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525-010-40 CONSTRUCTION OGC - 1V03 Page 5 of 12 7 .00 The Department's Obligations : Subject to other provisions hereof, the Department will honor requests for reimbursement to the Agency in amounts and at times deemed by the Department to be proper to ensure the carrying out of the project and payment of the eligible costs . However, notwithstanding any other provision of this Agreement, the Department may elect, by notice in writing , not to make a payment if: 7 . 01 Misrepresentation : The Agency shall have made misrepresentation of a material nature in its application , or any supplement thereto or amendment thereof, or in or with respect to any document or data furnished therewith or pursuant hereto; 7 .02 Litigation : There is then pending litigation with respect to the performance by the Agency of any of its duties or obligations which may jeopardize or adversely affect the project, this Agreement or payments to the project; 7.03 Approval by Department: The Agency shall have taken any action pertaining to the project, which under this Agreement, requires the approval of the Department or has made related expenditure or incurred related obligations without having been advised by the Department that same are approved ; 7.04 Conflict of Interests : There has been any violation of the conflict of interest provisions contained herein in 12.06 ; or 7 .05 Default: The Agency has been determined by the Department to be in default under any of the provisions of the Aqreement. 7 .06 Federal Participation : The Department may suspend or terminate payment for that portion of the project which the FHWA, or the Department acting in lieu of the FHWA, may designate as ineligible for federal-aid . 7 . 07 Disallowed Costs : In determining the amount of the payment, the Department will exclude all project costs incurred by the Agency prior to the effective date of this Agreement or the date of authorization , costs incurred after the expiration of the Agreement, costs which are not provided for in the latest approved schedule of funding for the project, and costs attributable to goods or services received under a contract or other arrangements which have not been approved in writing by the Department. 7 .08 Final Invoices : The Agency must submit the final invoice on the project to the Department within one hundred twenty (120) days after the completion of the project. Invoices submitted after the one hundred twenty ( 120) day time period may not be paid . 8 .00 Termination or Suspension of Project: 8 .01 Termination or Suspension Generally : The Department may , by written notice to the Agency , suspend any or all of its obligations under this Agreement until such time as the event or condition resulting in such suspension has ceased or been corrected , or the Department may terminate this Agreement in whole or in part at any time the interest of the Department requires such termination . If the Department determines that the performance of the Agency is not satisfactory , the Department shall have the option of (a) immediately terminating this Agreement or (b) suspending this Agreement and notifying the Agency of the deficiency with a requirement that the deficiency be corrected within a specified time , otherwise the Agreement will be terminated at the end of such time. Suspension of the contract will not affect the time period for completion of this Agreement. If the Department requires termination of this Agreement for reasons other than unsatisfactory performance of the Agency , the Department shall notify the Agency of such termination , with instructions as to the effective date of termination or specify the stage of work at which this Agreement is terminated . If this Agreement is terminated before performance is completed , the Agency shall be paid for the work satisfactorily performed . Payment is to be on the basis of substantiated costs . 8 .02 Action Subsequent to Notice of Termination or Suspension . Upon receipt of any final termination or suspension notice under this paragraph , the Agency shall proceed promptly to carry out the actions required therein which may include any or all of the following : (a) necessary action to terminate or suspend , as the case may be, project activities and contracts and such other action as may be required or desirable to keep to the minimum the costs upon the basis of which the financing is lobe computed ; (b) furnish a statement of the project activities and contracts, and other undertakings the cost of which are otherwise includable as project costs. The termination or suspension shall be carried out in conformity with the latest schedule , plan, and costs approved by the Department or upon the basis of terms and conditions