EDGAR Part 85 Subpart C (Responsibilities of Participants Regarding Transactions)
Subpart C_Responsibilities of Participants Regarding Transactions
Doing Business With Other Persons
Sec. 85.300 What must I do before I enter into a covered transaction
with another person at the next lower tier?
When you enter into a covered transaction with another person at the
next lower tier, you must verify that the person with whom you intend to
do business is not excluded or disqualified. You do this by:
(a) Checking the EPLS; or
(b) Collecting a certification from that person if allowed by this
rule; or
(c) Adding a clause or condition to the covered transaction with
that person.
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. 85.305 May I enter into a covered transaction with an excluded or
disqualified person?
(a) You as a participant may not enter into a covered transaction
with an excluded person, unless the Department of Education grants 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 have obtained an
exception under the disqualifying statute, Executive order, or
regulation.
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. 85.310 What must I do if a Federal agency excludes a person with
whom I am already doing business in a covered transaction?
(a) You as a participant may continue covered transactions with an
excluded person if the transactions were in existence when the agency
excluded the person. However, you are not required to continue the
transactions, 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
and appropriate.
(b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, unless the Department of
Education grants an exception under Sec. 85.120.
(c) If you are a title IV, HEA participant, you may not continue a
title IV, HEA transaction with an excluded person after the effective
date of the exclusion unless permitted by 34 CFR 668.26, 682.702, or
668.94, as applicable
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. 85.315 May I use the services of an excluded person as a
principal under a covered transaction?
(a) You as a participant may continue to use the services of an
excluded person as a principal under a covered transaction if you were
using the services of that person in the transaction before the person
was excluded. However, you are not required to continue using that
person's services as a principal. You should make a decision
about whether to discontinue that person's services only after a
thorough review to ensure that the action is proper and appropriate.
(b) You may not begin to use the services of an excluded person as a
principal under a covered transaction unless the Department of Education
grants 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. 85.320 Must I verify that principals of my covered transactions
are eligible to participate?
Yes, you as a participant are responsible for determining whether
any of your principals of your covered transactions is excluded or
disqualified from participating in the transaction. You may decide the
method and frequency by which you do so. You may, but you are not
required to, check the EPLS.
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. 85.325 What happens if I do business with an excluded person in a
covered transaction?
If as a participant you knowingly do business with an excluded
person, we may disallow costs, annul or terminate the transaction, issue
a stop work order, debar or suspend you, or take other remedies as
appropriate.
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. 85.330 What requirements must I pass down to persons at lower
tiers with whom I intend to do business?
Before entering into a covered transaction with a participant at the
next lower tier, you must require that participant to--
(a) Comply with this subpart as a condition of participation in the
transaction. You may do so using any method(s), unless Sec. 85.440
requires you to use specific methods.
(b) Pass the requirement to comply with this subpart to each person
with whom the participant enters into a covered transaction at the next
lower tier.
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.
Disclosing Information--Primary Tier Participants
Sec. 85.335 What information must I provide before entering into a
covered transaction with the Department of Education?
Before you enter into a covered transaction at the primary tier, you
as the participant must notify the ED office that is entering into the
transaction with you, if you know that you or any of the principals for
that covered transaction:
(a) Are presently excluded or disqualified;
(b) Have been convicted within the preceding three years of any of
the offenses listed in Sec. 85.800(a) or had a civil judgment rendered
against you for one of those offenses within that time period;
(c) Are presently indicted for or otherwise criminally or civilly
charged by a governmental entity (Federal, State or local) with
commission of any of the offenses listed in Sec. 85.800(a); or
(d) Have had one or more public transactions (Federal, State, or
local) terminated within the preceding three years for cause or default.
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. 85.340 If I disclose unfavorable information required under Sec.
85.335, will I be prevented from participating in the
transaction?
As a primary tier participant, your disclosure of unfavorable
information about yourself or a principal under Sec. 85.335 will not
necessarily cause us to deny your participation in the covered
transaction. We will consider the information when we determine whether
to enter into the covered transaction. We also will consider any
additional information or explanation that you elect to submit with the
disclosed information.
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. 85.345 What happens if I fail to disclose information required
under Sec. 85.335?
If we later determine that you failed to disclose information under
Sec. 85.335 that you knew at the time you entered into the covered
transaction, we 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. 85.350 What must I do if I learn of information required under
Sec. 85.335 after entering into a covered transaction with
the Department of Education?
At any time after you enter into a covered transaction, you must
give immediate written notice to the ED office with which you entered
into the transaction if you learn either that--
(a) You failed to disclose information earlier, as required by Sec.
85.335; or
(b) Due to changed circumstances, you or any of the principals for
the transaction now meet any of the criteria in Sec. 85.335.
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.
Disclosing Information--Lower Tier Participants
Sec. 85.355 What information must I provide to a higher tier
participant before entering into a covered transaction with
that participant?
Before you enter into a covered transaction with a person at the
next higher tier, you as a lower tier participant must notify that
person if you know that you or any of the principals are presently
excluded or disqualified.
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. 85.360 What happens if I fail to disclose the information
required under Sec. 85.355?
If we later determine that you failed to tell the person at the
higher tier that you were excluded or disqualified at the time you
entered into the covered transaction with that person, we may pursue any
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. 85.365 What must I do if I learn of information required under
Sec. 85.355 after entering into a covered transaction with a
higher tier participant?
At any time after you enter into a lower tier covered transaction
with a person at a higher tier, you must provide immediate written
notice to that person if you learn either that--
(a) You failed to disclose information earlier, as required by Sec.
85.355; or
(b) Due to changed circumstances, you or any of the principals for
the transaction now meet any of the criteria in Sec. 85.355.
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
