Page:United States Statutes at Large Volume 106 Part 2.djvu/167

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PUBLIC LAW 102-367 —SEPT. 7, 1992 106 STAT. 1047 minimum, such standards shall provide that, to be allowable, costs must— "(A) be necessary and reasonable for proper and efficient administration of the program under this Act; "(B) be allocable to the program under this Act; and "(C) not be a general expense required to carry out the overall responsibilities of State, local, or federally recognized Indian tribal governments except as specifically provided by this Act. "(3) The Governor, in accordance with minimum requirements established by the Secretary in regulations, shall prescribe and implement procurement standards to ensure fiscal accountability and prevent fraud and abuse in programs administered under this Act. The Secretary, in establishing such minimum requirements, shall consult with the Inspector General of the Department of Labor and take into consideration relevant aspects of the circulars issued by the Director of the Office of Management and Budget. Such minimum requirements shall include provisions to ensure that for States, substate areas, and service delivery areas— "(A) procurements shall be conducted in a manner providing full and open competition; "(B) the use of sole source procurements shall be minimized to the extent practicable, but in every case shall be justified; "(C) procurements shall include an appropriate analysis of the reasonableness of costs and prices; "(D) procurements shall not provide excess program income (for nonprofit and governmental entities) or excess profit (for private for-profit entities), and that appropriate factors shall be utilized in determining whether such income or profit is excessive, such as— "(i) the complexity of the work to be performed; "(ii) the risk borne by the contractor; and "(iii) market conditions in the surrounding geographical area; "(E) procurements shall clearly specify deliverables and the basis for payment; "(F) written procedures shall be established for procurement transactions; "(G) no grantee, contractor, subgrantee, or subcontractor shall engage in any conflict of interest, actual or apparent, in the selection, award, or administration of a contract or grant under this Act; "(H) all grantees and subgrantees shall conduct oversight to ensure compliance with procurement standards; and "(I) procurement transactions between units of State or local governments, and any other entities organized principally as the administrative entity for service delivery areas, shall be conducted on a cost reimbursable basis. "(4) The Governor shall annually conduct on-site monitoring of each service delivery area and substate area within the State to ensure compliance with the procurement standards established pursuant to paragraph (3). "(5) If the Governor determines that a service delivery area or substate area is not in compliance with the procurement standards established pursuant to paragraph (3), the Governor shall— "(A) require corrective action to secure prompt compliance; and