EDGAR Part 85 Subpart D (Responsibilities of ED Officials Regarding Transactions)
Subpart D_Responsibilities of ED Officials Regarding Transactions
Sec. 85.400 May I enter into a transaction with an excluded or
disqualified person?
(a) You as an agency official may not enter into a covered
transaction with an excluded person unless you obtain an exception under
Sec. 85.120.
(b) You may not enter into any transaction with a person who is
disqualified from that transaction, unless you obtain a waiver or
exception under the statute, Executive order, or regulation that is the
basis for the person's disqualification.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
Sec. 85.405 May I enter into a covered transaction with a participant
if a principal of the transaction is excluded?
As an agency official, you may not enter into a covered transaction
with a participant if you know that a principal of the transaction is
excluded, unless you obtain an exception under Sec. 85.120.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
Sec. 85.410 May I approve a participant's use of the services of an
excluded person?
After entering into a covered transaction with a participant, you as
an agency official may not approve a participant's use of an excluded
person as a principal under that transaction, unless you obtain an
exception under Sec. 85.120.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
Sec. 85.415 What must I do if a Federal agency excludes the
participant or a principal after I enter into a covered
transaction?
(a) You as an agency official may continue covered transactions with
an excluded person, or under which an excluded person is a principal, if
the transactions were in existence when the person was excluded. You are
not required to continue the transactions, however, and you may consider
termination. You should make a decision about whether to terminate and
the type of termination action, if any, only after a thorough review to
ensure that the action is proper.
(b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, or under which an
excluded person is a principal, unless you obtain an exception under
Sec. 85.120.
(c) Title IV, HEA transactions. If you are a title IV, HEA
participant--
(1) You may not renew or extend the term of any contract or
agreement for the services of an excluded person as a principal with
respect to a title IV, HEA transaction; and
(2) You may not continue to use the services of that excluded person
as a principal under this kind of an agreement or arrangement more than
90 days after you learn of the exclusion or after the close of the
Federal fiscal year in which the exclusion takes effect, whichever is
later.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
Sec. 85.420 May I approve a transaction with an excluded or
disqualified person at a lower tier?
If a transaction at a lower tier is subject to your approval, you as
an agency official may not approve--
(a) A covered transaction with a person who is currently excluded,
unless you obtain an exception under Sec. 85.120; or
(b) A transaction with a person who is disqualified from that
transaction, unless you obtain a waiver or exception under the statute,
Executive order, or regulation that is the basis for the person's
disqualification.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
Sec. 85.425 When do I check to see if a person is excluded or
disqualified?
As an agency official, you must check to see if a person is excluded
or disqualified before you--
(a) Enter into a primary tier covered transaction;
(b) Approve a principal in a primary tier covered transaction;
(c) Approve a lower tier participant if agency approval of the lower
tier participant is required; or
(d) Approve a principal in connection with a lower tier transaction
if agency approval of the principal is required.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
Sec. 85.430 How do I check to see if a person is excluded or
disqualified?
You check to see if a person is excluded or disqualified in two
ways:
(a) You as an agency official must check the EPLS when you take any
action listed in Sec. 85.425.
(b) You must review information that a participant gives you, as
required by Sec. 85.335, about its status or the status of the
principals of a transaction.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
Sec. 85.435 What must I require of a primary tier participant?
You as an agency official must require each participant in a primary
tier covered transaction to--
(a) Comply with subpart C of this part as a condition of
participation in the transaction; and
(b) Communicate the requirement to comply with Subpart C of this
part to persons at the next lower tier with whom the primary tier
participant enters into covered transactions.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
Sec. 85.440 What method do I use to communicate those requirements to
participants?
(a) To communicate those requirements, you must include a term or
condition in the transaction requiring each participant's compliance
with subpart C of this part and requiring the participant to include a
similar term or condition in lower-tier covered transactions.
(b) The failure of a participant to include a requirement to comply
with Subpart C of this part in the agreement with a lower tier
participant does not affect the lower tier participant's
responsibilities under this part.
Authority: E.O. 12549 (3 CFR, 1985 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455 of Pub. L. 103-355, 108 Stat. 3243 at 3327.
[68 FR 66612, Nov. 26, 2003]
Sec. 85.445 What action may I take if a primary tier participant
knowingly does business with an excluded or disqualified
person?
If a participant knowingly does business with an excluded or
disqualified person, you as an agency official may refer the matter for
suspension and debarment consideration. You may also disallow costs,
annul or terminate the transaction, issue a stop work order, or take any
other appropriate remedy.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
Sec. 85.450 What action may I take if a primary tier participant fails
to disclose the information required under Sec. 85.335?
If you as an agency official determine that a participant failed to
disclose information, as required by Sec. 85.335, at the time it
entered into a covered transaction with you, you may--
(a) Terminate the transaction for material failure to comply with
the terms and conditions of the transaction; or
(b) Pursue any other available remedies, including suspension and
debarment.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
Sec. 85.455 What may I do if a lower tier participant fails to
disclose the information required under Sec. 85.355 to the
next higher tier?
If you as an agency official determine that a lower tier participant
failed to disclose information, as required by Sec. 85.355, at the time
it entered into a covered transaction with a participant at the next
higher tier, you may pursue any remedies available to you, including the
initiation of a suspension or debarment action.
Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O 12689 (3 CFR,
1989 Comp., p. 235); 20 U.S.C. 1082, 1094, 1221e-3 and 3474; and Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327.
EDGAR version June 23, 2005
