERING AGENCY and the officers and employees of ADM - INISTERING AGENCY, when engaged in. the performance of this AGREEMENT, shall act in an independent capacity and not as officers, employees or agents of STATE. 5. Each project- specific PROGRAM SUPPLEMENT shall' separately establish the terms and funding limits for each described PROJECT funded under this AGREEMENT and that PROGRAM SUPPLEMENT. No STATE FUNDS are obligated against this AGREEMENT. 6, ADMINISTERING AGENCY certifies that neither ADMINISTERING AGENCY nor its principals are suspended or debarred at the. time of the execution of this AGREEMENT, and ADMI.NI.STERING AGENCY agrees that it will notify. STATE Immediately in the event a suspension or a. debarment occurs after the execution of this AGREEMENT. 7, ADMINISTERING AGENCY warrants, by execution of this AGREEMENT, that no person or selling agency has been employed or retained to solicit or secure this AGREEMENT upon an agreement or understanding for 'a commission, percentage, brokerage, or confingent fee, excepting bona fide employees or bona fide established commercial or selling agen:c ►es maintained by ADMINISTERING AGENCY for the purpose of securing business. For breach or violation of this warranty, STATE has the right to, annul this AGREEMENT without liability, pay only for the value of the PROJECT work actually performed, or in STATE's discretion,. to deduct from the price of PROGRAM SUPPLEMENT consideration, or otherwise recover,. the full amount of such commission, percentage, brokerage, or contingent fee. 8. In accordance with Public Contract Code section 10296, ADMINISTERING AGENCY hereby certifies under penalty of perjury that no. more than one final unappealable finding of contempt of court by a federal court has been issued against ADMINISTERING AGENCY within the immediate preceding two (2) year period because of ADMINISTERING AGENCY's failure to comply with an order of a federal court that orders ADMINISTERING AGENCY to comply with an order of the National Labor Relations Board. 9, ADMINISTERING AGENCY shall disclose any financial, business, or other relationship with STATE that may have an impact upon the outcome of this AGREEMENT or any individual PROJECT encompassed within a: PROGRAM SUPPLEMENT, ADMINISTERING AGENCY shall also list current contractors who may have a financial interest in the outcome of a PROJECT undertaken pursuant to this AGREEMENT. Page 12 of 16 10, ADMINISTERING AGENCY hereby certifies that it does not now have nor :shall it acquire any financial or business :interest that would conflict with the performance of any PROJECT initiated under this AGREEMENT, 11, ADMINISTERING AGENCY warrants that this AGREEMENT was not obtained or secured through rebates, kickbacks or .other unlawful consideration e.ithe.r promised or- paid to any STATE employee. For breach or violation of this warranty, STATE shall have the right, in its sol.e discretion, to terminate this AGREEMENT without liability, to pay only for PROJECT work actually performed, or to deduct from a PROGRAM SUPPLEMENT price or otherwise recover the full a:mount of such rebate, 'kickback, or other unlawful consideration. 12. *Any dispute concerning a question of fact arising under this AGREEMENT that is not disposed of by agreement shall be decided by the STATE's Contract Officer, who may .consider any written or verbal evidence submitted by ADMINISTERING AGENCY, The decision of the Contract Officer, .Issued in writing, shall be conclusive and binding on the PARTIES on all questions of fact considered and determined by the Contract Officer. 13. Neither the pending of a dispute nor its consideration by the Contract Officer will excuse the ADMINISTERING AGENCY from full and timely performance in accordance with the terms of this AGREEMENT and each PROGRAM SUPPLEMENT, 14, Neither STATE nor .any officer or employee thereof is responsible for any injury, damage or liability occurring by reason of anything done or omitted to be done by ADMINISTERING AGENCY under or in connection with any work, authority or jurisdiction of ADM:IN.ISTERING AGENCY arising under this .AGREEMENT, It is understood .and. agreed that ADMINISTERING AGENCY shall fully defend, indemnify and save harmless STATE .and all of its officers and employees from all claims and suits or actions of every name, kind and description brought forth under, including but :not limited to, tortuous, contractual, inverse :condemnation or other theories or assertions of liability occurring by reason of anything done or omitted to 'be done by ADMINISTERING AGENCY under this AGREEMENT. 15. Neither ADMINISTERING AGENCY nor any officer or employee thereof is responsible for any injury, damage or liability occurring by reason of anything done or omitted to 'be done by, under or in connection with. any work, authority or jurisdiction arising under this AGREEMENT, it is understood and agreed that STATE shall fully defend, indemnify and save, harmless the ADMINISTERING AGENCY and all of its officers and employees from all claims, suits or actions of every name, kind and description brought forth under, including but not .limited to, tortuous, contractual, inverse condemnation and other theories or assertions of liability occurring by reason of anything done or omitted to be done by STATE under this AGREEMENT, 16, In the event of (a) ADMINISTERING AGENCY failing to timely proceed with effective PROJECT work in accordance with the project- specific PROGRAM SUPPLEMENT; (b) failing to maintain any applicable bonding requirements; and {c) otherwise materially violating the terms and conditions of this AGREEMENT and /or any PROGRAM SUPPLEMENT, 'STATE reserves the right to terminate funding for that PROJECT upon thirty (30) days' written notice to ADMINISTERING AGENCY. 17, No termination notice shall become effective if, within thirty (30) days after receipt of a Notice of Termination, ADMINISTERING AGENCY either cures the default involved or, if the default is not reasonably susceptidle of cure within said thirty (30) day period the ADMINISTERING Page 13 of 16 AGENCY proceeds thereafter to complete that cure in a manner and time line acceptable to STATE. 16. Any such termination shall be accomplished by delivery to ADMINISTERING AGENCY of a Notice, of Termination, which notice shall- become effective not less than thirty (30) days after receipt, specifying. the reason for the termination, the extent to which funding of work under this AGREEMENT and the applicable PROGRAM SUPPLEMENT Is terminated: and the date upon which such termination becomes effective, if beyond thirty (30) days after receipt. During the period before the effective termination date, ADMI.NISTERIN'G AGENCY and STATE shall meet to attempt to resolve any dispute. In the event of such termination., STATE may proceed with the PROJECT work in' a: manner deemed proper by STATE. If STATE terminates funding for PROJECT with ADMINISTERING AGENCY for the reasons stated in paragraph sixteen (16) of ARTICLE Vi, STATE shall pay ADMINISTERING AGENCY the- sure due ADMIN'ISTER.ING AGENCY under the PROGRAM SUPPLEMENT and /or. STATE - approved finance Letter prior to termination, provided', however, ADMINISTERING AGENCY is not. in default of the terms and conditions of this AGREEMENT or the project- specific PROGRAM SUPPLEMENT and that the cost of any PROJECT completion to STATE shall first be deducted from any sum due ADMINISTERING AGENCY, 19. In the case of inconsistency or conflicts with the terms of this AGREEMENT and that of a project- specific PROGRAM SUPPLEMENT and /or Cooperative Agreement,. the terms stated in that PROGRAM SUPPLEMENT and /or Cooperative Agreement shall prevail over those in this AGREEMENT. 20; Without the written consent of STATE,. this AGREEMENT is not assignable by ADMINISTERING AGENCY either in whole or in part. 21. No alteration or variation of the terms, of this. AGREEMENT shall, be valid unless made in writing and signed by the PARTI:E.S, and no oral' understanding or agreement not incorporated herein. shall be binding on any of the PARTIES. IN WITNESS WHEREOF, the parties have executed this AGREEMENT by their du:ly authorized officer. STATE OF CALIFORNIA City of Los Gatos. DEPARTMENT OF TRANSPORTATION Chief, Office of Project Implementation Division of Local Assistance Date Page 14 of 16 City of Los Gatos Representative Name & Title (Authorized' Governing Body Representative) Date EXHIBIT A - FAIR EMPLOYMENT PRACTICES ADDENDUM 1. In the performance of this Agreement, ADMIN.ISTERIN.G AGENCY will not discriminate against any employee for employment because of race, color, sex, sexual orientation, religion, age, ancestry or national origin, physical disability, medical condition, marital status, political affiliation, family and medical care leave, pregnancy leave, or disability leave. ADMINISTERING AGENCY will take affirmative action to ensure that employees are treated during employment without regard to their race, sex, sexual orientation, color, religion, ancestry, or national origin, physical disability, medical condition, marital status, political affiliation, family and medical care leave., pregnancy leave, or disability leave. Such action shall include, but not be limited to, the following: employment; upgrading.; demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. ADMINISTERING AGENCY shall post in conspicuous places, available to employees for employment, notices to be provided by STATE setting forth the provisions of this Fair Employment section. 2. ADMINISTERING AGENCY, its contractors) and all subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Gov:: Code, 1290 -0 set seq.), and the applicable regulations promulgated thereunder -(Cal. Code .Begs., Title 2, 7285.0, et seq..). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code section 12900(a -f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are incorporated into this AGREEMENT by reference and made a part hereof as if set forth in full. Each of the ADMINISTERING AGENCY'S contractors and all subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreements, as appropriate. 3. ADMINISTERING AGENCY shall include the nondiscrimination and compliance provisions of this clause in all contracts and subcontracts to perform work under this AGREEMENT. 4. ADMINISTERING AGENCY will permit access to the records .of employment, employment advertisements, application forms, and other pertinent data and records by STATE, the State Fair Employment and :Housing Commission, or any other agency of the State of California designated by STATE, for the purposes of. investigation to ascertain compliance with the Fair Employment section of this Agreement. 5. Remedies for Willful Violation: (a) STATE may determine a willful violation of the Fair Employment provision to have occurred upon.receipt of a final judgment to that effect from a court in an action to which ADMINISTERfNG AGENCY was a party, or upon receipt of a written notice from the Fair Employment and .Housing Commission that it has investigated and determined that ADMINISTERING AGENCY has violated the Fair Employment Practices Act and had issued an order under Labor Code section 1426 which has become final or has obtained an injunction under Labor Code section 1429. (b) For willful violation of this Fair Employment Provision, STATE shall have the right to terminate this Agreement either in whole or in part, and.any loss or damage sustained by STATE in securing the goods or services thereunder shall be borne and paid for by ADMINISTERING AGENCY and by the surety under the performance bond, if any, and STATE may deduct from any moneys due Page 15 of 16 or thereafter may become clue to ADMINISTERING AGENCY, the difference between the price named in the Agreement and the actual cost th.ereof to STATE to cure ADMINISTERING AGENCY's breach of this Agreement, Page 16 of 16