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2. Where the prospective lower tier participant is unable to certify [o any of the statements in this <br /> certification, such prospective participants shall attach an explanation to [his proposal. <br /> X. Minority Business Enterprise Requirements <br /> is [he policy of the Department of Transportation that minority business enterprises, as defined <br /> in 49 CFR Part 23, shall have the maximum opportunity to participate in the performance of <br /> contracts financed in whole or in part with Federal funds under this agreement. Consequently, [he <br /> MBE requirements of 49 CFR Part 23 apply to this agreement. <br /> The recipient or its contractor agrees to ensure that minority business enterprises <br /> as defined in 49 CFR Part 23 have the maximum opportunity to participate in the <br /> performance of contracts and subcontracts financed in whole or in part with <br /> Federal funds provided under this agreement. In this regard, all recipients or <br /> contractors shall take all necessary and reasonable steps in accordance with 49 <br /> CFR Part 23 to ensure that minority business enterprises have the maximum <br /> opportunity to compete for and perform contracts. Recipients and their <br /> contractors shall not discriminate on the basis of race, color, national origin, or <br /> sex in the award and performance ofDOT-assisted contracts. <br /> <br /> XI. Requirements <br /> A. It is mutually agreed and promised [ha[ [he applicant shall follow the State and Federal <br /> requirements and guidelines set forth in the State of Hawaii Project Procedures Manual as <br /> amended. All project expenditure records aze to be retained for at leas[ three years after the <br /> date of the final expenditure report. <br /> <br /> XII. Authorization to Proceed <br /> A. It is mutually agreed between the STATE and the APPLICANT that this AGREEMENT OF <br /> UNDERSTANDING AND COMPLIANCE shall become effective upon the STATE'S <br /> agreement and authorization to proceed as set forth m PART II (2) of this application. <br /> <br />