preference requirements of 41 CFR Chapter 14. The contractor shall not enter into an Architect/Engineer agreement involving the expenditures of Federal funds until the Commissioner of Indian Affairs has reviewed the agreement.

(d) The drawings and specifications will conform to the educational and facilities specifications prepared in accordance with § 277.15a.

(e) The Bureau will review the drawings and specifications with the local education agency, the local Indian Education Commmittee and tribal governing body(s) of the tribe(s) to be served by the facility. After approval by the State and other regulatory agencies, the final drawings and specifications will be reviewed and approved by the Bureau.

[40 FR 51327, Nov. 4, 1975, as amended at 43 FR 37449, Aug. 23, 1978]

§ 277.23 Facilities construction.

The contractor usually bids, awards and administers the construction contract. The Commissioner of Indian Affairs will assist in preconstruction and construction activities to assure conformity with the requirements of Pub. L. 93-638. Approval of all proposed preconstruction documents will be obtained from the Commissioner of Indian Affairs. Assistance prior to the preparation of these and similar documents will be provided upon request. In this connection, the Commissioner of Indian Affairs may suggest a preliminary conference with the project architect and others if that seems desirable. The Bureau shall make interim inspections and audits during construction and participate in the final acceptance inspection.

§ 277.24 Selecting initial equipment.

Equipment procured with payments under this part must be approved by the Commissioner before invitations for bids or requests for proposals as to the acquisition of such equipment are issued. In order to obtain such approval, a list of equipment to be procured (indicating quantities, costs, and specifications) shall be provided to the Commissioner for prior approval.

§ 277.25 Advance payments.

Advance payments to school districts will be made in accordance with the applicable provisions of 41 CFR 1 as supplemented by 41 CFR 14 and 41 CFR 14H, except 41 CFR Part 14H-70. [40 FR 51327, Nov. 4, 1975, as amended 43 FR 37449, Aug. 23, 1978]

§ 277.26 Use and transfer of Government property.

(a) The use of Government-owned facilities for public school purposes may be authorized when not needed for Government activities. Transfer of title to such facilities (except land) may be arranged under the provisions of the Act of June 4, 1953 (67 Stat. 41), subject to the approval of the tribal government if property is located on a reservation.

(b) In carrying out a contract made under this part, the Commissioner of Indian Affairs may, with the approval of the tribal government, permit a contractor to use existing buildings, facilities, and related equipment and other personal property owned by the Bureau under terms and conditions agreed upon for their use and maintenance. The property at the time of transfer must conform to the minimum standards established by the Occupational Safety and Health Act of 1970 (84 Stat. 1590), as amended (29 U.S.C. 651).

(c) Use of Government property is subject to the following conditions:

(1) When nonexpendable Government property is turned over to public school authorities under a use permit, the permittee shall insure such property against damage by flood, fire, rain, windstorm, vandalism, snow, and tornado in amounts and with companies satisfactory to the Bureau officer in charge of the property. In case of damage or destruction of the property by flood, fire, rain, windstorm, vandalism, snow or tornado, the insurance money collected shall be expended only for repair or replacement of property. Otherwise, insurance proceeds shall be paid to the Bureau.

(2) If the public school authority is self-insured and can present evidence of that fact to the Commissioner of Indian Affairs, insurance for lost or

(a) School districts shall obtain public liability and motor vehicle insurance under contracts entered into with the Bureau under this part. However, where the Bureau contracting officer determines that the risk of death, personal injury or property damage under the contract is small and that the time and cost of procuring the insurance is great in relation to the risk, the contract may be exempted from this requirement.

(b) Notwithstanding paragraph (a) of this section, any contract which requires or authorizes, either expressly or by implication, the use of motor vehicles must contain a provision requiring the school district to provide liability insurance, regardless of how small the risk.

(c) School district is self-insured and can present evidence of that fact to the Commissioner of Indian Affairs, liability and motor vehicle insurance will not be required.

[40 FR 51327, Nov. 4, 1975, as amended at 43 FR 37449, Aug. 23, 1978]

§ 277.30 Recordkeeping.

A contractor will be required to develop and maintain a recordkeeping system which will:

(a) Fully reflect all financial transactions involving the receipt and expenditure of funds provided under the contract in a manner which will provide accurate, current and complete disclosure of financial status; correlation with budget or allowable cost schedules; and clear audit facilitating data.

(b) Reflect the amounts and sources of funds other than Bureau contract funds which may be included in the construction project.

(c) Provide for the creation, maintenance and safeguarding of records of lasting value.

§ 277.31 Audit and inspection.

(a) During the term of a contract under this part and for three years after the project or undertaking is completed, the Comptroller General and the Secretary, or any of their duly authorized representatives, shall have access, for audit and examination purposes, to any of the contractor's books, documents, papers, and records which, in their opinion, may be related or pertinent to the contract or any subcontract.

(b) The contractor will be responsible for maintaining all documents such as invoices, purchase orders, canceled checks, balance sheets and all other records relating to financial transactions in a manner which will facilitate auditing. The contractor will be responsible for maintaining files of correspondence and other documents relating to the contract properly separated from general records or crossreferenced to general files.

(c) The contractor receiving funds under this part shall be primarily responsible for contract compliance.

(d) The records involved in any claim or expenditure that has been questioned shall be further maintained until final determination has been made on the questioned expenditure.

(e) All contracts, reports, budgets, budget estimates, plans, and other documents pertaining to administration of the contract shall be made

available by the contractor. The contractor shall provide information in accordance with the Freedom of Information Act.

§ 277.32 Freedom of information.

(a) Unless otherwise required by law, the Bureau shall not place restrictions on contractors which will limit public access to the contractor's records except when records must remain confidential.

(b) A contractor under this part shall make all reports and information concerning the contract available to the Indian people which the contract affects. Reports and information may be withheld from disclosure only when both of the following conditions exist: (1) The reports and information fall within one of the following exempt categories:

(i) Specifically required by statute or Executive order to be kept secret.

(ii) Commercial or financial information obtained from a person or firm on a privileged or confidential basis.

(iii) Personnel, medical, and similar files where disclosure would be a clearly unwarranted invasion of personal privacy.

(iv) Geological and geophysical information and data concerning wells.

(2) Disclosure is prohibited by statute or Executive order or sound grounds exist for using the exemption given in paragraph (b)(1) of this section.

(c) A request to inspect or copy reports and information shall be in writing and must reasonably describe the reports and information requested. The request may be delivered or mailed to the contractor. Within ten (10) working days after receiving the request, the contractor shall determine whether to grant or deny the request. The requester shall be notified immediately of the determination.

(d) The time limit for making a determination may be extended up to an additional ten (10) working days for good reason. The requester shall be notified in writing of the extension, reasons for the extension, and the date on which the determination is expected to be made.

§ 277.33 Reporting.

(a) A contractor under this part shall make a detailed report to the Commissioner of Indian Affairs after construction is completed. The report shall include, but not be limited to, an accounting of the amounts and purposes for which the contract funds were expended.

(b) The contractor shall furnish other contract-related reports when and as required by the Commissioner of Indian Affairs.

(c) A contractor under this part shall send copies of the reports required by paragraphs (a) and (b) of this section to the tribe(s) affected by the construction at the same time as the reports are sent to the Bureau.

If any officer, director, agent, or employee of, or connected with, any contractor or subcontractor under this part embezzles, willfully misapplies, steals, or obtains by fraud any of the funds or property connected with the contract or subcontract, he shall be subject to the following penalties:

(a) If the amount involved does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both.

(b) If the amount involved exceeds $100, he shall be fined not more than $10,000 or imprisoned for not more than two years, or both.

§ 277.36 Applicable procurement regula tions

School districts wanting to contract with the Bureau under this part must comply with the applicable requirements in the Federal Procurement Regulations (41 CFR 1), as supplemented by the Interior Procurement Regulations (41 CFR 14) and the Bureau of Indian Affairs Procurement Regulations (41 CFR 14H), except 41 CFR Part 14H-70.

[40 FR 51327, Nov. 4, 1975, as amended at 43 FR 37449, Aug. 23, 1978]

§ 277.37 Privacy Act requirements.

(a) When a contractor operates a system of records to accomplish a Bureau function, the contractor shall comply with Subpart D of 43 CFR Part 2 which implements the Privacy Act (5 U.S.C. 552a). Examples of the contractor's responsibilities are:

(1) To continue maintaining those systems of records declared by the Bureau to be subject to the Privacy Act as published in the FEDERAL REGISTER.

(2) To make such records available to individuals involved.

(3) To disclose an individual's record to third parties only after receiving permission from the individual to whom the record pertains. 43 CFR 2.56 lists exceptions to this procedure.

(4) To establish a procedure to account for access, disclosures, denials, and amendments to records.

(5) To provide safeguards for the protection of the records.

(b) The contractor may not:

(1) Discontinue or alter any established systems of records without prior approval of the appropriate Bureau systems manager.

(2) Deny request for notification or access or records without prior approval of the appropriate Bureau systems manager.

(1) The reasons why the Bureau is considering canceling the contract.

(2) That the contractor will be given an opportunity to bring its work up to an acceptable level.

(c) If the contractor does not overcome the deficiencies in its contract performance, the Bureau shall cancel the contract for cause. The Bureau will notify the contractor, in writing, of the cancellation. The notice shall give the reasons for the cancellation and the right of the contractor to appeal under Subpart C of 43 CFR Part 4.

(d) When a contract is cancelled for cause, the Bureau will either perform the work with its own forces or by another contract, as appropriate.