[Title 32 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2018 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 32
National Defense
________________________
Parts 1 to 190
Revised as of July 1, 2018
Containing a codification of documents of general
applicability and future effect
As of July 1, 2018
Published by the Office of the Federal Register
National Archives and Records Administration as a
Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 32:
SUBTITLE A--Department of Defense
Chapter I--Office of the Secretary of Defense 3
Finding Aids:
Table of CFR Titles and Chapters........................ 1073
Alphabetical List of Agencies Appearing in the CFR...... 1093
List of CFR Sections Affected........................... 1103
[[Page iv]]
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 32 CFR 2.1 refers to
title 32, part 2, section
1.
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[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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LEGAL STATUS
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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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To determine whether a Code volume has been amended since its
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collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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PAST PROVISIONS OF THE CODE
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(a) The incorporation will substantially reduce the volume of
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(b) The matter incorporated is in fact available to the extent
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(c) The incorporating document is drafted and submitted for
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What if the material incorporated by reference cannot be found? If
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[[Page vii]]
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Oliver A. Potts,
Director,
Office of the Federal Register
July 1, 2018
[[Page ix]]
THIS TITLE
Title 32--National Defense is composed of six volumes. The parts in
these volumes are arranged in the following order: Parts 1-190, parts
191-399, parts 400-629, parts 630-699, parts 700-799, and part 800 to
end. The contents of these volumes represent all current regulations
codified under this title of the CFR as of July 1, 2018.
The current regulations issued by the Department of Defense appear
in the volumes containing parts 1-190 and parts 191-399; those issued by
the Department of the Army appear in the volumes containing parts 400-
629 and parts 630-699; those issued by the Department of the Navy appear
in the volume containing parts 700-799, and those issued by the
Department of the Air Force, Defense Logistics Agency, Selective Service
System, National Counterintelligence Center, Central Intelligence
Agency, Information Security Oversight Office, National Security
Council, Office of Science and Technology Policy, Office for Micronesian
Status Negotiations, and Office of the Vice President of the United
States appear in the volume containing part 800 to end.
For this volume, Gabrielle E. Burns was Chief Editor. The Code of
Federal Regulations publication program is under the direction of John
Hyrum Martinez, assisted by Stephen J. Frattini.
[[Page 1]]
TITLE 32--NATIONAL DEFENSE
(This book contains parts 1 to 190)
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SUBTITLE A--Department of Defense
Part
chapter i--Office of the Secretary of Defense............... 2
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Subtitle A--Department of Defense
[[Page 5]]
CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE
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SUBCHAPTER A--ACQUISITION
Part Page
1 [Reserved]
2 Pilot program policy........................ 11
3 Transactions other than contracts, grants,
or cooperative agreements for prototype
projects................................ 13
4-8 [Reserved]
SUBCHAPTER B [RESERVED]
SUBCHAPTER C--DOD GRANT AND AGREEMENT REGULATIONS
21 DoD grants and agreements--general matters.. 23
22 DoD grants and agreements--award and
administration.......................... 35
26 Governmentwide requirements for drug-free
workplace (financial assistance)........ 69
28 New restrictions on lobbying................ 74
32 Administrative requirements for grants and
agreements with institutions of higher
education, hospitals, and other non-
profit organizations.................... 86
33 Uniform administrative requirements for
grants and cooperative agreements to
State and local governments............. 115
34 Administrative requirements for grants and
agreements with for-profit organizations 143
37 Technology investment agreements............ 162
SUBCHAPTER D--PERSONNEL, MILITARY AND CIVILIAN
44 Screening the Ready Reserve................. 217
47 Active duty service for civilian or
contractual groups...................... 221
48 Retired serviceman's family protection plan. 227
50 Personal commercial solicitation on DoD
installations........................... 236
53 Wearing of the uniform...................... 247
[[Page 6]]
54 Allotments for child and spousal support.... 247
56 Nondiscrimination on the basis of handicap
in programs and activities assisted or
conducted by the Department of Defense.. 252
57 Provision of early intervention and special
education services to eligible DoD
dependents.............................. 271
60 Family advocacy command assistance team
(FACAT)................................. 321
61 Family advocacy program (FAP)............... 325
66 Qualification standards for enlistment,
appointment, and induction.............. 366
67 Educational requirements for appointment of
Reserve component officers to a grade
above first lieutenant or lieutenant
(junior grade).......................... 375
68 Voluntary education programs................ 377
69 School boards for Department of Defense
domestic dependent elementary and
secondary schools....................... 406
70 Discharge Review Board (DRB) procedures and
standards............................... 410
74 Appointment of doctors of osteopathy as
medical officers........................ 443
77 Program to encourage public and community
service................................. 444
78 Voluntary State tax withholding from retired
pay..................................... 454
79 Child Development Programs (CDPs)........... 457
80 Provision of early intervention services to
eligible infants and toddlers with
disabilities and their families, and
special education children with
disabilities within the section 6 school
arrangements............................ 491
85 Health promotion............................ 514
86 Background checks on individuals in DOD
child care services programs............ 518
88 Transition assistance program (TAP) for
military personnel...................... 528
89 Interstate compact on educational
opportunity for military children....... 545
93 Acceptance of service of process; release of
official information in litigation; and
testimony by NSA personnel as witnesses. 554
94 Naturalization of aliens serving in the
Armed Forces of the United States and of
alien spouses and/or alien adopted
children of military and civilian
personnel ordered overseas.............. 558
96 Acquisition and use of criminal history
record information by the military
services................................ 562
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97 Release of official information in
litigation and testimony by DoD
personnel as witnesses.................. 563
99 Procedures for States and localities to
request indemnification................. 567
100 Unsatisfactory performance of Ready Reserve
obligation.............................. 569
101 Participation in Reserve training programs.. 574
103 Sexual assault prevention and response
(SAPR) program.......................... 576
104 Civilian employment and reemployment rights
for service members, former service
members and applicants of the uniformed
services................................ 588
105 Sexual assault prevention and response
program procedures...................... 593
107 Personal services authority for direct
health care providers................... 666
108 Health care eligibility under the
Secretarial Designee Program and related
special authorities..................... 667
110 Standardized rates of subsistence allowance
and commutation instead of uniforms for
members of the Senior Reserve Officers'
Training Corps.......................... 673
112 Indebtedness of military personnel.......... 679
113 Indebtedness procedures of military
personnel............................... 682
117 National Industrial Security Program........ 699
142 Copyrighted sound and video recordings...... 713
143 DoD policy on organizations that seek to
represent or organize members of the
Armed Forces in negotiation or
collective bargaining................... 714
144 Service by members of the Armed Forces on
State and local juries.................. 717
145 Cooperation with the Office of Special
Counsel of the Merit Systems Protection
Board................................... 718
147 Adjudicative guidelines for determining
eligibility for access to classified
information............................. 724
148 National policy and implementation of
reciprocity of facilities............... 736
SUBCHAPTER E--REGULATIONS PERTAINING TO MILITARY JUSTICE
150 Courts of criminal appeals rules of practice
and procedure........................... 740
151 Status of forces policies and information... 748
152 Review of the Manual for Courts-Martial..... 754
[[Page 8]]
153 Criminal jurisdiction over civilians
employed by or accompanying the Armed
Forces outside the United States,
certain service members, and former
service members......................... 758
SUBCHAPTER F--SECURITY
155 Defense Industrial Personnel Security
Clearance Program....................... 779
156 Department of Defense Personnel Security
Program (PSP)........................... 786
157 DOD investigative and adjudicative guidance
for issuing the Common Access Card (CAC) 793
158 Operational contract support................ 807
159 Private security contractors operating in
contingency operations.................. 837
161 Identification (ID) cards for members of the
Uniformed Services, their dependents and
other eligible individuals.............. 843
SUBCHAPTER G--DEFENSE CONTRACTING
162 Productivity Enhancing Capital Investment
(PECI).................................. 921
165 Recoupment of nonrecurring costs (NCs) on
sales of U.S. items..................... 925
168a National Defense Science and Engineering
Graduate Fellowships.................... 928
169 Commercial activities program............... 929
169a Commercial activities program procedures.... 933
171 Implementation of Wildfire Suppression
Aircraft Transfer Act of 1996........... 975
172 Disposition of proceeds from DoD sales of
surplus personal property............... 978
173 Competitive information certificate and
profit reduction clause................. 985
SUBCHAPTER H--CLOSURES AND REALIGNMENT
174 Revitalizing base closure communities and
addressing impacts of realignment....... 989
175 [Reserved]
176 Revitalizing base closure communities and
community assistance--community
redevelopment and homeless assistance... 1003
[[Page 9]]
179 Munitions Response Site Prioritization
Protocol (MRSPP)........................ 1012
SUBCHAPTER I--CIVIL DEFENSE
183 Defense support of special events........... 1043
SUBCHAPTERS J-K [RESERVED]
SUBCHAPTER L--ENVIRONMENT
187 Environmental effects abroad of major
Department of Defense actions........... 1052
188 DOD environmental laboratory accreditation
program (ELAP).......................... 1061
189-190 [Reserved]
[[Page 11]]
SUBCHAPTER A_ACQUISITION
PART 1 [RESERVED]
PART 2_PILOT PROGRAM POLICY--Table of Contents
Sec.
2.1 Purpose.
2.2 Statutory relief for participating programs.
2.3 Regulatory relief for participating programs.
2.4 Designation of participating programs.
2.5 Criteria for designation of participating programs.
Authority: 10 U.S.C. 2340 note.
Source: 62 FR 17549, Apr. 10, 1997, unless otherwise noted.
Sec. 2.1 Purpose.
Section 809 of Public Law 101-510, ``National Defense Authorization
Act for Fiscal Year 1991,'' as amended by section 811 of Public Law 102-
484, ``National Defense Authorization Act for Fiscal Year 1993'' and
Public Law 103-160, ``National Defense Authorization Act for Fiscal Year
1994,'' authorizes the Secretary of Defense to conduct the Defense
Acquisition Pilot Program. In accordance with section 809 of Public Law
101-510, the Secretary may designate defense acquisition programs for
participation in the Defense Acquisition Pilot Program.
(a) The purpose of the pilot programs is to determine the potential
for increasing the efficiency and effectiveness of the acquisition
process. Pilot programs shall be conducted in accordance with the
standard commercial, industrial practices. As used in this policy, the
term ``standard commercial, industrial practice'' refers to any
acquisition management practice, process, or procedure that is used by
commercial companies to produce and sell goods and services in the
commercial marketplace. This definition purposely implies a broad range
of potential activities to adopt commercial practices, including
regulatory and statutory streamlining, to eliminate unique Government
requirements and practices such as government-unique contracting
policies and practices, government-unique specifications and standards,
and reliance on cost determination rather than price analysis.
(b) Standard commercial, industrial practices include, but are not
limited to:
(1) Innovative contracting policies and practices;
(2) Performance and commercial specifications and standards;
(3) Innovative budget policies;
(4) Establishing fair and reasonable prices without cost data;
(5) Maintenance of long-term relationships with quality suppliers;
(6) Acquisition of commercial and non-developmental items (including
components); and
(7) Other best commercial practices.
Sec. 2.2 Statutory relief for participating programs.
(a) Within the limitations prescribed, the applicability of any
provision of law or any regulation prescribed to implement a statutory
requirement may be waived for all programs participating in the Defense
Acquisition Pilot Program, or separately for each participating program,
if that waiver or limit is specifically authorized to be waived or
limited in a law authorizing appropriations for a program designated by
statute as a participant in the Defense Acquisition Pilot Program.
(b) Only those laws that prescribe procedures for the procurement of
supplies or services; a preference or requirement for acquisition from
any source or class of sources; any requirement related to contractor
performance; any cost allowability, cost accounting, or auditing
requirements; or any requirement for the management of, testing to be
performed under, evaluation of, or reporting on a defense acquisition
program may be waived.
(c) The requirements in section 809 of Public Law 101-510, as
amended by section 811 of Public Law 102-484, the requirements in any
law enacted on or after the enactment of Public Law 101-510 (except to
the extent that a waiver or limitation is specifically authorized for
such a defense acquisition program by statute), and any provision of law
that ensures the financial integrity of
[[Page 12]]
the conduct of a Federal Government program or that relates to the
authority of the Inspector General of the Department of Defense may not
be considered for waiver.
Sec. 2.3 Regulatory relief for participating programs.
(a) A program participating in the Defense Acquisition Pilot Program
will not be subject to any regulation, policy, directive, or
administrative rule or guideline relating to the acquisition activities
of the Department of Defense other than the Federal Acquisition
Regulation (FAR) \1\, the Defense FAR Supplement (DFARS) \2\, or those
regulatory requirements added by the Under Secretary of Defense for
Acquisition and Technology, the Head of the Component, or the DoD
Component Acquisition Executive.
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\1\ Copies of this Department of Defense publication may be obtained
from the Government Printing Office, Superintendent of Documents,
Washington, DC 20402.
\2\ See footnote 1 to Sec. 2.3(a).
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(b) Provisions of the FAR and/or DFARS that do not implement
statutory requirements may be waived by the Under Secretary of Defense
for Acquisition and Technology using appropriate administrative
procedures. Provisions of the FAR and DFARS that implement statutory
requirements may be waived or limited in accordance with the procedures
for statutory relief previously mentioned.
(c) Regulatory relief includes relief from use of government-unique
specifications and standards. Since a major objective of the Defense
Acquisition Pilot Program is to promote standard, commercial industrial
practices, functional performance and commercial specifications and
standards will be used to the maximum extent practical. Federal or
military specifications and standards may be used only when no practical
alternative exists that meet the user's needs. Defense acquisition
officials (other than the Program Manager or Commodity Manager) may only
require the use of military specifications and standards with advance
approval from the Under Secretary of Defense for Acquisition and
Technology, the Head of the DoD Component, or the DoD Component
Acquisition Executive.
Sec. 2.4 Designation of participating programs.
(a) Pilot programs may be nominated by a DoD Component Head or
Component Acquisition Executive for participation in the Defense
Acquisition Pilot Program. The Under Secretary of Defense for
Acquisition and Technology shall determine which specific programs will
participate in the pilot program and will transmit to the Congressional
defense committees a written notification of each defense acquisition
program proposed for participation in the pilot program. Programs
proposed for participation must be specifically designated as
participants in the Defense Acquisition Pilot Program in a law
authorizing appropriations for such programs and provisions of law to be
waived must be specifically authorized for waiver.
(b) Once included in the Defense Acquisition Pilot Program, decision
and approval authority for the participating program shall be delegated
to the lowest level allowed in the acquisition regulations consistent
with the total cost of the program (e.g., under DoD Directive 5000.1,
\3\ an acquisition program that is a major defense acquisition program
would be delegated to the appropriate Component Acquisition Executive as
an acquisition category IC program)
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\3\ Copies may be obtained, at cost, from the National Technical
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
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(c) At the time of nomination approval, the Under Secretary of
Defense for Acquisition and Technology will establish measures to judge
the success of a specific program, and will also establish a means of
reporting progress towards the measures.
Sec. 2.5 Criteria for designation of participating programs.
(a) Candidate programs must have an approved requirement, full
program funding assured prior to designation, and low risk. Nomination
of a candidate program to participate in the Defense Acquisition Pilot
Program should occur as early in the program's life-cycle as possible.
Developmental programs will only be considered on an exception basis.
[[Page 13]]
(b) Programs in which commercial or non-developmental items can
satisfy the military requirement are preferred as candidate programs. A
nominated program will address which standard commercial, industrial
practices will be used in the pilot program and how those practices will
be applied.
(c) Nomination of candidate programs must be accompanied by a list
of waivers being requested to Statutes, FAR, DFARS, DoD Directives \4\
and Instructions, \5\ and where applicable, DoD Component regulations.
Waivers being requested must be accompanied by rationale and
justification for the waiver. The justification must include:
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\4\ See footnote 3 to Sec. 2.4(b).
\5\ See footnote 3 to Sec. 2.4(b).
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(1) The provision of law proposed to be waived or limited.
(2) The effects of the provision of law on the acquisition,
including specific examples.
(3) The actions taken to ensure that the waiver or limitation will
not reduce the efficiency, integrity, and effectiveness of the
acquisition process used for the defense acquisition program; and
(4) A discussion of the efficiencies or savings, if any, that will
result from the waiver or limitation.
(d) No nominated program shall be accepted until the Under Secretary
of Defense has determined that the candidate program is properly
planned.
PART 3_TRANSACTIONS OTHER THAN CONTRACTS, GRANTS, OR COOPERATIVE
AGREEMENTS FOR PROTOTYPE PROJECTS--Table of Contents
Sec.
3.1 Purpose.
3.2 Background.
3.3 Applicability.
3.4 Definitions.
3.5 Appropriate use.
3.6 Limitations on cost-sharing.
3.7 Comptroller General access.
3.8 DoD access to records policy.
3.9 Follow-on production contracts.
Authority: Sec. 845, Pub. L. 103-160, 107 Stat. 1547, as amended.
Source: 66 FR 57383, Nov. 15, 2001, unless otherwise noted.
Sec. 3.1 Purpose.
This part consolidates rules that implement section 845 of the
National Defense Authorization Act for Fiscal Year 1994, Public Law 103-
160, 107 Stat. 1547, as amended, and have a significant impact on the
public. Section 845 authorizes the Secretary of a Military Department,
the Director of Defense Advanced Research Projects Agency, and any other
official designated by the Secretary of Defense, to enter into
transactions other than contracts, grants, or cooperative agreements in
certain situations for prototype projects that are directly relevant to
weapons or weapon systems proposed to be acquired or developed by the
Department of Defense.
[67 FR 54956, Aug. 27, 2002]
Sec. 3.2 Background.
``Other transactions'' is the term commonly used to refer to the 10
U.S.C. 2371 authority to enter into transactions other than contracts,
grants or cooperative agreements. ``Other transactions'' are generally
not subject to the Federal laws and regulations limited in applicability
to contracts, grants or cooperative agreements. As such, they are not
required to comply with the Federal Acquisition Regulation (FAR) and its
supplements (48 CFR).
[67 FR 54956, Aug. 27, 2002]
Sec. 3.3 Applicability.
This part applies to the Secretary of a Military Department, the
Directors of the Defense Agencies, and any other official designated by
the Secretary of Defense to enter into transactions other than
contracts, grants or cooperative agreements for prototype projects that
are directly relevant to weapons or weapon systems proposed to be
acquired or developed by the Department of Defense, under authority of
10 U.S.C. 2371. Such transactions are commonly referred to as ``other
transaction'' agreements and are hereafter referred to as agreements.
[65 FR 35576, June 5, 2000. Redesignated at 67 FR 54956, Aug. 27, 2002]
[[Page 14]]
Sec. 3.4 Definitions.
Agency point of contact (POC). The individual identified by the
military department or defense agency as its POC for prototype OTs.
Agreements Officer. An individual with the authority to enter into,
administer, or terminate OTs for prototype projects and make related
determinations and findings.
Approving Official. The official responsible for approving the OTs
acquisition strategy and resulting OT agreement. This official must be
at least one level above the Agreements Officer and at no lower level
than existing agency thresholds associated with procurement contracts.
Awardee. Any business unit that is the direct recipient of an OT
agreement.
Business unit. Any segment of an organization, or an entire business
organization which is not divided into segments.
Contracting activity. An element of an agency designated by the
agency head and delegated broad authority regarding acquisition
functions. It includes elements designated by the Director of a Defense
Agency which has been delegated contracting authority through its agency
charter.
Contracting Officer. A person with the authority to enter into,
administer, and/or terminate contracts and make related determinations
and findings as defined in Chapter 1 of Title 48, CFR, Federal
Acquisition Regulation, Section 2.101(b).
Cost-type OT. Agreements where payments are based on amounts
generated from the awardee's financial or cost records or that require
at least one third of the total costs to be provided by non-Federal
parties pursuant to statute or require submittal of financial or cost
records/reports to determine whether additional effort can be
accomplished for the fixed amount.
Fixed-price type OT. Agreements where payments are not based on
amounts generated from the awardee's financial or cost records.
Head of the contracting activity (HCA). The official who has overall
responsibility for managing the contracting activity.
Nontraditional Defense contractor. A business unit that has not, for
a period of at least one year prior to the date of the OT agreement,
entered into or performed on (1) any contract that is subject to full
coverage under the cost accounting standards prescribed pursuant to
section 26 of the Office of Federal Procurement Policy Act (41 U.S.C.
422) and the regulations implementing such section; or (2) any other
contract in excess of $500,000 to carry out prototype projects or to
perform basic, applied, or advanced research projects for a Federal
agency, that is subject to the Federal Acquisition Regulation.
Procurement contract. A contract awarded pursuant to the Federal
Acquisition Regulation.
Project Manager. The government manager for the prototype project.
Qualified Independent Public Accountant. An accountant that is
licensed or works for a firm that is licensed in the state or other
political jurisdiction where they operate their professional practice
and comply with the applicable provisions of the public accountancy law
and rules of the jurisdiction where the audit is being conducted.
Segment. One of two or more divisions, product departments, plants,
or other subdivisions of an organization reporting directly to a home
office, usually identified with responsibility for profit and/or
producing a product or service.
Senior Procurement Executive. The following individuals:
(1) Department of the Army--Assistant Secretary of the Army
(Acquisition, Logistics and Technology);
(2) Department of the Navy--Assistant Secretary of the Navy
(Research, Development and Acquisition);
(3) Department of the Air Force--Assistant Secretary of the Air
Force (Acquisition).
(4) The Directors of Defense Agencies who have been delegated
authority to act as Senior Procurement Executive for their respective
agencies.
Single Audit Act. Establishes uniform audit requirements for audits
of state and local government, universities, and non-profit
organizations that expend Federal awards.
Subawardee. Any business unit of a party, entity or subordinate
element
[[Page 15]]
performing effort under the OT agreement, other than the awardee.
Traditional Defense contractor. Any business unit that does not meet
the definition of a nontraditional Defense contractor.
[68 FR 27457, May 20, 2003, as amended at 69 FR 16482, Mar. 30, 2004]
Sec. 3.5 Appropriate use.
In accordance with statute, this authority may be used only when:
(a) At least one nontraditional Defense contractor is participating
to a significant extent in the prototype project; or
(b) No nontraditional Defense contractor is participating to a
significant extent in the prototype project, but at least one of the
following circumstances exists:
(1) At least one third of the total cost of the prototype project is
to be paid out of funds provided by non-Federal parties to the
transaction.
(2) The Senior Procurement Executive for the agency determines in
writing that exceptional circumstances justify the use of a transaction
that provides for innovative business arrangements or structures that
would not be feasible or appropriate under a procurement contract.
[67 FR 54956, Aug. 27, 2002]
Sec. 3.6 Limitations on cost-sharing.
(a) When a nontraditional Defense contractor is not participating to
a significant extent in the prototype project and cost-sharing is the
reason for using OT authority, then the non-Federal amounts counted as
provided, or to be provided, by the business units of an awardee or
subawardee participating in the performance of the OT agreement may not
include costs that were incurred before the date on which the OT
agreement becomes effective. Costs that were incurred for a prototype
project by the business units of an awardee or subawardee after the
beginning of negotiations, but prior to the date the OT agreement
becomes effective, may be counted as non-Federal amounts if and to the
extent that the Agreements Officer determines in writing that:
(1) The awardee or subawardee incurred the costs in anticipation of
entering into the OT agreement; and
(2) It was appropriate for the awardee or subawardee to incur the
costs before the OT agreement became effective in order to ensure the
successful implementation of the OT agreement.
(b) As a matter of policy, these limitations on cost-sharing apply
any time cost-sharing may be recognized when using OT authority for
prototype projects.
[67 FR 54956, Aug. 27, 2002]
Sec. 3.7 Comptroller General access.
(a) A clause must be included in solicitations and agreements for
prototype projects awarded under authority of 10 U.S.C. 2371, that
provide for total government payments in excess of $5,000,000 to allow
Comptroller General access to records that directly pertain to such
agreements.
(b) The clause referenced in paragraph (a) of this section will not
apply with respect to a party or entity, or subordinate element of a
party or entity, that has not entered into any other contract, grant,
cooperative agreement or ``other transaction'' agreement that provides
for audit access by a government entity in the year prior to the date of
the agreement. The clause must be included in all agreements described
in paragraph (a) of this section in order to fully implement the law by
covering those participating entities and their subordinate elements
which have entered into prior agreements providing for Government audit
access, and are therefore not exempt. The presence of the clause in an
agreement will not operate to require Comptroller General access to
records from any party or participating entity, or subordinate element
of a party or participating entity, or subordinate element of a party or
participating entity, which is otherwise exempt under the terms of the
clause and the law.
(c)(1) The right provided to the Comptroller General in a clause of
an agreement under paragraph (a) of this part, is limited as provided by
subparagraph (c)(2) of this part in the case of a party to the
agreement, an entity that participates in the performance of the
agreement, or a subordinate element of
[[Page 16]]
that party or entity, if the only cooperative agreements or ``other
transactions'' that the party, entity, or subordinate element entered
into with government entities in the year prior to the date of that
agreement are cooperative agreements or transactions that were entered
into under 10 U.S.C. 2371 or Section 845 of the National Defense
Authorization Act for Fiscal Year 1994 (Pub. L. 103-160; 10 U.S.C. 2371
note).
(c)(2) The only records of a party, other entity, or subordinate
element referred to in subparagraph (c)(1) of this part that the
Comptroller General may examine in the exercise of the right referred to
in that subparagraph, are records of the same type as the records that
the government has had the right to examine under the audit access
clauses of the previous cooperative agreements or transactions referred
to in such subparagraph that were entered into by that particular party,
entity, or subordinate element.
(d) The head of the contracting activity (HCA) that is carrying out
the agreement may waive the applicability of the Comptroller General
access requirement if the HCA determines it would not be in the public
interest to apply the requirement to the agreement. The waiver will be
effective with respect to the agreement only if the HCA transmits a
notification of the waiver to the Committees on Armed Services of the
Senate and the House of Representatives, the Comptroller General, and
the Director, Defense Procurement before entering into the agreement.
The notification must include the rationale for the determination.
(e) The HCA must notify the Director, Defense Procurement of
situations where there is evidence that the Comptroller General Access
requirement caused companies to refuse to participate or otherwise
restricted the Department's access to companies that typically do not do
business with the Department.
(f) In no case will the requirement to examine records under the
clause referenced in paragraph (a) of this section apply to an agreement
where more than three years have passed after final payment is made by
the government under such an agreement.
(g) The clause referenced in paragraph (a) of this section, must
provide for the following:
(1) The Comptroller General of the United States, in the discretion
of the Comptroller General, shall have access to and the right to
examine records of any party to the agreement or any entity that
participates in the performance of this agreement that directly pertain
to, and involve transactions relating to, the agreement.
(2) Excepted from the Comptroller General access requirement is any
party to this agreement or any entity that participates in the
performance of the agreement, or any subordinate element of such party
or entity, that, in the year prior to the date of the agreement, has not
entered into any other contract, grant, cooperative agreement, or
``other transaction'' agreement that provides for audit access to its
records by a government entity.
(3)(A) The right provided to the Comptroller General is limited as
provided in subparagraph (B) in the case of a party to the agreement,
any entity that participates in the performance of the agreement, or a
subordinate element of that party or entity if the only cooperative
agreements or ``other transactions'' that the party, entity, or
subordinate element entered into with government entities in the year
prior to the date of that agreement are cooperative agreements or
transactions that were entered into under 10 U.S.C. 2371 or Section 845
of the National Defense Authorization Act for Fiscal Year 1994 (Pub. L.
103-160; 10 U.S.C. 2371 note).
(B) The only records of a party, other entity, or subordinate
element referred to in subparagraph (A) that the Comptroller General may
examine in the exercise of the right referred to in that subparagraph
are records of the same type as the records that the government has had
the right to examine under the audit access clauses of the previous
agreements or transactions referred to in such subparagraph that were
entered into by that particular party, entity, or subordinate element.
(4) This clause shall not be construed to require any party or
entity, or any
[[Page 17]]
subordinate element of such party or entity, that participates in the
performance of the agreement, to create or maintain any record that is
not otherwise maintained in the ordinary course of business or pursuant
to a provision of law.
(5) The Comptroller General shall have access to the records
described in this clause until three years after the date the final
payment is made by the United States under this agreement.
(6) The recipient of the agreement shall flow down this provision to
any entity that participates in the performance of the agreement.
[65 FR 35576, June 5, 2000. Redesignated at 67 FR 54956, Aug. 27, 2002]
Sec. 3.8 DoD access to records policy.
(a) Applicability. This section provides policy concerning DoD
access to awardee and subawardee records on OT agreements for prototype
projects. This access is separate and distinct from Comptroller General
access.
(1) Fixed-price type OT agreements. (i) General--DoD access to
records is not generally required for fixed-price type OT agreements. In
order for an agreement to be considered a fixed-price type OT agreement,
it must adequately specify the effort to be accomplished for a fixed
amount and provide for defined payable milestones, with no provision for
financial or cost reporting that would be a basis for making adjustment
in either the work scope or price of the effort.
(ii) Termination considerations. The need to provide for DoD access
to records in the case of termination of a fixed-price type OT can be
avoided by limiting potential termination settlements to an amount
specified in the original agreement or to payment for the last completed
milestone. However, if a fixed-price agreement provides that potential
termination settlement amounts may be based on amounts generated from
cost or financial records and the agreement exceeds the specified
threshold, the OT should provide that DoD will have access to records in
the event of termination.
(2) Cost-type OT agreements. (i) Single Audit Act--In accordance
with the requirements of Public Law 98-502, as amended by Public Law
104-156, 110 STAT. 1396-1404, when a business unit that will perform the
OT agreement, or a subawardee, meets the criteria for an audit pursuant
to the Single Audit Act, the DoD must have sufficient access to the
entity's records to assure compliance with the provisions of the Act.
(ii) Traditional Defense contractors. The DoD shall have access to
records on cost-type OT agreements with traditional Defense contractors
that provide for total Government payments in excess of $5,000,000. The
content of the access to records clause shall be in accordance with
paragraph (c) of this section. The value establishing the threshold is
the total value of the agreement including all options.
(iii) Nontraditional Defense contractors. The DoD should have access
to records on cost-type OT agreements with nontraditional Defense
contractors that provide for total Government payments in excess of
$5,000,000. The content of the access to records clause should be in
accordance with paragraph (c) of this section. The value establishing
the threshold is the total value of the agreement including all options.
(iv) DoD access below threshold. The Agreements Officer has the
discretion to determine whether to include DoD access to records when
the OT does not meet any of the requirements in (a)(2)(i) through
(a)(2)(iii) of this section. The content of that access to records
clause should be tailored to meet the particular circumstances of the
agreement.
(v) Examples of cost-type OT agreements. (A) An agreement that
requires at least one-third cost share pursuant to statute.
(B) An agreement that includes payable milestones, but provides for
adjustment of the milestone amounts based on actual costs or reports
generated from the awardee's financial or cost records.
(C) An agreement that is for a fixed-Government amount, but the
agreement provides for submittal of financial or cost records/reports to
determine whether additional effort can be accomplished for the fixed
amount.
(3) Subawardees. When a DoD access to records provision is included
in the OT agreement, the awardee shall use the criteria established in
paragraphs
[[Page 18]]
(a)(2)(i) through (a)(2)(iii) of this section to determine whether DoD
access to records clauses should be included in subawards.
(b) Exceptions--(1) Nontraditional Defense contractors--(i) The
Agreements Officers may deviate, in part or in whole, from the
application of this access to records policy for a nontraditional
Defense contractor when application of the policy would adversely impact
the government's ability to incorporate commercial technology or execute
the prototype project.
(ii) The Agreements Officer will document:
(A) What aspect of the audit policy was not applied;
(B) Why it was problematic;
(C) What means will be used to protect the Government's interest;
and
(D) Why the benefits of deviating from the policy outweigh the
potential risks.
(iii) This determination will be reviewed by the approving official
as part of the pre-award approval of the agreement and submitted to the
agency POC within 10 days of award.
(iv) The agency POC will forward all such documentation received in
any given fiscal year, to the Director, Defense Procurement by 15
October of each year.
(2) Traditional Defense contractor. (i) Any departure from this
policy for other than nontraditional Defense contractors must be
approved by the Head of the Contracting Activity prior to award and set
forth the exceptional circumstances justifying deviation.
(ii) Additionally, the justification will document:
(A) What aspect of the policy was not applied;
(B) Why it was problematic;
(C) What means will be used to protect the Government's interest;
and
(D) Why the benefits of deviating from the policy outweigh the
potential risks.
(iii) The HCA will forward documentation associated with such
waivers in any given fiscal year, to the Director, Defense Procurement
by 15 October of each year.
(3) DoD access below the threshold. When the Agreements Officer
determines that access to records is appropriate for an agreement below
the $5,000,000 threshold, the content, length and extent of access may
be mutually agreed to by the parties, without documenting reasons for
departing from the policy of this section.
(4) Flow down provisions. The awardee shall submit justification for
any exception to the DoD access to records policy to the Agreements
Officer for subawardees. The Agreements Officer will review and obtain
appropriate approval, as set forth in paragraphs (b)(1) and (b)(2) of
this section.
(c) Content of DoD access to records clause. When a DoD access to
records clause is included as part of the OT agreement, address the
following areas during the negotiation of the clause:
(1) Frequency of audits. Audits will be performed when the
Agreements Officer determines it is necessary to verify statutory cost
share or to verify amounts generated from financial or cost records that
will be used as the basis for payment or adjustment of payment.
(2) Means of accomplishing audits. (i) Business units subject to the
Single Audit Act--When the awardee or subawardee is a state government,
local government, or nonprofit organization whose Federal cost
reimbursement contracts and financial assistance agreements are subject
to the Single Audit Act (Public Law 98-502, as amended by Public Law
104-156, 110 STAT. 1396-1404), the clause must apply the provisions of
that Act for purposes of performing audits of the awardee or subawardee
under the agreement.
(ii) Business units not subject to the Single Audit Act currently
performing on procurement contracts. The clause must provide that DCAA
will perform any necessary audits if, at the time of agreement award,
the awardee or subawardee is not subject to the Single Audit Act and is
performing a procurement contract that is subject to the Cost Principles
Applicable to Commercial Organizations (48 CFR part 31.2) and/or the
Cost Accounting Standards (48 CFR part 99).
(iii) Other business units. DCAA or a qualified IPA may perform any
necessary audit of a business unit of the awardee or subawardee if, at
the time of agreement award, the business unit
[[Page 19]]
does not meet the criteria in (c)(2)(i) or (c)(2)(ii) of this section.
The clause must provide for the use of a qualified IPA if such a
business unit will not accept the agreement if the Government has access
to the business unit's records. The Agreements Officer will include a
statement in the file that the business unit is not performing on a
procurement contract subject to the Cost Principles or Cost Accounting
Standards at the time of agreement award, and will not accept the
agreement if the government has access to the business unit's records.
The Agreements Officer will also prepare a report (Part III to the
annual report submission) for the Director, Defense Procurement that
identifies, for each business unit that is permitted to use an IPA: the
business unit's name, address and the expected value of its award. When
the clause provides for use of an IPA to perform any necessary audits,
the clause must state that:
(A) The IPA will perform the audit in accordance with Generally
Accepted Government Auditing Standards (GAGAS). Electronic copies of the
standards may be accessed at www.gao.gov. Printed copies may be
purchased from the U.S. Government Printing Office (for ordering
information, call (202) 512-1800 or access the Internet Site at
www.gpo.gov).
(B) The Agreements Officers' authorized representative has the right
to examine the IPA's audit report and working papers for 3 years after
final payment or three years after issuance of the audit report,
whichever is later, unless notified otherwise by the Agreements Officer.
(C) The IPA will send copies of the audit report to the Agreements
Officer and the Assistant Inspector General (Audit Policy and Oversight)
[AIG(APO)], 400 Army Navy Drive, Suite 737, Arlington, VA 22202.
(D) The IPA will report instances of suspected fraud directly to the
DoDIG.
(E) The Government has the right to require corrective action by the
awardee or subawardee if the Agreements Officer determines (subject to
appeal under the disputes clause of the agreement) that the audit has
not been performed or has not been performed in accordance with GAGAS.
The Agreements Officer should take action promptly once the Agreements
Officer determines that the audit is not being accomplished in a timely
manner or the audit is not performed in accordance with GAGAS but
generally no later than twelve (12) months of the date requested by the
Agreements Officer. The awardee or subawardee may take corrective action
by having the IPA correct any deficiencies identified by the Agreements
Officer, having another IPA perform the audit, or electing to have the
Government perform the audit. If corrective action is not taken, the
Agreements Officer has the right to take one or more of the following
actions:
(1) Withhold or disallow a specified percentage of costs until the
audit is completed satisfactorily. The agreement should include a
specified percentage that is sufficient to enhance performance of
corrective action while also not being unfairly punitive.
(2) Suspend performance until the audit is completed satisfactorily;
and/or
(3) Terminate the agreement if the agreements officer determines
that imposition of either (c)(2)(iii)(E)(1) or (c)(2)(iii)(e)(2) of this
section is not practical.
(F) If it is found that the awardee or subawardee was performing a
procurement contract subject to Cost Principles Applicable to Commercial
Organizations (48 CFR part 31.2) and/or Cost Accounting Standards (48
CFR part 99) at the time of agreement award, the Agreements Officer, or
an authorized representative, has the right to audit records of the
awardee or subawardee to verify the actual costs or reporting
information used as the basis for payment or to verify statutorily
required cost share under the agreement, and the IPA is to be paid by
the awardee or subawardee. The cost of an audit performed in accordance
with this policy is reimbursable based on the business unit's
established accounting practices and subject to any limitations in the
agreement.
(3) Scope of audit. The Agreements Officer should coordinate with
the auditor regarding the nature of any audit envisioned.
[[Page 20]]
(4) Length and extent of access--(i) Clauses that do not provide for
use of an IPA. The clause must provide for the Agreements Officer's
authorized representative to have access to directly pertinent records
of those business units of the awardee or subawardee's performing effort
under the OT agreement, when needed to verify the actual costs or
reporting used as the basis for payment or to verify statutorily
required cost share under the agreement.
(ii) Clauses that provide for use of an IPA to perform the audits.
The clause must:
(A) Provide the Agreements Officer's authorized representative
access to the IPA's audit reports and working papers to ensure that the
IPA has performed the audit in accordance with GAGAS.
(B) State that the Government will make copies of contractor records
contained in the IPA's work papers if needed to demonstrate that the
audit was not performed in accordance with GAGAS.
(C) State that the Government has no direct access to any awardee or
subawardee records unless it is found that the awardee or subawardee was
performing a procurement contract subject to Cost Principles (48 CFR
part 31) and/or Cost Accounting Standards (48 CFR part 99) at the time
of agreement award.
(iii) Business Units subject to the Single Audit Act. The clause
must provide access to the extent authorized by the Single Audit Act.
(iv) Record Retention/Period of Access. The clause must require that
the awardee and subawardee retain, and provide access to, the records
referred to in (c)(4)(i) and (c)(4)(ii) of this section for three years
after final payment, unless notified of a shorter or longer period by
the Agreements Officer.
(5) Awardee flow down responsibilities. Agreements must require
awardees to include the necessary provisions in subawards that meet the
conditions set forth in this DoD access to records policy.
(d) DoDIG and GAO access. In accordance with statute, if an
agreement gives the Agreements Officer or another DoD component official
access to a business unit's records, the DoDIG or GAO are granted the
same access to those records.
[68 FR 27457, May 20, 2003]
Sec. 3.9 Follow-on production contracts.
(a) Authority. A competitively awarded OT agreement for a prototype
project that satisfies the condition set forth in law that requires non-
Federal parties to the OT agreement to provide at least one-third of the
costs of the prototype project may provide for the award of a follow-on
production contract to the awardee of the OT prototype agreement for a
specific number of units at specific target prices, without further
competition.
(b) Conditions. The Agreements Officer must do the following in the
award of the prototype project:
(1) Ensure non-Federal parties to the OT prototype agreement offer
at least one-third of the costs of the prototype project pursuant to
subsection (d)(1)(B)(i), 10 U.S.C. 2371 note.
(2) Use competition to select parties for participation in the OT
prototype agreement and evaluate the proposed quantity and target prices
for the follow-on production units as part of that competition.
(3) Determine the production quantity that may be procured without
further competition, by balancing of the level of the investment made in
the project by the non-Federal parties with the interest of the Federal
Government in having competition among sources in the acquisition of the
product or products prototyped under the project.
(4) Specify the production quantity and target prices in the OT
prototype agreement and stipualte in the agreement that the Contracting
Officer for the follow-on contract may award a production contract
without further competition if the awardee successfully completes the
prototype project and agrees to production quantities and prices that do
not exceed those specified in the OT prototype agreement (see part
206.001 of the Defense Federal Acquisition Regulation Supplement).
(c) Limitation. As a matter of policy, establishing target prices
for production units should only be considered when the risk of the
prototype project permits realistic production pricing
[[Page 21]]
without placing undue risks on the awardee.
(d) Documentation. (1) The Agreements Officer will need to provide
information to the Contracting Officer from the agreement and award file
that the conditions set forth in paragraph (b) of this section have been
satisfied.
(2) The information shall contain, at a minimum:
(i) The competitive procedures used;
(ii) How the production quantities and target prices were evaluated
in the competition;
(iii) The percentage of cost-share; and
(iv) The production quantities and target prices set forth in the OT
agreement.
(3) The Project Manager will provide evidence of successful
completion of the prototype project to the Contracting Officer.
[69 FR 16482, Mar. 30, 2004]
PARTS 4 8 [RESERVED]
[[Page 22]]
SUBCHAPTER B [RESERVED]
[[Page 23]]
SUBCHAPTER C_DoD GRANT AND AGREEMENT REGULATIONS
PART 21_DoD GRANTS AND AGREEMENTS_GENERAL MATTERS--Table of Contents
Subpart A_Introduction
Sec.
21.100 What are the purposes of this part?
Subpart B_Defense Grant and Agreement Regulatory System
21.200 What is the Defense Grant and Agreement Regulatory System
(DGARS)?
21.205 What types of instruments are covered by the DGARS?
21.210 What are the purposes of the DGARS?
21.215 Who is responsible for the DGARS?
21.220 What publications are in the DGARS?
Subpart C_The DoD Grant and Agreement Regulations
21.300 What instruments are subject to the DoD Grant and Agreement
Regulations (DoDGARs)?
21.305 What is the purpose of the DoDGARs?
21.310 Who ensures DoD Component compliance with the DoDGARs?
21.315 May DoD Components issue supplemental policies and procedures to
implement the DoDGARs?
21.320 Are there areas in which DoD Components must establish policies
and procedures to implement the DoDGARs?
21.325 Do acquisition regulations also apply to DoD grants and
agreements?
21.330 How are the DoDGARs published and maintained?
21.335 Who can authorize deviations from the DoDGARs?
21.340 What are the procedures for requesting and documenting
deviations?
Subpart D_Authorities and Responsibilities for Making and Administering
Assistance Awards
21.400 To what instruments does this subpart apply?
21.405 What is the purpose of this subpart?
21.410 Must a DoD Component have statutory authority to make an
assistance award?
21.415 Must the statutory authority specifically mention the use of
grants or other assistance instruments?
21.420 Under what types of statutory authorities do DoD Components award
assistance instruments?
21.425 How does a DoD Component's authority flow to awarding and
administering activities?
21.430 What are the responsibilities of the head of the awarding or
administering activity?
21.435 Must DoD Components formally select and appoint grants officers
and agreements officers?
21.440 What are the standards for selecting and appointing grants
officers and agreements officers?
21.445 What are the requirements for a grants officer's or agreements
officer's statement of appointment?
21.450 What are the requirements for a termination of a grants officer's
or agreements officer's appointment?
21.455 Who can sign, administer, or terminate assistance instruments?
21.460 What is the extent of grants officers' and agreements officers'
authority?
21.465 What are grants officers' and agreements officers'
responsibilities?
Subpart E_Information Reporting on Awards Subject to 31 U.S.C. Chapter
61
21.500 What is the purpose of this subpart?
21.505 What is the Catalog of Federal Domestic Assistance (CFDA)?
21.510 Why does the DoD report information to the CFDA?
21.515 Who reports the information for the CFDA?
21.520 What are the purposes of the Defense Assistance Awards Data
System (DAADS)?
21.525 Who issues policy guidance for the DAADS?
21.530 Who operates the DAADS?
21.535 Do DoD Components have central points for collecting DAADS data?
21.540 What are the duties of the DoD Components' central points for the
DAADS?
21.545 Must DoD Components report every obligation to the DAADS?
21.550 Must DoD Components relate reported actions to listings in the
CFDA?
21.555 When and how must DoD Components report to the DAADS?
21.560 Must DoD Components assign numbers uniformly to awards?
21.565 Must DoD Components' electronic systems accept Data Universal
Numbering System (DUNS) numbers?
Subpart F_Definitions
21.605 Acquisition.
21.610 Agreements officer.
21.615 Assistance.
[[Page 24]]
21.620 Award.
21.625 Contract.
21.630 Contracting activity.
21.635 Contracting officer.
21.640 Cooperative agreement.
21.645 Deviation.
21.650 DoD Components.
21.655 Grant.
21.660 Grants officer.
21.665 Nonprocurement instrument.
21.670 Procurement contract.
21.675 Recipient.
21.680 Technology investment agreements.
Appendix A to Part 21--Instruments to Which DoDGARs Portions Apply
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Source: 68 FR 47153, Aug. 7, 2003, unless otherwise noted.
Subpart A_Introduction
Sec. 21.100 What are the purposes of this part?
This part of the DoD Grant and Agreement Regulations:
(a) Provides general information about the Defense Grant and
Agreement Regulatory System (DGARS).
(b) Sets forth general policies and procedures related to DoD
Components' overall management of functions related to assistance and
certain other nonprocurement instruments subject to the DGARS (see Sec.
21.205(b)).
Subpart B_Defense Grant and Agreement Regulatory System
Sec. 21.200 What is the Defense Grant and Agreement Regulatory System
(DGARS)?
The Defense Grant and Agreement Regulatory System (DGARS) is the
system of regulatory policies and procedures for the award and
administration of DoD Components' assistance and other nonprocurement
awards. DoD Directive 3210.6 \1\ established the DGARS.
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\1\ Electronic copies may be obtained at the Washington Headquarters
Services Internet site http://www.dtic.mil/whs/directives. Paper copies
may be obtained, at cost, from the National Technical Information
Service, 5285 Port Royal Road, Springfield, VA 22161.
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Sec. 21.205 What types of instruments are covered by the DGARS?
The Defense Grant and Agreement Regulatory System (DGARS) applies to
the following types of funding instruments awarded by DoD Components:
(a) All grants, cooperative agreements, and technology investment
agreements.
(b) Other nonprocurement instruments, as needed to implement
statutes, Executive orders, or other Federal Governmentwide rules that
apply to those other nonprocurement instruments, as well as to grants
and cooperative agreements.
Sec. 21.210 What are the purposes of the DGARS?
The purposes of the DGARS are to provide uniform policies and
procedures for DoD Components' awards, in order to meet DoD needs for:
(a) Efficient program execution, effective program oversight, and
proper stewardship of Federal funds.
(b) Compliance with relevant statutes; Executive orders; and
applicable guidance, such as Office of Management and Budget (OMB)
circulars.
(c) Collection from DoD Components, retention, and dissemination of
management and fiscal data related to awards.
Sec. 21.215 Who is responsible for the DGARS?
The Director of Defense Research and Engineering, or his or her
designee, develops and implements DGARS policies and procedures. He or
she does so by issuing and maintaining the DoD publications that
comprise the DGARS.
Sec. 21.220 What publications are in the DGARS?
A DoD publication (DoD 3210.6-R \2\) entitled ``The DoD Grant and
Agreement Regulations'' is the principal element of the DGARS. The
Director of Defense Research and Engineering also may publish DGARS
policies and procedures in DoD instructions and other DoD publications,
as appropriate.
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\2\ See footnote 1 to Sec. 21.200.
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[[Page 25]]
Subpart C_The DoD Grant and Agreement Regulations
Sec. 21.300 What instruments are subject to the DoD Grant and
Agreement Regulations (DoDGARs)?
(a) The types of instruments that are subject to the DoDGARs vary
from one portion of the DoDGARs to another. The types of instruments
include grants, cooperative agreements, and technology investment
agreements. Some portions of the DoDGARs apply to other types of
assistance or nonprocurement instruments. The term ``awards,'' as
defined in subpart D of this part, is used in this part to refer
collectively to all of the types of instruments that are subject to one
or more portions of the DoDGARs.
(b) Note that each portion of the DoDGARs identifies the types of
instruments to which it applies. However, grants officers and agreements
officers must exercise caution when determining the applicability of
some Governmentwide rules that are included within the DoDGARs, because
a term may be defined differently in a Governmentwide rule than it is
defined elsewhere in the DoDGARs. One example is part 33 of the DoDGARs
(32 CFR part 33), which contains administrative requirements for awards
to State and local governments. That DoDGARs part is the DoD's
codification of the Governmentwide rule implementing OMB Circular A-102.
\3\ Part 33 states that it applies to grants, but defines the term
``grant'' to include cooperative agreements and other forms of financial
assistance.
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\3\ Electronic copies may be obtained at the Internet site http://
www.whitehouse.gov/OMB. For paper copies, contact the Office of
Management and Budget, EOP Publications, 725 17th St., NW., New
Executive Office Building, Washington, DC 20503.
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(c) For convenience, the table in Appendix A to this part provides
an overview of the applicability of the various portions of the DoDGARs.
Sec. 21.305 What is the purpose of the DoDGARs?
The DoD Grant and Agreement Regulations provide uniform policies and
procedures for the award and administration of DoD Components' awards.
The DoDGARs are the primary DoD regulations for achieving the DGARS
purposes described in Sec. 21.210.
Sec. 21.310 Who ensures DoD Component compliance with the DoDGARs?
The Head of each DoD Component that makes or administers awards, or
his or her designee, is responsible for ensuring compliance with the
DoDGARs within that DoD Component.
Sec. 21.315 May DoD Components issue supplemental policies and
procedures to implement the DoDGARs?
Yes, Heads of DoD Components or their designees may issue
regulations, procedures, or instructions to implement the DGARS or
supplement the DoDGARs to satisfy needs that are specific to the DoD
Component, as long as the regulations, procedures, or instructions do
not impose additional costs or administrative burdens on recipients or
potential recipients.
Sec. 21.320 Are there areas in which DoD Components must establish
policies and procedures to implement the DoDGARs?
Yes, Heads of DoD Components or their designees must establish
policies and procedures in areas where uniform policies and procedures
throughout the DoD Component are required, such as for:
(a) Requesting class deviations from the DoDGARs (see Sec. Sec.
21.335(b) and 21.340(a)) or exemptions from the provisions of 31 U.S.C.
6301 through 6308, that govern the appropriate use of contracts, grants,
and cooperative agreements (see 32 CFR 22.220).
(b) Designating one or more Grant Appeal Authorities to resolve
claims, disputes, and appeals (see 32 CFR 22.815).
(c) Reporting data on assistance awards and programs, as required by
31 U.S.C. chapter 61 (see subpart E of this part).
(d) Prescribing requirements for use and disposition of real
property acquired under awards, if the DoD Component makes any awards to
institutions of higher education or to other nonprofit organizations
under which real property is acquired in whole or in
[[Page 26]]
part with Federal funds (see 32 CFR 32.32).
Sec. 21.325 Do acquisition regulations also apply to DoD grants
and agreements?
Unless the DoDGARs specify that they apply, policies and procedures
in the following acquisition regulations that apply to procurement
contracts do not apply to grants, cooperative agreements, technology
investment agreements, or to other assistance or nonprocurement awards:
(a) The Federal Acquisition Regulation (FAR)(48 CFR parts 1-53).
(b) The Defense Federal Acquisition Regulation Supplement (DFARS)(48
CFR parts 201-270).
(c) DoD Component supplements to the FAR and DFARS.
Sec. 21.330 How are the DoDGARs published and maintained?
(a) The DoD publishes the DoDGARs in the Code of Federal Regulations
(CFR) and in a separate internal DoD document (DoD 3210.6-R).
(1) The location of the DoDGARs in the CFR currently is in
transition. They are moving from Chapter I, Subchapter C, Title 32, to a
new location in Chapter XI, Title 2 of the CFR. During the transition,
there will be some parts of the DoDGARs in each of the two titles.
(2) The DoD document is divided into parts, subparts, and sections,
to parallel the CFR publication. Cross references within the DoD
document are stated as CFR citations (e.g., a reference to section
21.215 in part 21 would be to 32 CFR 21.215), which also is how they are
stated in the CFR publication of the DoDGARs.
(b) The DoD publishes updates to the DoDGARs in the Federal
Register. When finalized, the DoD also posts the updates to the internal
DoD document on the World Wide Web at http://www.dtic.mil/whs/
directives.
(c) A standing working group recommends revisions to the DoDGARs to
the Director of Defense Research and Engineering (DDR&E). The DDR&E,
Director of Defense Procurement, and each Military Department must be
represented on the working group. Other DoD Components that make or
administer awards may also nominate representatives. The working group
meets when necessary.
[68 FR 47153, Aug. 7, 2003, as amended at 72 FR 34986, June 26, 2007]
Sec. 21.335 Who can authorize deviations from the DoDGARs?
(a) The Head of the DoD Component or his or her designee may
authorize individual deviations from the DoDGARs, which are deviations
that affect only one award, if the deviations are not prohibited by
statute, executive order or regulation.
(b) The Director of Defense Research and Engineering (DDR&E) or his
or her designee must approve in advance any class deviation that affects
more than one award. Note that OMB concurrence also is required for
class deviations from two parts of the DoDGARs, 32 CFR parts 32 and 33,
in accordance with 32 CFR 32.4 and 33.6, respectively.
Sec. 21.340 What are the procedures for requesting and documenting
deviations?
(a) DoD Components must submit copies of justifications and agency
approvals for individual deviations and written requests for class
deviations to: Deputy Director of Defense Research and Engineering,
ATTN: Basic Research, 3080 Defense Pentagon, Washington, DC 20301-3080.
(b) Grants officers and agreements officers must maintain copies of
requests and approvals for individual and class deviations in award
files.
Subpart D_Authorities and Responsibilities for Making and Administering
Assistance Awards
Sec. 21.400 To what instruments does this subpart apply?
This subpart applies to grants, cooperative agreements, and
technology investment agreements, which are legal instruments used to
reflect assistance relationships between the United States Government
and recipients.
[[Page 27]]
Sec. 21.405 What is the purpose of this subpart?
This subpart describes the sources and flow of authority to make or
administer assistance awards, and assigns the broad responsibilities
associated with DoD Components' use of those instruments.
Sec. 21.410 Must a DoD Component have statutory authority to make
an assistance award?
Yes, the use of an assistance instrument to carry out a program
requires authorizing legislation. That is unlike the use of a
procurement contract, for which Federal agencies have inherent,
Constitutional authority.
Sec. 21.415 Must the statutory authority specifically mention
the use of grants or other assistance instruments?
No, the statutory authority described in Sec. 21.410 need not
specifically say that the purpose of the program is assistance or
mention the use of any type of assistance instrument. However, the
intent of the statute must support a judgment that the use of an
assistance instrument is appropriate. For example, a DoD Component may
judge that the principal purpose of a program for which it has
authorizing legislation is assistance, rather than acquisition. The DoD
Component would properly use an assistance instrument to carry out that
program, in accordance with 31 U.S.C. chapter 63.
Sec. 21.420 Under what types of statutory authorities do DoD
Components award assistance instruments?
DoD Components may use assistance instruments under a number of
statutory authorities that fall into three categories:
(a) Authorities that statutes provide to the Secretary of Defense.
These authorities generally are delegated by the Secretary of Defense to
Heads of DoD Components, usually through DoD directives, instructions,
or policy memoranda that are not part of the Defense Grant and Agreement
Regulatory System. Examples of statutory authorities in this category
are:
(1) Authority under 10 U.S.C. 2391 to award grants or cooperative
agreements to help State and local governments alleviate serious
economic impacts of defense program changes (e.g., base openings and
closings, contract changes, and personnel reductions and increases).
(2) Authority under 10 U.S.C. 2413 to enter into cooperative
agreements with entities that furnish procurement technical assistance
to businesses.
(b) Authorities that statutes may provide directly to Heads of DoD
Components. When a statute authorizes the Head of a DoD Component to use
a funding instrument to carry out a program with a principal purpose of
assistance, use of that authority requires no delegation by the
Secretary of Defense. For example, 10 U.S.C. 2358 authorizes the
Secretaries of the Military Departments, in addition to the Secretary of
Defense, to perform research and development projects through grants and
cooperative agreements. Similarly, 10 U.S.C. 2371 provides authority for
the Secretaries of the Military Departments and Secretary of Defense to
carry out basic, applied, or advanced research projects using assistance
instruments other than grants and cooperative agreements. A Military
Department's use of the authority of 10 U.S.C. 2358 or 10 U.S.C. 2371
therefore requires no delegation by the Secretary of Defense.
(c) Authorities that arise indirectly as the result of statute. For
example, authority to use an assistance instrument may result from:
(1) A federal statute authorizing a program that is consistent with
an assistance relationship (i.e., the support or stimulation of a public
purpose, rather than the acquisition of a good or service for the direct
benefit of the Department of Defense). In accordance with 31 U.S.C.
chapter 63, such a program would appropriately be carried out through
the use of grants or cooperative agreements. Depending upon the nature
of the program (e.g., research) and whether the program statute includes
authority for any specific types of instruments, there also may be
authority to use other assistance instruments.
(2) Exemptions requested by the Department of Defense and granted by
the Office of Management and Budget
[[Page 28]]
under 31 U.S.C. 6307, as described in 32 CFR 22.220.
Sec. 21.425 How does a DoD Component's authority flow to awarding
and administering activities?
The Head of a DoD Component, or his or her designee, may delegate to
the heads of contracting activities (HCAs) within the Component, that
Component's authority to make and administer awards, to appoint grants
officers and agreements officers (see Sec. Sec. 21.435 through 21.450),
and to broadly manage the DoD Component's functions related to
assistance instruments. The HCA is the same official (or officials)
designated as the head of the contracting activity for procurement
contracts, as defined at 48 CFR 2.101. The intent is that overall
management responsibilities for a DoD Component's functions related to
nonprocurement instruments be assigned only to officials that have
similar responsibilities for procurement contracts.
Sec. 21.430 What are the responsibilities of the head of the awarding
or administering activity?
When designated by the Head of the DoD Component or his or her
designee (see 32 CFR 21.425), the head of the awarding or administering
activity (i.e., the HCA) is responsible for the awards made by or
assigned to that activity. He or she must supervise and establish
internal policies and procedures for that activity's awards.
Sec. 21.435 Must DoD Components formally select and appoint grants
officers and agreements officers?
Yes, each DoD Component that awards grants or enters into
cooperative agreements must have a formal process (see Sec. 21.425) for
selecting and appointing grants officers and for terminating their
appointments. Similarly, each DoD Component that awards or administers
technology investment agreements must have a process for selecting and
appointing agreements officers and for terminating their appointments.
Sec. 21.440 What are the standards for selecting and appointing
grants officers and agreements officers?
In selecting grants officers and agreements officers, DoD Components
must use the following minimum standards:
(a) In selecting a grants officer, the appointing official must
judge whether the candidate has the necessary experience, training,
education, business acumen, judgment, and knowledge of assistance
instruments and contracts to function effectively as a grants officer.
The appointing official also must take those attributes of the candidate
into account when deciding the complexity and dollar value of the grants
and cooperative agreements to be assigned.
(b) In selecting an agreements officer, the appointing official must
consider all of the same factors as in paragraph (a) of this section. In
addition, the appointing official must consider the candidate's ability
to function in the less structured environment of technology investment
agreements, where the rules provide more latitude and the individual
must have a greater capacity for exercising judgment. Agreements
officers therefore should be individuals who have demonstrated expertise
in executing complex assistance and acquisition instruments.
Sec. 21.445 What are the requirements for a grants officer's or
agreements officer's statement of appointment?
A statement of a grants officer's or agreements officer's
appointment:
(a) Must be in writing.
(b) Must clearly state the limits of the individual's authority,
other than limits contained in applicable laws or regulations.
Information on those limits of a grants officer's or agreements
officer's authority must be readily available to the public and agency
personnel.
(c) May, if the individual is a contracting officer, be incorporated
into his or her statement of appointment as a contracting officer (i.e.,
there does not need to be a separate written statement of appointment
for assistance instruments).
[[Page 29]]
Sec. 21.450 What are the requirements for a termination of a grants
officer's or agreements officer's appointment?
A termination of a grants officer's or agreements officer's
authority:
(a) Must be in writing, unless the written statement of appointment
provides for automatic termination.
(b) May not be retroactive.
(c) May be integrated into a written termination of the individual's
appointment as a contracting officer, as appropriate.
Sec. 21.455 Who can sign, administer, or terminate assistance
instruments?
Only grants officers are authorized to sign, administer, or
terminate grants or cooperative agreements (other than technology
investment agreements) on behalf of the Department of Defense.
Similarly, only agreements officers may sign, administer, or terminate
technology investment agreements.
Sec. 21.460 What is the extent of grants officers' and agreements
officers' authority?
Grants officers and agreements officers may bind the Government only
to the extent of the authority delegated to them in their written
statements of appointment (see Sec. 21.445).
Sec. 21.465 What are grants officers' and agreements officers'
responsibilities?
Grants officers and agreements officers should be allowed wide
latitude to exercise judgment in performing their responsibilities,
which are to ensure that:
(a) Individual awards are used effectively in the execution of DoD
programs, and are made and administered in accordance with applicable
laws, Executive orders, regulations, and DoD policies.
(b) Sufficient funds are available for obligation.
(c) Recipients of awards receive impartial, fair, and equitable
treatment.
Subpart E_Information Reporting on Awards Subject to 31 U.S.C. Chapter
61
Sec. 21.500 What is the purpose of this subpart?
This subpart prescribes policies and procedures for compiling and
reporting data related to DoD awards and programs that are subject to
information reporting requirements of 31 U.S.C. chapter 61. That chapter
of the U.S. Code requires the Office of Management and Budget to
maintain a Governmentwide information system to collect data on Federal
agencies' domestic assistance awards and programs.
Sec. 21.505 What is the Catalog of Federal Domestic Assistance
(CFDA)?
The Catalog of Federal Domestic Assistance (CFDA) is a
Governmentwide compilation of information about domestic assistance
programs. It covers all domestic assistance programs and activities,
regardless of the number of awards made under the program, the total
dollar value of assistance provided, or the duration. In addition to
programs using grants and agreements, covered programs include those
providing assistance in other forms, such as payments in lieu of taxes
or indirect assistance resulting from Federal operations.
Sec. 21.510 Why does the DoD report information to the CFDA?
The Federal Program Information Act (31 U.S.C. 6101 through 6106),
as implemented through OMB Circular A-89, \4\ requires the Department of
Defense and other Federal agencies to provide certain information about
their domestic assistance programs to the OMB and the General Services
Administration (GSA). The GSA makes this information available to the
public by publishing it in the Catalog of Federal Domestic Assistance
(CFDA) and maintaining the Federal Assistance Programs Retrieval System,
a computerized data base of the information.
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\4\ See footnote 3 to Sec. 21.300(b).
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[[Page 30]]
Sec. 21.515 Who reports the information for the CFDA?
(a) Each DoD Component that provides domestic financial assistance
must:
(1) Report to the Director of Information, Operations and Reports,
Washington Headquarters Services (DIOR, WHS) all new programs and
changes as they occur or as the DoD Component submits its annual updates
to existing CFDA information.
(2) Identify to the DIOR, WHS a point-of-contact who will be
responsible for reporting the program information and for responding to
inquiries related to it.
(b) The DIOR, WHS is the Department of Defense's single office for
collecting, compiling and reporting such program information to the OMB
and GSA.
Sec. 21.520 What are the purposes of the Defense Assistance Awards
Data System (DAADS)?
Data from the Defense Assistance Awards Data System (DAADS) are used
to provide:
(a) DoD inputs to meet statutory requirements for Federal
Governmentwide reporting of data related to obligations of funds by
assistance instrument.
(b) A basis for meeting Governmentwide requirements to report to the
Federal Assistance Awards Data System (FAADS) maintained by the
Department of Commerce and for preparing other recurring and special
reports to the President, the Congress, the General Accounting Office,
and the public.
(c) Information to support policy formulation and implementation and
to meet management oversight requirements related to the use of awards.
Sec. 21.525 Who issues policy guidance for the DAADS?
The Deputy Director, Defense Research and Engineering (DDDR&E), or
his or her designee, issues necessary policy guidance for the Defense
Assistance Awards Data System.
Sec. 21.530 Who operates the DAADS?
The Director of Information Operations and Reports, Washington
Headquarters Services (DIOR, WHS), consistent with guidance issued by
the DDDR&E:
(a) Processes DAADS information on a quarterly basis and prepares
recurring and special reports using such information.
(b) Prepares, updates, and disseminates instructions for reporting
information to the DAADS. The instructions are to specify procedures,
formats, and editing processes to be used by DoD Components, including
record layout, submission deadlines, media, methods of submission, and
error correction schedules.
Sec. 21.535 Do DoD Components have central points for collecting
DAADS data?
Each DoD Component must have a central point for collecting DAADS
information from contracting activities within that DoD Component. The
central points are as follows:
(a) For the Army: As directed by the U.S. Army Contracting Support
Agency.
(b) For the Navy: As directed by the Office of Naval Research.
(c) For the Air Force: As directed by the Office of the Secretary of
the Air Force, Acquisition Contracting Policy and Implementation
Division (SAF/AQCP).
(d) For the Office of the Secretary of Defense, Defense Agencies,
and DoD Field Activities: Each Defense Agency must identify a central
point for collecting and reporting DAADS information to the DIOR, WHS,
at the address given in Sec. 21.555(a). DIOR, WHS serves as the central
point for offices and activities within the Office of the Secretary of
Defense and for DoD Field Activities.
Sec. 21.540 What are the duties of the DoD Components' central
points for the DAADS?
The office that serves, in accordance with Sec. 21.535, as the
central point for collecting DAADS information from contracting
activities within each DoD Component must:
(a) Establish internal procedures to ensure reporting by contracting
activities that make awards subject to 31 U.S.C. chapter 61.
[[Page 31]]
(b) Collect information required by DD Form 2566, \5\ ``DoD
Assistance Award Action Report,'' from those contracting activities, and
report it to DIOR, WHS, in accordance with Sec. Sec. 21.545 through
21.555.
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\5\ Department of Defense forms are available at Internet site
http://www.dior.whs.mil/ICDHOME/FORMTAB.HTM.
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(c) Submit to the DIOR, WHS, any recommended changes to the DAADS.
Sec. 21.545 Must DoD Components report every obligation to the DAADS?
Yes, DoD Components' central points must collect and report the data
required by the DD Form 2566 for each individual action that involves
the obligation or deobligation of Federal funds for an award that is
subject to 31 U.S.C. chapter 61.
Sec. 21.550 Must DoD Components relate reported actions to listings
in the CFDA?
Yes, DoD Components' central points must report each action as an
obligation or deobligation under a specific programmatic listing in the
Catalog of Federal Domestic Assistance (CFDA, see Sec. 21.505). The
programmatic listing to be shown is the one that provided the funds
being obligated or deobligated. For example, if a grants officer or
agreements officer in one DoD Component obligates appropriations of a
second DoD Component's programmatic listing, the grants officer or
agreements officer must show the CFDA programmatic listing of the second
DoD Component on the DD Form 2566.
Sec. 21.555 When and how must DoD Components report to the DAADS?
DoD Components' central points must report:
(a) On a quarterly basis to DIOR, WHS. For the first three quarters
of the Federal fiscal year, the data are due by close-of-business (COB)
on the 15th day after the end of the quarter (i.e., first-quarter data
are due by COB on January 15th, second-quarter data by COB April 15th,
and third-quarter data by COB July 15th). Fourth-quarter data are due by
COB October 25th, the 25th day after the end of the quarter. If any due
date falls on a weekend or holiday, the data are due on the next regular
workday. The mailing address for DIOR, WHS is 1215 Jefferson Davis
Highway, Suite 1204, Arlington, VA 22202-4302.
(b) On a floppy diskette or by other means permitted either by the
instructions described in Sec. 21.530(b) or by agreement with the DIOR,
WHS. The data must be reported in the format specified in the
instructions.
Sec. 21.560 Must DoD Components assign numbers uniformly to awards?
Yes, DoD Components must assign identifying numbers to all awards
subject to this subpart, including grants, cooperative agreements, and
technology investment agreements. The uniform numbering system parallels
the procurement instrument identification (PII) numbering system
specified in 48 CFR 204.70 (in the ``Defense Federal Acquisition
Regulation Supplement''), as follows:
(a) The first six alphanumeric characters of the assigned number
must be identical to those specified by 48 CFR 204.7003(a)(1) to
identify the DoD Component and contracting activity.
(b) The seventh and eighth positions must be the last two digits of
the fiscal year in which the number is assigned to the grant,
cooperative agreement, or other nonprocurement instrument.
(c) The 9th position must be a number:
(1) ``1'' for grants.
(2) ``2'' for cooperative agreements, including technology
investment agreements that are cooperative agreements (see Appendix B to
32 CFR part 37).
(3) ``3'' for other nonprocurement instruments, including technology
investment agreements that are not cooperative agreements.
(d) The 10th through 13th positions must be the serial number of the
instrument. DoD Components and contracting activities need not follow
any specific pattern in assigning these numbers and may create multiple
series of letters and numbers to meet internal needs for distinguishing
between various sets of awards.
[[Page 32]]
Sec. 21.565 Must DoD Components' electronic systems accept Data
Universal Numbering System (DUNS) numbers?
The DoD Components must comply with paragraph 5.e of the Office of
Management and Budget (OMB) policy directive entitled, ``Requirement for
a DUNS number in Applications for Federal Grants and Cooperative
Agreements.'' \6\ Paragraph 5.e requires electronic systems that handle
information about grants and cooperative agreements (which, for the DoD,
include Technology Investment Agreements) to accept DUNS numbers. Each
DoD Component that awards or administers grants or cooperative
agreements must ensure that DUNS numbers are accepted by each such
system for which the DoD Component controls the system specifications.
If the specifications of such a system are subject to another
organization's control and the system can not accept DUNS numbers, the
DoD Component must alert that organization to the OMB policy directive's
requirement for use of DUNS numbers with a copy to: Director for Basic
Sciences, ODDR&E, 3040 Defense Pentagon, Washington, DC 20301-3040.
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\6\ This OMB policy directive is available at the Internet site
http://www.whitehouse.gov/omb/grants/grants_docs.html.
[72 FR 34986, June 26, 2007]
Subpart F_Definitions
Sec. 21.605 Acquisition.
The acquiring (by purchase, lease, or barter) of property or
services for the direct benefit or use of the United States Government
(see more detailed definition at 48 CFR 2.101). In accordance with 31
U.S.C. 6303, procurement contracts are the appropriate legal instruments
for acquiring such property or services.
Sec. 21.610 Agreements officer.
An official with the authority to enter into, administer, and/or
terminate technology investment agreements.
Sec. 21.615 Assistance.
The transfer of a thing of value to a recipient to carry out a
public purpose of support or stimulation authorized by a law of the
United States (see 31 U.S.C. 6101(3)). Grants, cooperative agreements,
and technology investment agreements are examples of legal instruments
used to provide assistance.
Sec. 21.620 Award.
A grant, cooperative agreement, technology investment agreement, or
other nonprocurement instrument subject to one or more parts of the DoD
Grant and Agreement Regulations (see appendix A to this part).
Sec. 21.625 Contract.
See the definition for procurement contract in this subpart.
Sec. 21.630 Contracting activity.
An activity to which the Head of a DoD Component has delegated broad
authority regarding acquisition functions, pursuant to 48 CFR 1.601.
Sec. 21.635 Contracting officer.
A person with the authority to enter into, administer, and/or
terminate contracts and make related determinations and findings. A more
detailed definition of the term appears at 48 CFR 2.101.
Sec. 21.640 Cooperative agreement.
A legal instrument which, consistent with 31 U.S.C. 6305, is used to
enter into the same kind of relationship as a grant (see definition
``grant''), except that substantial involvement is expected between the
Department of Defense and the recipient when carrying out the activity
contemplated by the cooperative agreement. The term does not include
``cooperative research and development agreements'' as defined in 15
U.S.C. 3710a.
Sec. 21.645 Deviation.
The issuance or use of a policy or procedure that is inconsistent
with the DoDGARs.
Sec. 21.650 DoD Components.
The Office of the Secretary of Defense, the Military Departments,
the
[[Page 33]]
Defense Agencies, and DoD Field Activities.
Sec. 21.655 Grant.
A legal instrument which, consistent with 31 U.S.C. 6304, is used to
enter into a relationship:
(a) Of which the principal purpose is to transfer a thing of value
to the recipient to carry out a public purpose of support or stimulation
authorized by a law of the United States, rather than to acquire
property or services for the Department of Defense's direct benefit or
use.
(b) In which substantial involvement is not expected between the
Department of Defense and the recipient when carrying out the activity
contemplated by the grant.
Sec. 21.660 Grants officer.
An official with the authority to enter into, administer, and/or
terminate grants or cooperative agreements.
Sec. 21.665 Nonprocurement instrument.
A legal instrument other than a procurement contract. Examples
include instruments of financial assistance, such as grants or
cooperative agreements, and those of technical assistance, which provide
services in lieu of money.
Sec. 21.670 Procurement contract.
A legal instrument which, consistent with 31 U.S.C. 6303, reflects a
relationship between the Federal Government and a State, a local
government, or other recipient when the principal purpose of the
instrument is to acquire property or services for the direct benefit or
use of the Federal Government. See the more detailed definition for
contract at 48 CFR 2.101.
Sec. 21.675 Recipient.
An organization or other entity receiving an award from a DoD
Component.
Sec. 21.680 Technology investment agreements.
A special class of assistance instruments used to increase
involvement of commercial firms in defense research programs and for
other purposes related to integrating the commercial and defense sectors
of the nation's technology and industrial base. Technology investment
agreements include one kind of cooperative agreement with provisions
tailored for involving commercial firms, as well as one kind of other
assistance transaction. Technology investment agreements are described
more fully in 32 CFR part 37.
[[Page 34]]
Sec. Appendix A to Part 21--Instruments to Which DoDGARs Portions Apply
[GRAPHIC] [TIFF OMITTED] TR26JN07.007
[[Page 35]]
[72 FR 34986, June 26, 2007]
PART 22_DoD GRANTS AND AGREEMENTS_AWARD AND ADMINISTRATION--
Table of Contents
Subpart A_General
Sec.
22.100 Purpose, relation to other parts, and organization.
22.105 Definitions.
Subpart B_Selecting the Appropriate Instrument
22.200 Purpose.
22.205 Distinguishing assistance from procurement.
22.210 Authority for providing assistance.
22.215 Distinguishing grants and cooperative agreements.
22.220 Exemptions.
Subpart C_Competition
22.300 Purpose.
22.305 General policy and requirement for competition.
22.310 Statutes concerning certain research, development, and facilities
construction grants.
22.315 Merit-based, competitive procedures.
22.320 Special competitions.
22.325 Historically Black colleges and universities (HBCUs) and other
minority institutions (MIs).
Subpart D_Recipient Qualification Matters_General Policies and
Procedures
22.400 Purpose.
22.405 Policy.
22.410 Grants officers' responsibilities.
22.415 Standards.
22.420 Pre-award procedures.
Subpart E_National Policy Matters
22.505 Purpose.
22.510 Certifications, representations, and assurances.
22.515 Provisions of annual appropriations acts.
22.520 Campus access for military recruiting and Reserve Officer
Training Corps (ROTC).
22.525 Paperwork Reduction Act.
22.530 Metric system of measurement.
Subpart F_Award
22.600 Purpose.
22.605 Grants officers' responsibilities.
22.610 Award instruments.
Subpart G_Field Administration
22.700 Purpose.
22.705 Policy.
22.710 Assignment of grants administration offices.
22.715 Grants administration office functions.
Subpart H_Post-Award Administration
22.800 Purpose and relation to other parts.
22.805 Post-award requirements in other parts.
22.810 Payments.
22.815 Claims, disputes, and appeals.
22.820 Debt collection.
22.825 Closeout audits.
Appendix A to Part 22--Proposal Provision for Required Certification.
Appendix B to Part 22--Suggested Award Provisions for National Policy
Requirements That Often Apply.
Appendix C to Part 22--Administrative Requirements and Issues To Be
Addressed in Award Terms and Conditions.
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Source: 63 FR 12164, Mar. 12, 1998, unless otherwise noted.
Subpart A_General
Sec. 22.100 Purpose, relation to other parts, and organization.
(a) This part outlines grants officers' and DoD Components'
responsibilities related to the award and administration of grants and
cooperative agreements.
(b) In doing so, it also supplements other parts of the DoD Grant
and Agreement Regulations (DoDGARs) that are either Governmentwide rules
or DoD implementation of Governmentwide guidance in Office of Management
and Budget (OMB) Circulars. Those other parts of the DoDGARs, which are
referenced as appropriate in this part, are:
(1) The DoD implementation, in 2 CFR part 1125, of OMB guidance on
nonprocurement debarment and suspension.
(2) The Governmentwide rule on drug-free workplace requirements, in
32 CFR part 26.
(3) The Governmentwide rule on lobbying restrictions, in 32 CFR part
28.
(4) Administrative requirements for grants and agreements awarded to
specific types of recipients:
[[Page 36]]
(i) For State and local governmental organizations, in the
Governmentwide rule at 32 CFR part 33.
(ii) For institutions of higher education and other nonprofit
organizations, at 32 CFR part 32.
(iii) For for-profit organizations, at 32 CFR part 34.
(c) The organization of this part parallels the award and
administration process, from pre-award through post-award matters. It
therefore is organized in the same manner as the parts of the DoDGARs
(32 CFR parts 32, 33, and 34) that prescribe administrative requirements
for specific types of recipients.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005;
72 FR 34988, June 26, 2007]
Sec. 22.105 Definitions.
Other than the terms defined in this section, terms used in this
part are defined in 32 CFR part 21, subpart F.
Administrative offset. An action whereby money payable by the United
States Government to, or held by the Government for, a recipient is
withheld to satisfy a delinquent debt the recipient owes the Government.
Advanced research. Advanced technology development that creates new
technology or demonstrates the viability of applying existing technology
to new products and processes in a general way. Advanced research is
most closely analogous to precompetitive technology development in the
commercial sector (i.e., early phases of research and development on
which commercial competitors are willing to collaborate, because the
work is not so coupled to specific products and processes that the
results of the work must be proprietary). It does not include
development of military systems and hardware where specific requirements
have been defined. It is typically funded in Advanced Technology
Development (Budget Activity 3 and Research Category 6.3A) programs
within Research, Development, Test and Evaluation (RDT&E).
Applied research. Efforts that attempt to determine and exploit the
potential of scientific discoveries or improvements in technology such
as new materials, devices, methods and processes. It typically is funded
in Applied Research (Budget Activity 2 and Research Category 6.2)
programs within Research, Development, Test and Evaluation (RDT&E).
Applied research normally follows basic research but may not be fully
distinguishable from the related basic research. The term does not
include efforts whose principal aim is the design, development, or
testing of specific products, systems or processes to be considered for
sale or acquisition; these efforts are within the definition of
``development.''
Basic research. Efforts directed toward increasing knowledge and
understanding in science and engineering, rather than the practical
application of that knowledge and understanding. It typically is funded
within Basic Research (Budget Activity 1 and Research Category 6.1)
programs within Research, Development, Test and Evaluation (RDT&E). For
the purposes of this part, basic research includes:
(1) Research-related, science and engineering education, including
graduate fellowships and research traineeships.
(2) Research instrumentation and other activities designed to
enhance the infrastructure for science and engineering research.
Claim. A written demand or written assertion by one of the parties
to a grant or cooperative agreement seeking as a matter of right, the
payment of money in a sum certain, the adjustment or interpretation of
award terms, or other relief arising under or relating to a grant or
cooperative agreement. A routine request for payment that is not in
dispute when submitted is not a claim. The submission may be converted
to a claim by written notice to the grants officer if it is disputed
either as to liability or amount, or is not acted upon in a reasonable
time.
Debt. Any amount of money or any property owed to a Federal Agency
by any person, organization, or entity except another United States
Federal Agency. Debts include any amounts due from insured or guaranteed
loans, fees, leases, rents, royalties, services, sales of real or
personal property, or overpayments, penalties, damages, interest, fines
and forfeitures, and all other claims and similar sources.
[[Page 37]]
Amounts due a nonappropriated fund instrumentality are not debts owed
the United States, for the purposes of this subchapter.
Delinquent debt. A debt:
(1) That the debtor fails to pay by the date specified in the
initial written notice from the agency owed the debt, normally within 30
calendar days, unless the debtor makes satisfactory payment arrangements
with the agency by that date; and
(2) With respect to which the debtor has elected not to exercise any
available appeals or has exhausted all agency appeal processes.
Development. The systematic use of scientific and technical
knowledge in the design, development, testing, or evaluation of
potential new products, processes, or services to meet specific
performance requirements or objectives. It includes the functions of
design engineering, prototyping, and engineering testing.
Electronic commerce. The conduct of business through the use of
automation and electronic media, in lieu of paper transactions, direct
personal contact, telephone, or other means. For grants and cooperative
agreements, electronic commerce can include the use of electronic data
interchange, electronic mail, electronic bulletin board systems, and
electronic funds transfer for: program announcements or solicitations;
applications or proposals; award documents; recipients' requests for
payment; payment authorizations; and payments.
Electronic data interchange. The exchange of standardized
information communicated electronically between business partners,
typically between computers. It is DoD policy that DoD Component EDI
applications conform to the American National Standards Institute
(ANSI), Accredited Standards Committee (ASC) X-12 standard. \1\
---------------------------------------------------------------------------
\1\ Available from Accredited Standards Committee, X-12 Secretariat,
Data Interchange Standards Association, 1800 Diagonal Road, Suite 355,
Alexandria, VA 22314-2852; Attention: Manager Maintenance and
Publications.
---------------------------------------------------------------------------
Electronic funds transfer. A system that provides the authority to
debit or credit accounts in financial institutions by electronic means
rather than source documents (e.g., paper checks). Processing typically
occurs through the Federal Reserve System and/or the Automated Clearing
House (ACH) computer network. It is DoD policy that DoD Component EFT
transmissions conform to the American National Standards Institute
(ANSI), Accredited Standards Committee (ASC) X-12 standard.
Historically Black colleges and universities. Institutions of higher
education determined by the Secretary of Education to meet the
requirements of 34 CFR 608.2. Each DoD Component's contracting
activities and grants officers may obtain a list of historically Black
colleges and universities from that DoD Component's Small and
Disadvantaged Business Utilization office.
Institution of higher education. An educational institution that
meets the criteria in section 1201(a) of the Higher Education Act of
1965 (20 U.S.C. 1141(a)). Note, however, that institution of higher
education has a different meaning in Sec. 22.520, as given at Sec.
22.520(b)(2).
Minority institutions. Institutions of higher education that meet
the criteria for minority institutions specified in 10 U.S.C. 2323. Each
DoD Component's contracting activities and grants officers may obtain
copies of a current list of institutions that qualify as minority
institutions under 10 U.S.C. 2323 from that DoD Component's Small and
Disadvantaged Business Utilization office (the list of minority
institutions changes periodically, based on Department of Education data
on institutions' enrollments of minority students).
Research. Basic, applied, and advanced research, as defined in this
section.
Subaward. An award of financial assistance in the form of money, or
property in lieu of money, made under a DoD grant or cooperative
agreement by a recipient to an eligible subrecipient. The term includes
financial assistance for substantive program performance by the
subrecipient of a portion of the program for which the DoD grant or
cooperative agreement was made. It
[[Page 38]]
does not include the recipient's procurement of goods and services
needed to carry out the program.
[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]
Subpart B_Selecting the Appropriate Instrument
Sec. 22.200 Purpose.
This subpart provides the bases for determining the appropriate type
of instrument in a given situation.
Sec. 22.205 Distinguishing assistance from procurement.
Before using a grant or cooperative agreement, the grants officer
shall make a positive judgment that an assistance instrument, rather
than a procurement contract, is the appropriate instrument, based on the
following:
(a) Purpose. (1) The grants officer must judge that the principal
purpose of the activity to be carried out under the instrument is to
stimulate or support a public purpose (i.e., to provide assistance),
rather than acquisition (i.e., to acquire goods and services for the
direct benefit of the United States Government). If the principal
purpose is acquisition, then the grants officer shall judge that a
procurement contract is the appropriate instrument, in accordance with
31 U.S.C. chapter 63 (``Using Procurement Contracts and Grant and
Cooperative Agreements''). Assistance instruments shall not be used in
such situations, except:
(i) When a statute specifically provides otherwise; or
(ii) When an exemption is granted, in accordance with Sec. 22.220.
(2) For research and development, the appropriate use of grants and
cooperative agreements therefore is almost exclusively limited to the
performance of selected basic, applied, and advanced research projects.
Development projects nearly always shall be performed by contract or
other acquisition transaction because their principal purpose is the
acquisition of specific deliverable items (e.g., prototypes or other
hardware) for the benefit of the Department of Defense.
(b) Fee or profit. Payment of fee or profit is consistent with an
activity whose principal purpose is the acquisition of goods and
services for the direct benefit or use of the United States Government,
rather than an activity whose principal purpose is assistance.
Therefore, the grants officer shall use a procurement contract, rather
than an assistance instrument, in all cases where:
(1) Fee or profit is to be paid to the recipient of the instrument;
or
(2) The instrument is to be used to carry out a program where fee or
profit is necessary to achieving program objectives.
Sec. 22.210 Authority for providing assistance.
(a) Before a grant or cooperative agreement may be used, the grants
officer must:
(1) Identify the program statute, the statute that authorizes the
DoD Component to carry out the activity the principal purpose of which
is assistance (see 32 CFR 21.410 through 21.420.
(2) Review the program statute to determine if it contains
requirements that affect the:
(i) Solicitation, selection, and award processes. For example,
program statutes may authorize assistance to be provided only to certain
types of recipients; may require that recipients meet certain other
criteria to be eligible to receive assistance; or require that a
specific process shall be used to review recipients' proposals.
(ii) Terms and conditions of the award. For example, some program
statutes require a specific level of cost sharing or matching.
(b) The grants officer shall ensure that the award of DoD
appropriations through a grant or cooperative agreement for a research
project meets the standards of 10 U.S.C. 2358, DoD's broad authority to
carry out research, even if the research project is authorized under a
statutory authority other than 10 U.S.C. 2358. The standards of 10
U.S.C. 2358 are that, in the opinion of the Head of the DoD Component or
his or her designee, the projects must be:
(1) Necessary to the responsibilities of the DoD Component.
[[Page 39]]
(2) Related to weapons systems and other military needs or of
potential interest to the DoD Component.
[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]
Sec. 22.215 Distinguishing grants and cooperative agreements.
(a) Once a grants officer judges, in accordance with Sec. Sec.
22.205 and 22.210, that either a grant or cooperative agreement is the
appropriate instrument, the grants officer shall distinguish between the
two instruments as follows:
(1) Grants shall be used when the grants officer judges that
substantial involvement is not expected between the Department of
Defense and the recipient when carrying out the activity contemplated in
the agreement.
(2) Cooperative agreements shall be used when the grants officer
judges that substantial involvement is expected. The grants officer
should document the nature of the substantial involvement that led to
selection of a cooperative agreement. Under no circumstances are
cooperative agreements to be used solely to obtain the stricter controls
typical of a contract.
(b) In judging whether substantial involvement is expected, grants
officers should recognize that ``substantial involvement'' is a
relative, rather than an absolute, concept, and that it is primarily
based on programmatic factors, rather than requirements for grant or
cooperative agreement award or administration. For example, substantial
involvement may include collaboration, participation, or intervention in
the program or activity to be performed under the award.
Sec. 22.220 Exemptions.
Under 31 U.S.C. 6307, ``the Director of the Office of Management and
Budget may exempt an agency transaction or program'' from the
requirements of 31 U.S.C. chapter 63. Grants officers shall request such
exemptions only in exceptional circumstances. Each request shall specify
for which individual transaction or program the exemption is sought; the
reasons for requesting an exemption; the anticipated consequences if the
exemption is not granted; and the implications for other agency
transactions and programs if the exemption is granted. The procedures
for requesting exemptions shall be:
(a) In cases where 31 U.S.C. chapter 63 would require use of a
contract and an exemption from that requirement is desired:
(1) The grants officer shall submit a request for exemption, through
appropriate channels established by his or her DoD Component (see 32 CFR
21.320(a)), to the Director of Defense Procurement and Acquisition
Policy (DDP&AP).
(2) The DDP&AP, after coordination with the Director of Defense
Research and Engineering (DDR&E), shall transmit the request to OMB or
notify the DoD Component that the request has been disapproved.
(b) In other cases, the DoD Component shall submit a request for the
exemption through appropriate channels to the DDR&E. The DDR&E shall
transmit the request to OMB or notify the DoD Component that the request
has been disapproved.
(c) Where an exemption is granted, documentation of the approval
shall be maintained in the award file.
[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003; 70
FR 49464, Aug. 23, 2005]
Subpart C_Competition
Sec. 22.300 Purpose.
This subpart establishes DoD policy and implements statutes related
to the use of competitive procedures in the award of grants and
cooperative agreements.
Sec. 22.305 General policy and requirement for competition.
(a) It is DoD policy to maximize use of competition in the award of
grants and cooperative agreements. This also conforms with:
(1) 31 U.S.C. 6301(3), which encourages the use of competition in
awarding all grants and cooperative agreements.
(2) 10 U.S.C. 2374(a), which sets out Congressional policy that any
new grant for research, development, test, or evaluation be awarded
through merit-based selection procedures.
[[Page 40]]
(b) Grants officers shall use merit-based, competitive procedures
(as defined by Sec. 22.315) to award grants and cooperative agreements:
(1) In every case where required by statute (e.g., 10 U.S.C. 2361,
as implemented in Sec. 22.310, for certain grants to institutions of
higher education).
(2) To the maximum extent practicable in all cases where not
required by statute.
Sec. 22.310 Statutes concerning certain research, development,
and facilities construction grants.
(a) Definitions specific to this section. For the purposes of
implementing the requirements of 10 U.S.C. 2374 in this section, the
following terms are defined:
(1) Follow-on grant. A grant that provides for continuation of
research and development performed by a recipient under a preceding
grant. Note that follow-on grants are distinct from incremental funding
actions during the period of execution of a multi-year award.
(2) New grant. A grant that is not a follow-on grant.
(b) Statutory requirement to use competitive procedures. (1) A
grants officer shall not award a grant by other than merit-based,
competitive procedures (as defined by Sec. 22.315) to an institution of
higher education for the performance of research and development or for
the construction of research or other facilities, unless:
(i) In the case of a new grant for research and development, there
is a statute meeting the criteria in paragraph (c)(1) of this section;
(ii) In the case of a follow-on grant for research and development,
or of a grant for the construction of research or other facilities,
there is a statute meeting the criteria in paragraph (c)(2) of this
section; and
(iii) The Secretary of Defense submits to Congress a written notice
of intent to make the grant. The grant may not be awarded until 180
calendar days have elapsed after the date on which Congress received the
notice of intent. Contracting activities must submit a draft notice of
intent with supporting documentation through channels to the Deputy
Director, Defense Research and Engineering.
(2) Because subsequently enacted statutes may, by their terms,
impose different requirements than set out in paragraph (b)(1) of this
section, grants officers shall consult legal counsel on a case-by-case
basis, when grants for the performance of research and development or
for the construction of research or other facilities are to be awarded
to institutions of higher education by other than merit-based
competitive procedures.
(c) Subsequent statutes. In accordance with 10 U.S.C. 2361 and 10
U.S.C. 2374, a provision of law may not be construed as requiring the
award of a grant through other than the merit-based, competitive
procedures described in Sec. 22.315, unless:
(1) Institutions of higher education--new grants for research and
development. In the case of a new grant for research and development to
an institution of higher education, such provision of law specifically:
(i) Identifies the particular institution of higher education
involved;
(ii) States that such provision of law modifies or supersedes the
provisions of 10 U.S.C. 2361 (a requirement that applies only if the
statute authorizing or requiring award by other than competitive
procedures was enacted after September 30, 1989); and
(iii) States that the award to the institution of higher education
involved is required by such provision of law to be made in
contravention of the policy set forth in 10 U.S.C. 2374(a).
(2) Institutions of higher education--follow-on grants for research
and development and grants for the construction of any research or other
facility. In the case of any such grant to an institution of higher
education, such provision of law specifically:
(i) Identifies the particular institution of higher education
involved; and
(ii) States that such provision of law modifies or supersedes the
provisions of 10 U.S.C. 2361 (a requirement that applies only if the
statute authorizing or requiring award by other than competitive
procedures was enacted after September 30, 1989).
(3) Other entities--new grants for research and development--(i)
General. In
[[Page 41]]
the case of a new grant for research and development to an entity other
than an institution of higher education, such provision of law
specifically:
(A) Identifies the particular entity involved;
(B) States that the award to that entity is required by such
provision of law to be made in contravention of the policy set forth in
10 U.S.C. 2374(a).
(ii) Exception. The requirement of paragraph (c)(3)(i) of this
section does not apply to any grant that calls upon the National Academy
of Sciences to:
(A) Investigate, examine, or experiment upon any subject of science
or art of significance to the Department of Defense or any Military
Department; and
(B) Report on such matters to the Congress or any agency of the
Federal Government.
Sec. 22.315 Merit-based, competitive procedures.
Competitive procedures are methods that encourage participation in
DoD programs by a broad base of the most highly qualified performers.
These procedures are characterized by competition among as many eligible
proposers as possible, with a published or widely disseminated notice.
Competitive procedures include, as a minimum:
(a) Notice to prospective proposers. The notice may be a notice of
funding availability or Broad Agency Announcement that is publicly
disseminated, with unlimited distribution, or a specific notice that is
distributed to eligible proposers (a specific notice must be distributed
to at least two eligible proposers to be considered as part of a
competitive procedure). Requirements for notices are as follows:
(1) The format and content of each notice must conform with the
Governmentwide format for announcements of funding opportunities
established by the Office of Management and Budget (OMB) in a policy
directive entitled, ``Format for Financial Assistance Program
Announcements.'' \2\
---------------------------------------------------------------------------
\2\ This OMB policy directive is available at the Internet site
http://www.whitehouse.gov/omb/grants/grants_docs.html (the link is
``Final Policy Directive on Financial Assistance Program
Announcements'').
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(2) In accordance with that OMB policy directive, DoD Components
also must post on the Internet any notice under which domestic entities
may submit proposals, if the distribution of the notice is unlimited.
DoD Components are encouraged to simultaneously publish the notice in
other media (e.g., the Federal Register), if doing so would increase the
likelihood of its being seen by potential proposers. If a DoD Component
issues a specific notice with limited distribution (e.g., for national
security considerations), the notice need not be posted on the Internet.
(3) To comply with an OMB policy directive entitled, ``Requirement
to Post Funding Opportunity Announcement Synopses at Grants.gov and
Related Data Elements/Format,'' \3\ DoD Components must post on the
Internet a synopsis for each notice that, in accordance with paragraph
(a)(2) of this section, is posted on the Internet. The synopsis must be
posted at the Governmentwide site designated by the OMB (currently
http://www.FedGrants.gov). The synopsis for each notice must provide
complete instructions on where to obtain the notice and should have an
electronic link to the Internet location at which the notice is posted.
---------------------------------------------------------------------------
\3\ This OMB policy directive is available at the Internet site
http://www.whitehouse.gov/omb/grants/grants_docs.html (the link is
``Office of Federal Financial Management Policy Directive on Use of
Grants.Gov FIND'').
---------------------------------------------------------------------------
(4) In accordance with an OMB policy directive entitled,
``Requirement for a DUNS Number in Applications for Federal Grants and
Cooperative Agreements,'' \4\ each notice must include a requirement for
proposers to include Data Universal Numbering System (DUNS) numbers in
their proposals. If a notice provides for submission of application
forms, the forms must incorporate the DUNS number. To the extent that
unincorporated consortia of separate organizations may submit proposals,
the notice should explain that an unincorporated consortium
[[Page 42]]
would use the DUNS number of the entity proposed to receive DoD payments
under the award (usually, a lead organization that consortium members
identify for administrative matters).
---------------------------------------------------------------------------
\4\ This OMB policy directive is available at the Internet site
http://www.whitehouse.gov/omb/grants/grants_docs.html (the link is ``Use
of a Universal Identifier by Grant Applicants'').
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(b) At least two eligible, prospective proposers.
(c) Impartial review of the merits of applications or proposals
received in response to the notice, using the evaluation method and
selection criteria described in the notice. For research and development
awards, in order to be considered as part of a competitive procedure,
the two principal selection criteria, unless statute provides otherwise,
must be the:
(1) Technical merits of the proposed research and development; and
(2) Potential relationship of the proposed research and development
to Department of Defense missions.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005;
72 FR 34988, June 26, 2007]
Sec. 22.320 Special competitions.
Some programs may be competed for programmatic or policy reasons
among specific classes of potential recipients. An example would be a
program to enhance U.S. capabilities for academic research and research-
coupled graduate education in defense-critical, science and engineering
disciplines, a program that would be competed specifically among
institutions of higher education. All such special competitions shall be
consistent with program representations in the President's budget
submission to Congress and with subsequent Congressional authorizations
and appropriations for the programs.
Sec. 22.325 Historically Black colleges and universities (HBCUs)
and other minority institutions (MIs).
Increasing the ability of HBCUs and MIs to participate in federally
funded, university programs is an objective of Executive Order 12876 (3
CFR, 1993 Comp., p. 671) and 10 U.S.C. 2323. Grants officers shall
include appropriate provisions in Broad Agency Announcements (BAAs) or
other announcements for programs in which awards to institutions of
higher education are anticipated, in order to promote participation of
HBCUs and MIs in such programs. Also, whenever practicable, grants
officers shall reserve appropriate programmatic areas for exclusive
competition among HBCUs and MIs when preparing announcements for such
programs.
Subpart D_Recipient Qualification Matters_General Policies and
Procedures
Sec. 22.400 Purpose.
The purpose of this subpart is to specify policies and procedures
for grants officers' determination of recipient qualifications prior to
award.
Sec. 22.405 Policy.
(a) General. Grants officers normally shall award grants or
cooperative agreements only to qualified recipients that meet the
standards in Sec. 22.415. This practice conforms with the
Governmentwide policy to do business only with responsible persons,
which is stated in OMB guidance at 2 CFR 180.125(a) and implemented by
the Department of Defense in 2 CFR part 1125.
(b) Exception. In exceptional circumstances, grants officers may
make awards to recipients that do not fully meet the standards in Sec.
22.415 and include special award conditions that are appropriate to the
particular situation, in accordance with 32 CFR 32.14, 33.12, or 34.4.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005;
72 FR 34988, June 26, 2007]
Sec. 22.410 Grants officers' responsibilities.
The grants officer is responsible for determining a recipient's
qualification prior to award. The grants officer's signature on the
award document shall signify his or her determination that either:
(a) The potential recipient meets the standards in Sec. 22.415 and
is qualified to receive the grant or cooperative agreement; or
(b) An award is justified to a recipient that does not fully meet
the standards, pursuant to Sec. 22.405(b). In such cases, grants
officers shall document in the award file the rationale for making
[[Page 43]]
an award to a recipient that does not fully meet the standards.
Sec. 22.415 Standards.
To be qualified, a potential recipient must:
(a) Have the management capability and adequate financial and
technical resources, given those that would be made available through
the grant or cooperative agreement, to execute the program of activities
envisioned under the grant or cooperative agreement.
(b) Have a satisfactory record of executing such programs or
activities (if a prior recipient of an award).
(c) Have a satisfactory record of integrity and business ethics.
(d) Be otherwise qualified and eligible to receive a grant or
cooperative agreement under applicable laws and regulations (see Sec.
22.420(c)).
Sec. 22.420 Pre-award procedures.
(a) The appropriate method to be used and amount of effort to be
expended in deciding the qualification of a potential recipient will
vary. In deciding on the method and level of effort, the grants officer
should consider factors such as:
(1) DoD's past experience with the recipient;
(2) Whether the recipient has previously received cost-type
contracts, grants, or cooperative agreements from the Federal
Government; and
(3) The amount of the prospective award and complexity of the
project to be carried out under the award.
(b) There is no DoD-wide requirement to obtain a pre-award credit
report, audit, or any other specific piece of information. On a case-by-
case basis, the grants officer will decide whether there is a need to
obtain any such information to assist in deciding whether the recipient
meets the standards in Sec. 22.415 (a), (b), and (c).
(1) Should the grants officer in a particular case decide that a
pre-award credit report, audit, or survey is needed, he or she should
consult first with the appropriate grants administration office
(identified in Sec. 22.710), and decide whether pre-existing surveys or
audits of the recipient, such as those of the recipient's internal
control systems under OMB Circular A-133 \5\ will satisfy the need (see
Sec. 22.715(a)(1)).
---------------------------------------------------------------------------
\5\ Electronic copies may be obtained at Internet site http://
www.whitehouse.gov/OMB. For paper copies, contact the Office of
Management and Budget, EOP Publications, 725 17th St. NW., New Executive
Office Building, Washington, DC 20503.
---------------------------------------------------------------------------
(2) If, after consulting with the grants administration office, the
grants officer decides to obtain a credit report, audit, or other
information, and the report or other information discloses that a
potential recipient is delinquent on a debt to an agency of the United
States Government, then:
(i) The grants officer shall take such information into account when
determining whether the potential recipient is qualified with respect to
the grant or cooperative agreement; and
(ii) If the grants officer decides to make the award to the
recipient, unless there are compelling reasons to do otherwise, the
grants officer shall delay the award of the grant or cooperative
agreement until payment is made or satisfactory arrangements are made to
repay the debt.
(c) In deciding whether a recipient is otherwise qualified and
eligible in accordance with the standard in Sec. 22.415(d), the grants
officer shall ensure that the potential recipient:
(1) Is not identified in the Governmentwide Excluded Parties List
System (EPLS) as being debarred, suspended, or otherwise ineligible to
receive the award. In addition to being a requirement for every new
award, note that checking the EPLS also is a requirement for subsequent
obligations of additional funds, such as incremental funding actions, in
the case of pre-existing awards to institutions of higher education, as
described at 32 CFR 22.520(e)(5). The grants officer's responsibilities
include (see the OMB guidance at 2 CFR 180.425 and 180.430, as
implemented by the Department of Defense at 2 CFR 1125.425) checking the
EPLS for:
(i) Potential recipients of prime awards; and
(ii) A recipient's principals (as defined in OMB guidance at 2 CFR
180.995, implemented by the Department of Defense in 2 CFR part 1125),
potential recipients of subawards, and principals of
[[Page 44]]
those potential subaward recipients, if DoD Component approval of those
principals or lower-tier recipients is required under the terms of the
award (e.g., if a subsequent change in a recipient's principal
investigator or other key person would be subject to the DoD Component's
prior approval under 32 CFR 32.25(c)(2), 33.30(d)(3), or
34.15(c)(2)(i)).
(2) Has provided all certifications and assurances required by
Federal statute, Executive order, or codified regulation, unless they
are to be addressed in award terms and conditions at the time of award
(see Sec. 22.510).
(3) Meets any eligibility criteria that may be specified in the
statute authorizing the specific program under which the award is being
made (see Sec. 22.210(a)(2)).
(d) Grants officers shall obtain each recipient's Taxpayer
Identification Number (TIN, which may be the Social Security Number for
an individual and Employer Identification Number for a business or non-
profit entity) and notify the recipient that the TIN is being obtained
for purposes of collecting and reporting on any delinquent amounts that
may arise out of the recipient's relationship with the Government.
Obtaining the TIN and so notifying the recipient is a statutory
requirement of 31 U.S.C. 7701, as amended by the Debt Collection
Improvement Act of 1996 (section 31001(i)(1), Pub. L. 104-134).
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005;
72 FR 34988, June 26, 2007]
Subpart E_National Policy Matters
Sec. 22.505 Purpose.
The purpose of this subpart is to supplement other regulations that
implement national policy requirements, to the extent that it is
necessary to provide additional guidance to DoD grants officers. The
other regulations that implement national policy requirements include:
(a) The other parts of the DoDGARs (32 CFR parts 32, 33, and 34)
that implement the Governmentwide guidance in OMB Circulars A-102 \6\
and A-110 \7\ on administrative requirements for grants and cooperative
agreements. Those parts address some national policy matters that appear
in the OMB Circulars.
---------------------------------------------------------------------------
\6\ See footnote 5 to Sec. 22.420(b)(1).
\7\ See footnote 5 to Sec. 22.420(b)(1).
---------------------------------------------------------------------------
(b) DoD regulations other than the DoDGARs.
(c) Other Federal agencies' regulations.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005]
Sec. 22.510 Certifications, representations, and assurances.
(a) Certifications--(1) Policy. Certifications of compliance with
national policy requirements are to be obtained from recipients only for
those national policies where a statute, Executive order, or codified
regulation specifically states that a certification is required. Other
national policy requirements may be addressed by obtaining
representations or assurances (see paragraph (b) of this section).
Grants officers should utilize methods for obtaining certifications, in
accordance with Executive Order 12866 (3 CFR, 1993 Comp., p. 638), that
minimize administration and paperwork.
(2) Procedures. (i) When necessary, grants officers may obtain
individual, written certifications.
(ii) Whenever possible, and to the extent consistent with statute
and codified regulation, grants officers should identify the
certifications that are required for the particular type of recipient
and program, and consolidate them into a single certification provision
that cites them by reference.
(A) If a grants officer elects to have proposers incorporate
certifications by reference into their proposals, he or she must do so
in one of the two following ways. When required by statute or codified
regulation, the solicitation must include the full text of the
certifications that proposers are to provide by reference. In other
cases, the grants officer may include language in the solicitation that
informs the proposers where the full text may be found (e.g., in
documents or computer network sites that are readily available to the
public) and offers to provide it to proposers upon request.
[[Page 45]]
(B) Appendix A to this part provides language that may be used for
incorporating by reference the certification on lobbying, which
currently is the only certification requirement that commonly applies to
DoD grants and agreements. Because that certification is required by law
to be submitted at the time of proposal, rather than at the time of
award, Appendix A includes language to incorporate the certification by
reference into a proposal.
(C) Grants officers may incorporate certifications by reference in
award documents when doing so is consistent with statute and codified
regulation (that is not the case for the lobbying certification
addressed in paragraph (a)(2)(ii)(B) of this section). The provision
that a grants officer would use to incorporate certifications in award
documents, when consistent with statute and codified regulation, would
be similar to the provision in Appendix A to this part, except that it
would be modified to state that the recipient is providing the required
certifications by signing the award document or by accepting funds under
the award.
(b) Representations and assurances. Many national policies, either
in statute or in regulation, require recipients of grants and
cooperative agreements to make representations or provide assurances
(rather than certifications) that they are in compliance with the
policies. As discussed in Sec. 22.610(b), Appendix B to this part
suggests award terms and conditions that may be used to address several
of the more commonly applicable national policy requirements. These
terms and conditions may be used to obtain required assurances and
representations, if the grants officer wishes to do so at the time of
award, rather than through the use of the standard application form (SF-
424 \8\) or other means at the time of proposal.
---------------------------------------------------------------------------
\8\ For copies of Standard Forms listed in this part, contact
regional grants administration offices of the Office of Naval Research.
Addresses for the offices are listed in the ``Federal Directory of
Contract Administration Services (CAS) Components,'' which may be
accessed through the Defense Contract Management Agency homepage at:
http://www.dcma.mil.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005]
Sec. 22.515 Provisions of annual appropriations acts.
An annual appropriations act can include general provisions stating
national policy requirements that apply to the use of funds (e.g.,
obligation through a grant or cooperative agreement) appropriated by the
act. Because these requirements are of limited duration (the period
during which a given year's appropriations are available for
obligation), and because they can vary from year to year and from one
agency's appropriations act to another agency's, the grants officer must
know the agency(ies) and fiscal year(s) of the appropriations being
obligated by a given grant or cooperative agreement, and may need to
consult legal counsel if he or she does not know the requirements
applicable to those appropriations.
Sec. 22.520 Campus access for military recruiting and Reserve
Officer Training Corps (ROTC).
(a) Purpose. (1) The purpose of this section is to implement 10
U.S.C. 983 as it applies to grants. Under that statute, DoD Components
are prohibited from providing funds to institutions of higher education
that have policies or practices, as described in paragraph (c) of this
section, restricting campus access of military recruiters or the Reserve
Officer Training Corps (ROTC).
(2) By addressing the effect of 10 U.S.C. 983 on grants and
cooperative agreements, this section supplements the DoD's primary
implementation of that statute in 32 CFR part 216, ``Military Recruiting
and Reserve Officer Training Corps Program Access to Institutions of
Higher Education.'' Part 216 establishes procedures by which the
Department of Defense identifies institutions of higher education that
have a policy or practice described in paragraph (c) of this section.
(b) Definition specific to this section. ``Institution of higher
education'' in this section has the meaning given at 32 CFR 216.3, which
is different than the meaning given at Sec. 22.105 for other sections
of this part.
[[Page 46]]
(c) Statutory requirement of 10 U.S.C. 983. No funds made available
to the Department of Defense may be provided by grant to an institution
of higher education (including any subelement of such institution) if
the Secretary of Defense determines that the institution (or any
subelement of that institution) has a policy or practice that either
prohibits, or in effect prevents:
(1) The Secretary of a Military Department from maintaining,
establishing, or operating a unit of the Senior ROTC (in accordance with
10 U.S.C. 654 and other applicable Federal laws) at that institution (or
any subelement of that institution);
(2) A student at that institution (or any subelement of that
institution) from enrolling in a unit of the Senior ROTC at another
institution of higher education;
(3) The Secretary of a Military Department or Secretary of Homeland
Security from gaining access to campuses, or access to students (who are
17 years of age or older) on campuses, for purposes of military
recruiting in a manner that is at least equal in quality and scope to
the access to campuses and to students that is provided to any other
employer; or
(4) Access by military recruiters for purposes of military
recruiting to the following information pertaining to students (who are
17 years of age or older) enrolled at that institution (or any
subelement of that institution):
(i) Names, addresses, and telephone listings.
(ii) Date and place of birth, levels of education, academic majors,
degrees received, and the most recent educational institution enrolled
in by the student.
(d) Policy--(1) Applicability to cooperative agreements. As a matter
of DoD policy, the restrictions of 10 U.S.C. 983, as implemented by 32
CFR part 216, apply to cooperative agreements, as well as grants.
(2) Deviations. Grants officers may not deviate from any provision
of this section without obtaining the prior approval of the Director of
Defense Research and Engineering. Requests for deviations shall be
submitted, through appropriate channels, to: Director for Basic
Sciences, ODUSD(LABS), 3040 Defense Pentagon, Washington, D.C. 20301-
3040.
(e) Grants officers' responsibility. (1) A grants officer shall not
award any grant or cooperative agreement to an institution of higher
education that has been identified pursuant to the procedures of 32 CFR
part 216. Such institutions are identified as being ineligible on the
Governmentwide Excluded Parties List System (EPLS). The cause and
treatment code on the EPLS indicates the reason for an institution's
ineligibility, as well as the effect of the exclusion. Note that OMB
guidance in 2 CFR 180.425 and 180.430, as implemented by the Department
of Defense at 2 CFR part 1125, require a grants officer to check the
EPLS prior to determining that a recipient is qualified to receive an
award.
(2) A grants officer shall not consent to a subaward of DoD funds to
such an institution, under a grant or cooperative agreement to any
recipient, if the subaward requires the grants officer's consent.
(3) A grants officer shall include the following award term in each
grant or cooperative agreement with an institution of higher education
(note that this requirement does not flow down and that recipients are
not required to include the award term in subawards):
``As a condition for receipt of funds available to the Department of
Defense (DoD) under this award, the recipient agrees that it is not an
institution of higher education (as defined in 32 CFR part 216) that has
a policy or practice that either prohibits, or in effect prevents:
(A) The Secretary of a Military Department from maintaining,
establishing, or operating a unit of the Senior Reserve Officers
Training Corps (in accordance with 10 U.S.C. 654 and other applicable
Federal laws) at that institution (or any subelement of that
institution);
(B) Any student at that institution (or any subelement of that
institution) from enrolling in a unit of the Senior ROTC at another
institution of higher education;
(C) The Secretary of a Military Department or Secretary of Homeland
Security from gaining access to campuses, or access to students (who are
17 years of age or older) on campuses, for purposes of military
recruiting in a manner that is at least equal in quality and scope to
the access to campuses and to students that is provided to any other
employer; or
[[Page 47]]
(D) Access by military recruiters for purposes of military
recruiting to the names of students (who are 17 years of age or older
and enrolled at that institution or any subelement of that institution);
their addresses, telephone listings, dates and places of birth, levels
of education, academic majors, and degrees received; and the most recent
educational institutions in which they were enrolled.
If the recipient is determined, using the procedures in 32 CFR part 216,
to be such an institution of higher education during the period of
performance of this agreement, the Government will cease all payments of
DoD funds under this agreement and all other DoD grants and cooperative
agreements to the recipient, and it may suspend or terminate such grants
and agreements unilaterally for material failure to comply with the
terms and conditions of award.''
(4) If an institution of higher education refuses to accept the
award term in paragraph (e)(3) of this section, the grants officer
shall:
(i) Determine that the institution is not qualified with respect to
the award. The grants officer may award to an alternative recipient.
(ii) Transmit the name of the institution, through appropriate
channels, to the Director for Accession Policy, Office of the Deputy
Under Secretary of Defense for Military Personnel Policy (ODUSD(MPP)),
4000 Defense Pentagon, Washington, DC 20301-4000. This will allow
ODUSD(MPP) to decide whether to initiate an evaluation of the
institution under 32 CFR part 216, to determine whether it is an
institution that has a policy or practice described in paragraph (c) of
this section.
(5) With respect to any pre-existing award to an institution of
higher education that currently is listed on the EPLS pursuant to a
determination under 32 CFR part 216, a grants officer:
(i) Shall not obligate additional funds available to the DoD for the
award. A grants officer therefore must check the EPLS before approving
an incremental funding action or other additional funding for any pre-
existing award to an institution of higher education. The grants officer
may not obligate the additional funds if the cause and treatment code
indicates that the reason for an institution's EPLS listing is a
determination under 32 CFR part 216 that institutional policies or
practices restrict campus access of military recruiters or ROTC.
(ii) Shall not approve any request for payment submitted by such an
institution (including payments for costs already incurred).
(iii) Shall:
(A) Terminate the award unless he or she has a reason to believe,
after consulting with the ODUSD(MPP), 4000 Defense Pentagon, Washington,
DC 20301-4000), that the institution may be removed from the EPLS in the
near term and have its eligibility restored; and
(B) Suspend any award that is not immediately terminated, as well as
all payments under it.
(f) Post-award administration responsibilities of the Office of
Naval Research (ONR). As the DoD office assigned responsibility for
performing field administration services for grants and cooperative
agreements with institutions of higher education, the ONR shall
disseminate the list it receives from the ODUSD(MPP) of institutions of
higher education identified pursuant to the procedures of 32 CFR part
216 to:
(1) ONR field administration offices, with instructions to:
(i) Disapprove any payment requests under awards to such
institutions for which post-award payment administration was delegated
to the ONR; and
(ii) Alert the DoD offices that made the awards to their
responsibilities under paragraphs (e)(5)(i) and (e)(5)(iii) of this
section.
(2) Awarding offices in DoD Components that may be identified from
data in the Defense Assistance Awards Data System (see 32 CFR 21.520
through 21.555) as having awards with such institutions for which post-
award payment administration was not delegated to ONR. The ONR is to
alert those offices to their responsibilities under paragraph (e)(5) of
this section.
[70 FR 49465, Aug. 23, 2005, as amended at 72 FR 34988, June 26, 2007]
Sec. 22.525 Paperwork Reduction Act.
Grants officers shall include appropriate award terms or conditions,
if a recipient's activities under an award will be subject to the
Paperwork Reduction Act of 1995 (44 U.S.C. 3500, et seq.):
[[Page 48]]
(a) Generally, the Act only applies to Federal agencies--it requires
agencies to obtain clearance from the Office of Management and Budget
before collecting information using forms, schedules, questionnaires, or
other methods calling either for answers to:
(1) Identical questions from ten or more persons other than
agencies, instrumentalities, or employees of the United States.
(2) Questions from agencies, instrumentalities, or employees of the
United States which are to be used for statistical compilations of
general public interest.
(b) The Act applies to similar collections of information by
recipients of grants or cooperative agreements only when:
(1) A recipient collects information at the specific request of the
awarding Federal agency; or
(2) The terms and conditions of the award require specific approval
by the agency of the information collection or the collection
procedures.
Sec. 22.530 Metric system of measurement.
(a) Statutory requirement. The Metric Conversion Act of 1975, as
amended by the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C.
205) and implemented by Executive Order 12770 (3 CFR, 1991 Comp., p.
343), states that:
(1) The metric system is the preferred measurement system for U.S.
trade and commerce.
(2) The metric system of measurement will be used, to the extent
economically feasible, in federal agencies' procurements, grants, and
other business-related activities.
(3) Metric implementation shall not be required to the extent that
such use is likely to cause significant inefficiencies or loss of
markets to United States firms.
(b) Responsibilities. DoD Components shall ensure that the metric
system is used, to the maximum extent practicable, in measurement-
sensitive activities supported by programs that use grants and
cooperative agreements, and in measurement-sensitive outputs of such
programs.
Subpart F_Award
Sec. 22.600 Purpose.
This subpart sets forth grants officers' responsibilities relating
to the award document and other actions at the time of award.
Sec. 22.605 Grants officers' responsibilities.
At the time of award, the grants officer is responsible for ensuring
that:
(a) The award instrument contains the appropriate terms and
conditions, in accordance with Sec. 22.610.
(b) Information about the award is provided to the office
responsible for preparing reports for the Defense Assistance Award Data
System (DAADS), to ensure timely and accurate reporting of data required
by 31 U.S.C. 6101-6106 (see 32 CFR part 21, subpart E).
(c)(1) In addition to the copy of the award document provided to the
recipient, a copy is forwarded to the office designated to administer
the grant or cooperative agreement, and another copy is forwarded to the
finance and accounting office designated to make the payments to the
recipient.
(2) For any award subject to the electronic funds transfer (EFT)
requirement described in Sec. 22.810(b)(2), the grants officer shall
include a prominent notification of that fact on the first page of the
copies forwarded to the recipient, the administrative grants officer,
and the finance and accounting office. On the first page of the copy
forwarded to the recipient, the grants officer also shall include a
prominent notification that the recipient, to be paid, must submit a
Payment Information Form (Standard Form SF-3881 \9\) to the responsible
DoD payment office, if that payment office does not currently have the
information (e.g., bank name and account number) needed to pay the
recipient by EFT.
---------------------------------------------------------------------------
\9\ See footnote 8 to Sec. 22.510(b).
[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003; 70
FR 49465, Aug. 23, 2005]
[[Page 49]]
Sec. 22.610 Award instruments.
(a) Each award document shall include terms and conditions that:
(1) Address programmatic requirements (e.g., a statement of work or
other appropriate terms or conditions that describe the specific goals
and objectives of the project). The grants officer shall develop such
terms and conditions in coordination with program officials.
(2) Provide for the recipient's compliance with:
(i) Pertinent Federal statutes or Executive orders that apply
broadly to Federal or DoD assistance awards.
(ii) Any program-specific requirements that are prescribed in the
program statute (see Sec. 22.210(a)(2)), or appropriation-specific
requirements that are stated in the pertinent Congressional
appropriations (see Sec. 22.515).
(iii) Pertinent portions of the DoDGARs or other Federal
regulations, including those that implement the Federal statutes or
Executive orders described in paragraphs (a)(2) (i) and (ii) of this
section.
(3) Specify the grants officer's instructions for post-award
administration, for any matter where the post-award administration
provisions in 32 CFR part 32, 33, or 34 give the grants officer options
for handling the matter. For example, under 32 CFR 32.24(b), the grants
officers must choose among possible methods for the recipient's
disposition of program income. It is essential that the grants officer
identify the option selected in each case, to provide clear instructions
to the recipient and the grants officer responsible for post-award
administration of the grant or cooperative agreement.
(b) To assist grants officers:
(1) Appendix B to this part provides model clauses to implement
certain Federal statutes, Executive orders, and regulations (see
paragraph (a)(2)(i) of this section) that frequently apply to DoD grants
and cooperative agreements. Grants officers may incorporate the model
clauses into award terms and conditions, as appropriate. It should be
noted that Appendix B to this part is an aid, and not an exhaustive list
of all requirements that apply in all cases. Depending on the
circumstances of a given award, other statutes, Executive orders, or
codified regulations also may apply (e.g., Appendix B to this part does
not list program-specific requirements described in paragraph (a)(2)(ii)
of this section).
(2) Appendix C to this part is a list of administrative requirements
that apply to awards to different types of recipients. It also
identifies post-award administration issues that the grants officer must
address in the award terms and conditions.
Subpart G_Field Administration
Sec. 22.700 Purpose.
This subpart prescribes policies and procedures for administering
grants and cooperative agreements. It does so in conjunction with 32 CFR
parts 32, 33, and 34, which prescribe administrative requirements for
particular types of recipients.
Sec. 22.705 Policy.
(a) DoD policy is to have each recipient deal with a single office,
to the maximum extent practicable, for post-award administration of its
grants and cooperative agreements. This reduces burdens on recipients
that can result when multiple DoD offices separately administer grants
and cooperative agreements they award to a given recipient. It also
minimizes unnecessary duplication of field administration services.
(b) To further reduce burdens on recipients, the office responsible
for performing field administration services for grants and cooperative
agreements to a particular recipient shall be, to the maximum extent
practicable, the same office that is assigned responsibility for
performing field administration services for contracts awarded to that
recipient.
(c) Contracting activities and grants officers therefore shall use
cross-servicing arrangements whenever practicable and, to the maximum
extent possible, delegate responsibility for post-award administration
to the cognizant grants administration offices identified in Sec.
22.710.
[[Page 50]]
Sec. 22.710 Assignment of grants administration offices.
In accordance with the policy stated in Sec. 22.705(b), the DoD
offices (referred to in this part as ``grants administration offices'')
that are assigned responsibility for performing field administration
services for grants and cooperative agreements are (see the ``Federal
Directory of Contract Administration Services (CAS) Components'' \10\
for specific addresses of administration offices):
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\10\ The ``Federal Directory of Contract Administration Services
(CAS) Components'' may be accessed through the Defense Contract
Management Agency hompage at http://www.dcma.mil.
---------------------------------------------------------------------------
(a) Regional offices of the Office of Naval Research, for grants and
cooperative agreements with:
(1) Institutions of higher education and laboratories affiliated
with such institutions, to the extent that such organizations are
subject to the university cost principles in OMB Circular A-21. \11\
---------------------------------------------------------------------------
\11\ See footnote 5 to Sec. 22.420(b)(1).
---------------------------------------------------------------------------
(2) Nonprofit organizations that are subject to the cost principles
in OMB Circular A-122, \12\ if their principal business with the
Department of Defense is research and development.
---------------------------------------------------------------------------
\12\ See footnote 5 to Sec. 22.420(b)(1).
---------------------------------------------------------------------------
(b) Field offices of the Defense Contract Management Command, for
grants and cooperative agreements with all other entities, including:
(1) For-profit organizations.
(2) Nonprofit organizations identified in Attachment C of OMB
Circular A-122 that are subject to for-profit cost principles in 48 CFR
part 31.
(3) Nonprofit organizations subject to the cost principles in OMB
Circular A-122, if their principal business with the Department of
Defense is other than research and development.
(4) State and local governments.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49466, Aug. 23, 2005;
72 FR 34989, June 26, 2007]
Sec. 22.715 Grants administration office functions.
The primary responsibility of cognizant grants administration
offices shall be to advise and assist grants officers and recipients
prior to and after award, and to help ensure that recipients fulfill all
requirements in law, regulation, and award terms and conditions.
Specific functions include:
(a) Conducting reviews and coordinating reviews, audits, and audit
requests. This includes:
(1) Advising grants officers on the extent to which audits by
independent auditors (i.e., public accountants or Federal auditors) have
provided the information needed to carry out their responsibilities. If
a recipient has had an independent audit in accordance with OMB Circular
A-133, and the audit report disclosed no material weaknesses in the
recipient's financial management and other management and control
systems, additional preaward or closeout audits usually will not be
needed (see Sec. Sec. 22.420(b) and 22.825(b)).
(2) Performing pre-award surveys, when requested by a grants
officer, after providing advice described in paragraph (a)(1) of this
section.
(3) Reviewing recipients' systems and compliance with Federal
requirements, in coordination with any reviews and compliance audits
performed by independent auditors under OMB Circular A-133, or in
accordance with the terms and conditions of the award. This includes:
(i) Reviewing recipients' financial management, property management,
and purchasing systems, to determine the adequacy of such systems.
(ii) Determining that recipients have drug-free workplace programs,
as required under 32 CFR part 26.
(iii) Determining that governmental, university and nonprofit
recipients have complied with requirements in OMB Circular A-133, as
implemented at 32 CFR 32.26 and 33.26, to have single audits and submit
audit reports to the Federal Audit Clearinghouse. If a recipient has not
had a required audit, appropriate action must be taken (e.g., contacting
the recipient and coordinating with the Office of the Assistant
Inspector General for Audit Policy and Oversight (OAIG(P&O)), Office of
the Deputy Inspector General for Inspections and Policy, Office of the
Inspector General of the Department of Defense (OIG, DoD), 400 Army-Navy
Drive, Arlington, VA 22202).
[[Page 51]]
(4) Issuing timely management decisions, in accordance with DoD
Directive 7640.2, ``Policy for Follow-up on Contract Audit Reports,''
\13\ on single audit findings referred by the OIG, DoD, under DoD
Directive 7600.10, ``Audits of States, Local Governments, and Non-Profit
Organizations.'' \14\
---------------------------------------------------------------------------
\13\ Electronic copies may be obtained at the Washington
Headquarters Services Internet site http://www.dtic.mil/whs/directives.
Paper copies may be obtained, at cost, from the National Technical
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
\14\ See footnote 13 to Sec. 22.715(a)(4).
---------------------------------------------------------------------------
(b) Performing property administration services for Government-owned
property, and for any property acquired by a recipient, with respect to
which the recipient has further obligations to the Government.
(c) Ensuring timely submission of required reports.
(d) Executing administrative closeout procedures.
(e) Establishing recipients' indirect cost rates, where the
Department of Defense is the cognizant or oversight Federal agency with
the responsibility for doing so.
(f) Performing other administration functions (e.g., receiving
recipients' payment requests and transmitting approved payment
authorizations to payment offices) as delegated by applicable cross-
servicing agreements or letters of delegation.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49466, Aug. 23, 2005;
72 FR 34989, June 26, 2007]
Subpart H_Post-Award Administration
Sec. 22.800 Purpose and relation to other parts.
This subpart sets forth grants officers' and DoD Components'
responsibilities for post-award administration, by providing DoD-
specific requirements on payments; debt collection; claims, disputes and
appeals; and closeout audits.
Sec. 22.805 Post-award requirements in other parts.
Grants officers responsible for post-award administration of grants
and cooperative agreements shall administer such awards in accordance
with the following parts of the DoDGARs, as supplemented by this
subpart:
(a) Awards to domestic recipients. Standard administrative
requirements for grants and cooperative agreements with domestic
recipients are specified in other parts of the DoDGARs, as follows:
(1) For awards to domestic institutions of higher education and
other nonprofit organizations, requirements are specified in 32 CFR part
32, which is the DoD implementation of OMB Circular A-110.
(2) For awards to State and local governments, requirements are
specified in 32 CFR part 33, which is the DoD codification of the
Governmentwide common rule to implement OMB Circular A-102.
(3) For awards to domestic for-profit organizations, requirements
are specified in 32 CFR part 34, which is modeled on the requirements in
OMB Circular A-110.
(b) Awards to foreign recipients. DoD Components shall use the
administrative requirements specified in paragraph (a) of this section,
to the maximum extent practicable, for grants and cooperative agreements
to foreign recipients.
Sec. 22.810 Payments.
(a) Purpose. This section prescribes policies and grants officers'
post-award responsibilities, with respect to payments to recipients of
grants and cooperative agreements.
(b) Policy. (1) It is Governmentwide policy to minimize the time
elapsing between any payment of funds to a recipient and the recipient's
disbursement of the funds for program purposes (see 32 CFR 32.22(a) and
33.21(b), and the implementation of the Cash Management Improvement Act
at 31 CFR part 205).
(2) It also is a Governmentwide requirement to use electronic funds
transfer (EFT) in the payment of any grant for which an application or
proposal was submitted or renewed on or after July 26, 1996, unless the
recipient has obtained a waiver by submitting to the head of the
pertinent Federal agency a certification that it has neither an
[[Page 52]]
account with a financial institution nor an authorized payment agent.
This requirement is in 31 U.S.C. 3332, as amended by the Debt Collection
Improvement Act of 1996 (section 31001(x)(1)(A), Pub. L. 104-134), and
as implemented by Department of Treasury regulations at 31 CFR part 208.
As a matter of DoD policy, this requirement applies to cooperative
agreements, as well as grants. Within the Department of Defense, the
Defense Finance and Accounting Service implements this EFT requirement,
and grants officers have collateral responsibilities at the time of
award, as described in Sec. 22.605(c), and in postaward administration,
as described in Sec. 22.810(c)(3)(iv).
(3) Expanding on these Governmentwide policies, DoD policy is for
DoD Components to use electronic commerce, to the maximum extent
practicable, in the portions of the payment process for grants and
cooperative agreements for which grants officers are responsible. In
cases where recipients submit each payment request to the grants
officer, this includes using electronic methods to receive recipients'
requests for payment and to transmit authorizations for payment to the
DoD payment office. Using electronic methods will improve timeliness and
accuracy of payments and reduce administrative burdens associated with
paper-based payments.
(c) Post-award responsibilities. In cases where the recipient
submits each payment request to the grants officer, the administrative
grants officer designated to handle payments for a grant or cooperative
agreement is responsible for:
(1) Handling the recipient's requests for payments in accordance
with DoD implementation of Governmentwide guidance (see 32 CFR 32.22,
33.21, or 34.12, as applicable).
(2) Reviewing each payment request to ensure that:
(i) The request complies with the award terms.
(ii) Available funds are adequate to pay the request.
(iii) The recipient will not have excess cash on hand, based on
expenditure patterns.
(3) Maintaining a close working relationship with the personnel in
the finance and accounting office responsible for making the payments. A
good working relationship is necessary, to ensure timely and accurate
handling of financial transactions for grants and cooperative
agreements. Administrative grants officers:
(i) Should be generally familiar with policies and procedures for
disbursing offices that are contained in Chapter 19 of Volume 10 of the
DoD Financial Management Regulation (the FMR, DoD 7000.14-R \15\).
---------------------------------------------------------------------------
\15\ See footnote 13 to Sec. 22.715(a)(4).
---------------------------------------------------------------------------
(ii) Shall forward authorizations to the designated payment office
expeditiously, so that payments may be made in accordance with the
timely payment guidelines in Chapter 19 of Volume 10 of the FMR. Unless
alternative arrangements are made with the payment office,
authorizations should be forwarded to the payment office at least 3
working days before the end of the period specified in the FMR. The
period specified in the FMR is:
(A) No more than seven calendar days after receipt of the
recipient's request by the administrative grants officer, whenever
electronic commerce is used (i.e., EDI to request and authorize payments
and electronic funds transfer (EFT) to make payments).
(B) No more than thirty calendar days after receipt of the
recipient's request by the administrative grants officer, when it is not
possible to use electronic commerce and paper transactions are used.
(C) No more than seven calendar days after each date specified, when
payments are authorized in advance based on a predetermined payment
schedule, provided that the payment schedule was received in the
disbursing office at least 30 calendar days in advance of the date of
the scheduled payment.
(iii) Shall ensure that the recipients' Taxpayer Identification
Number (TIN) is included with each payment authorization forwarded to
the payment office. This is a statutory requirement of 31 U.S.C. 3325,
as amended by the Debt Collection Improvement Act of 1996 (section
31001(y), Pub. L. 104-134).
[[Page 53]]
(iv) For each award that is required to be paid by EFT (see Sec.
22.605(c) and (Sec. 22.810(b)(2)), shall prominently indicate that fact
in the payment authorization.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49467, Aug. 23, 2005]
Sec. 22.815 Claims, disputes, and appeals.
(a) Award terms. Grants officers shall include in grants and
cooperative agreements a term or condition that incorporates the
procedures of this section for:
(1) Processing recipient claims and disputes.
(2) Deciding appeals of grants officers' decisions.
(b) Submission of claims--(1) Recipient claims. If a recipient
wishes to submit a claim arising out of or relating to a grant or
cooperative agreement, the grants officer shall inform the recipient
that the claim must:
(i) Be submitted in writing to the grants officer for decision;
(ii) Specify the nature and basis for the relief requested; and
(iii) Include all data that supports the claim.
(2) DoD Component claims. Claims by a DoD Component shall be the
subject of a written decision by a grants officer.
(c) Alternative Dispute Resolution (ADR)--(1) Policy. DoD policy is
to try to resolve all issues concerning grants and cooperative
agreements by mutual agreement at the grants officer's level. DoD
Components therefore are encouraged to use ADR procedures to the maximum
extent practicable. ADR procedures are any voluntary means (e.g., mini-
trials or mediation) used to resolve issues in controversy without
resorting to formal administrative appeals (see paragraph (e) of this
section) or to litigation.
(2) Procedures. (i) The ADR procedures or techniques to be used may
either be agreed upon by the Government and the recipient in advance
(e.g., when agreeing on the terms and conditions of the grant or
cooperative agreement), or may be agreed upon at the time the parties
determine to use ADR procedures.
(ii) If a grants officer and a recipient are not able to resolve an
issue through unassisted negotiations, the grants officer shall
encourage the recipient to enter into ADR procedures. ADR procedures may
be used prior to submission of a recipient's claim or at any time prior
to the Grant Appeal Authority's decision on a recipient's appeal (see
paragraph (e)(3)(iii) of this section).
(d) Grants officer decisions. (1) Within 60 calendar days of receipt
of a written claim, the grants officer shall either:
(i) Prepare a written decision, which shall include the reasons for
the decision; shall identify all relevant data on which the decision is
based; shall identify the cognizant Grant Appeal Authority and give his
or her mailing address; and shall be included in the award file; or
(ii) Notify the recipient of a specific date when he or she will
render a written decision, if more time is required to do so. The notice
shall inform the recipient of the reason for delaying the decision
(e.g., the complexity of the claim, a need for more time to complete ADR
procedures, or a need for the recipient to provide additional
information to support the claim).
(2) The decision of the grants officer shall be final, unless the
recipient decides to appeal. If a recipient decides to appeal a grants
officer's decision, the grants officer shall encourage the recipient to
enter into ADR procedures, as described in paragraph (c) of this
section.
(e) Formal administrative appeals--(1) Grant appeal authorities.
Each DoD Component that awards grants or cooperative agreements shall
establish one or more Grant Appeal Authorities to decide formal,
administrative appeals in accordance with paragraph (e)(3) of this
section. Each Grant Appeal Authority shall be either:
(i) An individual at a grade level in the Senior Executive Service,
if civilian, or at the rank of Flag or General Officer, if military; or
(ii) A board chaired by such an individual.
(2) Right of appeal. A recipient has the right to appeal a grants
officer's decision to the Grant Appeal Authority (but note that ADR
procedures, as described in paragraph (c) of this section, are the
preferred means for resolving any appeal).
[[Page 54]]
(3) Appeal procedures--(i) Notice of appeal. A recipient may appeal
a decision of the grants officer within 90 calendar days of receiving
that decision, by filing a written notice of appeal to the Grant Appeal
Authority and to the grants officer. If a recipient elects to use an ADR
procedure, the recipient is permitted an additional 60 calendar days to
file the written notice of appeal to the Grant Appeal Authority and
grants officer.
(ii) Appeal file. Within 30 calendar days of receiving the notice of
appeal, the grants officer shall forward to the Grant Appeal Authority
and the recipient the appeal file, which shall include copies of all
documents relevant to the appeal. The recipient may supplement the file
with additional documents it deems relevant. Either the grants officer
or the recipient may supplement the file with a memorandum in support of
its position. The Grant Appeal Authority may request additional
information from either the grants officer or the recipient.
(iii) Decision. The appeal shall be decided solely on the basis of
the written record, unless the Grant Appeal Authority decides to conduct
fact-finding procedures or an oral hearing on the appeal. Any fact-
finding or hearing shall be conducted using procedures that the Grant
Appeal Authority deems appropriate.
(f) Representation. A recipient may be represented by counsel or any
other designated representative in any claim, appeal, or ADR proceeding
brought pursuant to this section, as long as the representative is not
otherwise prohibited by law or regulation from appearing before the DoD
Component concerned.
(g) Non-exclusivity of remedies. Nothing in this section is intended
to limit a recipient's right to any remedy under the law.
Sec. 22.820 Debt collection.
(a) Purpose. This section prescribes procedures for establishing
debts owed by recipients of grants and cooperative agreements, and
transferring them to payment offices for collection.
(b) Resolution of indebtedness. The grants officer shall attempt to
resolve by mutual agreement any claim of a recipient's indebtedness to
the United States arising out of a grant or cooperative agreement (e.g.,
by a finding that a recipient was paid funds in excess of the amount to
which the recipient was entitled under the terms and conditions of the
award).
(c) Grants officer's decision. In the absence of such mutual
agreement, any claim of a recipient's indebtedness shall be the subject
of a grants officer decision, in accordance with Sec. 22.815(b)(2). The
grants officer shall prepare and transmit to the recipient a written
notice that:
(1) Describes the debt, including the amount, the name and address
of the official who determined the debt (e.g., the grants officer under
Sec. 22.815(d)), and a copy of that determination.
(2) Informs the recipient that:
(i) Within 30 calendar days of the grants officer's decision, the
recipient shall either pay the amount owed to the grants officer (at the
address that was provided pursuant to paragraph (c)(1) of this section)
or inform the grants officer of the recipient's intention to appeal the
decision.
(ii) If the recipient elects not to appeal, any amounts not paid
within 30 calendar days of the grants officer's decision will be a
delinquent debt.
(iii) If the recipient elects to appeal the grants officer's
decision the recipient has 90 calendar days, or 150 calendar days if ADR
procedures are used, after receipt of the grants officer's decision to
file the appeal, in accordance with Sec. 22.815(e)(3)(i).
(iv) The debt will bear interest, and may include penalties and
other administrative costs, in accordance with the debt collection
provisions in Chapters 29, 31, and 32 of Volume 5 and Chapters 18 and 19
of Volume 10 of the DoD Financial Management Regulation (DoD 7000.14-R).
No interest will be charged if the recipient pays the amount owed within
30 calendar days of the grants officer's decision. Interest will be
charged for the entire period from the date the decision was mailed, if
the recipient pays the amount owed after 30 calendar days.
(d) Follow-up. Depending upon the response from the recipient, the
grants officer shall proceed as follows:
[[Page 55]]
(1) If the recipient pays the amount owed within 30 calendar days to
the grants officer, the grants officer shall forward the payment to the
responsible payment office.
(2) If within 30 calendar days the recipient elects to appeal the
grants officer's decision, further action to collect the debt is
deferred, pending the outcome of the appeal. If the final result of the
appeal is a determination that the recipient owes a debt to the Federal
Government, the grants officer shall send a demand letter to the
recipient and transfer responsibility for further debt collection to a
payment office, as described in paragraph (d)(3) of this section.
(3) If within 30 calendar days the recipient has neither paid the
amount due nor provided notice of intent to file an appeal of the grants
officer's decision, the grants officer shall send a demand letter to the
recipient, with a copy to the payment office that will be responsible
for collecting the delinquent debt. The payment office will be
responsible for any further debt collection activity, including issuance
of additional demand letters (see Chapter 19 of volume 10 of the DoD
Financial Management Regulation, DoD 7000.14-R). The grants officer's
demand letter shall:
(i) Describe the debt, including the amount, the name and address of
the official that determined the debt (e.g., the grants officer under
Sec. 22.815(d)), and a copy of that determination.
(ii) Notify the recipient that the debt is a delinquent debt that
bears interest from the date of the grants officer's decision, and that
penalties and other administrative costs may be assessed.
(iii) Identify the payment office that is responsible for the
collection of the debt, and notify the recipient that it may submit a
proposal to that payment office to defer collection, if immediate
payment is not practicable.
(e) Administrative offset. In carrying out the responsibility for
collecting delinquent debts, a disbursing officer may need to consult
grants officers, to determine whether administrative offset against
payments to a recipient owing a delinquent debt would interfere with
execution of projects being carried out under grants or cooperative
agreements. Disbursing officers may also ask grants officers whether it
is feasible to convert payment methods under grants or cooperative
agreements from advance payments to reimbursements, to facilitate use of
administrative offset. Grants officers therefore should be familiar with
guidelines for disbursing officers, in Chapter 19 of Volume 10 of the
Financial Management Regulation (DoD 7000.14-R), concerning withholding
and administrative offset to recover delinquent debts.
Sec. 22.825 Closeout audits.
(a) Purpose. This section establishes DoD policy for obtaining
audits at closeout of individual grants and cooperative agreements. It
thereby supplements the closeout procedures specified in:
(1) 32 CFR 32.71 and 32.72, for awards to institutions of higher
education and other nonprofit organizations.
(2) 32 CFR 33.50 and 33.51, for awards to State and local
governments.
(3) 32 CFR 34.61 and 34.62, for awards to for-profit entities.
(b) Policy. Grants officers shall use their judgment on a case-by-
case basis, in deciding whether to obtain an audit prior to closing out
a grant or cooperative agreement (i.e., there is no specific DoD
requirement to obtain an audit prior to doing so). Factors to be
considered include:
(1) The amount of the award.
(2) DoD's past experience with the recipient, including the presence
or lack of findings of material deficiencies in recent:
(i) Audits of individual awards; or
(ii) Systems-wide financial audits and audits of the compliance of
the recipient's systems with Federal requirements, under OMB Circular A-
133, where that Circular is applicable. (See Sec. 22.715(a)(1)).
[[Page 56]]
Sec. Appendix A to Part 22--Proposal Provision for Required
Certification
[GRAPHIC] [TIFF OMITTED] TR23AU05.028
[70 FR 49468, Aug. 23, 2005]
[[Page 57]]
Sec. Appendix B to Part 22--Suggested Award Provisions for National
Policy Requirements That Often Apply
[GRAPHIC] [TIFF OMITTED] TR26JN07.008
[[Page 58]]
[GRAPHIC] [TIFF OMITTED] TR26JN07.009
[[Page 59]]
[GRAPHIC] [TIFF OMITTED] TR26JN07.010
[[Page 60]]
[GRAPHIC] [TIFF OMITTED] TR26JN07.011
[[Page 61]]
[GRAPHIC] [TIFF OMITTED] TR26JN07.012
[[Page 62]]
[GRAPHIC] [TIFF OMITTED] TR26JN07.013
[[Page 63]]
[GRAPHIC] [TIFF OMITTED] TR26JN07.014
[[Page 64]]
[GRAPHIC] [TIFF OMITTED] TR26JN07.015
[72 FR 34989, June 26, 2007]
[[Page 65]]
Sec. Appendix C to Part 22--Administrative Requirements and Issues To Be
Addressed in Award Terms and Conditions
[GRAPHIC] [TIFF OMITTED] TR16MR00.024
[[Page 66]]
[GRAPHIC] [TIFF OMITTED] TR16MR00.025
[[Page 67]]
[GRAPHIC] [TIFF OMITTED] TR16MR00.026
[[Page 68]]
[GRAPHIC] [TIFF OMITTED] TR16MR00.027
[65 FR 14411, Mar. 16, 2000]
[[Page 69]]
PART 26_GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE
(FINANCIAL ASSISTANCE)--Table of Contents
Subpart A_Purpose and Coverage
Sec.
26.100 What does this part do?
26.105 Does this part apply to me?
26.110 Are any of my Federal assistance awards exempt from this part?
26.115 Does this part affect the Federal contracts that I receive?
Subpart B_Requirements for Recipients Other Than Individuals
26.200 What must I do to comply with this part?
26.205 What must I include in my drug-free workplace statement?
26.210 To whom must I distribute my drug-free workplace statement?
26.215 What must I include in my drug-free awareness program?
26.220 By when must I publish my drug-free workplace statement and
establish my drug-free awareness program?
26.225 What actions must I take concerning employees who are convicted
of drug violations in the workplace?
26.230 How and when must I identify workplaces?
Subpart C_Requirements for Recipients Who Are Individuals
26.300 What must I do to comply with this part if I am an individual
recipient?
26.301 [Reserved]
Subpart D_Responsibilities of DOD Component Awarding Officials
26.400 What are my responsibilities as a DOD Component awarding
official?
Subpart E_Violations of This Part and Consequences
26.500 How are violations of this part determined for recipients other
than individuals?
26.505 How are violations of this part determined for recipients who are
individuals?
26.510 What actions will the Federal Government take against a recipient
determined to have violated this part?
26.515 Are there any exceptions to those actions?
Subpart F_Definitions
26.605 Award
26.610 Controlled substance.
26.615 Conviction.
26.620 Cooperative agreement.
26.625 Criminal drug statute.
26.630 Debarment.
26.632 DOD Component.
26.635 Drug-free workplace.
26.640 Employee.
26.645 Federal agency or agency.
26.650 Grant.
26.655 Individual.
26.660 Recipient.
26.665 State.
26.670 Suspension.
Authority: 41U.S.C.701, et seq.
Source: 68 FR 66557, 66609, Nov. 26, 2003, unless otherwise noted.
Subpart A_Purpose and Coverage
Sec. 26.100 What does this part do?
This part carries out the portion of the Drug-Free Workplace Act of
1988 (41 U.S.C. 701 et seq., as amended) that applies to grants. It also
applies the provisions of the Act to cooperative agreements and other
financial assistance awards, as a matter of Federal Government policy.
Sec. 26.105 Does this part apply to me?
(a) Portions of this part apply to you if you are either--
(1) A recipient of an assistance award from the DOD Component; or
(2) A(n) DOD Component awarding official. (See definitions of award
and recipient in Sec. Sec. 26.605 and 26.660, respectively.)
(b) The following table shows the subparts that apply to you:
------------------------------------------------------------------------
If you are . . . see subparts . . .
------------------------------------------------------------------------
(1) A recipient who is not an individual.. A, B and E.
(2) A recipient who is an individual...... A, C and E.
(3) A(n) DOD Component awarding official.. A, D and E.
------------------------------------------------------------------------
Sec. 26.110 Are any of my Federal assistance awards exempt from this
part?
This part does not apply to any award that the Head of the DOD
Component or his or her designee determines that the application of this
part would be inconsistent with the international obligations of the
United States or the laws or regulations of a foreign government.
[[Page 70]]
Sec. 26.115 Does this part affect the Federal contracts that
I receive?
It will affect future contract awards indirectly if you are debarred
or suspended for a violation of the requirements of this part, as
described in Sec. 26.510(c). However, this part does not apply directly
to procurement contracts. The portion of the Drug-Free Workplace Act of
1988 that applies to Federal procurement contracts is carried out
through the Federal Acquisition Regulation in chapter 1 of Title 48 of
the Code of Federal Regulations (the drug-free workplace coverage
currently is in 48 CFR part 23, subpart 23.5).
Subpart B_Requirements for Recipients Other Than Individuals
Sec. 26.200 What must I do to comply with this part?
There are two general requirements if you are a recipient other than
an individual.
(a) First, you must make a good faith effort, on a continuing basis,
to maintain a drug-free workplace. You must agree to do so as a
condition for receiving any award covered by this part. The specific
measures that you must take in this regard are described in more detail
in subsequent sections of this subpart. Briefly, those measures are to--
(1) Publish a drug-free workplace statement and establish a drug-
free awareness program for your employees (see Sec. Sec. 26.205 through
26.220); and
(2) Take actions concerning employees who are convicted of violating
drug statutes in the workplace (see Sec. 26.225).
(b) Second, you must identify all known workplaces under your
Federal awards (see Sec. 26.230).
Sec. 26.205 What must I include in my drug-free workplace statement?
You must publish a statement that--
(a) Tells your employees that the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled substance
is prohibited in your workplace;
(b) Specifies the actions that you will take against employees for
violating that prohibition; and
(c) Lets each employee know that, as a condition of employment under
any award, he or she:
(1) Will abide by the terms of the statement; and
(2) Must notify you in writing if he or she is convicted for a
violation of a criminal drug statute occurring in the workplace and must
do so no more than five calendar days after the conviction.
Sec. 26.210 To whom must I distribute my drug-free workplace
statement?
You must require that a copy of the statement described in Sec.
26.205 be given to each employee who will be engaged in the performance
of any Federal award.
Sec. 26.215 What must I include in my drug-free awareness program?
You must establish an ongoing drug-free awareness program to inform
employees about--
(a) The dangers of drug abuse in the workplace;
(b) Your policy of maintaining a drug-free workplace;
(c) Any available drug counseling, rehabilitation, and employee
assistance programs; and
(d) The penalties that you may impose upon them for drug abuse
violations occurring in the workplace.
Sec. 26.220 By when must I publish my drug-free workplace statement
and establish my drug-free awareness program?
If you are a new recipient that does not already have a policy
statement as described in Sec. 26.205 and an ongoing awareness program
as described in Sec. 26.215, you must publish the statement and
establish the program by the time given in the following table:
------------------------------------------------------------------------
If . . . then you . . .
------------------------------------------------------------------------
(a) The performance period of the award is must have the policy
less than 30 days. statement and program in
place as soon as possible,
but before the date on
which performance is
expected to be completed.
(b) The performance period of the award is must have the policy
30 days or more. statement and program in
place within 30 days after
award.
[[Page 71]]
(c) You believe there are extraordinary may ask the DOD Component
circumstances that will require more than awarding official to give
30 days for you to publish the policy you more time to do so. The
statement and establish the awareness amount of additional time,
program. if any, to be given is at
the discretion of the
awarding official.
------------------------------------------------------------------------
Sec. 26.225 What actions must I take concerning employees who are
convicted of drug violations in the workplace?
There are two actions you must take if an employee is convicted of a
drug violation in the workplace:
(a) First, you must notify Federal agencies if an employee who is
engaged in the performance of an award informs you about a conviction,
as required by Sec. 26.205(c)(2), or you otherwise learn of the
conviction. Your notification to the Federal agencies must_
(1) Be in writing;
(2) Include the employee's position title;
(3) Include the identification number(s) of each affected award;
(4) Be sent within ten calendar days after you learn of the
conviction; and
(5) Be sent to every Federal agency on whose award the convicted
employee was working. It must be sent to every awarding official or his
or her official designee, unless the Federal agency has specified a
central point for the receipt of the notices.
(b) Second, within 30 calendar days of learning about an employee's
conviction, you must either_
(1) Take appropriate personnel action against the employee, up to
and including termination, consistent with the requirements of the
Rehabilitation Act of 1973 (29 U.S.C. 794), as amended; or
(2) Require the employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for these purposes
by a Federal, State or local health, law enforcement, or other
appropriate agency.
Sec. 26.230 How and when must I identify workplaces?
(a) You must identify all known workplaces under each DOD Component
award. A failure to do so is a violation of your drug-free workplace
requirements. You may identify the workplaces_
(1) To the DOD Component official that is making the award, either
at the time of application or upon award; or
(2) In documents that you keep on file in your offices during the
performance of the award, in which case you must make the information
available for inspection upon request by DOD Component officials or
their designated representatives.
(b) Your workplace identification for an award must include the
actual address of buildings (or parts of buildings) or other sites where
work under the award takes place. Categorical descriptions may be used
(e.g., all vehicles of a mass transit authority or State highway
department while in operation, State employees in each local
unemployment office, performers in concert halls or radio studios).
(c) If you identified workplaces to the DOD Component awarding
official at the time of application or award, as described in paragraph
(a)(1) of this section, and any workplace that you identified changes
during the performance of the award, you must inform the DOD Component
awarding official.
Subpart C_Requirements for Recipients Who Are Individuals
Sec. 26.300 What must I do to comply with this part if I am an
individual recipient?
As a condition of receiving a(n) DOD Component award, if you are an
individual recipient, you must agree that--
(a) You will not engage in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance in conducting
any activity related to the award; and
(b) If you are convicted of a criminal drug offense resulting from a
violation occurring during the conduct of any award activity, you will
report the conviction:
(1) In writing.
(2) Within 10 calendar days of the conviction.
(3) To the DOD Component awarding official or other designee for
each award that you currently have, unless Sec. 26.301 or the award
document designates a central point for the receipt of the notices. When
notice is made to a central point, it must include the
[[Page 72]]
identification number(s) of each affected award.
Sec. 26.301 [Reserved]
Subpart D_Responsibilities of DOD Component Awarding Officials
Sec. 26.400 What are my responsibilities as a(n) DOD Component
awarding official?
As a(n) DOD Component awarding official, you must obtain each
recipient's agreement, as a condition of the award, to comply with the
requirements in--
(a) Subpart B of this part, if the recipient is not an individual;
or
(b) Subpart C of this part, if the recipient is an individual.
Subpart E_Violations of this Part and Consequences
Sec. 26.500 How are violations of this part determined for recipients
other than individuals?
A recipient other than an individual is in violation of the
requirements of this part if the Head of the DOD Component or his or her
designee determines, in writing, that--
(a) The recipient has violated the requirements of subpart B of this
part; or
(b) The number of convictions of the recipient's employees for
violating criminal drug statutes in the workplace is large enough to
indicate that the recipient has failed to make a good faith effort to
provide a drug-free workplace.
Sec. 26.505 How are violations of this part determined for
recipients who are individuals?
An individual recipient is in violation of the requirements of this
part if the Head of the DOD Component or his or her designee determines,
in writing, that--
(a) The recipient has violated the requirements of subpart C of this
part; or
(b) The recipient is convicted of a criminal drug offense resulting
from a violation occurring during the conduct of any award activity.
Sec. 26.510 What actions will the Federal Government take against
a recipient determined to have violated this part?
If a recipient is determined to have violated this part, as
described in Sec. 26.500 or Sec. 26.505, the DOD Component may take
one or more of the following actions--
(a) Suspension of payments under the award;
(b) Suspension or termination of the award; and
(c) Suspension or debarment of the recipient under 32 CFR Part 25,
for a period not to exceed five years.
Sec. 26.515 Are there any exceptions to those actions?
The Secretary of Defense or Secretary of a Military Department may
waive with respect to a particular award, in writing, a suspension of
payments under an award, suspension or termination of an award, or
suspension or debarment of a recipient if the Secretary of Defense or
Secretary of a Military Department determines that such a waiver would
be in the public interest. This exception authority cannot be delegated
to any other official.
Subpart F_Definitions
Sec. 26.605 Award.
Award means an award of financial assistance by the DOD Component or
other Federal agency directly to a recipient.
(a) The term award includes:
(1) A Federal grant or cooperative agreement, in the form of money
or property in lieu of money.
(2) A block grant or a grant in an entitlement program, whether or
not the grant is exempted from coverage under the Governmentwide rule 32
CFR Part 33 that implements OMB Circular A-102 (for availability, see 5
CFR 1310.3) and specifies uniform administrative requirements.
(b) The term award does not include:
(1) Technical assistance that provides services instead of money.
(2) Loans.
(3) Loan guarantees.
(4) Interest subsidies.
(5) Insurance.
(6) Direct appropriations.
[[Page 73]]
(7) Veterans' benefits to individuals (i.e., any benefit to
veterans, their families, or survivors by virtue of the service of a
veteran in the Armed Forces of the United States).
Sec. 26.610 Controlled substance.
Controlled substance means a controlled substance in schedules I
through V of the Controlled Substances Act (21 U.S.C. 812), and as
further defined by regulation at 21 CFR 1308.11 through 1308.15.
Sec. 26.615 Conviction.
Conviction means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal
or State criminal drug statutes.
Sec. 26.620 Cooperative agreement.
Cooperative agreement means an award of financial assistance that,
consistent with 31 U.S.C. 6305, is used to enter into the same kind of
relationship as a grant (see definition of grant in Sec. 26.650),
except that substantial involvement is expected between the Federal
agency and the recipient when carrying out the activity contemplated by
the award. The term does not include cooperative research and
development agreements as defined in 15 U.S.C. 3710a.
Sec. 26.625 Criminal drug statute.
Criminal drug statute means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing, use, or
possession of any controlled substance.
Sec. 26.630 Debarment.
Debarment means an action taken by a Federal agency to prohibit a
recipient from participating in Federal Government procurement contracts
and covered nonprocurement transactions. A recipient so prohibited is
debarred, in accordance with the Federal Acquisition Regulation for
procurement contracts (48 CFR part 9, subpart 9.4) and the common rule,
Government-wide Debarment and Suspension (Nonprocurement), that
implements Executive Order 12549 and Executive Order 12689.
Sec. 26.632 DOD Component.
DOD Component means the Office of the Secretary of Defense, a
Military Department, a Defense Agency, or the Office of Economic
Adjustment.
[68 FR 66609, Nov. 26, 2003]
Sec. 26.635 Drug-free workplace.
Drug-free workplace means a site for the performance of work done in
connection with a specific award at which employees of the recipient are
prohibited from engaging in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance.
Sec. 26.640 Employee.
(a) Employee means the employee of a recipient directly engaged in
the performance of work under the award, including--
(1) All direct charge employees;
(2) All indirect charge employees, unless their impact or
involvement in the performance of work under the award is insignificant
to the performance of the award; and
(3) Temporary personnel and consultants who are directly engaged in
the performance of work under the award and who are on the recipient's
payroll.
(b) This definition does not include workers not on the payroll of
the recipient (e.g., volunteers, even if used to meet a matching
requirement; consultants or independent contractors not on the payroll;
or employees of subrecipients or subcontractors in covered workplaces).
Sec. 26.645 Federal agency or agency.
Federal agency or agency means any United States executive
department, military department, government corporation, government
controlled corporation, any other establishment in the executive branch
(including the Executive Office of the President), or any independent
regulatory agency.
Sec. 26.650 Grant.
Grant means an award of financial assistance that, consistent with
31 U.S.C.
[[Page 74]]
6304, is used to enter into a relationship--
(a) The principal purpose of which is to transfer a thing of value
to the recipient to carry out a public purpose of support or stimulation
authorized by a law of the United States, rather than to acquire
property or services for the Federal Government's direct benefit or use;
and
(b) In which substantial involvement is not expected between the
Federal agency and the recipient when carrying out the activity
contemplated by the award.
Sec. 26.655 Individual.
Individual means a natural person.
Sec. 26.660 Recipient.
Recipient means any individual, corporation, partnership,
association, unit of government (except a Federal agency) or legal
entity, however organized, that receives an award directly from a
Federal agency.
Sec. 26.665 State.
State means any of the States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, or any territory or
possession of the United States.
Sec. 26.670 Suspension.
Suspension means an action taken by a Federal agency that
immediately prohibits a recipient from participating in Federal
Government procurement contracts and covered nonprocurement transactions
for a temporary period, pending completion of an investigation and any
judicial or administrative proceedings that may ensue. A recipient so
prohibited is suspended, in accordance with the Federal Acquisition
Regulation for procurement contracts (48 CFR part 9, subpart 9.4) and
the common rule, Government-wide Debarment and Suspension
(Nonprocurement), that implements Executive Order 12549 and Executive
Order 12689. Suspension of a recipient is a distinct and separate action
from suspension of an award or suspension of payments under an award.
PART 28_NEW RESTRICTIONS ON LOBBYING--Table of Contents
Subpart A_General
Sec.
28.100 Conditions on use of funds.
28.105 Definitions.
28.110 Certification and disclosure.
Subpart B_Activities by Own Employees
28.200 Agency and legislative liaison.
28.205 Professional and technical services.
28.210 Reporting.
Subpart C_Activities by Other Than Own Employees
28.300 Professional and technical services.
Subpart D_Penalties and Enforcement
28.400 Penalties.
28.405 Penalty procedures.
28.410 Enforcement.
Subpart E_Exemptions
28.500 Secretary of Defense.
Subpart F_Agency Reports
28.600 Semi-annual compilation.
28.605 Inspector General report.
Appendix A to Part 28--Certification Regarding Lobbying
Appendix B to Part 28--Disclosure Form To Report Lobbying
Authority: Section 319, Public Law 102-121 (31 U.S.C. 1352); 5
U.S.C. section 301; 10 U.S.C. 113.
Source: 55 FR 6737, 6752, Feb. 26, 1990, unless otherwise noted.
Redesignated at 57 FR 6199, Feb. 21, 1992.
Cross Reference: See also Office of Management and Budget notice
published at 54 FR 52306, December 20, 1989.
Subpart A_General
Sec. 28.100 Conditions on use of funds.
(a) No appropriated funds may be expended by the recipient of a
Federal contract, grant, loan, or cooperative ageement to pay any person
for influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with any of the following
covered Federal actions: the awarding of any Federal
[[Page 75]]
contract, the making of any Federal grant, the making of any Federal
loan, the entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
(b) Each person who requests or receives from an agency a Federal
contract, grant, loan, or cooperative agreement shall file with that
agency a certification, set forth in Appendix A, that the person has not
made, and will not make, any payment prohibited by paragraph (a) of this
section.
(c) Each person who requests or receives from an agency a Federal
contract, grant, loan, or a cooperative agreement shall file with that
agency a disclosure form, set forth in Appendix B, if such person has
made or has agreed to make any payment using nonappropriated funds (to
include profits from any covered Federal action), which would be
prohibited under paragraph (a) of this section if paid for with
appropriated funds.
(d) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with that agency a statement, set forth in appendix A, whether that
person has made or has agreed to make any payment to influence or
attempt to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with that loan insurance or guarantee.
(e) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with that agency a disclosure form, set forth in Appendix B, if that
person has made or has agreed to make any payment to influence or
attempt to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with that loan insurance or guarantee.
Sec. 28.105 Definitions.
For purposes of this part:
(a) Agency, as defined in 5 U.S.C. 552(f), includes Federal
executive departments and agencies as well as independent regulatory
commissions and Government corporations, as defined in 31 U.S.C.
9101(1).
(b) Covered Federal action means any of the following Federal
actions:
(1) The awarding of any Federal contract;
(2) The making of any Federal grant;
(3) The making of any Federal loan;
(4) The entering into of any cooperative agreement; and,
(5) The extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.
Covered Federal action does not include receiving from an agency a
commitment providing for the United States to insure or guarantee a
loan. Loan guarantees and loan insurance are addressed independently
within this part.
(c) Federal contract means an acquisition contract awarded by an
agency, including those subject to the Federal Acquisition Regulation
(FAR), and any other acquisition contract for real or personal property
or services not subject to the FAR.
(d) Federal cooperative agreement means a cooperative agreement
entered into by an agency.
(e) Federal grant means an award of financial assistance in the form
of money, or property in lieu of money, by the Federal Government or a
direct appropriation made by law to any person. The term does not
include technical assistance which provides services instead of money,
or other assistance in the form of revenue sharing, loans, loan
guarantees, loan insurance, interest subsidies, insurance, or direct
United States cash assistance to an individual.
(f) Federal loan means a loan made by an agency. The term does not
include loan guarantee or loan insurance.
(g) Indian tribe and tribal organization have the meaning provided
in section 4 of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions
of Indian tribes in that Act.
(h) Influencing or attempting to influence means making, with the
intent to
[[Page 76]]
influence, any communication to or appearance before an officer or
employee or any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection with any
covered Federal action.
(i) Loan guarantee and loan insurance means an agency's guarantee or
insurance of a loan made by a person.
(j) Local government means a unit of government in a State and, if
chartered, established, or otherwise recognized by a State for the
performance of a governmental duty, including a local public authority,
a special district, an intrastate district, a council of governments, a
sponsor group representative organization, and any other instrumentality
of a local government.
(k) Officer or employee of an agency includes the following
individuals who are employed by an agency:
(1) An individual who is appointed to a position in the Government
under title 5, U.S. Code, including a position under a temporary
appointment;
(2) A member of the uniformed services as defined in section 101(3),
title 37, U.S. Code;
(3) A special Government employee as defined in section 202, title
18, U.S. Code; and,
(4) An individual who is a member of a Federal advisory committee,
as defined by the Federal Advisory Committee Act, title 5, U.S. Code
appendix 2.
(l) Person means an individual, corporation, company, association,
authority, firm, partnership, society, State, and local government,
regardless of whether such entity is operated for profit or not for
profit. This term excludes an Indian tribe, tribal organization, or any
other Indian organization with respect to expenditures specifically
permitted by other Federal law.
(m) Reasonable compensation means, with respect to a regularly
employed officer or employee of any person, compensation that is
consistent with the normal compensation for such officer or employee for
work that is not furnished to, not funded by, or not furnished in
cooperation with the Federal Government.
(n) Reasonable payment means, with respect to perfessional and other
technical services, a payment in an amount that is consistent with the
amount normally paid for such services in the private sector.
(o) Recipient includes all contractors, subcontractors at any tier,
and subgrantees at any tier of the recipient of funds received in
connection with a Federal contract, grant, loan, or cooperative
agreement. The term excludes an Indian tribe, tribal organization, or
any other Indian organization with respect to expenditures specifically
permitted by other Federal law.
(p) Regularly employed means, with respect to an officer or employee
of a person requesting or receiving a Federal contract, grant, loan, or
cooperative agreement or a commitment providing for the United States to
insure or guarantee a loan, an officer or employee who is employed by
such person for at least 130 working days within one year immediately
preceding the date of the submission that initiates agency consideration
of such person for receipt of such contract, grant, loan, cooperative
agreement, loan insurance commitment, or loan guarantee commitment. An
officer or employee who is employed by such person for less than 130
working days within one year immediately preceding the date of the
submission that initiates agency consideration of such person shall be
considered to be regularly employed as soon as he or she is employed by
such person for 130 working days.
(q) State means a State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, a territory or possession of
the United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and
powers.
Sec. 28.110 Certification and disclosure.
(a) Each person shall file a certification, and a disclosure form,
if required, with each submission that initiates agency consideration of
such person for:
(1) Award of a Federal contract, grant, or cooperative agreement
exceeding $100,000; or
[[Page 77]]
(2) An award of a Federal loan or a commitment providing for the
United States to insure or guarantee a loan exceeding $150,000.
(b) Each person shall file a certification, and a disclosure form,
if required, upon receipt by such person of:
(1) A Federal contract, grant, or cooperative agreement exceeding
$100,000; or
(2) A Federal loan or a commitment providing for the United States
to insure or guarantee a loan exceeding $150,000,
Unless such person previously filed a certification, and a disclosure
form, if required, under paragraph (a) of this section.
(c) Each person shall file a disclosure form at the end of each
calendar quarter in which there occurs any event that requires
disclosure or that materially affects the accuracy of the information
contained in any disclosure form previously filed by such person under
paragraphs (a) or (b) of this section. An event that materially affects
the accuracy of the information reported includes:
(1) A cumulative increase of $25,000 or more in the amount paid or
expected to be paid for influencing or attempting to influence a covered
Federal action; or
(2) A change in the person(s) or individual(s) influencing or
attempting to influence a covered Federal action; or,
(3) A change in the officer(s), employee(s), or Member(s) contacted
to influence or attempt to influence a covered Federal action.
(d) Any person who requests or receives from a person referred to in
paragraphs (a) or (b) of this section:
(1) A subcontract exceeding $100,000 at any tier under a Federal
contract;
(2) A subgrant, contract, or subcontract exceeding $100,000 at any
tier under a Federal grant;
(3) A contract or subcontract exceeding $100,000 at any tier under a
Federal loan exceeding $150,000; or,
(4) A contract or subcontract exceeding $100,000 at any tier under a
Federal cooperative agreement,
Shall file a certification, and a disclosure form, if required, to the
next tier above.
(e) All disclosure forms, but not certifications, shall be forwarded
from tier to tier until received by the person referred to in paragraphs
(a) or (b) of this section. That person shall forward all disclosure
forms to the agency.
(f) Any certification or disclosure form filed under paragraph (e)
of this section shall be treated as a material representation of fact
upon which all receiving tiers shall rely. All liability arising from an
erroneous representation shall be borne solely by the tier filing that
representation and shall not be shared by any tier to which the
erroneous representation is forwarded. Submitting an erroneous
certification or disclosure constitutes a failure to file the required
certification or disclosure, respectively. If a person fails to file a
required certification or disclosure, the United States may pursue all
available remedies, including those authorized by section 1352, title
31, U.S. Code.
(g) For awards and commitments in process prior to December 23,
1989, but not made before that date, certifications shall be required at
award or commitment, covering activities occurring between December 23,
1989, and the date of award or commitment. However, for awards and
commitments in process prior to the December 23, 1989 effective date of
these provisions, but not made before December 23, 1989, disclosure
forms shall not be required at time of award or commitment but shall be
filed within 30 days.
(h) No reporting is required for an activity paid for with
appropriated funds if that activity is allowable under either subpart B
or C.
Subpart B_Activities by Own Employees
Sec. 28.200 Agency and legislative liaison.
(a) The prohibition on the use of appropriated funds, in Sec.
28.100 (a), does not apply in the case of a payment of reasonable
compensation made to an officer or employee of a person requesting or
receiving a Federal contract, grant, loan, or cooperative agreement if
the payment is for agency and legislative liaison activities not
directly related to a covered Federal action.
[[Page 78]]
(b) For purposes of paragraph (a) of this section, providing any
information specifically requested by an agency or Congress is allowable
at any time.
(c) For purposes of paragraph (a) of this section, the following
agency and legislative liaison activities are allowable at any time only
where they are not related to a specific solicitation for any covered
Federal action:
(1) Discussing with an agency (including individual demonstrations)
the qualities and characteristics of the person's products or services,
conditions or terms of sale, and service capabilities; and,
(2) Technical discussions and other activities regarding the
application or adaptation of the person's products or services for an
agency's use.
(d) For purposes of paragraph (a) of this section, the following
agencies and legislative liaison activities are allowable only where
they are prior to formal solicitation of any covered Federal action:
(1) Providing any information not specifically requested but
necessary for an agency to make an informed decision about initiation of
a covered Federal action;
(2) Technical discussions regarding the preparation of an
unsolicited proposal prior to its official submission; and,
(3) Capability presentations by persons seeking awards from an
agency pursuant to the provisions of the Small Business Act, as amended
by Public Law 95-507 and other subsequent amendments.
(e) Only those activities expressly authorized by this section are
allowable under this section.
[55 FR 6737, 6752, Feb. 26, 1990. Redesignated and amended at 57 FR
6199, 6200, Feb. 21, 1992]
Sec. 28.205 Professional and technical services.
(a) The prohibition on the use of appropriated funds, in Sec.
28.100 (a), does not apply in the case of a payment of reasonable
compensation made to an officer or employee of a person requesting or
receiving a Federal contract, grant, loan, or cooperative agreement or
an extension, continuation, renewal, amendment, or modification of a
Federal contract, grant, loan, or cooperative agreement if payment is
for professional or technical services rendered directly in the
preparation, submission, or negotiation of any bid, proposal, or
application for that Federal contract, grant, loan, or cooperative
agreement or for meeting requirements imposed by or pursuant to law as a
condition for receiving that Federal contract, grant, loan, or
cooperative agreement.
(b) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting of a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
(c) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or
[[Page 79]]
reasonably expected to be required by law or regulation, and any other
requirements in the actual award documents.
(d) Only those services expressly authorized by this section are
allowable under this section.
[55 FR 6737, 6752, Feb. 26, 1990. Redesignated and amended at 57 FR
6199, 6200, Feb. 21, 1992]
Sec. 28.210 Reporting.
No reporting is required with respect to payments of reasonable
compensation made to regularly employed officers or employees of a
person.
Subpart C_Activities by Other Than Own Employees
Sec. 28.300 Professional and technical services.
(a) The prohibition on the use of appropriated funds, in Sec.
28.100 (a), does not apply in the case of any reasonable payment to a
person, other than an officer or employee of a person requesting or
receiving a covered Federal action, if the payment is for professional
or technical services rendered directly in the preparation, submission,
or negotiation of any bid, proposal, or application for that Federal
contract, grant, loan, or cooperative agreement or for meeting
requirements imposed by or pursuant to law as a condition for receiving
that Federal contract, grant, loan, or cooperative agreement.
(b) The reporting requirments in Sec. 28.110 (a) and (b) regarding
filing a disclosure form by each person, if required, shall not apply
with respect to professional or technical services rendered directly in
the preparation, submission, or negotiation of any commitment providing
for the United States to insure or guarantee a loan.
(c) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting of a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
(d) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or reasonably expected to be required by law or regulation,
and any other requirements in the actual award documents.
(e) Persons other than officers or employees of a person requesting
or receiving a covered Federal action include consultants and trade
associations.
(f) Only those services expressly authorized by this section are
allowable under this section.
[55 FR 6737, 6752, Feb. 26, 1990. Redesignated and amended at 57 FR
6199, 6200, Feb. 21, 1992]
Subpart D_Penalties and Enforcement
Sec. 28.400 Penalties.
(a) Any person who makes an expenditure prohibited herein shall be
subject to a civil penalty of not less than
[[Page 80]]
$10,000 and not more than $100,000 for each such expenditure.
(b) Any person who fails to file or amend the disclosure form (see
Appendix B) to be filed or amended if required herein, shall be subject
to a civil penalty of not less than $10,000 and not more than $100,000
for each such failure.
(c) A filing or amended filing on or after the date on which an
administrative action for the imposition of a civil penalty is commenced
does not prevent the imposition of such civil penalty for a failure
occurring before that date. An administrative action is commenced with
respect to a failure when an investigating official determines in
writing to commence an investigation of an allegation of such failure.
(d) In determining whether to impose a civil penalty, and the amount
of any such penalty, by reason of a violation by any person, the agency
shall consider the nature, circumstances, extent, and gravity of the
violation, the effect on the ability of such person to continue in
business, any prior violations by such person, the degree of culpability
of such person, the ability of the person to pay the penalty, and such
other matters as may be appropriate.
(e) First offenders under paragraphs (a) or (b) of this section
shall be subject to a civil penalty of $10,000, absent aggravating
circumstances. Second and subsequent offenses by persons shall be
subject to an appropriate civil penalty between $10,000 and $100,000, as
determined by the agency head or his or her designee.
(f) An imposition of a civil penalty under this section does not
prevent the United States from seeking any other remedy that may apply
to the same conduct that is the basis for the imposition of such civil
penalty.
Sec. 28.405 Penalty procedures.
Agencies shall impose and collect civil penalties pursuant to the
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C.
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and
3812, insofar as these provisions are not inconsistent with the
requirements herein.
Sec. 28.410 Enforcement.
The head of each agency shall take such actions as are necessary to
ensure that the provisions herein are vigorously implemented and
enforced in that agency.
Subpart E_Exemptions
Sec. 28.500 Secretary of Defense.
(a) Exemption authority. The Secretary of Defense may exempt, on a
case-by-case basis, a covered Federal action from the prohibition
whenever the Secretary determines, in writing, that such an exemption is
in the national interest. The Secretary shall transmit a copy of each
such written exemption to Congress immediately after making such a
determination.
(b) Policy. It is the policy of the Department of Defense that
exemptions under paragraph (a) of this section shall be requested only
rarely and in exceptional circumstances.
(c) Procedures. Each DoD Component that awards or administers
Federal grants, Federal cooperative agreements, or Federal loans subject
to this part shall establish procedures whereby:
(1) A grants officer wishing to request an exemption for a grant,
cooperative agreement, or loan shall transmit such request through
appropriate channels to: Director for Research, ODDR&E(R), 3080 Defense
Pentagon, Washington, DC. 20301-3080.
(2) Each such request shall explain why an exemption is in the
national interest, a justification that must be transmitted to Congress
for each exemption that is approved.
[63 FR 12188, Mar. 12, 1998]
Subpart F_Agency Reports
Sec. 28.600 Semi-annual compilation.
(a) The head of each agency shall collect and compile the disclosure
reports (see appendix B) and, on May 31 and November 30 of each year,
submit to the Secretary of the Senate and the Clerk of the House of
Representatives a report containing a compilation of the information
contained in the disclosure reports received during the six-month period
ending on March 31 or
[[Page 81]]
September 30, respectively, of that year.
(b) The report, including the compilation, shall be available for
public inspection 30 days after receipt of the report by the Secretary
and the Clerk.
(c) Information that involves intelligence matters shall be reported
only to the Select Committee on Intelligence of the Senate, the
Permanent Select Committee on Intelligence of the House of
Representatives, and the Committees on Appropriations of the Senate and
the House of Representatives in accordance with procedures agreed to by
such committees. Such information shall not be available for public
inspection.
(d) Information that is classified under Executive Order 12356 or
any successor order shall be reported only to the Committee on Foreign
Relations of the Senate and the Committee on Foreign Affairs of the
House of Representatives or the Committees on Armed Services of the
Senate and the House of Representatives (whichever such committees have
jurisdiction of matters involving such information) and to the
Committees on Appropriations of the Senate and the House of
Representatives in accordance with procedures agreed to by such
committees. Such information shall not be available for public
inspection.
(e) The first semi-annual compilation shall be submitted on May 31,
1990, and shall contain a compilation of the disclosure reports received
from December 23, 1989 to March 31, 1990.
(f) Major agencies, designated by the Office of Management and
Budget (OMB), are required to provide machine-readable compilations to
the Secretary of the Senate and the Clerk of the House of
Representatives no later than with the compilations due on May 31, 1991.
OMB shall provide detailed specifications in a memorandum to these
agencies.
(g) Non-major agencies are requested to provide machine-readable
compilations to the Secretary of the Senate and the Clerk of the House
of Representatives.
(h) Agencies shall keep the originals of all disclosure reports in
the official files of the agency.
Sec. 28.605 Inspector General report.
(a) The Inspector General, or other official as specified in
paragraph (b) of this section, of each agency shall prepare and submit
to Congress each year, commencing with submission of the President's
Budget in 1991, an evaluation of the compliance of that agency with, and
the effectiveness of, the requirements herein. The evaluation may
include any recommended changes that may be necessary to strengthen or
improve the requirements.
(b) In the case of an agency that does not have an Inspector
General, the agency official comparable to an Inspector General shall
prepare and submit the annual report, or, if there is no such comparable
official, the head of the agency shall prepare and submit the annual
report.
(c) The annual report shall be submitted at the same time the agency
submits its annual budget justifications to Congress.
(d) The annual report shall include the following: All alleged
violations relating to the agency's covered Federal actions during the
year covered by the report, the actions taken by the head of the agency
in the year covered by the report with respect to those alleged
violations and alleged violations in previous years, and the amounts of
civil penalties imposed by the agency in the year covered by the report.
Sec. Appendix A to Part 28--Certification Regarding Lobbying
Certification for Contracts, Grants, Loans, and Cooperative Agreements
The undersigned certifies, to the best of his or her knowledge and
belief, that:
(1) No Federal appropriated funds have been paid or will be paid, by
or on behalf of the undersigned, to any person for influencing or
attempting to influence an officer or employee of an agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with the awarding of any Federal contract, the
making of any Federal grant, the making of any Federal loan, the
entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
(2) If any funds other than Federal appropriated funds have been
paid or will be paid to any person for influencing or attempting
[[Page 82]]
to influence an officer or employee of any agency, a Member of Congress,
an officer or employee of Congress, or an employee of a Member of
Congress in connection with this Federal contract, grant, loan, or
cooperative agreement, the undersigned shall complete and submit
Standard Form-LLL, ``Disclosure Form to Report Lobbying,'' in accordance
with its instructions.
(3) The undersigned shall require that the language of this
certification be included in the award documents for all subawards at
all tiers (including subcontracts, subgrants, and contracts under
grants, loans, and cooperative agreements) and that all subrecipients
shall certify and disclose accordingly.
This certification is a material representation of fact upon which
reliance was placed when this transaction was made or entered into.
Submission of this certification is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31, U.S.
Code. Any person who fails to file the required certification shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.
Statement for Loan Guarantees and Loan Insurance
The undersigned states, to the best of his or her knowledge and
belief, that:
If any funds have been paid or will be paid to any person for
influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with this commitment
providing for the United States to insure or guarantee a loan, the
undersigned shall complete and submit Standard Form-LLL, ``Disclosure
Form to Report Lobbying,'' in accordance with its instructions.
Submission of this statement is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31, U.S.
Code. Any person who fails to file the required statement shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.
[[Page 83]]
Sec. Appendix B to Part 28--Disclosure Form To Report Lobbying
[GRAPHIC] [TIFF OMITTED] TC23OC91.000
[[Page 84]]
[GRAPHIC] [TIFF OMITTED] TC23OC91.001
[[Page 85]]
[GRAPHIC] [TIFF OMITTED] TC23OC91.002
[[Page 86]]
PART 32_ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH
INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT
ORGANIZATIONS--Table of Contents
Subpart A_General
Sec.
32.1 Purpose.
32.2 Definitions
32.3 Effect on other issuances.
32.4 Deviations.
32.5 Subawards.
Subpart B_Pre-Award Requirements
32.10 Purpose.
32.11 Pre-award policies.
32.12 Forms for applying for Federal assistance.
32.13 Debarment and suspension.
32.14 Special award conditions.
32.15 Metric system of measurement.
32.16 Resource Conservation and Recovery Act (RCRA).
32.17 Certifications and representations.
Subpart C_Post-Award Requirements
Financial and Program Management
32.20 Purpose of financial and program management.
32.21 Standards for financial management systems.
32.22 Payment.
32.23 Cost sharing or matching.
32.24 Program income.
32.25 Revision of budget and program plans.
32.26 Non-Federal audits.
32.27 Allowable costs.
32.28 Period of availability of funds.
Property Standards
32.30 Purpose of property standards.
32.31 Insurance coverage.
32.32 Real property.
32.33 Federally-owned and exempt property.
32.34 Equipment.
32.35 Supplies.
32.36 Intangible property.
32.37 Property trust relationship.
Procurement Standards
32.40 Purpose of procurement standards.
32.41 Recipient responsibilities.
32.42 Codes of conduct.
32.43 Competition.
32.44 Procurement procedures.
32.45 Cost and price analysis.
32.46 Procurement records.
32.47 Contract administration.
32.48 Contract provisions.
32.49 Resource Conservation and Recovery Act.
Reports and Records
32.50 Purpose of reports and records.
32.51 Monitoring and reporting program performance.
32.52 Financial reporting.
32.53 Retention and access requirements for records.
Termination and Enforcement
32.60 Purpose of termination and enforcement.
32.61 Termination.
32.62 Enforcement.
Subpart D_After-the-Award Requirements
32.70 Purpose.
32.71 Closeout procedures.
32.72 Subsequent adjustments and continuing responsibilities.
32.73 Collection of amounts due.
Appendix A to Part 32--Contract Provisions
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Source: 63 FR 12188, Mar. 12, 1998, unless otherwise noted.
Subpart A_General
Sec. 32.1 Purpose.
(a) General. This part implements OMB Circular A-110 \1\ and
establishes uniform administrative requirements for awards and subawards
to institutions of higher education, hospitals, and other non-
governmental, non-profit organizations.
---------------------------------------------------------------------------
\1\ For copies of the Circular, contact the Office of Management and
Budget, EOP Publications, 725 17th St. NW, New Executive Office
Building, Washington, DC 20503.
---------------------------------------------------------------------------
(b) Relationship to other parts. This part is an integral part of
the DoD Grant and Agreement Regulations (DoDGARs), which comprise this
subchapter of the Code of Federal Regulations. This part includes
references to other parts of the DoDGARs that implement Governmentwide
guidance and provide uniform internal policies and procedures for DoD
Components that make or administer awards. Although parts 21 and 22 of
this subchapter do not impose any direct requirements on recipients, and
recipients therefore are not required to be familiar with those parts,
the information in those parts
[[Page 87]]
concerning internal policies and procedures should be helpful to
recipients of DoD awards.
(c) Prime awards. DoD Components shall apply the provisions of this
part to awards to recipients that are institutions of higher education,
hospitals, and other non-profit organizations. DoD Components shall not
impose additional or inconsistent requirements, except as provided in
Sec. Sec. 32.4 and 32.14, or unless specifically required by Federal
statute or executive order.
(d) Subawards. Any legal entity that receives an award from a DoD
Component shall apply the provisions of this part to subawards with
institutions of higher education, hospitals, and other non-profit
organizations. Thus, a governmental or for-profit organization, whose
prime award from a DoD Component is subject to 32 CFR part 33 or part
34, respectively, applies this part to subawards with institutions of
higher education, hospitals, or other non-profit organizations. It
should be noted that subawards are for the performance of substantive
work under awards, and are distinct from contracts for procuring goods
and services. It should be further noted that non-profit organizations
that implement Federal programs for the States are also subject to State
requirements.
Sec. 32.2 Definitions.
The following are definitions of terms used in this part. Grants
officers are cautioned that terms may be defined differently in this
part than they are in other parts of the DoD Grant and Agreement
Regulations, because this part implements OMB Circular A-110 and uses
definitions as stated in that Circular. In such cases, the definition
given in this section applies to the term as it is used in this part,
and the definition given in other parts applies to the term as it is
used in those parts. For example, ``suspension'' is defined in this
section to mean temporary withdrawal of Federal sponsorship under an
award, but is defined in the part of the DoD Grant and Agreement
Regulations on nonprocurement suspension and debarment (2 CFR part 1125,
which implements OMB guidance at 2 CFR part 180) to be an action taken
to exclude a person from participating in a grant, cooperative
agreement, or other covered transaction (see definition at 2 CFR
180.1015).
Accrued expenditures. The charges incurred by the recipient during a
given period requiring the provision of funds for:
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subrecipients, and
other payees; and
(3) Other amounts becoming owed under programs for which no current
services or performance is required.
Accrued income. The sum of:
(1) Earnings during a given period from:
(i) Services performed by the recipient; and
(ii) Goods and other tangible property delivered to purchasers.
(2) Amounts becoming owed to the recipient for which no current
services or performance is required by the recipient.
Acquisition cost of equipment. The net invoice price of the
equipment, including the cost of modifications, attachments,
accessories, or auxiliary apparatus necessary to make the property
usable for the purpose for which it was acquired. Other charges, such as
the cost of installation, transportation, taxes, duty or protective in-
transit insurance, shall be included or excluded from the unit
acquisition cost in accordance with the recipient's regular accounting
practices.
Advance. A payment made by Treasury check or other appropriate
payment mechanism to a recipient upon its request either before outlays
are made by the recipient or through the use of predetermined payment
schedules.
Award. Financial assistance that provides support or stimulation to
accomplish a public purpose. Awards include grants and other agreements
in the form of money or property in lieu of money, by the Federal
Government to an eligible recipient. The term does not include:
Technical assistance, which provides services instead of money; other
assistance in the form of loans, loan guarantees, interest subsidies, or
insurance; direct payments of any kind to individuals; and, contracts
which
[[Page 88]]
are required to be entered into and administered under procurement laws
and regulations.
Cash contributions. The recipient's cash outlay, including the
outlay of money contributed to the recipient by third parties.
Closeout. The process by which the grants officer administering an
award made by a DoD Component determines that all applicable
administrative actions and all required work of the award have been
completed by the recipient and DoD Component.
Contract. A procurement contract under an award or subaward, and a
procurement subcontract under a recipient's or subrecipient's contract.
Cost sharing or matching. That portion of project or program costs
not borne by the Federal Government.
Date of completion. The date on which all work under an award is
completed or the date on the award document, or any supplement or
amendment thereto, on which Federal sponsorship ends.
Disallowed costs. Those charges to an award that the grants officer
administering an award made by a DoD Component determines to be
unallowable, in accordance with the applicable Federal cost principles
or other terms and conditions contained in the award.
DoD Component. A Military Department, Defense Agency, DoD field
activity, or organization within the Office of the Secretary of Defense
that provides or administers an award to a recipient.
Equipment. Tangible nonexpendable personal property including exempt
property charged directly to the award having a useful life of more than
one year and an acquisition cost of $5,000 or more per unit. However,
consistent with recipient policy, lower limits may be established.
Excess property. Property under the control of any DoD Component
that, as determined by the head thereof, is no longer required for its
needs or the discharge of its responsibilities.
Exempt property. Tangible personal property acquired in whole or in
part with Federal funds, where the DoD Component has statutory authority
to vest title in the recipient without further obligation to the Federal
Government. An example of exempt property authority is contained in the
Federal Grant and Cooperative Agreement Act (31 U.S.C. 6306), for
property acquired under an award to conduct basic or applied research by
a non-profit institution of higher education or non-profit organization
whose principal purpose is conducting scientific research.
Federal funds authorized. The total amount of Federal funds
obligated by a DoD Component for use by the recipient. This amount may
include any authorized carryover of unobligated funds from prior funding
periods when permitted by agency regulations or agency implementing
instructions.
Federal share (of real property, equipment, or supplies). That
percentage of the property's acquisition costs and any improvement
expenditures paid with Federal funds.
Funding period. The period of time when Federal funding is available
for obligation by the recipient.
Intangible property and debt instruments. Property that includes,
but is not limited to, trademarks, copyrights, patents and patent
applications and such property as loans, notes and other debt
instruments, lease agreements, stock and other instruments of property
ownership, whether considered tangible or intangible.
Obligations. The amounts of orders placed, contracts and grants
awarded, services received and similar transactions during a given
period that require payment by the recipient during the same or a future
period.
Outlays or expenditures. Charges made to the project or program.
They may be reported on a cash or accrual basis. For reports prepared on
a cash basis, outlays are the sum of cash disbursements for direct
charges for goods and services, the amount of indirect expense charged,
the value of third party in-kind contributions applied and the amount of
cash advances and payments made to subrecipients. For reports prepared
on an accrual basis, outlays are the sum of cash disbursements for
direct charges for goods and services, the amount of indirect expense
incurred, the value of in-kind contributions applied, and the net
increase (or decrease) in the amounts owed by the recipient for goods
and other property received, for services performed by employees,
contractors, subrecipients and
[[Page 89]]
other payees and other amounts becoming owed under programs for which no
current services or performance are required.
Personal property. Property of any kind except real property. It may
be tangible, having physical existence, or intangible, having no
physical existence, such as copyrights, patents, or securities.
Prior approval. Written approval by an authorized official
evidencing prior consent.
Program income. Gross income earned by the recipient that is
directly generated by a supported activity or earned as a result of the
award (see exclusions in Sec. 32.24(e) and (h)). Program income
includes, but is not limited to, income from fees for services
performed, the use or rental of real or personal property acquired under
federally-funded projects, the sale of commodities or items fabricated
under an award, license fees and royalties on patents and copyrights,
and interest on loans made with award funds. Interest earned on advances
of Federal funds is not program income. Except as otherwise provided in
program regulations or the terms and conditions of the award, program
income does not include the receipt of principal on loans, rebates,
credits, discounts, etc., or interest earned on any of them.
Project costs. All allowable costs, as set forth in the applicable
Federal cost principles, incurred by a recipient and the value of the
contributions made by third parties in accomplishing the objectives of
the award during the project period.
Project period. The period established in the award document during
which Federal sponsorship begins and ends.
Property. Real property and personal property (equipment, supplies,
intangible property and debt instruments), unless stated otherwise.
Real property. Land, including land improvements, structures and
appurtenances thereto, but excluding movable machinery and equipment.
Recipient. An organization receiving financial assistance directly
from DoD Components to carry out a project or program. The term includes
public and private institutions of higher education, public and private
hospitals, and other quasi-public and private non-profit organizations
such as, but not limited to, community action agencies, research
institutes, educational associations, and health centers. The term also
includes consortia comprised of any combination of universities, other
nonprofit organizations, governmental organizations, for-profit
organizations, and other entities, to the extent that the consortia are
legally incorporated as nonprofit organizations. The term does not
include Government-owned contractor-operated facilities or research
centers providing continued support for mission-oriented, large-scale
programs that are Government-owned or controlled, or are designated as
federally-funded research and development centers.
Research and development. All research activities, both basic and
applied, and all development activities that are supported at
universities, colleges, and other non-profit institutions. Research is
defined as a systematic study directed toward fuller scientific
knowledge or understanding of the subject studied. Development is the
systematic use of knowledge and understanding gained from research
directed toward the production of useful materials, devices, systems, or
methods, including design and development of prototypes and processes.
The term research also includes activities involving the training of
individuals in research techniques where such activities utilize the
same facilities as other research and development activities and where
such activities are not included in the instruction function.
Small award. An award not exceeding the simplified acquisition
threshold fixed at 41 U.S.C. 403(11) (currently $100,000).
Subaward. An award of financial assistance in the form of money, or
property in lieu of money, made under an award by a recipient to an
eligible subrecipient or by a subrecipient to a lower tier subrecipient.
The term includes financial assistance when provided by any legal
agreement, even if the agreement is called a contract, but does not
include procurement of goods and services nor does it include any form
of assistance which is excluded
[[Page 90]]
from the definition of ``award'' in this section.
Subrecipient. The legal entity to which a subaward is made and which
is accountable to the recipient for the use of the funds provided.
Supplies. All personal property excluding equipment, intangible
property, and debt instruments as defined in this section, and
inventions of a contractor conceived or first actually reduced to
practice in the performance of work under a funding agreement (``subject
inventions''), as defined in 37 CFR part 401, ``Rights to Inventions
Made by Nonprofit Organizations and Small Business Firms Under
Government Grants, Contracts, and Cooperative Agreements.''
Suspension. An action by a DoD Component that temporarily withdraws
Federal sponsorship under an award, pending corrective action by the
recipient or pending a decision to terminate the award by the DoD
Component. Suspension of an award is a separate action from suspension
of a participant under 2 CFR part 1125.
Termination. The cancellation of an award, in whole or in part, at
any time prior to the date of completion.
Third party in-kind contributions. The value of non-cash
contributions provided by non-Federal third parties. Third party in-kind
contributions may be in the form of real property, equipment, supplies,
and the value of goods and services directly benefiting and specifically
identifiable to the project or program.
Unliquidated obligations. The amount of obligations incurred by the
recipient:
(1) That have not been paid, if financial reports are prepared on a
cash basis.
(2) For which an outlay has not been recorded, if reports are
prepared on an accrued expenditure basis.
Unobligated balance. The portion of the funds authorized by a DoD
Component that has not been obligated by the recipient and is determined
by deducting the cumulative obligations from the cumulative funds
authorized.
Unrecovered indirect cost. The difference between the amount awarded
and the amount which could have been awarded under the recipient's
approved negotiated indirect cost rate.
Working capital advance. A procedure whereby funds are advanced to
the recipient to cover its estimated disbursement needs for a given
initial period.
[63 FR 12188, Mar. 12, 1998, as amended at 70 FR 49477, Aug. 23, 2005;
72 FR 34998, June 26, 2007]
Sec. 32.3 Effect on other issuances.
For awards subject to this part, all administrative requirements of
codified program regulations, program manuals, handbooks and other
nonregulatory materials which are inconsistent with the requirements of
this part shall be superseded, except to the extent they are required by
statute, or authorized in accordance with the deviations provision in
Sec. 32.4.
Sec. 32.4 Deviations.
(a) Individual deviations. Individual deviations affecting only one
award may be approved by DoD Components in accordance with procedures
stated in 32 CFR 21.335(a) and 21.340.
(b) Small awards. DoD Components may apply less restrictive
requirements than the provisions of this part when awarding small
awards, except for those requirements which are statutory.
(c) Other class deviations. (1) For classes of awards other than
small awards, the Director of Defense Research and Engineering (DDR&E),
or his or her designee, may grant exceptions from the requirements of
this part:
(i) With the written concurrence of the Office of the Management and
Budget (OMB). The DDR&E, or his or her designee, shall provide written
notification to OMB of the Department of Defense's intention to grant a
class deviation; and
(ii) When exceptions are not prohibited by statute.
(2) DoD Components shall request approval for such deviations in
accordance with 32 CFR 21.335(b) and 21.340. However, in the interest of
maximum
[[Page 91]]
uniformity, exceptions from the requirements of this part shall be
permitted only in unusual circumstances.
[63 FR 12188, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]
Sec. 32.5 Subawards.
Unless sections of this part specifically exclude subrecipients from
coverage, the provisions of this part shall be applied to subrecipients
performing work under awards if such subrecipients are institutions of
higher education, hospitals or other non-profit organizations. State and
local government subrecipients are subject to the provisions of 32 CFR
part 33. Subrecipients that are for-profit organizations are subject to
32 CFR part 34.
Subpart B_Pre-Award Requirements
Sec. 32.10 Purpose.
Sections 32.11 through 32.17 prescribe application forms and
instructions and other pre-award matters.
Sec. 32.11 Pre-award policies.
(a) Use of grants, cooperative agreements, and contracts. (1) OMB
Circular A-110 states that:
(i) In each instance, the Federal awarding agency shall decide on
the appropriate award instrument (i.e., grant, cooperative agreement, or
contract).
(ii) The Federal Grant and Cooperative Agreement Act (31 U.S.C.
6301-6308) governs the use of grants, cooperative agreements, and
contracts. Under that Act:
(A) A grant or cooperative agreement shall be used only when the
principal purpose of a transaction is to accomplish a public purpose of
support or stimulation authorized by Federal statute.
(B) Contracts shall be used when the principal purpose is
acquisition of property or services for the direct benefit or use of the
Federal Government.
(C) The statutory criterion for choosing between grants and
cooperative agreements is that for the latter, ``substantial involvement
is expected between the executive agency and the State, local
government, or other recipient when carrying out the activity
contemplated in the agreement.''
(2) In selecting the appropriate award instruments, DoD Components'
grants officers shall comply with the DoD implementation of the Federal
Grant and Cooperative Agreement Act at 32 CFR part 22, subpart B.
(b) Public notice and priority setting. As a matter of
Governmentwide policy, Federal awarding agencies shall notify the public
of intended funding priorities for programs that use discretionary
awards, unless funding priorities are established by Federal statute.
For DoD Components, compliance with competition policies and statutory
requirements implemented in 32 CFR part 22, subpart C, shall constitute
compliance with this Governmentwide policy.
[63 FR 12188, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]
Sec. 32.12 Forms for applying for Federal assistance.
(a) DoD Components shall comply with the applicable report clearance
requirements of 5 CFR part 1320, ``Controlling Paperwork Burdens on the
Public,'' with regard to all forms used in place of or as a supplement
to the Standard Form 424 \2\ (SF-424) series.
---------------------------------------------------------------------------
\2\ For copies of Standard Forms listed in this part, contact
regional grants administration offices of the Office of Naval Research.
Addresses for the offices are listed in the ``DoD Directory of Contract
Administration Services Components,'' DLAH 4105.4, which can be obtained
from: Defense Logistics Agency, Publications Distribution Division
(DASC-WDM), 8725 John J. Kingman Rd., Suite 0119, Fort Belvoir, VA
22060-6220.
---------------------------------------------------------------------------
(b) Applicants shall use the SF-424 series or those forms and
instructions prescribed by DoD Components.
(c) For Federal programs covered by E.O. 12372 (3 CFR, 1982 Comp.,
p. 197), ``Intergovernmental Review of Federal Programs,'' the applicant
shall complete the appropriate sections of the SF-424 (Application for
Federal Assistance) indicating whether the application was subject to
review by the State Single Point of Contact (SPOC). The name and address
of the SPOC for a particular State can be obtained from the DoD
Component or the Catalog of Federal Domestic Assistance. The
[[Page 92]]
SPOC shall advise the applicant whether the program for which
application is made has been selected by that State for review.
(d) DoD Components that do not use the SF-424 form should indicate
whether the application is subject to review by the State under E.O.
12372.
Sec. 32.13 Debarment and suspension.
DoD Components and recipients shall comply with the policy and
procedural requirements in the OMB guidance on nonprocurement debarment
and suspension (2 CFR part 180), as implemented by the Department of
Defense in 2 CFR part 1125. Those policies and procedures restrict
subawards and contracts with certain parties that are debarred,
suspended or otherwise excluded from or ineligible for participation in
Federal assistance programs or activities.
[72 FR 34998, June 26, 2007]
Sec. 32.14 Special award conditions.
(a) DoD Components may impose additional requirements as needed,
over and above those provided in this part, if an applicant or
recipient:
(1) Has a history of poor performance;
(2) Is not financially stable;
(3) Has a management system that does not meet the standards
prescribed in this part;
(4) Has not conformed to the terms and conditions of a previous
award; or
(5) Is not otherwise responsible.
(b) Before imposing additional requirements, DoD Components shall
notify the applicant or recipient in writing as to:
(1) The nature of the additional requirements;
(2) The reason why the additional requirements are being imposed;
(3) The nature of the corrective action needed;
(4) The time allowed for completing the corrective actions; and
(5) The method for requesting reconsideration of the additional
requirements imposed.
(c) Any special conditions shall be promptly removed once the
conditions that prompted them have been corrected.
(d) Grants officers:
(1) Should coordinate the imposition and removal of special award
conditions with the cognizant grants administration office identified in
32 CFR 22.710.
(2) Shall include in the award file the written notification to the
recipient, described in paragraph (b) of this section, and the
documentation required by 32 CFR 22.410(b).
Sec. 32.15 Metric system of measurement.
The Metric Conversion Act, as amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 205) declares that the metric system is
the preferred measurement system for U.S. trade and commerce, and for
Federal agencies' procurements, grants, and other business-related
activities. DoD grants officers shall comply with requirements
concerning the use of the metric system at 32 CFR 22.530.
Sec. 32.16 Resource Conservation and Recovery Act (RCRA).
Recipients' procurements shall comply with applicable requirements
of the Resource Conservation and Recovery Act (RCRA), as described at
Sec. 32.49.
Sec. 32.17 Certifications and representations.
(a) OMB Circular A-110 authorizes and encourages each Federal
agency, unless prohibited by statute or codified regulation, to allow
recipients to submit certifications and representations required by
statute, executive order, or regulation on an annual basis, if the
recipients have ongoing and continuing relationships with the agency.
The Circular further states that annual certifications and
representations, when used, shall be signed by responsible officials
with the authority to ensure recipients' compliance with the pertinent
requirements.
(b) DoD grants officers shall comply with the provisions concerning
certifications and representations at 32 CFR 22.510. Those provisions
ease burdens on recipients to the extent possible, given current
statutory and regulatory impediments to obtaining all certifications on
an annual basis. The provisions thereby also comply with the intent of
OMB Circular A-110, to use less
[[Page 93]]
burdensome methods for obtaining certifications and representations, as
such methods become feasible.
Subpart C_Post-Award Requirements
Financial and Program Management
Sec. 32.20 Purpose of financial and program management.
Sections 32.21 through 32.28 prescribe standards for financial
management systems, methods for making payments and rules for:
satisfying cost sharing and matching requirements, accounting for
program income, budget revision approvals, making audits, determining
allowability of cost, and establishing fund availability.
Sec. 32.21 Standards for financial management systems.
(a) DoD Components shall require recipients to relate financial data
to performance data and develop unit cost information whenever
practical. For awards that support research, it should be noted that it
is generally not appropriate to develop unit cost information.
(b) Recipients' financial management systems shall provide for the
following.
(1) Accurate, current and complete disclosure of the financial
results of each federally-sponsored project or program in accordance
with the reporting requirements set forth in Sec. 32.52. If a DoD
Component requires reporting on an accrual basis from a recipient that
maintains its records on other than an accrual basis, the recipient
shall not be required to establish an accrual accounting system. These
recipients may develop such accrual data for its reports on the basis of
an analysis of the documentation on hand.
(2) Records that identify adequately the source and application of
funds for federally-sponsored activities. These records shall contain
information pertaining to Federal awards, authorizations, obligations,
unobligated balances, assets, outlays, income and interest.
(3) Effective control over and accountability for all funds,
property and other assets. Recipients shall adequately safeguard all
such assets and assure they are used solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award.
Whenever appropriate, financial information should be related to
performance and unit cost data. As discussed in paragraph (a) of this
section, unit cost data is generally not appropriate for awards that
support research.
(5) Written procedures to minimize the time elapsing between the
transfer of funds to the recipient from the U.S. Treasury and the
issuance or redemption of checks, warrants or payments by other means
for program purposes by the recipient. To the extent that the provisions
of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern,
payment methods of State agencies, instrumentalities, and fiscal agents
should be consistent with CMIA Treasury-State Agreements or the CMIA
default procedures codified at 31 CFR part 205, ``Withdrawal of Cash
from the Treasury for Advances under Federal Grant and Other Programs.''
(6) Written procedures for determining the reasonableness,
allocability and allowability of costs in accordance with the provisions
of the applicable Federal cost principles (see Sec. 32.27) and the
terms and conditions of the award.
(7) Accounting records including cost accounting records that are
supported by source documentation.
(c) Where the Federal Government guarantees or insures the repayment
of money borrowed by the recipient, the DoD Component, at its
discretion, may require adequate bonding and insurance if the bonding
and insurance requirements of the recipient are not deemed adequate to
protect the interest of the Federal Government.
(d) The DoD Component may require adequate fidelity bond coverage
where the recipient lacks sufficient coverage to protect the Federal
Government's interest.
(e) Where bonds are required in the situations described above, the
bonds shall be obtained from companies holding certificates of authority
as acceptable sureties, as prescribed in 31 CFR part 223, ``Surety
Companies Doing Business with the United States.''
[[Page 94]]
Sec. 32.22 Payment.
(a) Payment methods shall minimize the time elapsing between the
transfer of funds from the United States Treasury and the issuance or
redemption of checks, warrants, or payment by other means by the
recipients. Payment methods of State agencies or instrumentalities shall
be consistent with Treasury-State agreements under the Cash Management
Improvement Act (CMIA) (31 U.S.C. 3335 and 6503) or default procedures
in 31 CFR part 205.
(b) Recipients are to be paid in advance, provided they maintain or
demonstrate the willingness to maintain:
(1) Written procedures that minimize the time elapsing between the
transfer of funds and disbursement by the recipient; and
(2) Financial management systems that meet the standards for fund
control and accountability as established in Sec. 32.21. Cash advances
to a recipient organization shall be limited to the minimum amounts
needed and be timed to be in accordance with the actual, immediate cash
requirements of the recipient organization in carrying out the purpose
of the approved program or project. The timing and amount of cash
advances shall be as close as is administratively feasible to the actual
disbursements by the recipient organization for direct program or
project costs and the proportionate share of any allowable indirect
costs.
(c) Whenever possible, advances shall be consolidated to cover
anticipated cash needs for all awards made by the DoD Component to the
recipient.
(1) Advance payment mechanisms include, but are not limited to,
Treasury check and electronic funds transfer.
(2) Advance payment mechanisms are subject to 31 CFR part 205.
(3) Recipients shall be authorized to submit requests for advances
and reimbursements at least monthly when electronic fund transfers are
not used.
(d) Requests for Treasury check advance payment shall be submitted
on SF-270, \3\ ``Request for Advance or Reimbursement,'' or other forms
as may be authorized by OMB. This form is not to be used when Treasury
check advance payments are made to the recipient automatically through
the use of a predetermined payment schedule or if inconsistent with DoD
procedures for electronic funds transfer.
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\3\ See footnote 2 to Sec. 32.12(a).
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(e) Reimbursement is the preferred method when the requirements in
paragraph (b) of this section cannot be met. DoD Components may also use
this method on any construction agreement, or if the major portion of
the construction project is accomplished through private market
financing or Federal loans, and the Federal assistance constitutes a
minor portion of the project.
(1) When the reimbursement method is used, the responsible DoD
payment office generally makes payment within 30 calendar days after
receipt of the billing by the office designated to receive the billing,
unless the billing is improper (for further information about timeframes
for payments, see 32 CFR 22.810(c)(3)(ii)).
(2) Recipients shall be authorized to submit requests for
reimbursement at least monthly when electronic funds transfers are not
used.
(f) If a recipient cannot meet the criteria for advance payments and
the grants officer, in consultation with the program manager, has
determined that reimbursement is not feasible because the recipient
lacks sufficient working capital, the award may provide for cash on a
working capital advance basis. Under this procedure, the award shall
provide for advancing cash to the recipient to cover its estimated
disbursement needs for an initial period generally geared to the
awardee's disbursing cycle. Thereafter, the award shall provide for
reimbursing the recipient for its actual cash disbursements. The working
capital advance method of payment shall not be used for recipients
unwilling or unable to provide timely advances to their subrecipient to
meet the subrecipient's actual cash disbursements.
(g) To the extent available, recipients shall disburse funds
available from repayments to and interest earned on a revolving fund,
program income, rebates, refunds, contract settlements, audit recoveries
and interest earned on such funds before requesting additional cash
payments.
[[Page 95]]
(h) Unless otherwise required by statute, grants officers shall not
withhold payments for proper charges made by recipients at any time
during the project period unless:
(1) A recipient has failed to comply with the project objectives,
the terms and conditions of the award, or Federal reporting
requirements; or
(2) The recipient or subrecipient is delinquent in a debt to the
United States under OMB Circular A-129, ``Managing Federal Credit
Programs'' (see definitions of ``debt'' and ``delinquent debt,'' at 32
CFR 22.105). Under such conditions, the grants officer may, upon
reasonable notice, inform the recipient that payments shall not be made
for obligations incurred after a specified date until the conditions are
corrected or the indebtedness to the Federal Government is liquidated
(also see 32 CFR 22.420(b)(2) and 22.820).
(i) Standards governing the use of banks and other institutions as
depositories of funds advanced under awards are as follows:
(1) Except for situations described in paragraph (i)(2) of this
section, DoD Components shall not require separate depository accounts
for funds provided to a recipient or establish any eligibility
requirements for depositories for funds provided to a recipient.
However, recipients must be able to account for the receipt, obligation
and expenditure of funds.
(2) Advances of Federal funds shall be deposited and maintained in
insured accounts whenever possible.
(j) Consistent with the national goal of expanding the opportunities
for women-owned and minority-owned business enterprises, recipients
shall be encouraged to use women-owned and minority-owned banks (a bank
which is owned at least 50 percent by women or minority group members).
(k) Recipients shall maintain advances of Federal funds in interest
bearing accounts, unless:
(1) The recipient receives less than $120,000 in Federal awards per
year;
(2) The best reasonably available interest bearing account would not
be expected to earn interest in excess of $250 per year on Federal cash
balances; or
(3) The depository would require an average or minimum balance so
high that it would not be feasible within the expected Federal and non-
Federal cash resources.
(l)(1) Interest earned on Federal advances deposited in interest
bearing accounts shall be remitted annually to Department of Health and
Human Services, Payment Management System, PO Box 6021, Rockville, MD
20852.
(2) In keeping with Electronic Funds Transfer rules (31 CFR part
206), interest should be remitted to the HHS Payment Management System
through an electronic medium such as the FEDWIR Deposit System.
Electronic remittances should be in the format and should include any
data that are specified by the grants officer as being necessary to
facilitate direct deposit in HHS' account at the Department of the
Treasury.
(3) Recipients that do not have electronic remittance capability
should use a check.
(4) Interest amounts up to $250 per year may be retained by the
recipient for administrative expense.
(m) Except as noted elsewhere in this part, only the following forms
shall be authorized for the recipients in requesting advances and
reimbursements. DoD Components shall not require more than an original
and two copies of these forms.
(1) SF-270, Request for Advance or Reimbursement. Each DoD Component
shall adopt the SF-270 as a standard form for all nonconstruction
programs when electronic funds transfer or predetermined advance methods
are not used. DoD Components, however, have the option of using this
form for construction programs in lieu of the SF-271, \4\ ``Outlay
Report and Request for Reimbursement for Construction Programs.''
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\4\ See footnote 2 to Sec. 32.12(a).
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(2) SF-271, Outlay Report and Request for Reimbursement for
Construction Programs. Each DoD Component shall adopt the SF-271 as the
standard form to be used for requesting reimbursement for construction
programs. However, a DoD Component may substitute the SF-270 when the
DoD Component determines that it provides adequate information to meet
Federal needs.
[[Page 96]]
Sec. 32.23 Cost sharing or matching.
(a) All contributions, including cash and third party in-kind, shall
be accepted as part of the recipient's cost sharing or matching when
such contributions meet all of the following criteria:
(1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other federally-
assisted project or program.
(3) Are necessary and reasonable for proper and efficient
accomplishment of project or program objectives.
(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another award,
except where authorized by Federal statute to be used for cost sharing
or matching.
(6) Are provided for in the approved budget when required by the DoD
Component.
(7) Conform to other provisions of this part, as applicable.
(b) Unrecovered indirect costs (see definition in Sec. 32.2) may be
included as part of cost sharing or matching.
(c) Values for recipient contributions of services and property
shall be established in accordance with the applicable cost principles.
If a DoD Component authorizes recipients to donate buildings or land for
construction/facilities acquisition projects or long-term use, the value
of the donated property for cost sharing or matching shall be the lesser
of:
(1) The certified value of the remaining life of the property
recorded in the recipient's accounting records at the time of donation;
or
(2) The current fair market value. However, when there is sufficient
justification, the DoD Component may approve the use of the current fair
market value of the donated property, even if it exceeds the certified
value at the time of donation to the project. The DoD Component may
accept the use of any reasonable basis for determining the fair market
value of the property.
(d) Volunteer services furnished by professional and technical
personnel, consultants, and other skilled and unskilled labor may be
counted as cost sharing or matching if the service is an integral and
necessary part of an approved project or program. Rates for volunteer
services shall be consistent with those paid for similar work in the
recipient's organization. In those instances in which the required
skills are not found in the recipient organization, rates shall be
consistent with those paid for similar work in the labor market in which
the recipient competes for the kind of services involved. In either
case, paid fringe benefits that are reasonable, allowable, and allocable
may be included in the valuation.
(e) When an employer other than the recipient furnishes the services
of an employee, these services shall be valued at the employee's regular
rate of pay (plus an amount of fringe benefits that are reasonable,
allowable, and allocable, but exclusive of overhead costs), provided
these services are in the same skill for which the employee is normally
paid.
(f) Donated supplies may include such items as office supplies,
laboratory supplies or workshop and classroom supplies. Value assessed
to donated supplies included in the cost sharing or matching share shall
be reasonable and shall not exceed the fair market value of the property
at the time of the donation.
(g) The method used for determining cost sharing or matching for
donated equipment, buildings and land for which title passes to the
recipient may differ according to the purpose of the award, if the
purpose of the award is to:
(1) Assist the recipient in the acquisition of equipment, buildings
or land, the total value of the donated property may be claimed as cost
sharing or matching; or
(2) Support activities that require the use of equipment, buildings
or land, normally only depreciation or use charges for equipment and
buildings may be made. However, the full value of equipment or other
capital assets and fair rental charges for land may be allowed, provided
that the DoD Component has approved the charges.
(h) The value of donated property shall be determined in accordance
with the usual accounting policies of the recipient, with the following
qualifications.
[[Page 97]]
(1) The value of donated land and buildings shall not exceed its
fair market value at the time of donation to the recipient as
established by an independent appraiser (e.g., certified real property
appraiser or General Services Administration representative) and
certified by a responsible official of the recipient.
(2) The value of donated equipment shall not exceed the fair market
value of equipment of the same age and condition at the time of
donation.
(3) The value of donated space shall not exceed the fair rental
value of comparable space as established by an independent appraisal of
comparable space and facilities in a privately-owned building in the
same locality.
(4) The value of loaned equipment shall not exceed its fair rental
value.
(i) The following requirements pertain to the recipient's supporting
records for in-kind contributions from third parties:
(1) Volunteer services shall be documented and, to the extent
feasible, supported by the same methods used by the recipient for its
own employees.
(2) The basis for determining the valuation for personal service and
property shall be documented.
Sec. 32.24 Program income.
(a) DoD Components shall apply the standards set forth in this
section in requiring recipient organizations to account for program
income related to projects financed in whole or in part with Federal
funds.
(b) Except as provided in paragraph (h) of this section, program
income earned during the project period shall be retained by the
recipient and, in accordance with the terms and conditions of the award,
shall be used in one or more of the following ways:
(1) Added to funds committed to the project by the DoD Component and
recipient and used to further eligible project or program objectives.
(2) Used to finance the non-Federal share of the project or program.
(3) Deducted from the total project or program allowable cost in
determining the net allowable costs on which the Federal share of costs
is based.
(c) When a program regulation or award authorizes the disposition of
program income as described in paragraphs (b)(1) or (b)(2) of this
section, program income in excess of any limits stipulated shall be used
in accordance with paragraph (b)(3) of this section.
(d) In the event that program regulations or the terms and
conditions of the award do not specify how program income is to be used,
paragraph (b)(3) of this section shall apply automatically to all
projects or programs except research. For awards that support research,
paragraph (b)(1) of this section shall apply automatically unless the
terms and conditions specify another alternative or the recipient is
subject to special award conditions, as indicated in Sec. 32.14.
(e) Unless program regulations or the terms and conditions of the
award provide otherwise, recipients shall have no obligation to the
Federal Government regarding program income earned after the end of the
project period.
(f) If authorized by program regulations or the terms and conditions
of the award, costs incident to the generation of program income may be
deducted from gross income to determine program income, provided these
costs have not been charged to the award.
(g) Proceeds from the sale of property shall be handled in
accordance with the requirements of the Property Standards (see
Sec. Sec. 32.30 through 32.37).
(h) Unless program regulations or the terms and condition of the
award provide otherwise, recipients shall have no obligation to the
Federal Government with respect to program income earned from license
fees and royalties for copyrighted material, patents, patent
applications, trademarks, and inventions produced under an award. Note
that the Patent and Trademark Amendments (35 U.S.C. chapter 18) apply to
inventions made under an experimental, developmental, or research award.
Sec. 32.25 Revision of budget and program plans.
(a) The budget plan is the financial expression of the project or
program as approved during the award process. It may include either the
sum of the Federal and non-Federal shares, or only the Federal share,
depending upon DoD Component requirements. It shall be
[[Page 98]]
related to performance for program evaluation purposes whenever
appropriate.
(b) Recipients are required to report deviations from budget and
program plans, and request prior approvals for budget and program plan
revisions, in accordance with this section.
(c) For nonconstruction awards, recipients shall request prior
approvals from the cognizant grants officer for one or more of the
following program or budget related reasons.
(1) Change in the scope or the objective of the project or program
(even if there is no associated budget revision requiring prior written
approval).
(2) Change in a key person specified in the application or award
document.
(3) The absence for more than three months, or a 25 percent
reduction in time devoted to the project, by the approved project
director or principal investigator.
(4) The need for additional Federal funding.
(5) The transfer of amounts budgeted for indirect costs to absorb
increases in direct costs, or vice versa, if approval is required by the
DoD Component. DoD Components should require this prior approval only in
exceptional circumstances. The requirement in each such case must be
stated in the award document.
(6) The inclusion, unless waived by the DoD Component, of costs that
require prior approval in accordance with OMB Circular A-21, \5\ ``Cost
Principles for Institutions of Higher Education,'' OMB Circular A-122,
\6\ ``Cost Principles for Non-Profit Organizations,'' or Appendix E to
45 CFR part 74, ``Principles for Determining Costs Applicable to
Research and Development under Grants and Contracts with Hospitals,'' or
48 CFR part 31, ``Contract Cost Principles and Procedures,'' as
applicable. However, it should be noted that many of the prior approvals
in these cost principles are appropriately waived only after
consultation with the cognizant federal agency responsible for
negotiating the recipient's indirect costs.
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\5\ See footnote 1 to Sec. 32.1(a).
\6\ See footnote 1 to Sec. 32.1(a).
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(7) The transfer of funds allotted for training allowances (direct
payment to trainees) to other categories of expense.
(8) Unless described in the application and funded in the approved
awards, the subaward, transfer or contracting out of any work under an
award. This provision does not apply to the purchase of supplies,
material, equipment or general support services.
(9) If required by the DoD Component, the transfer of funds among
direct cost categories that is described in paragraph (e) of this
section.
(d) (1) Except for requirements listed in paragraphs (c)(1) and
(c)(4) of this section, OMB Circular A-110 authorizes DoD Components, at
their option, to waive cost-related and administrative prior written
approvals required by this part and OMB Circulars A-21 and A-122 (but
see cautionary note at end of paragraph (c)(5) of this section).
(2) The two prior approvals listed in paragraphs (d)(2)(i) and (ii)
of this section are automatically waived unless the award document
states otherwise. DoD Components should override this automatic waiver
and require the prior approvals, especially for research awards, only in
exceptional circumstances. Absent an override in the award terms and
conditions, recipients need not obtain prior approvals before:
(i) Incurring pre-award costs 90 calendar days prior to award
(incurring pre-award costs more than 90 calendar days prior to award
would still require the prior approval of the DoD Component). All pre-
award costs are incurred at the recipient's risk (i.e., the DoD
Component is under no obligation to reimburse such costs if for any
reason the recipient does not receive an award or if the award is less
than anticipated and inadequate to cover such costs).
(ii) Carrying forward unobligated balances to subsequent funding
periods.
(3) Under certain conditions, a DoD Component may authorize a
recipient to initiate, without prior approval, a one-time, no-cost
extension (i.e., an extension in the expiration date of an award that
does not require additional Federal funds) for a period of up to twelve
months, as long as the no-cost extension does not involve a change in
the approved objectives or scope of the
[[Page 99]]
project. The conditions for waiving this prior approval requirement are
that the DoD Component must:
(i) Judge that the recipient's subsequently initiating a one-time,
no-cost extension would not cause the DoD Component to fail to comply
with DoD funding policies (for further information on the location of
DoD funding policies, grants officers may refer to Appendix C to 32 CFR
part 22).
(ii) Require a recipient that wishes to initiate a one-time, no-cost
extension to so notify the office that made the award at least 10
calendar days before the original expiration date of the award.
(e) The DoD Component may, at its option, restrict the transfer of
funds among direct cost categories, functions and activities for awards
in which the Federal share of the project exceeds $100,000 and the
cumulative amount of such transfers exceeds or is expected to exceed 10
percent of the total budget as last approved by the DoD Component. As a
matter of DoD policy, requiring prior approvals for such transfers
generally is not appropriate for grants to support research. No DoD
Component shall permit a transfer that would cause any Federal
appropriation or part thereof to be used for purposes other than those
consistent with the original intent of the appropriation.
(f) For construction awards, recipients shall request prior written
approval promptly from grants officers for budget revisions whenever:
(1) The revision results from changes in the scope or the objective
of the project or program;
(2) The need arises for additional Federal funds to complete the
project; or
(3) A revision is desired which involves specific costs for which
prior written approval requirements may be imposed consistent with
applicable OMB cost principles listed in Sec. 32.27.
(g) When a DoD Component makes an award that provides support for
both construction and nonconstruction work, the DoD Component may
require the recipient to request prior approval from the grants officer
before making any fund or budget transfers between the two types of work
supported.
(h) No other prior approval requirements for specific items may be
imposed unless a deviation has been approved, in accordance with the
deviation procedures in Sec. 32.4(c).
(i) For both construction and nonconstruction awards, DoD Components
shall require recipients to notify the grants officer in writing
promptly whenever the amount of Federal authorized funds is expected to
exceed the needs of the recipient for the project period by more than
$5000 or five percent of the Federal award, whichever is greater. This
notification shall not be required if an application for additional
funding is submitted for a continuation award.
(j) When requesting approval for budget revisions, recipients shall
use the budget forms that were used in the application unless the grants
officer indicates a letter of request suffices.
(k) Within 30 calendar days from the date of receipt of the request
for budget revisions, the grants officer shall review the request and
notify the recipient whether the budget revisions have been approved. If
the revision is still under consideration at the end of 30 calendar
days, the grants officer shall inform the recipient in writing of the
date when the recipient may expect the decision.
Sec. 32.26 Non-Federal audits.
(a) Recipients and subrecipients that are institutions of higher
education or other non-profit organizations (including hospitals) shall
be subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133,
\7\ ``Audits of States, Local Governments, and Non-Profit
Organizations.''
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\7\ See footnote 1 to Sec. 32.1(a).
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(b) State and local governments that are subrecipients shall be
subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133,
``Audits of States, Local Governments, and Non-Profit Organizations.''
(c) Hospitals that are subrecipients and are not covered by the
audit provisions of revised OMB Circular A-133
[[Page 100]]
shall be subject to the audit requirements specified in award terms and
conditions.
(d) For-profit organizations that are subrecipients shall be subject
to the audit requirements specified in 32 CFR 34.16.
Sec. 32.27 Allowable costs.
(a) General. For each kind of recipient or subrecipient of a cost-
type assistance award, or each contractor receiving a. cost-type
contract under an assistance award, there is a set of Federal principles
for determining allowable costs. Allowability of costs shall be
determined in accordance with the cost principles applicable to the
entity incurring the costs.
(b) Governmental organizations. Allowability of costs incurred by
State, local or federally-recognized Indian tribal governments that may
be subrecipients or contractors under awards subject to this part is
determined in accordance with the provisions of OMB Circular A-87, \8\
``Cost Principles for State and Local Governments.''
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\8\ See footnote 1 to Sec. 32.1(a).
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(c) Non-profit organizations. The allowability of costs incurred by
non-profit organizations that may be recipients or subrecipients of
awards subject to this part, or contractors under such awards, is
determined in accordance with the provisions of OMB Circular A-122,
``Cost Principles for Non-Profit Organizations.''
(d) Higher educational institutions. The allowability of costs
incurred by institutions of higher education that may be recipients,
subrecipients, or contractors is determined in accordance with the
provisions of OMB Circular A-21, ``Cost Principles for Educational
Institutions.''
(e) Hospitals. The allowability of costs incurred by hospitals that
are recipients, subrecipients, or contractors is determined in
accordance with the provisions of Appendix E to 45 CFR part 74,
``Principles for Determining Costs Applicable to Research and
Development Under Grants and Contracts with Hospitals.''
(f) For-profit organizations. The allowability of costs incurred by
subrecipients or contractors that are either for-profit organizations or
non-profit organizations listed in Attachment C to Circular A-122 is
determined in accordance with the provisions of the Federal Acquisition
Regulation (FAR) at 48 CFR part 31; however, the grants officer or the
award terms and conditions may in rare cases authorize a determination
of allowable costs that are in accordance with uniform cost accounting
standards and comply with cost principles acceptable to the Department
of Defense.
Sec. 32.28 Period of availability of funds.
Where a funding period is specified, a recipient may charge to the
award only allowable costs resulting from obligations incurred during
the funding period and any pre-award costs (see Sec. 32.25(d)(2)(i))
authorized by the DoD Component.
Property Standards
Sec. 32.30 Purpose of property standards.
Sections 32.31 through 32.37 set forth uniform standards governing
management and disposition of property furnished by the Federal
Government and property whose cost was charged to a project supported by
a Federal award. DoD Components shall require recipients to observe
these standards under awards and shall not impose additional
requirements, unless specifically required by Federal statute. The
recipient may use its own property management standards and procedures
provided it observes the provisions of Sec. Sec. 32.31 through 32.37.
Sec. 32.31 Insurance coverage.
Recipients shall, at a minimum, provide the equivalent insurance
coverage for real property and equipment acquired with Federal funds as
provided to property owned by the recipient. Federally-owned property
need not be insured unless required by the terms and conditions of the
award.
Sec. 32.32 Real property.
Each DoD Component that makes awards under which real property is
acquired in whole or in part with Federal funds shall prescribe
requirements for
[[Page 101]]
recipients concerning the use and disposition of such property. Unless
otherwise provided by statute, such requirements, at a minimum, shall
contain the following:
(a) Title to real property shall vest in the recipient subject to
the condition that the recipient shall use the real property for the
authorized purpose of the project as long as it is needed and shall not
encumber the property without approval of the DoD Component.
(b) The recipient shall obtain written approval by the grants
officer for the use of real property in other federally sponsored
projects when the recipient determines that the property is no longer
needed for the purpose of the original project. Use in other projects
shall be limited to those under federally sponsored projects (i.e.,
awards) or programs that have purposes consistent with those authorized
for support by the DoD Component.
(c) When the real property is no longer needed as provided in
paragraphs (a) and (b) of this section, the recipient shall request
disposition instructions from the DoD Component or its successor Federal
agency. The responsible Federal agency shall observe one or more of the
following disposition instructions:
(1) The recipient may be permitted to retain title without further
obligation to the Federal Government after it compensates the Federal
Government for that percentage of the current fair market value of the
property attributable to the Federal participation in the project.
(2) The recipient may be directed to sell the property under
guidelines provided by the DoD Component and pay the Federal Government
for that percentage of the current fair market value of the property
attributable to the Federal participation in the project (after
deducting actual and reasonable selling and fix-up expenses, if any,
from the sales proceeds). When the recipient is authorized or required
to sell the property, proper sales procedures shall be established that
provide for competition to the extent practicable and result in the
highest possible return.
(3) The recipient may be directed to transfer title to the property
to the Federal Government or to an eligible third party provided that,
in such cases, the recipient shall be entitled to compensation for its
attributable percentage of the current fair market value of the
property.
Sec. 32.33 Federally-owned and exempt property.
(a) Federally-owned property. (1) Title to federally-owned property
remains vested in the Federal Government. Recipients shall submit
annually an inventory listing of federally-owned property in their
custody to the DoD Component that made the award. Upon completion of the
award or when the property is no longer needed, the recipient shall
report the property to the DoD Component for further Federal agency
utilization.
(2) If the DoD Component that made the award has no further need for
the property, it shall be declared excess and either:
(i) Reported to the General Services Administration, in accordance
with the Federal Property and Administrative Services Act of 1949 (40
U.S.C. 483(b)(2)), as implemented by General Services Administration
regulations at 41 CFR 101-47.202; or
(ii) Disposed of by alternative methods pursuant to other specific
statutory authority. For example, DoD Components are authorized by the
Federal Technology Transfer Act (15 U.S.C. 3710(i)), to donate research
equipment to educational and non-profit organizations for the conduct of
technical and scientific education and research activities--donations
under this Act shall be in accordance with the DoD implementation of
E.O. 12999 (3 CFR, 1996 Comp., p. 180), ``Educational Technology:
Ensuring Opportunity for All Children in the Next Century,'' as
applicable. Appropriate instructions shall be issued to the recipient by
the DoD Component.
(b) Exempt property. (1) When statutory authority exists, a DoD
Component may vest title to property acquired with Federal funds in the
recipient without further obligation to the Federal Government and under
conditions the DoD Component considers appropriate. For example, under
31 U.S.C. 6306, DoD Components may so vest title to tangible personal
property
[[Page 102]]
under a grant or cooperative agreement for basic or applied research in
a nonprofit institution of higher education or a nonprofit organization
whose primary purpose is conducting scientific research. Such property
is ``exempt property.''
(2) As a matter of policy, DoD Components shall make maximum use of
the authority of 31 U.S.C. 6306 to vest title to exempt property in
institutions of higher education, without further obligation to the
Government, to enhance the university infrastructure for future
performance of defense research and related, science and engineering
education.
(3) DoD Components may establish conditions, in regulation or in
award terms and conditions, for vesting title to exempt property. Should
a DoD Component not establish conditions, title to exempt property upon
acquisition shall vest in the recipient without further obligation to
the Federal Government.
Sec. 32.34 Equipment.
(a) Title to equipment acquired by a recipient with Federal funds
shall vest in the recipient, subject to conditions of this section.
(b) The recipient shall not use equipment acquired with Federal
funds to provide services to non-Federal outside organizations for a fee
that is less than private companies charge for equivalent services,
unless specifically authorized by Federal statute, for as long as the
Federal Government retains an interest in the equipment.
(c) The recipient shall use the equipment in the project or program
for which it was acquired as long as needed, whether or not the project
or program continues to be supported by Federal funds and shall not
encumber the property without approval of the DoD Component that made
the award. When no longer needed for the original project or program,
the recipient shall use the equipment in connection with its other
federally-sponsored activities, in the following order of priority:
(1) First, activities sponsored by the DoD Component that funded the
original project.
(2) Second, activities sponsored by other DoD Components.
(3) Then, activities sponsored by other Federal agencies.
(d) During the time that equipment is used on the project or program
for which it was acquired, the recipient shall make it available for use
on other projects or programs if such other use will not interfere with
the work on the project or program for which the equipment was
originally acquired. First preference for such other use shall be given
to other projects or programs sponsored by the DoD Component that
financed the equipment; second preference shall be given to projects or
programs sponsored by other DoD Components; and third preference shall
be given to projects or programs sponsored by other Federal agencies. If
the property is owned by the Federal Government, use on other activities
not sponsored by the Federal Government shall be permissible if
authorized by the DoD Component that financed the property. User charges
shall be treated as program income.
(e) When acquiring replacement equipment, the recipient may use the
equipment to be replaced as trade-in or sell the equipment and use the
proceeds to offset the costs of the replacement equipment subject to the
approval of the DoD Component that financed the equipment.
(f) The recipient's property management standards for equipment
acquired with Federal funds and federally-owned property shall include
all of the following:
(1) Records for equipment and federally-owned property shall be
maintained accurately and shall include the following information:
(i) A description of the equipment or federally-owned property.
(ii) Manufacturer's serial number, model number, Federal stock
number, national stock number, or other identification number.
(iii) Source of the equipment or federally-owned property, including
the award number.
(iv) Whether title vests in the recipient or the Federal Government.
(v) Acquisition date (or date received, if the property was
furnished by the Federal Government) and cost.
(vi) Information from which one can calculate the percentage of
Federal
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participation in the cost of the equipment (not applicable to property
furnished by the Federal Government).
(vii) Location and condition of the equipment or federally-owned
property and the date the information was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data, including date of disposal and sales
price or the method used to determine current fair market value where a
recipient compensates the DoD Component that made the award for its
share.
(2) Property owned by the Federal Government shall be identified to
indicate Federal ownership.
(3) A physical inventory of equipment and federally-owned property
shall be taken and the results reconciled with the equipment records at
least once every two years. Any differences between quantities
determined by the physical inspection and those shown in the accounting
records shall be investigated to determine the causes of the difference.
The recipient shall, in connection with the inventory, verify the
existence, current utilization, and continued need for the equipment or
federally-owned property.
(4) A control system shall be in effect to insure adequate
safeguards to prevent loss, damage, or theft of the equipment or
federally-owned property. Any loss, damage, or theft of equipment or
federally-owned property shall be investigated and fully documented; if
the property was owned by the Federal Government, the recipient shall
promptly notify the DoD Component.
(5) Adequate maintenance procedures shall be implemented to keep the
equipment or federally-owned property in good condition.
(6) Where the recipient is authorized or required to sell the
equipment, proper sales procedures shall be established which provide
for competition to the extent practicable and result in the highest
possible return.
(g) When the recipient no longer needs the equipment, the equipment
may be used for other activities in accordance with the following
standards.
(1) For equipment with a current per unit fair market value of
$5,000 or more, the recipient may retain the equipment for other uses
provided that compensation is made to the DoD Component that originally
made the award or its successor. The amount of compensation shall be
computed by applying the percentage of Federal participation in the cost
of the original project or program to the current fair market value of
the equipment.
(2) If the recipient has no need for the equipment, the recipient
shall request disposition instructions from the DoD Component. The DoD
Component shall issue instructions to the recipient no later than 120
calendar days after the recipient's request and the following procedures
shall govern:
(i) The grants officer, in consultation with the program manager,
shall judge whether the age and nature of the equipment warrant a
screening procedure to determine whether the equipment is useful to a
DoD Component or other Federal agency. If a screening procedure is
warranted:
(A) The DoD Component shall determine whether the equipment can be
used to meet DoD requirements.
(B) If no DoD requirement exists, the availability of the equipment
shall be reported to the General Services Administration by the DoD
Component to determine whether a requirement for the equipment exists in
other Federal agencies.
(ii) If so instructed or if disposition instructions are not issued
within 120 calendar days after the recipient's request, the recipient
shall sell the equipment and reimburse the DoD Component that made the
award an amount computed by applying to the sales proceeds the
percentage of Federal participation in the cost of the original project
or program. However, the recipient shall be permitted to deduct and
retain from the Federal share $500 or ten percent of the proceeds,
whichever is less, for the recipient's selling and handling expenses.
(iii) If the recipient is instructed to ship the equipment
elsewhere, the recipient shall be reimbursed by the Federal Government
by an amount which is computed by applying the percentage of the
recipient's participation in the cost of the original project or program
to the current fair market value of the equipment, plus any reasonable
[[Page 104]]
shipping or interim storage costs incurred.
(iv) If the recipient is instructed to otherwise dispose of the
equipment, the recipient shall be reimbursed by the DoD Component that
made the award for such costs incurred in its disposition.
(h) The DoD Component may reserve the right to transfer the title to
the Federal Government or to a third party named by the Federal
Government when such third party is otherwise eligible under existing
statutes. Such transfer shall be subject to the following standards.
(1) The equipment shall be appropriately identified in the award or
otherwise made known to the recipient in writing. For exempt property,
in accordance with Sec. 32.33(b)(3), note that this identification must
occur by the time of award, or title to the property vests in the
recipient without further obligation to the Government.
(2) The DoD Component shall issue disposition instructions within
120 calendar days after receipt of a final inventory. The final
inventory shall list all equipment acquired with award funds and
federally-owned property. If the DoD Component fails to issue
disposition instructions for equipment within the 120 calendar day
period, the recipient shall apply the standards of paragraph (g) of this
section.
(3) When the DoD Component exercises its right to take title, the
equipment shall be subject to the provisions for federally-owned
property.
Sec. 32.35 Supplies.
(a) Title to supplies shall vest in the recipient upon acquisition.
If there is a residual inventory of unused supplies exceeding $5,000 in
total aggregate value upon termination or completion of the project or
program and the supplies are not needed for any other federally-
sponsored project or program, the recipient shall retain the supplies
for use on non-Federal sponsored activities or sell them, but shall, in
either case, compensate the Federal Government for its share. The amount
of compensation shall be computed in the same manner as for equipment.
(b) The recipient shall not use supplies acquired with Federal funds
to provide services to non-Federal outside organizations for a fee that
is less than private companies charge for equivalent services, unless
specifically authorized by Federal statute as long as the Federal
Government retains an interest in the supplies.
Sec. 32.36 Intangible property.
(a) The recipient may copyright any work that is subject to
copyright and was developed, or for which ownership was purchased, under
an award. DoD Components reserve a royalty-free, nonexclusive and
irrevocable right to reproduce, publish, or otherwise use the work for
Federal purposes, and to authorize others to do so.
(b) Recipients are subject to applicable regulations governing
patents and inventions, including Governmentwide regulations issued by
the Department of Commerce at 37 CFR part 401, ``Rights to Inventions
Made by Nonprofit Organizations and Small Business Firms Under
Government Grants, Contracts and Cooperative Agreements.''
(c) The Federal Government has the right to:
(1) Obtain, reproduce, publish or otherwise use the data first
produced under an award; and
(2) Authorize others to receive, reproduce, publish, or otherwise
use such data for Federal purposes.
(d)(1) In addition, in response to a Freedom of Information Act
(FOIA) request for research data relating to published research findings
produced under an award that were used by the Federal Government in
developing an agency action that has the force and effect of law, the
DoD Component that made the award shall request, and the recipient shall
provide, within a reasonable time, the research data so that they can be
made available to the public through the procedures established under
the FOIA. If the DoD Component that made the award obtains the research
data solely in response to a FOIA request, the agency may charge the
requester a reasonable fee equaling the full incremental cost of
obtaining the research data. This fee should reflect costs incurred by
the agency, the recipient, and applicable subrecipients. This fee is in
addition to any fees the
[[Page 105]]
agency may assess under the FOIA (5 U.S.C. 552(a)(4)(A)).
(2) The following definitions apply for purposes of this paragraph
(d):
(i) Research data is defined as the recorded factual material
commonly accepted in the scientific community as necessary to validate
research findings, but not any of the following: preliminary analyses,
drafts of scientific papers, plans for future research, peer reviews, or
communications with colleagues. This ``recorded'' material excludes
physical objects (e.g., laboratory samples). Research data also do not
include:
(A) Trade secrets, commercial information, materials necessary to be
held confidential by a researcher until they are published, or similar
information which is protected under law; and
(B) Personnel and medical information and similar information the
disclosure of which would constitute a clearly unwarranted invasion of
personal privacy, such as information that could be used to identify a
particular person in a research study.
(ii) Published is defined as either when:
(A) Research findings are published in a peer-reviewed scientific or
technical journal; or
(B) A Federal agency publicly and officially cites the research
findings in support of an agency action that has the force and effect of
law.
(iii) Used by the Federal Government in developing an agency action
that has the force and effect of law is defined as when an agency
publicly and officially cites the research findings in support of an
agency action that has the force and effect of law.
(e) Title to intangible property and debt instruments acquired under
an award or subaward (rather than developed or produced under the award
or subaward) vests upon acquisition in the recipient. The recipient
shall use that property for the originally-authorized purpose, and the
recipient shall not encumber the property without approval of the DoD
Component that made the award. When no longer needed for the originally
authorized purpose, disposition of the intangible property shall occur
in accordance with the provisions of Sec. 32.34(g).
[63 FR 12188, Mar. 12, 1998, as amended at 65 FR 14407, 14416, Mar. 16,
2000]
Sec. 32.37 Property trust relationship.
Real property, equipment, intangible property and debt instruments
that are acquired or improved with Federal funds shall be held in trust
by the recipient as trustee for the beneficiaries of the project or
program under which the property was acquired or improved. DoD
Components may require recipients to record liens or other appropriate
notices of record to indicate that personal or real property has been
acquired or improved with Federal funds and that use and disposition
conditions apply to the property.
Procurement Standards
Sec. 32.40 Purpose of procurement standards.
Sections 32.41 through 32.48 set forth standards for use by
recipients in establishing procedures for the procurement of supplies
and other expendable property, equipment, real property and other
services with Federal funds. These standards are furnished to ensure
that such materials and services are obtained in an effective manner and
in compliance with the provisions of applicable Federal statutes and
executive orders.
Sec. 32.41 Recipient responsibilities.
The standards contained in this section do not relieve the recipient
of the contractual responsibilities arising under its contract(s). The
recipient is the responsible authority, without recourse to the DoD
Component that made the award, regarding the settlement and satisfaction
of all contractual and administrative issues arising out of procurements
entered into in support of an award or other agreement. This includes
disputes, claims, protests of award, source evaluation or other matters
of a contractual nature. Matters concerning violation of statute are to
be referred to such Federal, State or local authority as may have proper
jurisdiction.
[[Page 106]]
Sec. 32.42 Codes of conduct.
The recipient shall maintain written standards of conduct governing
the performance of its employees engaged in the award and administration
of contracts. No employee, officer, or agent shall participate in the
selection, award, or administration of a contract supported by Federal
funds if a real or apparent conflict of interest would be involved. Such
a conflict would arise when the employee, officer, or agent, any member
of his or her immediate family, his or her partner, or an organization
which employs or is about to employ any of the parties indicated herein,
has a financial or other interest in the firm selected for an award. The
officers, employees, and agents of the recipient shall neither solicit
nor accept gratuities, favors, or anything of monetary value from
contractors, or parties to subagreements. However, recipients may set
standards for situations in which the financial interest is not
substantial or the gift is an unsolicited item of nominal value. The
standards of conduct shall provide for disciplinary actions to be
applied for violations of such standards by officers, employees, or
agents of the recipient.
Sec. 32.43 Competition.
All procurement transactions shall be conducted in a manner to
provide, to the maximum extent practical, open and free competition. The
recipient shall be alert to organizational conflicts of interest as well
as noncompetitive practices among contractors that may restrict or
eliminate competition or otherwise restrain trade. In order to ensure
objective contractor performance and eliminate unfair competitive
advantage, contractors that develop or draft specifications,
requirements, statements of work, invitations for bids and/or requests
for proposals shall be excluded from competing for such procurements.
Awards shall be made to the bidder or offeror whose bid or offer is
responsive to the solicitation and is most advantageous to the
recipient, price, quality and other factors considered. Solicitations
shall clearly set forth all requirements that the bidder or offeror
shall fulfill in order for the bid or offer to be evaluated by the
recipient. Any and all bids or offers may be rejected when it is in the
recipient's interest to do so.
Sec. 32.44 Procurement procedures.
(a) All recipients shall establish written procurement procedures.
These procedures shall provide, at a minimum, that:
(1) Recipients avoid purchasing unnecessary items;
(2) Where appropriate, an analysis is made of lease and purchase
alternatives to determine which would be the most economical and
practical procurement; and
(3) Solicitations for goods and services provide for all of the
following:
(i) A clear and accurate description of the technical requirements
for the material, product or service to be procured. In competitive
procurements, such a description shall not contain features which unduly
restrict competition.
(ii) Requirements which the bidder/offeror must fulfill and all
other factors to be used in evaluating bids or proposals.
(iii) A description, whenever practicable, of technical requirements
in terms of functions to be performed or performance required, including
the range of acceptable characteristics or minimum acceptable standards.
(iv) The specific features of ``brand name or equal'' descriptions
that bidders are required to meet when such items are included in the
solicitation.
(v) The acceptance, to the extent practicable and economically
feasible, of products and services dimensioned in the metric system of
measurement.
(vi) Preference, to the extent practicable and economically
feasible, for products and services that conserve natural resources and
protect the environment and are energy efficient.
(b) Positive efforts shall be made by recipients to utilize small
businesses, minority-owned firms, and women's business enterprises,
whenever possible. Recipients of Federal awards shall take all of the
following steps to further this goal:
(1) Ensure that small businesses, minority-owned firms, and women's
business enterprises are used to the fullest extent practicable.
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(2) Make information on forthcoming opportunities available and
arrange time frames for purchases and contracts to encourage and
facilitate participation by small businesses, minority-owned firms, and
women's business enterprises.
(3) Consider in the contract process whether firms competing for
larger contracts intend to subcontract with small businesses, minority-
owned firms, and women's business enterprises.
(4) Encourage contracting with consortiums of small businesses,
minority-owned firms and women's business enterprises when a contract is
too large for one of these firms to handle individually.
(5) Use the services and assistance, as appropriate, of such
organizations as the Small Business Administration and the Department of
Commerce's Minority Business Development Agency in the solicitation and
utilization of small businesses, minority-owned firms and women's
business enterprises.
(c) The type of procuring instruments used (e.g., fixed price
contracts, cost reimbursable contracts, purchase orders, and incentive
contracts) shall be determined by the recipient but shall be appropriate
for the particular procurement and for promoting the best interest of
the program or project involved. The ``cost-plus-a-percentage-of-cost''
or ``percentage of construction cost'' methods of contracting shall not
be used.
(d) Contracts shall be made only with responsible contractors who
possess the potential ability to perform successfully under the terms
and conditions of the proposed procurement. Consideration shall be given
to such matters as contractor integrity, record of past performance,
financial and technical resources or accessibility to other necessary
resources. In certain circumstances, contracts with certain parties are
restricted by the DoD implementation, in 2 CFR part 1125, of OMB
guidance on nonprocurement debarment and suspension (2 CFR part 180)
(e) Recipients shall, on request, make available for the DoD
Component's pre-award review, procurement documents such as request for
proposals or invitations for bids, independent cost estimates, etc.,
when any of the following conditions apply:
(1) A recipient's procurement procedures or operation fails to
comply with the procurement standards in this part.
(2) The procurement is expected to exceed the simplified acquisition
threshold fixed at 41 U.S.C. 403 (11) (currently $100,000) and is to be
awarded without competition or only one bid or offer is received in
response to a solicitation.
(3) The procurement, which is expected to exceed the simplified
acquisition threshold, specifies a ``brand name'' product.
(4) The proposed award over the simplified acquisition threshold is
to be awarded to other than the apparent low bidder under a sealed bid
procurement.
(5) A proposed contract modification changes the scope of a contract
or increases the contract amount by more than the amount of the
simplified acquisition threshold.
[63 FR 12188, Mar. 12, 1998, as amended at 72 FR 34998, June 26, 2007]
Sec. 32.45 Cost and price analysis.
Some form of cost or price analysis shall be made and documented in
the procurement files in connection with every procurement action. Price
analysis may be accomplished in various ways, including the comparison
of price quotations submitted, market prices and similar indicia,
together with discounts. Cost analysis is the review and evaluation of
each element of cost to determine reasonableness, allocability and
allowability.
Sec. 32.46 Procurement records.
Procurement records and files for purchases in excess of the
simplified acquisition threshold shall include the following at a
minimum:
(a) Basis for contractor selection;
(b) Justification for lack of competition when competitive bids or
offers are not obtained; and
(c) Basis for award cost or price.
Sec. 32.47 Contract administration.
A system for contract administration shall be maintained to ensure
contractor conformance with the terms,
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conditions and specifications of the contract and to ensure adequate and
timely follow up of all purchases. Recipients shall evaluate contractor
performance and document, as appropriate, whether contractors have met
the terms, conditions and specifications of the contract.