It is the policy of the Institute to encourage the purchase of goods and services required for the Grant Award from suppliers in the State to the extent reasonably possible. A Grant Recipient shall undertake good faith efforts to purchase from suppliers in the State at least fifty percent (50%) of the goods and services purchased with Grant Award funds.     
       (1) A Grant Recipient must use good faith efforts to purchase goods and services from suppliers in the State when available at a price and time comparable to products and materials purchased outside of the State.      
       (2) A Grant Recipient that expends more than forty percent (40%) of the Grant Award funds budgeted for a Project Year on goods and services purchased outside of the State must notify the Institute in writing and provide an explanation of the good faith efforts undertaken to purchase the goods or services from suppliers in the State, including a statement that products and materials were not available in the State at a comparable price and time. Such notification and explanation may be accomplished by completing the Historically Underutilized Business and Texas Supplier form submitted as part of the annual Grant Progress Report.      
       (3) The Institute may deny reimbursement or require repayment of Grant Award funds already expended if the Grant Recipient fails to provide a statement as required by paragraph (2) of this section with a reasonable explanation of the good faith efforts undertaken to purchase the goods or services from suppliers in the State of Texas.      
     Source Note:        The provisions of this §701.21 adopted to be effective March 2, 2014, 39 TexReg 1380