(a) Any State, through its Governor, is eligible for an award under this part if the State submits, and receives approval of, an application in accordance with § 370.20.
(b) The Governor of each State shall designate a public or private agency to conduct the State's CAP under this part.
(c) Except as provided in paragraph (d) of this section, the Governor shall designate an agency that is independent of any agency that provides treatment, services, or rehabilitation to individuals under the Act.
(d) The Governor may, in the initial designation, designate an agency that provides treatment, services, or rehabilitation to individuals with disabilities under the Act if, at any time before February 22, 1984, there was an agency in the State that both—
(1) Was a grantee under section 112 of the Act by serving as a client assistance agency and directly carrying out a CAP; and
(2) Was, at the same time, a grantee under any other provision of the Act.
(e) Except as permitted in paragraph (f) of this section, an agency designated by the Governor of a State to conduct the State's CAP under this part may not award a subgrant to or enter into a contract with an agency that provides services under this Act either to carry out the CAP or to provide services under the CAP.
(f) An agency designated by the Governor of a State to conduct the State's CAP under this part may enter into a contract with a center for independent living (center) that provides services under the Act if—
(1) On February 22, 1984, the designated agency was contracting with one or more centers to provide CAP services; and
(2) The designated agency meets the requirements of paragraph (g) of this section.
(g) A designated agency that contracts to provide CAP services with a center (pursuant to paragraph (f) of this section) or with an entity or individual that does not provide services under the Act remains responsible for—
(1) The conduct of a CAP that meets all of the requirements of this part;
(2) Ensuring that the center, entity, or individual expends CAP funds in accordance with—
(i) The regulations in this part; and
(ii) The cost principles applicable to the designated agency; and
(3) The direct day-to-day supervision of the CAP services being carried out by the contractor. This day-to-day supervision must include the direct supervision of the individuals who are employed or used by the contractor to provide CAP services.