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CONTRACT GUIDANCE l. Purpose of this Document 1) The purpose of this document is to establish a convenient resource for Sponsors that consolidates all possible provisions and clauses into one document that includes an applicability matrix. This document itself does not create, revise or delete requirements for participation in the Airport Improvement Program. The source of requirements addressed within this document are identified within the section for each individual clause. 2) Federal laws and regulations require that an sponsor (a recipient of federal assistance) include specific clauses in certain contracts, solicitations, or specifications regardless of whether or not the project is federally funded. 3) The term sponsor is used in this document to mean either an obligated sponsor on a project that is not federally funded, or a sponsor on an AIP funded project. 4) The term Owner is generally used in the solicitation or contract clauses because of its common use in public contracts. 5) An Owner becomes an obligated sponsor upon acceptance of the Airport Improvement Program (AIP) grant assurances associated with current or prior AIP grant funded projects. 6) For purposes of determining requirements for contract provisions, the term contract includes subcontracts and supplier contracts such as purchase orders. 7) For purpose of remaining compliant with its obligations, a sponsor must incorporate applicable contract provisions in all its procurements and contract documents. Unless otherwise stated, these provisions flow down to subcontracts and sub-tier agreements. 8) The term contractor is understood to mean a contractor, subcontractor, or consultant; and means one who participates, through a contract or subcontract (at any tier). 9) The term bid is understood to mean a bid, an offer, or a proposal. 10) Applicant: a. For the Equal Employment Opportunity (EEO) clause, the term applicant means an applicant for employment (whether or not the phrase, for employment, follows the word applicant or applicants). b. For all other clauses, the term applicant means a bidder, offerer, or proposer for a contract. 2. Sponsor Requirements In general, the sponsor must take the following actions in order to remain consistent with its obligations: 1) Include in its procurements the provisions that are applicable to its project. 2) Not incorporate the entire contract provisions guidelines in its solicitation or contract documents, whether by reference or by inclusion in whole. Incorporation of this entire guidance document creates potential for ambiguous interpretation and may lead to improper application that unnecessarily increases price. A sponsor that fails to properly incorporate applicable contract clauses may place themselves at risk for audit findings or denial of Federal funding. Incorporate applicable contract provisions using mandatory language as required. The subheading entitled Applicability advises whether a particular clause or provision has mandatory language that a sponsor must use. (a) Mandatory Language -Whenever a clause or provision has mandatory text, the sponsor must incorporate the text of the provision without change, except where specific adaptive input is necessary (e .g. such as the sponsor's name). (b) No Mandatory Language Provided -For provisions without mandatory language, this guidance provides model language acceptable to the FAA. Some sponsors may already have Guidelines for Contract Provisions for Obligated Sponsors and Airport Improvement Program Projects Issued on December 12, 2017 Page 3