(a) Terms and conditions. The Regional Administrator may award a design/build (Step 7) project grant provided that:
(1) The proposed treatment works has an estimated total cost of $8 million or less;
(2) The proposed treatment works is an aerated lagoon, trickling filter, waste stabilization pond, land application system (wastewater or sludge), slow rate (intermittent) sand filter or subsurface disposal system;
(3) The proposed treatment works will be an operable unit, will meet all requirements of title II of the Act, and will be operated to meet the requirements of any applicable permit;
(4) The grantee obtains bonds from the contractor in an amount the Regional Administrator determines adequate to protect the Federal interest in the treatment works (see 2 CFR 200.326);
(5) The grantee will not allow any engineer, engineering firm or contractor which provided facilities planning or pre-bid services to bid or carry out any part of the design/build work;
(6) Contracts will be firm, fixed price contracts;
(7) The grantee agrees that the grant amount, as amended to reflect the lowest responsive/responsible bid (see paragraph (e) of this section), will not be increased;
(8) The grantee will establish reasonable building start and completion dates;
(9) The grantee agrees that EPA will not pay more than 95 percent of the grant amount until after completion of building and the Regional Administrator's final project approval, based on initiation of operation and acceptance of the facility by the grantee;
(10) The grantee agrees that a recipient of a Step 7 grant is not eligible for any other grant for the project under title II of the Act; and
(11) The grantee accepts other terms and conditions deemed necessary by the Regional Administrator.
(b) Procurement.(1) Grantee procurement for developing or supplementing the facilities plan to prepare the pre-bid package, as well as for designing and building the project and performing construction management and contract administration, will be in accordance with the procurement standards at 2 CFR 200.317 through 200.327 and 2 CFR 1500.10 through 1500.11.
(2) The grantee will use the sealed bid (formal advertising) method of procurement to select the design/build contractor.
(3) The grantee may use the same architect or engineer that prepared the facilities plan to provide any or all of the pre-bid, construction management, and contract and/or project administration services provided the initial procurement met EPA requirements (see 2 CFR 1500.11).
(c) Pre-bid package. Each design/build project grant will provide for the preparation of a pre-bid package that is sufficiently detailed to insure that the bids received for the design/build work are complete, accurate and comparable and will result in a cost-effective, operable facility.
(d) Grant amount. The grant amount will be based on an estimate of the design/build project's final cost, including:
(1) An allowance for facilities planning if the grantee did not receive a Step 1 grant (the amount of the allowance is established as a percentage of the estimated design/build cost in accordance with appendix B of this subpart);
(2) An estimated cost of supplementing the facilities plan and other costs necessary to prepare the pre-bid package (see appendix A.I.1(a) of this subpart); and
(3) The estimated cost of the design/build contract.
(e) Amended grant amount.(1) After bids are accepted for the design/build contract, and the price of the lowest responsive, responsible bidder is determined, EPA will amend the design/build project grant based on:
(i) The amount of the lowest responsive, responsible bid;
(ii) A lump sum for construction management, contract and project administration services and contingencies;
(iii) Any adjustments to the final allowance for facilities planning if included as required by paragraph (c)(1) of this section (the amount of the final allowance is established as a percentage of the actual building cost in accordance with appendix B of this subpart);
(iv) The actual reasonable and necessary cost of supplementing the facilities plan to prepare the pre-bid package (see paragraph (c)(1) of this section); and
(v) The submission of approvable items required by §35.2203 of this part.
(2) Changes to Step 7 projects cannot increase the amount of EPA assistance established at the time of the grant amendment.
(f) Allotment limit for design/build grants. The Governor may use up to 20 percent of the State's annual allotment for design/build project grants.
[55 FR 27096, June 29, 1990, as amended at 79 FR 76056, Dec. 19, 2014; 87 FR 30400, May 19, 2022]