[Title 2 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2021 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          

          Title 2

Grants and Agreements

                         Revised as of January 1, 2021

          Containing a codification of documents of general 
          applicability and future effect

          As of January 1, 2021
                    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.................................................     vii

  Title 2:
          SUBTITLE A--Office of Management and Budget Guidance 
          for Grants and Agreements                                  3
          Chapter I--Office of Management and Budget 
          Governmentwide Guidance for Grants and Agreements          9
          Chapter II--Office of Management and Budget Guidance      79
    SUBTITLE B--Federal Agency Regulations for Grants and 
      Agreements
          Chapter III--Department of Health and Human Services     249
          Chapter IV--Department of Agriculture                    257
          Chapter VI--Department of State                          297
          Chapter VII--Agency for International Development        303
          Chapter VIII--Department of Veterans Affairs             321
          Chapter IX--Department of Energy                         329
          Chapter X--Department of Treasury                        377
          Chapter XI--Department of Defense                        381
          Chapter XII--Department of Transportation                505
          Chapter XIII--Department of Commerce                     511
          Chapter XIV--Department of the Interior                  519

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          Chapter XV--Environmental Protection Agency              545
          Chapter XVIII--National Aeronautics and Space 
          Administration                                           565
          Chapter XX--United States Nuclear Regulatory 
          Commission                                               577
          Chapter XXII--Corporation for National and Community 
          Service                                                  581
          Chapter XXIII--Social Security Administration            587
          Chapter XXIV--Department of Housing and Urban 
          Development                                              593
          Chapter XXV--National Science Foundation                 605
          Chapter XXVI--National Archives and Records 
          Administration                                           609
          Chapter XXVII--Small Business Administration             613
          Chapter XXVIII--Department of Justice                    621
          Chapter XXIX--Department of Labor                        627
          Chapter XXX--Department of Homeland Security             637
          Chapter XXXI--Institute of Museum and Library 
          Services                                                 645
          Chapter XXXII--National Endowment for the Arts           655
          Chapter XXXIII--National Endowment for the 
          Humanities                                               661
          Chapter XXXIV--Department of Education                   667
          Chapter XXXV--Export-Import Bank of the United 
          States                                                   683
          CHAPTER XXXVI--Office of National Drug Control 
          Policy, Executive Office of the President                687
          Chapter XXXVII--Peace Corps                              691
          Chapter LVIII--Election Assistance Commission            695
          CHAPTER LIX--Gulf Coast Ecosystem Restoration 
          Council                                                  701
  Finding Aids:

[[Page v]]

      Table of CFR Titles and Chapters........................     707
      Alphabetical List of Agencies Appearing in the CFR......     727
      List of CFR Sections Affected...........................     737

[[Page vi]]





                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 2 CFR 1.100 refers 
                       to title 2, part 1, 
                       section 100.

                     ----------------------------

[[Page vii]]



                               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 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
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 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
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    To determine whether a Code volume has been amended since its 
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EFFECTIVE AND EXPIRATION DATES

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inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page viii]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
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requirements.

PAST PROVISIONS OF THE CODE

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``[RESERVED]'' TERMINOLOGY

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not dropped in error.

INCORPORATION BY REFERENCE

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This material, like any other properly issued regulation, has the force 
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    What is a proper incorporation by reference? The Director of the 
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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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    An index to the text of ``Title 3--The President'' is carried within 
that volume.

[[Page ix]]

    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
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the revision dates of the 50 CFR titles.

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of the Federal Register and the Government Publishing Office. It is 
available at www.ecfr.gov.

    Oliver A. Potts,
    Director,
    Office of the Federal Register
    January 1, 2021.







[[Page xi]]



                               THIS TITLE

    Title 2--Grants and Agreements is composed of one volume. This 
volume is comprised of Subtitle A--Office of Management and Budget 
Guidance for Grants and Agreements and Subtitle B--Federal Agency 
Regulations for Grants and Agreements. The contents of this volume 
represent all current regulations codified under this title of the CFR 
as of January 1, 2021.

    For this volume, Susannah C. Hurley 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 2--GRANTS AND AGREEMENTS




  --------------------------------------------------------------------

  SUBTITLE A--Office of Management and Budget Guidance for Grants and 
                                Agreements

                                                                    Part

chapter i--Office of Management and Budget Governmentwide 
  Guidance for Grants and Agreements........................         175

chapter ii--Office of Management and Budget Guidance........         200

    SUBTITLE B--Federal Agency Regulations for Grants and Agreements 

chapter iii--Department of Health and Human Services........         376

chapter iv--Department of Agriculture.......................         417

chapter vi--Department of State.............................         601

chapter vii--Agency for International Development...........         780

chapter viii--Department of Veterans Affairs................         801

chapter ix--Department of Energy............................         901

chapter x--Department of Treasury...........................        1000

chapter xi--Department of Defense...........................        1125

chapter xii--Department of Transportation...................        1200

chapter xiii--Department of Commerce........................        1326

chapter xiv--Department of the Interior.....................        1400

chapter xv--Environmental Protection Agency.................        1532

[[Page 2]]


chapter xviii--National Aeronautics and Space Administration        1880

chapter xx--United States Nuclear Regulatory Commission.....        2000

chapter xxii--Corporation for National and Community Service        2200

chapter xxiii--Social Security Administration...............        2336

chapter xxiv--Department of Housing and Urban Development...        2424

chapter xxv--National Science Foundation....................        2520

chapter xxvi--National Archives and Records Administration..        2600

chapter xxvii--Small Business Administration................        2700

chapter xxviii--Department of Justice.......................        2867

chapter xxix--Department of Labor...........................        2900

chapter xxx--Department of Homeland Security................        3000

chapter xxxi--Institute of Museum and Library Services......        3185

chapter xxxii--National Endowment for the Arts..............        3254

chapter xxxiii--National Endowment for the Humanities.......        3369

chapter xxxiv--Department of Education......................        3485

chapter xxxv--Export-Import Bank of the United States.......        3513

chapter xxxvi--Office of National Drug Control Policy, 
  Executive Office of the President.........................        3603

chapter xxxvii--Peace Corps.................................        3700

chapter lviii--Election Assistance Commission...............        5800

chapter lix--Gulf Coast Ecosystem Restoration Council.......        5900

[[Page 3]]

  Subtitle A--Office of Management and Budget Guidance for Grants and 
                               Agreements

  --------------------------------------------------------------------

Part                                                                Page
1               About Title 2 of the Code of Federal 
                    Regulations and Subtitle A..............           5

[[Page 5]]



PART 1_ABOUT TITLE 2 OF THE CODE OF FEDERAL REGULATIONS AND
SUBTITLE A--Table of Contents



              Subpart A_Introduction to Title 2 of the CFR

Sec.
1.100 Content of this title.
1.105 Organization and subtitle content.
1.110 Issuing authorities.

                  Subpart B_Introduction to Subtitle A

1.200 Purpose of chapters I and II.
1.205 Applicability to grants and other funding instruments.
1.210 Applicability to Federal agencies and others.
1.215 Relationship to previous issuances.
1.220 Federal agency implementation of this subtitle.
1.230 Maintenance of this subtitle.

         Subpart C_Responsibilities of OMB and Federal Agencies

1.300 OMB responsibilities.
1.305 Federal agency responsibilities.

    Authority: 31 U.S.C. 503; 31 U.S.C. 1111; 41 U.S.C. 405; 
Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR 10737, 3 CFR, 1966-
1970, p. 939.

    Source: 69 FR 26280, May 11, 2004, unless otherwise noted.



              Subpart A_Introduction to Title 2 of the CFR



Sec.  1.100  Content of this title.

    This title contains--
    (a) Office of Management and Budget (OMB) guidance to Federal 
agencies on government-wide policies and procedures for the award and 
administration of grants and agreements; and
    (b) Federal agency regulations implementing that OMB guidance.



Sec.  1.105  Organization and subtitle content.

    (a) This title is organized into two subtitles.
    (b) The OMB guidance described in Sec.  1.100(a) is published in 
subtitle A. Publication of the OMB guidance in the CFR does not change 
its nature--it is guidance and not regulation.
    (c) Each Federal agency that publishes regulations implementing the 
OMB guidance has a chapter in subtitle B in which it issues those 
regulations. The Federal agency regulations in subtitle B differ in 
nature from the OMB guidance in subtitle A because the OMB guidance is 
not regulatory (Federal agency regulations in subtitle B may give 
regulatory effect to the OMB guidance, to the extent that the agency 
regulations require compliance with all or portions of the guidance).



Sec.  1.110  Issuing authorities.

    OMB issues this subtitle. Each Federal agency that has a chapter in 
subtitle B of this title issues that chapter.



                  Subpart B_Introduction to Subtitle A



Sec.  1.200  Purpose of chapters I and II.

    (a) Chapters I and II of subtitle A provide OMB guidance to Federal 
agencies that helps ensure consistent and uniform government-wide 
policies and procedures for management of the agencies' grants and 
agreements.
    (b) There are two chapters for publication of the guidance because 
portions of it may be revised as a result of ongoing efforts to 
streamline and simplify requirements for the award and administration of 
grants and other financial assistance (and thereby implement the Federal 
Financial Assistance Management Improvement Act of 1999, Pub. L. 106-
107).
    (c) The OMB guidance in its initial form--before completion of 
revisions described in paragraph (b) of this section--is published in 
chapter II of this subtitle. When revisions to a part of the guidance 
are finalized, that part is published in chapter I and removed from 
chapter II.



Sec.  1.205  Applicability to grants and other funding instruments.

    The types of instruments that are subject to the guidance in this 
subtitle vary from one portion of the guidance to another (note that 
each part identifies the types of instruments to which it applies). All 
portions of the guidance apply to grants and cooperative agreements, 
some portions also apply to other types of financial assistance or 
nonprocurement instruments, and some portions also apply to procurement 
contracts. For example, the:

[[Page 6]]

    (a) Guidance on debarment and suspension in part 180 of this 
subtitle applies broadly to all financial assistance and other 
nonprocurement transactions, and not just to grants and cooperative 
agreements.
    (b) Cost principles in parts 220, 225 and 230 of this subtitle apply 
to procurement contracts, as well as to financial assistance, although 
those principles are implemented for procurement contracts through the 
Federal Acquisition Regulation in title 48 of the CFR, rather than 
through Federal agency regulations on grants and agreements in this 
title.

[70 FR 51863, Aug. 31, 2005]



Sec.  1.210  Applicability to Federal agencies and others.

    (a) This subtitle contains guidance that directly applies only to 
Federal agencies.
    (b) The guidance in this subtitle may affect others through each 
Federal agency's implementation of the guidance, portions of which may 
apply to--
    (1) The agency's awarding or administering officials;
    (2) Non-Federal entities that receive or apply for the agency's 
grants or agreements or receive subawards under those grants or 
agreements; or
    (3) Any other entities involved in agency transactions subject to 
the guidance in this chapter.



Sec.  1.215  Relationship to previous issuances.

    Although some of the guidance was organized differently within OMB 
circulars or other documents, much of the guidance in this subtitle 
existed prior to the establishment of title 2 of the CFR. Specifically:

 
------------------------------------------------------------------------
                                                       Previously was in
        Guidance in * * *              On * * *              * * *
------------------------------------------------------------------------
(a) Chapter I, part 180.........  Nonprocurement      OMB guidance that
                                   debarment and       conforms with the
                                   suspension.         government-wide
                                                       common rule (see
                                                       60 FR 33036, June
                                                       26, 1995).
(b) Chapter I, part 182.........  Drug-free           OMB guidance (54
                                   workplace           FR 4946, January
                                   requirements.       31, 1989) and a
                                                       government-wide
                                                       common rule (as
                                                       amended at 68 FR
                                                       66534, November
                                                       26, 2003).
(c) Chapter II, part 200........  Uniform             OMB Circulars A-
                                   administrative      21, ``Cost
                                   requirements,       Principles for
                                   cost principles,    Educational
                                   and audit           Institutions''
                                   requirements for    (Chapter II, part
                                   federal awards.     225); A-87,
                                                       ``Cost Principles
                                                       for State, Local
                                                       and Indian Tribal
                                                       Governments''
                                                       (Chapter II, part
                                                       225); A-89,
                                                       ``Federal
                                                       Domestic
                                                       Assistance
                                                       Program
                                                       Information'';
                                                       ''; A-102 and a
                                                       government-wide
                                                       common rule (53
                                                       FR 8034, March
                                                       11, 1988); A-110,
                                                       ``Uniform
                                                       Administrative
                                                       Requirements for
                                                       Awards and Other
                                                       Agreements with
                                                       Institutions of
                                                       Higher Education,
                                                       Hospitals, and
                                                       Other Nonprofit
                                                       Organizations''
                                                       (Chapter II, part
                                                       215); A-122,
                                                       ``Cost Principles
                                                       for Non-Profit
                                                       Organizations''
                                                       (Chapter II, part
                                                       230); and A-133
                                                       ``Audits of
                                                       States, Local
                                                       Governments and
                                                       Non-Profit
                                                       Organizations''.
------------------------------------------------------------------------


[79 FR 75878, Dec. 19, 2014]



Sec.  1.220  Federal agency implementation of this subtitle.

    A Federal agency that awards grants and agreements subject to the 
guidance in this subtitle implements the guidance in agency regulations 
in subtitle B of this title and/or in policy and procedural issuances, 
such as internal instructions to the agency's awarding and administering 
officials. An applicant or recipient would see the effect of that 
implementation in the organization and content of the agency's 
announcements of funding opportunities and in its award terms and 
conditions.



Sec.  1.230  Maintenance of this subtitle.

    OMB issues guidance in this subtitle after publication in the 
Federal Register. Any portion of the guidance that has a potential 
impact on the public is published with an opportunity for public 
comment.

[[Page 7]]



         Subpart C_Responsibilities of OMB and Federal Agencies



Sec.  1.300  OMB responsibilities.

    OMB is responsible for:
    (a) Issuing and maintaining the guidance in this subtitle, as 
described in Sec.  1.230.
    (b) Interpreting the policy requirements in this subtitle.
    (c) Reviewing Federal agency regulations implementing the 
requirements of this subtitle, as required by Executive Order 12866.
    (d) Conducting broad oversight of government-wide compliance with 
the guidance in this subtitle.
    (e) Performing other OMB functions specified in this subtitle.



Sec.  1.305  Federal agency responsibilities.

    The head of each Federal agency that awards and administers grants 
and agreements subject to the guidance in this subtitle is responsible 
for:
    (a) Implementing the guidance in this subtitle.
    (b) Ensuring that the agency's components and subcomponents comply 
with the agency's implementation of the guidance.
    (c) Performing other functions specified in this subtitle.

[[Page 9]]



 CHAPTER I--OFFICE OF MANAGEMENT AND BUDGET GOVERNMENTWIDE GUIDANCE FOR 
                          GRANTS AND AGREEMENTS




  --------------------------------------------------------------------
Part                                                                Page
2-24

[Reserved]

25              Universal identifier and system for award 
                    management..............................          11
26-169

[Reserved]

170             Reporting subaward and Executive 
                    compensation information................          16
171-174

[Reserved]

175             Award term for trafficking in persons.......          20
176             Award terms for assistance agreements that 
                    include funds under the American 
                    Recovery and Reinvestment Act of 2009, 
                    Public Law 111-5........................          22
177-179

[Reserved]

180             OMB guidelines to agencies on governmentwide 
                    debarment and suspension 
                    (nonprocurement)........................          43
181

[Reserved]

182             Governmentwide requirements for drug-free 
                    workplace (financial assistance)........          68
183             Never contract with the enemy...............          75
184-199

[Reserved]

[[Page 11]]







                          PARTS 2	24 [RESERVED]



PART 25_UNIVERSAL IDENTIFIER AND SYSTEM FOR AWARD MANAGEMENT-
-Table of Contents



                            Subpart A_General

Sec.
25.100 Purposes of this part.
25.105 Types of awards to which this part applies.
25.110 Exceptions to this part.

                            Subpart B_Policy

25.200 Requirements for notice of funding opportunities, regulations, 
          and application instructions.
25.205 Effect of noncompliance with a requirement to obtain a unique 
          entity identifier or register in the SAM.
25.210 Authority to modify agency application forms or formats.
25.215 Requirements for agency information systems.
25.220 Use of award term.

            Subpart C_Recipient Requirements of Subrecipients

25.300 Requirement for recipients to ensure subrecipients have a unique 
          entity identifier.

                          Subpart D_Definitions

25.400 Applicant.
25.401 Federal Awarding Agency.
25.405 Federal Award.
25.406 Federal financial assistance.
25.407 Recipient.
25.410 System for Award Management (SAM).
25.415 Unique entity identifier.
25.425 For-profit organization.
25.430 Foreign organization.
25.431 Foreign public entity.
25.432 Highest level owner.
25.433 Indian Tribe (or ``Federally recognized Indian Tribe'').
25.440 Local government.
25.443 Non-Federal entity.
25.445 Nonprofit organization.
25.447 Predecessor.
25.450 State.
25.455 Subaward.
25.460 Subrecipient.
25.462 Subsidiary.
25.465 Successor.

Appendix A to Part 25--Award Term

    Authority: Pub. L. 109-282; 31 U.S.C. 6102.

    Source: 75 FR 55673, Sept. 14, 2010, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 25 appear at 79 FR 
75879, Dec. 19, 2014.



                            Subpart A_General



Sec.  25.100  Purposes of this part.

    This part provides guidance to Federal awarding agencies to 
establish:
    (a) The unique entity identifier as a universal identifier for 
Federal financial assistance applicants, as well as recipients and their 
direct subrecipients, and;
    (b) The System for Award Management (SAM) as the repository for 
standard information about applicants and recipients.

[75 FR 55673, Sept. 14, 2010, as amended at 79 FR 75879, Dec. 19, 2014; 
80 FR 54407, Sept. 10, 2015; 85 FR 49522, Aug. 13, 2020]



Sec.  25.105  Types of awards to which this part applies.

    This part applies to a Federal awarding agency's grants, cooperative 
agreements, loans, and other types of Federal financial assistance as 
defined in Sec.  25.406.

[85 FR 49522, Aug. 13, 2020]



Sec.  25.110  Exceptions to this part.

    (a) General. Through a Federal awarding agency's implementation of 
the guidance in this part, this part applies to all applicants and 
recipients of Federal awards, other than those exempted by statute or 
exempted in paragraphs (b) and (c) of this section that apply for or 
receive agency awards.
    (b) Exceptions for individuals. None of the requirements in this 
part apply to an individual who applies for or receives Federal 
financial assistance as a natural person (i.e., unrelated to any 
business or nonprofit organization he or she may own or operate in his 
or her name).
    (c) Other exceptions. (1) Under a condition identified in paragraph 
(c)(2) of this section, a Federal awarding agency may exempt an 
applicant or recipient from an applicable requirement to

[[Page 12]]

obtain a unique entity identifier and register in the SAM, or both.
    (i) In that case, the Federal awarding agency must use a generic 
unique entity identifier in data it reports to USAspending.gov if 
reporting for a prime award to the recipient is required by the Federal 
Funding Accountability and Transparency Act (Pub. L. 109-282, hereafter 
cited as ``Transparency Act'').
    (ii) Federal awarding agency use of a generic unique entity 
identifier should be used rarely for prime award reporting because it 
prevents prime awardees from being able to fulfill the subaward or 
executive compensation reporting required by the Transparency Act.
    (2) The conditions under which a Federal awarding agency may exempt 
an applicant or recipient are--
    (i) For any applicant or recipient, if the Federal awarding agency 
determines that it must protect information about the entity from 
disclosure if it is in the national security or foreign policy interests 
of the United States, or to avoid jeopardizing the personal safety of 
the applicant or recipient's staff or clients.
    (ii) For a foreign organization or foreign public entity applying 
for or receiving a Federal award or subaward for a project or program 
performed outside the United States valued at less than $25,000, if the 
Federal awarding agency deems it to be impractical for the entity to 
comply with the requirement(s). This exemption must be determined by the 
Federal awarding agency on a case-by-case basis while utilizing a risk-
based approach and does not apply if subawards are anticipated.
    (iii) For an applicant, if the Federal awarding agency makes a 
determination that there are exigent circumstances that prohibit the 
applicant from receiving a unique entity identifier and completing SAM 
registration prior to receiving a Federal award. In these instances, 
Federal awarding agencies must require the recipient to obtain a unique 
entity identifier and complete SAM registration within 30 days of the 
Federal award date.
    (3) Federal awarding agencies' use of generic unique entity 
identifier, as described in paragraphs (c)(1) and (2) of this section, 
should be rare. Having a generic unique entity identifier limits a 
recipient's ability to use Governmentwide systems that are needed to 
comply with some reporting requirements.
    (d) Class exceptions. OMB may allow exceptions for classes of 
Federal awards, applicants, and recipients subject to the requirements 
of this part when exceptions are not prohibited by statute.

[85 FR 49523, Aug. 13, 2020]



                            Subpart B_Policy



Sec.  25.200  Requirements for notice of funding opportunities, 
regulations, and application instructions.

    (a) Each Federal awarding agency that awards the types of Federal 
financial assistance defined in Sec.  25.406 must include the 
requirements described in paragraph (b) of this section in each notice 
of funding opportunity, regulation, or other issuance containing 
instructions for applicants that is issued on or after August 13, 2020.
    (b) The notice of funding opportunity, regulation, or other issuance 
must require each applicant that applies and does not have an exemption 
under Sec.  25.110 to:
    (1) Be registered in the SAM prior to submitting an application or 
plan;
    (2) Maintain an active SAM registration with current information, 
including information on a recipient's immediate and highest level owner 
and subsidiaries, as well as on all predecessors that have been awarded 
a Federal contract or grant within the last three years, if applicable, 
at all times during which it has an active Federal award or an 
application or plan under consideration by a Federal awarding agency; 
and
    (3) Provide its unique entity identifier in each application or plan 
it submits to the Federal awarding agency.
    (c) For purposes of this policy:
    (1) The applicant meets the Federal awarding agency's eligibility 
criteria and has the legal authority to apply and to receive the Federal 
award. For example, if a consortium applies for a

[[Page 13]]

Federal award to be made to the consortium as the recipient, the 
consortium must have a unique entity identifier. If a consortium is 
eligible to receive funding under a Federal awarding agency program but 
the agency's policy is to make the Federal award to a lead entity for 
the consortium, the unique entity identifier of the lead applicant will 
be used.
    (2) A notice of funding opportunity is any paper or electronic 
issuance that an agency uses to announce a funding opportunity, whether 
it is called a ``program announcement,'' ``notice of funding 
availability,'' ``broad agency announcement,'' ``research 
announcement,'' ``solicitation,'' or some other term.
    (3) To remain registered in the SAM database after the initial 
registration, the applicant is required to review and update its 
information in the SAM database on an annual basis from the date of 
initial registration or subsequent updates to ensure it is current, 
accurate and complete.

[85 FR 49523, Aug. 13, 2020]



Sec.  25.205  Effect of noncompliance with a requirement to obtain a 
unique entity identifier or register in the SAM.

    (a) A Federal awarding agency may not make a Federal award or 
financial modification to an existing Federal award to an applicant or 
recipient until the entity has complied with the requirements described 
in Sec.  25.200 to provide a valid unique entity identifier and maintain 
an active SAM registration with current information (other than any 
requirement that is not applicable because the entity is exempted under 
Sec.  25.110).
    (b) At the time a Federal awarding agency is ready to make a Federal 
award, if the intended recipient has not complied with an applicable 
requirement to provide a unique entity identifier or maintain an active 
SAM registration with current information, the Federal awarding agency:
    (1) May determine that the applicant is not qualified to receive a 
Federal award; and
    (2) May use that determination as a basis for making a Federal award 
to another applicant.

[85 FR 49523, Aug. 13, 2020]



Sec.  25.210  Authority to modify agency application forms or formats.

    To implement the policies in Sec. Sec.  25.200 and 25.205, a Federal 
awarding agency may add a unique entity identifier field to information 
collections previously approved by OMB, without having to obtain further 
approval to add the field.

[85 FR 49523, Aug. 13, 2020]



Sec.  25.215  Requirements for agency information systems.

    Each Federal awarding agency that awards Federal financial 
assistance (as defined in Sec.  25.406) must ensure that systems 
processing information related to the Federal awards, and other systems 
as appropriate, are able to accept and use the unique entity identifier 
as the universal identifier for Federal financial assistance applicants 
and recipients.

[85 FR 49523, Aug. 13, 2020]



Sec.  25.220  Use of award term.

    (a) To accomplish the purposes described in Sec.  25.100, a Federal 
awarding agency must include in each Federal award (as defined in Sec.  
25.405) the award term in appendix A to this part.
    (b) A Federal awarding agency may use different letters and numbers 
than those in appendix A to this part to designate the paragraphs of the 
Federal award term, if necessary, to conform the system of paragraph 
designations with the one used in other terms and conditions in the 
Federal awarding agency's Federal awards.

[85 FR 49524, Aug. 13, 2020]



            Subpart C_Recipient Requirements of Subrecipients

    Source: 85 FR 49524, Aug. 13, 2020, unless otherwise noted.

[[Page 14]]



Sec.  25.300  Requirement for recipients to ensure subrecipients 
have a unique entity identifier.

    (a) A recipient may not make a subaward to a subrecipient unless 
that subrecipient has obtained and provided to the recipient a unique 
entity identifier. Subrecipients are not required to complete full SAM 
registration to obtain a unique entity identifier.
    (b) A recipient must notify any potential subrecipients that the 
recipient cannot make a subaward unless the subrecipient has obtained a 
unique entity identifier as described in paragraph (a) of this section.



                          Subpart D_Definitions

    Source: 85 FR 49524, Aug. 13, 2020, unless otherwise noted.



Sec.  25.400  Applicant.

    Applicant, for the purposes of this part, means a non-Federal entity 
or Federal agency that applies for Federal awards.



Sec.  25.401  Federal Awarding Agency.

    Federal Awarding Agency has the meaning given in 2 CFR 200.1.



Sec.  25.405  Federal Award.

    Federal Award, for the purposes of this part, means an award of 
Federal financial assistance that a non-Federal entity or Federal agency 
received from a Federal awarding agency.



Sec.  25.406  Federal financial assistance.

    (a) Federal financial assistance, for the purposes of this part, 
means assistance that entities received or administer in the form of:
    (1) Grant;
    (2) Cooperative agreements (which does not include a cooperative 
research and development agreement pursuant to the Federal Technology 
Transfer Act of 1986, as amended (15 U.S.C. 3710a));
    (3) Loans;
    (4) Loan guarantees;
    (5) Subsidies;
    (6) Insurance;
    (7) Food commodities;
    (8) Direct appropriations;
    (9) Assessed or voluntary contributions; or
    (10) Any other financial assistance transaction that authorizes the 
non-Federal entity's expenditure of Federal funds.
    (b) Federal financial assistance, for the purposes of this part, 
does not include:
    (1) Technical assistance, which provides services in lieu of money; 
and
    (2) A transfer of title to federally owned property provided in lieu 
of money, even if the award is called a grant.



Sec.  25.407  Recipient.

    Recipient, for the purposes of this part, means a non-Federal entity 
or Federal agency that received a Federal award. This term also includes 
a non-Federal entity who administers Federal financial assistance awards 
on behalf of a Federal agency.



Sec.  25.410  System for Award Management (SAM).

    System for Award Management (SAM) has the meaning given in paragraph 
C.1 of the award term in appendix A to this part.



Sec.  25.415  Unique entity identifier.

    Unique entity identifier has the meaning given in paragraph C.2 of 
the award term in appendix A to this part.



Sec.  25.425  For-profit organization.

    For-profit organization means a non-Federal entity organized for 
profit. It includes, but is not limited to:
    (a) An ``S corporation'' incorporated under Subchapter S of the 
Internal Revenue Code;
    (b) A corporation incorporated under another authority;
    (c) A partnership;
    (d) A limited liability corporation or partnership; and
    (e) A sole proprietorship.



Sec.  25.430  Foreign organization.

    Foreign organization has the meaning given in 2 CFR 200.1.



Sec.  25.431  Foreign public entity.

    Foreign public entity has the meaning given in 2 CFR 200.1.

[[Page 15]]



Sec.  25.432  Highest level owner.

    Highest level owner has the meaning given in 2 CFR 200.1.



Sec.  25.433  Indian Tribe (or ``federally recognized Indian Tribe'').

    Indian Tribe (or ``federally recognized Indian Tribe'') has the 
meaning given in 2 CFR 200.1.



Sec.  25.440  Local government.

    Local government has the meaning given in 2 CFR 200.1.



Sec.  25.443  Non-Federal entity.

    Non-Federal entity, as it is used in this part, has the meaning 
given in paragraph C.3 of the award term in appendix A to this part.



Sec.  25.445  Nonprofit organization.

    Non-Federal organization, has the meaning given in 2 CFR 200.1.



Sec.  25.447  Predecessor.

    Predecessor means a non-Federal entity that is replaced by a 
successor and includes any predecessors of the predecessor.



Sec.  25.450  State.

    State has the meaning given in 2 CFR 200.1.



Sec.  25.455  Subaward.

    Subaward has the meaning given in 2 CFR 200.1.



Sec.  25.460  Subrecipient.

    Subrecipient has the meaning given in 2 CR 200.1.



Sec.  25.462  Subsidiary.

    Subsidiary has the meaning given in 2 CFR 200.1.



Sec.  25.465  Successor.

    Successor means a non-Federal entity that has replaced a predecessor 
by acquiring the assets and carrying out the affairs of the predecessor 
under a new name (often through acquisition or merger). The term 
``successor'' does not include new offices or divisions of the same 
company or a company that only changes its name.



                 Sec. Appendix A to Part 25--Award Term

  I. System for Award Management and Universal Identifier Requirements

             A. Requirement for System for Award Management

    Unless you are exempted from this requirement under 2 CFR 25.110, 
you as the recipient must maintain current information in the SAM. This 
includes information on your immediate and highest level owner and 
subsidiaries, as well as on all of your predecessors that have been 
awarded a Federal contract or Federal financial assistance within the 
last three years, if applicable, until you submit the final financial 
report required under this Federal award or receive the final payment, 
whichever is later. This requires that you review and update the 
information at least annually after the initial registration, and more 
frequently if required by changes in your information or another Federal 
award term.

               B. Requirement for Unique Entity Identifier

    If you are authorized to make subawards under this Federal award, 
you:
    1. Must notify potential subrecipients that no entity (see 
definition in paragraph C of this award term) may receive a subaward 
from you until the entity has provided its Unique Entity Identifier to 
you.
    2. May not make a subaward to an entity unless the entity has 
provided its Unique Entity Identifier to you. Subrecipients are not 
required to obtain an active SAM registration, but must obtain a Unique 
Entity Identifier.

                             C. Definitions

    For purposes of this term:
    1. System for Award Management (SAM) means the Federal repository 
into which a recipient must provide information required for the conduct 
of business as a recipient. Additional information about registration 
procedures may be found at the SAM internet site (currently at https://
www.sam.gov).
    2. Unique Entity Identifier means the identifier assigned by SAM to 
uniquely identify business entities.
    3. Entity includes non-Federal entities as defined at 2 CFR 200.1 
and also includes all of the following, for purposes of this part:
    a. A foreign organization;
    b. A foreign public entity;
    c. A domestic for-profit organization; and
    d. A domestic or foreign for-profit organization; and
    d. A Federal agency.
    4. Subaward has the meaning given in 2 CFR 200.1.
    5. Subrecipient has the meaning given in 2 CFR 200.1.

[85 FR 49525, Aug. 13, 2020]

[[Page 16]]

                         PARTS 26	169 [RESERVED]



PART 170_REPORTING SUBAWARD AND EXECUTIVE COMPENSATION INFORMATION-
-Table of Contents



                            Subpart A_General

Sec.
170.100 Purposes of this part.
170.105 Types of awards to which this part applies.
170.110 Exceptions to which this part applies.

                            Subpart B_Policy

170.200 Federal awarding agency reporting requirements.
170.210 Requirements for notices of funding opportunities, regulations, 
          and application instructions.
170.220 Award Term.

                          Subpart C_Definitions

170.300 Federal agency.
170.301 Federal awarding agency.
170.305 Federal award.
170.307 Foreign organization.
170.308 Foreign public entity.
170.310 Non-Federal entity.
170.315 Executive.
170.320 Federal financial assistance subject to the Transparency Act.
170.322 Recipient.
170.325 Subaward.
170.330 Total compensation.

Appendix A to Part 170--Award term

    Authority: Pub. L. 109-282; 31 U.S.C. 6102.

    Source: 75 FR 55669, Sept. 14, 2010, unless otherwise noted.



                            Subpart A_General



Sec.  170.100  Purposes of this part.

    This part provides guidance to Federal awarding agencies on 
reporting Federal awards to establish requirements for recipients' 
reporting of information on subawards and executive total compensation, 
as required by the Federal Funding Accountability and Transparency Act 
of 2006 (Pub. L. 109-282), as amended by section 6202 of Public Law 110-
252, hereafter referred to as ``the Transparency Act''.

[85 FR 49525, Aug. 13, 2020]



Sec.  170.105  Types of awards to which this part applies.

    This part applies to Federal awarding agency's grants, cooperative 
agreements, loans, and other forms of Federal financial assistance 
subject to the Transparency Act, as defined in Sec.  170.320.

[85 FR 49525, Aug. 13, 2020]



Sec.  170.110  Exceptions to which this part applies.

    (a) General. Through a Federal awarding agency's implementation of 
the guidance in this part, this part applies to recipients, other than 
those exempted by law or excepted in accordance with paragraphs (b) and 
(c) of this section, that--
    (1) Apply for or receive Federal awards; or
    (2) Receive subawards under Federal awards.
    (b) Exceptions. (1) None of the requirements in this part apply to 
an individual who applies for or receives a Federal award as a natural 
person (i.e., unrelated to any business or nonprofit organization he or 
she may own or operate in his or her name).
    (2) None of the requirements regarding reporting names and total 
compensation of a non-Federal entity's five most highly compensated 
executives apply unless in the non-Federal entity's preceding fiscal 
year, it received--
    (i) 80 percent or more of its annual gross revenue in Federal 
procurement contracts (and subcontracts) and Federal financial 
assistance awards subject to the Transparency Act, as defined at Sec.  
170.320 (and subawards); and
    (ii) $25,000,000 or more in annual gross revenue from Federal 
procurement contracts (and subcontracts) and Federal financial 
assistance awards subject to the Transparency Act, as defined at Sec.  
170.320; and
    (3) The public does not have access to information about the 
compensation of senior executives, unless otherwise publicly available, 
through periodic reports filed under section 13(a) or 15(d) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 
6104 of the Internal Revenue Code of 1986.

[[Page 17]]

    (c) Exceptions for classes of Federal awards or recipients. OMB may 
allow exceptions for classes of Federal awards or recipients subject to 
the requirements of this part when exceptions are not prohibited by 
statute.

[85 FR 49525, Aug. 13, 2020]



                            Subpart B_Policy



Sec.  170.200  Federal awarding agency reporting requirements.

    (a) Federal awarding agencies are required to publicly report 
Federal awards that equal or exceed the micro-purchase threshold and 
publish the required information on a public-facing, OMB-designated, 
governmentwide website and follow OMB guidance to support Transparency 
Act implementation.
    (b) Federal awarding agencies that obtain post-award data on 
subaward obligations outside of this policy should take the necessary 
steps to ensure that their recipients are not required, due to the 
combination of agency-specific and Transparency Act reporting 
requirements, to submit the same or similar data multiple times during a 
given reporting period.

[85 FR 49525, Aug. 13, 2020]



Sec.  170.210  Requirements for notices of funding opportunities,
regulations, and application instructions.

    (a) Each Federal awarding agency that makes awards of Federal 
financial assistance subject to the Transparency Act must include the 
requirements described in paragraph (b) of this section in each notice 
of funding opportunity, regulation, or other issuance containing 
instructions for applicants under which Federal awards may be made that 
are subject to Transparency Act reporting requirements, and is issued on 
or after the effective date of this part.
    (b) The notice of funding opportunity, regulation, or other issuance 
must require each non-Federal entity that applies for Federal financial 
assistance and that does not have an exception under Sec.  170.110(b) to 
have the necessary processes and systems in place to comply with the 
reporting requirements should they receive Federal funding.

[85 FR 49526, Aug. 13, 2020]



Sec.  170.220  Award term.

    (a) To accomplish the purposes described in Sec.  170.100, a Federal 
awarding agency must include the award term in appendix A to this part 
in each Federal award to a recipient under which the total funding is 
anticipated to equal or exceed $30,000 in Federal funding.
    (b) A Federal awarding agency, consistent with paragraph (a) of this 
section, is not required to include the award term in appendix A to this 
part if it determines that there is no possibility that the total amount 
of Federal funding under the Federal award will equal or exceed $30,000. 
However, the Federal awarding agency must subsequently modify the award 
to add the award term if changes in circumstances increase the total 
Federal funding under the award is anticipated to equal or exceed 
$30,000 during the period of performance.

[85 FR 49526, Aug. 13, 2020]



                          Subpart C_Definitions



Sec.  170.300  Federal agency.

    Federal agency means a Federal agency as defined at 5 U.S.C. 551(1) 
and further clarified by 5 U.S.C. 552(f).

[85 FR 49526, Aug. 13, 2020]



Sec.  170.301  Federal awarding agency.

    Federal awarding agency has the meaning given in 2 CFR 200.1.

[85 FR 49526, Aug. 13, 2020]



Sec.  170.305  Federal award.

    Federal award, for the purposes of this part, means an award of 
Federal financial assistance that a recipient receives directly from a 
Federal awarding agency.

[85 FR 49526, Aug. 13, 2020]



Sec.  170.307  Foreign organization.

    Foreign organization has the meaning given in 2 CFR 200.1.

[85 FR 49526, Aug. 13, 2020]

[[Page 18]]



Sec.  170.308  Foreign public entity.

    Foreign public entity has the meaning given in 2 CFR 200.1.

[85 FR 49526, Aug. 13, 2020]



Sec.  170.310  Non-Federal entity.

    Non-Federal entity has the meaning given in 2 CFR 200.1 and also 
includes all of the following, for the purposes of this part:
    (a) A foreign organization;
    (b) A foreign public entity; and
    (c) A domestic or foreign for-profit organization.

[85 FR 49526, Aug. 13, 2020]



Sec.  170.315  Executive.

    Executive means officers, managing partners, or any other employees 
in management positions.



Sec.  170.320  Federal financial assistance subject to the 
Transparency Act.

    Federal financial assistance subject to the Transparency Act means 
assistance that non-Federal entities described in Sec.  170.105 receive 
or administer in the form of--
    (a) Grants;
    (b) Cooperative agreements (which does not include cooperative 
research and development agreements pursuant to the Federal Technology 
Transfer Act of 1986, as amended (15 U.S.C. 3710a));
    (c) Loans;
    (d) Loan guarantees;
    (e) Subsidies;
    (f) Insurance;
    (g) Food commodities;
    (h) Direct appropriations;
    (i) Assessed and voluntary contributions; and
    (j) Other financial assistance transactions that authorize the non-
Federal entities' expenditure of Federal funds.
    (k) Federal financial assistance subject to the Transparency Act, 
does not include--
    (1) Technical assistance, which provides services in lieu of money;
    (2) A transfer of title to federally-owned property provided in lieu 
of money, even if the award is called a grant;
    (3) Any classified award; or
    (4) Any award funded in whole or in part with Recovery funds, as 
defined in section 1512 of the American Recovery and Reinvestment Act of 
2009 (Pub. L. 111-5).

[75 FR 55669, Sept. 14, 2010, as amended at 85 FR 49526, Aug. 13, 2020]



Sec.  170.322  Recipient.

    Recipient, for the purposes of this part, means a non-Federal entity 
or Federal agency that received a Federal award.

[85 FR 49526, Aug. 13, 2020]



Sec.  170.325  Subaward.

    Subaward has the meaning given in 2 CFR 200.1.

[85 FR 49526, Aug. 13, 2020]



Sec.  170.330  Total compensation.

    Total Compensation has the meaning given in paragraph e.5 of the 
award term in Appendix A to this part.



                 Sec. Appendix A to Part 170--Award Term

            I. Reporting Subawards and Executive Compensation

    a. Reporting of first-tier subawards.
    Applicability. Unless you are exempt as provided in paragraph d. of 
this award term, you must report each action that equals or exceeds 
$30,000 in Federal funds for a subaward to a non-Federal entity or 
Federal agency (see definitions in paragraph e. of this award term).
    2. Where and when to report.
    i. The non-Federal entity or Federal agency must report each 
obligating action described in paragraph a.1. of this award term to 
http://www.fsrs.gov.
    ii. For subaward information, report no later than the end of the 
month following the month in which the obligation was made. (For 
example, if the obligation was made on November 7, 2010, the obligation 
must be reported by no later than December 31, 2010.)
    3. What to report. You must report the information about each 
obligating action that the submission instructions posted at http://
www.fsrs.gov specify.
    b. Reporting total compensation of recipient executives for non-
Federal entities.
    1. Applicability and what to report. You must report total 
compensation for each of your five most highly compensated executives 
for the preceding completed fiscal year, if--
    i. The total Federal funding authorized to date under this Federal 
award equals or exceeds $30,000 as defined in 2 CFR 170.320;
    ii. in the preceding fiscal year, you received--

[[Page 19]]

    (A) 80 percent or more of your annual gross revenues from Federal 
procurement contracts (and subcontracts) and Federal financial 
assistance subject to the Transparency Act, as defined at 2 CFR 170.320 
(and subawards), and
    (B) $25,000,000 or more in annual gross revenues from Federal 
procurement contracts (and subcontracts) and Federal financial 
assistance subject to the Transparency Act, as defined at 2 CFR 170.320 
(and subawards); and,
    iii. The public does not have access to information about the 
compensation of the executives through periodic reports filed under 
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 
78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. 
(To determine if the public has access to the compensation information, 
see the U.S. Security and Exchange Commission total compensation filings 
at http://www.sec.gov/answers/execomp.htm.)
    2. Where and when to report. You must report executive total 
compensation described in paragraph b.1. of this award term:
    i. As part of your registration profile at https://www.sam.gov.
    ii. By the end of the month following the month in which this award 
is made, and annually thereafter.
    c. Reporting of Total Compensation of Subrecipient Executives.
    1. Applicability and what to report. Unless you are exempt as 
provided in paragraph d. of this award term, for each first-tier non-
Federal entity subrecipient under this award, you shall report the names 
and total compensation of each of the subrecipient's five most highly 
compensated executives for the subrecipient's preceding completed fiscal 
year, if--
    i. in the subrecipient's preceding fiscal year, the subrecipient 
received--
    (A) 80 percent or more of its annual gross revenues from Federal 
procurement contracts (and subcontracts) and Federal financial 
assistance subject to the Transparency Act, as defined at 2 CFR 170.320 
(and subawards) and,
    (B) $25,000,000 or more in annual gross revenues from Federal 
procurement contracts (and subcontracts), and Federal financial 
assistance subject to the Transparency Act (and subawards); and
    ii. The public does not have access to information about the 
compensation of the executives through periodic reports filed under 
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 
78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. 
(To determine if the public has access to the compensation information, 
see the U.S. Security and Exchange Commission total compensation filings 
at http://www.sec.gov/answers/execomp.htm.)
    2. Where and when to report. You must report subrecipient executive 
total compensation described in paragraph c.1. of this award term:
    i. To the recipient.
    ii. By the end of the month following the month during which you 
make the subaward. For example, if a subaward is obligated on any date 
during the month of October of a given year (i.e., between October 1 and 
31), you must report any required compensation information of the 
subrecipient by November 30 of that year.
    d. Exemptions.
    If, in the previous tax year, you had gross income, from all 
sources, under $300,000, you are exempt from the requirements to report:
    i. Subawards, and
    ii. The total compensation of the five most highly compensated 
executives of any subrecipient.
    e. Definitions. For purposes of this award term:
    1. Federal Agency means a Federal agency as defined at 5 U.S.C. 
551(1) and further clarified by 5 U.S.C. 552(f).
    2. Non-Federal entity means all of the following, as defined in 2 
CFR part 25:
    i. A Governmental organization, which is a State, local government, 
or Indian tribe;
    ii. A foreign public entity;
    iii. A domestic or foreign nonprofit organization; and,
    iv. A domestic or foreign for-profit organization
    3. Executive means officers, managing partners, or any other 
employees in management positions.
    4. Subaward:
    i. This term means a legal instrument to provide support for the 
performance of any portion of the substantive project or program for 
which you received this award and that you as the recipient award to an 
eligible subrecipient.
    ii. The term does not include your procurement of property and 
services needed to carry out the project or program (for further 
explanation, see 2 CFR 200.331).
    iii. A subaward may be provided through any legal agreement, 
including an agreement that you or a subrecipient considers a contract.
    5. Subrecipient means a non-Federal entity or Federal agency that:
    i. Receives a subaward from you (the recipient) under this award; 
and
    ii. Is accountable to you for the use of the Federal funds provided 
by the subaward.
    6. Total compensation means the cash and noncash dollar value earned 
by the executive during the recipient's or subrecipient's preceding 
fiscal year and includes the following (for more information see 17 CFR 
229.402(c)(2)).

[85 FR 49526, Aug. 13, 2020]

[[Page 20]]

                        PARTS 171	174 [RESERVED]



PART 175_AWARD TERM FOR TRAFFICKING IN PERSONS--Table of Contents



Sec.
175.5 Purpose of this part.
175.10 Statutory requirement.
175.15 Award term.
175.20 Referral.
175.25 Definitions.

    Authority: 22 U.S.C. 7104(g); 31 U.S.C. 503; 31 U.S.C. 1111; 41 
U.S.C. 405; Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR 10737, 
3 CFR, 1966-1970, p. 939.

    Source: 72 FR 63783, Nov. 13, 2007, unless otherwise noted.



Sec.  175.5  Purpose of this part.

    This part establishes a Governmentwide award term for grants and 
cooperative agreements to implement the requirement in paragraph (g) of 
section 106 of the Trafficking Victims Protection Act of 2000 (TVPA), as 
amended (22 U.S.C. 7104(g)).



Sec.  175.10  Statutory requirement.

    In each agency award (i.e., grant or cooperative agreement) under 
which funding is provided to a private entity, section 106(g) of the 
TVPA, as amended, requires the agency to include a condition that 
authorizes the agency to terminate the award, without penalty, if the 
recipient or a subrecipient--
    (a) Engages in severe forms of trafficking in persons during the 
period of time that the award is in effect;
    (b) Procures a commercial sex act during the period of time that the 
award is in effect; or
    (c) Uses forced labor in the performance of the award or subawards 
under the award.



Sec.  175.15  Award term.

    (a) To implement the trafficking in persons requirement in section 
106(g) of the TVPA, as amended, a Federal awarding agency must include 
the award term in paragraph (b) of this section in--
    (1) A grant or cooperative agreement to a private entity, as defined 
in Sec.  175.25(d); and
    (2) A grant or cooperative agreement to a State, local government, 
Indian tribe or foreign public entity, if funding could be provided 
under the award to a private entity as a subrecipient.
    (b) The award term that an agency must include, as described in 
paragraph (a) of this section, is:

    I. Trafficking in persons.
    a. Provisions applicable to a recipient that is a private entity.
    1. You as the recipient, your employees, subrecipients under this 
award, and subrecipients' employees may not--
    i. Engage in severe forms of trafficking in persons during the 
period of time that the award is in effect;
    ii. Procure a commercial sex act during the period of time that the 
award is in effect; or
    iii. Use forced labor in the performance of the award or subawards 
under the award.
    2. We as the Federal awarding agency may unilaterally terminate this 
award, without penalty, if you or a subrecipient that is a private 
entity --
    i. Is determined to have violated a prohibition in paragraph a.1 of 
this award term; or
    ii. Has an employee who is determined by the agency official 
authorized to terminate the award to have violated a prohibition in 
paragraph a.1 of this award term through conduct that is either--
    A. Associated with performance under this award; or
    B. Imputed to you or the subrecipient using the standards and due 
process for imputing the conduct of an individual to an organization 
that are provided in 2 CFR part 180, ``OMB Guidelines to Agencies on 
Governmentwide Debarment and Suspension (Nonprocurement),'' as 
implemented by our agency at [agency must insert reference here to its 
regulatory implementation of the OMB guidelines in 2 CFR part 180 (e.g., 
``2 CFR part XX'')].
    b. Provision applicable to a recipient other than a private entity. 
We as the Federal awarding agency may unilaterally terminate this award, 
without penalty, if a subrecipient that is a private entity--
    1. Is determined to have violated an applicable prohibition in 
paragraph a.1 of this award term; or
    2. Has an employee who is determined by the agency official 
authorized to terminate the award to have violated an applicable 
prohibition in paragraph a.1 of this award term through conduct that is 
either--
    i. Associated with performance under this award; or
    ii. Imputed to the subrecipient using the standards and due process 
for imputing the conduct of an individual to an organization that are 
provided in 2 CFR part 180, ``OMB Guidelines to Agencies on 
Governmentwide Debarment and Suspension (Nonprocurement),'' as 
implemented by our agency at

[[Page 21]]

[agency must insert reference here to its regulatory implementation of 
the OMB guidelines in 2 CFR part 180 (e.g., ``2 CFR part XX'')].
    c. Provisions applicable to any recipient.
    1. You must inform us immediately of any information you receive 
from any source alleging a violation of a prohibition in paragraph a.1 
of this award term.
    2. Our right to terminate unilaterally that is described in 
paragraph a.2 or b of this section:
    i. Implements section 106(g) of the Trafficking Victims Protection 
Act of 2000 (TVPA), as amended (22 U.S.C. 7104(g)), and
    ii. Is in addition to all other remedies for noncompliance that are 
available to us under this award.
    3. You must include the requirements of paragraph a.1 of this award 
term in any subaward you make to a private entity.
    d. Definitions. For purposes of this award term:
    1. ``Employee'' means either:
    i. An individual employed by you or a subrecipient who is engaged in 
the performance of the project or program under this award; or
    ii. Another person engaged in the performance of the project or 
program under this award and not compensated by you including, but not 
limited to, a volunteer or individual whose services are contributed by 
a third party as an in-kind contribution toward cost sharing or matching 
requirements.
    2. ``Forced labor'' means labor obtained by any of the following 
methods: the recruitment, harboring, transportation, provision, or 
obtaining of a person for labor or services, through the use of force, 
fraud, or coercion for the purpose of subjection to involuntary 
servitude, peonage, debt bondage, or slavery.
    3. ``Private entity'':
    i. Means any entity other than a State, local government, Indian 
tribe, or foreign public entity, as those terms are defined in 2 CFR 
175.25.
    ii. Includes:
    A. A nonprofit organization, including any nonprofit institution of 
higher education, hospital, or tribal organization other than one 
included in the definition of Indian tribe at 2 CFR 175.25(b).
    B. A for-profit organization.
    4. ``Severe forms of trafficking in persons,'' ``commercial sex 
act,'' and ``coercion'' have the meanings given at section 103 of the 
TVPA, as amended (22 U.S.C. 7102).

    (c) An agency may use different letters and numbers to designate the 
paragraphs of the award term in paragraph (b) of this section, if 
necessary, to conform the system of paragraph designations with the one 
used in other terms and conditions in the agency's awards.



Sec.  175.20  Referral.

    An agency official should inform the agency's suspending or 
debarring official if he or she terminates an award based on a violation 
of a prohibition contained in the award term under Sec.  175.15.



Sec.  175.25  Definitions.

    Terms used in this part are defined as follows:
    (a) Foreign public entity means:
    (1) A foreign government or foreign governmental entity;
    (2) A public international organization, which is an organization 
entitled to enjoy privileges, exemptions, and immunities as an 
international organization under the International Organizations 
Immunities Act (22 U.S.C. 288-288f);
    (3) An entity owned (in whole or in part) or controlled by a foreign 
government; and
    (4) Any other entity consisting wholly or partially of one or more 
foreign governments or foreign governmental entities.
    (b) Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaskan Native village or 
regional or village corporation (as defined in, or established under, 
the Alaskan Native Claims Settlement Act (43 U.S.C. 1601, et seq.)) that 
is recognized by the United States as eligible for the special programs 
and services provided by the United States to Indians because of their 
status as Indians.
    (c) Local government means a:
    (1) County;
    (2) Borough;
    (3) Municipality;
    (4) City;
    (5) Town;
    (6) Township;
    (7) Parish;
    (8) Local public authority, including any public housing agency 
under the United States Housing Act of 1937;
    (9) Special district;
    (10) School district;
    (11) Intrastate district;
    (12) Council of governments, whether or not incorporated as a 
nonprofit corporation under State law; and
    (13) Any other instrumentality of a local government.

[[Page 22]]

    (d) Private entity. (1) This term means any entity other than a 
State, local government, Indian tribe, or foreign public entity.
    (2) This term includes:
    (i) A nonprofit organization, including any nonprofit institution of 
higher education, hospital, or tribal organization other than one 
included in the definition of Indian tribe in paragraph (b) of this 
section.
    (ii) A for-profit organization.
    (e) State, consistent with the definition in section 103 of the 
TVPA, as amended (22 U.S.C. 7102), means:
    (1) Any State of the United States;
    (2) The District of Columbia;
    (3) Any agency or instrumentality of a State other than a local 
government or State-controlled institution of higher education;
    (4) The Commonwealths of Puerto Rico and the Northern Mariana 
Islands; and
    (5) The United States Virgin Islands, Guam, American Samoa, and a 
territory or possession of the United States.



PART 176_AWARD TERMS FOR ASSISTANCE AGREEMENTS THAT INCLUDE FUNDS
UNDER THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009, 
PUBLIC LAW 111-5--Table of Contents



Sec.
176.10 Purpose of this part.
176.20 Agency responsibilities (general).
176.30 Definitions.

Subpart A_Reporting and Registration Requirements under Section 1512 of 
           the American Recovery and Reinvestment Act of 2009

176.40 Procedure.
176.50 Award term--Reporting and registration requirements under section 
          1512 of the Recovery Act.

 Subpart B_Buy American Requirement under Section 1605 of the American 
                  Recovery and Reinvestment Act of 2009

176.60 Statutory requirement.
176.70 Policy.
176.80 Exceptions.
176.90 Acquisitions covered under international agreements.
176.100 Timely determination concerning the inapplicability of section 
          1605 of the Recovery Act.
176.110 Evaluating proposals of foreign iron, steel, and/or manufactured 
          goods.
176.120 Determinations on late requests.
176.130 Noncompliance.
176.140 Award term--Required Use of American Iron, Steel, and 
          Manufactured Goods--Section 1605 of the American Recovery and 
          Reinvestment Act of 2009.
176.150 Notice of Required Use of American Iron, Steel, and Manufactured 
          Goods--Section 1605 of the American Recovery and Reinvestment 
          Act of 2009.
176.160 Award term--Required Use of American Iron, Steel, and 
          Manufactured Goods (covered under International Agreements)--
          Section 1605 of the American Recovery and Reinvestment Act of 
          2009.
176.170 Notice of Required Use of American Iron, Steel, and Manufactured 
          Goods (covered under International Agreements)--Section 1605 
          of the American Recovery and Reinvestment Act of 2009.

Appendix to Subpart B of Part 176--U.S. States, Other Sub-Federal 
          Entities, and Other Entities Subject to U.S. Obligations Under 
          International Agreements (as of February 16, 2010)

  Subpart C_Wage Rate Requirements under Section 1606 of the American 
                  Recovery and Reinvestment Act of 2009

176.180 Procedure.
176.190 Award term--Wage rate requirements under Section 1606 of the 
          Recovery Act.

 Subpart D_Single Audit Information for Recipients of Recovery Act Funds

176.200 Procedure.
176.210 Award term--Recovery Act transactions listed in Schedule of 
          Expenditures of Federal Awards and Recipient Responsibilities 
          for Informing Subrecipients.

    Authority: American Recovery and Reinvestment Act of 2009, Public 
Law 111-5; Federal Funding Accountability and Transparency Act of 2006, 
(Pub. L. 109-282), as amended.

    Source: 74 FR 18450, Apr. 23, 2009, unless otherwise noted.



Sec.  176.10  Purpose of this part.

    This part establishes Federal Governmentwide award terms for 
financial assistance awards, namely, grants, cooperative agreements, and 
loans, to implement the cross-cutting requirements of the American 
Recovery and

[[Page 23]]

Reinvestment Act of 2009, Public Law 111-5 (Recovery Act). These 
requirements are cross-cutting in that they apply to more than one 
agency's awards.



Sec.  176.20  Agency responsibilities (general).

    (a) In any assistance award funded in whole or in part by the 
Recovery Act, the award official shall indicate that the award is being 
made under the Recovery Act, and indicate what projects and/or 
activities are being funded under the Recovery Act. This requirement 
applies whenever Recovery Act funds are used, regardless of the 
assistance type.
    (b) To maximize transparency of Recovery Act funds required for 
reporting by the assistance recipient, the award official shall consider 
structuring assistance awards to allow for separately tracking Recovery 
Act funds.
    (c) Award officials shall ensure that recipients comply with the 
Recovery Act requirements of Subpart A. If the recipient fails to comply 
with the reporting requirements or other award terms, the award official 
or other authorized agency action official shall take the appropriate 
enforcement or termination action in accordance with 2 CFR 215.62 or the 
agency's implementation of the OMB Circular A-102 grants management 
common rule. OMB Circular A-102 is available at http://
www.whitehouse.gov/omb/circulars/a102/a102.html.
    (d) The award official shall make the recipient's failure to comply 
with the reporting requirements a part of the recipient's performance 
record.



Sec.  176.30  Definitions.

    As used in this part--
    Award means any grant, cooperative agreement or loan made with 
Recovery Act funds. Award official means a person with the authority to 
enter into, administer, and/or terminate financial assistance awards and 
make related determinations and findings.
    Classified or ``classified information'' means any knowledge that 
can be communicated or any documentary material, regardless of its 
physical form or characteristics, that--
    (1)(i) Is owned by, is produced by or for, or is under the control 
of the United States Government; or
    (ii) Has been classified by the Department of Energy as privately 
generated restricted data following the procedures in 10 CFR 1045.21; 
and
    (2) Must be protected against unauthorized disclosure according to 
Executive Order 12958, Classified National Security Information, April 
17, 1995, or classified in accordance with the Atomic Energy Act of 
1954.
    Recipient means any entity other than an individual that receives 
Recovery Act funds in the form of a grant, cooperative agreement or loan 
directly from the Federal Government.
    Recovery funds or Recovery Act funds are funds made available 
through the appropriations of the American Recovery and Reinvestment Act 
of 2009, Public Law 111-5.
    Subaward means--
    (1) A legal instrument to provide support for the performance of any 
portion of the substantive project or program for which the recipient 
received this award and that the recipient awards to an eligible 
subrecipient;
    (2) The term does not include the recipient's procurement of 
property and services needed to carry out the project or program (for 
further explanation, see Sec. __.210 of the attachment to OMB Circular 
A-133, ``Audits of States, Local Governments, and Non-Profit 
Organizations''). OMB Circular A-133 is available at http://
www.whitehouse.gov/omb/circulars/a133/a133.html.
    (3) A subaward may be provided through any legal agreement, 
including an agreement that the recipient or a subrecipient considers a 
contract.
    Subcontract means a legal instrument used by a recipient for 
procurement of property and services needed to carry out the project or 
program.
    Subrecipient or Subawardee means a non-Federal entity that expends 
Federal awards received from a pass-through entity to carry out a 
Federal program, but does not include an individual that is a 
beneficiary of such a program. A subrecipient may also be a recipient of 
other Federal awards directly from a Federal awarding agency. Guidance 
on distinguishing between a

[[Page 24]]

subrecipient and a vendor is provided in Sec. __.210 of OMB Circular A-
133.



Subpart A_Reporting and Registration Requirements Under Section 1512 of 
           the American Recovery and Reinvestment Act of 2009



Sec.  176.40  Procedure.

    The award official shall insert the standard award term in this 
subpart in all awards funded in whole or in part with Recovery Act 
funds, except for those that are classified, awarded to individuals, or 
awarded under mandatory and entitlement programs, except as specifically 
required by OMB, or expressly exempted from the reporting requirement in 
the Recovery Act.



Sec.  176.50  Award term--Reporting and registration requirements 
under section 1512 of the Recovery Act.

    Agencies are responsible for ensuring that their recipients report 
information required under the Recovery Act in a timely manner. The 
following award term shall be used by agencies to implement the 
recipient reporting and registration requirements in section 1512:
    (a) This award requires the recipient to complete projects or 
activities which are funded under the American Recovery and Reinvestment 
Act of 2009 (Recovery Act) and to report on use of Recovery Act funds 
provided through this award. Information from these reports will be made 
available to the public.
    (b) The reports are due no later than ten calendar days after each 
calendar quarter in which the recipient receives the assistance award 
funded in whole or in part by the Recovery Act.
    (c) Recipients and their first-tier recipients must maintain current 
registrations in the System of Award Management (http://www.ccr.gov) at 
all times during which they have active federal awards funded with 
Recovery Act funds. A Dun and Bradstreet Data Universal Numbering System 
(DUNS) Number (http://www.dnb.com) is one of the requirements for 
registration in the System of Award Management.
    (d) The recipient shall report the information described in section 
1512(c) of the Recovery Act using the reporting instructions and data 
elements that will be provided online at http://www.FederalReporting.gov 
and ensure that any information that is pre-filled is corrected or 
updated as needed.



 Subpart B_Buy American Requirement Under Section 1605 of the American 
                  Recovery and Reinvestment Act of 2009



Sec.  176.60  Statutory requirement.

    Section 1605 of the Recovery Act prohibits use of recovery funds for 
a project for the construction, alteration, maintenance, or repair of a 
public building or public work unless all of the iron, steel, and 
manufactured goods used in the project are produced in the United 
States. The law requires that this prohibition be applied in a manner 
consistent with U.S. obligations under international agreements, and it 
provides for waiver under three circumstances:
    (a) Iron, steel, or relevant manufactured goods are not produced in 
the United States in sufficient and reasonably available quantities and 
of a satisfactory quality;
    (b) Inclusion of iron, steel, or manufactured goods produced in the 
United States will increase the cost of the overall project by more than 
25 percent; or
    (c) Applying the domestic preference would be inconsistent with the 
public interest.



Sec.  176.70  Policy.

    Except as provided in Sec.  176.80 or Sec.  176.90--
    (a) None of the funds appropriated or otherwise made available by 
the Recovery Act may be used for a project for the construction, 
alteration, maintenance, or repair of a public building or public work 
(see definitions at Sec. Sec.  176.140 and 176.160) unless--
    (1) The public building or public work is located in the United 
States; and
    (2) All of the iron, steel, and manufactured goods used in the 
project are produced or manufactured in the United States.

[[Page 25]]

    (i) Production in the United States of the iron or steel used in the 
project requires that all manufacturing processes must take place in the 
United States, except metallurgical processes involving refinement of 
steel additives. These requirements do not apply to iron or steel used 
as components or subcomponents of manufactured goods used in the 
project.
    (ii) There is no requirement with regard to the origin of components 
or subcomponents in manufactured goods used in the project, as long as 
the manufacturing occurs in the United States.
    (b) Paragraph (a) of this section shall not apply where the Recovery 
Act requires the application of alternative Buy American requirements 
for iron, steel, and manufactured goods.



Sec.  176.80  Exceptions.

    (a) When one of the following exceptions applies in a case or 
category of cases, the award official may allow the recipient to use 
foreign iron, steel and/or manufactured goods in the project without 
regard to the restrictions of section 1605 of the Recovery Act:
    (1) Nonavailability. The head of the Federal department or agency 
may determine that the iron, steel or relevant manufactured good is not 
produced or manufactured in the United States in sufficient and 
reasonably available commercial quantities of a satisfactory quality. 
The determinations of nonavailability of the articles listed at 48 CFR 
25.104(a) and the procedures at 48 CFR 25.103(b)(1) also apply if any of 
those articles are manufactured goods needed in the project.
    (2) Unreasonable cost. The head of the Federal department or agency 
may determine that the cost of domestic iron, steel, or relevant 
manufactured goods will increase the cost of the overall project by more 
than 25 percent in accordance with Sec.  176.110.
    (3) Inconsistent with public interest. The head of the Federal 
department or agency may determine that application of the restrictions 
of section 1605 of the Recovery Act would be inconsistent with the 
public interest.
    (b) When a determination is made for any of the reasons stated in 
this section that certain foreign iron, steel, and/or manufactured goods 
may be used--
    (1) The award official shall list the excepted materials in the 
award; and
    (2) The head of the Federal department or agency shall publish a 
notice in the Federal Register within two weeks after the determination 
is made, unless the item has already been determined to be domestically 
nonavailable. A list of items that are not domestically available is at 
48 CFR 25.104(a). The Federal Register notice or information from the 
notice may be posted by OMB to Recovery.gov. The notice shall include--
    (i) The title ``Buy American Exception under the American Recovery 
and Reinvestment Act of 2009'';
    (ii) The dollar value and brief description of the project; and
    (iii) A detailed written justification as to why the restriction is 
being waived.



Sec.  176.90  Acquisitions covered under international agreements.

    Section 1605(d) of the Recovery Act provides that the Buy American 
requirement in section 1605 shall be applied in a manner consistent with 
U.S. obligations under international agreements.
    (a) The Buy American requirement set out in Sec.  176.70 shall not 
be applied where the iron, steel, or manufactured goods used in the 
project are from a Party to an international agreement, listed in 
paragraph (b) of this section, and the recipient is required under an 
international agreement, described in the appendix to this subpart, to 
treat the goods and services of that Party the same as domestic goods 
and services. As of January 1, 2010, this obligation shall only apply to 
projects with an estimated value of $7,804,000 or more and projects that 
are not specifically excluded from the application of those agreements.
    (b) The international agreements that obligate recipients that are 
covered under an international agreement to treat the goods and services 
of a Party the same as domestic goods and services and the respective 
Parties to the agreements are:
    (1) The World Trade Organization Government Procurement Agreement

[[Page 26]]

(Aruba, Austria, Belgium, Bulgaria, Canada, Chinese Taipei (Taiwan), 
Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, 
Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, 
Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, 
Malta, Netherlands, Norway, Poland, Portugal, Romania, Singapore, Slovak 
Republic, Slovenia, Spain, Sweden, Switzerland, and United Kingdom);
    (2) The following Free Trade Agreements:
    (i) Dominican Republic-Central America-United States Free Trade 
Agreement (Costa Rica, Dominican Republic, El Salvador, Guatemala, 
Honduras, Nicaragua);
    (ii) North American Free Trade Agreement (NAFTA) (Canada and 
Mexico);
    (iii) United States-Australia Free Trade Agreement;
    (iv) United States-Bahrain Free Trade Agreement;
    (v) United States-Chile Free Trade Agreement;
    (vi) United States-Israel Free Trade Agreement;
    (vii) United States-Morocco Free Trade Agreement;
    (viii) United States-Oman Free Trade Agreement;
    (ix) United States-Peru Trade Promotion Agreement; and
    (x) United States-Singapore Free Trade Agreement.
    (3) United States-European Communities Exchange of Letters (May 15, 
1995): Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, 
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, 
Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, 
Romania, Slovak Republic, Slovenia, Spain, Sweden, and United Kingdom; 
and
    (4) Agreement between the Government of Canada and the Government of 
the United States of America on Government Procurement.

[74 FR 18450, Apr. 23, 2009, as amended at 75 FR 14323, Mar. 25, 2010]



Sec.  176.100  Timely determination concerning the inapplicability of
section 1605 of the Recovery Act.

    (a) The head of the Federal department or agency involved may make a 
determination regarding inapplicability of section 1605 to a particular 
case or to a category of cases.
    (b) Before Recovery Act funds are awarded by the Federal agency or 
obligated by the recipient for a project for the construction, 
alteration, maintenance, or repair of a public building or public work, 
an applicant or recipient may request from the award official a 
determination concerning the inapplicability of section 1605 of the 
Recovery Act for specifically identified items.
    (c) The time for submitting the request and the information and 
supporting data that must be included in the request are to be specified 
in the agency's and recipient's request for applications and/or 
proposals, and as appropriate, in other written communications. The 
content of those communications should be consistent with the notice in 
Sec.  176.150 or Sec.  176.170, whichever applies.
    (d) The award official must evaluate all requests based on the 
information provided and may supplement this information with other 
readily available information.
    (e) In making a determination based on the increased cost to the 
project of using domestic iron, steel, and/or manufactured goods, the 
award official must compare the total estimated cost of the project 
using foreign iron, steel and/or relevant manufactured goods to the 
estimated cost if all domestic iron, steel, and/or relevant manufactured 
goods were used. If use of domestic iron, steel, and/or relevant 
manufactured goods would increase the cost of the overall project by 
more than 25 percent, then the award official shall determine that the 
cost of the domestic iron, steel, and/or relevant manufactured goods is 
unreasonable.



Sec.  176.110  Evaluating proposals of foreign iron, steel, and/or
manufactured goods.

    (a) If the award official receives a request for an exception based 
on the cost of certain domestic iron, steel,

[[Page 27]]

and/or manufactured goods being unreasonable, in accordance with Sec.  
176.80, then the award official shall apply evaluation factors to the 
proposal to use such foreign iron, steel, and/or manufactured goods as 
follows:
    (1) Use an evaluation factor of 25 percent, applied to the total 
estimated cost of the project, if the foreign iron, steel, and/or 
manufactured goods are to be used in the project based on an exception 
for unreasonable cost requested by the applicant.
    (2) Total evaluated cost = project cost estimate + (.25 x project 
cost estimate, if paragraph (a)(1) of this section applies).
    (b) Applicants or recipients also may submit alternate proposals 
based on use of equivalent domestic iron, steel, and/or manufactured 
goods to avoid possible denial of Recovery Act funding for the proposal 
if the Federal Government determines that an exception permitting use of 
the foreign item(s) does not apply.
    (c) If the award official makes an award to an applicant that 
proposed foreign iron, steel, and/or manufactured goods not listed in 
the applicable notice in the request for applications or proposals, then 
the award official must add the excepted materials to the list in the 
award term.



Sec.  176.120  Determinations on late requests.

    (a) If a recipient requests a determination regarding the 
inapplicability of section 1605 of the Recovery Act after obligating 
Recovery Act funds for a project for construction, alteration, 
maintenance, or repair (late request), the recipient must explain why it 
could not request the determination before making the obligation or why 
the need for such determination otherwise was not reasonably 
foreseeable. If the award official concludes that the recipient should 
have made the request before making the obligation, the award official 
may deny the request.
    (b) The award official must base evaluation of any late request for 
a determination regarding the inapplicability of section 1605 of the 
Recovery Act on information required by Sec.  176.150(c) and (d) or 
Sec.  176.170(c) and (d) and/or other readily available information.
    (c) If a determination, under Sec.  176.80 is made after Recovery 
Act funds were obligated for a project for construction, alteration, 
maintenance, or repair that an exception to section 1605 of the Recovery 
Act applies, the award official must amend the award to allow use of the 
foreign iron, steel, and/or relevant manufactured goods. When the basis 
of the exception is nonavailability or public interest, the amended 
award shall reflect adjustment of the award amount, redistribution of 
budgeted funds, and/or other appropriate actions taken to cover costs 
associated with acquiring or using the foreign iron, steel, and/or 
manufactured goods. When the basis for the exception is the unreasonable 
cost of domestic iron, steel, and/or manufactured goods the award 
official shall adjust the award amount or the budget, as appropriate, by 
at least the differential established in Sec.  176.110(a).



Sec.  176.130  Noncompliance.

    The award official must--
    (a) Review allegations of violations of section 1605 of the Recovery 
Act;
    (b) Unless fraud is suspected, notify the recipient of the apparent 
unauthorized use of foreign iron, steel, and/or manufactured goods and 
request a reply, to include proposed corrective action; and
    (c) If the review reveals that a recipient or subrecipient has used 
foreign iron, steel, and/or manufactured goods without authorization, 
take appropriate action, including one or more of the following:
    (1) Process a determination concerning the inapplicability of 
section 1605 of the Recovery Act in accordance with Sec.  176.120.
    (2) Consider requiring the removal and replacement of the 
unauthorized foreign iron, steel, and/or manufactured goods.
    (3) If removal and replacement of foreign iron, steel, and/or 
manufactured goods used in a public building or a public work would be 
impracticable, cause undue delay, or otherwise be detrimental to the 
interests of the Federal Government, the award official may determine in 
writing that the foreign iron, steel, and/or manufactured goods need not 
be removed and replaced. A

[[Page 28]]

determination to retain foreign iron, steel, and/or manufactured goods 
does not constitute a determination that an exception to section 1605 of 
the Recovery Act applies, and this should be stated in the 
determination. Further, a determination to retain foreign iron, steel, 
and/or manufactured goods does not affect the Federal Government's right 
to reduce the amount of the award by the cost of the steel, iron, or 
manufactured goods that are used in the project or to take enforcement 
or termination action in accordance with the agency's grants management 
regulations.
    (4) If the noncompliance is sufficiently serious, consider 
exercising appropriate remedies, such as withholding cash payments 
pending correction of the deficiency, suspending or terminating the 
award, and withholding further awards for the project. Also consider 
preparing and forwarding a report to the agency suspending or debarring 
official in accordance with the agency's debarment rule implementing 2 
CFR part 180. If the noncompliance appears to be fraudulent, refer the 
matter to other appropriate agency officials, such as the officer 
responsible for criminal investigation.



Sec.  176.140  Award term--Required Use of American Iron, Steel, 
and Manufactured Goods--Section 1605 of the American Recovery and 
Reinvestment Act of 2009.

    When awarding Recovery Act funds for construction, alteration, 
maintenance, or repair of a public building or public work that does not 
involve iron, steel, and/or manufactured goods covered under 
international agreements, the agency shall use the award term described 
in the following paragraphs:
    (a) Definitions. As used in this award term and condition--
    (1) Manufactured good means a good brought to the construction site 
for incorporation into the building or work that has been--
    (i) Processed into a specific form and shape; or
    (ii) Combined with other raw material to create a material that has 
different properties than the properties of the individual raw 
materials.
    (2) Public building and public work means a public building of, and 
a public work of, a governmental entity (the United States; the District 
of Columbia; commonwealths, territories, and minor outlying islands of 
the United States; State and local governments; and multi-State, 
regional, or interstate entities which have governmental functions). 
These buildings and works may include, without limitation, bridges, 
dams, plants, highways, parkways, streets, subways, tunnels, sewers, 
mains, power lines, pumping stations, heavy generators, railways, 
airports, terminals, docks, piers, wharves, ways, lighthouses, buoys, 
jetties, breakwaters, levees, and canals, and the construction, 
alteration, maintenance, or repair of such buildings and works.
    (3) Steel means an alloy that includes at least 50 percent iron, 
between .02 and 2 percent carbon, and may include other elements.
    (b) Domestic preference. (1) This award term and condition 
implements Section 1605 of the American Recovery and Reinvestment Act of 
2009 (Recovery Act) (Pub. L. 111-5), by requiring that all iron, steel, 
and manufactured goods used in the project are produced in the United 
States except as provided in paragraph (b)(3) and (b)(4) of this section 
and condition.
    (2) This requirement does not apply to the material listed by the 
Federal Government as follows:
________________________________________________________________________

    [Award official to list applicable excepted materials or indicate 
``none'']

    (3) The award official may add other iron, steel, and/or 
manufactured goods to the list in paragraph (b)(2) of this section and 
condition if the Federal Government determines that--
    (i) The cost of the domestic iron, steel, and/or manufactured goods 
would be unreasonable. The cost of domestic iron, steel, or manufactured 
goods used in the project is unreasonable when the cumulative cost of 
such material will increase the cost of the overall project by more than 
25 percent;
    (ii) The iron, steel, and/or manufactured good is not produced, or 
manufactured in the United States in sufficient and reasonably available 
quantities and of a satisfactory quality; or

[[Page 29]]

    (iii) The application of the restriction of section 1605 of the 
Recovery Act would be inconsistent with the public interest.
    (c) Request for determination of inapplicability of Section 1605 of 
the Recovery Act. (1)(i) Any recipient request to use foreign iron, 
steel, and/or manufactured goods in accordance with paragraph (b)(3) of 
this section shall include adequate information for Federal Government 
evaluation of the request, including--
    (A) A description of the foreign and domestic iron, steel, and/or 
manufactured goods;
    (B) Unit of measure;
    (C) Quantity;
    (D) Cost;
    (E) Time of delivery or availability;
    (F) Location of the project;
    (G) Name and address of the proposed supplier; and
    (H) A detailed justification of the reason for use of foreign iron, 
steel, and/or manufactured goods cited in accordance with paragraph 
(b)(3) of this section.
    (ii) A request based on unreasonable cost shall include a reasonable 
survey of the market and a completed cost comparison table in the format 
in paragraph (d) of this section.
    (iii) The cost of iron, steel, and/or manufactured goods material 
shall include all delivery costs to the construction site and any 
applicable duty.
    (iv) Any recipient request for a determination submitted after 
Recovery Act funds have been obligated for a project for construction, 
alteration, maintenance, or repair shall explain why the recipient could 
not reasonably foresee the need for such determination and could not 
have requested the determination before the funds were obligated. If the 
recipient does not submit a satisfactory explanation, the award official 
need not make a determination.
    (2) If the Federal Government determines after funds have been 
obligated for a project for construction, alteration, maintenance, or 
repair that an exception to section 1605 of the Recovery Act applies, 
the award official will amend the award to allow use of the foreign 
iron, steel, and/or relevant manufactured goods. When the basis for the 
exception is nonavailability or public interest, the amended award shall 
reflect adjustment of the award amount, redistribution of budgeted 
funds, and/or other actions taken to cover costs associated with 
acquiring or using the foreign iron, steel, and/or relevant manufactured 
goods. When the basis for the exception is the unreasonable cost of the 
domestic iron, steel, or manufactured goods, the award official shall 
adjust the award amount or redistribute budgeted funds by at least the 
differential established in 2 CFR 176.110(a).
    (3) Unless the Federal Government determines that an exception to 
section 1605 of the Recovery Act applies, use of foreign iron, steel, 
and/or manufactured goods is noncompliant with section 1605 of the 
American Recovery and Reinvestment Act.
    (d) Data. To permit evaluation of requests under paragraph (b) of 
this section based on unreasonable cost, the Recipient shall include the 
following information and any applicable supporting data based on the 
survey of suppliers:

                                   Foreign and Domestic Items Cost Comparison
----------------------------------------------------------------------------------------------------------------
                         Description                           Unit of measure      Quantity     Cost (dollars)*
----------------------------------------------------------------------------------------------------------------
Item 1:......................................................
    Foreign steel, iron, or manufactured good................           _____            _____            _____
    Domestic steel, iron, or manufactured good...............           _____            _____            _____
Item 2:......................................................
    Foreign steel, iron, or manufactured good................           _____            _____            _____
    Domestic steel, iron, or manufactured good...............           _____            _____            _____
----------------------------------------------------------------------------------------------------------------
[List name, address, telephone number, email address, and contact for suppliers surveyed. Attach copy of
  response; if oral, attach summary.]
[Include other applicable supporting information.]
[*Include all delivery costs to the construction site.]


[[Page 30]]



Sec.  176.150  Notice of Required Use of American Iron, Steel, and
Manufactured Goods--Section 1605 of the American Recovery and
Reinvestment Act of 2009.

    When requesting applications or proposals for Recovery Act programs 
or activities that may involve construction, alteration, maintenance, or 
repair of a public building or public work, and do not involve iron, 
steel, and/or manufactured goods covered under international agreements, 
the agency shall use the notice described in the following paragraphs in 
their solicitations:
    (a) Definitions. Manufactured good, public building and public work, 
and steel, as used in this notice, are defined in the 2 CFR 176.140.
    (b) Requests for determinations of inapplicability. A prospective 
applicant requesting a determination regarding the inapplicability of 
section 1605 of the American Recovery and Reinvestment Act of 2009 (Pub. 
L. 111-5) (Recovery Act) should submit the request to the award official 
in time to allow a determination before submission of applications or 
proposals. The prospective applicant shall include the information and 
applicable supporting data required by paragraphs at 2 CFR 176.140(c) 
and (d) in the request. If an applicant has not requested a 
determination regarding the inapplicability of 1605 of the Recovery Act 
before submitting its application or proposal, or has not received a 
response to a previous request, the applicant shall include the 
information and supporting data in the application or proposal.
    (c) Evaluation of project proposals. If the Federal Government 
determines that an exception based on unreasonable cost of domestic 
iron, steel, and/or manufactured goods applies, the Federal Government 
will evaluate a project requesting exception to the requirements of 
section 1605 of the Recovery Act by adding to the estimated total cost 
of the project 25 percent of the project cost, if foreign iron, steel, 
or manufactured goods are used in the project based on unreasonable cost 
of comparable manufactured domestic iron, steel, and/or manufactured 
goods.
    (d) Alternate project proposals. (1) When a project proposal 
includes foreign iron, steel, and/or manufactured goods not listed by 
the Federal Government at 2 CFR 176.140(b)(2), the applicant also may 
submit an alternate proposal based on use of equivalent domestic iron, 
steel, and/or manufactured goods.
    (2) If an alternate proposal is submitted, the applicant shall 
submit a separate cost comparison table prepared in accordance with 2 
CFR 176.140(c) and (d) for the proposal that is based on the use of any 
foreign iron, steel, and/or manufactured goods for which the Federal 
Government has not yet determined an exception applies.
    (3) If the Federal Government determines that a particular exception 
requested in accordance with 2 CFR 176.140(b) does not apply, the 
Federal Government will evaluate only those proposals based on use of 
the equivalent domestic iron, steel, and/or manufactured goods, and the 
applicant shall be required to furnish such domestic items.



Sec.  176.160  Award term--Required Use of American Iron, Steel,
and Manufactured Goods (covered under International Agreements)-
-Section 1605 of the American Recovery and Reinvestment Act of 2009.

    When awarding Recovery Act funds for construction, alteration, 
maintenance, or repair of a public building or public work that involves 
iron, steel, and/or manufactured goods materials covered under 
international agreements, the agency shall use the award term described 
in the following paragraphs:
    (a) Definitions. As used in this award term and condition--
    Designated country--(1) A World Trade Organization Government 
Procurement Agreement country (Aruba, Austria, Belgium, Bulgaria, 
Canada, Chinese Taipei (Taiwan), Cyprus, Czech Republic, Denmark, 
Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, 
Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, 
Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, 
Poland, Portugal, Romania, Singapore, Slovak Republic, Slovenia, Spain, 
Sweden, Switzerland, and United Kingdom;
    (2) A Free Trade Agreement (FTA) country (Australia, Bahrain, 
Canada,

[[Page 31]]

Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, 
Israel, Mexico, Morocco, Nicaragua, Oman, Peru, or Singapore);
    (3) A United States-European Communities Exchange of Letters (May 
15, 1995) country: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, 
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, 
Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, 
Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, and United 
Kingdom; or
    (4) An Agreement between Canada and the United States of America on 
Government Procurement country (Canada).
    Designated country iron, steel, and/or manufactured goods--(1) Is 
wholly the growth, product, or manufacture of a designated country; or
    (2) In the case of a manufactured good that consist in whole or in 
part of materials from another country, has been substantially 
transformed in a designated country into a new and different 
manufactured good distinct from the materials from which it was 
transformed.
    Domestic iron, steel, and/or manufactured good--(1) Is wholly the 
growth, product, or manufacture of the United States; or
    (2) In the case of a manufactured good that consists in whole or in 
part of materials from another country, has been substantially 
transformed in the United States into a new and different manufactured 
good distinct from the materials from which it was transformed. There is 
no requirement with regard to the origin of components or subcomponents 
in manufactured goods or products, as long as the manufacture of the 
goods occurs in the United States.
    Foreign iron, steel, and/or manufactured good means iron, steel and/
or manufactured good that is not domestic or designated country iron, 
steel, and/or manufactured good.
    Manufactured good means a good brought to the construction site for 
incorporation into the building or work that has been--
    (1) Processed into a specific form and shape; or
    (2) Combined with other raw material to create a material that has 
different properties than the properties of the individual raw 
materials.
    Public building and public work means a public building of, and a 
public work of, a governmental entity (the United States; the District 
of Columbia; commonwealths, territories, and minor outlying islands of 
the United States; State and local governments; and multi-State, 
regional, or interstate entities which have governmental functions). 
These buildings and works may include, without limitation, bridges, 
dams, plants, highways, parkways, streets, subways, tunnels, sewers, 
mains, power lines, pumping stations, heavy generators, railways, 
airports, terminals, docks, piers, wharves, ways, lighthouses, buoys, 
jetties, breakwaters, levees, and canals, and the construction, 
alteration, maintenance, or repair of such buildings and works.
    Steel means an alloy that includes at least 50 percent iron, between 
.02 and 2 percent carbon, and may include other elements.
    (b) Iron, steel, and manufactured goods. (1) The award term and 
condition described in this section implements--
    (i) Section 1605(a) of the American Recovery and Reinvestment Act of 
2009 (Pub. L. 111-5) (Recovery Act), by requiring that all iron, steel, 
and manufactured goods used in the project are produced in the United 
States; and
    (ii) Section 1605(d), which requires application of the Buy American 
requirement in a manner consistent with U.S. obligations under 
international agreements. The restrictions of section 1605 of the 
Recovery Act do not apply to designated country iron, steel, and/or 
manufactured goods. The Buy American requirement in section 1605 shall 
not be applied where the iron, steel or manufactured goods used in the 
project are from a Party to an international agreement that obligates 
the recipient to treat the goods and services of that Party the same as 
domestic goods and services. As of January 1, 2010, this obligation 
shall only apply to projects with an estimated value of $7,804,000 or 
more.
    (2) The recipient shall use only domestic or designated country 
iron,

[[Page 32]]

steel, and manufactured goods in performing the work funded in whole or 
part with this award, except as provided in paragraphs (b)(3) and (b)(4) 
of this section.
    (3) The requirement in paragraph (b)(2) of this section does not 
apply to the iron, steel, and manufactured goods listed by the Federal 
Government as follows:
________________________________________________________________________

    [Award official to list applicable excepted materials or indicate 
``none'']

    (4) The award official may add other iron, steel, and manufactured 
goods to the list in paragraph (b)(3) of this section if the Federal 
Government determines that--
    (i) The cost of domestic iron, steel, and/or manufactured goods 
would be unreasonable. The cost of domestic iron, steel, and/or 
manufactured goods used in the project is unreasonable when the 
cumulative cost of such material will increase the overall cost of the 
project by more than 25 percent;
    (ii) The iron, steel, and/or manufactured good is not produced, or 
manufactured in the United States in sufficient and reasonably available 
commercial quantities of a satisfactory quality; or
    (iii) The application of the restriction of section 1605 of the 
Recovery Act would be inconsistent with the public interest.
    (c) Request for determination of inapplicability of section 1605 of 
the Recovery Act or the Buy American Act. (1)(i) Any recipient request 
to use foreign iron, steel, and/or manufactured goods in accordance with 
paragraph (b)(4) of this section shall include adequate information for 
Federal Government evaluation of the request, including--
    (A) A description of the foreign and domestic iron, steel, and/or 
manufactured goods;
    (B) Unit of measure;
    (C) Quantity;
    (D) Cost;
    (E) Time of delivery or availability;
    (F) Location of the project;
    (G) Name and address of the proposed supplier; and
    (H) A detailed justification of the reason for use of foreign iron, 
steel, and/or manufactured goods cited in accordance with paragraph 
(b)(4) of this section.
    (ii) A request based on unreasonable cost shall include a reasonable 
survey of the market and a completed cost comparison table in the format 
in paragraph (d) of this section.
    (iii) The cost of iron, steel, or manufactured goods shall include 
all delivery costs to the construction site and any applicable duty.
    (iv) Any recipient request for a determination submitted after 
Recovery Act funds have been obligated for a project for construction, 
alteration, maintenance, or repair shall explain why the recipient could 
not reasonably foresee the need for such determination and could not 
have requested the determination before the funds were obligated. If the 
recipient does not submit a satisfactory explanation, the award official 
need not make a determination.
    (2) If the Federal Government determines after funds have been 
obligated for a project for construction, alteration, maintenance, or 
repair that an exception to section 1605 of the Recovery Act applies, 
the award official will amend the award to allow use of the foreign 
iron, steel, and/or relevant manufactured goods. When the basis for the 
exception is nonavailability or public interest, the amended award shall 
reflect adjustment of the award amount, redistribution of budgeted 
funds, and/or other appropriate actions taken to cover costs associated 
with acquiring or using the foreign iron, steel, and/or relevant 
manufactured goods.. When the basis for the exception is the 
unreasonable cost of the domestic iron, steel, or manufactured goods, 
the award official shall adjust the award amount or redistribute 
budgeted funds, as appropriate, by at least the differential established 
in 2 CFR 176.110(a).
    (3) Unless the Federal Government determines that an exception to 
section 1605 of the Recovery Act applies, use of foreign iron, steel, 
and/or manufactured goods other than designated country iron, steel, 
and/or manufactured goods is noncompliant with the applicable Act.

[[Page 33]]

    (d) Data. To permit evaluation of requests under paragraph (b) of 
this section based on unreasonable cost, the applicant shall include the 
following information and any applicable supporting data based on the 
survey of suppliers:

               Foreign and Domestic Items Cost Comparison
------------------------------------------------------------------------
                                   Unit of                      Cost
          Description              measure      Quantity     (dollars)*
------------------------------------------------------------------------
Item 1:
    Foreign steel, iron, or           _____         _____         _____
     manufactured good........
    Domestic steel, iron, or          _____         _____         _____
     manufactured good........
Item 2:
    Foreign steel, iron, or           _____         _____         _____
     manufactured good........
    Domestic steel, iron, or          _____         _____         _____
     manufactured good........
------------------------------------------------------------------------
[List name, address, telephone number, email address, and contact for
  suppliers surveyed. Attach copy of response; if oral, attach summary.]
[Include other applicable supporting information.]
[*Include all delivery costs to the construction site.]


[74 FR 18450, Apr. 23, 2009, as amended at 75 FR 14323, Mar. 25, 2010]



Sec.  176.170  Notice of Required Use of American Iron, Steel, and
Manufactured Goods (covered under International Agreements)-
-Section 1605 of the American Recovery and Reinvestment Act of 2009.

    When requesting applications or proposals for Recovery Act programs 
or activities that may involve construction, alteration, maintenance, or 
repair of a public building or public work, and involve iron, steel, 
and/or manufactured goods covered under international agreements, the 
agency shall use the notice described in the following paragraphs in the 
solicitation:
    (a) Definitions. Designated country iron, steel, and/or manufactured 
goods, foreign iron, steel, and/or manufactured good, manufactured good, 
public building and public work, and steel, as used in this provision, 
are defined in 2 CFR 176.160(a).
    (b) Requests for determinations of inapplicability. A prospective 
applicant requesting a determination regarding the inapplicability of 
section 1605 of the American Recovery and Reinvestment Act of 2009 (Pub. 
L. 111-5) (Recovery Act) should submit the request to the award official 
in time to allow a determination before submission of applications or 
proposals. The prospective applicant shall include the information and 
applicable supporting data required by 2 CFR 176.160 (c) and (d) in the 
request. If an applicant has not requested a determination regarding the 
inapplicability of section 1605 of the Recovery Act before submitting 
its application or proposal, or has not received a response to a 
previous request, the applicant shall include the information and 
supporting data in the application or proposal.
    (c) Evaluation of project proposals. If the Federal Government 
determines that an exception based on unreasonable cost of domestic 
iron, steel, and/or manufactured goods applies, the Federal Government 
will evaluate a project requesting exception to the requirements of 
section 1605 of the Recovery Act by adding to the estimated total cost 
of the project 25 percent of the project cost if foreign iron, steel, or 
manufactured goods are used based on unreasonable cost of comparable 
domestic iron, steel, or manufactured goods.
    (d) Alternate project proposals. (1) When a project proposal 
includes foreign iron, steel, and/or manufactured goods, other than 
designated country iron, steel, and/or manufactured goods, that are not 
listed by the Federal Government in this Buy American notice in the 
request for applications or proposals, the applicant may submit an 
alternate proposal based on use of equivalent domestic or designated 
country iron, steel, and/or manufactured goods.
    (2) If an alternate proposal is submitted, the applicant shall 
submit a separate cost comparison table prepared in accordance with 
paragraphs 2 CFR 176.160(c) and (d) for the proposal that is based on 
the use of any foreign

[[Page 34]]

iron, steel, and/or manufactured goods for which the Federal Government 
has not yet determined an exception applies.
    (3) If the Federal Government determines that a particular exception 
requested in accordance with 2 CFR 176.160(b) does not apply, the 
Federal Government will evaluate only those proposals based on use of 
the equivalent domestic or designated country iron, steel, and/or 
manufactured goods, and the applicant shall be required to furnish such 
domestic or designated country items.



  Sec. Appendix to Subpart B of 2 CFR Part 176--U.S. States, Other Sub-
 Federal Entities, and Other Entities Subject to U.S. Obligations Under 
           International Agreements (as of February 16, 2010)

----------------------------------------------------------------------------------------------------------------
                                                                                          Relevant international
                States                     Entities covered            Exclusions               agreements
----------------------------------------------------------------------------------------------------------------
Arizona..............................  Executive branch         .......................  --WTO GPA.
                                        agencies.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Singapore FTA.
Arkansas.............................  Executive branch         Construction services..  --WTO GPA.
                                        agencies, including                              --DR-CAFTA.
                                        universities but                                 --U.S.-Australia FTA.
                                        excluding the Office                             --U.S.-Chile FTA.
                                        of Fish and Game.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Peru TPA.
                                                                                         --U.S.-Singapore FTA.
California...........................  Executive branch         .......................  --WTO GPA.
                                        agencies.
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Singapore FTA.
Colorado.............................  Executive branch         .......................  --WTO GPA.
                                        agencies.
                                                                                         --DR-CAFTA.
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Peru TPA.
                                                                                         --U.S.-Singapore FTA.
Connecticut..........................  --Department of          .......................  --WTO GPA.
                                        Administrative                                   --DR-CAFTA.
                                        Services                                         --U.S.-Australia FTA.
                                       --Department of                                   --U.S.-Chile FTA.
                                        Transportation.                                  --U.S.-Morocco FTA.
                                       --Department of Public                            --U.S.-Singapore FTA.
                                        Works.
                                       --Constituent Units of
                                        Higher Education.
Delaware.............................  --Administrative         Construction-grade       --WTO GPA.
                                        Services (Central        steel (including        --DR-CAFTA (except
                                        Procurement Agency).     requirements on          Honduras).
                                       --State Universities.     subcontracts); motor    --U.S.-Australia FTA.
                                       --State Colleges.         vehicles; coal.         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.
Florida..............................  Executive branch         Construction-grade       --WTO GPA.
                                        agencies.                steel (including        --DR-CAFTA.
                                                                 requirements on         --U.S.-Australia FTA.
                                                                 subcontracts); motor    --U.S.-Chile FTA.
                                                                 vehicles; coal.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Peru TPA.
                                                                                         --U.S.-Singapore FTA.
Georgia..............................  --Department of          Beef; compost; mulch...  --U.S.-Australia FTA.
                                        Administrative
                                        Services.
                                       --Georgia Technology
                                        Authority.
Hawaii...............................  Department of            Software developed in    --WTO GPA.
                                        Accounting and General   the State;              --DR-CAFTA (except
                                        Services.                construction.            Honduras).
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.

[[Page 35]]

 
Idaho................................  Central Procurement      .......................  --WTO GPA.
                                        Agency (including all                            --DR-CAFTA (except
                                        colleges and                                      Honduras).
                                        universities subject                             --U.S.-Australia FTA.
                                        to central purchasing                            --U.S.-Chile FTA.
                                        oversight).
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.
Illinois.............................  --Department of Central  Construction-grade       --WTO GPA.
                                        Management Services.     steel (including        --U.S.-Australia FTA.
                                                                 requirements on         --U.S.-Chile FTA.
                                                                 subcontracts); motor
                                                                 vehicles; coal.
                                                                                         --U.S.-Peru TPA.
                                                                                         --U.S.-Singapore FTA.
                                                                                         --U.S.-EC.
                                                                                         Exchange of Letters
                                                                                          (applies to EC Member
                                                                                          States for procurement
                                                                                          not covered by WTO GPA
                                                                                          and only where the
                                                                                          State considers out-of-
                                                                                          State suppliers).
Iowa.................................  --Department of General  Construction-grade       --WTO GPA.
                                        Services                 steel (including        --U.S.-Chile FTA.
                                       --Department of           requirements on         --U.S.-Singapore FTA.
                                        Transportation.          subcontracts); motor
                                       --Board of Regents'       vehicles; coal.
                                        Institutions
                                        (universities).
Kansas...............................  Executive branch         Construction services;   --WTO GPA.
                                        agencies.                automobiles; aircraft.  --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.
Kentucky.............................  Division of Purchases,   Construction projects..  --WTO GPA.
                                        Finance and                                      --DR-CAFTA.
                                        Administration Cabinet.                          --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.
Louisiana............................  Executive branch         .......................  --WTO GPA.
                                        agencies.
                                                                                         --DR-CAFTA.
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.
Maine................................  --Department of          Construction-grade       --WTO GPA.
                                        Administrative and       steel (including        --U.S.-Australia FTA.
                                        Financial Services       requirements on         --U.S.-Chile FTA.
                                       --Bureau of General       subcontracts); motor    --U.S.-Singapore FTA.
                                        Services (covering       vehicles; coal.
                                        State government
                                        agencies and school
                                        construction).
                                       -- Department of
                                        Transportation.
Maryland.............................  --Office of the          Construction-grade       --WTO GPA.
                                        Treasury                 steel (including        --DR-CAFTA.
                                       --Department of the       requirements on         --U.S.-Australia FTA.
                                        Environment.             subcontracts); motor    --U.S.-Chile FTA.
                                       --Department of General   vehicles; coal.         --U.S.-Morocco FTA.
                                        Services.                                        --U.S.-Singapore FTA.
                                       --Department of Housing
                                        and Community
                                        Development.
                                       --Department of Human
                                        Resources.
                                       --Department of
                                        Licensing and
                                        Regulation.
                                       --Department of Natural
                                        Resources.
                                       --Department of Public
                                        Safety and
                                        Correctional Services.
                                       --Department of
                                        Personnel.
                                       --Department of
                                        Transportation.
Massachusetts........................  --Executive Office for   .......................  --WTO GPA.
                                        Administration and                               --U.S.-Chile FTA.
                                        Finance.

[[Page 36]]

 
                                       --Executive Office of                             --U.S.-Singapore FTA.
                                        Communities and
                                        Development.
                                       --Executive Office of
                                        Consumer Affairs.
                                       --Executive Office of
                                        Economic Affairs.
                                       --Executive Office of
                                        Education.
                                       --Executive Office of
                                        Elder Affairs.
                                       --Executive Office of
                                        Environmental Affairs.
                                       --Executive Office of
                                        Health and Human
                                        Service.
                                       --Executive Office of
                                        Labor.
                                       --Executive Office of
                                        Public Safety.
                                       --Executive Office of
                                        Transportation and
                                        Construction.
Michigan.............................  Department of            Construction-grade       --WTO GPA.
                                        Management and Budget.   steel (including        --U.S.-Australia FTA.
                                                                 requirements on         --U.S.-Chile FTA.
                                                                 subcontracts); motor    --U.S.-Singapore FTA.
                                                                 vehicles; coal.
Minnesota............................  Executive branch         .......................  --WTO GPA.
                                        agencies.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Singapore FTA.
Mississippi..........................  Department of Finance    Services...............  --WTO GPA.
                                        and Administration.                              --DR-CAFTA.
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Peru TPA.
                                                                                         --U.S.-Singapore FTA.
Missouri.............................  --Office of              .......................  --WTO GPA.
                                        Administration.
                                       --Division of                                     --U.S.-Chile FTA.
                                        Purchasing and                                   --U.S.-Singapore FTA.
                                        Materials Management.
Montana..............................  Executive branch         Goods..................  --WTO GPA.
                                        agencies.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Singapore FTA.
Nebraska.............................  Central Procurement      .......................  --WTO GPA.
                                        Agency.
                                                                                         --DR-CAFTA.
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.
New Hampshire........................  Central Procurement      Construction-grade       --WTO GPA.
                                        Agency.                  steel (including        --DR-CAFTA.
                                                                 requirements on         --U.S.-Australia FTA.
                                                                 subcontracts), motor    --U.S.-Chile FTA.
                                                                 vehicles; coal.         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.
New York.............................  --State agencies         Construction-grade       --WTO GPA.
                                       --State university        steel (including        --DR-CAFTA.
                                        system.                  requirements on         --U.S.-Australia FTA.
                                       --Public authorities      subcontracts); motor    --U.S.-Chile FTA.
                                        and public benefit       vehicles; coal;         --U.S.-Morocco FTA.
                                        corporations, with the   transit cars, buses     --U.S.-Peru TPA.
                                        exception of those       and related equipment.  --U.S.-Singapore FTA.
                                        entities with multi-
                                        State mandates.
North Dakota.........................  .......................  .......................  --U.S.-EC Exchange of
                                                                                          Letters (applies to EC
                                                                                          Member States and only
                                                                                          where the State
                                                                                          considers out-of-State
                                                                                          suppliers).
Oklahoma.............................  Department of Central    Construction services;   --WTO GPA.
                                        Services and all State   construction-grade      --U.S.-Australia FTA.
                                        agencies and             steel (including        --U.S.-Chile FTA.
                                        departments subject to   requirements on         --U.S.-Peru TPA.
                                        the Oklahoma Central     subcontracts); motor    --U.S.-Singapore FTA.
                                        Purchasing Act.          vehicles; coal.
Oregon...............................  Department of            .......................  --WTO GPA.
                                        Administrative                                   --DR-CAFTA (except
                                        Services.                                         Honduras).
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.

[[Page 37]]

 
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.
Pennsylvania.........................  Executive branch         Construction-grade       --WTO GPA.
                                        agencies, including:     steel (including        --U.S.-Australia FTA.
                                       --Governor's Office.      requirements on         --U.S.-Chile FTA.
                                       --Department of the       subcontracts); motor    --U.S.-Singapore FTA.
                                        Auditor General.         vehicles; coal.
                                       --Treasury Department.
                                       --Department of
                                        Agriculture.
                                       --Department of Banking
                                       --Pennsylvania
                                        Securities Commission.
                                       --Department of Health.
                                       --Department of
                                        Transportation.
                                       --Insurance Department.
                                       --Department of Aging..
                                       --Department of
                                        Correction.
                                       --Department of Labor
                                        and Industry.
                                       --Department of
                                        Military Affairs.
                                       --Office of Attorney
                                        General.
                                       --Department of General
                                        Services.
                                       --Department of
                                        Education.
                                       --Public Utility
                                        Commission.
                                       --Department of Revenue
                                       --Department of State..
                                       --Pennsylvania State
                                        Police.
                                       --Department of Public
                                        Welfare.
                                       --Fish Commission......
                                       --Game Commission......
                                       --Department of
                                        Commerce.
                                       --Board of Probation
                                        and Parole.
                                       --Liquor Control Board.
                                       --Milk Marketing Board.
                                       --Lieutenant Governor's
                                        Office.
                                       --Department of
                                        Community Affairs.
                                       --Pennsylvania
                                        Historical and Museum
                                        Commission.
                                       --Pennsylvania
                                        Emergency Management
                                        Agency.
                                       --State Civil Service
                                        Commission.
                                       --Pennsylvania Public
                                        Television Network.
                                       --Department of
                                        Environmental
                                        Resources.
                                       --State Tax
                                        Equalization Board.
                                       --Department of Public
                                        Welfare.
                                       --State Employees'
                                        Retirement System.
                                       --Pennsylvania
                                        Municipal Retirement
                                        Board.
                                       --Public School
                                        Employees' Retirement
                                        System.
                                       --Pennsylvania Crime
                                        Commission.
                                       --Executive Offices....
Rhode Island.........................  Executive branch         Boats, automobiles,      --WTO GPA.
                                        agencies.                buses and related       --DR-CAFTA (except
                                                                 equipment.               Honduras).
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.

[[Page 38]]

 
South Dakota.........................  Central Procuring        Beef...................  --WTO GPA.
                                        Agency (including                                --DR-CAFTA.
                                        universities and penal                           --U.S.-Australia FTA.
                                        institutions).
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.
Tennessee............................  Executive branch         Services; construction.  --WTO GPA-U.S.-
                                        agencies.                                         Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Singapore FTA.
Texas................................  Texas Building and       .......................  --WTO GPA.
                                        Procurement Commission.                          --DR-CAFTA.
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Peru TPA.
                                                                                         --U.S.-Singapore FTA.
Utah.................................  Executive branch         .......................  --WTO GPA.
                                        agencies.                                        --DR-CAFTA (except
                                                                                          Honduras).
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Peru TPA.
                                                                                         --U.S.-Singapore FTA.
Vermont..............................  Executive branch         .......................  --WTO GPA.
                                        agencies.                                        --DR-CAFTA.
                                                                                         --U.S.-Australia FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Singapore FTA.
Washington...........................  Executive branch         Fuel; paper products;    --WTO GPA.
                                        agencies, including:     boats; ships; and       --DR-CAFTA.
                                       --General                 vessels.                --U.S.-Australia FTA.
                                        Administration.                                  --U.S.-Chile FTA.
                                       --Department of                                   --U.S.-Morocco FTA.
                                        Transportation.                                  --U.S.-Singapore FTA.
                                       --State Universities.
West Virginia........................  .......................  .......................  --U.S.-EC Exchange of
                                                                                          Letters (applies to EC
                                                                                          Member States and only
                                                                                          where the State
                                                                                          considers out-of-State
                                                                                          suppliers).
Wisconsin............................  Executive branch         .......................  --WTO GPA.
                                        agencies, including:                             --U.S.-Chile FTA.
                                       --Department of                                   --U.S.-Singapore FTA.
                                        Administration.
                                       --State Correctional
                                        Institutions.
                                       --Department of
                                        Development.
                                       --Educational
                                        Communications Board.
                                       --Department of
                                        Employment Relations.
                                       --State Historical
                                        Society.
                                       --Department of Health
                                        and Social Services.
                                       --Insurance
                                        Commissioner.
                                       --Department of
                                        Justice.
                                       --Lottery Board.
                                       --Department of Natural
                                        Resources.
                                       --Administration for
                                        Public Instruction.
                                       --Racing Board.
                                       --Department of
                                        Revenue.
                                       --State Fair Park
                                        Board.
                                       --Department of
                                        Transportation.
                                       --State University
                                        System.

[[Page 39]]

 
Wyoming..............................  --Procurement Services   Construction-grade       --WTO GPA.
                                        Division                 steel (including        --DR-CAFTA.
                                       --Wyoming Department of   requirements on         --U.S.-Australia FTA.
                                        Transportation.          subcontracts); motor    --U.S.-Chile FTA.
                                       --University of           vehicles; coal.         --U.S.-Morocco FTA.
                                        Wyoming.                                         --U.S.-Singapore FTA.
----------------------------------------------------------------------------------------------------------------
      Other sub-federal entities           Entities covered            Exclusions         Relevant international
                                                                                                agreements
----------------------------------------------------------------------------------------------------------------
Puerto Rico..........................  --Department of State    Construction services..  --DR-CAFTA.
                                       --Department of                                   --U.S.-Peru TPA.
                                        Justice.
                                       --Department of the      --Department of
                                        Treasury.                Economic Development
                                                                 and Commerce.
                                       --Department of Labor
                                        and Human Resources.
                                       --Department of Natural
                                        and Environmental
                                        Resources.
                                       --Department of
                                        Consumer Affairs.
                                       --Department of Sports
                                        and Recreation.
Port Authority of New York and New     .......................  Restrictions attached    --WTO GPA (except
 Jersey.                                                         to Federal funds for     Canada).
                                                                 airport projects;       --U.S.-Chile FTA.
                                                                 maintenance, repair     --U.S.-Singapore FTA.
                                                                 and operating
                                                                 materials and supplies.
Port of Baltimore....................  .......................  Restrictions attached    --WTO GPA (except
                                                                 to Federal funds for     Canada).
                                                                 airport projects.       --U.S.-Chile FTA.
                                                                                         --U.S.-Singapore FTA.
New York Power Authority.............  .......................  Restrictions attached    --WTO GPA (except
                                                                 to Federal funds for     Canada).
                                                                 airport projects;       --U.S.-Chile FTA.
                                                                 conditions specified    --U.S.-Singapore FTA.
                                                                 for the State of New
                                                                 York.
Massachusetts Port Authority.........  .......................  .......................  U.S.-EC Exchange of
                                                                                          Letters (applies to EC
                                                                                          Member States and only
                                                                                          where the Port
                                                                                          Authority considers
                                                                                          out-of-State
                                                                                          suppliers).
Boston, Chicago, Dallas, Detroit,      .......................  .......................  U.S.-EC Exchange of
 Indianapolis, Nashville, and San                                                         Letters (only applies
 Antonio.                                                                                 to EC Member States
                                                                                          and where the city
                                                                                          considers out-of-city
                                                                                          suppliers).
----------------------------------------------------------------------------------------------------------------
            Other entities                 Entities covered            Exclusions         Relevant international
                                                                                                agreements
----------------------------------------------------------------------------------------------------------------
Rural Utilities Service (waiver of     Any recipient..........  .......................  --WTO GPA.
 Buy American restriction on                                                             --DR-CAFTA.
 financing for all power generation                                                      --NAFTA.
 projects).                                                                              --U.S.-Australia FTA.
                                                                                         --U.S.-Bahrain FTA.
                                                                                         --U.S.-Chile FTA.
                                                                                         --U.S.-Morocco FTA.
                                                                                         --U.S.-Oman FTA.
                                                                                         --U.S.-Peru TPA.
                                                                                         --U.S.-Singapore FTA.
Rural Utilities Service (waiver of     Any recipient..........  .......................  --NAFTA.
 Buy American restriction on                                                             --U.S.-Israel FTA.
 financing for telecommunications
 projects).

[[Page 40]]

 
U.S. Department of Agriculture, Rural  Any recipient..........  .......................  U.S.-Canada Agreement.
 Utilities Services, Water and Waste
 Disposal Programs (exclusion of
 Canadian iron, steel and
 manufactured products from domestic
 purchasing restriction in Section
 1605 of American Recovery and
 Reinvestment Act of 2009).
U.S. Department of Agriculture, Rural  Any recipient..........  .......................  U.S.-Canada Agreement.
 Housing Service, Community
 Facilities Program (exclusion of
 Canadian iron, steel and
 manufactured products from domestic
 purchasing restriction in Section
 1605 of American Recovery and
 Reinvestment Act of 2009).
U.S. Department of Energy, Office of   Any recipient..........  .......................  U.S.-Canada Agreement.
 Energy Efficiency and Renewable
 Energy, Energy Efficiency and
 Conservation Block Grants (exclusion
 of Canadian iron, steel and
 manufactured products from domestic
 purchasing restriction in Section
 1605 of American Recovery and
 Reinvestment Act of 2009).
U.S. Department of Energy, Office of   Any recipient..........  .......................  U.S.-Canada Agreement.
 Energy Efficiency and Renewable
 Energy, State Energy Program
 (exclusion of Canadian iron, steel
 and manufactured products from
 domestic purchasing restriction in
 Section 1605 of American Recovery
 and Reinvestment Act of 2009 (ARRA).
U.S. Department of Housing and Urban   Any recipient..........  .......................  U.S.-Canada Agreement.
 Development, Office of Community
 Planning and Development, Community
 Development Block Grants Recovery
 (CDBG-R) (exclusion of Canadian
 iron, steel and manufactured
 products from domestic purchasing
 restriction in Section 1605 of
 American Recovery and Reinvestment
 Act of 2009).
U.S. Department of Housing and Urban   Any recipient..........  .......................  U.S.-Canada Agreement.
 Development, Office of Public and
 Indian Housing, Public Housing
 Capital Fund (exclusion of Canadian
 iron, steel and manufactured
 products from domestic purchasing
 restriction in Section 1605 of
 American Recovery and Reinvestment
 Act of 2009).

[[Page 41]]

 
U.S. Environmental Protection Clean    Any recipient..........  .......................  U.S.-Canada Agreement.
 Water and Drinking Water State
 Revolving Funds Agency for projects
 funded by reallocated ARRA funds
 where the contracts are signed after
 February 17, 2010 (exclusion of
 Canadian iron, steel and
 manufactured products from domestic
 purchasing restriction in Section
 1605 of American Recovery and
 Reinvestment Act of 2009).
----------------------------------------------------------------------------------------------------------------

    General Exceptions: The following restrictions and exceptions are 
excluded from U.S. obligations under international agreements:
    1. The restrictions attached to Federal funds to States for mass 
transit and highway projects.
    2. Dredging.
    The World Trade Organization Government Procurement Agreement (WTO 
GPA) Parties: Aruba, Austria, Belgium, Bulgaria, Canada, Chinese Taipei 
(Taiwan), Cyprus, Czech Republic, Denmark, Estonia, Finland, France, 
Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, 
Japan, Korea (Republic of), Latvia, Liechtenstein, Lithuania, 
Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, 
Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, and 
United Kingdom.
    The Free Trade Agreements and the respective Parties to the 
agreements are:
    (1) Dominican Republic-Central America-United States Free Trade 
Agreement (DR-CAFTA): Costa Rica, Dominican Republic, El Salvador, 
Guatemala, Honduras, and Nicaragua;
    (2) North American Free Trade Agreement (NAFTA): Canada and Mexico;
    (3) United States-Australia Free Trade Agreement (U.S.-Australia 
FTA);
    (4) United States-Bahrain Free Trade Agreement (U.S.-Bahrain FTA);
    (5) United States-Chile Free Trade Agreement (U.S.-Chile FTA);
    (6) United States-Israel Free Trade Agreement (U.S.-Israel FTA);
    (7) United States-Morocco Free Trade Agreement (U.S.-Morocco FTA);
    (8) United States-Oman Free Trade Agreement (U.S.-Oman FTA);
    (9) United States-Peru Trade Promotion Agreement (U.S.-Peru TPA); 
and
    (10) United States-Singapore Free Trade Agreement (U.S.-Singapore 
FTA).
    United States-European Communities Exchange of Letters (May 30, 
1995) (U.S.-EC Exchange of Letters) applies to EC Member States: 
Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, 
Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, 
Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, 
Slovak Republic, Slovenia, Spain, Sweden, and United Kingdom.
    Agreement between the Government of Canada and the Government of the 
United States of America on Government Procurement (Feb. 10, 2010) 
(U.S.-Canada Agreement): Applies only to Canada.

[75 FR 14324, Mar. 25, 2010]



  Subpart C_Wage Rate Requirements Under Section 1606 of the American 
                  Recovery and Reinvestment Act of 2009



Sec.  176.180  Procedure.

    The award official shall insert the standard award term in this 
subpart in all awards funded in whole or in part with Recovery Act 
funds.



Sec.  176.190  Award term--Wage rate requirements under Section 1606
of the Recovery Act.

    When issuing announcements or requesting applications for Recovery 
Act programs or activities that may involve construction, alteration, 
maintenance, or repair the agency shall use the award term described in 
the following paragraphs:
    (a) Section 1606 of the Recovery Act requires that all laborers and 
mechanics employed by contractors and subcontractors on projects funded 
directly by or assisted in whole or in part by and through the Federal 
Government pursuant to the Recovery Act shall be paid wages at rates not 
less than those prevailing on projects of a character similar in the 
locality as determined

[[Page 42]]

by the Secretary of Labor in accordance with subchapter IV of chapter 31 
of title 40, United States Code.
    Pursuant to Reorganization Plan No. 14 and the Copeland Act, 40 
U.S.C. 3145, the Department of Labor has issued regulations at 29 CFR 
parts 1, 3, and 5 to implement the Davis-Bacon and related Acts. 
Regulations in 29 CFR 5.5 instruct agencies concerning application of 
the standard Davis-Bacon contract clauses set forth in that section. 
Federal agencies providing grants, cooperative agreements, and loans 
under the Recovery Act shall ensure that the standard Davis-Bacon 
contract clauses found in 29 CFR 5.5(a) are incorporated in any 
resultant covered contracts that are in excess of $2,000 for 
construction, alteration or repair (including painting and decorating).
    (b) For additional guidance on the wage rate requirements of section 
1606, contact your awarding agency. Recipients of grants, cooperative 
agreements and loans should direct their initial inquiries concerning 
the application of Davis-Bacon requirements to a particular federally 
assisted project to the Federal agency funding the project. The 
Secretary of Labor retains final coverage authority under Reorganization 
Plan Number 14.



 Subpart D_Single Audit Information for Recipients of Recovery Act Funds



Sec.  176.200  Procedure.

    The award official shall insert the standard award term in this 
subpart in all awards funded in whole or in part with Recovery Act 
funds.



Sec.  176.210  Award term--Recovery Act transactions listed in 
Schedule of Expenditures of Federal Awards and Recipient 
Responsibilities for Informing Subrecipients.

    The award term described in this section shall be used by agencies 
to clarify recipient responsibilities regarding tracking and documenting 
Recovery Act expenditures:
    (a) To maximize the transparency and accountability of funds 
authorized under the American Recovery and Reinvestment Act of 2009 
(Pub. L. 111-5) (Recovery Act) as required by Congress and in accordance 
with 2 CFR 215.21 ``Uniform Administrative Requirements for Grants and 
Agreements'' and OMB Circular A-102 Common Rules provisions, recipients 
agree to maintain records that identify adequately the source and 
application of Recovery Act funds. OMB Circular A-102 is available at 
http://www.whitehouse.gov/omb/circulars/a102/a102.html.
    (b) For recipients covered by the Single Audit Act Amendments of 
1996 and OMB Circular A-133, ``Audits of States, Local Governments, and 
Non-Profit Organizations,'' recipients agree to separately identify the 
expenditures for Federal awards under the Recovery Act on the Schedule 
of Expenditures of Federal Awards (SEFA) and the Data Collection Form 
(SF-SAC) required by OMB Circular A-133. OMB Circular A-133 is available 
at http://www.whitehouse.gov/omb/circulars/a133/a133.html. This shall be 
accomplished by identifying expenditures for Federal awards made under 
the Recovery Act separately on the SEFA, and as separate rows under Item 
9 of Part III on the SF-SAC by CFDA number, and inclusion of the prefix 
``ARRA-'' in identifying the name of the Federal program on the SEFA and 
as the first characters in Item 9d of Part III on the SF-SAC.
    (c) Recipients agree to separately identify to each subrecipient, 
and document at the time of subaward and at the time of disbursement of 
funds, the Federal award number, CFDA number, and amount of Recovery Act 
funds. When a recipient awards Recovery Act funds for an existing 
program, the information furnished to subrecipients shall distinguish 
the subawards of incremental Recovery Act funds from regular subawards 
under the existing program.
    (d) Recipients agree to require their subrecipients to include on 
their SEFA information to specifically identify Recovery Act funding 
similar to the requirements for the recipient SEFA described above. This 
information is needed to allow the recipient to properly monitor 
subrecipient expenditure of ARRA funds as well as oversight by the 
Federal awarding agencies, Offices of Inspector General and the 
Government Accountability Office.

[[Page 43]]

                        PARTS 177	179 [RESERVED]



PART 180_OMB GUIDELINES TO AGENCIES ON GOVERNMENTWIDE DEBARMENT AND
SUSPENSION (NONPROCUREMENT)--Table of Contents



Sec.
180.5 What does this part do?
180.10 How is this part organized?
180.15 To whom do these guidelines apply?
180.20 What must a Federal agency do to implement these guidelines?
180.25 What must a Federal agency address in its implementation of these 
          guidelines?
180.30 Where does a Federal agency implement these guidelines?
180.35 By when must a Federal agency implement these guidelines?
180.40 How are these guidelines maintained?
180.45 Do these guidelines cover persons who are disqualified, as well 
          as those who are excluded from nonprocurement transactions?

                            Subpart A_General

180.100 How are subparts A through I organized?
180.105 How is this part written?
180.110 Do terms in this part have special meanings?
180.115 What do subparts A through I of this part do?
180.120 Do subparts A through I of this part apply to me?
180.125 What is the purpose of the nonprocurement debarment and 
          suspension system?
180.130 How does an exclusion restrict a person's involvement in covered 
          transactions?
180.135 May a Federal agency grant an exception to let an excluded 
          person participate in a covered transaction?
180.140 Does an exclusion under the nonprocurement system affect a 
          person's eligibility for Federal procurement contracts?
180.145 Does an exclusion under the Federal procurement system affect a 
          person's eligibility to participate in nonprocurement 
          transactions?
180.150 Against whom may a Federal agency take an exclusion action?
180.155 How do I know if a person is excluded?

                     Subpart B_Covered Transactions

180.200 What is a covered transaction?
180.205 Why is it important to know if a particular transaction is a 
          covered transaction?
180.210 Which nonprocurement transactions are covered transactions?
180.215 Which nonprocurement transactions are not covered transactions?
180.220 Are any procurement contracts included as covered transactions?
180.225 How do I know if a transaction in which I may participate is a 
          covered transaction?

Subpart C_Responsibilities of Participants Regarding Transactions Doing 
                       Business With Other Persons

180.300 What must I do before I enter into a covered transaction with 
          another person at the next lower tier?
180.305 May I enter into a covered transaction with an excluded or 
          disqualified person?
180.310 What must I do if a Federal agency excludes a person with whom I 
          am already doing business in a covered transaction?
180.315 May I use the services of an excluded person as a principal 
          under a covered transaction?
180.320 Must I verify that principals of my covered transactions are 
          eligible to participate?
180.325 What happens if I do business with an excluded person in a 
          covered transaction?
180.330 What requirements must I pass down to persons at lower tiers 
          with whom I intend to do business?

            Disclosing Information--Primary Tier Participants

180.335 What information must I provide before entering into a covered 
          transaction with a Federal agency?
180.340 If I disclose unfavorable information required under Sec.  
          180.335 will I be prevented from participating in the 
          transaction?
180.345 What happens if I fail to disclose information required under 
          Sec.  180.335?
180.350 What must I do if I learn of information required under Sec.  
          180.335 after entering into a covered transaction with a 
          Federal agency?

             Disclosing Information--Lower Tier Participants

180.355 What information must I provide to a higher tier participant 
          before entering into a covered transaction with that 
          participant?
180.360 What happens if I fail to disclose information required under 
          Sec.  180.355?
180.365 What must I do if I learn of information required under Sec.  
          180.355 after entering into a covered transaction with a 
          higher tier participant?

[[Page 44]]

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

180.400 May I enter into a transaction with an excluded or disqualified 
          person?
180.405 May I enter into a covered transaction with a participant if a 
          principal of the transaction is excluded?
180.410 May I approve a participant's use of the services of an excluded 
          person?
180.415 What must I do if a Federal agency excludes the participant or a 
          principal after I enter into a covered transaction?
180.420 May I approve a transaction with an excluded or disqualified 
          person at a lower tier?
180.425 When do I check to see if a person is excluded or disqualified?
180.430 How do I check to see if a person is excluded or disqualified?
180.435 What must I require of a primary tier participant?
180.440 What action may I take if a primary tier participant knowingly 
          does business with an excluded or disqualified person?
180.445 What action may I take if a primary tier participant fails to 
          disclose the information required under Sec.  180.335?
180.450 What may I do if a lower tier participant fails to disclose the 
          information required under Sec.  180.355 to the next higher 
          tier?

            Subpart E_System for Award Management Exclusions

180.500 What is the purpose of the System for Award Management 
          Exclusions (SAM Exclusions)?
180.505 Who uses SAM Exclusions?
180.510 Who maintains SAM Exclusions?
180.515 What specific information is in SAM Exclusions?
180.520 Who places the information into SAM Exclusions?
180.525 Whom do I ask if I have questions about a person in SAM 
          Exclusions?
180.530 Where can I find SAM Exclusions?

   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions

180.600 How do suspension and debarment actions start?
180.605 How does suspension differ from debarment?
180.610 What procedures does a Federal agency use in suspension and 
          debarment actions?
180.615 How does a Federal agency notify a person of a suspension or 
          debarment action?
180.620 Do Federal agencies coordinate suspension and debarment actions?
180.625 What is the scope of a suspension or debarment?
180.630 May a Federal agency impute the conduct of one person to 
          another?
180.635 May a Federal agency settle a debarment or suspension action?
180.640 May a settlement include a voluntary exclusion?
180.645 Do other Federal agencies know if an agency agrees to a 
          voluntary exclusion?
180.650 May an administrative agreement be the result of a settlement?
180.655 How will other Federal awarding agencies know about an 
          administrative agreement that is the result of a settlement?
180.660 Will administrative agreement information about me in the 
          designated integrity and performance system accessible through 
          SAM be corrected or updated?

                          Subpart G_Suspension

180.700 When may the suspending official issue a suspension?
180.705 What does the suspending official consider in issuing a 
          suspension?
180.710 When does a suspension take effect?
180.715 What notice does the suspending official give me if I am 
          suspended?
180.720 How may I contest a suspension?
180.725 How much time do I have to contest a suspension?
180.730 What information must I provide to the suspending official if I 
          contest the suspension?
180.735 Under what conditions do I get an additional opportunity to 
          challenge the facts on which the suspension is based?
180.740 Are suspension proceedings formal?
180.745 How is fact-finding conducted?
180.750 What does the suspending official consider in deciding whether 
          to continue or terminate my suspension?
180.755 When will I know whether the suspension is continued or 
          terminated?
180.760 How long may my suspension last?

                           Subpart H_Debarment

180.800 What are the causes for debarment?
180.805 What notice does the debarring official give me if I am proposed 
          for debarment?
180.810 When does a debarment take effect?
180.815 How may I contest a proposed debarment?
180.820 How much time do I have to contest a proposed debarment?
180.825 What information must I provide to the debarring official if I 
          contest the proposed debarment?
180.830 Under what conditions do I get an additional opportunity to 
          challenge the facts on which the proposed debarment is based?
180.835 Are debarment proceedings formal?
180.840 How is fact-finding conducted?

[[Page 45]]

180.845 What does the debarring official consider in deciding whether to 
          debar me?
180.850 What is the standard of proof in a debarment action?
180.855 Who has the burden of proof in a debarment action?
180.860 What factors may influence the debarring official's decision?
180.865 How long may my debarment last?
180.870 When do I know if the debarring official debars me?
180.875 May I ask the debarring official to reconsider a decision to 
          debar me?
180.880 What factors may influence the debarring official during 
          reconsideration?
180.885 May the debarring official extend a debarment?

                          Subpart I_Definitions

180.900 Adequate evidence.
180.905 Affiliate.
180.910 Agent or representative.
180.915 Civil judgment.
180.920 Conviction.
180.925 Debarment.
180.930 Debarring official.
180.935 Disqualified.
180.940 Excluded or exclusion.
180.945 System for Award Management Exclusions (SAM Exclusions).
180.950 Federal agency.
180.955 Indictment.
180.960 Ineligible or ineligibility.
180.965 Legal proceedings.
180.970 Nonprocurement transaction.
180.975 Notice.
180.980 Participant.
180.985 Person.
180.990 Preponderance of the evidence.
180.995 Principal.
180.1000 Respondent.
180.1005 State.
180.1010 Suspending official.
180.1015 Suspension.
180.1020 Voluntary exclusion or voluntarily excluded.

Appendix to Part 180--Covered Transactions

    Authority: Pub. L. 109-282; 31 U.S.C. 6102, Sec. 2455, Pub. L. 103-
355, 108 Stat. 3327; E.O. 12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 
3 CFR, 1989 Comp., p. 235.

    Source: 70 FR 51865, Aug. 31, 2005, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 180 appear at 79 FR 
75879, Dec. 19, 2014.



Sec.  180.5  What does this part do?

    This part provides Office of Management and Budget (OMB) guidance 
for Federal agencies on the governmentwide debarment and suspension 
system for nonprocurement programs and activities.



Sec.  180.10  How is this part organized?

    This part is organized in two segments.
    (a) Sections 180.5 through 180.45 contain general policy direction 
for Federal agencies' use of the standards in subparts A through I of 
this part.
    (b) Subparts A through I of this part contain uniform governmentwide 
standards that Federal agencies are to use to specify--
    (1) The types of transactions that are covered by the nonprocurement 
debarment and suspension system;
    (2) The effects of an exclusion under that nonprocurement system, 
including reciprocal effects with the governmentwide debarment and 
suspension system for procurement;
    (3) The criteria and minimum due process to be used in 
nonprocurement debarment and suspension actions; and
    (4) Related policies and procedures to ensure the effectiveness of 
those actions.



Sec.  180.15  To whom does the guidance apply?

    The guidance provides OMB guidance only to Federal agencies. 
Publication of the guidance in the CFR does not change its nature--it is 
guidance and not regulation. Federal agencies' implementation of the 
guidance governs the rights and responsibilities of other persons 
affected by the nonprocurement debarment and suspension system.



Sec.  180.20  What must a Federal agency do to implement these guidelines?

    As required by Section 3 of E.O. 12549, each Federal agency with 
nonprocurement programs and activities covered by subparts A through I 
of the guidance must issue regulations consistent with those subparts.



Sec.  180.25  What must a Federal agency address in its 
implementation of the guidance?

    Each Federal agency implementing regulation:
    (a) Must establish policies and procedures for that agency's 
nonprocurement debarment and suspension programs and activities that are 
consistent with the guidance. When adopted by a Federal agency, the 
provisions

[[Page 46]]

of the guidance have regulatory effect for that agency's programs and 
activities.
    (b) Must address some matters for which these guidelines give each 
Federal agency some discretion. Specifically, the regulation must--
    (1) Identify either the Federal agency head or the title of the 
designated official who is authorized to grant exceptions under Sec.  
180.135 to let an excluded person participate in a covered transaction.
    (2) State whether the agency includes as covered transactions an 
additional tier of contracts awarded under covered nonprocurement 
transactions, as permitted under Sec.  180.220(c).
    (3) Identify the method(s) an agency official may use, when entering 
into a covered transaction with a primary tier participant, to 
communicate to the participant the requirements described in Sec.  
180.435. Examples of methods are an award term that requires compliance 
as a condition of the award; an assurance of compliance obtained at time 
of application; or a certification.
    (4) State whether the Federal agency specifies a particular method 
that participants must use to communicate compliance requirements to 
lower-tier participants, as described in Sec.  180.330(a). If there is a 
specified method, the regulation needs to require agency officials, when 
entering into covered transactions with primary tier participants, to 
communicate that requirement.
    (c) May also, at the agency's option:
    (1) Identify any specific types of transactions that the Federal 
agency includes as ``nonprocurement transactions'' in addition to the 
examples provided in Sec.  180.970.
    (2) Identify any types of nonprocurement transactions that the 
Federal agency exempts from coverage under these guidelines, as 
authorized under Sec.  180.215(g)(2).
    (3) Identify specific examples of types of individuals who would be 
``principals'' under the Federal agency's nonprocurement programs and 
transactions, in addition to the types of individuals described at Sec.  
180.995.
    (4) Specify the Federal agency's procedures, if any, by which a 
respondent may appeal a suspension or debarment decision.
    (5) Identify by title the officials designated by the Federal agency 
head as debarring officials under Sec.  180.930 or suspending officials 
under Sec.  180.1010.
    (6) Include a subpart covering disqualifications, as authorized in 
Sec.  180.45.
    (7) Include any provisions authorized by OMB.

[70 FR 51865, Aug. 31, 2005, as amended at 71 FR 66432, Nov. 15, 2006; 
79 FR 75879, Dec. 19, 2014]



Sec.  180.30  Where does a Federal agency implement these guidelines?

    Each Federal agency that participates in the governmentwide 
nonprocurement debarment and suspension system must issue a regulation 
implementing these guidelines within its chapter in subtitle B of this 
title of the Code of Federal Regulations.



Sec.  180.35  By when must a Federal agency implement these guidelines?

    Federal agencies must submit proposed regulations to the OMB for 
review within nine months of the issuance of these guidelines and issue 
final regulations within eighteen months of these guidelines.



Sec.  180.40  How are these guidelines maintained?

    The Interagency Committee on Debarment and Suspension established by 
section 4 of E.O. 12549 recommends to the OMB any needed revisions to 
the guidelines in this part. The OMB publishes proposed changes to the 
guidelines in the Federal Register for public comment, considers 
comments with the help of the Interagency Committee on Debarment and 
Suspension, and issues the final guidelines.



Sec.  180.45  Do these guidelines cover persons who are disqualified,
as well as those who are excluded from nonprocurement transactions?

    A Federal agency may add a subpart covering disqualifications to its 
regulation implementing these guidelines, but the guidelines in subparts 
A through I of this part--
    (a) Address disqualified persons only to--
    (1) Provide for their inclusion in SAM Exclusions; and

[[Page 47]]

    (2) State responsibilities of Federal agencies and participants to 
check for disqualified persons before entering into covered 
transactions.
    (b) Do not specify the--
    (1) Transactions for which a disqualified person is ineligible. 
Those transactions vary on a case-by-case basis, because they depend on 
the language of the specific statute, Executive order or regulation that 
caused the disqualification;
    (2) Entities to which a disqualification applies; or
    (3) Process that a Federal agency uses to disqualify a person. 
Unlike exclusion under subparts A through I of this part, 
disqualification is frequently not a discretionary action that a Federal 
agency takes, and may include special procedures.



                            Subpart A_General



Sec.  180.100  How are subparts A through I organized?

    (a) Each subpart contains information related to a broad topic or 
specific audience with special responsibilities, as shown in the 
following table:

----------------------------------------------------------------------------------------------------------------
              In subpart . . .                             You will find provisions related to . . .
----------------------------------------------------------------------------------------------------------------
A...........................................  general information about Subparts A through I of this part.
B...........................................  the types of transactions that are covered by the Governmentwide
                                               nonprocurement suspension and debarment system.
C...........................................  the responsibilities of persons who participate in covered
                                               transactions.
D...........................................  the responsibilities of Federal agency officials who are
                                               authorized to enter into covered transactions.
E...........................................  the responsibilities of Federal agencies for entering information
                                               into SAM Exclusions
F...........................................  the general principles governing suspension, debarment, voluntary
                                               exclusion and settlement.
G...........................................  suspension actions.
H...........................................  debarment actions.
I...........................................  definitions of terms used in this part.
----------------------------------------------------------------------------------------------------------------

    (b) The following table shows which subparts may be of special 
interest to you, depending on who you are:

------------------------------------------------------------------------
          If you are . . .                   See Subpart(s) . . .
------------------------------------------------------------------------
(1) a participant or principal in a  A, B, C and I.
 nonprocurement transaction.
(2) a respondent in a suspension     A, B, F, G and I.
 action.
(3) a respondent in a debarment      A, B, F, H and I.
 action.
(4) a suspending official..........  A, B, E, F, G and I.
(5) a debarring official...........  A, B, D, F, H and I.
(6) an Federal agency official       A, B, D, E and I.
 authorized to enter into a covered
 transaction.
------------------------------------------------------------------------



Sec.  180.105  How is this part written?

    (a) This part uses a ``plain language'' format to make it easier for 
the general public and business community to use. The section headings 
and text, often in the form of questions and answers, must be read 
together.
    (b) Pronouns used within this part, such as ``I'' and ``you,'' 
change from subpart to subpart depending on the audience being 
addressed.
    (c) The ``Covered Transactions'' diagram in the appendix to this 
part shows the levels or ``tiers'' at which a Federal agency may enforce 
an exclusion.



Sec.  180.110  Do terms in this part have special meanings?

    This part uses terms throughout the text that have special meaning. 
Those terms are defined in subpart I of this part. For example, three 
important terms are--
    (a) Exclusion or excluded, which refers only to discretionary 
actions taken by a suspending or debarring official under Executive 
Order 12549 and Executive Order 12689 or under the Federal Acquisition 
Regulation (48 CFR part 9, subpart 9.4);
    (b) Disqualification or disqualified, which refers to prohibitions 
under specific statutes, executive orders (other than Executive Order 
12549 and Executive Order 12689), or other authorities. 
Disqualifications frequently are not

[[Page 48]]

subject to the discretion of a Federal agency official, may have a 
different scope than exclusions, or have special conditions that apply 
to the disqualification; and
    (c) Ineligibility or ineligible, which generally refers to a person 
who is either excluded or disqualified.



Sec.  180.115  What do Subparts A through I of this part do?

    Subparts A through I of this part provide for reciprocal exclusion 
of persons who have been excluded under the Federal Acquisition 
Regulation, and provide for the consolidated listing of all persons who 
are excluded, or disqualified by statute, executive order or other legal 
authority.



Sec.  180.120  Do subparts A through I of this part apply to me?

    Portions of subparts A through I of this part (see table at Sec.  
180.100(b)) apply to you if you are a--
    (a) Person who has been, is, or may reasonably be expected to be, a 
participant or principal in a covered transaction;
    (b) Respondent (a person against whom a Federal agency has initiated 
a debarment or suspension action);
    (c) Federal agency debarring or suspending official; or
    (d) Federal agency official who is authorized to enter into covered 
transactions with non-Federal parties.



Sec.  180.125  What is the purpose of the nonprocurement debarment
and suspension system?

    (a) To protect the public interest, the Federal Government ensures 
the integrity of Federal programs by conducting business only with 
responsible persons.
    (b) A Federal agency uses the nonprocurement debarment and 
suspension system to exclude from Federal programs persons who are not 
presently responsible.
    (c) An exclusion is a serious action that a Federal agency may take 
only to protect the public interest. A Federal agency may not exclude a 
person or commodity for the purposes of punishment.



Sec.  180.130  How does an exclusion restrict a person's involvement
in covered transactions?

    With the exceptions stated in Sec. Sec.  180.135, 315, and 420, a 
person who is excluded by any Federal agency may not:
    (a) Be a participant in a Federal agency transaction that is a 
covered transaction; or
    (b) Act as a principal of a person participating in one of those 
covered transactions.



Sec.  180.135  May a Federal agency grant an exception to let an
excluded person participate in a covered transaction?

    (a) A Federal agency head or designee may grant an exception 
permitting an excluded person to participate in a particular covered 
transaction. If the agency head or designee grants an exception, the 
exception must be in writing and state the reason(s) for deviating from 
the governmentwide policy in Executive Order 12549.
    (b) An exception granted by one Federal agency for an excluded 
person does not extend to the covered transactions of another Federal 
agency.



Sec.  180.140  Does an exclusion under the nonprocurement system
affect a person's eligibility for Federal procurement contracts?

    If any Federal agency excludes a person under Executive Order 12549 
or Executive Order 12689, on or after August 25, 1995, the excluded 
person is also ineligible for Federal procurement transactions under the 
FAR. Therefore, an exclusion under this part has reciprocal effect in 
Federal procurement transactions.



Sec.  180.145  Does an exclusion under the Federal procurement 
system affect a person's eligibility to participate in nonprocurement 
transactions?

    If any Federal agency excludes a person under the FAR on or after 
August 25, 1995, the excluded person is also ineligible to participate 
in Federal agencies' nonprocurement covered transactions. Therefore, an 
exclusion under the FAR has reciprocal effect in Federal nonprocurement 
transactions.

[[Page 49]]



Sec.  180.150  Against whom may a Federal agency take an exclusion
action?

    Given a cause that justifies an exclusion under this part, a Federal 
agency may exclude any person who has been, is, or may reasonably be 
expected to be a participant or principal in a covered transaction.



Sec.  180.155  How do I know if a person is excluded?

    Check the Governmentwide System for Award Management Exclusions (SAM 
Exclusions) to determine whether a person is excluded. The General 
Services Administration (GSA) maintains the SAM Exclusions and makes it 
available, as detailed in Subpart E of this part. When a Federal agency 
takes an action to exclude a person under the nonprocurement or 
procurement debarment and suspension system, the agency enters the 
information about the excluded person into the SAM Exclusions.

[70 FR 51865, Aug. 31, 2005, as amended at 79 FR 75879, Dec. 19, 2014]



                     Subpart B_Covered Transactions



Sec.  180.200  What is a covered transaction?

    A covered transaction is a nonprocurement or procurement transaction 
that is subject to the prohibitions of this part. It may be a 
transaction at--
    (a) The primary tier, between a Federal agency and a person (see 
appendix to this part); or
    (b) A lower tier, between a participant in a covered transaction and 
another person.



Sec.  180.205  Why is it important if a particular transaction is a 
covered transaction?

    The importance of whether a transaction is a covered transaction 
depends upon who you are.
    (a) As a participant in the transaction, you have the 
responsibilities laid out in subpart C of this part. Those include 
responsibilities to the person or Federal agency at the next higher tier 
from whom you received the transaction, if any. They also include 
responsibilities if you subsequently enter into other covered 
transactions with persons at the next lower tier.
    (b) As a Federal official who enters into a primary tier 
transaction, you have the responsibilities laid out in subpart D of this 
part.
    (c) As an excluded person, you may not be a participant or principal 
in the transaction unless--
    (1) The person who entered into the transaction with you allows you 
to continue your involvement in a transaction that predates your 
exclusion, as permitted under Sec.  180.310 or Sec.  180.415; or
    (2) A Federal agency official obtains an exception from the agency 
head or designee to allow you to be involved in the transaction, as 
permitted under Sec.  180.135.



Sec.  180.210  Which nonprocurement transactions are covered
transactions?

    All nonprocurement transactions, as defined in Sec.  180.970, are 
covered transactions unless listed in the exemptions under Sec.  
180.215.



Sec.  180.215  Which nonprocurement transactions are not covered
transactions?

    The following types of nonprocurement transactions are not covered 
transactions:
    (a) A direct award to--
    (1) A foreign government or foreign governmental entity;
    (2) A public international organization;
    (3) An entity owned (in whole or in part) or controlled by a foreign 
government; or
    (4) Any other entity consisting wholly or partially of one or more 
foreign governments or foreign governmental entities.
    (b) A benefit to an individual as a personal entitlement without 
regard to the individual's present responsibility (but benefits received 
in an individual's business capacity are not excepted). For example, if 
a person receives social security benefits under the Supplemental 
Security Income provisions of the Social Security Act, 42 U.S.C. 1301 et 
seq., those benefits are not covered transactions and, therefore, are 
not affected if the person is excluded.
    (c) Federal employment.

[[Page 50]]

    (d) A transaction that a Federal agency needs to respond to a 
national or agency-recognized emergency or disaster.
    (e) A permit, license, certificate or similar instrument issued as a 
means to regulate public health, safety or the environment, unless a 
Federal agency specifically designates it to be a covered transaction.
    (f) An incidental benefit that results from ordinary governmental 
operations.
    (g) Any other transaction if--
    (1) The application of an exclusion to the transaction is prohibited 
by law; or
    (2) A Federal agency's regulation exempts it from coverage under 
this part.
    (h) Notwithstanding paragraph (a) of this section, covered 
transactions must include non-procurement and procurement transactions 
involving entities engaged in activity that contributed to or is a 
significant factor in a country's non-compliance with its obligations 
under arms control, nonproliferation or disarmament agreements or 
commitments with the United States. Federal awarding agencies and 
primary tier non-procurement recipients must not award, renew, or extend 
a non-procurement transaction or procurement transaction, regardless of 
amount or tier, with any entity listed in the System for Award 
Management Exclusions List on the basis of involvement in activities 
that violate arms control, nonproliferation or disarmament agreements or 
commitments with the United States, pursuant to section 1290 of the 
National Defense Authorization Act for Fiscal Year 2017, unless the head 
of a Federal agency grants an exception pursuant to 2 CFR 180.135 with 
the concurrence of the OMB Director.

[70 FR 51865, Aug. 31, 2005, as amended at 83 FR 31038, July 3, 2018]



Sec.  180.220  Are any procurement contracts included as covered
transactions?

    (a) Covered transactions under this part--
    (1) Do not include any procurement contracts awarded directly by a 
Federal agency; but
    (2) Do include some procurement contracts awarded by non-Federal 
participants in nonprocurement covered transactions.
    (b) Specifically, a contract for goods or services is a covered 
transaction if any of the following applies:
    (1) The contract is awarded by a participant in a nonprocurement 
transaction that is covered under Sec.  180.210, and the amount of the 
contract is expected to equal or exceed $25,000.
    (2) The contract requires the consent of an official of a Federal 
agency. In that case, the contract, regardless of the amount, always is 
a covered transaction, and it does not matter who awarded it. For 
example, it could be a subcontract awarded by a contractor at a tier 
below a nonprocurement transaction, as shown in the appendix to this 
part.
    (3) The contract is for Federally-required audit services.
    (c) A subcontract also is a covered transaction if,--
    (1) It is awarded by a participant in a procurement transaction 
under a nonprocurement transaction of a Federal agency that extends the 
coverage of paragraph (b)(1) of this section to additional tiers of 
contracts (see the diagram in the appendix to this part showing that 
optional lower tier coverage); and
    (2) The value of the subcontract is expected to equal or exceed 
$25,000.

[70 FR 51865, Aug. 31, 2005, as amended at 71 FR 66432, Nov. 15, 2006]



Sec.  180.225  How do I know if a transaction in which I may
participate is a covered transaction?

    As a participant in a transaction, you will know that it is a 
covered transaction because the Federal agency regulations governing the 
transaction, the appropriate Federal agency official or participant at 
the next higher tier who enters into the transaction with you, will tell 
you that you must comply with applicable portions of this part.

[[Page 51]]



Subpart C_Responsibilities of Participants Regarding Transactions Doing 
                       Business With Other Persons



Sec.  180.300  What must I do before I enter into a covered transaction
with another person at the next lower tier?

    When you enter into a covered transaction with another person at the 
next lower tier, you must verify that the person with whom you intend to 
do business is not excluded or disqualified. You do this by:
    (a) Checking SAM Exclusions; or
    (b) Collecting a certification from that person; or
    (c) Adding a clause or condition to the covered transaction with 
that person.

[70 FR 51865, Aug. 31, 2005, as amended at 71 FR 66432, Nov. 15, 2006]



Sec.  180.305  May I enter into a covered transaction with an excluded
or disqualified person?

    (a) You as a participant may not enter into a covered transaction 
with an excluded person, unless the Federal agency responsible for the 
transaction grants an exception under Sec.  180.135.
    (b) You may not enter into any transaction with a person who is 
disqualified from that transaction, unless you have obtained an 
exception under the disqualifying statute, Executive order, or 
regulation.



Sec.  180.310  What must I do if a Federal agency excludes a person
with whom I am already doing business in a covered transaction?

    (a) You as a participant may continue covered transactions with an 
excluded person if the transactions were in existence when the agency 
excluded the person. However, you are not required to continue the 
transactions, and you may consider termination. You should make a 
decision about whether to terminate and the type of termination action, 
if any, only after a thorough review to ensure that the action is proper 
and appropriate.
    (b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, unless the Federal 
agency responsible for the transaction grants an exception under Sec.  
180.135.



Sec.  180.315  May I use the services of an excluded person as a 
principal under a covered transaction?

    (a) You as a participant may continue to use the services of an 
excluded person as a principal under a covered transaction if you were 
using the services of that person in the transaction before the person 
was excluded. However, you are not required to continue using that 
person's services as a principal. You should make a decision about 
whether to discontinue that person's services only after a thorough 
review to ensure that the action is proper and appropriate.
    (b) You may not begin to use the services of an excluded person as a 
principal under a covered transaction unless the Federal agency 
responsible for the transaction grants an exception under Sec.  180.135.



Sec.  180.320  Must I verify that principals of my covered transactions
are eligible to participate?

    Yes, you as a participant are responsible for determining whether 
any of your principals of your covered transactions is excluded or 
disqualified from participating in the transaction.
    You may decide the method and frequency by which you do so. You may, 
but you are not required to, check SAM Exclusions.



Sec.  180.325  What happens if I do business with an excluded person
in a covered transaction?

    If as a participant you knowingly do business with an excluded 
person, the Federal agency responsible for your transaction may disallow 
costs, annul or terminate the transaction, issue a stop work order, 
debar or suspend you, or take other remedies as appropriate.



Sec.  180.330  What requirements must I pass down to persons at lower
tiers with whom I intend to do business?

    Before entering into a covered transaction with a participant at the 
next lower tier, you must require that participant to--

[[Page 52]]

    (a) Comply with this subpart as a condition of participation in the 
transaction. You may do so using any method(s), unless the regulation of 
the Federal agency responsible for the transaction requires you to use 
specific methods.
    (b) Pass the requirement to comply with this subpart to each person 
with whom the participant enters into a covered transaction at the next 
lower tier.

            Disclosing Information--Primary Tier Participants



Sec.  180.335  What information must I provide before entering into 
a covered transaction with a Federal agency?

    Before you enter into a covered transaction at the primary tier, you 
as the participant must notify the Federal agency office that is 
entering into the transaction with you, if you know that you or any of 
the principals for that covered transaction:
    (a) Are presently excluded or disqualified;
    (b) Have been convicted within the preceding three years of any of 
the offenses listed in Sec.  180.800(a) or had a civil judgment rendered 
against you for one of those offenses within that time period;
    (c) Are presently indicted for or otherwise criminally or civilly 
charged by a governmental entity (Federal, State or local) with 
commission of any of the offenses listed in Sec.  180.800(a); or
    (d) Have had one or more public transactions (Federal, State, or 
local) terminated within the preceding three years for cause or default.



Sec.  180.340  If I disclose unfavorable information required under
Sec.  180.335, will I be prevented from participating in the transaction?

    As a primary tier participant, your disclosure of unfavorable 
information about yourself or a principal under Sec.  180.335 will not 
necessarily cause a Federal agency to deny your participation in the 
covered transaction. The agency will consider the information when it 
determines whether to enter into the covered transaction. The agency 
will also consider any additional information or explanation that you 
elect to submit with the disclosed information.



Sec.  180.345  What happens if I fail to disclose information required
under Sec.  180.335?

    If a Federal agency later determines that you failed to disclose 
information under Sec.  180.335 that you knew at the time you entered 
into the covered transaction, the agency may--
    (a) Terminate the transaction for material failure to comply with 
the terms and conditions of the transaction; or
    (b) Pursue any other available remedies, including suspension and 
debarment.



Sec.  180.350  What must I do if I learn of information required under
Sec.  180.335 after entering into a covered transaction with a Federal
agency?

    At any time after you enter into a covered transaction, you must 
give immediate written notice to the Federal agency office with which 
you entered into the transaction if you learn either that--
    (a) You failed to disclose information earlier, as required by Sec.  
180.335; or
    (b) Due to changed circumstances, you or any of the principals for 
the transaction now meet any of the criteria in Sec.  180.335.

             Disclosing Information--Lower Tier Participants



Sec.  180.355  What information must I provide to a higher tier
participant before entering into a covered transaction with that 
participant?

    Before you enter into a covered transaction with a person at the 
next higher tier, you as a lower tier participant must notify that 
person if you know that you or any of the principals are presently 
excluded or disqualified.



Sec.  180.360  What happens if I fail to disclose information required
under Sec.  180.355?

    If a Federal agency later determines that you failed to tell the 
person at the higher tier that you were excluded or disqualified at the 
time you entered into the covered transaction with that person, the 
agency may pursue any

[[Page 53]]

available remedies, including suspension and debarment.



Sec.  180.365  What must I do if I learn of information required
under Sec.  180.355 after entering into a covered transaction with
a higher tier participant?

    At any time after you enter into a lower tier covered transaction 
with a person at a higher tier, you must provide immediate written 
notice to that person if you learn either that--
    (a) You failed to disclose information earlier, as required by Sec.  
180.355; or
    (b) Due to changed circumstances, you or any of the principals for 
the transaction now meet any of the criteria in Sec.  180.355.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  180.400  May I enter into a transaction with an excluded or
disqualified person?

    (a) You as a Federal agency official may not enter into a covered 
transaction with an excluded person unless you obtain an exception under 
Sec.  180.135.
    (b) You may not enter into any transaction with a person who is 
disqualified from that transaction, unless you obtain a waiver or 
exception under the statute, Executive order, or regulation that is the 
basis for the person's disqualification.



Sec.  180.405  May I enter into a covered transaction with a participant
if a principal of the transaction is excluded?

    As a Federal agency official, you may not enter into a covered 
transaction with a participant if you know that a principal of the 
transaction is excluded, unless you obtain an exception under Sec.  
180.135.



Sec.  180.410  May I approve a participant's use of the services of
an excluded person?

    After entering into a covered transaction with a participant, you as 
a Federal agency official may not approve a participant's use of an 
excluded person as a principal under that transaction, unless you obtain 
an exception under Sec.  180.135.



Sec.  180.415  What must I do if a Federal agency excludes the
participant or a principal after I enter into a covered transaction?

    (a) You as a Federal agency official may continue covered 
transactions with an excluded person, or under which an excluded person 
is a principal, if the transactions were in existence when the person 
was excluded. You are not required to continue the transactions, 
however, and you may consider termination. You should make a decision 
about whether to terminate and the type of termination action, if any, 
only after a thorough review to ensure that the action is proper.
    (b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, or under which an 
excluded person is a principal, unless you obtain an exception under 
Sec.  180.135.



Sec.  180.420  May I approve a transaction with an excluded or
disqualified person at a lower tier?

    If a transaction at a lower tier is subject to your approval, you as 
a Federal agency official may not approve--
    (a) A covered transaction with a person who is currently excluded, 
unless you obtain an exception under Sec.  180.135; or
    (b) A transaction with a person who is disqualified from that 
transaction, unless you obtain a waiver or exception under the statute, 
Executive order, or regulation that is the basis for the person's 
disqualification.



Sec.  180.425  When do I check to see if a person is excluded or
disqualified?

    As a Federal agency official, you must check to see if a person is 
excluded or disqualified before you--
    (a) Enter into a primary tier covered transaction;
    (b) Approve a principal in a primary tier covered transaction;
    (c) Approve a lower tier participant if your agency's approval of 
the lower tier participant is required; or
    (d) Approve a principal in connection with a lower tier transaction 
if your agency's approval of the principal is required.

[[Page 54]]



Sec.  180.430  How do I check to see if a person is excluded or
disqualified?

    You check to see if a person is excluded or disqualified in two 
ways:
    (a) You as a Federal agency official must check SAM Exclusions when 
you take any action listed in Sec.  180.425.
    (b) You must review information that a participant gives you, as 
required by Sec.  180.335, about its status or the status of the 
principals of a transaction.



Sec.  180.435  What must I require of a primary tier participant?

    You as a Federal agency official must require each participant in a 
primary tier covered transaction to--
    (a) Comply with subpart C of this part as a condition of 
participation in the transaction; and
    (b) Communicate the requirement to comply with subpart C of this 
part to persons at the next lower tier with whom the primary tier 
participant enters into covered transactions.



Sec.  180.440  What action may I take if a primary tier participant
knowingly does business with an excluded or disqualified person?

    If a participant knowingly does business with an excluded or 
disqualified person, you as a Federal agency official may refer the 
matter for suspension and debarment consideration. You may also disallow 
costs, annul or terminate the transaction, issue a stop work order, or 
take any other appropriate remedy.



Sec.  180.445  What action may I take if a primary tier participant
fails to disclose the information required under Sec.  180.335?

    If you as a Federal agency official determine that a participant 
failed to disclose information, as required by Sec.  180.335, at the 
time it entered into a covered transaction with you, you may--
    (a) Terminate the transaction for material failure to comply with 
the terms and conditions of the transaction; or
    (b) Pursue any other available remedies, including suspension and 
debarment.



Sec.  180.450  What action may I take if a lower tier participant
fails to disclose the information required under Sec.  180.355 to 
the next higher tier?

    If you as a Federal agency official determine that a lower tier 
participant failed to disclose information, as required by Sec.  
180.355, at the time it entered into a covered transaction with a 
participant at the next higher tier, you may pursue any remedies 
available to you, including the initiation of a suspension or debarment 
action.



            Subpart E_ System for Award Management Exclusions



Sec.  180.500  What is the purpose of the System for Award Management
Exclusions (SAM Exclusions)?

    SAM Exclusions is a widely available source of the most current 
information about persons who are excluded or disqualified from covered 
transactions.



Sec.  180.505  Who uses SAM Exclusions?

    (a) Federal agency officials use SAM Exclusions to determine whether 
to enter into a transaction with a person, as required under Sec.  
180.430.
    (b) Participants also may, but are not required to, use SAM 
Exclusions to determine if--
    (1) Principals of their transactions are excluded or disqualified, 
as required under Sec.  180.320; or
    (2) Persons with whom they are entering into covered transactions at 
the next lower tier are excluded or disqualified.
    (c) Sam Exclusions are available to the general public.

[70 FR 51865, Aug. 31, 2005, as amended at 79 FR 75879, Dec. 19, 2014]



Sec.  180.510  Who maintains SAM Exclusions?

    The General Services Administration (GSA) maintains SAM Exclusions. 
When a Federal agency takes an action to exclude a person under the 
nonprocurement or procurement debarment and suspension system, the 
agency enters the information about the excluded person into SAM 
Exclusions.

[[Page 55]]



Sec.  180.515  What specific information is in SAM Exclusions?

    (a) At a minimum, SAM Exclusions indicates--
    (1) The full name (where available) and address of each excluded and 
disqualified person, in alphabetical order, with cross references if 
more than one name is involved in a single action;
    (2) The type of action;
    (3) The cause for the action;
    (4) The scope of the action;
    (5) Any termination date for the action;
    (6) The Federal agency and name and telephone number of the agency 
point of contact for the action; and
    (7) The unique entity identifier approved by the GSA, of the 
excluded or disqualified person, if available.
    (b)(1) The database for SAM Exclusions includes a field for the 
Taxpayer Identification Number (TIN) (the social security number (SSN) 
for an individual) of an excluded or disqualified person.
    (2) Agencies disclose the SSN of an individual to verify the 
identity of an individual, only if permitted under the Privacy Act of 
1974 and, if appropriate, the Computer Matching and Privacy Protection 
Act of 1988, as codified in 5 U.S.C. 552(a).

[70 FR 51865, Aug. 31, 2005, as amended at 79 FR 75879, Dec. 19, 2014]



Sec.  180.520  Who places the information into SAM Exclusions?

    Federal agency officials who take actions to exclude persons under 
this part or officials who are responsible for identifying disqualified 
persons must enter the following information about those persons into 
SAM Exclusions:
    (a) Information required by Sec.  180.515(a);
    (b) The Taxpayer Identification Number (TIN) of the excluded or 
disqualified person, including the social security number (SSN) for an 
individual, if the number is available and may be disclosed under law;
    (c) Information about an excluded or disqualified person, within 
three business days, after--
    (1) Taking an exclusion action;
    (2) Modifying or rescinding an exclusion action;
    (3) Finding that a person is disqualified; or
    (4) Finding that there has been a change in the status of a person 
who is listed as disqualified.

[70 FR 51865, Aug. 31, 2005, as amended at 80 FR 43308, July 22, 2015]



Sec.  180.525  Whom do I ask if I have questions about a person in
SAM Exclusions?

    If you have questions about a listed person in SAM Exclusions, ask 
the point of contact for the Federal agency that placed the person's 
name into SAM Exclusions. You may find the agency point of contact from 
SAM Exclusions.



Sec.  180.530  Where can I find SAM Exclusions?

    You may access SAM Exclusions through the Internet, currently at 
https://www.sam.gov.

[79 FR 75879, Dec. 19, 2014]



   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions



Sec.  180.600  How do suspension and debarment actions start?

    When Federal agency officials receive information from any source 
concerning a cause for suspension or debarment, they will promptly 
report it and the agency will investigate. The officials refer the 
question of whether to suspend or debar you to their suspending or 
debarring official for consideration, if appropriate.



Sec.  180.605  How does suspension differ from debarment?

    Suspension differs from debarment in that--

------------------------------------------------------------------------
      A suspending official . . .           A debarring official . . .
------------------------------------------------------------------------
(a) Imposes suspension as a temporary    Imposes debarment for a
 status of in eligibility for             specified period as a final
 procurement and nonprocurement           determination that a person is
 transactions, pending completion of an   not presently responsible.
 investigation or legal proceedings.
(b) Must--

[[Page 56]]

 
    (1) Have adequate evidence that
     there may be a cause for debarment
     of a person; and
    (2) Conclude that immediate action   Must conclude, based on a
     is necessary to protect the          preponderance of the evidence,
     Federal interest                     that the person has engaged in
                                          conduct that warrants
                                          debarment.
(c) Usually imposes the suspension       Imposes debarment after giving
 first, and then promptly notifies the    the respondent notice of the
 suspended person, giving the person an   action and an opportunity to
 opportunity to contest the suspension    contest the proposed
 and have it lifted.                      debarment.
------------------------------------------------------------------------



Sec.  180.610  What procedures does a Federal agency use in suspension
and debarment actions?

    In deciding whether to suspend or debar you, a Federal agency 
handles the actions as informally as practicable, consistent with 
principles of fundamental fairness.
    (a) For suspension actions, a Federal agency uses the procedures in 
this subpart and subpart G of this part.
    (b) For debarment actions, a Federal agency uses the procedures in 
this subpart and subpart H of this part.



Sec.  180.615  How does a Federal agency notify a person of a 
suspension or debarment action?

    (a) The suspending or debarring official sends a written notice to 
the last known street address, facsimile number, or e-mail address of--
    (1) You or your identified counsel; or
    (2) Your agent for service of process, or any of your partners, 
officers, directors, owners, or joint venturers.
    (b) The notice is effective if sent to any of these persons.



Sec.  180.620  Do Federal agencies coordinate suspension and 
debarment actions?

    Yes, when more than one Federal agency has an interest in a 
suspension or debarment, the agencies may consider designating one 
agency as the lead agency for making the decision. Agencies are 
encouraged to establish methods and procedures for coordinating their 
suspension and debarment actions.



Sec.  180.625  What is the scope of a suspension or debarment?

    If you are suspended or debarred, the suspension or debarment is 
effective as follows:
    (a) Your suspension or debarment constitutes suspension or debarment 
of all of your divisions and other organizational elements from all 
covered transactions, unless the suspension or debarment decision is 
limited--
    (1) By its terms to one or more specifically identified individuals, 
divisions, or other organizational elements; or
    (2) To specific types of transactions.
    (b) Any affiliate of a participant may be included in a suspension 
or debarment action if the suspending or debarring official--
    (1) Officially names the affiliate in the notice; and
    (2) Gives the affiliate an opportunity to contest the action.



Sec.  180.630  May a Federal agency impute the conduct of one 
person to another?

    For purposes of actions taken under this part, a Federal agency may 
impute conduct as follows:
    (a) Conduct imputed from an individual to an organization. A Federal 
agency may impute the fraudulent, criminal, or other improper conduct of 
any officer, director, shareholder, partner, employee, or other 
individual associated with an organization, to that organization when 
the improper conduct occurred in connection with the individual's 
performance of duties for or on behalf of that organization, or with the 
organization's knowledge, approval or acquiescence. The organization's 
acceptance of the benefits derived from the conduct is evidence of 
knowledge, approval or acquiescence.
    (b) Conduct imputed from an organization to an individual, or 
between individuals. A Federal agency may impute the fraudulent, 
criminal, or other improper conduct of any organization to an 
individual, or from one individual to another individual, if the 
individual to whom the improper conduct is imputed either participated 
in, had knowledge

[[Page 57]]

of, or reason to know of the improper conduct.
    (c) Conduct imputed from one organization to another organization. A 
Federal agency may impute the fraudulent, criminal, or other improper 
conduct of one organization to another organization when the improper 
conduct occurred in connection with a partnership, joint venture, joint 
application, association or similar arrangement, or when the 
organization to whom the improper conduct is imputed has the power to 
direct, manage, control or influence the activities of the organization 
responsible for the improper conduct. Acceptance of the benefits derived 
from the conduct is evidence of knowledge, approval or acquiescence.



Sec.  180.635  May a Federal agency settle a debarment or suspension action?

    Yes, a Federal agency may settle a debarment or suspension action at 
any time if it is in the best interest of the Federal Government.



Sec.  180.640  May a settlement include a voluntary exclusion?

    Yes, if a Federal agency enters into a settlement with you in which 
you agree to be excluded, it is called a voluntary exclusion and has 
governmentwide effect.



Sec.  180.645  Do other Federal agencies know if an agency agrees
to a voluntary exclusion?

    (a) Yes, the Federal agency agreeing to the voluntary exclusion 
enters information about it into SAM Exclusions.
    (b) Also, any agency or person may contact the Federal agency that 
agreed to the voluntary exclusion to find out the details of the 
voluntary exclusion.



Sec.  180.650  May an administrative agreement be the result of
a settlement?

    Yes, a Federal agency may enter into an administrative agreement 
with you as part of the settlement of a debarment or suspension action.

[80 FR 43308, July 22, 2015]



Sec.  180.655  How will other Federal awarding agencies know about
an administrative agreement that is the result of a settlement?

    The suspending or debarring official who enters into an 
administrative agreement with you must report information about the 
agreement to the designated integrity and performance system within 
three business days after entering into the agreement. This information 
is required by section 872 of the Duncan Hunter National Defense 
Authorization Act for Fiscal Year 2009 (41 U.S.C. 2313).

[80 FR 43308, July 22, 2015]



Sec.  180.660  Will administrative agreement information about me
in the designated integrity and performance system accessible 
through SAM be corrected or updated?

    Yes, the suspending or debarring official who entered information 
into the designated integrity and performance system about an 
administrative agreement with you:
    (a) Must correct the information within three business days if he or 
she subsequently learns that any of the information is erroneous.
    (b) Must correct in the designated integrity and performance system, 
within three business days, the ending date of the period during which 
the agreement is in effect, if the agreement is amended to extend that 
period.
    (c) Must report to the designated integrity and performance system, 
within three business days, any other modification to the administrative 
agreement.
    (d) Is strongly encouraged to amend the information in the 
designated integrity and performance system in a timely way to 
incorporate any update that he or she obtains that could be helpful to 
Federal awarding agencies who must use the system.

[80 FR 43308, July 22, 2015]

[[Page 58]]



                          Subpart G_Suspension



Sec.  180.700  When may the suspending official issue a suspension?

    Suspension is a serious action. Using the procedures of this subpart 
and subpart F of this part, the suspending official may impose 
suspension only when that official determines that--
    (a) There exists an indictment for, or other adequate evidence to 
suspect, an offense listed under Sec.  180.800(a), or
    (b) There exists adequate evidence to suspect any other cause for 
debarment listed under Sec.  180.800(b) through (d); and
    (c) Immediate action is necessary to protect the public interest.



Sec.  180.705  What does the suspending official consider in
issuing a suspension?

    (a) In determining the adequacy of the evidence to support the 
suspension, the suspending official considers how much information is 
available, how credible it is given the circumstances, whether or not 
important allegations are corroborated, and what inferences can 
reasonably be drawn as a result. During this assessment, the suspending 
official may examine the basic documents, including grants, cooperative 
agreements, loan authorizations, contracts, and other relevant 
documents.
    (b) An indictment, conviction, civil judgment, or other official 
findings by Federal, State, or local bodies that determine factual and/
or legal matters, constitutes adequate evidence for purposes of 
suspension actions.
    (c) In deciding whether immediate action is needed to protect the 
public interest, the suspending official has wide discretion. For 
example, the suspending official may infer the necessity for immediate 
action to protect the public interest either from the nature of the 
circumstances giving rise to a cause for suspension or from potential 
business relationships or involvement with a program of the Federal 
Government.



Sec.  180.710  When does a suspension take effect?

    A suspension is effective when the suspending official signs the 
decision to suspend.



Sec.  180.715  What notice does the suspending official give me
if I am suspended?

    After deciding to suspend you, the suspending official promptly 
sends you a Notice of Suspension advising you--
    (a) That you have been suspended;
    (b) That your suspension is based on--
    (1) An indictment;
    (2) A conviction;
    (3) Other adequate evidence that you have committed irregularities 
which seriously reflect on the propriety of further Federal Government 
dealings with you; or
    (4) Conduct of another person that has been imputed to you, or your 
affiliation with a suspended or debarred person;
    (c) Of any other irregularities in terms sufficient to put you on 
notice without disclosing the Federal Government's evidence;
    (d) Of the cause(s) upon which the suspending official relied under 
Sec.  180.700 for imposing suspension;
    (e) That your suspension is for a temporary period pending the 
completion of an investigation or resulting legal or debarment 
proceedings;
    (f) Of the applicable provisions of this subpart, subpart F of this 
part, and any other agency procedures governing suspension 
decisionmaking; and
    (g) Of the governmentwide effect of your suspension from procurement 
and nonprocurement programs and activities.



Sec.  180.720  How may I contest a suspension?

    If you as a respondent wish to contest a suspension, you or your 
representative must provide the suspending official with information in 
opposition to the suspension. You may do this orally or in writing, but 
any information provided orally that you consider important must also be 
submitted in writing for the official record.



Sec.  180.725  How much time do I have to contest a suspension?

    (a) As a respondent you or your representative must either send, or 
make arrangements to appear and present, the information and argument to 
the

[[Page 59]]

suspending official within 30 days after you receive the Notice of 
Suspension.
    (b) The Federal agency taking the action considers the notice to be 
received by you--
    (1) When delivered, if the agency mails the notice to the last known 
street address, or five days after the agency sends it if the letter is 
undeliverable;
    (2) When sent, if the agency sends the notice by facsimile or five 
days after the agency sends it if the facsimile is undeliverable; or
    (3) When delivered, if the agency sends the notice by e-mail or five 
days after the agency sends it if the e-mail is undeliverable.



Sec.  180.730  What information must I provide to the suspending
official if I contest the suspension?

    (a) In addition to any information and argument in opposition, as a 
respondent your submission to the suspending official must identify--
    (1) Specific facts that contradict the statements contained in the 
Notice of Suspension. A general denial is insufficient to raise a 
genuine dispute over facts material to the suspension;
    (2) All existing, proposed, or prior exclusions under regulations 
implementing Executive Order 12549 and all similar actions taken by 
Federal, State, or local agencies, including administrative agreements 
that affect only those agencies;
    (3) All criminal and civil proceedings not included in the Notice of 
Suspension that grew out of facts relevant to the cause(s) stated in the 
notice; and
    (4) All of your affiliates.
    (b) If you fail to disclose this information, or provide false 
information, the Federal agency taking the action may seek further 
criminal, civil or administrative action against you, as appropriate.



Sec.  180.735  Under what conditions do I get an additional
opportunity to challenge the facts on which the suspension is based?

    (a) You as a respondent will not have an additional opportunity to 
challenge the facts if the suspending official determines that--
    (1) Your suspension is based upon an indictment, conviction, civil 
judgment, or other finding by a Federal, State, or local body for which 
an opportunity to contest the facts was provided;
    (2) Your presentation in opposition contains only general denials to 
information contained in the Notice of Suspension;
    (3) The issues raised in your presentation in opposition to the 
suspension are not factual in nature, or are not material to the 
suspending official's initial decision to suspend, or the official's 
decision whether to continue the suspension; or
    (4) On the basis of advice from the Department of Justice, an office 
of the United States Attorney, a State attorney general's office, or a 
State or local prosecutor's office, that substantial interests of the 
government in pending or contemplated legal proceedings based on the 
same facts as the suspension would be prejudiced by conducting fact-
finding.
    (b) You will have an opportunity to challenge the facts if the 
suspending official determines that--
    (1) The conditions in paragraph (a) of this section do not exist; 
and
    (2) Your presentation in opposition raises a genuine dispute over 
facts material to the suspension.
    (c) If you have an opportunity to challenge disputed material facts 
under this section, the suspending official or designee must conduct 
additional proceedings to resolve those facts.



Sec.  180.740  Are suspension proceedings formal?

    (a) Suspension proceedings are conducted in a fair and informal 
manner. The suspending official may use flexible procedures to allow you 
to present matters in opposition. In so doing, the suspending official 
is not required to follow formal rules of evidence or procedure in 
creating an official record upon which the official will base a final 
suspension decision.
    (b) You as a respondent or your representative must submit any 
documentary evidence you want the suspending official to consider.



Sec.  180.745  How is fact-finding conducted?

    (a) If fact-finding is conducted--

[[Page 60]]

    (1) You may present witnesses and other evidence, and confront any 
witness presented; and
    (2) The fact-finder must prepare written findings of fact for the 
record.
    (b) A transcribed record of fact-finding proceedings must be made, 
unless you as a respondent and the Federal agency agree to waive it in 
advance. If you want a copy of the transcribed record, you may purchase 
it.



Sec.  180.750  What does the suspending official consider in deciding
whether to continue or terminate my suspension?

    (a) The suspending official bases the decision on all information 
contained in the official record. The record includes--
    (1) All information in support of the suspending official's initial 
decision to suspend you;
    (2) Any further information and argument presented in support of, or 
opposition to, the suspension; and
    (3) Any transcribed record of fact-finding proceedings.
    (b) The suspending official may refer disputed material facts to 
another official for findings of fact. The suspending official may 
reject any resulting findings, in whole or in part, only after 
specifically determining them to be arbitrary, capricious, or clearly 
erroneous.



Sec.  180.755  When will I know whether the suspension is continued
or terminated?

    The suspending official must make a written decision whether to 
continue, modify, or terminate your suspension within 45 days of closing 
the official record. The official record closes upon the suspending 
official's receipt of final submissions, information and findings of 
fact, if any. The suspending official may extend that period for good 
cause.



Sec.  180.760  How long may my suspension last?

    (a) If legal or debarment proceedings are initiated at the time of, 
or during your suspension, the suspension may continue until the 
conclusion of those proceedings. However, if proceedings are not 
initiated, a suspension may not exceed 12 months.
    (b) The suspending official may extend the 12 month limit under 
paragraph (a) of this section for an additional 6 months if an office of 
a U.S. Assistant Attorney General, U.S. Attorney, or other responsible 
prosecuting official requests an extension in writing. In no event may a 
suspension exceed 18 months without initiating proceedings under 
paragraph (a) of this section.
    (c) The suspending official must notify the appropriate officials 
under paragraph (b) of this section of an impending termination of a 
suspension at least 30 days before the 12 month period expires to allow 
the officials an opportunity to request an extension.



                           Subpart H_Debarment



Sec.  180.800  What are the causes for debarment?

    A Federal agency may debar a person for--
    (a) Conviction of or civil judgment for--
    (1) Commission of fraud or a criminal offense in connection with 
obtaining, attempting to obtain, or performing a public or private 
agreement or transaction;
    (2) Violation of Federal or State antitrust statutes, including 
those proscribing price fixing between competitors, allocation of 
customers between competitors, and bid rigging;
    (3) Commission of embezzlement, theft, forgery, bribery, 
falsification or destruction of records, making false statements, tax 
evasion, receiving stolen property, making false claims, or obstruction 
of justice; or
    (4) Commission of any other offense indicating a lack of business 
integrity or business honesty that seriously and directly affects your 
present responsibility;
    (b) Violation of the terms of a public agreement or transaction so 
serious as to affect the integrity of an agency program, such as--
    (1) A willful failure to perform in accordance with the terms of one 
or more public agreements or transactions;
    (2) A history of failure to perform or of unsatisfactory performance 
of one or more public agreements or transactions; or

[[Page 61]]

    (3) A willful violation of a statutory or regulatory provision or 
requirement applicable to a public agreement or transaction;
    (c) Any of the following causes:
    (1) A nonprocurement debarment by any Federal agency taken before 
October 1, 1988, or a procurement debarment by any Federal agency taken 
pursuant to 48 CFR part 9, subpart 9.4, before August 25, 1995;
    (2) Knowingly doing business with an ineligible person, except as 
permitted under Sec.  180.135;
    (3) Failure to pay a single substantial debt, or a number of 
outstanding debts (including disallowed costs and overpayments, but not 
including sums owed the Federal Government under the Internal Revenue 
Code) owed to any Federal agency or instrumentality, provided the debt 
is uncontested by the debtor or, if contested, provided that the 
debtor's legal and administrative remedies have been exhausted;
    (4) Violation of a material provision of a voluntary exclusion 
agreement entered into under Sec.  180.640 or of any settlement of a 
debarment or suspension action; or
    (5) Violation of the provisions of the Drug-Free Workplace Act of 
1988 (41 U.S.C. 701); or
    (d) Any other cause of so serious or compelling a nature that it 
affects your present responsibility.



Sec.  180.805  What notice does the debarring official give me if I
am proposed for debarment?

    After consideration of the causes in Sec.  180.800, if the debarring 
official proposes to debar you, the official sends you a Notice of 
Proposed Debarment, pursuant to Sec.  180.615, advising you--
    (a) That the debarring official is considering debarring you;
    (b) Of the reasons for proposing to debar you in terms sufficient to 
put you on notice of the conduct or transactions upon which the proposed 
debarment is based;
    (c) Of the cause(s) under Sec.  180.800 upon which the debarring 
official relied for proposing your debarment;
    (d) Of the applicable provisions of this subpart, subpart F of this 
part, and any other agency procedures governing debarment; and
    (e) Of the governmentwide effect of a debarment from procurement and 
nonprocurement programs and activities.



Sec.  180.810  When does a debarment take effect?

    Unlike suspension, a debarment is not effective until the debarring 
official issues a decision. The debarring official does not issue a 
decision until the respondent has had an opportunity to contest the 
proposed debarment.



Sec.  180.815  How may I contest a proposed debarment?

    If you as a respondent wish to contest a proposed debarment, you or 
your representative must provide the debarring official with information 
in opposition to the proposed debarment. You may do this orally or in 
writing, but any information provided orally that you consider important 
must also be submitted in writing for the official record.



Sec.  180.820  How much time do I have to contest a proposed debarment?

    (a) As a respondent you or your representative must either send, or 
make arrangements to appear and present, the information and argument to 
the debarring official within 30 days after you receive the Notice of 
Proposed Debarment.
    (b) The Federal agency taking the action considers the Notice of 
Proposed Debarment to be received by you--
    (1) When delivered, if the agency mails the notice to the last known 
street address, or five days after the agency sends it if the letter is 
undeliverable;
    (2) When sent, if the agency sends the notice by facsimile or five 
days after the agency sends it if the facsimile is undeliverable; or
    (3) When delivered, if the agency sends the notice by e-mail or five 
days after the agency sends it if the e-mail is undeliverable.



Sec.  180.825  What information must I provide to the debarring 
official if I contest the proposed debarment?

    (a) In addition to any information and argument in opposition, as a 
respondent your submission to the debarring official must identify--

[[Page 62]]

    (1) Specific facts that contradict the statements contained in the 
Notice of Proposed Debarment. Include any information about any of the 
factors listed in Sec.  180.860. A general denial is insufficient to 
raise a genuine dispute over facts material to the debarment;
    (2) All existing, proposed, or prior exclusions under regulations 
implementing Executive Order 12549 and all similar actions taken by 
Federal, State, or local agencies, including administrative agreements 
that affect only those agencies;
    (3) All criminal and civil proceedings not included in the Notice of 
Proposed Debarment that grew out of facts relevant to the cause(s) 
stated in the notice; and
    (4) All of your affiliates.
    (b) If you fail to disclose this information, or provide false 
information, the Federal agency taking the action may seek further 
criminal, civil or administrative action against you, as appropriate.



Sec.  180.830  Under what conditions do I get an additional 
opportunity to challenge the facts on which the proposed debarment
is based?

    (a) You as a respondent will not have an additional opportunity to 
challenge the facts if the debarring official determines that--
    (1) Your debarment is based upon a conviction or civil judgment;
    (2) Your presentation in opposition contains only general denials to 
information contained in the Notice of Proposed Debarment; or
    (3) The issues raised in your presentation in opposition to the 
proposed debarment are not factual in nature, or are not material to the 
debarring official's decision whether to debar.
    (b) You will have an additional opportunity to challenge the facts 
if the debarring official determines that--
    (1) The conditions in paragraph (a) of this section do not exist; 
and
    (2) Your presentation in opposition raises a genuine dispute over 
facts material to the proposed debarment.
    (c) If you have an opportunity to challenge disputed material facts 
under this section, the debarring official or designee must conduct 
additional proceedings to resolve those facts.



Sec.  180.835  Are debarment proceedings formal?

    (a) Debarment proceedings are conducted in a fair and informal 
manner. The debarring official may use flexible procedures to allow you 
as a respondent to present matters in opposition. In so doing, the 
debarring official is not required to follow formal rules of evidence or 
procedure in creating an official record upon which the official will 
base the decision whether to debar.
    (b) You or your representative must submit any documentary evidence 
you want the debarring official to consider.



Sec.  180.840  How is fact-finding conducted?

    (a) If fact-finding is conducted--
    (1) You may present witnesses and other evidence, and confront any 
witness presented; and
    (2) The fact-finder must prepare written findings of fact for the 
record.
    (b) A transcribed record of fact-finding proceedings must be made, 
unless you as a respondent and the Federal agency agree to waive it in 
advance. If you want a copy of the transcribed record, you may purchase 
it.



Sec.  180.845  What does the debarring official consider in deciding
whether to debar me?

    (a) The debarring official may debar you for any of the causes in 
Sec.  180.800. However, the official need not debar you even if a cause 
for debarment exists. The official may consider the seriousness of your 
acts or omissions and the mitigating or aggravating factors set forth at 
Sec.  180.860.
    (b) The debarring official bases the decision on all information 
contained in the official record. The record includes--
    (1) All information in support of the debarring official's proposed 
debarment;
    (2) Any further information and argument presented in support of, or 
in opposition to, the proposed debarment; and
    (3) Any transcribed record of fact-finding proceedings.
    (c) The debarring official may refer disputed material facts to 
another official for findings of fact. The debarring

[[Page 63]]

official may reject any resultant findings, in whole or in part, only 
after specifically determining them to be arbitrary, capricious, or 
clearly erroneous.



Sec.  180.850  What is the standard of proof in a debarment action?

    (a) In any debarment action, the Federal agency must establish the 
cause for debarment by a preponderance of the evidence.
    (b) If the proposed debarment is based upon a conviction or civil 
judgment, the standard of proof is met.



Sec.  180.855  Who has the burden of proof in a debarment action?

    (a) The Federal agency has the burden to prove that a cause for 
debarment exists.
    (b) Once a cause for debarment is established, you as a respondent 
have the burden of demonstrating to the satisfaction of the debarring 
official that you are presently responsible and that debarment is not 
necessary.



Sec.  180.860  What factors may influence the debarring official's
decision?

    This section lists the mitigating and aggravating factors that the 
debarring official may consider in determining whether to debar you and 
the length of your debarment period. The debarring official may consider 
other factors if appropriate in light of the circumstances of a 
particular case. The existence or nonexistence of any factor, such as 
one of those set forth in this section, is not necessarily determinative 
of your present responsibility. In making a debarment decision, the 
debarring official may consider the following factors:
    (a) The actual or potential harm or impact that results or may 
result from the wrongdoing.
    (b) The frequency of incidents and/or duration of the wrongdoing.
    (c) Whether there is a pattern or prior history of wrongdoing. For 
example, if you have been found by another Federal agency or a State 
agency to have engaged in wrongdoing similar to that found in the 
debarment action, the existence of this fact may be used by the 
debarring official in determining that you have a pattern or prior 
history of wrongdoing.
    (d) Whether you are or have been excluded or disqualified by an 
agency of the Federal Government or have not been allowed to participate 
in State or local contracts or assistance agreements on a basis of 
conduct similar to one or more of the causes for debarment specified in 
this part.
    (e) Whether you have entered into an administrative agreement with a 
Federal agency or a State or local government that is not governmentwide 
but is based on conduct similar to one or more of the causes for 
debarment specified in this part.
    (f) Whether and to what extent you planned, initiated, or carried 
out the wrongdoing.
    (g) Whether you have accepted responsibility for the wrongdoing and 
recognize the seriousness of the misconduct that led to the cause for 
debarment.
    (h) Whether you have paid or agreed to pay all criminal, civil and 
administrative liabilities for the improper activity, including any 
investigative or administrative costs incurred by the government, and 
have made or agreed to make full restitution.
    (i) Whether you have cooperated fully with the government agencies 
during the investigation and any court or administrative action. In 
determining the extent of cooperation, the debarring official may 
consider when the cooperation began and whether you disclosed all 
pertinent information known to you.
    (j) Whether the wrongdoing was pervasive within your organization.
    (k) The kind of positions held by the individuals involved in the 
wrongdoing.
    (l) Whether your organization took appropriate corrective action or 
remedial measures, such as establishing ethics training and implementing 
programs to prevent recurrence.
    (m) Whether your principals tolerated the offense.
    (n) Whether you brought the activity cited as a basis for the 
debarment to the attention of the appropriate government agency in a 
timely manner.
    (o) Whether you have fully investigated the circumstances 
surrounding the cause for debarment and, if so,

[[Page 64]]

made the result of the investigation available to the debarring 
official.
    (p) Whether you had effective standards of conduct and internal 
control systems in place at the time the questioned conduct occurred.
    (q) Whether you have taken appropriate disciplinary action against 
the individuals responsible for the activity which constitutes the cause 
for debarment.
    (r) Whether you have had adequate time to eliminate the 
circumstances within your organization that led to the cause for the 
debarment.
    (s) Other factors that are appropriate to the circumstances of a 
particular case.



Sec.  180.865  How long may my debarment last?

    (a) If the debarring official decides to debar you, your period of 
debarment will be based on the seriousness of the cause(s) upon which 
your debarment is based. Generally, debarment should not exceed three 
years. However, if circumstances warrant, the debarring official may 
impose a longer period of debarment.
    (b) In determining the period of debarment, the debarring official 
may consider the factors in Sec.  180.860. If a suspension has preceded 
your debarment, the debarring official must consider the time you were 
suspended.
    (c) If the debarment is for a violation of the provisions of the 
Drug-Free Workplace Act of 1988, your period of debarment may not exceed 
five years.



Sec.  180.870  When do I know if the debarring official debars me?

    (a) The debarring official must make a written decision whether to 
debar within 45 days of closing the official record. The official record 
closes upon the debarring official's receipt of final submissions, 
information and findings of fact, if any. The debarring official may 
extend that period for good cause.
    (b) The debarring official sends you written notice, pursuant to 
Sec.  180.615 that the official decided, either--
    (1) Not to debar you; or
    (2) To debar you. In this event, the notice:
    (i) Refers to the Notice of Proposed Debarment;
    (ii) Specifies the reasons for your debarment;
    (iii) States the period of your debarment, including the effective 
dates; and
    (iv) Advises you that your debarment is effective for covered 
transactions and contracts that are subject to the Federal Acquisition 
Regulation (48 CFR chapter 1), throughout the executive branch of the 
Federal Government unless an agency head or an authorized designee 
grants an exception.



Sec.  180.875  May I ask the debarring official to reconsider a 
decision to debar me?

    Yes, as a debarred person you may ask the debarring official to 
reconsider the debarment decision or to reduce the time period or scope 
of the debarment. However, you must put your request in writing and 
support it with documentation.



Sec.  180.880  What factors may influence the debarring official
during reconsideration?

    The debarring official may reduce or terminate your debarment based 
on--
    (a) Newly discovered material evidence;
    (b) A reversal of the conviction or civil judgment upon which your 
debarment was based;
    (c) A bona fide change in ownership or management;
    (d) Elimination of other causes for which the debarment was imposed; 
or
    (e) Other reasons the debarring official finds appropriate.



Sec.  180.885  May the debarring official extend a debarment?

    (a) Yes, the debarring official may extend a debarment for an 
additional period, if that official determines that an extension is 
necessary to protect the public interest.
    (b) However, the debarring official may not extend a debarment 
solely on the basis of the facts and circumstances upon which the 
initial debarment action was based.
    (c) If the debarring official decides that a debarment for an 
additional period is necessary, the debarring official must follow the 
applicable procedures in this subpart, and subpart F of this part, to 
extend the debarment.

[[Page 65]]



                          Subpart I_Definitions



Sec.  180.900  Adequate evidence.

    Adequate evidence means information sufficient to support the 
reasonable belief that a particular act or omission has occurred.



Sec.  180.905  Affiliate.

    Persons are affiliates of each other if, directly or indirectly, 
either one controls or has the power to control the other or a third 
person controls or has the power to control both. The ways a Federal 
agency may determine control include, but are not limited to--
    (a) Interlocking management or ownership;
    (b) Identity of interests among family members;
    (c) Shared facilities and equipment;
    (d) Common use of employees; or
    (e) A business entity which has been organized following the 
exclusion of a person which has the same or similar management, 
ownership, or principal employees as the excluded person.



Sec.  180.910  Agent or representative.

    Agent or representative means any person who acts on behalf of, or 
who is authorized to commit a participant in a covered transaction.



Sec.  180.915  Civil judgment.

    Civil judgment means the disposition of a civil action by any court 
of competent jurisdiction, whether by verdict, decision, settlement, 
stipulation, other disposition which creates a civil liability for the 
complained of wrongful acts, or a final determination of liability under 
the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-3812).



Sec.  180.920  Conviction.

Conviction means--
    (a) A judgment or any other determination of guilt of a criminal 
offense by any court of competent jurisdiction, whether entered upon a 
verdict or plea, including a plea of nolo contendere; or
    (b) Any other resolution that is the functional equivalent of a 
judgment, including probation before judgment and deferred prosecution. 
A disposition without the participation of the court is the functional 
equivalent of a judgment only if it includes an admission of guilt.



Sec.  180.925  Debarment.

    Debarment means an action taken by a debarring official under 
Subpart H of this part to exclude a person from participating in covered 
transactions and transactions covered under the Federal Acquisition 
Regulation (48 CFR chapter 1). A person so excluded is debarred.



Sec.  180.930  Debarring official.

    Debarring official means an agency official who is authorized to 
impose debarment. A debarring official is either--
    (a) The agency head; or
    (b) An official designated by the agency head.



Sec.  180.935  Disqualified.

    Disqualified means that a person is prohibited from participating in 
specified Federal procurement or nonprocurement transactions as required 
under a statute, Executive order (other than Executive Orders 12549 and 
12689) or other authority. Examples of disqualifications include persons 
prohibited under--
    (a) The Davis-Bacon Act (40 U.S.C. 276(a));
    (b) The equal employment opportunity acts and Executive orders; or
    (c) The Clean Air Act (42 U.S.C. 7606), Clean Water Act (33 U.S.C. 
1368) and Executive Order 11738 (3 CFR, 1973 Comp., p. 799).



Sec.  180.940  Excluded or exclusion.

    Excluded or exclusion means--
    (a) That a person or commodity is prohibited from being a 
participant in covered transactions, whether the person has been 
suspended; debarred; proposed for debarment under 48 CFR part 9, subpart 
9.4; voluntarily excluded; or
    (b) The act of excluding a person.



Sec.  180.945  System for Award Management Exclusions (SAM Exclusions).

    System for Award Management Exclusions (SAM Exclusions) means the 
list maintained and disseminated by the General Services Administration 
(GSA)

[[Page 66]]

containing the names and other information about persons who are 
ineligible.

[79 FR 75880, Dec. 19, 2014]



Sec.  180.950  Federal agency.

    Federal agency means any United States executive department, 
military department, defense agency or any other agency of the executive 
branch. Other agencies of the Federal Government are not considered 
``agencies'' for the purposes of this part unless they issue regulations 
adopting the governmentwide Debarment and Suspension system under 
Executive Orders 12549 and 12689.



Sec.  180.955  Indictment.

    Indictment means an indictment for a criminal offense. A 
presentment, information, or other filing by a competent authority 
charging a criminal offense shall be given the same effect as an 
indictment.



Sec.  180.960  Ineligible or ineligibility.

    Ineligible or ineligibility means that a person or commodity is 
prohibited from covered transactions because of an exclusion or 
disqualification.



Sec.  180.965  Legal proceedings.

    Legal proceedings means any criminal proceeding or any civil 
judicial proceeding, including a proceeding under the Program Fraud 
Civil Remedies Act (31 U.S.C. 3801-3812), to which the Federal 
Government or a State or local government or quasi-governmental 
authority is a party. The term also includes appeals from those 
proceedings.



Sec.  180.970  Nonprocurement transaction.

    (a) Nonprocurement transaction means any transaction, regardless of 
type (except procurement contracts), including, but not limited to the 
following:
    (1) Grants.
    (2) Cooperative agreements.
    (3) Scholarships.
    (4) Fellowships.
    (5) Contracts of assistance.
    (6) Loans.
    (7) Loan guarantees.
    (8) Subsidies.
    (9) Insurances.
    (10) Payments for specified uses.
    (11) Donation agreements.
    (b) A nonprocurement transaction at any tier does not require the 
transfer of Federal funds.



Sec.  180.975  Notice.

    Notice means a written communication served in person, sent by 
certified mail or its equivalent, or sent electronically by e-mail or 
facsimile. (See Sec.  180.615.)



Sec.  180.980  Participant.

    Participant means any person who submits a proposal for or who 
enters into a covered transaction, including an agent or representative 
of a participant.



Sec.  180.985  Person.

    Person means any individual, corporation, partnership, association, 
unit of government, or legal entity, however organized.



Sec.  180.990  Preponderance of the evidence.

    Preponderance of the evidence means proof by information that, 
compared with information opposing it, leads to the conclusion that the 
fact at issue is more probably true than not.



Sec.  180.995  Principal.

    Principal means--
    (a) An officer, director, owner, partner, principal investigator, or 
other person within a participant with management or supervisory 
responsibilities related to a covered transaction; or
    (b) A consultant or other person, whether or not employed by the 
participant or paid with Federal funds, who--
    (1) Is in a position to handle Federal funds;
    (2) Is in a position to influence or control the use of those funds; 
or,
    (3) Occupies a technical or professional position capable of 
substantially influencing the development or outcome of an activity 
required to perform the covered transaction.



Sec.  180.1000  Respondent.

    Respondent means a person against whom an agency has initiated a 
debarment or suspension action.

[[Page 67]]



Sec.  180.1005  State.

    (a) State means--
    (1) Any of the states of the United States;
    (2) The District of Columbia;
    (3) The Commonwealth of Puerto Rico;
    (4) Any territory or possession of the United States; or
    (5) Any agency or instrumentality of a state.
    (b) For purposes of this part, State does not include institutions 
of higher education, hospitals, or units of local government.



Sec.  180.1010  Suspending official.

    (a) Suspending official means an agency official who is authorized 
to impose suspension. The suspending official is either:
    (1) The agency head; or
    (2) An official designated by the agency head.



Sec.  180.1015  Suspension.

    Suspension is an action taken by a suspending official under subpart 
G of this part that immediately prohibits a person from participating in 
covered transactions and transactions covered under the Federal 
Acquisition Regulation (48 CFR chapter 1) for a temporary period, 
pending completion of an agency investigation and any judicial or 
administrative proceedings that may ensue. A person so excluded is 
suspended.



Sec.  180.1020  Voluntary exclusion or voluntarily excluded.

    (a) Voluntary exclusion means a person's agreement to be excluded 
under the terms of a settlement between the person and one or more 
agencies. Voluntary exclusion must have governmentwide effect.
    (b) Voluntarily excluded means the status of a person who has agreed 
to a voluntary exclusion.



             Sec. Appendix to Part 180--Covered Transactions

[[Page 68]]

[GRAPHIC] [TIFF OMITTED] TR31AU05.000

                           PART 181 [RESERVED]



PART 182_GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE
(FINANCIAL ASSISTANCE)--Table of Contents



Sec.
182.5 What does this part do?
182.10 How is this part organized?
182.15 To whom does the guidance apply?
182.20 What must a Federal agency do to implement the guidance?
182.25 What must a Federal agency address in its implementation of the 
          guidance?
182.30 Where does a Federal agency implement the guidance?
182.35 By when must a Federal agency implement the guidance?
182.40 How is the guidance maintained?

                     Subpart A_Purpose and Coverage

182.100 How is this part written?
182.105 Do terms in this part have special meanings?
182.110 What do subparts A through F of this part do?
182.115 Does this part apply to me?
182.120 Are any of my Federal assistance awards exempt from this part?
182.125 Does this part affect the Federal contracts that I receive?

      Subpart B_Requirements for Recipients Other Than Individuals

182.200 What must I do to comply with this part?
182.205 What must I include in my drug-free workplace statement?
182.210 To whom must I distribute my drug-free workplace statement?

[[Page 69]]

182.215 What must I include in my drug-free awareness program?
182.220 By when must I publish my drug-free workplace statement and 
          establish my drug-free awareness program?
182.225 What actions must I take concerning employees who are convicted 
          of drug violations in the workplace?
182.230 How and when must I identify workplaces?

        Subpart C_Requirements for Recipients Who Are Individuals

182.300 What must I do to comply with this part if I am an individual 
          recipient?

         Subpart D_Responsibilities of Agency Awarding Officials

182.400 What are my responsibilities as an agency awarding official?

           Subpart E_Violations of This Part and Consequences

182.500 How are violations of this part determined for recipients other 
          than individuals?
182.505 How are violations of this part determined for recipients who 
          are individuals?
182.510 What actions will the Federal Government take against a 
          recipient determined to have violated this part?
182.515 Are there any exceptions to those actions?

                          Subpart F_Definitions

182.605 Award.
182.610 Controlled substance.
182.615 Conviction.
182.620 Cooperative agreement.
182.625 Criminal drug statute.
182.630 Debarment.
182.635 Drug-free workplace.
182.640 Employee.
182.645 Federal agency or agency.
182.650 Grant.
182.655 Individual.
182.660 Recipient.
182.665 State.
182.670 Suspension.

    Authority: 41 U.S.C. 701, et seq.

    Source: 74 FR 28150, June 15, 2009, unless otherwise noted.



Sec.  182.5  What does this part do?

    This part provides Office of Management and Budget (OMB) guidance 
for Federal agencies on the portion of the Drug-Free Workplace Act of 
1988 (41 U.S.C. 701-707, 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.  182.10  How is this part organized?

    This part is organized in two segments.
    (a) Sections 182.5 through 182.40 contain general policy direction 
for Federal agencies' use of the uniform policies and procedures in 
subparts A through F of this part.
    (b) Subparts A through F of this part contain uniform governmentwide 
policies and procedures for Federal agency use to specify the--
    (1) Types of awards that are covered by drug-free workplace 
requirements;
    (2) Drug-free workplace requirements with which a recipient must 
comply;
    (3) Actions required of an agency awarding official; and
    (4) Consequences of a violation of drug-free workplace requirements.



Sec.  182.15  To whom does the guidance apply?

    This part provides OMB guidance only to Federal agencies. 
Publication of this guidance in the Code of Federal Regulations does not 
change its nature--it is guidance and not regulation. Federal agencies' 
implementation of the guidance governs the rights and responsibilities 
of other persons affected by the drug-free workplace requirements.



Sec.  182.20  What must a Federal agency do to implement the guidance?

    To comply with the requirement in Section 41 U.S.C. 705 for 
Governmentwide regulations, each Federal agency that awards grants or 
cooperative agreements or makes other financial assistance awards that 
are subject to the drug-free workplace requirements in subparts A 
through F of the guidance must issue a regulation consistent with those 
subparts.



Sec.  182.25  What must a Federal agency address in its implementation
of the guidance?

    Each Federal agency's implementing regulation:
    (a) Must establish drug-free workplace policies and procedures for 
that

[[Page 70]]

agency's awards that are consistent with the guidance in this part. When 
adopted by a Federal agency, the provisions of the guidance have 
regulatory effect for that agency's awards.
    (b) Must address some matters for which the guidance in this part 
gives the agency discretion. Specifically, the regulation must--
    (1) State whether the agency:
    (i) Has a central point to which a recipient may send the 
notification of a conviction that is required under Sec.  182.225(a) or 
Sec.  182.300(b); or
    (ii) Requires the recipient to send the notification to the awarding 
official for each agency award, or to his or her official designee.
    (2) Either:
    (i) State that the agency head is the official authorized to 
determine under Sec.  182.500 or Sec.  182.505 that a recipient has 
violated the drug-free workplace requirements; or
    (ii) Provide the title of the official designated to make that 
determination.
    (c) May also, at the agency's option, identify any specific types of 
financial assistance awards, in addition to grants and cooperative 
agreements, to which the Federal agency makes this guidance applicable.



Sec.  182.30  Where does a Federal agency implement the guidance?

    Each Federal agency that awards grants or cooperative agreements or 
makes other financial assistance awards that are subject to the drug-
free workplace guidance in this part must issue a regulation 
implementing the guidance within its chapter in subtitle B of this title 
of the Code of Federal Regulations.



Sec.  182.35  By when must a Federal agency implement the guidance?

    Federal agencies must submit proposed regulations to the OMB for 
review within nine months of the issuance of this part and issue final 
regulations within eighteen months of the guidance.



Sec.  182.40  How is the guidance maintained?

    The OMB publishes proposed changes to the guidance in the Federal 
Register for public comment, considers comments with the help of 
appropriate interagency working groups, and then issues any changes to 
the guidance in final form.



                     Subpart A_Purpose and Coverage



Sec.  182.100  How is this part written?

    (a) This part uses a ``plain language'' format to make it easier for 
the general public and business community to use and understand. The 
section headings and text, often in the form of questions and answers, 
must be read together.
    (b) Pronouns used within this part, such as ``I'' and ``you,'' 
change from subpart to subpart depending on the audience being 
addressed.



Sec.  182.105  Do terms in this part have special meanings?

    This part uses terms that have special meanings. Those terms are 
defined in subpart F of this part.



Sec.  182.110  What do subparts A through F of this part do?

    Subparts A through F of this part specify standard policies and 
procedures to carry out the Drug-Free Workplace Act of 1988 for 
financial assistance awards.



Sec.  182.115  Does this part apply to me?

    (a) Portions of this part apply to you if you are either--
    (1) A recipient of a Federal assistance award (see definitions of 
award and recipient in Sec. Sec.  182.605 and 182.660, respectively); or
    (2) A Federal agency awarding official.
    (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 Federal agency awarding official...  A, D and E.
------------------------------------------------------------------------



Sec.  182.120  Are any of my Federal assistance awards exempt from
this part?

    This part does not apply to any award to which the agency head, or 
his or her designee, determines that the

[[Page 71]]

application of this part would be inconsistent with the international 
obligations of the United States or the laws or regulations of a foreign 
government.



Sec.  182.125  Does this part affect the Federal contracts that
I receive?

    This part 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.  182.510(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.  182.200  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.  182.205 
through 182.220); and
    (2) Take actions concerning employees who are convicted of violating 
drug statutes in the workplace (see Sec.  182.225).
    (b) Second, you must identify all known workplaces under your 
Federal awards (see Sec.  182.230).



Sec.  182.205  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.  182.210  To whom must I distribute my drug-free workplace
statement?

    You must require that a copy of the statement described in Sec.  
182.205 be given to each employee who will be engaged in the performance 
of any Federal award.



Sec.  182.215  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.  182.220  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.  182.205 and an ongoing awareness program 
as described in Sec.  182.215, you must publish the statement and 
establish the program by the time given in the following table:

[[Page 72]]



------------------------------------------------------------------------
                If * * *                          Then you * * *
------------------------------------------------------------------------
(a) the performance period of the award  must have the policy statement
 is less than 30 days.                    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  must have the policy statement
 is 30 days or more.                      and program in place within 30
                                          days after award.
(c) you believe there are extraordinary  may ask the agency awarding
 circumstances that will require more     official to give you more time
 than 30 days for you to publish the      to do so. The amount of
 policy statement and establish the       additional time, if any, to be
 awareness program.                       given is at the discretion of
                                          the awarding official.
------------------------------------------------------------------------



Sec.  182.225  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.  182.205(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.  182.230  How and when must I identify workplaces?

    (a) You must identify all known workplaces under each agency award. 
A failure to do so is a violation of your drug-free workplace 
requirements. You may identify the workplaces--
    (1) To the agency 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 agency 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 agency 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 agency awarding official.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  182.300  What must I do to comply with this part if I am an
individual recipient?

    As a condition of receiving a Federal agency 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

[[Page 73]]

award activity, you will report the conviction:
    (1) In writing.
    (2) Within 10 calendar days of the conviction.
    (3) To the Federal agency awarding official or other designee for 
each award that you currently have, unless the agency designates a 
central point for the receipt of the notices, either in the award 
document or its regulation implementing the guidance in this part. When 
notice is made to a central point, it must include the identification 
number(s) of each affected award.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  182.400  What are my responsibilities as an agency awarding
official?

    As a Federal agency 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.  182.500  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 agency head 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.  182.505  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 agency head 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.  182.510  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.  182.500 or Sec.  182.505, the agency 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 the agency's 
regulation implementing the OMB guidance on nonprocurement debarment and 
suspension (2 CFR part 180), for a period not to exceed five years.



Sec.  182.515  Are there any exceptions to those actions?

    The agency head 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 agency head 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.  182.605  Award.

    Award means an award of financial assistance by a 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 
that implements OMB Circular A-102 (for availability of OMB circulars, 
see 5 CFR 1310.3) and specifies uniform administrative requirements.
    (b) The term award does not include:

[[Page 74]]

    (1) Technical assistance that provides services instead of money.
    (2) Loans.
    (3) Loan guarantees.
    (4) Interest subsidies.
    (5) Insurance.
    (6) Direct appropriations.
    (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.  182.610  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.  182.615  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.  182.620  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.  182.650), 
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.  182.625  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.  182.630  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 agency 
regulations implementing the OMB guidance on nonprocurement debarment 
and suspension (2 CFR part 180, which implements Executive Orders 12549 
and 12689).



Sec.  182.635  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.  182.640  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.  182.645  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.  182.650  Grant.

    Grant means an award of financial assistance that, consistent with 
31 U.S.C. 6304, is used to enter into a relationship--

[[Page 75]]

    (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.  182.655  Individual.

    Individual means a natural person.



Sec.  182.660  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.  182.665  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.  182.670  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 
agency regulations implementing the OMB guidance on nonprocurement 
debarment and suspension (2 CFR part 180, which implements Executive 
Orders 12549 and 12689). Suspension of a recipient is a distinct and 
separate action from suspension of an award or suspension of payments 
under an award.



PART 183_NEVER CONTRACT WITH THE ENEMY--Table of Contents



Sec.
183.5 Purpose of this part.
183.10 Applicability.
183.15 Responsibilities of Federal awarding agencies.
183.20 Reporting responsibilities of Federal awarding agencies.
183.25 Responsibilities of recipients.
183.30 Access to records.
183.35 Definitions.

Appendix A to Part 183--Award Terms for Never Contract With the Enemy.

    Authority: Pub. L. 113-291.

    Source: 85 FR 49527, Aug. 13, 2020, unless otherwise noted.



Sec.  183.5  Purpose of this part.

    This part provides guidance to Federal awarding agencies on the 
implementation of the Never Contract with the Enemy requirements 
applicable to certain grants and cooperative agreements, as specified in 
subtitle E, title VIII of the National Defense Authorization Act (NDAA) 
for Fiscal Year (FY) 2015 (Pub. L. 113-291), as amended by Sec. 822 of 
the National Defense Authorization Act for Fiscal Year 2020 (Pub. L. 
116-92).



Sec.  183.10  Applicability.

    (a) This part applies only to grants and cooperative agreements that 
are expected to exceed $50,000 and that are performed outside the United 
States, including U.S. territories, and that are in support of a 
contingency operation in which members of the Armed Forces are actively 
engaged in hostilities. It does not apply to the authorized intelligence 
or law enforcement activities of the Federal Government.
    (b) All elements of this part are applicable until the date of 
expiration as provided in law.



Sec.  183.15  Responsibilities of Federal awarding agencies.

    (a) Prior to making an award for a covered grant or cooperative 
agreement (see also Sec.  183.35), the Federal awarding agency must 
check the current list of prohibited or restricted persons or entities 
in the System Award Management (SAM) Exclusions.

[[Page 76]]

    (b) The Federal awarding agency may include the award term provided 
in appendix A of this part in all covered grant and cooperative 
agreement awards in accordance with Never Contract with the Enemy.
    (c) A Federal awarding agency may become aware of a person or entity 
that:
    (1) Provides funds, including goods and services, received under a 
covered grant or cooperative agreement of an executive agency directly 
or indirectly to covered persons or entities; or
    (2) Fails to exercise due diligence to ensure that none of the 
funds, including goods and services, received under a covered grant or 
cooperative agreement of an executive agency are provided directly or 
indirectly to covered persons or entities.
    (d) When a Federal awarding agency becomes aware of such a person or 
entity, it may do any of the following actions:
    (1) Restrict the future award of all Federal contracts, grants, and 
cooperative agreements to the person or entity based upon concerns that 
Federal awards to the entity would provide grant funds directly or 
indirectly to a covered person or entity.
    (2) Terminate any contract, grant, or cooperative agreement to a 
covered person or entity upon becoming aware that the recipient has 
failed to exercise due diligence to ensure that none of the award funds 
are provided directly or indirectly to a covered person or entity.
    (3) Void in whole or in part any grant, cooperative agreement or 
contracts of the executive agency concerned upon a written determination 
by the head of contracting activity or other appropriate official that 
the grant or cooperative agreement provides funds directly or indirectly 
to a covered person or entity.
    (e) The Federal awarding agency must notify recipients in writing 
regarding its decision to restrict all future awards and/or to terminate 
or void a grant or cooperative agreement. The agency must also notify 
the recipient in writing about the recipient's right to request an 
administrative review (using the agency's procedures) of the 
restriction, termination, or void of the grant or cooperative agreement 
within 30 days of receiving notification.



Sec.  183.20  Reporting responsibilities of Federal awarding agencies.

    (a) If a Federal awarding agency restricts all future awards to a 
covered person or entity, it must enter information on the ineligible 
person or entity into SAM Exclusions as a prohibited or restricted 
source pursuant to Subtitle E, Title VIII of the NDAA for FY 2015 (Pub. 
L. 113-291).
    (b) When a Federal awarding agency terminates or voids a grant or 
cooperative agreement due to Never Contract with the Enemy, it must 
report the termination as a Termination for Material Failure to Comply 
in the Office of Management and Budget (OMB)-designated integrity and 
performance system accessible through SAM (currently the Federal Awardee 
Performance and Integrity Information System (FAPIIS)).
    (c) The Federal awarding agency shall document and report to the 
head of the executive agency concerned (or the designee of such head) 
and the commander of the covered combatant command concerned (or 
specific deputies):
    (1) Any action to restrict all future awards or to terminate or void 
an award with a covered person or entity.
    (2) Any decision not to restrict all future awards, terminate, or 
void an award along with the agency's reasoning for not taking one of 
these actions after the agency became aware that a person or entity is a 
prohibited or restricted source.
    (d) Each report referenced in paragraph (c)(1) of this section shall 
include:
    (1) The executive agency taking such action.
    (2) An explanation of the basis for the action taken.
    (3) The value of the terminated or voided grant or cooperative 
agreement.
    (4) The value of all grants and cooperative agreements of the 
executive agency with the person or entity concerned at the time the 
grant or cooperative agreement was terminated or voided.
    (e) Each report referenced in paragraph (c)(2) of this section shall 
include:

[[Page 77]]

    (1) The executive agency concerned.
    (2) An explanation of the basis for not taking the action.
    (f) For each instance in which an executive agency exercised the 
additional authority to examine recipient and lower tier entity (e.g., 
subrecipient or contractor) records, the agency must report in writing 
to the head of the executive agency concerned (or the designee of such 
head) and the commander of the covered combatant command concerned (or 
specific deputies) the following:
    (1) An explanation of the basis for the action taken; and
    (2) A summary of the results of any examination of records.



Sec.  183.25  Responsibilities of recipients.

    (a) Recipients of covered grants or cooperative agreements must 
fulfill the requirements outlined in the award term provided in appendix 
A to this part.
    (b) Recipients must also flow down the provisions in award terms 
covered in appendix A to this part to all contracts and subawards under 
the award.



Sec.  183.30  Access to records.

    In addition to any other existing examination-of-records authority, 
the Federal Government is authorized to examine any records of the 
recipient and its subawards, to the extent necessary, to ensure that 
funds, including supplies and services, received under a covered grant 
or cooperative agreement (see Sec.  183.35) are not provided directly or 
indirectly to a covered person or entity in accordance with Never 
Contract with the Enemy. The Federal awarding agency may only exercise 
this authority upon a written determination by the Federal awarding 
agency that relies on a finding by the commander of a covered combatant 
command that there is reason to believe that funds, including supplies 
and services, received under the grant or cooperative agreement may have 
been provided directly or indirectly to a covered person or entity.



Sec.  183.35  Definitions.

    Terms used in this part are defined as follows:
    Contingency operation, as defined in 10 U.S.C. 101a, means a 
military operation that--
    (1) Is designated by the Secretary of Defense as an operation in 
which members of the armed forces are or may become involved in military 
actions, operations, or hostilities against an enemy of the United 
States or against an opposing military force; or
    (2) Results in the call or order to, or retention on, active duty of 
members of the uniformed services under 10 U.S.C. 688, 12301a, 12302, 
12304, 12304a, 12305, 12406 of 10 U.S.C. chapter 15, 14 U.S.C. 712 or 
any other provision of law during a war or during a national emergency 
declared by the President or Congress.
    Covered combatant command means the following:
    (1) The United States Africa Command.
    (2) The United States Central Command.
    (3) The United States European Command.
    (4) The United States Pacific Command.
    (5) The United States Southern Command.
    (6) The United States Transportation Command.
    Covered grant or cooperative agreement means a grant or cooperative 
agreement, as defined in 2 CFR 200.1 with an estimated value in excess 
of $50,000 that is performed outside the United States, including its 
possessions and territories, in support of a contingency operation in 
which members of the Armed Forces are actively engaged in hostilities. 
Except for U.S. Department of Defense grants and cooperative agreements 
that were awarded on or before December 19, 2017, that will be performed 
in the United States Central Command, where the estimated value is in 
excess of $100,000.
    Covered person or entity means a person or entity that is actively 
opposing United States or coalition forces involved in a contingency 
operation in which members of the Armed Forces are actively engaged in 
hostilities.

[[Page 78]]



  Sec. Appendix A to Part 183--Award Terms for Never Contract With the 
                                  Enemy

    Federal awarding agencies may include the following award terms in 
all awards for covered grants and cooperative agreements in accordance 
with Never Contract with the Enemy:

                                 Term 1

               Prohibition on Providing Funds to the Enemy

    (a) The recipient must--
    (1) Exercise due diligence to ensure that none of the funds, 
including supplies and services, received under this grant or 
cooperative agreement are provided directly or indirectly (including 
through subawards or contracts) to a person or entity who is actively 
opposing the United States or coalition forces involved in a contingency 
operation in which members of the Armed Forces are actively engaged in 
hostilities, which must be completed through 2 CFR 180.300 prior to 
issuing a subaward or contract and;
    (2) Terminate or void in whole or in part any subaward or contract 
with a person or entity listed in SAM as a prohibited or restricted 
source pursuant to subtitle E of Title VIII of the NDAA for FY 2015, 
unless the Federal awarding agency provides written approval to continue 
the subaward or contract.
    (b) The recipient may include the substance of this clause, 
including paragraph (a) of this clause, in subawards under this grant or 
cooperative agreement that have an estimated value over $50,000 and will 
be performed outside the United States, including its outlying areas.
    (c) The Federal awarding agency has the authority to terminate or 
void this grant or cooperative agreement, in whole or in part, if the 
Federal awarding agency becomes aware that the recipient failed to 
exercise due diligence as required by paragraph (a) of this clause or if 
the Federal awarding agency becomes aware that any funds received under 
this grant or cooperative agreement have been provided directly or 
indirectly to a person or entity who is actively opposing coalition 
forces involved in a contingency operation in which members of the Armed 
Forces are actively engaged in hostilities.

(End of term)

                                 Term 2

                 Additional Access to Recipient Records

    (a) In addition to any other existing examination-of-records 
authority, the Federal Government is authorized to examine any records 
of the recipient and its subawards or contracts to the extent necessary 
to ensure that funds, including supplies and services, available under 
this grant or cooperative agreement are not provided, directly or 
indirectly, to a person or entity that is actively opposing United 
States or coalition forces involved in a contingency operation in which 
members of the Armed Forces are actively engaged in hostilities, except 
for awards awarded by the Department of Defense on or before Dec 19, 
2017 that will be performed in the United States Central Command 
(USCENTCOM) theater of operations.
    (b) The substance of this clause, including this paragraph (b), is 
required to be included in subawards or contracts under this grant or 
cooperative agreement that have an estimated value over $50,000 and will 
be performed outside the United States, including its outlying areas.

(End of term)

                        PARTS 184	199 [RESERVED]

[[Page 79]]



          CHAPTER II--OFFICE OF MANAGEMENT AND BUDGET GUIDANCE




  --------------------------------------------------------------------
Part                                                                Page
200             Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................          81
201-299

[Reserved]

[[Page 81]]









PART 200_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



                   Subpart A_Acronyms and Definitions

                                Acronyms

Sec.
200.0 Acronyms.
200.1 Definitions.
200.2 Acquisition cost.
200.3 Advance payment.
200.4 Allocation.
200.5 Audit finding.
200.6 Auditee.
200.7 Auditor.
200.8 Budget.
200.9 Central service cost allocation plan.
200.10 Catalog of Federal Domestic Assistance (CFDA) number.
200.11 CFDA program title.
200.12 Capital assets.
200.13 Capital expenditures.
200.14 Claim.
200.15 Class of Federal awards.
200.16 Closeout.
200.17 Cluster of programs.
200.18 Cognizant agency for audit.
200.19 Cognizant agency for indirect costs.
200.20 Computing devices.
200.21 Compliance supplement.
200.22 Contract.
200.23 Contractor.
200.24 Cooperative agreement.
200.25 Cooperative audit resolution.
200.26 Corrective action.
200.27 Cost allocation plan.
200.28 Cost objective.
200.29 Cost sharing or matching.
200.30 Cross-cutting audit finding.
200.31 [Reserved]
200.32 Data Universal Numbering System (DUNS) number.
200.33 Equipment.
200.34 Expenditures.
200.35 Federal agency.
200.36 Federal Audit Clearinghouse (FAC).
200.37 Federal awarding agency.
200.38 Federal award.
200.39 Federal award date.
200.40 Federal financial assistance.
200.41 Federal interest.
200.42 Federal program.
200.43 Federal share.
200.44 Final cost objective.
200.45 Fixed amount awards.
200.46 Foreign public entity.
200.47 Foreign organization.
200.48 General purpose equipment.
200.49 Generally Accepted Accounting Principles (GAAP).
200.50 Generally Accepted Government Auditing Standards (GAGAS).
200.51 Grant agreement.
200.52 Hospital.
200.53 Improper payment.
200.54 Indian tribe (or ``federally recognized Indian tribe'').
200.55 Institutions of Higher Education (IHEs).
200.56 Indirect (facilities & administrative (F&A)) costs.
200.57 Indirect cost rate proposal.
200.58 Information technology systems.
200.59 Intangible property.
200.60 Intermediate cost objective.
200.61 Internal controls.
200.62 Internal control over compliance requirements for Federal awards.
200.63 Loan.
200.64 Local government.
200.65 Major program.
200.66 Management decision.
200.67 Micro-purchase.
200.68 Modified Total Direct Cost (MTDC).
200.69 Non-Federal entity.
200.70 Nonprofit organization.
200.71 Obligations.
200.72 Office of Management and Budget (OMB).
200.73 Oversight agency for audit.
200.74 Pass-through entity.
200.75 Participant support costs.
200.76 Performance goal.
200.77 Period of performance.
200.78 Personal property.
200.79 Personally Identifiable Information (PII).
200.80 Program income.
200.81 Property.
200.82 Protected Personally Identifiable Information (Protected PII).
200.83 Project cost.
200.84 Questioned cost.
200.85 Real property.
200.86 Recipient.
200.87 Research and Development (R&D).
200.88 Simplified acquisition threshold.
200.89 Special purpose equipment.
200.90 State.
200.91 Student Financial Aid (SFA).
200.92 Subaward.
200.93 Subrecipient.
200.94 Supplies.
200.95 Termination.
200.96 Third-party in-kind contributions.
200.97 Unliquidated obligations.
200.98 Unobligated balance.
200.99 Voluntary committed cost sharing.

                      Subpart B_General Provisions

200.100 Purpose.
200.101 Applicability.

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200.102 Exceptions.
200.103 Authorities.
200.104 Supersession.
200.105 Effect on other issuances.
200.106 Agency implementation.
200.107 OMB responsibilities.
200.108 Inquiries.
200.109 Review date.
200.110 Effective/applicability date.
200.111 English language.
200.112 Conflict of interest.
200.113 Mandatory disclosures.

 Subpart C_Pre-Federal Award Requirements and Contents of Federal Awards

200.200 Purpose.
200.201 Use of grant agreements (including fixed amount awards), 
          cooperative agreements, and contracts.
200.202 Program planning and design.
200.203 Requirement to provide public notice of Federal financial 
          assistance programs.
200.204 Notices of funding opportunities.
200.205 Federal awarding agency review of merit of proposals.
200.206 Federal awarding agency review of risk posed by applicants.
200.207 Standard application requirements.
200.208 Specific conditions.
200.209 Certifications and representations.
200.210 Pre-award costs.
200.211 Information contained in a Federal award.
200.212 Public access to Federal award information.
200.213 Reporting a determination that a non-Federal entity is not 
          qualified for a Federal award.
200.214 Suspension and debarment.
200.215 Never contract with the enemy.
200.216 Prohibition on certain telecommunications and video surveillance 
          services or equipment.

                Subpart D_Post Federal Award Requirements

200.300 Statutory and national policy requirements.
200.301 Performance measurement.
200.302 Financial management.
200.303 Internal controls.
200.304 Bonds.
200.305 Federal payment.
200.306 Cost sharing or matching.
200.307 Program income.
200.308 Revision of budget and program plans.
200.309 Modifications to period of performance.

                           Property Standards

200.310 Insurance coverage.
200.311 Real property.
200.312 Federally-owned and exempt property.
200.313 Equipment.
200.314 Supplies.
200.315 Intangible property.
200.316 Property trust relationship.

                          Procurement Standards

200.317 Procurements by states.
200.318 General procurement standards.
200.319 Competition.
200.320 Methods of procurement to be followed.
200.321 Contracting with small and minority businesses, women's business 
          enterprises, and labor surplus area firms.
200.322 Domestic preferences for procurements.
200.323 Procurement of recovered materials.
200.324 Contract cost and price.
200.325 Federal awarding agency or pass-through entity review.
200.326 Bonding requirements.
200.327 Contract provisions.

           Performance and Financial Monitoring and Reporting

200.328 Financial reporting.
200.329 Monitoring and reporting program performance.
200.330 Reporting on real property.

                 Subrecipient Monitoring and Management

200.331 Subrecipient and contractor determinations.
200.332 Requirements for pass-through entities.
200.333 Fixed amount subawards.

                       Record Retention and Access

200.334 Retention requirements for records.
200.335 Requests for transfer of records.
200.336 Methods for collection, transmission, and storage of 
          information.
200.337 Access to records.
200.338 Restrictions on public access to records.

                       Remedies for Noncompliance

200.339 Remedies for noncompliance.
200.340 Termination.
200.341 Notification of termination requirement.
200.342 Opportunities to object, hearings, and appeals.
200.343 Effects of suspension and termination.

                                Closeout

200.344 Closeout.

        Post-Closeout Adjustments and Continuing Responsibilities

200.345 Post-closeout adjustments and continuing responsibilities.

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                        Collection of Amounts Due

200.346 Collection of amounts due.

                        Subpart E_Cost Principles

                           General Provisions

200.400 Policy guide.
200.401 Application.

                          Basic Considerations

200.402 Composition of costs.
200.403 Factors affecting allowability of costs.
200.404 Reasonable costs.
200.405 Allocable costs.
200.406 Applicable credits.
200.407 Prior written approval (prior approval).
200.408 Limitation on allowance of costs.
200.409 Special considerations.
200.410 Collection of unallowable costs.
200.411 Adjustment of previously negotiated indirect (F&A) cost rates 
          containing unallowable costs.

                     Direct and Indirect (F&A) Costs

200.412 Classification of costs.
200.413 Direct costs.
200.414 Indirect (F&A) costs.
200.415 Required certifications.

 Special Considerations for States, Local Governments and Indian Tribes

200.416 Cost allocation plans and indirect cost proposals.
200.417 Interagency service.

       Special Considerations for Institutions of Higher Education

200.418 Costs incurred by states and local governments.
200.419 Cost accounting standards and disclosure statement.

              General Provisions for Selected Items of Cost

200.420 Considerations for selected items of cost.
200.421 Advertising and public relations.
200.422 Advisory councils.
200.423 Alcoholic beverages.
200.424 Alumni/ae activities.
200.425 Audit services.
200.426 Bad debts.
200.427 Bonding costs.
200.428 Collections of improper payments.
200.429 Commencement and convocation costs.
200.430 Compensation--personal services.
200.431 Compensation--fringe benefits.
200.432 Conferences.
200.433 Contingency provisions.
200.434 Contributions and donations.
200.435 Defense and prosecution of criminal and civil proceedings, 
          claims, appeals and patent infringements.
200.436 Depreciation.
200.437 Employee health and welfare costs.
200.438 Entertainment costs.
200.439 Equipment and other capital expenditures.
200.440 Exchange rates.
200.441 Fines, penalties, damages and other settlements.
200.442 Fund raising and investment management costs.
200.443 Gains and losses on disposition of depreciable assets.
200.444 General costs of government.
200.445 Goods or services for personal use.
200.446 Idle facilities and idle capacity.
200.447 Insurance and indemnification.
200.448 Intellectual property.
200.449 Interest.
200.450 Lobbying.
200.451 Losses on other awards or contracts.
200.452 Maintenance and repair costs.
200.453 Materials and supplies costs, including costs of computing 
          devices.
200.454 Memberships, subscriptions, and professional activity costs.
200.455 Organization costs.
200.456 Participant support costs.
200.457 Plant and security costs.
200.458 Pre-award costs.
200.459 Professional service costs.
200.460 Proposal costs.
200.461 Publication and printing costs.
200.462 Rearrangement and reconversion costs.
200.463 Recruiting costs.
200.464 Relocation costs of employees.
200.465 Rental costs of real property and equipment.
200.466 Scholarships and student aid costs.
200.467 Selling and marketing costs.
200.468 Specialized service facilities.
200.469 Student activity costs.
200.470 Taxes (including Value Added Tax).
200.471 Telecommunication costs and video surveillance costs.
200.472 Termination costs.
200.473 Training and education costs.
200.474 Transportation costs.
200.475 Travel costs.
200.476 Trustees.

                      Subpart F_Audit Requirements

                                 General

200.500 Purpose.

                                 Audits

200.501 Audit requirements.
200.502 Basis for determining Federal awards expended.
200.503 Relation to other audit requirements.
200.504 Frequency of audits.

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200.505 Sanctions.
200.506 Audit costs.
200.507 Program-specific audits.

                                Auditees

200.508 Auditee responsibilities.
200.509 Auditor selection.
200.510 Financial statements.
200.511 Audit findings follow-up.
200.512 Report submission.

                            Federal Agencies

200.513 Responsibilities.

                                Auditors

200.514 Scope of audit.
200.515 Audit reporting.
200.516 Audit findings.
200.517 Audit documentation.
200.518 Major program determination.
200.519 Criteria for Federal program risk.
200.520 Criteria for a low-risk auditee.

                          Management Decisions

200.521 Management decision.

Appendix I to Part 200--Full Text of Notice of Funding Opportunity
Appendix II to Part 200--Contract Provisions for Non-Federal Entity 
          Contracts Under Federal Awards
Appendix III to Part 200--Indirect (F&A) Costs Identification and 
          Assignment, and Rate Determination for Institutions of Higher 
          Education (IHEs)
Appendix IV to Part 200--Indirect (F&A) Costs Identification and 
          Assignment, and Rate Determination for Nonprofit Organizations
Appendix V to Part 200-- State/Local Governmentwide Central Service Cost 
          Allocation Plans
Appendix VI to Part 200--Public Assistance Cost Allocation Plans
Appendix VII to Part 220--States and Local Government and Indian Tribe 
          Indirect Cost Proposals
Appendix VIII to Part 200--Nonprofit Organizations Exempted From Subpart 
          E of Part 200
Appendix IX to Part 200--Hospital Cost Principles
Appendix X to Part 200--Data Collection Form (Form SF-SAC)
Appendix XI to Part 200--Compliance Supplement
Appendix XII to Part 200--Award Term and Condition for Recipient 
          Integrity and Performance Matters

    Authority: 31 U.S.C. 503

    Source: 78 FR 78608, Dec. 26, 2013, unless otherwise noted.



                   Subpart A_Acronyms and Definitions

                                Acronyms



Sec.  200.0  Acronyms.

                              Acronym Term

CAS Cost Accounting Standards
CFR Code of Federal Regulations
CMIA Cash Management Improvement Act
COG Councils Of Governments
COSO Committee of Sponsoring Organizations of the Treadway Commission


EPA Environmental Protection Agency
ERISA Employee Retirement Income Security Act of 1974 (29 U.S.C. 1301-
    1461)
EUI Energy Usage Index
F&A Facilities and Administration
FAC Federal Audit Clearinghouse
FAIN Federal Award Identification Number
FAPIIS Federal Awardee Performance and Integrity Information System
FAR Federal Acquisition Regulation
FFATA Federal Funding Accountability and Transparency Act of 2006 or 
    Transparency Act--Public Law 109-282, as amended by section 6202(a) 
    of Public Law 110-252 (31 U.S.C. 6101)
FICA Federal Insurance Contributions Act
FOIA Freedom of Information Act
FR Federal Register
FTE Full-time equivalent
GAAP Generally Accepted Accounting Principles
GAGAS Generally Accepted Government Auditing Standards
GAO Government Accountability Office
GOCO Government owned, contractor operated
GSA General Services Administration
IBS Institutional Base Salary
IHE Institutions of Higher Education
IRC Internal Revenue Code
ISDEAA Indian Self-Determination and Education and Assistance Act
MTC Modified Total Cost
MTDC Modified Total Direct Cost
NFE Non-Federal Entity

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OMB Office of Management and Budget
PII Personally Identifiable Information
PMS Payment Management System
PRHP Post-retirement Health Plans
PTE Pass-through Entity
REUI Relative Energy Usage Index
SAM System for Award Management
SFA Student Financial Aid
SNAP Supplemental Nutrition Assistance Program
SPOC Single Point of Contact
TANF Temporary Assistance for Needy Families
TFM Treasury Financial Manual
U.S.C. United States Code
VAT Value Added Tax

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014; 
80 FR 43308, July 22, 2015; 85 FR 49529, Aug. 13, 2020]



Sec.  200.1  Definitions.

    These are the definitions for terms used in this part. Different 
definitions may be found in Federal statutes or regulations that apply 
more specifically to particular programs or activities. These 
definitions could be supplemented by additional instructional 
information provided in governmentwide standard information collections. 
For purposes of this part, the following definitions apply:
    Acquisition cost means the cost of the asset including the cost to 
ready the asset for its intended use. Acquisition cost for equipment, 
for example, means the net invoice price of the equipment, including the 
cost of any modifications, attachments, accessories, or auxiliary 
apparatus necessary to make it usable for the purpose for which it is 
acquired. Acquisition costs for software includes those development 
costs capitalized in accordance with generally accepted accounting 
principles (GAAP). Ancillary charges, such as taxes, duty, protective in 
transit insurance, freight, and installation may be included in or 
excluded from the acquisition cost in accordance with the non-Federal 
entity's regular accounting practices.
    Advance payment means a payment that a Federal awarding agency or 
pass-through entity makes by any appropriate payment mechanism, 
including a predetermined payment schedule, before the non-Federal 
entity disburses the funds for program purposes.
    Allocation means the process of assigning a cost, or a group of 
costs, to one or more cost objective(s), in reasonable proportion to the 
benefit provided or other equitable relationship. The process may entail 
assigning a cost(s) directly to a final cost objective or through one or 
more intermediate cost objectives.
    Assistance listings refers to the publicly available listing of 
Federal assistance programs managed and administered by the General 
Services Administration, formerly known as the Catalog of Federal 
Domestic Assistance (CFDA).
    Assistance listing number means a unique number assigned to identify 
a Federal Assistance Listings, formerly known as the CFDA Number.
    Assistance listing program title means the title that corresponds to 
the Federal Assistance Listings Number, formerly known as the CFDA 
program title.
    Audit finding means deficiencies which the auditor is required by 
Sec.  200.516(a) to report in the schedule of findings and questioned 
costs.
    Auditee means any non-Federal entity that expends Federal awards 
which must be audited under subpart F of this part.
    Auditor means an auditor who is a public accountant or a Federal, 
State, local government, or Indian tribe audit organization, which meets 
the general standards specified for external auditors in generally 
accepted government auditing standards (GAGAS). The term auditor does 
not include internal auditors of nonprofit organizations.
    Budget means the financial plan for the Federal award that the 
Federal awarding agency or pass-through entity approves during the 
Federal award process or in subsequent amendments to the Federal award. 
It may include the Federal and non-Federal share or only the Federal 
share, as determined by the Federal awarding agency or pass-through 
entity.
    Budget period means the time interval from the start date of a 
funded portion of an award to the end date of that funded portion during 
which recipients are authorized to expend the funds

[[Page 86]]

awarded, including any funds carried forward or other revisions pursuant 
to Sec.  200.308.
    Capital assets means:
    (1) Tangible or intangible assets used in operations having a useful 
life of more than one year which are capitalized in accordance with 
GAAP. Capital assets include:
    (i) Land, buildings (facilities), equipment, and intellectual 
property (including software) whether acquired by purchase, 
construction, manufacture, exchange, or through a lease accounted for as 
financed purchase under Government Accounting Standards Board (GASB) 
standards or a finance lease under Financial Accounting Standards Board 
(FASB) standards; and
    (ii) Additions, improvements, modifications, replacements, 
rearrangements, reinstallations, renovations or alterations to capital 
assets that materially increase their value or useful life (not ordinary 
repairs and maintenance).
    (2) For purpose of this part, capital assets do not include 
intangible right-to-use assets (per GASB) and right-to-use operating 
lease assets (per FASB). For example, assets capitalized that recognize 
a lessee's right to control the use of property and/or equipment for a 
period of time under a lease contract. See also Sec.  200.465.
    Capital expenditures means expenditures to acquire capital assets or 
expenditures to make additions, improvements, modifications, 
replacements, rearrangements, reinstallations, renovations, or 
alterations to capital assets that materially increase their value or 
useful life.
    Central service cost allocation plan means the documentation 
identifying, accumulating, and allocating or developing billing rates 
based on the allowable costs of services provided by a State or local 
government or Indian tribe on a centralized basis to its departments and 
agencies. The costs of these services may be allocated or billed to 
users.
    Claim means, depending on the context, either:
    (1) A written demand or written assertion by one of the parties to a 
Federal award seeking as a matter of right:
    (i) The payment of money in a sum certain;
    (ii) The adjustment or interpretation of the terms and conditions of 
the Federal award; or
    (iii) Other relief arising under or relating to a Federal award.
    (2) A request for payment that is not in dispute when submitted.
    Class of Federal awards means a group of Federal awards either 
awarded under a specific program or group of programs or to a specific 
type of non-Federal entity or group of non-Federal entities to which 
specific provisions or exceptions may apply.
    Closeout means the process by which the Federal awarding agency or 
pass-through entity determines that all applicable administrative 
actions and all required work of the Federal award have been completed 
and takes actions as described in Sec.  200.344.
    Cluster of programs means a grouping of closely related programs 
that share common compliance requirements. The types of clusters of 
programs are research and development (R&D), student financial aid 
(SFA), and other clusters. ``Other clusters'' are as defined by OMB in 
the compliance supplement or as designated by a State for Federal awards 
the State provides to its subrecipients that meet the definition of a 
cluster of programs. When designating an ``other cluster,'' a State must 
identify the Federal awards included in the cluster and advise the 
subrecipients of compliance requirements applicable to the cluster, 
consistent with Sec.  200.332(a). A cluster of programs must be 
considered as one program for determining major programs, as described 
in Sec.  200.518, and, with the exception of R&D as described in Sec.  
200.501(c), whether a program-specific audit may be elected.
    Cognizant agency for audit means the Federal agency designated to 
carry out the responsibilities described in Sec.  200.513(a). The 
cognizant agency for audit is not necessarily the same as the cognizant 
agency for indirect costs. A list of cognizant agencies for audit can be 
found on the Federal Audit Clearinghouse (FAC) website.
    Cognizant agency for indirect costs means the Federal agency 
responsible

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for reviewing, negotiating, and approving cost allocation plans or 
indirect cost proposals developed under this part on behalf of all 
Federal agencies. The cognizant agency for indirect cost is not 
necessarily the same as the cognizant agency for audit. For assignments 
of cognizant agencies see the following:
    (1) For Institutions of Higher Education (IHEs): Appendix III to 
this part, paragraph C.11.
    (2) For nonprofit organizations: Appendix IV to this part, paragraph 
C.2.a.
    (3) For State and local governments: Appendix V to this part, 
paragraph F.1.
    (4) For Indian tribes: Appendix VII to this part, paragraph D.1.
    Compliance supplement means an annually updated authoritative source 
for auditors that serves to identify existing important compliance 
requirements that the Federal Government expects to be considered as 
part of an audit. Auditors use it to understand the Federal program's 
objectives, procedures, and compliance requirements, as well as audit 
objectives and suggested audit procedures for determining compliance 
with the relevant Federal program.
    Computing devices means machines used to acquire, store, analyze, 
process, and publish data and other information electronically, 
including accessories (or ``peripherals'') for printing, transmitting 
and receiving, or storing electronic information. See also the 
definitions of supplies and information technology systems in this 
section.
    Contract means, for the purpose of Federal financial assistance, a 
legal instrument by which a recipient or subrecipient purchases property 
or services needed to carry out the project or program under a Federal 
award. For additional information on subrecipient and contractor 
determinations, see Sec.  200.331. See also the definition of subaward 
in this section.
    Contractor means an entity that receives a contract as defined in 
this section.
    Cooperative agreement means a legal instrument of financial 
assistance between a Federal awarding agency and a recipient or a pass-
through entity and a subrecipient that, consistent with 31 U.S.C. 6302-
6305:
    (1) Is used to enter into a relationship the principal purpose of 
which is to transfer anything of value to carry out a public purpose 
authorized by a law of the United States (see 31 U.S.C. 6101(3)); and 
not to acquire property or services for the Federal Government or pass-
through entity's direct benefit or use;
    (2) Is distinguished from a grant in that it provides for 
substantial involvement of the Federal awarding agency in carrying out 
the activity contemplated by the Federal award.
    (3) The term does not include:
    (i) A cooperative research and development agreement as defined in 
15 U.S.C. 3710a; or
    (ii) An agreement that provides only:
    (A) Direct United States Government cash assistance to an 
individual;
    (B) A subsidy;
    (C) A loan;
    (D) A loan guarantee; or
    (E) Insurance.
    Cooperative audit resolution means the use of audit follow-up 
techniques which promote prompt corrective action by improving 
communication, fostering collaboration, promoting trust, and developing 
an understanding between the Federal agency and the non-Federal entity. 
This approach is based upon:
    (1) A strong commitment by Federal agency and non-Federal entity 
leadership to program integrity;
    (2) Federal agencies strengthening partnerships and working 
cooperatively with non-Federal entities and their auditors; and non-
Federal entities and their auditors working cooperatively with Federal 
agencies;
    (3) A focus on current conditions and corrective action going 
forward;
    (4) Federal agencies offering appropriate relief for past 
noncompliance when audits show prompt corrective action has occurred; 
and
    (5) Federal agency leadership sending a clear message that continued 
failure to correct conditions identified by audits which are likely to 
cause improper payments, fraud, waste, or abuse is unacceptable and will 
result in sanctions.
    Corrective action means action taken by the auditee that:
    (1) Corrects identified deficiencies;
    (2) Produces recommended improvements; or

[[Page 88]]

    (3) Demonstrates that audit findings are either invalid or do not 
warrant auditee action.
    Cost allocation plan means central service cost allocation plan or 
public assistance cost allocation plan.
    Cost objective means a program, function, activity, award, 
organizational subdivision, contract, or work unit for which cost data 
are desired and for which provision is made to accumulate and measure 
the cost of processes, products, jobs, capital projects, etc. A cost 
objective may be a major function of the non-Federal entity, a 
particular service or project, a Federal award, or an indirect 
(Facilities & Administrative (F&A)) cost activity, as described in 
subpart E of this part. See also the definitions of final cost objective 
and intermediate cost objective in this section.
    Cost sharing or matching means the portion of project costs not paid 
by Federal funds or contributions (unless otherwise authorized by 
Federal statute). See also Sec.  200.306.
    Cross-cutting audit finding means an audit finding where the same 
underlying condition or issue affects all Federal awards (including 
Federal awards of more than one Federal awarding agency or pass-through 
entity).
    Disallowed costs means those charges to a Federal award that the 
Federal awarding agency or pass-through entity determines to be 
unallowable, in accordance with the applicable Federal statutes, 
regulations, or the terms and conditions of the Federal award.
    Discretionary award means an award in which the Federal awarding 
agency, in keeping with specific statutory authority that enables the 
agency to exercise judgment (``discretion''), selects the recipient and/
or the amount of Federal funding awarded through a competitive process 
or based on merit of proposals. A discretionary award may be selected on 
a non-competitive basis, as appropriate.
    Equipment means tangible personal property (including information 
technology systems) having a useful life of more than one year and a 
per-unit acquisition cost which equals or exceeds the lesser of the 
capitalization level established by the non-Federal entity for financial 
statement purposes, or $5,000. See also the definitions of capital 
assets, computing devices, general purpose equipment, information 
technology systems, special purpose equipment, and supplies in this 
section.
    Expenditures means charges made by a non-Federal entity to a project 
or program for which a Federal award was received.
    (1) The charges may be reported on a cash or accrual basis, as long 
as the methodology is disclosed and is consistently applied.
    (2) For reports prepared on a cash basis, expenditures are the sum 
of:
    (i) Cash disbursements for direct charges for property and services;
    (ii) The amount of indirect expense charged;
    (iii) The value of third-party in-kind contributions applied; and
    (iv) The amount of cash advance payments and payments made to 
subrecipients.
    (3) For reports prepared on an accrual basis, expenditures are the 
sum of:
    (i) Cash disbursements for direct charges for property and services;
    (ii) The amount of indirect expense incurred;
    (iii) The value of third-party in-kind contributions applied; and
    (iv) The net increase or decrease in the amounts owed by the non-
Federal entity for:
    (A) Goods and other property received;
    (B) Services performed by employees, contractors, subrecipients, and 
other payees; and
    (C) Programs for which no current services or performance are 
required such as annuities, insurance claims, or other benefit payments.
    Federal agency means an ``agency'' as defined at 5 U.S.C. 551(1) and 
further clarified by 5 U.S.C. 552(f).
    Federal Audit Clearinghouse (FAC) means the clearinghouse designated 
by OMB as the repository of record where non-Federal entities are 
required to transmit the information required by subpart F of this part.
    Federal award has the meaning, depending on the context, in either 
paragraph (1) or (2) of this definition:
    (1)(i) The Federal financial assistance that a recipient receives 
directly from

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a Federal awarding agency or indirectly from a pass-through entity, as 
described in Sec.  200.101; or
    (ii) The cost-reimbursement contract under the Federal Acquisition 
Regulations that a non-Federal entity receives directly from a Federal 
awarding agency or indirectly from a pass-through entity, as described 
in Sec.  200.101.
    (2) The instrument setting forth the terms and conditions. The 
instrument is the grant agreement, cooperative agreement, other 
agreement for assistance covered in paragraph (2) of the definition of 
Federal financial assistance in this section, or the cost-reimbursement 
contract awarded under the Federal Acquisition Regulations.
    (3) Federal award does not include other contracts that a Federal 
agency uses to buy goods or services from a contractor or a contract to 
operate Federal Government owned, contractor operated facilities 
(GOCOs).
    (4) See also definitions of Federal financial assistance, grant 
agreement, and cooperative agreement.
    Federal award date means the date when the Federal award is signed 
by the authorized official of the Federal awarding agency.
    Federal financial assistance means
    (1) Assistance that non-Federal entities receive or administer in 
the form of:
    (i) Grants;
    (ii) Cooperative agreements;
    (iii) Non-cash contributions or donations of property (including 
donated surplus property);
    (iv) Direct appropriations;
    (v) Food commodities; and
    (vi) Other financial assistance (except assistance listed in 
paragraph (2) of this definition).
    (2) For Sec.  200.203 and subpart F of this part, Federal financial 
assistance also includes assistance that non-Federal entities receive or 
administer in the form of:
    (i) Loans;
    (ii) Loan Guarantees;
    (iii) Interest subsidies; and
    (iv) Insurance.
    (3) For Sec.  200.216, Federal financial assistance includes 
assistance that non-Federal entities receive or administer in the form 
of:
    (i) Grants;
    (ii) Cooperative agreements;
    (iii) Loans; and
    (iv) Loan Guarantees.
    (4) Federal financial assistance does not include amounts received 
as reimbursement for services rendered to individuals as described in 
Sec.  200.502(h) and (i).
    Federal interest means, for purposes of Sec.  200.330 or when used 
in connection with the acquisition or improvement of real property, 
equipment, or supplies under a Federal award, the dollar amount that is 
the product of the:
    (1) The percentage of Federal participation in the total cost of the 
real property, equipment, or supplies; and
    (2) Current fair market value of the property, improvements, or 
both, to the extent the costs of acquiring or improving the property 
were included as project costs.
    Federal program means:
    (1) All Federal awards which are assigned a single Assistance 
Listings Number.
    (2) When no Assistance Listings Number is assigned, all Federal 
awards from the same agency made for the same purpose must be combined 
and considered one program.
    (3) Notwithstanding paragraphs (1) and (2) of this definition, a 
cluster of programs. The types of clusters of programs are:
    (i) Research and development (R&D);
    (ii) Student financial aid (SFA); and
    (iii) ``Other clusters,'' as described in the definition of cluster 
of programs in this section.
    Federal share means the portion of the Federal award costs that are 
paid using Federal funds.
    Final cost objective means a cost objective which has allocated to 
it both direct and indirect costs and, in the non-Federal entity's 
accumulation system, is one of the final accumulation points, such as a 
particular award, internal project, or other direct activity of a non-
Federal entity. See also the definitions of cost objective and 
intermediate cost objective in this section.
    Financial obligations, when referencing a recipient's or 
subrecipient's use of funds under a Federal award, means orders placed 
for property and services, contracts and subawards

[[Page 90]]

made, and similar transactions that require payment.
    Fixed amount awards means a type of grant or cooperative agreement 
under which the Federal awarding agency or pass-through entity provides 
a specific level of support without regard to actual costs incurred 
under the Federal award. This type of Federal award reduces some of the 
administrative burden and record-keeping requirements for both the non-
Federal entity and Federal awarding agency or pass-through entity. 
Accountability is based primarily on performance and results. See 
Sec. Sec.  200.102(c), 200.201(b), and 200.333.
    Foreign organization means an entity that is:
    (1) A public or private organization located in a country other than 
the United States and its territories that is subject to the laws of the 
country in which it is located, irrespective of the citizenship of 
project staff or place of performance;
    (2) A private nongovernmental organization located in a country 
other than the United States that solicits and receives cash 
contributions from the general public;
    (3) A charitable organization located in a country other than the 
United States that is nonprofit and tax exempt under the laws of its 
country of domicile and operation, and is not a university, college, 
accredited degree-granting institution of education, private foundation, 
hospital, organization engaged exclusively in research or scientific 
activities, church, synagogue, mosque or other similar entities 
organized primarily for religious purposes; or
    (4) An organization located in a country other than the United 
States not recognized as a foreign public entity.
    Foreign public entity means:
    (1) A foreign government or foreign governmental entity;
    (2) A public international organization, which is an organization 
entitled to enjoy privileges, exemptions, and immunities as an 
international organization under the International Organizations 
Immunities Act (22 U.S.C. 288-288f);
    (3) An entity owned (in whole or in part) or controlled by a foreign 
government; or
    (4) Any other entity consisting wholly or partially of one or more 
foreign governments or foreign governmental entities.
    General purpose equipment means equipment which is not limited to 
research, medical, scientific or other technical activities. Examples 
include office equipment and furnishings, modular offices, telephone 
networks, information technology equipment and systems, air conditioning 
equipment, reproduction and printing equipment, and motor vehicles. See 
also the definitions of equipment and special purpose equipment in this 
section.
    Generally accepted accounting principles (GAAP) has the meaning 
specified in accounting standards issued by the GASB and the FASB.
    Generally accepted government auditing standards (GAGAS), also known 
as the Yellow Book, means generally accepted government auditing 
standards issued by the Comptroller General of the United States, which 
are applicable to financial audits.
    Grant agreement means a legal instrument of financial assistance 
between a Federal awarding agency or pass-through entity and a non-
Federal entity that, consistent with 31 U.S.C. 6302, 6304:
    (1) Is used to enter into a relationship the principal purpose of 
which is to transfer anything of value to carry out a public purpose 
authorized by a law of the United States (see 31 U.S.C. 6101(3)); and 
not to acquire property or services for the Federal awarding agency or 
pass-through entity's direct benefit or use;
    (2) Is distinguished from a cooperative agreement in that it does 
not provide for substantial involvement of the Federal awarding agency 
in carrying out the activity contemplated by the Federal award.
    (3) Does not include an agreement that provides only:
    (i) Direct United States Government cash assistance to an 
individual;
    (ii) A subsidy;
    (iii) A loan;
    (vi) A loan guarantee; or
    (v) Insurance.
    Highest level owner means the entity that owns or controls an 
immediate owner of the offeror, or that owns or

[[Page 91]]

controls one or more entities that control an immediate owner of the 
offeror. No entity owns or exercises control of the highest-level owner 
as defined in the Federal Acquisition Regulations (FAR) (48 CFR 52.204-
17).
    Hospital means a facility licensed as a hospital under the law of 
any state or a facility operated as a hospital by the United States, a 
state, or a subdivision of a state.
    Improper payment means:
    (1) Any payment that should not have been made or that was made in 
an incorrect amount under statutory, contractual, administrative, or 
other legally applicable requirements.
    (i) Incorrect amounts are overpayments or underpayments that are 
made to eligible recipients (including inappropriate denials of payment 
or service, any payment that does not account for credit for applicable 
discounts, payments that are for an incorrect amount, and duplicate 
payments). An improper payment also includes any payment that was made 
to an ineligible recipient or for an ineligible good or service, or 
payments for goods or services not received (except for such payments 
authorized by law).
    Note 1 to paragraph (1)(i) of this definition. Applicable discounts 
are only those discounts where it is both advantageous and within the 
agency's control to claim them.
    (ii) When an agency's review is unable to discern whether a payment 
was proper as a result of insufficient or lack of documentation, this 
payment should also be considered an improper payment. When establishing 
documentation requirements for payments, agencies should ensure that all 
documentation requirements are necessary and should refrain from 
imposing additional burdensome documentation requirements.
    (iii) Interest or other fees that may result from an underpayment by 
an agency are not considered an improper payment if the interest was 
paid correctly. These payments are generally separate transactions and 
may be necessary under certain statutory, contractual, administrative, 
or other legally applicable requirements.
    (iv) A ``questioned cost'' (as defined in this section) should not 
be considered an improper payment until the transaction has been 
completely reviewed and is confirmed to be improper.
    (v) The term ``payment'' in this definition means any disbursement 
or transfer of Federal funds (including a commitment for future payment, 
such as cash, securities, loans, loan guarantees, and insurance 
subsidies) to any non-Federal person, non-Federal entity, or Federal 
employee, that is made by a Federal agency, a Federal contractor, a 
Federal grantee, or a governmental or other organization administering a 
Federal program or activity.
    (vi) The term ``payment'' includes disbursements made pursuant to 
prime contracts awarded under the Federal Acquisition Regulation and 
Federal awards subject to this part that are expended by recipients.
    (2) See definition of improper payment in OMB Circular A-123 
appendix C, part I A (1) ``What is an improper payment?'' Questioned 
costs, including those identified in audits, are not an improper payment 
until reviewed and confirmed to be improper as defined in OMB Circular 
A-123 appendix C.
    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant to 
the Alaska Native Claims Settlement Act (43 U.S.C. Chapter 33), which is 
recognized as eligible for the special programs and services provided by 
the United States to Indians because of their status as Indians (25 
U.S.C. 450b(e)). See annually published Bureau of Indian Affairs list of 
Indian Entities Recognized and Eligible to Receive Services.
    Institutions of Higher Education (IHEs) is defined at 20 U.S.C. 
1001.
    Indirect (facilities & administrative (F&A)) costs means those costs 
incurred for a common or joint purpose benefitting more than one cost 
objective, and not readily assignable to the cost objectives 
specifically benefitted, without effort disproportionate to the results 
achieved. To facilitate equitable distribution of indirect expenses to 
the cost objectives served, it may be necessary to establish a number of 
pools of indirect (F&A) costs. Indirect (F&A)

[[Page 92]]

cost pools must be distributed to benefitted cost objectives on bases 
that will produce an equitable result in consideration of relative 
benefits derived.
    Indirect cost rate proposal means the documentation prepared by a 
non-Federal entity to substantiate its request for the establishment of 
an indirect cost rate as described in appendices III through VII and 
appendix IX to this part.
    Information technology systems means computing devices, ancillary 
equipment, software, firmware, and similar procedures, services 
(including support services), and related resources. See also the 
definitions of computing devices and equipment in this section.
    Intangible property means property having no physical existence, 
such as trademarks, copyrights, patents and patent applications and 
property, such as loans, notes and other debt instruments, lease 
agreements, stock and other instruments of property ownership (whether 
the property is tangible or intangible).
    Intermediate cost objective means a cost objective that is used to 
accumulate indirect costs or service center costs that are subsequently 
allocated to one or more indirect cost pools or final cost objectives. 
See also the definitions of cost objective and final cost objective in 
this section.
    Internal controls for non-Federal entities means:
    (1) Processes designed and implemented by non-Federal entities to 
provide reasonable assurance regarding the achievement of objectives in 
the following categories:
    (i) Effectiveness and efficiency of operations;
    (ii) Reliability of reporting for internal and external use; and
    (iii) Compliance with applicable laws and regulations.
    (2) Federal awarding agencies are required to follow internal 
control compliance requirements in OMB Circular No. A-123, Management's 
Responsibility for Enterprise Risk Management and Internal Control.
    Loan means a Federal loan or loan guarantee received or administered 
by a non-Federal entity, except as used in the definition of program 
income in this section.
    (1) The term ``direct loan'' means a disbursement of funds by the 
Federal Government to a non-Federal borrower under a contract that 
requires the repayment of such funds with or without interest. The term 
includes the purchase of, or participation in, a loan made by another 
lender and financing arrangements that defer payment for more than 90 
days, including the sale of a Federal Government asset on credit terms. 
The term does not include the acquisition of a federally guaranteed loan 
in satisfaction of default claims or the price support loans of the 
Commodity Credit Corporation.
    (2) The term ``direct loan obligation'' means a binding agreement by 
a Federal awarding agency to make a direct loan when specified 
conditions are fulfilled by the borrower.
    (3) The term ``loan guarantee'' means any Federal Government 
guarantee, insurance, or other pledge with respect to the payment of all 
or a part of the principal or interest on any debt obligation of a non-
Federal borrower to a non-Federal lender, but does not include the 
insurance of deposits, shares, or other withdrawable accounts in 
financial institutions.
    (4) The term ``loan guarantee commitment'' means a binding agreement 
by a Federal awarding agency to make a loan guarantee when specified 
conditions are fulfilled by the borrower, the lender, or any other party 
to the guarantee agreement.
    Local government means any unit of government within a state, 
including a:
    (1) County;
    (2) Borough;
    (3) Municipality;
    (4) City;
    (5) Town;
    (6) Township;
    (7) Parish;
    (8) Local public authority, including any public housing agency 
under the United States Housing Act of 1937;
    (9) Special district;
    (10) School district;
    (11) Intrastate district;
    (12) Council of governments, whether or not incorporated as a 
nonprofit corporation under State law; and
    (13) Any other agency or instrumentality of a multi-, regional, or 
intra-State or local government.

[[Page 93]]

    Major program means a Federal program determined by the auditor to 
be a major program in accordance with Sec.  200.518 or a program 
identified as a major program by a Federal awarding agency or pass-
through entity in accordance with Sec.  200.503(e).
    Management decision means the Federal awarding agency's or pass-
through entity's written determination, provided to the auditee, of the 
adequacy of the auditee's proposed corrective actions to address the 
findings, based on its evaluation of the audit findings and proposed 
corrective actions.
    Micro-purchase means a purchase of supplies or services, the 
aggregate amount of which does not exceed the micro-purchase threshold. 
Micro-purchases comprise a subset of a non-Federal entity's small 
purchases as defined in Sec.  200.320.
    Micro-purchase threshold means the dollar amount at or below which a 
non-Federal entity may purchase property or services using micro-
purchase procedures (see Sec.  200.320). Generally, the micro-purchase 
threshold for procurement activities administered under Federal awards 
is not to exceed the amount set by the FAR at 48 CFR part 2, subpart 
2.1, unless a higher threshold is requested by the non-Federal entity 
and approved by the cognizant agency for indirect costs.
    Modified Total Direct Cost (MTDC) means all direct salaries and 
wages, applicable fringe benefits, materials and supplies, services, 
travel, and up to the first $25,000 of each subaward (regardless of the 
period of performance of the subawards under the award). MTDC excludes 
equipment, capital expenditures, charges for patient care, rental costs, 
tuition remission, scholarships and fellowships, participant support 
costs and the portion of each subaward in excess of $25,000. Other items 
may only be excluded when necessary to avoid a serious inequity in the 
distribution of indirect costs, and with the approval of the cognizant 
agency for indirect costs.
    Non-discretionary award means an award made by the Federal awarding 
agency to specific recipients in accordance with statutory, eligibility 
and compliance requirements, such that in keeping with specific 
statutory authority the agency has no ability to exercise judgement 
(``discretion''). A non-discretionary award amount could be determined 
specifically or by formula.
    Non-Federal entity (NFE) means a State, local government, Indian 
tribe, Institution of Higher Education (IHE), or nonprofit organization 
that carries out a Federal award as a recipient or subrecipient.
    Nonprofit organization means any corporation, trust, association, 
cooperative, or other organization, not including IHEs, that:
    (1) Is operated primarily for scientific, educational, service, 
charitable, or similar purposes in the public interest;
    (2) Is not organized primarily for profit; and
    (3) Uses net proceeds to maintain, improve, or expand the operations 
of the organization.
    Notice of funding opportunity means a formal announcement of the 
availability of Federal funding through a financial assistance program 
from a Federal awarding agency. The notice of funding opportunity 
provides information on the award, who is eligible to apply, the 
evaluation criteria for selection of an awardee, required components of 
an application, and how to submit the application. The notice of funding 
opportunity is any paper or electronic issuance that an agency uses to 
announce a funding opportunity, whether it is called a ``program 
announcement,'' ``notice of funding availability,'' ``broad agency 
announcement,'' ``research announcement,'' ``solicitation,'' or some 
other term.
    Office of Management and Budget (OMB) means the Executive Office of 
the President, Office of Management and Budget.
    Oversight agency for audit means the Federal awarding agency that 
provides the predominant amount of funding directly (direct funding) (as 
listed on the schedule of expenditures of Federal awards, see Sec.  
200.510(b)) to a non-Federal entity unless OMB designates a specific 
cognizant agency for audit. When the direct funding represents less than 
25 percent of the total Federal expenditures (as direct and sub-awards) 
by the non-Federal entity, then the Federal agency with the predominant

[[Page 94]]

amount of total funding is the designated cognizant agency for audit. 
When there is no direct funding, the Federal awarding agency which is 
the predominant source of pass-through funding must assume the oversight 
responsibilities. The duties of the oversight agency for audit and the 
process for any reassignments are described in Sec.  200.513(b).
    Participant support costs means direct costs for items such as 
stipends or subsistence allowances, travel allowances, and registration 
fees paid to or on behalf of participants or trainees (but not 
employees) in connection with conferences, or training projects.
    Pass-through entity (PTE) means a non-Federal entity that provides a 
subaward to a subrecipient to carry out part of a Federal program.
    Performance goal means a target level of performance expressed as a 
tangible, measurable objective, against which actual achievement can be 
compared, including a goal expressed as a quantitative standard, value, 
or rate. In some instances (e.g., discretionary research awards), this 
may be limited to the requirement to submit technical performance 
reports (to be evaluated in accordance with agency policy).
    Period of performance means the total estimated time interval 
between the start of an initial Federal award and the planned end date, 
which may include one or more funded portions, or budget periods. 
Identification of the period of performance in the Federal award per 
Sec.  200.211(b)(5) does not commit the awarding agency to fund the 
award beyond the currently approved budget period.
    Personal property means property other than real property. It may be 
tangible, having physical existence, or intangible.
    Personally Identifiable Information (PII) means information that can 
be used to distinguish or trace an individual's identity, either alone 
or when combined with other personal or identifying information that is 
linked or linkable to a specific individual. Some information that is 
considered to be PII is available in public sources such as telephone 
books, public websites, and university listings. This type of 
information is considered to be Public PII and includes, for example, 
first and last name, address, work telephone number, email address, home 
telephone number, and general educational credentials. The definition of 
PII is not anchored to any single category of information or technology. 
Rather, it requires a case-by-case assessment of the specific risk that 
an individual can be identified. Non-PII can become PII whenever 
additional information is made publicly available, in any medium and 
from any source, that, when combined with other available information, 
could be used to identify an individual.
    Program income means gross income earned by the non-Federal entity 
that is directly generated by a supported activity or earned as a result 
of the Federal award during the period of performance except as provided 
in Sec.  200.307(f). (See the definition of period of performance in 
this section.) Program income includes but is not limited to income from 
fees for services performed, the use or rental or real or personal 
property acquired under Federal awards, the sale of commodities or items 
fabricated under a Federal award, license fees and royalties on patents 
and copyrights, and principal and interest on loans made with Federal 
award funds. Interest earned on advances of Federal funds is not program 
income. Except as otherwise provided in Federal statutes, regulations, 
or the terms and conditions of the Federal award, program income does 
not include rebates, credits, discounts, and interest earned on any of 
them. See also Sec.  200.407. See also 35 U.S.C. 200-212 ``Disposition 
of Rights in Educational Awards'' applies to inventions made under 
Federal awards.
    Project cost means total allowable costs incurred under a Federal 
award and all required cost sharing and voluntary committed cost 
sharing, including third-party contributions.
    Property means real property or personal property. See also the 
definitions of real property and personal property in this section.
    Protected Personally Identifiable Information (Protected PII) means 
an individual's first name or first initial and last name in combination 
with any one or

[[Page 95]]

more of types of information, including, but not limited to, social 
security number, passport number, credit card numbers, clearances, bank 
numbers, biometrics, date and place of birth, mother's maiden name, 
criminal, medical and financial records, educational transcripts. This 
does not include PII that is required by law to be disclosed. See also 
the definition of Personally Identifiable Information (PII) in this 
section.
    Questioned cost means a cost that is questioned by the auditor 
because of an audit finding:
    (1) Which resulted from a violation or possible violation of a 
statute, regulation, or the terms and conditions of a Federal award, 
including for funds used to match Federal funds;
    (2) Where the costs, at the time of the audit, are not supported by 
adequate documentation; or
    (3) Where the costs incurred appear unreasonable and do not reflect 
the actions a prudent person would take in the circumstances.
    (4) Questioned costs are not an improper payment until reviewed and 
confirmed to be improper as defined in OMB Circular A-123 appendix C. 
(See also the definition of Improper payment in this section).
    Real property means land, including land improvements, structures 
and appurtenances thereto, but excludes moveable machinery and 
equipment.
    Recipient means an entity, usually but not limited to non-Federal 
entities that receives a Federal award directly from a Federal awarding 
agency. The term recipient does not include subrecipients or individuals 
that are beneficiaries of the award.
    Renewal award means an award made subsequent to an expiring Federal 
award for which the start date is contiguous with, or closely follows, 
the end of the expiring Federal award. A renewal award's start date will 
begin a distinct period of performance.
    Research and Development (R&D) means all research activities, both 
basic and applied, and all development activities that are performed by 
non-Federal entities. 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. ``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.
    Simplified acquisition threshold means the dollar amount below which 
a non-Federal entity may purchase property or services using small 
purchase methods (see Sec.  200.320). Non-Federal entities adopt small 
purchase procedures in order to expedite the purchase of items at or 
below the simplified acquisition threshold. The simplified acquisition 
threshold for procurement activities administered under Federal awards 
is set by the FAR at 48 CFR part 2, subpart 2.1. The non-Federal entity 
is responsible for determining an appropriate simplified acquisition 
threshold based on internal controls, an evaluation of risk, and its 
documented procurement procedures. However, in no circumstances can this 
threshold exceed the dollar value established in the FAR (48 CFR part 2, 
subpart 2.1) for the simplified acquisition threshold. Recipients should 
determine if local government laws on purchasing apply.
    Special purpose equipment means equipment which is used only for 
research, medical, scientific, or other technical activities. Examples 
of special purpose equipment include microscopes, x-ray machines, 
surgical instruments, and spectrometers. See also the definitions of 
equipment and general purpose equipment in this section.
    State means any state of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, U.S. Virgin Islands, Guam, 
American Samoa, the Commonwealth of the Northern Mariana Islands, and 
any agency or instrumentality thereof exclusive of local governments.
    Student Financial Aid (SFA) means Federal awards under those 
programs of general student assistance, such as those authorized by 
Title IV of the

[[Page 96]]

Higher Education Act of 1965, as amended, (20 U.S.C. 1070-1099d), which 
are administered by the U.S. Department of Education, and similar 
programs provided by other Federal agencies. It does not include Federal 
awards under programs that provide fellowships or similar Federal awards 
to students on a competitive basis, or for specified studies or 
research.
    Subaward means an award provided by a pass-through entity to a 
subrecipient for the subrecipient to carry out part of a Federal award 
received by the pass-through entity. It does not include payments to a 
contractor or payments to an individual that is a beneficiary of a 
Federal program. A subaward may be provided through any form of legal 
agreement, including an agreement that the pass-through entity considers 
a contract.
    Subrecipient means an entity, usually but not limited to non-Federal 
entities, that receives a subaward from a pass-through entity to carry 
out part of a Federal award; but does not include an individual that is 
a beneficiary of such award. A subrecipient may also be a recipient of 
other Federal awards directly from a Federal awarding agency.
    Subsidiary means an entity in which more than 50 percent of the 
entity is owned or controlled directly by a parent corporation or 
through another subsidiary of a parent corporation.
    Supplies means all tangible personal property other than those 
described in the definition of equipment in this section. A computing 
device is a supply if the acquisition cost is less than the lesser of 
the capitalization level established by the non-Federal entity for 
financial statement purposes or $5,000, regardless of the length of its 
useful life. See also the definitions of computing devices and equipment 
in this section.
    Telecommunications cost means the cost of using communication and 
telephony technologies such as mobile phones, land lines, and internet.
    Termination means the ending of a Federal award, in whole or in part 
at any time prior to the planned end of period of performance. A lack of 
available funds is not a termination.
    Third-party in-kind contributions means the value of non-cash 
contributions (i.e., property or services) that--
    (1) Benefit a federally-assisted project or program; and
    (2) Are contributed by non-Federal third parties, without charge, to 
a non-Federal entity under a Federal award.
    Unliquidated financial obligations means, for financial reports 
prepared on a cash basis, financial obligations incurred by the non-
Federal entity that have not been paid (liquidated). For reports 
prepared on an accrual expenditure basis, these are financial 
obligations incurred by the non-Federal entity for which an expenditure 
has not been recorded.
    Unobligated balance means the amount of funds under a Federal award 
that the non-Federal entity has not obligated. The amount is computed by 
subtracting the cumulative amount of the non-Federal entity's 
unliquidated financial obligations and expenditures of funds under the 
Federal award from the cumulative amount of the funds that the Federal 
awarding agency or pass-through entity authorized the non-Federal entity 
to obligate.
    Voluntary committed cost sharing means cost sharing specifically 
pledged on a voluntary basis in the proposal's budget on the part of the 
non-Federal entity and that becomes a binding requirement of Federal 
award. See also Sec.  200.306.

[85 FR 49529, Aug. 13, 2020]



Sec.  200.2  Acquisition cost.

    Acquisition cost means the cost of the asset including the cost to 
ready the asset for its intended use. Acquisition cost for equipment, 
for example, means the net invoice price of the equipment, including the 
cost of any modifications, attachments, accessories, or auxiliary 
apparatus necessary to make it usable for the purpose for which it is 
acquired. Acquisition costs for software includes those development 
costs capitalized in accordance with generally accepted accounting 
principles (GAAP). Ancillary charges, such as taxes, duty, protective in 
transit insurance, freight, and installation may be included in or 
excluded from the acquisition cost in accordance with the non-

[[Page 97]]

Federal entity's regular accounting practices.



Sec.  200.3  Advance payment.

    Advance payment means a payment that a Federal awarding agency or 
pass-through entity makes by any appropriate payment mechanism, 
including a predetermined payment schedule, before the non-Federal 
entity disburses the funds for program purposes.



Sec.  200.4  Allocation.

    Allocation means the process of assigning a cost, or a group of 
costs, to one or more cost objective(s), in reasonable proportion to the 
benefit provided or other equitable relationship. The process may entail 
assigning a cost(s) directly to a final cost objective or through one or 
more intermediate cost objectives.



Sec.  200.5  Audit finding.

    Audit finding means deficiencies which the auditor is required by 
Sec.  200.516 Audit findings, paragraph (a) to report in the schedule of 
findings and questioned costs.



Sec.  200.6  Auditee.

    Auditee means any non-Federal entity that expends Federal awards 
which must be audited under Subpart F--Audit Requirements of this part.



Sec.  200.7  Auditor.

    Auditor means an auditor who is a public accountant or a Federal, 
state, local government, or Indian tribe audit organization, which meets 
the general standards specified for external auditors in generally 
accepted government auditing standards (GAGAS). The term auditor does 
not include internal auditors of nonprofit organizations.

[79 FR 75880, Dec. 19, 2014]



Sec.  200.8  Budget.

    Budget means the financial plan for the project or program that the 
Federal awarding agency or pass-through entity approves during the 
Federal award process or in subsequent amendments to the Federal award. 
It may include the Federal and non-Federal share or only the Federal 
share, as determined by the Federal awarding agency or pass-through 
entity.



Sec.  200.9  Central service cost allocation plan.

    Central service cost allocation plan means the documentation 
identifying, accumulating, and allocating or developing billing rates 
based on the allowable costs of services provided by a state, local 
government, or Indian tribe on a centralized basis to its departments 
and agencies. The costs of these services may be allocated or billed to 
users.



Sec.  200.10  Catalog of Federal Domestic Assistance (CFDA) number.

    CFDA number means the number assigned to a Federal program in the 
CFDA.



Sec.  200.11  CFDA program title.

    CFDA program title means the title of the program under which the 
Federal award was funded in the CFDA.



Sec.  200.12  Capital assets.

    Capital assets means tangible or intangible assets used in 
operations having a useful life of more than one year which are 
capitalized in accordance with GAAP. Capital assets include:
    (a) Land, buildings (facilities), equipment, and intellectual 
property (including software) whether acquired by purchase, 
construction, manufacture, lease-purchase, exchange, or through capital 
leases; and
    (b) Additions, improvements, modifications, replacements, 
rearrangements, reinstallations, renovations or alterations to capital 
assets that materially increase their value or useful life (not ordinary 
repairs and maintenance).



Sec.  200.13  Capital expenditures.

    Capital expenditures means expenditures to acquire capital assets or 
expenditures to make additions, improvements, modifications, 
replacements, rearrangements, reinstallations, renovations, or 
alterations to capital assets that materially increase their value or 
useful life.

[[Page 98]]



Sec.  200.14  Claim.

    Claim means, depending on the context, either:
    (a) A written demand or written assertion by one of the parties to a 
Federal award seeking as a matter of right:
    (1) The payment of money in a sum certain;
    (2) The adjustment or interpretation of the terms and conditions of 
the Federal award; or
    (3) Other relief arising under or relating to a Federal award.
    (b) A request for payment that is not in dispute when submitted.



Sec.  200.15  Class of Federal awards.

    Class of Federal awards means a group of Federal awards either 
awarded under a specific program or group of programs or to a specific 
type of non-Federal entity or group of non-Federal entities to which 
specific provisions or exceptions may apply.



Sec.  200.16  Closeout.

    Closeout means the process by which the Federal awarding agency or 
pass-through entity determines that all applicable administrative 
actions and all required work of the Federal award have been completed 
and takes actions as described in Sec.  200.343 Closeout.



Sec.  200.17  Cluster of programs.

    Cluster of programs means a grouping of closely related programs 
that share common compliance requirements. The types of clusters of 
programs are research and development (R&D), student financial aid 
(SFA), and other clusters. ``Other clusters'' are as defined by OMB in 
the compliance supplement or as designated by a state for Federal awards 
the state provides to its subrecipients that meet the definition of a 
cluster of programs. When designating an ``other cluster,'' a state must 
identify the Federal awards included in the cluster and advise the 
subrecipients of compliance requirements applicable to the cluster, 
consistent with Sec.  200.331 Requirements for pass-through entities, 
paragraph (a). A cluster of programs must be considered as one program 
for determining major programs, as described in Sec.  200.518 Major 
program determination, and, with the exception of R&D as described in 
Sec.  200.501 Audit requirements, paragraph (c), whether a program-
specific audit may be elected.



Sec.  200.18  Cognizant agency for audit.

    Cognizant agency for audit means the Federal agency designated to 
carry out the responsibilities described in Sec.  200.513 
Responsibilities, paragraph (a). The cognizant agency for audit is not 
necessarily the same as the cognizant agency for indirect costs. A list 
of cognizant agencies for audit may be found at the FAC Web site.



Sec.  200.19  Cognizant agency for indirect costs.

    Cognizant agency for indirect costs means the Federal agency 
responsible for reviewing, negotiating, and approving cost allocation 
plans or indirect cost proposals developed under this part on behalf of 
all Federal agencies. The cognizant agency for indirect cost is not 
necessarily the same as the cognizant agency for audit. For assignments 
of cognizant agencies see the following:
    (a) For IHEs: Appendix III to Part 200--Indirect (F&A) Costs 
Identification and Assignment, and Rate Determination for Institutions 
of Higher Education (IHEs), paragraph C.11.
    (b) For nonprofit organizations: Appendix IV to Part 200--Indirect 
(F&A) Costs Identification and Assignment, and Rate Determination for 
Nonprofit Organizations, paragraph C.2.a.
    (c) For state and local governments: Appendix V to Part 200--State/
Local Governmentwide Central Service Cost Allocation Plans, paragraph 
F.1.
    (d) For Indian tribes: Appendix VII to Part 200--States and Local 
Government and Indian Tribe Indirect Cost Proposal, paragraph D.1.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014; 
80 FR 54407, Sept. 10, 2015]



Sec.  200.20  Computing devices.

    Computing devices means machines used to acquire, store, analyze, 
process, and publish data and other information electronically, 
including accessories (or ``peripherals'') for printing, transmitting 
and receiving, or storing electronic information. See also Sec. Sec.  
200.94

[[Page 99]]

Supplies and 200.58 Information technology systems.



Sec.  200.21  Compliance supplement.

    Compliance supplement means Appendix XI to Part 200--Compliance 
Supplement (previously known as the Circular A-133 Compliance 
Supplement).



Sec.  200.22  Contract.

    Contract means a legal instrument by which a non-Federal entity 
purchases property or services needed to carry out the project or 
program under a Federal award. The term as used in this part does not 
include a legal instrument, even if the non-Federal entity considers it 
a contract, when the substance of the transaction meets the definition 
of a Federal award or subaward (see Sec.  200.92 Subaward).



Sec.  200.23  Contractor.

    Contractor means an entity that receives a contract as defined in 
Sec.  200.22 Contract.



Sec.  200.24  Cooperative agreement.

    Cooperative agreement means a legal instrument of financial 
assistance between a Federal awarding agency or pass-through entity and 
a non-Federal entity that, consistent with 31 U.S.C. 6302-6305:
    (a) Is used to enter into a relationship the principal purpose of 
which is to transfer anything of value from the Federal awarding agency 
or pass-through entity to the non-Federal entity to carry out a public 
purpose authorized by a law of the United States (see 31 U.S.C. 
6101(3)); and not to acquire property or services for the Federal 
Government or pass-through entity's direct benefit or use;
    (b) Is distinguished from a grant in that it provides for 
substantial involvement between the Federal awarding agency or pass-
through entity and the non-Federal entity in carrying out the activity 
contemplated by the Federal award.
    (c) The term does not include:
    (1) A cooperative research and development agreement as defined in 
15 U.S.C. 3710a; or
    (2) An agreement that provides only:
    (i) Direct United States Government cash assistance to an 
individual;
    (ii) A subsidy;
    (iii) A loan;
    (iv) A loan guarantee; or
    (v) Insurance.



Sec.  200.25  Cooperative audit resolution.

    Cooperative audit resolution means the use of audit follow-up 
techniques which promote prompt corrective action by improving 
communication, fostering collaboration, promoting trust, and developing 
an understanding between the Federal agency and the non-Federal entity. 
This approach is based upon:
    (a) A strong commitment by Federal agency and non-Federal entity 
leadership to program integrity;
    (b) Federal agencies strengthening partnerships and working 
cooperatively with non-Federal entities and their auditors; and non-
Federal entities and their auditors working cooperatively with Federal 
agencies;
    (c) A focus on current conditions and corrective action going 
forward;
    (d) Federal agencies offering appropriate relief for past 
noncompliance when audits show prompt corrective action has occurred; 
and
    (e) Federal agency leadership sending a clear message that continued 
failure to correct conditions identified by audits which are likely to 
cause improper payments, fraud, waste, or abuse is unacceptable and will 
result in sanctions.



Sec.  200.26  Corrective action.

    Corrective action means action taken by the auditee that:
    (a) Corrects identified deficiencies;
    (b) Produces recommended improvements; or
    (c) Demonstrates that audit findings are either invalid or do not 
warrant auditee action.



Sec.  200.27  Cost allocation plan.

    Cost allocation plan means central service cost allocation plan or 
public assistance cost allocation plan.



Sec.  200.28  Cost objective.

    Cost objective means a program, function, activity, award, 
organizational subdivision, contract, or work unit for which cost data 
are desired and for which provision is made to accumulate and measure 
the cost of processes, products, jobs, capital projects, etc. A

[[Page 100]]

cost objective may be a major function of the non-Federal entity, a 
particular service or project, a Federal award, or an indirect 
(Facilities & Administrative (F&A)) cost activity, as described in 
Subpart E--Cost Principles of this Part. See also Sec. Sec.  200.44 
Final cost objective and 200.60 Intermediate cost objective.



Sec.  200.29  Cost sharing or matching.

    Cost sharing or matching means the portion of project costs not paid 
by Federal funds (unless otherwise authorized by Federal statute). See 
also Sec.  200.306 Cost sharing or matching.



Sec.  200.30  Cross-cutting audit finding.

    Cross-cutting audit finding means an audit finding where the same 
underlying condition or issue affects Federal awards of more than one 
Federal awarding agency or pass-through entity.



Sec.  200.31  Disallowed costs.

    Disallowed costs means those charges to a Federal award that the 
Federal awarding agency or pass-through entity determines to be 
unallowable, in accordance with the applicable Federal statutes, 
regulations, or the terms and conditions of the Federal award.



Sec.  200.32  [Reserved]



Sec.  200.33  Equipment.

    Equipment means tangible personal property (including information 
technology systems) having a useful life of more than one year and a 
per-unit acquisition cost which equals or exceeds the lesser of the 
capitalization level established by the non-Federal entity for financial 
statement purposes, or $5,000. See also Sec. Sec.  200.12 Capital 
assets, 200.20 Computing devices, 200.48 General purpose equipment, 
200.58 Information technology systems, 200.89 Special purpose equipment, 
and 200.94 Supplies.



Sec.  200.34  Expenditures.

    Expenditures means charges made by a non-Federal entity to a project 
or program for which a Federal award was received.
    (a) The charges may be reported on a cash or accrual basis, as long 
as the methodology is disclosed and is consistently applied.
    (b) For reports prepared on a cash basis, expenditures are the sum 
of:
    (1) Cash disbursements for direct charges for property and services;
    (2) The amount of indirect expense charged;
    (3) The value of third-party in-kind contributions applied; and
    (4) The amount of cash advance payments and payments made to 
subrecipients.
    (c) For reports prepared on an accrual basis, expenditures are the 
sum of:
    (1) Cash disbursements for direct charges for property and services;
    (2) The amount of indirect expense incurred;
    (3) The value of third-party in-kind contributions applied; and
    (4) The net increase or decrease in the amounts owed by the non-
Federal entity for:
    (i) Goods and other property received;
    (ii) Services performed by employees, contractors, subrecipients, 
and other payees; and
    (iii) Programs for which no current services or performance are 
required such as annuities, insurance claims, or other benefit payments.



Sec.  200.35  Federal agency.

    Federal agency means an ``agency'' as defined at 5 U.S.C. 551(1) and 
further clarified by 5 U.S.C. 552(f).



Sec.  200.36  Federal Audit Clearinghouse (FAC).

    FAC means the clearinghouse designated by OMB as the repository of 
record where non-Federal entities are required to transmit the reporting 
packages required by Subpart F--Audit Requirements of this part. The 
mailing address of the FAC is Federal Audit Clearinghouse, Bureau of the 
Census, 1201 E. 10th Street, Jeffersonville, IN 47132 and the web 
address is: http://harvester.census.gov/sac/. Any future updates to the 
location of the FAC may be found at the OMB Web site.

[[Page 101]]



Sec.  200.37  Federal awarding agency.

    Federal awarding agency means the Federal agency that provides a 
Federal award directly to a non-Federal entity.



Sec.  200.38  Federal award.

    Federal award has the meaning, depending on the context, in either 
paragraph (a) or (b) of this section:
    (a)(1) The Federal financial assistance that a non-Federal entity 
receives directly from a Federal awarding agency or indirectly from a 
pass-through entity, as described in Sec.  200.101 Applicability; or
    (2) The cost-reimbursement contract under the Federal Acquisition 
Regulations that a non-Federal entity receives directly from a Federal 
awarding agency or indirectly from a pass-through entity, as described 
in Sec.  200.101 Applicability.
    (b) The instrument setting forth the terms and conditions. The 
instrument is the grant agreement, cooperative agreement, other 
agreement for assistance covered in paragraph (b) of Sec.  200.40 
Federal financial assistance, or the cost-reimbursement contract awarded 
under the Federal Acquisition Regulations.
    (c) Federal award does not include other contracts that a Federal 
agency uses to buy goods or services from a contractor or a contract to 
operate Federal Government owned, contractor operated facilities 
(GOCOs).
    (d) See also definitions of Federal financial assistance, grant 
agreement, and cooperative agreement.



Sec.  200.39  Federal award date.

    Federal award date means the date when the Federal award is signed 
by the authorized official of the Federal awarding agency.



Sec.  200.40  Federal financial assistance.

    (a) Federal financial assistance means assistance that non-Federal 
entities receive or administer in the form of:
    (1) Grants;
    (2) Cooperative agreements;
    (3) Non-cash contributions or donations of property (including 
donated surplus property);
    (4) Direct appropriations;
    (5) Food commodities; and
    (6) Other financial assistance (except assistance listed in 
paragraph (b) of this section).
    (b) For Sec.  200.202 Requirement to provide public notice of 
Federal financial assistance programs and Subpart F--Audit Requirements 
of this part, Federal financial assistance also includes assistance that 
non-Federal entities receive or administer in the form of:
    (1) Loans;
    (2) Loan Guarantees;
    (3) Interest subsidies; and
    (4) Insurance.
    (c) Federal financial assistance does not include amounts received 
as reimbursement for services rendered to individuals as described in 
Sec.  200.502 Basis for determining Federal awards expended, paragraph 
(h) and (i) of this part.

[78 FR 78608, Dec. 26, 2013, as amended at 80 FR 54407, Sept. 10, 2015]



Sec.  200.41  Federal interest.

    Federal interest means, for purposes of Sec.  200.329 Reporting on 
real property or when used in connection with the acquisition or 
improvement of real property, equipment, or supplies under a Federal 
award, the dollar amount that is the product of the:
    (a) Federal share of total project costs; and
    (b) Current fair market value of the property, improvements, or 
both, to the extent the costs of acquiring or improving the property 
were included as project costs.



Sec.  200.42  Federal program.

    Federal program means:
    (a) All Federal awards which are assigned a single number in the 
CFDA.
    (b) When no CFDA number is assigned, all Federal awards to non-
Federal entities from the same agency made for the same purpose must be 
combined and considered one program.
    (c) Notwithstanding paragraphs (a) and (b) of this definition, a 
cluster of programs. The types of clusters of programs are:
    (1) Research and development (R&D);
    (2) Student financial aid (SFA); and

[[Page 102]]

    (3) ``Other clusters,'' as described in the definition of Cluster of 
Programs.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014]



Sec.  200.43  Federal share.

    Federal share means the portion of the total project costs that are 
paid by Federal funds.



Sec.  200.44  Final cost objective.

    Final cost objective means a cost objective which has allocated to 
it both direct and indirect costs and, in the non-Federal entity's 
accumulation system, is one of the final accumulation points, such as a 
particular award, internal project, or other direct activity of a non-
Federal entity. See also Sec. Sec.  200.28 Cost objective and 200.60 
Intermediate cost objective.



Sec.  200.45  Fixed amount awards.

    Fixed amount awards means a type of grant agreement under which the 
Federal awarding agency or pass-through entity provides a specific level 
of support without regard to actual costs incurred under the Federal 
award. This type of Federal award reduces some of the administrative 
burden and record-keeping requirements for both the non-Federal entity 
and Federal awarding agency or pass-through entity. Accountability is 
based primarily on performance and results. See Sec. Sec.  200.201 Use 
of grant agreements (including fixed amount awards), cooperative 
agreements, and contracts, paragraph (b) and 200.332 Fixed amount 
subawards.



Sec.  200.46  Foreign public entity.

    Foreign public entity means:
    (a) A foreign government or foreign governmental entity;
    (b) A public international organization, which is an organization 
entitled to enjoy privileges, exemptions, and immunities as an 
international organization under the International Organizations 
Immunities Act (22 U.S.C. 288-288f);
    (c) An entity owned (in whole or in part) or controlled by a foreign 
government; or
    (d) Any other entity consisting wholly or partially of one or more 
foreign governments or foreign governmental entities.



Sec.  200.47  Foreign organization.

    Foreign organization means an entity that is:
    (a) A public or private organization located in a country other than 
the United States and its territories that is subject to the laws of the 
country in which it is located, irrespective of the citizenship of 
project staff or place of performance;
    (b) A private nongovernmental organization located in a country 
other than the United States that solicits and receives cash 
contributions from the general public;
    (c) A charitable organization located in a country other than the 
United States that is nonprofit and tax exempt under the laws of its 
country of domicile and operation, and is not a university, college, 
accredited degree-granting institution of education, private foundation, 
hospital, organization engaged exclusively in research or scientific 
activities, church, synagogue, mosque or other similar entities 
organized primarily for religious purposes; or
    (d) An organization located in a country other than the United 
States not recognized as a Foreign Public Entity.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014]



Sec.  200.48  General purpose equipment.

    General purpose equipment means equipment which is not limited to 
research, medical, scientific or other technical activities. Examples 
include office equipment and furnishings, modular offices, telephone 
networks, information technology equipment and systems, air conditioning 
equipment, reproduction and printing equipment, and motor vehicles. See 
also Equipment and Special Purpose Equipment.



Sec.  200.49  Generally Accepted Accounting Principles (GAAP).

    GAAP has the meaning specified in accounting standards issued by the 
Government Accounting Standards Board (GASB) and the Financial 
Accounting Standards Board (FASB).

[[Page 103]]



Sec.  200.50  Generally Accepted Government Auditing Standards (GAGAS).

    GAGAS, also known as the Yellow Book, means generally accepted 
government auditing standards issued by the Comptroller General of the 
United States, which are applicable to financial audits.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014]



Sec.  200.51  Grant agreement.

    Grant agreement means a legal instrument of financial assistance 
between a Federal awarding agency or pass-through entity and a non-
Federal entity that, consistent with 31 U.S.C. 6302, 6304:
    (a) Is used to enter into a relationship the principal purpose of 
which is to transfer anything of value from the Federal awarding agency 
or pass-through entity to the non-Federal entity to carry out a public 
purpose authorized by a law of the United States (see 31 U.S.C. 
6101(3)); and not to acquire property or services for the Federal 
awarding agency or pass-through entity's direct benefit or use;
    (b) Is distinguished from a cooperative agreement in that it does 
not provide for substantial involvement between the Federal awarding 
agency or pass-through entity and the non-Federal entity in carrying out 
the activity contemplated by the Federal award.
    (c) Does not include an agreement that provides only:
    (1) Direct United States Government cash assistance to an 
individual;
    (2) A subsidy;
    (3) A loan;
    (4) A loan guarantee; or
    (5) Insurance.



Sec.  200.52  Hospital.

    Hospital means a facility licensed as a hospital under the law of 
any state or a facility operated as a hospital by the United States, a 
state, or a subdivision of a state.



Sec.  200.53  Improper payment.

    (a) Improper payment means any payment that should not have been 
made or that was made in an incorrect amount (including overpayments and 
underpayments) under statutory, contractual, administrative, or other 
legally applicable requirements; and
    (b) Improper payment includes any payment to an ineligible party, 
any payment for an ineligible good or service, any duplicate payment, 
any payment for a good or service not received (except for such payments 
where authorized by law), any payment that does not account for credit 
for applicable discounts, and any payment where insufficient or lack of 
documentation prevents a reviewer from discerning whether a payment was 
proper.



Sec.  200.54  Indian tribe (or ``federally recognized Indian tribe'').

    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant to 
the Alaska Native Claims Settlement Act (43 U.S.C. Chapter 33), which is 
recognized as eligible for the special programs and services provided by 
the United States to Indians because of their status as Indians (25 
U.S.C. 450b(e)). See annually published Bureau of Indian Affairs list of 
Indian Entities Recognized and Eligible to Receive Services.



Sec.  200.55  Institutions of Higher Education (IHEs).

    IHE is defined at 20 U.S.C. 1001.



Sec.  200.56  Indirect (facilities & administrative (F&A)) costs.

    Indirect (F&A) costs means those costs incurred for a common or 
joint purpose benefitting more than one cost objective, and not readily 
assignable to the cost objectives specifically benefitted, without 
effort disproportionate to the results achieved. To facilitate equitable 
distribution of indirect expenses to the cost objectives served, it may 
be necessary to establish a number of pools of indirect (F&A) costs. 
Indirect (F&A) cost pools must be distributed to benefitted cost 
objectives on bases that will produce an equitable result in 
consideration of relative benefits derived.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014]

[[Page 104]]



Sec.  200.57  Indirect cost rate proposal.

    Indirect cost rate proposal means the documentation prepared by a 
non-Federal entity to substantiate its request for the establishment of 
an indirect cost rate as described in Appendix III to Part 200--Indirect 
(F&A) Costs Identification and Assignment, and Rate Determination for 
Institutions of Higher Education (IHEs) through Appendix VII to Part 
200--States and Local Government and Indian Tribe Indirect Cost 
Proposals of this part, and Appendix IX to Part 200--Hospital Cost 
Principles.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014]



Sec.  200.58  Information technology systems.

    Information technology systems means computing devices, ancillary 
equipment, software, firmware, and similar procedures, services 
(including support services), and related resources. See also Sec. Sec.  
200.20 Computing devices and 200.33 Equipment.



Sec.  200.59  Intangible property.

    Intangible property means property having no physical existence, 
such as trademarks, copyrights, patents and patent applications and 
property, such as loans, notes and other debt instruments, lease 
agreements, stock and other instruments of property ownership (whether 
the property is tangible or intangible).



Sec.  200.60  Intermediate cost objective.

    Intermediate cost objective means a cost objective that is used to 
accumulate indirect costs or service center costs that are subsequently 
allocated to one or more indirect cost pools or final cost objectives. 
See also Sec.  200.28 Cost objective and Sec.  200.44 Final cost 
objective.



Sec.  200.61  Internal controls.

    Internal controls means a process, implemented by a non-Federal 
entity, designed to provide reasonable assurance regarding the 
achievement of objectives in the following categories:
    (a) Effectiveness and efficiency of operations;
    (b) Reliability of reporting for internal and external use; and
    (c) Compliance with applicable laws and regulations.



Sec.  200.62  Internal control over compliance requirements for
Federal awards.

    Internal control over compliance requirements for Federal awards 
means a process implemented by a non-Federal entity designed to provide 
reasonable assurance regarding the achievement of the following 
objectives for Federal awards:
    (a) Transactions are properly recorded and accounted for, in order 
to:
    (1) Permit the preparation of reliable financial statements and 
Federal reports;
    (2) Maintain accountability over assets; and
    (3) Demonstrate compliance with Federal statutes, regulations, and 
the terms and conditions of the Federal award;
    (b) Transactions are executed in compliance with:
    (1) Federal statutes, regulations, and the terms and conditions of 
the Federal award that could have a direct and material effect on a 
Federal program; and
    (2) Any other Federal statutes and regulations that are identified 
in the Compliance Supplement; and
    (c) Funds, property, and other assets are safeguarded against loss 
from unauthorized use or disposition.



Sec.  200.63  Loan.

    Loan means a Federal loan or loan guarantee received or administered 
by a non-Federal entity, except as used in the definition of Sec.  
200.80 Program income.
    (a) The term ``direct loan'' means a disbursement of funds by the 
Federal Government to a non-Federal borrower under a contract that 
requires the repayment of such funds with or without interest. The term 
includes the purchase of, or participation in, a loan made by another 
lender and financing arrangements that defer payment for more than 90 
days, including the sale of a Federal Government asset on credit terms. 
The term does not include the acquisition of a federally guaranteed loan 
in satisfaction of default claims or the price support loans of the 
Commodity Credit Corporation.

[[Page 105]]

    (b) The term ``direct loan obligation'' means a binding agreement by 
a Federal awarding agency to make a direct loan when specified 
conditions are fulfilled by the borrower.
    (c) The term ``loan guarantee'' means any Federal Government 
guarantee, insurance, or other pledge with respect to the payment of all 
or a part of the principal or interest on any debt obligation of a non-
Federal borrower to a non-Federal lender, but does not include the 
insurance of deposits, shares, or other withdrawable accounts in 
financial institutions.
    (d) The term ``loan guarantee commitment'' means a binding agreement 
by a Federal awarding agency to make a loan guarantee when specified 
conditions are fulfilled by the borrower, the lender, or any other party 
to the guarantee agreement.



Sec.  200.64  Local government.

    Local government means any unit of government within a state, 
including a:
    (a) County;
    (b) Borough;
    (c) Municipality;
    (d) City;
    (e) Town;
    (f) Township;
    (g) Parish;
    (h) Local public authority, including any public housing agency 
under the United States Housing Act of 1937;
    (i) Special district;
    (j) School district;
    (k) Intrastate district;
    (l) Council of governments, whether or not incorporated as a 
nonprofit corporation under state law; and
    (m) Any other agency or instrumentality of a multi-, regional, or 
intra-state or local government.



Sec.  200.65  Major program.

    Major program means a Federal program determined by the auditor to 
be a major program in accordance with Sec.  200.518 Major program 
determination or a program identified as a major program by a Federal 
awarding agency or pass-through entity in accordance with Sec.  200.503 
Relation to other audit requirements, paragraph (e).



Sec.  200.66  Management decision.

    Management decision means the evaluation by the Federal awarding 
agency or pass-through entity of the audit findings and corrective 
action plan and the issuance of a written decision to the auditee as to 
what corrective action is necessary.



Sec.  200.67  Micro-purchase.

    Micro-purchase means a purchase of supplies or services using 
simplified acquisition procedures, the aggregate amount of which does 
not exceed the micro-purchase threshold. Micro-purchase procedures 
comprise a subset of a non-Federal entity's small purchase procedures. 
The non-Federal entity uses such procedures in order to expedite the 
completion of its lowest-dollar small purchase transactions and minimize 
the associated administrative burden and cost. The micro-purchase 
threshold is set by the Federal Acquisition Regulation at 48 CFR Subpart 
2.1 (Definitions). It is $3,000 except as otherwise discussed in Subpart 
2.1 of that regulation, but this threshold is periodically adjusted for 
inflation.



Sec.  200.68  Modified Total Direct Cost (MTDC).

    MTDC means all direct salaries and wages, applicable fringe 
benefits, materials and supplies, services, travel, and up to the first 
$25,000 of each subaward (regardless of the period of performance of the 
subawards under the award). MTDC excludes equipment, capital 
expenditures, charges for patient care, rental costs, tuition remission, 
scholarships and fellowships, participant support costs and the portion 
of each subaward in excess of $25,000. Other items may only be excluded 
when necessary to avoid a serious inequity in the distribution of 
indirect costs, and with the approval of the cognizant agency for 
indirect costs.

[79 FR 75880, Dec. 19, 2014]



Sec.  200.69  Non-Federal entity.

    Non-Federal entity means a state, local government, Indian tribe, 
institution of higher education (IHE), or nonprofit organization that 
carries out a Federal award as a recipient or subrecipient.

[[Page 106]]



Sec.  200.70  Nonprofit organization.

    Nonprofit organization means any corporation, trust, association, 
cooperative, or other organization, not including IHEs, that:
    (a) Is operated primarily for scientific, educational, service, 
charitable, or similar purposes in the public interest;
    (b) Is not organized primarily for profit; and
    (c) Uses net proceeds to maintain, improve, or expand the operations 
of the organization.



Sec.  200.71  Obligations.

    When used in connection with a non-Federal entity's utilization of 
funds under a Federal award, obligations means orders placed for 
property and services, contracts and subawards made, and similar 
transactions during a given period that require payment by the non-
Federal entity during the same or a future period.



Sec.  200.72  Office of Management and Budget (OMB).

    OMB means the Executive Office of the President, Office of 
Management and Budget.



Sec.  200.73  Oversight agency for audit.

    Oversight agency for audit means the Federal awarding agency that 
provides the predominant amount of funding directly to a non-Federal 
entity not assigned a cognizant agency for audit. When there is no 
direct funding, the Federal awarding agency which is the predominant 
source of pass-through funding must assume the oversight 
responsibilities. The duties of the oversight agency for audit and the 
process for any reassignments are described in Sec.  200.513 
Responsibilities, paragraph (b).



Sec.  200.74  Pass-through entity.

    Pass-through entity means a non-Federal entity that provides a 
subaward to a subrecipient to carry out part of a Federal program.



Sec.  200.75  Participant support costs.

    Participant support costs means direct costs for items such as 
stipends or subsistence allowances, travel allowances, and registration 
fees paid to or on behalf of participants or trainees (but not 
employees) in connection with conferences, or training projects.



Sec.  200.76  Performance goal.

    Performance goal means a target level of performance expressed as a 
tangible, measurable objective, against which actual achievement can be 
compared, including a goal expressed as a quantitative standard, value, 
or rate. In some instances (e.g., discretionary research awards), this 
may be limited to the requirement to submit technical performance 
reports (to be evaluated in accordance with agency policy).



Sec.  200.77  Period of performance.

    Period of performance means the time during which the non-Federal 
entity may incur new obligations to carry out the work authorized under 
the Federal award. The Federal awarding agency or pass-through entity 
must include start and end dates of the period of performance in the 
Federal award (see Sec. Sec.  200.210 Information contained in a Federal 
award paragraph (a)(5) and 200.331 Requirements for pass-through 
entities, paragraph (a)(1)(iv)).



Sec.  200.78  Personal property.

    Personal property means property other than real property. It may be 
tangible, having physical existence, or intangible.



Sec.  200.79  Personally Identifiable Information (PII).

    PII means information that can be used to distinguish or trace an 
individual's identity, either alone or when combined with other personal 
or identifying information that is linked or linkable to a specific 
individual. Some information that is considered to be PII is available 
in public sources such as telephone books, public Web sites, and 
university listings. This type of information is considered to be Public 
PII and includes, for example, first and last name, address, work 
telephone number, email address, home telephone number, and general 
educational credentials. The definition of PII is not anchored to any 
single category of information or technology. Rather, it requires a 
case-by-case assessment of the specific risk that an individual can be

[[Page 107]]

identified. Non-PII can become PII whenever additional information is 
made publicly available, in any medium and from any source, that, when 
combined with other available information, could be used to identify an 
individual.



Sec.  200.80  Program income.

    Program income means gross income earned by the non-Federal entity 
that is directly generated by a supported activity or earned as a result 
of the Federal award during the period of performance except as provided 
in Sec.  200.307 paragraph (f). (See Sec.  200.77 Period of 
performance.) Program income includes but is not limited to income from 
fees for services performed, the use or rental or real or personal 
property acquired under Federal awards, the sale of commodities or items 
fabricated under a Federal award, license fees and royalties on patents 
and copyrights, and principal and interest on loans made with Federal 
award funds. Interest earned on advances of Federal funds is not program 
income. Except as otherwise provided in Federal statutes, regulations, 
or the terms and conditions of the Federal award, program income does 
not include rebates, credits, discounts, and interest earned on any of 
them. See also Sec.  200.407 Prior written approval (prior approval). 
See also 35 U.S.C. 200-212 ``Disposition of Rights in Educational 
Awards'' applies to inventions made under Federal awards.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014]



Sec.  200.81  Property.

    Property means real property or personal property.



Sec.  200.82  Protected Personally Identifiable Information
(Protected PII).

    Protected PII means an individual's first name or first initial and 
last name in combination with any one or more of types of information, 
including, but not limited to, social security number, passport number, 
credit card numbers, clearances, bank numbers, biometrics, date and 
place of birth, mother's maiden name, criminal, medical and financial 
records, educational transcripts. This does not include PII that is 
required by law to be disclosed. (See also Sec.  200.79 Personally 
Identifiable Information (PII)).



Sec.  200.83  Project cost.

    Project cost means total allowable costs incurred under a Federal 
award and all required cost sharing and voluntary committed cost 
sharing, including third-party contributions.



Sec.  200.84  Questioned cost.

    Questioned cost means a cost that is questioned by the auditor 
because of an audit finding:
    (a) Which resulted from a violation or possible violation of a 
statute, regulation, or the terms and conditions of a Federal award, 
including for funds used to match Federal funds;
    (b) Where the costs, at the time of the audit, are not supported by 
adequate documentation; or
    (c) Where the costs incurred appear unreasonable and do not reflect 
the actions a prudent person would take in the circumstances.



Sec.  200.85  Real property.

    Real property means land, including land improvements, structures 
and appurtenances thereto, but excludes moveable machinery and 
equipment.



Sec.  200.86  Recipient.

    Recipient means a non-Federal entity that receives a Federal award 
directly from a Federal awarding agency to carry out an activity under a 
Federal program. The term recipient does not include subrecipients. See 
also Sec.  200.69 Non-Federal entity.



Sec.  200.87  Research and Development (R&D).

    R&D means all research activities, both basic and applied, and all 
development activities that are performed by non-Federal entities. 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.
    ``Research'' is defined as a systematic study directed toward fuller 
scientific knowledge or understanding of the subject studied. 
``Development'' is

[[Page 108]]

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.



Sec.  200.88  Simplified acquisition threshold.

    Simplified acquisition threshold means the dollar amount below which 
a non-Federal entity may purchase property or services using small 
purchase methods. Non-Federal entities adopt small purchase procedures 
in order to expedite the purchase of items costing less than the 
simplified acquisition threshold. The simplified acquisition threshold 
is set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 
(Definitions) and in accordance with 41 U.S.C. 1908. As of the 
publication of this part, the simplified acquisition threshold is 
$150,000, but this threshold is periodically adjusted for inflation. 
(Also see definition of Sec.  200.67 Micro-purchase.)



Sec.  200.89  Special purpose equipment.

    Special purpose equipment means equipment which is used only for 
research, medical, scientific, or other technical activities. Examples 
of special purpose equipment include microscopes, x-ray machines, 
surgical instruments, and spectrometers. See also Sec. Sec.  200.33 
Equipment and 200.48 General purpose equipment.



Sec.  200.90  State.

    State means any state of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, U.S. Virgin Islands, Guam, 
American Samoa, the Commonwealth of the Northern Mariana Islands, and 
any agency or instrumentality thereof exclusive of local governments.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014]



Sec.  200.91  Student Financial Aid (SFA).

    SFA means Federal awards under those programs of general student 
assistance, such as those authorized by Title IV of the Higher Education 
Act of 1965, as amended, (20 U.S.C. 1070-1099d), which are administered 
by the U.S. Department of Education, and similar programs provided by 
other Federal agencies. It does not include Federal awards under 
programs that provide fellowships or similar Federal awards to students 
on a competitive basis, or for specified studies or research.



Sec.  200.92  Subaward.

    Subaward means an award provided by a pass-through entity to a 
subrecipient for the subrecipient to carry out part of a Federal award 
received by the pass-through entity. It does not include payments to a 
contractor or payments to an individual that is a beneficiary of a 
Federal program. A subaward may be provided through any form of legal 
agreement, including an agreement that the pass-through entity considers 
a contract.



Sec.  200.93  Subrecipient.

    Subrecipient means a non-Federal entity that receives a subaward 
from a pass-through entity to carry out part of a Federal program; but 
does not include an individual that is a beneficiary of such program. A 
subrecipient may also be a recipient of other Federal awards directly 
from a Federal awarding agency.



Sec.  200.94  Supplies.

    Supplies means all tangible personal property other than those 
described in Sec.  200.33 Equipment. A computing device is a supply if 
the acquisition cost is less than the lesser of the capitalization level 
established by the non-Federal entity for financial statement purposes 
or $5,000, regardless of the length of its useful life. See also 
Sec. Sec.  200.20 Computing devices and 200.33 Equipment.



Sec.  200.95  Termination.

    Termination means the ending of a Federal award, in whole or in part 
at any time prior to the planned end of period of performance.



Sec.  200.96  Third-party in-kind contributions.

    Third-party in-kind contributions means the value of non-cash 
contributions (i.e., property or services) that--
    (a) Benefit a federally assisted project or program; and

[[Page 109]]

    (b) Are contributed by non-Federal third parties, without charge, to 
a non-Federal entity under a Federal award.



Sec.  200.97  Unliquidated obligations.

    Unliquidated obligations means, for financial reports prepared on a 
cash basis, obligations incurred by the non-Federal entity that have not 
been paid (liquidated). For reports prepared on an accrual expenditure 
basis, these are obligations incurred by the non-Federal entity for 
which an expenditure has not been recorded.



Sec.  200.98  Unobligated balance.

    Unobligated balance means the amount of funds under a Federal award 
that the non-Federal entity has not obligated. The amount is computed by 
subtracting the cumulative amount of the non-Federal entity's 
unliquidated obligations and expenditures of funds under the Federal 
award from the cumulative amount of the funds that the Federal awarding 
agency or pass-through entity authorized the non-Federal entity to 
obligate.



Sec.  200.99  Voluntary committed cost sharing.

    Voluntary committed cost sharing means cost sharing specifically 
pledged on a voluntary basis in the proposal's budget or the Federal 
award on the part of the non-Federal entity and that becomes a binding 
requirement of Federal award.



                      Subpart B_General Provisions



Sec.  200.100  Purpose.

    (a) Purpose. (1) This part establishes uniform administrative 
requirements, cost principles, and audit requirements for Federal awards 
to non-Federal entities, as described in Sec.  200.101. Federal awarding 
agencies must not impose additional or inconsistent requirements, except 
as provided in Sec. Sec.  200.102 and 200.211, or unless specifically 
required by Federal statute, regulation, or Executive order.
    (2) This part provides the basis for a systematic and periodic 
collection and uniform submission by Federal agencies of information on 
all Federal financial assistance programs to the Office of Management 
and Budget (OMB). It also establishes Federal policies related to the 
delivery of this information to the public, including through the use of 
electronic media. It prescribes the manner in which General Services 
Administration (GSA), OMB, and Federal agencies that administer Federal 
financial assistance programs are to carry out their statutory 
responsibilities under the Federal Program Information Act (31 U.S.C. 
6101-6106).
    (b) Administrative requirements. Subparts B through D of this part 
set forth the uniform administrative requirements for grant and 
cooperative agreements, including the requirements for Federal awarding 
agency management of Federal grant programs before the Federal award has 
been made, and the requirements Federal awarding agencies may impose on 
non-Federal entities in the Federal award.
    (c) Cost principles. Subpart E of this part establishes principles 
for determining the allowable costs incurred by non-Federal entities 
under Federal awards. The principles are for the purpose of cost 
determination and are not intended to identify the circumstances or 
dictate the extent of Federal Government participation in the financing 
of a particular program or project. The principles are designed to 
provide that Federal awards bear their fair share of cost recognized 
under these principles except where restricted or prohibited by statute.
    (d) Single Audit Requirements and Audit Follow-up. Subpart F of this 
part is issued pursuant to the Single Audit Act Amendments of 1996, (31 
U.S.C. 7501-7507). It sets forth standards for obtaining consistency and 
uniformity among Federal agencies for the audit of non-Federal entities 
expending Federal awards. These provisions also provide the policies and 
procedures for Federal awarding agencies and pass-through entities when 
using the results of these audits.
    (e) Guidance on challenges and prizes. For OMB guidance to Federal 
awarding agencies on challenges and prizes, please see memo M-10-11 
Guidance on the Use of Challenges and Prizes to Promote Open Government, 
issued March 8, 2010, or its successor.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49536, Aug. 13, 2020]

[[Page 110]]



Sec.  200.101  Applicability.

    (a) General applicability to Federal agencies. (1) The requirements 
established in this part apply to Federal agencies that make Federal 
awards to non-Federal entities. These requirements are applicable to all 
costs related to Federal awards.
    (2) Federal awarding agencies may apply subparts A through E of this 
part to Federal agencies, for-profit entities, foreign public entities, 
or foreign organizations, except where the Federal awarding agency 
determines that the application of these subparts would be inconsistent 
with the international responsibilities of the United States or the 
statutes or regulations of a foreign government.
    (b) Applicability to different types of Federal awards. (1) 
Throughout this part when the word ``must'' is used it indicates a 
requirement. Whereas, use of the word ``should'' or ``may'' indicates a 
best practice or recommended approach rather than a requirement and 
permits discretion.
    (2) The following table describes what portions of this part apply 
to which types of Federal awards. The terms and conditions of Federal 
awards (including this part) flow down to subawards to subrecipients 
unless a particular section of this part or the terms and conditions of 
the Federal award specifically indicate otherwise. This means that non-
Federal entities must comply with requirements in this part regardless 
of whether the non-Federal entity is a recipient or subrecipient of a 
Federal award. Pass-through entities must comply with the requirements 
described in subpart D of this part, Sec. Sec.  200.331 through 200.333, 
but not any requirements in this part directed towards Federal awarding 
agencies unless the requirements of this part or the terms and 
conditions of the Federal award indicate otherwise.

                        Table 1 to Paragraph (b)
------------------------------------------------------------------------
                                Are applicable to
                               the following types
                                of Federal Awards    Are NOT applicable
                                 and Fixed-Price      to the following
  The following portions of       Contracts and       types of Federal
          this Part           Subcontracts (except    Awards and Fixed-
                                   as noted in       Price Contracts and
                               paragraphs (d) and       Subcontracts:
                                   (e) of this
                                    section):
------------------------------------------------------------------------
Subpart A--Acronyms and       --All...............
 Definitions.
Subpart B--General            --All...............
 Provisions, except for Sec.
  Sec.   200.111 English
 Language, 200.112 Conflict
 of Interest, 200.113
 Mandatory Disclosures.
Sec.  Sec.   200.111 English  --Grant Agreements    --Agreements for
 Language, 200.112 Conflict    and cooperative       loans, loan
 of Interest, 200.113          agreements.           guarantees,
 Mandatory Disclosures.                              interest subsidies
                                                     and insurance.
                                                    --Procurement
                                                     contracts awarded
                                                     by Federal Agencies
                                                     under the Federal
                                                     Acquisition
                                                     Regulation and
                                                     subcontracts under
                                                     those contracts.
Subparts C-D, except for      --Grant Agreements    --Agreements for
 Sec.  Sec.   200.203          and cooperative       loans, loan
 Requirement to provide        agreements.           guarantees,
 public notice of Federal                            interest subsidies
 financial assistance                                and insurance.
 programs, 200.303 Internal                         --Procurement
 controls, 200.331-333                               contracts awarded
 Subrecipient Monitoring and                         by Federal Agencies
 Management.                                         under the Federal
                                                     Acquisition
                                                     Regulation and
                                                     subcontracts under
                                                     those contracts.
Sec.   200.203 Requirement    --Grant Agreements    --Procurement
 to provide public notice of   and cooperative       contracts awarded
 Federal financial             agreements.           by Federal Agencies
 assistance programs.         --Agreements for       under the Federal
                               loans, loan           Acquisition
                               guarantees,           Regulation and
                               interest subsidies    subcontracts under
                               and insurance.        those contracts.
Sec.  Sec.   200.303          --All...............
 Internal controls, 200.331-
 333 Subrecipient Monitoring
 and Management.
Subpart E--Cost Principles..  --Grant Agreements    --Grant agreements
                               and cooperative       and cooperative
                               agreements, except    agreements
                               those providing       providing foods
                               food commodities.     commodities.
                              --All procurement     --Fixed amount
                               contracts under the   awards.
                               Federal Acquisition  --Agreements for
                               Regulations except    loans, loans
                               those that are not    guarantees,
                               negotiated.           interest subsidies
                                                     and insurance.
                                                    --Federal awards to
                                                     hospitals (see
                                                     Appendix IX
                                                     Hospital Cost
                                                     Principles).

[[Page 111]]

 
Subpart F--Audit              --Grant Agreements    --Fixed-price
 Requirements.                 and cooperative       contracts and
                               agreements.           subcontracts
                              --Contracts and        awarded under the
                               subcontracts,         Federal Acquisition
                               except for fixed      Regulation.
                               price contacts and
                               subcontracts,
                               awarded under the
                               Federal Acquisition
                               Regulation.
                              --Agreements for
                               loans, loans
                               guarantees,
                               interest subsidies
                               and insurance and
                               other forms of
                               Federal Financial
                               Assistance as
                               defined by the
                               Single Audit Act
                               Amendment of 1996.
------------------------------------------------------------------------

    (c) Federal award of cost-reimbursement contract under the FAR to a 
non-Federal entity. When a non-Federal entity is awarded a cost-
reimbursement contract, only subpart D, Sec. Sec.  200.331 through 
200.333, and subparts E and F of this part are incorporated by reference 
into the contract, but the requirements of subparts D, E, and F are 
supplementary to the FAR and the contract. When the Cost Accounting 
Standards (CAS) are applicable to the contract, they take precedence 
over the requirements of this part, including subpart F of this part, 
which are supplementary to the CAS requirements. In addition, costs that 
are made unallowable under 10 U.S.C. 2324(e) and 41 U.S.C. 4304(a) as 
described in the FAR 48 CFR part 31, subpart 31.2, and 48 CFR 31.603 are 
always unallowable. For requirements other than those covered in subpart 
D, Sec. Sec.  200.331 through 200.333, and subparts E and F of this 
part, the terms of the contract and the FAR apply. Note that when a non-
Federal entity is awarded a FAR contract, the FAR applies, and the terms 
and conditions of the contract shall prevail over the requirements of 
this part.
    (d) Governing provisions. With the exception of subpart F of this 
part, which is required by the Single Audit Act, in any circumstances 
where the provisions of Federal statutes or regulations differ from the 
provisions of this part, the provision of the Federal statutes or 
regulations govern. This includes, for agreements with Indian tribes, 
the provisions of the Indian Self-Determination and Education and 
Assistance Act (ISDEAA), as amended, 25 U.S.C 450-458ddd-2.
    (e) Program applicability. Except for Sec. Sec.  200.203 and 200.331 
through 200.333, the requirements in subparts C, D, and E of this part 
do not apply to the following programs:
    (1) The block grant awards authorized by the Omnibus Budget 
Reconciliation Act of 1981 (including Community Services), except to the 
extent that subpart E of this part apply to subrecipients of Community 
Services Block Grant funds pursuant to 42 U.S.C. 9916(a)(1)(B);
    (2) Federal awards to local education agencies under 20 U.S.C. 7702-
7703b, (portions of the Impact Aid program);
    (3) Payments under the Department of Veterans Affairs' State Home 
Per Diem Program (38 U.S.C. 1741); and
    (4) Federal awards authorized under the Child Care and Development 
Block Grant Act of 1990, as amended:
    (i) Child Care and Development Block Grant (42 U.S.C. 9858).
    (ii) Child Care Mandatory and Matching Funds of the Child Care and 
Development Fund (42 U.S.C. 9858).
    (f) Additional program applicability. Except for Sec.  200.203, the 
guidance in subpart C of this part does not apply to the following 
programs:
    (1) Entitlement Federal awards to carry out the following programs 
of the Social Security Act:
    (i) Temporary Assistance for Needy Families (title IV-A of the 
Social Security Act, 42 U.S.C. 601-619);
    (ii) Child Support Enforcement and Establishment of Paternity (title 
IV-D

[[Page 112]]

of the Social Security Act, 42 U.S.C. 651-669b);
    (iii) Foster Care and Adoption Assistance (title IV-E of the Act, 42 
U.S.C. 670-679c);
    (iv) Aid to the Aged, Blind, and Disabled (titles I, X, XIV, and 
XVI-AABD of the Act, as amended);
    (v) Medical Assistance (Medicaid) (title XIX of the Act, 42 U.S.C. 
1396-1396w-5) not including the State Medicaid Fraud Control program 
authorized by section 1903(a)(6)(B) of the Social Security Act (42 
U.S.C. 1396b(a)(6)(B)); and
    (vi) Children's Health Insurance Program (title XXI of the Act, 42 
U.S.C. 1397aa-1397mm).
    (2) A Federal award for an experimental, pilot, or demonstration 
project that is also supported by a Federal award listed in paragraph 
(f)(1) of this section.
    (3) Federal awards under subsection 412(e) of the Immigration and 
Nationality Act and subsection 501(a) of the Refugee Education 
Assistance Act of 1980 (Pub. L. 96-422, 94 Stat. 1809), for cash 
assistance, medical assistance, and supplemental security income 
benefits to refugees and entrants and the administrative costs of 
providing the assistance and benefits (8 U.S.C. 1522(e)).
    (4) Entitlement awards under the following programs of The National 
School Lunch Act:
    (i) National School Lunch Program (section 4 of the Act, 42 U.S.C. 
1753);
    (ii) Commodity Assistance (section 6 of the Act, 42 U.S.C. 1755);
    (iii) Special Meal Assistance (section 11 of the Act, 42 U.S.C. 
1759a);
    (iv) Summer Food Service Program for Children (section 13 of the 
Act, 42 U.S.C. 1761); and
    (v) Child and Adult Care Food Program (section 17 of the Act, 42 
U.S.C. 1766).
    (5) Entitlement awards under the following programs of The Child 
Nutrition Act of 1966:
    (i) Special Milk Program (section 3 of the Act, 42 U.S.C. 1772);
    (ii) School Breakfast Program (section 4 of the Act, 42 U.S.C. 
1773); and
    (iii) State Administrative Expenses (section 7 of the Act, 42 U.S.C. 
1776).
    (6) Entitlement awards for State Administrative Expenses under The 
Food and Nutrition Act of 2008 (section 16 of the Act, 7 U.S.C. 2025).
    (7) Non-discretionary Federal awards under the following non-
entitlement programs:
    (i) Special Supplemental Nutrition Program for Women, Infants and 
Children (section 17 of the Child Nutrition Act of 1966) 42 U.S.C. 1786;
    (ii) The Emergency Food Assistance Programs (Emergency Food 
Assistance Act of 1983) 7 U.S.C. 7501 note; and
    (iii) Commodity Supplemental Food Program (section 5 of the 
Agriculture and Consumer Protection Act of 1973) 7 U.S.C. 612c note.

[85 FR 49536, Aug. 13, 2020]



Sec.  200.102  Exceptions.

    (a) With the exception of subpart F of this part, OMB may allow 
exceptions for classes of Federal awards or non-Federal entities subject 
to the requirements of this part when exceptions are not prohibited by 
statute. In the interest of maximum uniformity, exceptions from the 
requirements of this part will be permitted as described in this 
section.
    (b) Exceptions on a case-by-case basis for individual non-Federal 
entities may be authorized by the Federal awarding agency or cognizant 
agency for indirect costs, except where otherwise required by law or 
where OMB or other approval is expressly required by this part.
    (c) The Federal awarding agency may apply adjust requirements to a 
class of Federal awards or non-Federal entities when approved by OMB, or 
when required by Federal statutes or regulations, except for the 
requirements in subpart F of this part. A Federal awarding agency may 
apply less restrictive requirements when making fixed amount awards as 
defined in subpart A of this part, except for those requirements imposed 
by statute or in subpart F of this part.
    (d) Federal awarding agencies may request exceptions in support of 
innovative program designs that apply a risk-based, data-driven 
framework to

[[Page 113]]

alleviate select compliance requirements and hold recipients accountable 
for good performance. See also Sec.  200.206.

[85 FR 49538, Aug. 13, 2020]



Sec.  200.103  Authorities.

    This part is issued under the following authorities.
    (a) Subparts B through D of this part are authorized under 31 U.S.C. 
503 (the Chief Financial Officers Act, Functions of the Deputy Director 
for Management), 41 U.S.C. 1101-1131 (the Office of Federal Procurement 
Policy Act), Reorganization Plan No. 2 of 1970, and Executive Order 
11541 (``Prescribing the Duties of the Office of Management and Budget 
and the Domestic Policy Council in the Executive Office of the 
President''), the Single Audit Act Amendments of 1996, (31 U.S.C. 7501-
7507), as well as The Federal Program Information Act (Pub. L. 95-220 
and Pub. L. 98-169, as amended, codified at 31 U.S.C. 6101-6106).
    (b) Subpart E of this part is authorized under the Budget and 
Accounting Act of 1921, as amended; the Budget and Accounting Procedures 
Act of 1950, as amended (31 U.S.C. 1101-1125); the Chief Financial 
Officers Act of 1990 (31 U.S.C. 503-504); Reorganization Plan No. 2 of 
1970; and Executive Order 11541, ``Prescribing the Duties of the Office 
of Management and Budget and the Domestic Policy Council in the 
Executive Office of the President.''
    (c) Subpart F of this part is authorized under the Single Audit Act 
Amendments of 1996, (31 U.S.C. 7501-7507).

[85 FR 49538, Aug. 13, 2020]



Sec.  200.104  Supersession.

    As described in Sec.  200.110, this part supersedes the following 
OMB guidance documents and regulations under title 2 of the Code of 
Federal Regulations:
    (a) A-21, ``Cost Principles for Educational Institutions'' (2 CFR 
part 220);
    (b) A-87, ``Cost Principles for State, Local and Indian Tribal 
Governments'' (2 CFR part 225) and also Federal Register notice 51 FR 
552 (January 6, 1986);
    (c) A-89, ``Federal Domestic Assistance Program Information'';
    (d) A-102, ``Grant Awards and Cooperative Agreements with State and 
Local Governments'';
    (e) A-110, ``Uniform Administrative Requirements for Awards and 
Other Agreements with Institutions of Higher Education, Hospitals, and 
Other Nonprofit Organizations'' (codified at 2 CFR 215);
    (f) A-122, ``Cost Principles for Non-Profit Organizations'' (2 CFR 
part 230);
    (g) A-133, ``Audits of States, Local Governments and Non-Profit 
Organizations''; and
    (h) Those sections of A-50 related to audits performed under subpart 
F of this part.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75882, Dec. 19, 2014; 
85 FR 49538, Aug. 13, 2020]



Sec.  200.105  Effect on other issuances.

    (a) Superseding inconsistent requirements. For Federal awards 
subject to this part, all administrative requirements, program manuals, 
handbooks and other non-regulatory materials that are inconsistent with 
the requirements of this part must be superseded upon implementation of 
this part by the Federal agency, except to the extent they are required 
by statute or authorized in accordance with the provisions in Sec.  
200.102.
    (b) Imposition of requirements on recipients. Agencies may impose 
legally binding requirements on recipients only through the notice and 
public comment process through an approved agency process, including as 
authorized by this part, other statutes or regulations, or as 
incorporated into the terms of a Federal award.

[85 FR 49538, Aug. 13, 2020]



Sec.  200.106  Agency implementation.

    The specific requirements and responsibilities of Federal agencies 
and non-Federal entities are set forth in this part. Federal agencies 
making Federal awards to non-Federal entities must implement the 
language in subparts C through F of this part in codified regulations 
unless different provisions are required by Federal statute or are 
approved by OMB.

[85 FR 49538, Aug. 13, 2020]

[[Page 114]]



Sec.  200.107  OMB responsibilities.

    OMB will review Federal agency regulations and implementation of 
this part, and will provide interpretations of policy requirements and 
assistance to ensure effective and efficient implementation. Any 
exceptions will be subject to approval by OMB. Exceptions will only be 
made in particular cases where adequate justification is presented.



Sec.  200.108  Inquiries.

    Inquiries concerning this part may be directed to the Office of 
Federal Financial Management Office of Management and Budget, in 
Washington, DC. Non-Federal entities' inquiries should be addressed to 
the Federal awarding agency, cognizant agency for indirect costs, 
cognizant or oversight agency for audit, or pass-through entity as 
appropriate.



Sec.  200.109  Review date.

    OMB will review this part at least every five years after December 
26, 2013.



Sec.  200.110  Effective/applicability date.

    (a) The standards set forth in this part that affect the 
administration of Federal awards issued by Federal awarding agencies 
become effective once implemented by Federal awarding agencies or when 
any future amendment to this part becomes final.
    (b) Existing negotiated indirect cost rates (as of the publication 
date of the revisions to the guidance) will remain in place until they 
expire. The effective date of changes to indirect cost rates must be 
based upon the date that a newly re-negotiated rate goes into effect for 
a specific non-Federal entity's fiscal year. Therefore, for indirect 
cost rates and cost allocation plans, the revised Uniform Guidance (as 
of the publication date for revisions to the guidance) become effective 
in generating proposals and negotiating a new rate (when the rate is re-
negotiated).

[85 FR 49538, Aug. 13, 2020]



Sec.  200.111  English language.

    (a) All Federal financial assistance announcements and Federal award 
information must be in the English language. Applications must be 
submitted in the English language and must be in the terms of U.S. 
dollars. If the Federal awarding agency receives applications in another 
currency, the Federal awarding agency will evaluate the application by 
converting the foreign currency to United States currency using the date 
specified for receipt of the application.
    (b) Non-Federal entities may translate the Federal award and other 
documents into another language. In the event of inconsistency between 
any terms and conditions of the Federal award and any translation into 
another language, the English language meaning will control. Where a 
significant portion of the non-Federal entity's employees who are 
working on the Federal award are not fluent in English, the non-Federal 
entity must provide the Federal award in English and the language(s) 
with which employees are more familiar.



Sec.  200.112  Conflict of interest.

    The Federal awarding agency must establish conflict of interest 
policies for Federal awards. The non-Federal entity must disclose in 
writing any potential conflict of interest to the Federal awarding 
agency or pass-through entity in accordance with applicable Federal 
awarding agency policy.



Sec.  200.113  Mandatory disclosures.

    The non-Federal entity or applicant for a Federal award must 
disclose, in a timely manner, in writing to the Federal awarding agency 
or pass-through entity all violations of Federal criminal law involving 
fraud, bribery, or gratuity violations potentially affecting the Federal 
award. Non-Federal entities that have received a Federal award including 
the term and condition outlined in appendix XII to this part are 
required to report certain civil, criminal, or administrative 
proceedings to SAM (currently FAPIIS). Failure to make required 
disclosures can result in any of the remedies described in Sec.  
200.339. (See also 2 CFR part 180, 31 U.S.C. 3321, and 41 U.S.C. 2313.)

[85 FR 49539, Aug. 13, 2020]

[[Page 115]]



 Subpart C_Pre-Federal Award Requirements and Contents of Federal Awards

    Source: 85 FR 49539, Aug. 13, 2020, unless otherwise noted.



Sec.  200.200  Purpose.

    Sections 200.201 through 200.216 prescribe instructions and other 
pre-award matters to be used by Federal awarding agencies in the program 
planning, announcement, application and award processes.



Sec.  200.201  Use of grant agreements (including fixed amount awards),
cooperative agreements, and contracts.

    (a) Federal award instrument. The Federal awarding agency or pass-
through entity must decide on the appropriate instrument for the Federal 
award (i.e., grant agreement, cooperative agreement, or contract) in 
accordance with the Federal Grant and Cooperative Agreement Act (31 
U.S.C. 6301-08).
    (b) Fixed amount awards. In addition to the options described in 
paragraph (a) of this section, Federal awarding agencies, or pass-
through entities as permitted in Sec.  200.333, may use fixed amount 
awards (see Fixed amount awards in Sec.  200.1) to which the following 
conditions apply:
    (1) The Federal award amount is negotiated using the cost principles 
(or other pricing information) as a guide. The Federal awarding agency 
or pass-through entity may use fixed amount awards if the project scope 
has measurable goals and objectives and if adequate cost, historical, or 
unit pricing data is available to establish a fixed amount award based 
on a reasonable estimate of actual cost. Payments are based on meeting 
specific requirements of the Federal award. Accountability is based on 
performance and results. Except in the case of termination before 
completion of the Federal award, there is no governmental review of the 
actual costs incurred by the non-Federal entity in performance of the 
award. Some of the ways in which the Federal award may be paid include, 
but are not limited to:
    (i) In several partial payments, the amount of each agreed upon in 
advance, and the ``milestone'' or event triggering the payment also 
agreed upon in advance, and set forth in the Federal award;
    (ii) On a unit price basis, for a defined unit or units, at a 
defined price or prices, agreed to in advance of performance of the 
Federal award and set forth in the Federal award; or,
    (iii) In one payment at Federal award completion.
    (2) A fixed amount award cannot be used in programs which require 
mandatory cost sharing or match.
    (3) The non-Federal entity must certify in writing to the Federal 
awarding agency or pass-through entity at the end of the Federal award 
that the project or activity was completed or the level of effort was 
expended. If the required level of activity or effort was not carried 
out, the amount of the Federal award must be adjusted.
    (4) Periodic reports may be established for each Federal award.
    (5) Changes in principal investigator, project leader, project 
partner, or scope of effort must receive the prior written approval of 
the Federal awarding agency or pass-through entity.



Sec.  200.202  Program planning and design.

    The Federal awarding agency must design a program and create an 
Assistance Listing before announcing the Notice of Funding Opportunity. 
The program must be designed with clear goals and objectives that 
facilitate the delivery of meaningful results consistent with the 
Federal authorizing legislation of the program. Program performance 
shall be measured based on the goals and objectives developed during 
program planning and design. See Sec.  200.301 for more information on 
performance measurement. Performance measures may differ depending on 
the type of program. The program must align with the strategic goals and 
objectives within the Federal awarding agency's performance plan and 
should support the Federal awarding agency's performance measurement, 
management, and reporting as required by Part 6 of OMB Circular A-11 
(Preparation, Submission, and Execution of the

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Budget). The program must also be designed to align with the Program 
Management Improvement Accountability Act (Pub. L. 114-264).



Sec.  200.203  Requirement to provide public notice of Federal 
financial assistance programs.

    (a) The Federal awarding agency must notify the public of Federal 
programs in the Federal Assistance Listings maintained by the General 
Services Administration (GSA).
    (1) The Federal Assistance Listings is the single, authoritative, 
governmentwide comprehensive source of Federal financial assistance 
program information produced by the executive branch of the Federal 
Government.
    (2) The information that the Federal awarding agency must submit to 
GSA for approval by OMB is listed in paragraph (b) of this section. GSA 
must prescribe the format for the submission in coordination with OMB.
    (3) The Federal awarding agency may not award Federal financial 
assistance without assigning it to a program that has been included in 
the Federal Assistance Listings as required in this section unless there 
are exigent circumstances requiring otherwise, such as timing 
requirements imposed by statute.
    (b) For each program that awards discretionary Federal awards, non-
discretionary Federal awards, loans, insurance, or any other type of 
Federal financial assistance, the Federal awarding agency must, to the 
extent practicable, create, update, and manage Assistance Listings 
entries based on the authorizing statute for the program and comply with 
additional guidance provided by GSA in consultation with OMB to ensure 
consistent, accurate information is available to prospective applicants. 
Accordingly, Federal awarding agencies must submit the following 
information to GSA:
    (1) Program Description, Purpose, Goals, and Measurement. A brief 
summary of the statutory or regulatory requirements of the program and 
its intended outcome. Where appropriate, the Program Description, 
Purpose, Goals, and Measurement should align with the strategic goals 
and objectives within the Federal awarding agency's performance plan and 
should support the Federal awarding agency's performance measurement, 
management, and reporting as required by Part 6 of OMB Circular A-11;
    (2) Identification. Identification of whether the program makes 
Federal awards on a discretionary basis or the Federal awards are 
prescribed by Federal statute, such as in the case of formula grants.
    (3) Projected total amount of funds available for the program. 
Estimates based on previous year funding are acceptable if current 
appropriations are not available at the time of the submission;
    (4) Anticipated source of available funds. The statutory authority 
for funding the program and, to the extent possible, agency, sub-agency, 
or, if known, the specific program unit that will issue the Federal 
awards, and associated funding identifier (e.g., Treasury Account 
Symbol(s));
    (5) General eligibility requirements. The statutory, regulatory or 
other eligibility factors or considerations that determine the 
applicant's qualification for Federal awards under the program (e.g., 
type of non-Federal entity); and
    (6) Applicability of Single Audit Requirements. Applicability of 
Single Audit Requirements as required by subpart F of this part.



Sec.  200.204  Notices of funding opportunities.

    For discretionary grants and cooperative agreements that are 
competed, the Federal awarding agency must announce specific funding 
opportunities by providing the following information in a public notice:
    (a) Summary information in notices of funding opportunities. The 
Federal awarding agency must display the following information posted on 
the OMB-designated governmentwide website for funding and applying for 
Federal financial assistance, in a location preceding the full text of 
the announcement:
    (1) Federal Awarding Agency Name;
    (2) Funding Opportunity Title;
    (3) Announcement Type (whether the funding opportunity is the 
initial announcement of this funding opportunity or a modification of a 
previously announced opportunity);

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    (4) Funding Opportunity Number (required, if applicable). If the 
Federal awarding agency has assigned or will assign a number to the 
funding opportunity announcement, this number must be provided;
    (5) Assistance Listings Number(s);
    (6) Key Dates. Key dates include due dates for applications or 
Executive Order 12372 submissions, as well as for any letters of intent 
or pre-applications. For any announcement issued before a program's 
application materials are available, key dates also include the date on 
which those materials will be released; and any other additional 
information, as deemed applicable by the relevant Federal awarding 
agency.
    (b) Availability period. The Federal awarding agency must generally 
make all funding opportunities available for application for at least 60 
calendar days. The Federal awarding agency may make a determination to 
have a less than 60 calendar day availability period but no funding 
opportunity should be available for less than 30 calendar days unless 
exigent circumstances require as determined by the Federal awarding 
agency head or delegate.
    (c) Full text of funding opportunities. The Federal awarding agency 
must include the following information in the full text of each funding 
opportunity. For specific instructions on the content required in this 
section, refer to appendix I to this part.
    (1) Full programmatic description of the funding opportunity.
    (2) Federal award information, including sufficient information to 
help an applicant make an informed decision about whether to submit an 
application. (See also Sec.  200.414(c)(4)).
    (3) Specific eligibility information, including any factors or 
priorities that affect an applicant's or its application's eligibility 
for selection.
    (4) Application Preparation and Submission Information, including 
the applicable submission dates and time.
    (5) Application Review Information including the criteria and 
process to be used to evaluate applications. See also Sec. Sec.  200.205 
and 200.206.
    (6) Federal Award Administration Information. See also Sec.  
200.211.
    (7) Applicable terms and conditions for resulting awards, including 
any exceptions from these standard terms.



Sec.  200.205  Federal awarding agency review of merit of proposals.

    For discretionary Federal awards, unless prohibited by Federal 
statute, the Federal awarding agency must design and execute a merit 
review process for applications, with the objective of selecting 
recipients most likely to be successful in delivering results based on 
the program objectives outlined in section Sec.  200.202. A merit review 
is an objective process of evaluating Federal award applications in 
accordance with written standards set forth by the Federal awarding 
agency. This process must be described or incorporated by reference in 
the applicable funding opportunity (see appendix I to this part.). See 
also Sec.  200.204. The Federal awarding agency must also periodically 
review its merit review process.



Sec.  200.206  Federal awarding agency review of risk posed by 
applicants.

    (a) Review of OMB-designated repositories of governmentwide data. 
(1) Prior to making a Federal award, the Federal awarding agency is 
required by the Improper Payments Elimination and Recovery Improvement 
Act of 2012, 31 U.S.C. 3321 note, and 41 U.S.C. 2313 to review 
information available through any OMB-designated repositories of 
governmentwide eligibility qualification or financial integrity 
information as appropriate. See also suspension and debarment 
requirements at 2 CFR part 180 as well as individual Federal agency 
suspension and debarment regulations in title 2 of the Code of Federal 
Regulations.
    (2) In accordance 41 U.S.C. 2313, the Federal awarding agency is 
required to review the non-public segment of the OMB-designated 
integrity and performance system accessible through SAM (currently the 
Federal Awardee Performance and Integrity Information System (FAPIIS)) 
prior to making a Federal award where the Federal share is expected to 
exceed the simplified acquisition threshold, defined in 41 U.S.C. 134, 
over the period of performance. As required by Public Law 112-239, 
National Defense Authorization Act for

[[Page 118]]

Fiscal Year 2013, prior to making a Federal award, the Federal awarding 
agency must consider all of the information available through FAPIIS 
with regard to the applicant and any immediate highest level owner, 
predecessor (i.e.; a non-Federal entity that is replaced by a 
successor), or subsidiary, identified for that applicant in FAPIIS, if 
applicable. At a minimum, the information in the system for a prior 
Federal award recipient must demonstrate a satisfactory record of 
executing programs or activities under Federal grants, cooperative 
agreements, or procurement awards; and integrity and business ethics. 
The Federal awarding agency may make a Federal award to a recipient who 
does not fully meet these standards, if it is determined that the 
information is not relevant to the current Federal award under 
consideration or there are specific conditions that can appropriately 
mitigate the effects of the non-Federal entity's risk in accordance with 
Sec.  200.208.
    (b) Risk evaluation. (1) The Federal awarding agency must have in 
place a framework for evaluating the risks posed by applicants before 
they receive Federal awards. This evaluation may incorporate results of 
the evaluation of the applicant's eligibility or the quality of its 
application. If the Federal awarding agency determines that a Federal 
award will be made, special conditions that correspond to the degree of 
risk assessed may be applied to the Federal award. Criteria to be 
evaluated must be described in the announcement of funding opportunity 
described in Sec.  200.204.
    (2) In evaluating risks posed by applicants, the Federal awarding 
agency may use a risk-based approach and may consider any items such as 
the following:
    (i) Financial stability. Financial stability;
    (ii) Management systems and standards. Quality of management systems 
and ability to meet the management standards prescribed in this part;
    (iii) History of performance. The applicant's record in managing 
Federal awards, if it is a prior recipient of Federal awards, including 
timeliness of compliance with applicable reporting requirements, 
conformance to the terms and conditions of previous Federal awards, and 
if applicable, the extent to which any previously awarded amounts will 
be expended prior to future awards;
    (iv) Audit reports and findings. Reports and findings from audits 
performed under subpart F of this part or the reports and findings of 
any other available audits; and
    (v) Ability to effectively implement requirements. The applicant's 
ability to effectively implement statutory, regulatory, or other 
requirements imposed on non-Federal entities.
    (c) Risk-based requirements adjustment. The Federal awarding agency 
may adjust requirements when a risk-evaluation indicates that it may be 
merited either pre-award or post-award.
    (d) Suspension and debarment compliance. (1) The Federal awarding 
agency must comply with the guidelines on governmentwide suspension and 
debarment in 2 CFR part 180, and must require non-Federal entities to 
comply with these provisions. These provisions restrict Federal awards, 
subawards and contracts with certain parties that are debarred, 
suspended or otherwise excluded from or ineligible for participation in 
Federal programs or activities.



Sec.  200.207  Standard application requirements.

    (a) Paperwork clearances. The Federal awarding agency may only use 
application information collections approved by OMB under the Paperwork 
Reduction Act of 1995 and OMB's implementing regulations in 5 CFR part 
1320 and in alignment with OMB-approved, governmentwide data elements 
available from the OMB-designated standards lead. Consistent with these 
requirements, OMB will authorize additional information collections only 
on a limited basis.
    (b) Information collection. If applicable, the Federal awarding 
agency may inform applicants and recipients that they do not need to 
provide certain information otherwise required by the relevant 
information collection.



Sec.  200.208  Specific conditions.

    (a) Federal awarding agencies are responsible for ensuring that 
specific

[[Page 119]]

Federal award conditions are consistent with the program design 
reflected in Sec.  200.202 and include clear performance expectations of 
recipients as required in Sec.  200.301.
    (b) The Federal awarding agency or pass-through entity may adjust 
specific Federal award conditions as needed, in accordance with this 
section, based on an analysis of the following factors:
    (1) Based on the criteria set forth in Sec.  200.206;
    (2) The applicant or recipient's history of compliance with the 
general or specific terms and conditions of a Federal award;
    (3) The applicant or recipient's ability to meet expected 
performance goals as described in Sec.  200.211; or
    (4) A responsibility determination of an applicant or recipient.
    (c) Additional Federal award conditions may include items such as 
the following:
    (1) Requiring payments as reimbursements rather than advance 
payments;
    (2) Withholding authority to proceed to the next phase until receipt 
of evidence of acceptable performance within a given performance period;
    (3) Requiring additional, more detailed financial reports;
    (4) Requiring additional project monitoring;
    (5) Requiring the non-Federal entity to obtain technical or 
management assistance; or
    (6) Establishing additional prior approvals.
    (d) If the Federal awarding agency or pass-through entity is 
imposing additional requirements, they must notify the applicant or non-
Federal entity as to:
    (1) The nature of the additional requirements;
    (2) The reason why the additional requirements are being imposed;
    (3) The nature of the action needed to remove the additional 
requirement, if applicable;
    (4) The time allowed for completing the actions if applicable; and
    (5) The method for requesting reconsideration of the additional 
requirements imposed.
    (e) Any additional requirements must be promptly removed once the 
conditions that prompted them have been satisfied.



Sec.  200.209  Certifications and representations.

    Unless prohibited by the U.S. Constitution, Federal statutes or 
regulations, each Federal awarding agency or pass-through entity is 
authorized to require the non-Federal entity to submit certifications 
and representations required by Federal statutes, or regulations on an 
annual basis. Submission may be required more frequently if the non-
Federal entity fails to meet a requirement of a Federal award.



Sec.  200.210  Pre-award costs.

    For requirements on costs incurred by the applicant prior to the 
start date of the period of performance of the Federal award, see Sec.  
200.458.



Sec.  200.211  Information contained in a Federal award.

    A Federal award must include the following information:
    (a) Federal award performance goals. Performance goals, indicators, 
targets, and baseline data must be included in the Federal award, where 
applicable. The Federal awarding agency must also specify how 
performance will be assessed in the terms and conditions of the Federal 
award, including the timing and scope of expected performance. See 
Sec. Sec.  200.202 and 200.301 for more information on Federal award 
performance goals.
    (b) General Federal award information. The Federal awarding agency 
must include the following general Federal award information in each 
Federal award:
    (1) Recipient name (which must match the name associated with its 
unique entity identifier as defined at 2 CFR 25.315);
    (2) Recipient's unique entity identifier;
    (3) Unique Federal Award Identification Number (FAIN);
    (4) Federal Award Date (see Federal award date in Sec.  200.201);
    (5) Period of Performance Start and End Date;
    (6) Budget Period Start and End Date;

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    (7) Amount of Federal Funds Obligated by this action;
    (8) Total Amount of Federal Funds Obligated;
    (9) Total Approved Cost Sharing or Matching, where applicable;
    (10) Total Amount of the Federal Award including approved Cost 
Sharing or Matching;
    (11) Budget Approved by the Federal Awarding Agency;
    (11) Federal award description, (to comply with statutory 
requirements (e.g., FFATA));
    (12) Name of Federal awarding agency and contact information for 
awarding official,
    (13) Assistance Listings Number and Title;
    (14) Identification of whether the award is R&D and
    (15) Indirect cost rate for the Federal award (including if the de 
minimis rate is charged per Sec.  200.414).
    (c) General terms and conditions. (1) Federal awarding agencies must 
incorporate the following general terms and conditions either in the 
Federal award or by reference, as applicable:
    (i) Administrative requirements. Administrative requirements 
implemented by the Federal awarding agency as specified in this part.
    (ii) National policy requirements. These include statutory, 
executive order, other Presidential directive, or regulatory 
requirements that apply by specific reference and are not program-
specific. See Sec.  200.300 Statutory and national policy requirements.
    (iii) Recipient integrity and performance matters. If the total 
Federal share of the Federal award may include more than $500,000 over 
the period of performance, the Federal awarding agency must include the 
term and condition available in appendix XII of this part. See also 
Sec.  200.113.
    (iv) Future budget periods. If it is anticipated that the period of 
performance will include multiple budget periods, the Federal awarding 
agency must indicate that subsequent budget periods are subject to the 
availability of funds, program authority, satisfactory performance, and 
compliance with the terms and conditions of the Federal award.
    (v) Termination provisions. Federal awarding agencies must make 
recipients aware, in a clear and unambiguous manner, of the termination 
provisions in Sec.  200.340, including the applicable termination 
provisions in the Federal awarding agency's regulations or in each 
Federal award.
    (2) The Federal award must incorporate, by reference, all general 
terms and conditions of the award, which must be maintained on the 
agency's website.
    (3) If a non-Federal entity requests a copy of the full text of the 
general terms and conditions, the Federal awarding agency must provide 
it.
    (4) Wherever the general terms and conditions are publicly 
available, the Federal awarding agency must maintain an archive of 
previous versions of the general terms and conditions, with effective 
dates, for use by the non-Federal entity, auditors, or others.
    (d) Federal awarding agency, program, or Federal award specific 
terms and conditions. The Federal awarding agency must include with each 
Federal award any terms and conditions necessary to communicate 
requirements that are in addition to the requirements outlined in the 
Federal awarding agency's general terms and conditions. See also Sec.  
200.208. Whenever practicable, these specific terms and conditions also 
should be shared on the agency's website and in notices of funding 
opportunities (as outlined in Sec.  200.204) in addition to being 
included in a Federal award. See also Sec.  200.207.
    (e) Federal awarding agency requirements. Any other information 
required by the Federal awarding agency.



Sec.  200.212  Public access to Federal award information.

    (a) In accordance with statutory requirements for Federal spending 
transparency (e.g., FFATA), except as noted in this section, for 
applicable Federal awards the Federal awarding agency must announce all 
Federal awards publicly and publish the required information on a 
publicly available OMB-designated governmentwide website.
    (b) All information posted in the designated integrity and 
performance system accessible through SAM (currently FAPIIS) on or after 
April 15, 2011 will

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be publicly available after a waiting period of 14 calendar days, except 
for:
    (1) Past performance reviews required by Federal Government 
contractors in accordance with the Federal Acquisition Regulation (FAR) 
48 CFR part 42, subpart 42.15;
    (2) Information that was entered prior to April 15, 2011; or
    (3) Information that is withdrawn during the 14-calendar day waiting 
period by the Federal Government official.
    (c) Nothing in this section may be construed as requiring the 
publication of information otherwise exempt under the Freedom of 
Information Act (5 U.S.C 552), or controlled unclassified information 
pursuant to Executive Order 13556.



Sec.  200.213  Reporting a determination that a non-Federal entity
is not qualified for a Federal award.

    (a) If a Federal awarding agency does not make a Federal award to a 
non-Federal entity because the official determines that the non-Federal 
entity does not meet either or both of the minimum qualification 
standards as described in Sec.  200.206(a)(2), the Federal awarding 
agency must report that determination to the designated integrity and 
performance system accessible through SAM (currently FAPIIS), only if 
all of the following apply:
    (1) The only basis for the determination described in this paragraph 
(a) is the non-Federal entity's prior record of executing programs or 
activities under Federal awards or its record of integrity and business 
ethics, as described in Sec.  200.206(a)(2) (i.e., the entity was 
determined to be qualified based on all factors other than those two 
standards); and
    (2) The total Federal share of the Federal award that otherwise 
would be made to the non-Federal entity is expected to exceed the 
simplified acquisition threshold over the period of performance.
    (b) The Federal awarding agency is not required to report a 
determination that a non-Federal entity is not qualified for a Federal 
award if they make the Federal award to the non-Federal entity and 
include specific award terms and conditions, as described in Sec.  
200.208.
    (c) If a Federal awarding agency reports a determination that a non-
Federal entity is not qualified for a Federal award, as described in 
paragraph (a) of this section, the Federal awarding agency also must 
notify the non-Federal entity that--
    (1) The determination was made and reported to the designated 
integrity and performance system accessible through SAM, and include 
with the notification an explanation of the basis for the determination;
    (2) The information will be kept in the system for a period of five 
years from the date of the determination, as required by section 872 of 
Public Law 110-417, as amended (41 U.S.C. 2313), then archived;
    (3) Each Federal awarding agency that considers making a Federal 
award to the non-Federal entity during that five year period must 
consider that information in judging whether the non-Federal entity is 
qualified to receive the Federal award when the total Federal share of 
the Federal award is expected to include an amount of Federal funding in 
excess of the simplified acquisition threshold over the period of 
performance;
    (4) The non-Federal entity may go to the awardee integrity and 
performance portal accessible through SAM (currently the Contractor 
Performance Assessment Reporting System (CPARS)) and comment on any 
information the system contains about the non-Federal entity itself; and
    (5) Federal awarding agencies will consider that non-Federal 
entity's comments in determining whether the non-Federal entity is 
qualified for a future Federal award.
    (d) If a Federal awarding agency enters information into the 
designated integrity and performance system accessible through SAM about 
a determination that a non-Federal entity is not qualified for a Federal 
award and subsequently:
    (1) Learns that any of that information is erroneous, the Federal 
awarding agency must correct the information in the system within three 
business days; and
    (2) Obtains an update to that information that could be helpful to 
other Federal awarding agencies, the Federal

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awarding agency is strongly encouraged to amend the information in the 
system to incorporate the update in a timely way.
    (e) Federal awarding agencies must not post any information that 
will be made publicly available in the non-public segment of designated 
integrity and performance system that is covered by a disclosure 
exemption under the Freedom of Information Act. If the recipient asserts 
within seven calendar days to the Federal awarding agency that posted 
the information that some or all of the information made publicly 
available is covered by a disclosure exemption under the Freedom of 
Information Act, the Federal awarding agency that posted the information 
must remove the posting within seven calendar days of receiving the 
assertion. Prior to reposting the releasable information, the Federal 
awarding agency must resolve the issue in accordance with the agency's 
Freedom of Information Act procedures.



Sec.  200.214  Suspension and debarment.

    Non-Federal entities are subject to the non-procurement debarment 
and suspension regulations implementing Executive Orders 12549 and 
12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict 
awards, subawards, and contracts with certain parties that are debarred, 
suspended, or otherwise excluded from or ineligible for participation in 
Federal assistance programs or activities.



Sec.  200.215  Never contract with the enemy.

    Federal awarding agencies and recipients are subject to the 
regulations implementing Never Contract with the Enemy in 2 CFR part 
183. The regulations in 2 CFR part 183 affect covered contracts, grants 
and cooperative agreements that are expected to exceed $50,000 within 
the period of performance, are performed outside the United States and 
its territories, and are in support of a contingency operation in which 
members of the Armed Forces are actively engaged in hostilities.



Sec.  200.216  Prohibition on certain telecommunications and video
surveillance services or equipment.

    (a) Recipients and subrecipients are prohibited from obligating or 
expending loan or grant funds to:
    (1) Procure or obtain;
    (2) Extend or renew a contract to procure or obtain; or
    (3) Enter into a contract (or extend or renew a contract) to procure 
or obtain equipment, services, or systems that uses covered 
telecommunications equipment or services as a substantial or essential 
component of any system, or as critical technology as part of any 
system. As described in Public Law 115-232, section 889, covered 
telecommunications equipment is telecommunications equipment produced by 
Huawei Technologies Company or ZTE Corporation (or any subsidiary or 
affiliate of such entities).
    (i) For the purpose of public safety, security of government 
facilities, physical security surveillance of critical infrastructure, 
and other national security purposes, video surveillance and 
telecommunications equipment produced by Hytera Communications 
Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua 
Technology Company (or any subsidiary or affiliate of such entities).
    (ii) Telecommunications or video surveillance services provided by 
such entities or using such equipment.
    (iii) Telecommunications or video surveillance equipment or services 
produced or provided by an entity that the Secretary of Defense, in 
consultation with the Director of the National Intelligence or the 
Director of the Federal Bureau of Investigation, reasonably believes to 
be an entity owned or controlled by, or otherwise connected to, the 
government of a covered foreign country.
    (b) In implementing the prohibition under Public Law 115-232, 
section 889, subsection (f), paragraph (1), heads of executive agencies 
administering loan, grant, or subsidy programs shall prioritize 
available funding and technical support to assist affected businesses, 
institutions and organizations as is reasonably necessary for those 
affected entities to transition from covered communications equipment 
and

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services, to procure replacement equipment and services, and to ensure 
that communications service to users and customers is sustained.
    (c) See Public Law 115-232, section 889 for additional information.
    (d) See also Sec.  200.471.



                Subpart D_Post Federal Award Requirements

    Source: 85 FR 49543, Aug. 13, 2020, unless otherwise noted.



Sec.  200.300  Statutory and national policy requirements.

    (a) The Federal awarding agency must manage and administer the 
Federal award in a manner so as to ensure that Federal funding is 
expended and associated programs are implemented in full accordance with 
the U.S. Constitution, Federal Law, and public policy requirements: 
Including, but not limited to, those protecting free speech, religious 
liberty, public welfare, the environment, and prohibiting 
discrimination. The Federal awarding agency must communicate to the non-
Federal entity all relevant public policy requirements, including those 
in general appropriations provisions, and incorporate them either 
directly or by reference in the terms and conditions of the Federal 
award.
    (b) The non-Federal entity is responsible for complying with all 
requirements of the Federal award. For all Federal awards, this includes 
the provisions of FFATA, which includes requirements on executive 
compensation, and also requirements implementing the Act for the non-
Federal entity at 2 CFR parts 25 and 170. See also statutory 
requirements for whistleblower protections at 10 U.S.C. 2409, 41 U.S.C. 
4712, and 10 U.S.C. 2324, 41 U.S.C. 4304 and 4310.



Sec.  200.301  Performance measurement.

    (a) The Federal awarding agency must measure the recipient's 
performance to show achievement of program goals and objectives, share 
lessons learned, improve program outcomes, and foster adoption of 
promising practices. Program goals and objectives should be derived from 
program planning and design. See Sec.  200.202 for more information. 
Where appropriate, the Federal award may include specific program goals, 
indicators, targets, baseline data, data collection, or expected 
outcomes (such as outputs, or services performance or public impacts of 
any of these) with an expected timeline for accomplishment. Where 
applicable, this should also include any performance measures or 
independent sources of data that may be used to measure progress. The 
Federal awarding agency will determine how performance progress is 
measured, which may differ by program. Performance measurement progress 
must be both measured and reported. See Sec.  200.329 for more 
information on monitoring program performance. The Federal awarding 
agency may include program-specific requirements, as applicable. These 
requirements must be aligned, to the extent permitted by law, with the 
Federal awarding agency strategic goals, strategic objectives or 
performance goals that are relevant to the program. See also OMB 
Circular A-11, Preparation, Submission, and Execution of the Budget Part 
6.
    (b) The Federal awarding agency should provide recipients with clear 
performance goals, indicators, targets, and baseline data as described 
in Sec.  200.211. Performance reporting frequency and content should be 
established to not only allow the Federal awarding agency to understand 
the recipient progress but also to facilitate identification of 
promising practices among recipients and build the evidence upon which 
the Federal awarding agency's program and performance decisions are 
made. See Sec.  200.328 for more information on reporting program 
performance.
    (c) This provision is designed to operate in tandem with evidence-
related statutes (e.g.; The Foundations for Evidence-Based Policymaking 
Act of 2018, which emphasizes collaboration and coordination to advance 
data and evidence-building functions in the Federal government). The 
Federal awarding agency should also specify any requirements of award 
recipients' participation in a federally funded evaluation, and any 
evaluation activities required to be conducted by the Federal award.

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Sec.  200.302  Financial management.

    (a) Each state must expend and account for the Federal award in 
accordance with state laws and procedures for expending and accounting 
for the state's own funds. In addition, the state's and the other non-
Federal entity's financial management systems, including records 
documenting compliance with Federal statutes, regulations, and the terms 
and conditions of the Federal award, must be sufficient to permit the 
preparation of reports required by general and program-specific terms 
and conditions; and the tracing of funds to a level of expenditures 
adequate to establish that such funds have been used according to the 
Federal statutes, regulations, and the terms and conditions of the 
Federal award. See also Sec.  200.450.
    (b) The financial management system of each non-Federal entity must 
provide for the following (see also Sec. Sec.  200.334, 200.335, 
200.336, and 200.337):
    (1) Identification, in its accounts, of all Federal awards received 
and expended and the Federal programs under which they were received. 
Federal program and Federal award identification must include, as 
applicable, the Assistance Listings title and number, Federal award 
identification number and year, name of the Federal agency, and name of 
the pass-through entity, if any.
    (2) Accurate, current, and complete disclosure of the financial 
results of each Federal award or program in accordance with the 
reporting requirements set forth in Sec. Sec.  200.328 and 200.329. If a 
Federal awarding agency requires reporting on an accrual basis from a 
recipient that maintains its records on other than an accrual basis, the 
recipient must not be required to establish an accrual accounting 
system. This recipient may develop accrual data for its reports on the 
basis of an analysis of the documentation on hand. Similarly, a pass-
through entity must not require a subrecipient to establish an accrual 
accounting system and must allow the subrecipient to develop accrual 
data for its reports on the basis of an analysis of the documentation on 
hand.
    (3) Records that identify adequately the source and application of 
funds for federally-funded activities. These records must contain 
information pertaining to Federal awards, authorizations, financial 
obligations, unobligated balances, assets, expenditures, income and 
interest and be supported by source documentation.
    (4) Effective control over, and accountability for, all funds, 
property, and other assets. The non-Federal entity must adequately 
safeguard all assets and assure that they are used solely for authorized 
purposes. See Sec.  200.303.
    (5) Comparison of expenditures with budget amounts for each Federal 
award.
    (6) Written procedures to implement the requirements of Sec.  
200.305.
    (7) Written procedures for determining the allowability of costs in 
accordance with subpart E of this part and the terms and conditions of 
the Federal award.



Sec.  200.303  Internal controls.

    The non-Federal entity must:
    (a) Establish and maintain effective internal control over the 
Federal award that provides reasonable assurance that the non-Federal 
entity is managing the Federal award in compliance with Federal 
statutes, regulations, and the terms and conditions of the Federal 
award. These internal controls should be in compliance with guidance in 
``Standards for Internal Control in the Federal Government'' issued by 
the Comptroller General of the United States or the ``Internal Control 
Integrated Framework'', issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO).
    (b) Comply with the U.S. Constitution, Federal statutes, 
regulations, and the terms and conditions of the Federal awards.
    (c) Evaluate and monitor the non-Federal entity's compliance with 
statutes, regulations and the terms and conditions of Federal awards.
    (d) Take prompt action when instances of noncompliance are 
identified including noncompliance identified in audit findings.
    (e) Take reasonable measures to safeguard protected personally 
identifiable information and other information the Federal awarding 
agency or pass-

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through entity designates as sensitive or the non-Federal entity 
considers sensitive consistent with applicable Federal, State, local, 
and tribal laws regarding privacy and responsibility over 
confidentiality.



Sec.  200.304  Bonds.

    The Federal awarding agency may include a provision on bonding, 
insurance, or both in the following circumstances:
    (a) Where the Federal Government guarantees or insures the repayment 
of money borrowed by the recipient, the Federal awarding agency, at its 
discretion, may require adequate bonding and insurance if the bonding 
and insurance requirements of the non-Federal entity are not deemed 
adequate to protect the interest of the Federal Government.
    (b) The Federal awarding agency may require adequate fidelity bond 
coverage where the non-Federal entity lacks sufficient coverage to 
protect the Federal Government's interest.
    (c) Where bonds are required in the situations described above, the 
bonds must be obtained from companies holding certificates of authority 
as acceptable sureties, as prescribed in 31 CFR part 223.



Sec.  200.305  Federal payment.

    (a) For states, payments are governed by Treasury-State Cash 
Management Improvement Act (CMIA) agreements and default procedures 
codified at 31 CFR part 205 and Treasury Financial Manual (TFM) 4A-2000, 
``Overall Disbursing Rules for All Federal Agencies''.
    (b) For non-Federal entities other than states, payments methods 
must minimize the time elapsing between the transfer of funds from the 
United States Treasury or the pass-through entity and the disbursement 
by the non-Federal entity whether the payment is made by electronic 
funds transfer, or issuance or redemption of checks, warrants, or 
payment by other means. See also Sec.  200.302(b)(6). Except as noted 
elsewhere in this part, Federal agencies must require recipients to use 
only OMB-approved, governmentwide information collection requests to 
request payment.
    (1) The non-Federal entity must be paid in advance, provided it 
maintains or demonstrates the willingness to maintain both written 
procedures that minimize the time elapsing between the transfer of funds 
and disbursement by the non-Federal entity, and financial management 
systems that meet the standards for fund control and accountability as 
established in this part. Advance payments to a non-Federal entity must 
be limited to the minimum amounts needed and be timed to be in 
accordance with the actual, immediate cash requirements of the non-
Federal entity in carrying out the purpose of the approved program or 
project. The timing and amount of advance payments must be as close as 
is administratively feasible to the actual disbursements by the non-
Federal entity for direct program or project costs and the proportionate 
share of any allowable indirect costs. The non-Federal entity must make 
timely payment to contractors in accordance with the contract 
provisions.
    (2) Whenever possible, advance payments must be consolidated to 
cover anticipated cash needs for all Federal awards made by the Federal 
awarding agency to the recipient.
    (i) Advance payment mechanisms include, but are not limited to, 
Treasury check and electronic funds transfer and must comply with 
applicable guidance in 31 CFR part 208.
    (ii) Non-Federal entities must be authorized to submit requests for 
advance payments and reimbursements at least monthly when electronic 
fund transfers are not used, and as often as they like when electronic 
transfers are used, in accordance with the provisions of the Electronic 
Fund Transfer Act (15 U.S.C. 1693-1693r).
    (3) Reimbursement is the preferred method when the requirements in 
this paragraph (b) cannot be met, when the Federal awarding agency sets 
a specific condition per Sec.  200.208, or when the non-Federal entity 
requests payment by reimbursement. This method may be used on any 
Federal award for construction, or if the major portion of the 
construction project is accomplished through private market financing or 
Federal loans, and the Federal award constitutes a minor portion of the

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project. When the reimbursement method is used, the Federal awarding 
agency or pass-through entity must make payment within 30 calendar days 
after receipt of the billing, unless the Federal awarding agency or 
pass-through entity reasonably believes the request to be improper.
    (4) If the non-Federal entity cannot meet the criteria for advance 
payments and the Federal awarding agency or pass-through entity has 
determined that reimbursement is not feasible because the non-Federal 
entity lacks sufficient working capital, the Federal awarding agency or 
pass-through entity may provide cash on a working capital advance basis. 
Under this procedure, the Federal awarding agency or pass-through entity 
must advance cash payments to the non-Federal entity to cover its 
estimated disbursement needs for an initial period generally geared to 
the non-Federal entity's disbursing cycle. Thereafter, the Federal 
awarding agency or pass-through entity must reimburse the non-Federal 
entity for its actual cash disbursements. Use of the working capital 
advance method of payment requires that the pass-through entity provide 
timely advance payments to any subrecipients in order to meet the 
subrecipient's actual cash disbursements. The working capital advance 
method of payment must not be used by the pass-through entity if the 
reason for using this method is the unwillingness or inability of the 
pass-through entity to provide timely advance payments to the 
subrecipient to meet the subrecipient's actual cash disbursements.
    (5) To the extent available, the non-Federal entity must disburse 
funds available from program income (including repayments to a revolving 
fund), rebates, refunds, contract settlements, audit recoveries, and 
interest earned on such funds before requesting additional cash 
payments.
    (6) Unless otherwise required by Federal statutes, payments for 
allowable costs by non-Federal entities must not be withheld at any time 
during the period of performance unless the conditions of Sec.  200.208, 
subpart D of this part, including Sec.  200.339, or one or more of the 
following applies:
    (i) The non-Federal entity has failed to comply with the project 
objectives, Federal statutes, regulations, or the terms and conditions 
of the Federal award.
    (ii) The non-Federal entity is delinquent in a debt to the United 
States as defined in OMB Circular A-129, ``Policies for Federal Credit 
Programs and Non-Tax Receivables.'' Under such conditions, the Federal 
awarding agency or pass-through entity may, upon reasonable notice, 
inform the non-Federal entity that payments must not be made for 
financial obligations incurred after a specified date until the 
conditions are corrected or the indebtedness to the Federal Government 
is liquidated.
    (iii) A payment withheld for failure to comply with Federal award 
conditions, but without suspension of the Federal award, must be 
released to the non-Federal entity upon subsequent compliance. When a 
Federal award is suspended, payment adjustments will be made in 
accordance with Sec.  200.343.
    (iv) A payment must not be made to a non-Federal entity for amounts 
that are withheld by the non-Federal entity from payment to contractors 
to assure satisfactory completion of work. A payment must be made when 
the non-Federal entity actually disburses the withheld funds to the 
contractors or to escrow accounts established to assure satisfactory 
completion of work.
    (7) Standards governing the use of banks and other institutions as 
depositories of advance payments under Federal awards are as follows.
    (i) The Federal awarding agency and pass-through entity must not 
require separate depository accounts for funds provided to a non-Federal 
entity or establish any eligibility requirements for depositories for 
funds provided to the non-Federal entity. However, the non-Federal 
entity must be able to account for funds received, obligated, and 
expended.
    (ii) Advance payments of Federal funds must be deposited and 
maintained in insured accounts whenever possible.
    (8) The non-Federal entity must maintain advance payments of Federal 
awards in interest-bearing accounts, unless the following apply:

[[Page 127]]

    (i) The non-Federal entity receives less than $250,000 in Federal 
awards per year.
    (ii) The best reasonably available interest-bearing account would 
not be expected to earn interest in excess of $500 per year on Federal 
cash balances.
    (iii) 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.
    (iv) A foreign government or banking system prohibits or precludes 
interest-bearing accounts.
    (9) Interest earned amounts up to $500 per year may be retained by 
the non-Federal entity for administrative expense. Any additional 
interest earned on Federal advance payments deposited in interest-
bearing accounts must be remitted annually to the Department of Health 
and Human Services Payment Management System (PMS) through an electronic 
medium using either Automated Clearing House (ACH) network or a Fedwire 
Funds Service payment.
    (i) For returning interest on Federal awards paid through PMS, the 
refund should:
    (A) Provide an explanation stating that the refund is for interest;
    (B) List the PMS Payee Account Number(s) (PANs);
    (C) List the Federal award number(s) for which the interest was 
earned; and
    (D) Make returns payable to: Department of Health and Human 
Services.
    (ii) For returning interest on Federal awards not paid through PMS, 
the refund should:
    (A) Provide an explanation stating that the refund is for interest;
    (B) Include the name of the awarding agency;
    (C) List the Federal award number(s) for which the interest was 
earned; and
    (D) Make returns payable to: Department of Health and Human 
Services.
    (10) Funds, principal, and excess cash returns must be directed to 
the original Federal agency payment system. The non-Federal entity 
should review instructions from the original Federal agency payment 
system. Returns should include the following information:
    (i) Payee Account Number (PAN), if the payment originated from PMS, 
or Agency information to indicate whom to credit the funding if the 
payment originated from ASAP, NSF, or another Federal agency payment 
system.
    (ii) PMS document number and subaccount(s), if the payment 
originated from PMS, or relevant account numbers if the payment 
originated from another Federal agency payment system.
    (iii) The reason for the return (e.g., excess cash, funds not spent, 
interest, part interest part other, etc.)
    (11) When returning funds or interest to PMS you must include the 
following as applicable:
    (i) For ACH Returns:

Routing Number: 051036706
Account number: 303000
Bank Name and Location: Credit Gateway--ACH Receiver St. Paul, MN

    (ii) For Fedwire Returns \1\:

Routing Number: 021030004
Account number: 75010501
Bank Name and Location: Federal Reserve Bank Treas NYC/Funds Transfer 
    Division New York, NY

    \1\ Please note that the organization initiating payment is likely 
to incur a charge from their Financial Institution for this type of 
payment.
    (iii) For International ACH Returns:

Beneficiary Account: Federal Reserve Bank of New York/ITS (FRBNY/ITS)
Bank: Citibank N.A. (New York)
Swift Code: CITIUS33
Account Number: 36838868
Bank Address: 388 Greenwich Street, New York, NY 10013 USA
Payment Details (Line 70): Agency Locator Code (ALC): 75010501
Name (abbreviated when possible) and ALC Agency POC

    (iv) For recipients that do not have electronic remittance 
capability, please make check \2\ payable to: ``The Department of Health 
and Human Services.''

Mail Check to Treasury approved lockbox:
HHS Program Support Center, P.O. Box 530231, Atlanta, GA 30353-0231

    \2\ Please allow 4-6 weeks for processing of a payment by check to 
be applied to the appropriate PMS account.


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    (v) Questions can be directed to PMS at 877-614-5533 or 
[email protected].



Sec.  200.306  Cost sharing or matching.

    (a) Under Federal research proposals, voluntary committed cost 
sharing is not expected. It cannot be used as a factor during the merit 
review of applications or proposals, but may be considered if it is both 
in accordance with Federal awarding agency regulations and specified in 
a notice of funding opportunity. Criteria for considering voluntary 
committed cost sharing and any other program policy factors that may be 
used to determine who may receive a Federal award must be explicitly 
described in the notice of funding opportunity. See also Sec. Sec.  
200.414 and 200.204 and appendix I to this part.
    (b) For all Federal awards, any shared costs or matching funds and 
all contributions, including cash and third-party in-kind contributions, 
must be accepted as part of the non-Federal entity's cost sharing or 
matching when such contributions meet all of the following criteria:
    (1) Are verifiable from the non-Federal entity's records;
    (2) Are not included as contributions for any other Federal award;
    (3) Are necessary and reasonable for accomplishment of project or 
program objectives;
    (4) Are allowable under subpart E of this part;
    (5) Are not paid by the Federal Government under another Federal 
award, except where the Federal statute authorizing a program 
specifically provides that Federal funds made available for such program 
can be applied to matching or cost sharing requirements of other Federal 
programs;
    (6) Are provided for in the approved budget when required by the 
Federal awarding agency; and
    (7) Conform to other provisions of this part, as applicable.
    (c) Unrecovered indirect costs, including indirect costs on cost 
sharing or matching may be included as part of cost sharing or matching 
only with the prior approval of the Federal awarding agency. Unrecovered 
indirect cost means the difference between the amount charged to the 
Federal award and the amount which could have been charged to the 
Federal award under the non-Federal entity's approved negotiated 
indirect cost rate.
    (d) Values for non-Federal entity contributions of services and 
property must be established in accordance with the cost principles in 
subpart E of this part. If a Federal awarding agency authorizes the non-
Federal entity 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 must be the lesser of paragraph (d)(1) or 
(2) of this section.
    (1) The value of the remaining life of the property recorded in the 
non-Federal entity's accounting records at the time of donation.
    (2) The current fair market value. However, when there is sufficient 
justification, the Federal awarding agency may approve the use of the 
current fair market value of the donated property, even if it exceeds 
the value described in paragraph (d)(1) of this section at the time of 
donation.
    (e) Volunteer services furnished by third-party 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 third-
party volunteer services must be consistent with those paid for similar 
work by the non-Federal entity. In those instances in which the required 
skills are not found in the non-Federal entity, rates must be consistent 
with those paid for similar work in the labor market in which the non-
Federal entity competes for the kind of services involved. In either 
case, paid fringe benefits that are reasonable, necessary, allocable, 
and otherwise allowable may be included in the valuation.
    (f) When a third-party organization furnishes the services of an 
employee, these services must be valued at the employee's regular rate 
of pay plus an amount of fringe benefits that is reasonable, necessary, 
allocable, and otherwise allowable, and indirect costs at either the 
third-party organization's approved federally-negotiated indirect cost 
rate or, a rate in accordance with

[[Page 129]]

Sec.  200.414(d) provided these services employ the same skill(s) for 
which the employee is normally paid. Where donated services are treated 
as indirect costs, indirect cost rates will separate the value of the 
donated services so that reimbursement for the donated services will not 
be made.
    (g) Donated property from third parties may include such items as 
equipment, office supplies, laboratory supplies, or workshop and 
classroom supplies. Value assessed to donated property included in the 
cost sharing or matching share must not exceed the fair market value of 
the property at the time of the donation.
    (h) The method used for determining cost sharing or matching for 
third-party-donated equipment, buildings and land for which title passes 
to the non-Federal entity may differ according to the purpose of the 
Federal award, if paragraph (h)(1) or (2) of this section applies.
    (1) If the purpose of the Federal award is to assist the non-Federal 
entity in the acquisition of equipment, buildings or land, the aggregate 
value of the donated property may be claimed as cost sharing or 
matching.
    (2) If the purpose of the Federal award is to support activities 
that require the use of equipment, buildings or land, normally only 
depreciation charges for equipment and buildings may be made. However, 
the fair market value of equipment or other capital assets and fair 
rental charges for land may be allowed, provided that the Federal 
awarding agency has approved the charges. See also Sec.  200.420.
    (i) The value of donated property must be determined in accordance 
with the usual accounting policies of the non-Federal entity, with the 
following qualifications:
    (1) The value of donated land and buildings must not exceed its fair 
market value at the time of donation to the non-Federal entity 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 non-Federal entity as 
required by the Uniform Relocation Assistance and Real Property 
Acquisition Policies Act of 1970, as amended, (42 U.S.C. 4601-4655) 
(Uniform Act) except as provided in the implementing regulations at 49 
CFR part 24, ``Uniform Relocation Assistance And Real Property 
Acquisition For Federal And Federally-Assisted Programs''.
    (2) The value of donated equipment must 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 must 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 must not exceed its fair rental 
value.
    (j) For third-party in-kind contributions, the fair market value of 
goods and services must be documented and to the extent feasible 
supported by the same methods used internally by the non-Federal entity.
    (k) For IHEs, see also OMB memorandum M-01-06, dated January 5, 
2001, Clarification of OMB A-21 Treatment of Voluntary Uncommitted Cost 
Sharing and Tuition Remission Costs.



Sec.  200.307  Program income.

    (a) General. Non-Federal entities are encouraged to earn income to 
defray program costs where appropriate.
    (b) Cost of generating program income. If authorized by Federal 
regulations or the Federal award, costs incidental 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 Federal award.
    (c) Governmental revenues. Taxes, special assessments, levies, 
fines, and other such revenues raised by a non-Federal entity are not 
program income unless the revenues are specifically identified in the 
Federal award or Federal awarding agency regulations as program income.
    (d) Property. Proceeds from the sale of real property, equipment, or 
supplies are not program income; such proceeds will be handled in 
accordance with the requirements of the Property Standards Sec. Sec.  
200.311, 200.313, and 200.314, or as specifically identified in Federal 
statutes, regulations, or the terms and conditions of the Federal award.

[[Page 130]]

    (e) Use of program income. If the Federal awarding agency does not 
specify in its regulations or the terms and conditions of the Federal 
award, or give prior approval for how program income is to be used, 
paragraph (e)(1) of this section must apply. For Federal awards made to 
IHEs and nonprofit research institutions, if the Federal awarding agency 
does not specify in its regulations or the terms and conditions of the 
Federal award how program income is to be used, paragraph (e)(2) of this 
section must apply. In specifying alternatives to paragraphs (e)(1) and 
(2) of this section, the Federal awarding agency may distinguish between 
income earned by the recipient and income earned by subrecipients and 
between the sources, kinds, or amounts of income. When the Federal 
awarding agency authorizes the approaches in paragraphs (e)(2) and (3) 
of this section, program income in excess of any amounts specified must 
also be deducted from expenditures.
    (1) Deduction. Ordinarily program income must be deducted from total 
allowable costs to determine the net allowable costs. Program income 
must be used for current costs unless the Federal awarding agency 
authorizes otherwise. Program income that the non-Federal entity did not 
anticipate at the time of the Federal award must be used to reduce the 
Federal award and non-Federal entity contributions rather than to 
increase the funds committed to the project.
    (2) Addition. With prior approval of the Federal awarding agency 
(except for IHEs and nonprofit research institutions, as described in 
this paragraph (e)) program income may be added to the Federal award by 
the Federal agency and the non-Federal entity. The program income must 
be used for the purposes and under the conditions of the Federal award.
    (3) Cost sharing or matching. With prior approval of the Federal 
awarding agency, program income may be used to meet the cost sharing or 
matching requirement of the Federal award. The amount of the Federal 
award remains the same.
    (f) Income after the period of performance. There are no Federal 
requirements governing the disposition of income earned after the end of 
the period of performance for the Federal award, unless the Federal 
awarding agency regulations or the terms and conditions of the Federal 
award provide otherwise. The Federal awarding agency may negotiate 
agreements with recipients regarding appropriate uses of income earned 
after the period of performance as part of the grant closeout process. 
See also Sec.  200.344.
    (g) License fees and royalties. Unless the Federal statute, 
regulations, or terms and conditions for the Federal award provide 
otherwise, the non-Federal entity is not accountable to the Federal 
awarding agency with respect to program income earned from license fees 
and royalties for copyrighted material, patents, patent applications, 
trademarks, and inventions made under a Federal award to which 37 CFR 
part 401 is applicable.



Sec.  200.308  Revision of budget and program plans.

    (a) The approved budget for the Federal award summarizes the 
financial aspects of the project or program as approved during the 
Federal award process. It may include either the Federal and non-Federal 
share (see definition for Federal share in Sec.  200.1) or only the 
Federal share, depending upon Federal awarding agency requirements. The 
budget and program plans include considerations for performance and 
program evaluation purposes whenever required in accordance with the 
terms and conditions of the award.
    (b) Recipients are required to report deviations from budget or 
project scope or objective, and request prior approvals from Federal 
awarding agencies for budget and program plan revisions, in accordance 
with this section.
    (c) For non-construction Federal awards, recipients must request 
prior approvals from Federal awarding agencies for 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 the 
Federal award.

[[Page 131]]

    (3) The disengagement from the project 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 inclusion, unless waived by the Federal awarding agency, of 
costs that require prior approval in accordance with subpart E of this 
part as applicable.
    (5) The transfer of funds budgeted for participant support costs to 
other categories of expense.
    (6) Unless described in the application and funded in the approved 
Federal awards, the subawarding, transferring or contracting out of any 
work under a Federal award, including fixed amount subawards as 
described in Sec.  200.333. This provision does not apply to the 
acquisition of supplies, material, equipment or general support 
services.
    (7) Changes in the approved cost-sharing or matching provided by the 
non-Federal entity.
    (8) The need arises for additional Federal funds to complete the 
project.
    (d) No other prior approval requirements for specific items may be 
imposed unless an exception has been approved by OMB. See also 
Sec. Sec.  200.102 and 200.407.
    (e) Except for requirements listed in paragraphs (c)(1) through (8) 
of this section, the Federal awarding agency is authorized, at its 
option, to waive other cost-related and administrative prior written 
approvals contained in subparts D and E of this part. Such waivers may 
include authorizing recipients to do any one or more of the following:
    (1) Incur project costs 90 calendar days before the Federal awarding 
agency makes the Federal award. Expenses more than 90 calendar days pre-
award require prior approval of the Federal awarding agency. All costs 
incurred before the Federal awarding agency makes the Federal award are 
at the recipient's risk (i.e., the Federal awarding agency is not 
required to reimburse such costs if for any reason the recipient does 
not receive a Federal award or if the Federal award is less than 
anticipated and inadequate to cover such costs). See also Sec.  200.458.
    (2) Initiate a one-time extension of the period of performance by up 
to 12 months unless one or more of the conditions outlined in paragraphs 
(e)(2)(i) through (iii) of this section apply. For one-time extensions, 
the recipient must notify the Federal awarding agency in writing with 
the supporting reasons and revised period of performance at least 10 
calendar days before the end of the period of performance specified in 
the Federal award. This one-time extension must not be exercised merely 
for the purpose of using unobligated balances. Extensions require 
explicit prior Federal awarding agency approval when:
    (i) The terms and conditions of the Federal award prohibit the 
extension.
    (ii) The extension requires additional Federal funds.
    (iii) The extension involves any change in the approved objectives 
or scope of the project.
    (3) Carry forward unobligated balances to subsequent budget periods.
    (4) For Federal awards that support research, unless the Federal 
awarding agency provides otherwise in the Federal award or in the 
Federal awarding agency's regulations, the prior approval requirements 
described in this paragraph (e) are automatically waived (i.e., 
recipients need not obtain such prior approvals) unless one of the 
conditions included in paragraph (e)(2) of this section applies.
    (f) The Federal awarding agency may, at its option, restrict the 
transfer of funds among direct cost categories or programs, functions 
and activities for Federal awards in which the Federal share of the 
project exceeds the simplified acquisition threshold and the cumulative 
amount of such transfers exceeds or is expected to exceed 10 percent of 
the total budget as last approved by the Federal awarding agency. The 
Federal awarding agency cannot permit a transfer that would cause any 
Federal appropriation to be used for purposes other than those 
consistent with the appropriation.
    (g) All other changes to non-construction budgets, except for the 
changes described in paragraph (c) of this section, do not require prior 
approval (see also Sec.  200.407).

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    (h) For construction Federal awards, the recipient must request 
prior written approval promptly from the Federal awarding agency for 
budget revisions whenever paragraph (h)(1), (2), or (3) of this section 
applies:
    (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.
    (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 subpart E.
    (4) No other prior approval requirements for budget revisions may be 
imposed unless an exception has been approved by OMB.
    (5) When a Federal awarding agency makes a Federal award that 
provides support for construction and non-construction work, the Federal 
awarding agency may require the recipient to obtain prior approval from 
the Federal awarding agency before making any fund or budget transfers 
between the two types of work supported.
    (i) When requesting approval for budget revisions, the recipient 
must use the same format for budget information that was used in the 
application, unless the Federal awarding agency indicates a letter of 
request suffices.
    (j) Within 30 calendar days from the date of receipt of the request 
for budget revisions, the Federal awarding agency must 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 Federal awarding agency must inform the recipient in 
writing of the date when the recipient may expect the decision.



Sec.  200.309  Modifications to Period of Performance.

    If a Federal awarding agency or pass-through entity approves an 
extension, or if a recipient extends under Sec.  200.308(e)(2), the 
Period of Performance will be amended to end at the completion of the 
extension. If a termination occurs, the Period of Performance will be 
amended to end upon the effective date of termination. If a renewal 
award is issued, a distinct Period of Performance will begin.

                           Property Standards



Sec.  200.310  Insurance coverage.

    The non-Federal entity must, at a minimum, provide the equivalent 
insurance coverage for real property and equipment acquired or improved 
with Federal funds as provided to property owned by the non-Federal 
entity. Federally-owned property need not be insured unless required by 
the terms and conditions of the Federal award.



Sec.  200.311  Real property.

    (a) Title. Subject to the requirements and conditions set forth in 
this section, title to real property acquired or improved under a 
Federal award will vest upon acquisition in the non-Federal entity.
    (b) Use. Except as otherwise provided by Federal statutes or by the 
Federal awarding agency, real property will be used for the originally 
authorized purpose as long as needed for that purpose, during which time 
the non-Federal entity must not dispose of or encumber its title or 
other interests.
    (c) Disposition. When real property is no longer needed for the 
originally authorized purpose, the non-Federal entity must obtain 
disposition instructions from the Federal awarding agency or pass-
through entity. The instructions must provide for one of the following 
alternatives:
    (1) Retain title after compensating the Federal awarding agency. The 
amount paid to the Federal awarding agency will be computed by applying 
the Federal awarding agency's percentage of participation in the cost of 
the original purchase (and costs of any improvements) to the fair market 
value of the property. However, in those situations where the non-
Federal entity is disposing of real property acquired or improved with a 
Federal award and acquiring replacement real property under the same 
Federal award, the net proceeds from the disposition may be used as an 
offset to the cost of the replacement property.
    (2) Sell the property and compensate the Federal awarding agency. 
The amount due to the Federal awarding

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agency will be calculated by applying the Federal awarding agency's 
percentage of participation in the cost of the original purchase (and 
cost of any improvements) to the proceeds of the sale after deduction of 
any actual and reasonable selling and fixing-up expenses. If the Federal 
award has not been closed out, the net proceeds from sale may be offset 
against the original cost of the property. When the non-Federal entity 
is directed to sell property, sales procedures must be followed that 
provide for competition to the extent practicable and result in the 
highest possible return.
    (3) Transfer title to the Federal awarding agency or to a third 
party designated/approved by the Federal awarding agency. The non-
Federal entity is entitled to be paid an amount calculated by applying 
the non-Federal entity's percentage of participation in the purchase of 
the real property (and cost of any improvements) to the current fair 
market value of the property.



Sec.  200.312  Federally-owned and exempt property.

    (a) Title to federally-owned property remains vested in the Federal 
Government. The non-Federal entity must submit annually an inventory 
listing of federally-owned property in its custody to the Federal 
awarding agency. Upon completion of the Federal award or when the 
property is no longer needed, the non-Federal entity must report the 
property to the Federal awarding agency for further Federal agency 
utilization.
    (b) If the Federal awarding agency has no further need for the 
property, it must declare the property excess and report it for disposal 
to the appropriate Federal disposal authority, unless the Federal 
awarding agency has statutory authority to dispose of the property by 
alternative methods (e.g., the authority provided by the Federal 
Technology Transfer Act (15 U.S.C. 3710 (i)) to donate research 
equipment to educational and nonprofit organizations in accordance with 
Executive Order 12999, ``Educational Technology: Ensuring Opportunity 
for All Children in the Next Century.''). The Federal awarding agency 
must issue appropriate instructions to the non-Federal entity.
    (c) Exempt property means property acquired under a Federal award 
where the Federal awarding agency has chosen to vest title to the 
property to the non-Federal entity without further responsibility to the 
Federal Government, based upon the explicit terms and conditions of the 
Federal award. The Federal awarding agency may exercise this option when 
statutory authority exists. Absent statutory authority and specific 
terms and conditions of the Federal award, title to exempt property 
acquired under the Federal award remains with the Federal Government.



Sec.  200.313  Equipment.

    See also Sec.  200.439.
    (a) Title. Subject to the requirements and conditions set forth in 
this section, title to equipment acquired under a Federal award will 
vest upon acquisition in the non-Federal entity. Unless a statute 
specifically authorizes the Federal agency to vest title in the non-
Federal entity without further responsibility to the Federal Government, 
and the Federal agency elects to do so, the title must be a conditional 
title. Title must vest in the non-Federal entity subject to the 
following conditions:
    (1) Use the equipment for the authorized purposes of the project 
during the period of performance, or until the property is no longer 
needed for the purposes of the project.
    (2) Not encumber the property without approval of the Federal 
awarding agency or pass-through entity.
    (3) Use and dispose of the property in accordance with paragraphs 
(b), (c), and (e) of this section.
    (b) General. A state must use, manage and dispose of equipment 
acquired under a Federal award by the state in accordance with state 
laws and procedures. Other non-Federal entities must follow paragraphs 
(c) through (e) of this section.
    (c) Use. (1) Equipment must be used by the non-Federal entity in the 
program or project for which it was acquired as long as needed, whether 
or not the project or program continues to be supported by the Federal 
award, and the non-Federal entity must not encumber the property without 
prior

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approval of the Federal awarding agency. The Federal awarding agency may 
require the submission of the applicable common form for equipment. When 
no longer needed for the original program or project, the equipment may 
be used in other activities supported by the Federal awarding agency, in 
the following order of priority:
    (i) Activities under a Federal award from the Federal awarding 
agency which funded the original program or project, then
    (ii) Activities under Federal awards from other Federal awarding 
agencies. This includes consolidated equipment for information 
technology systems.
    (2) During the time that equipment is used on the project or program 
for which it was acquired, the non-Federal entity must also make 
equipment available for use on other projects or programs currently or 
previously supported by the Federal Government, provided that such use 
will not interfere with the work on the projects or program for which it 
was originally acquired. First preference for other use must be given to 
other programs or projects supported by Federal awarding agency that 
financed the equipment and second preference must be given to programs 
or projects under Federal awards from other Federal awarding agencies. 
Use for non-federally-funded programs or projects is also permissible. 
User fees should be considered if appropriate.
    (3) Notwithstanding the encouragement in Sec.  200.307 to earn 
program income, the non-Federal entity must not use equipment acquired 
with the Federal award to provide services 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.
    (4) When acquiring replacement equipment, the non-Federal entity may 
use the equipment to be replaced as a trade-in or sell the property and 
use the proceeds to offset the cost of the replacement property.
    (d) Management requirements. Procedures for managing equipment 
(including replacement equipment), whether acquired in whole or in part 
under a Federal award, until disposition takes place will, as a minimum, 
meet the following requirements:
    (1) Property records must be maintained that include a description 
of the property, a serial number or other identification number, the 
source of funding for the property (including the FAIN), who holds 
title, the acquisition date, and cost of the property, percentage of 
Federal participation in the project costs for the Federal award under 
which the property was acquired, the location, use and condition of the 
property, and any ultimate disposition data including the date of 
disposal and sale price of the property.
    (2) A physical inventory of the property must be taken and the 
results reconciled with the property records at least once every two 
years.
    (3) A control system must be developed to ensure adequate safeguards 
to prevent loss, damage, or theft of the property. Any loss, damage, or 
theft must be investigated.
    (4) Adequate maintenance procedures must be developed to keep the 
property in good condition.
    (5) If the non-Federal entity is authorized or required to sell the 
property, proper sales procedures must be established to ensure the 
highest possible return.
    (e) Disposition. When original or replacement equipment acquired 
under a Federal award is no longer needed for the original project or 
program or for other activities currently or previously supported by a 
Federal awarding agency, except as otherwise provided in Federal 
statutes, regulations, or Federal awarding agency disposition 
instructions, the non-Federal entity must request disposition 
instructions from the Federal awarding agency if required by the terms 
and conditions of the Federal award. Disposition of the equipment will 
be made as follows, in accordance with Federal awarding agency 
disposition instructions:
    (1) Items of equipment with a current per unit fair market value of 
$5,000 or less may be retained, sold or otherwise disposed of with no 
further responsibility to the Federal awarding agency.
    (2) Except as provided in Sec.  200.312(b), or if the Federal 
awarding agency fails

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to provide requested disposition instructions within 120 days, items of 
equipment with a current per-unit fair market value in excess of $5,000 
may be retained by the non-Federal entity or sold. The Federal awarding 
agency is entitled to an amount calculated by multiplying the current 
market value or proceeds from sale by the Federal awarding agency's 
percentage of participation in the cost of the original purchase. If the 
equipment is sold, the Federal awarding agency may permit the non-
Federal entity to deduct and retain from the Federal share $500 or ten 
percent of the proceeds, whichever is less, for its selling and handling 
expenses.
    (3) The non-Federal entity may transfer title to the property to the 
Federal Government or to an eligible third party provided that, in such 
cases, the non-Federal entity must be entitled to compensation for its 
attributable percentage of the current fair market value of the 
property.
    (4) In cases where a non-Federal entity fails to take appropriate 
disposition actions, the Federal awarding agency may direct the non-
Federal entity to take disposition actions.



Sec.  200.314  Supplies.

    See also Sec.  200.453.
    (a) Title to supplies will vest in the non-Federal entity 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 
Federal award, the non-Federal entity must retain the supplies for use 
on other activities or sell them, but must, in either case, compensate 
the Federal Government for its share. The amount of compensation must be 
computed in the same manner as for equipment. See Sec.  200.313 (e)(2) 
for the calculation methodology.
    (b) As long as the Federal Government retains an interest in the 
supplies, the non-Federal entity must not use supplies acquired under a 
Federal award to provide services to other organizations for a fee that 
is less than private companies charge for equivalent services, unless 
specifically authorized by Federal statute.



Sec.  200.315  Intangible property.

    (a) Title to intangible property (see definition for Intangible 
property in Sec.  200.1) acquired under a Federal award vests upon 
acquisition in the non-Federal entity. The non-Federal entity must use 
that property for the originally-authorized purpose, and must not 
encumber the property without approval of the Federal awarding agency. 
When no longer needed for the originally authorized purpose, disposition 
of the intangible property must occur in accordance with the provisions 
in Sec.  200.313(e).
    (b) The non-Federal entity may copyright any work that is subject to 
copyright and was developed, or for which ownership was acquired, under 
a Federal award. The Federal awarding agency reserves 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.
    (c) The non-Federal entity is 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 Awards, Contracts and Cooperative Agreements.''
    (d) The Federal Government has the right to:
    (1) Obtain, reproduce, publish, or otherwise use the data produced 
under a Federal award; and
    (2) Authorize others to receive, reproduce, publish, or otherwise 
use such data for Federal purposes.
    (e)(1) In response to a Freedom of Information Act (FOIA) request 
for research data relating to published research findings produced under 
a Federal award that were used by the Federal Government in developing 
an agency action that has the force and effect of law, the Federal 
awarding agency must request, and the non-Federal entity must 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 Federal awarding agency obtains the research data solely in 
response to a FOIA request,

[[Page 136]]

the Federal awarding 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 Federal agency and the non-
Federal entity. This fee is in addition to any fees the Federal awarding 
agency may assess under the FOIA (5 U.S.C. 552(a)(4)(A)).
    (2) Published research findings means when:
    (i) Research findings are published in a peer-reviewed scientific or 
technical journal; or
    (ii) A Federal agency publicly and officially cites the research 
findings in support of an agency action that has the force and effect of 
law. ``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.
    (3) Research data means 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:
    (i) 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
    (ii) 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.



Sec.  200.316  Property trust relationship.

    Real property, equipment, and intangible property, that are acquired 
or improved with a Federal award must be held in trust by the non-
Federal entity as trustee for the beneficiaries of the project or 
program under which the property was acquired or improved. The Federal 
awarding agency may require the non-Federal entity to record liens or 
other appropriate notices of record to indicate that personal or real 
property has been acquired or improved with a Federal award and that use 
and disposition conditions apply to the property.

                          Procurement Standards



Sec.  200.317  Procurements by states.

    When procuring property and services under a Federal award, a State 
must follow the same policies and procedures it uses for procurements 
from its non-Federal funds. The State will comply with Sec. Sec.  
200.321, 200.322, and 200.323 and ensure that every purchase order or 
other contract includes any clauses required by Sec.  200.327. All other 
non-Federal entities, including subrecipients of a State, must follow 
the procurement standards in Sec. Sec.  200.318 through 200.327.



Sec.  200.318  General procurement standards.

    (a) The non-Federal entity must have and use documented procurement 
procedures, consistent with State, local, and tribal laws and 
regulations and the standards of this section, for the acquisition of 
property or services required under a Federal award or subaward. The 
non-Federal entity's documented procurement procedures must conform to 
the procurement standards identified in Sec. Sec.  200.317 through 
200.327.
    (b) Non-Federal entities must maintain oversight to ensure that 
contractors perform in accordance with the terms, conditions, and 
specifications of their contracts or purchase orders.
    (c)(1) The non-Federal entity must maintain written standards of 
conduct covering conflicts of interest and governing the actions of its 
employees engaged in the selection, award and administration of 
contracts. No employee, officer, or agent may participate in the 
selection, award, or administration of a contract supported by a Federal 
award if he or she has a real or apparent conflict of interest. Such a 
conflict of interest would arise when the employee, officer, or agent, 
any

[[Page 137]]

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 or a tangible 
personal benefit from a firm considered for a contract. The officers, 
employees, and agents of the non-Federal entity may neither solicit nor 
accept gratuities, favors, or anything of monetary value from 
contractors or parties to subcontracts. However, non-Federal entities 
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 must provide for disciplinary actions to be applied 
for violations of such standards by officers, employees, or agents of 
the non-Federal entity.
    (2) If the non-Federal entity has a parent, affiliate, or subsidiary 
organization that is not a State, local government, or Indian tribe, the 
non-Federal entity must also maintain written standards of conduct 
covering organizational conflicts of interest. Organizational conflicts 
of interest means that because of relationships with a parent company, 
affiliate, or subsidiary organization, the non-Federal entity is unable 
or appears to be unable to be impartial in conducting a procurement 
action involving a related organization.
    (d) The non-Federal entity's procedures must avoid acquisition of 
unnecessary or duplicative items. Consideration should be given to 
consolidating or breaking out procurements to obtain a more economical 
purchase. Where appropriate, an analysis will be made of lease versus 
purchase alternatives, and any other appropriate analysis to determine 
the most economical approach.
    (e) To foster greater economy and efficiency, and in accordance with 
efforts to promote cost-effective use of shared services across the 
Federal Government, the non-Federal entity is encouraged to enter into 
state and local intergovernmental agreements or inter-entity agreements 
where appropriate for procurement or use of common or shared goods and 
services. Competition requirements will be met with applied to 
documented procurement actions using strategic sourcing, shared 
services, and other similar procurement arrangements.
    (f) The non-Federal entity is encouraged to use Federal excess and 
surplus property in lieu of purchasing new equipment and property 
whenever such use is feasible and reduces project costs.
    (g) The non-Federal entity is encouraged to use value engineering 
clauses in contracts for construction projects of sufficient size to 
offer reasonable opportunities for cost reductions. Value engineering is 
a systematic and creative analysis of each contract item or task to 
ensure that its essential function is provided at the overall lower 
cost.
    (h) The non-Federal entity must award contracts only to responsible 
contractors possessing the ability to perform successfully under the 
terms and conditions of a proposed procurement. Consideration will be 
given to such matters as contractor integrity, compliance with public 
policy, record of past performance, and financial and technical 
resources. See also Sec.  200.214.
    (i) The non-Federal entity must maintain records sufficient to 
detail the history of procurement. These records will include, but are 
not necessarily limited to, the following: Rationale for the method of 
procurement, selection of contract type, contractor selection or 
rejection, and the basis for the contract price.
    (j)(1) The non-Federal entity may use a time-and-materials type 
contract only after a determination that no other contract is suitable 
and if the contract includes a ceiling price that the contractor exceeds 
at its own risk. Time-and-materials type contract means a contract whose 
cost to a non-Federal entity is the sum of:
    (i) The actual cost of materials; and
    (ii) Direct labor hours charged at fixed hourly rates that reflect 
wages, general and administrative expenses, and profit.
    (2) Since this formula generates an open-ended contract price, a 
time-and-materials contract provides no positive profit incentive to the 
contractor for cost control or labor efficiency. Therefore, each 
contract must set a ceiling price that the contractor exceeds at its

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own risk. Further, the non-Federal entity awarding such a contract must 
assert a high degree of oversight in order to obtain reasonable 
assurance that the contractor is using efficient methods and effective 
cost controls.
    (k) The non-Federal entity alone must be responsible, in accordance 
with good administrative practice and sound business judgment, for the 
settlement of all contractual and administrative issues arising out of 
procurements. These issues include, but are not limited to, source 
evaluation, protests, disputes, and claims. These standards do not 
relieve the non-Federal entity of any contractual responsibilities under 
its contracts. The Federal awarding agency will not substitute its 
judgment for that of the non-Federal entity unless the matter is 
primarily a Federal concern. Violations of law will be referred to the 
local, state, or Federal authority having proper jurisdiction.



Sec.  200.319  Competition.

    (a) All procurement transactions for the acquisition of property or 
services required under a Federal award must be conducted in a manner 
providing full and open competition consistent with the standards of 
this section and Sec.  200.320.
    (b) In order to ensure objective contractor performance and 
eliminate unfair competitive advantage, contractors that develop or 
draft specifications, requirements, statements of work, or invitations 
for bids or requests for proposals must be excluded from competing for 
such procurements. Some of the situations considered to be restrictive 
of competition include but are not limited to:
    (1) Placing unreasonable requirements on firms in order for them to 
qualify to do business;
    (2) Requiring unnecessary experience and excessive bonding;
    (3) Noncompetitive pricing practices between firms or between 
affiliated companies;
    (4) Noncompetitive contracts to consultants that are on retainer 
contracts;
    (5) Organizational conflicts of interest;
    (6) Specifying only a ``brand name'' product instead of allowing 
``an equal'' product to be offered and describing the performance or 
other relevant requirements of the procurement; and
    (7) Any arbitrary action in the procurement process.
    (c) The non-Federal entity must conduct procurements in a manner 
that prohibits the use of statutorily or administratively imposed state, 
local, or tribal geographical preferences in the evaluation of bids or 
proposals, except in those cases where applicable Federal statutes 
expressly mandate or encourage geographic preference. Nothing in this 
section preempts state licensing laws. When contracting for 
architectural and engineering (A/E) services, geographic location may be 
a selection criterion provided its application leaves an appropriate 
number of qualified firms, given the nature and size of the project, to 
compete for the contract.
    (d) The non-Federal entity must have written procedures for 
procurement transactions. These procedures must ensure that all 
solicitations:
    (1) Incorporate a clear and accurate description of the technical 
requirements for the material, product, or service to be procured. Such 
description must not, in competitive procurements, contain features 
which unduly restrict competition. The description may include a 
statement of the qualitative nature of the material, product or service 
to be procured and, when necessary, must set forth those minimum 
essential characteristics and standards to which it must conform if it 
is to satisfy its intended use. Detailed product specifications should 
be avoided if at all possible. When it is impractical or uneconomical to 
make a clear and accurate description of the technical requirements, a 
``brand name or equivalent'' description may be used as a means to 
define the performance or other salient requirements of procurement. The 
specific features of the named brand which must be met by offers must be 
clearly stated; and
    (2) Identify all requirements which the offerors must fulfill and 
all other factors to be used in evaluating bids or proposals.
    (e) The non-Federal entity must ensure that all prequalified lists 
of persons, firms, or products which are used

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in acquiring goods and services are current and include enough qualified 
sources to ensure maximum open and free competition. Also, the non-
Federal entity must not preclude potential bidders from qualifying 
during the solicitation period.
    (f) Noncompetitive procurements can only be awarded in accordance 
with Sec.  200.320(c).



Sec.  200.320  Methods of procurement to be followed.

    The non-Federal entity must have and use documented procurement 
procedures, consistent with the standards of this section and Sec. Sec.  
200.317, 200.318, and 200.319 for any of the following methods of 
procurement used for the acquisition of property or services required 
under a Federal award or sub-award.
    (a) Informal procurement methods. When the value of the procurement 
for property or services under a Federal award does not exceed the 
simplified acquisition threshold (SAT), as defined in Sec.  200.1, or a 
lower threshold established by a non-Federal entity, formal procurement 
methods are not required. The non-Federal entity may use informal 
procurement methods to expedite the completion of its transactions and 
minimize the associated administrative burden and cost. The informal 
methods used for procurement of property or services at or below the SAT 
include:
    (1) Micro-purchases--(i) Distribution. The acquisition of supplies 
or services, the aggregate dollar amount of which does not exceed the 
micro-purchase threshold (See the definition of micro-purchase in Sec.  
200.1). To the maximum extent practicable, the non-Federal entity should 
distribute micro-purchases equitably among qualified suppliers.
    (ii) Micro-purchase awards. Micro-purchases may be awarded without 
soliciting competitive price or rate quotations if the non-Federal 
entity considers the price to be reasonable based on research, 
experience, purchase history or other information and documents it files 
accordingly. Purchase cards can be used for micro-purchases if 
procedures are documented and approved by the non-Federal entity.
    (iii) Micro-purchase thresholds. The non-Federal entity is 
responsible for determining and documenting an appropriate micro-
purchase threshold based on internal controls, an evaluation of risk, 
and its documented procurement procedures. The micro-purchase threshold 
used by the non-Federal entity must be authorized or not prohibited 
under State, local, or tribal laws or regulations. Non-Federal entities 
may establish a threshold higher than the Federal threshold established 
in the Federal Acquisition Regulations (FAR) in accordance with 
paragraphs (a)(1)(iv) and (v) of this section.
    (iv) Non-Federal entity increase to the micro-purchase threshold up 
to $50,000. Non-Federal entities may establish a threshold higher than 
the micro-purchase threshold identified in the FAR in accordance with 
the requirements of this section. The non-Federal entity may self-
certify a threshold up to $50,000 on an annual basis and must maintain 
documentation to be made available to the Federal awarding agency and 
auditors in accordance with Sec.  200.334. The self-certification must 
include a justification, clear identification of the threshold, and 
supporting documentation of any of the following:
    (A) A qualification as a low-risk auditee, in accordance with the 
criteria in Sec.  200.520 for the most recent audit;
    (B) An annual internal institutional risk assessment to identify, 
mitigate, and manage financial risks; or,
    (C) For public institutions, a higher threshold consistent with 
State law.
    (v) Non-Federal entity increase to the micro-purchase threshold over 
$50,000. Micro-purchase thresholds higher than $50,000 must be approved 
by the cognizant agency for indirect costs. The non-federal entity must 
submit a request with the requirements included in paragraph (a)(1)(iv) 
of this section. The increased threshold is valid until there is a 
change in status in which the justification was approved.
    (2) Small purchases--(i) Small purchase procedures. The acquisition 
of property or services, the aggregate dollar amount of which is higher 
than the micro-purchase threshold but does not exceed the simplified 
acquisition threshold. If small purchase procedures are used, price or 
rate quotations must

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be obtained from an adequate number of qualified sources as determined 
appropriate by the non-Federal entity.
    (ii) Simplified acquisition thresholds. The non-Federal entity is 
responsible for determining an appropriate simplified acquisition 
threshold based on internal controls, an evaluation of risk and its 
documented procurement procedures which must not exceed the threshold 
established in the FAR. When applicable, a lower simplified acquisition 
threshold used by the non-Federal entity must be authorized or not 
prohibited under State, local, or tribal laws or regulations.
    (b) Formal procurement methods. When the value of the procurement 
for property or services under a Federal financial assistance award 
exceeds the SAT, or a lower threshold established by a non-Federal 
entity, formal procurement methods are required. Formal procurement 
methods require following documented procedures. Formal procurement 
methods also require public advertising unless a non-competitive 
procurement can be used in accordance with Sec.  200.319 or paragraph 
(c) of this section. The following formal methods of procurement are 
used for procurement of property or services above the simplified 
acquisition threshold or a value below the simplified acquisition 
threshold the non-Federal entity determines to be appropriate:
    (1) Sealed bids. A procurement method in which bids are publicly 
solicited and a firm fixed-price contract (lump sum or unit price) is 
awarded to the responsible bidder whose bid, conforming with all the 
material terms and conditions of the invitation for bids, is the lowest 
in price. The sealed bids method is the preferred method for procuring 
construction, if the conditions.
    (i) In order for sealed bidding to be feasible, the following 
conditions should be present:
    (A) A complete, adequate, and realistic specification or purchase 
description is available;
    (B) Two or more responsible bidders are willing and able to compete 
effectively for the business; and
    (C) The procurement lends itself to a firm fixed price contract and 
the selection of the successful bidder can be made principally on the 
basis of price.
    (ii) If sealed bids are used, the following requirements apply:
    (A) Bids must be solicited from an adequate number of qualified 
sources, providing them sufficient response time prior to the date set 
for opening the bids, for local, and tribal governments, the invitation 
for bids must be publicly advertised;
    (B) The invitation for bids, which will include any specifications 
and pertinent attachments, must define the items or services in order 
for the bidder to properly respond;
    (C) All bids will be opened at the time and place prescribed in the 
invitation for bids, and for local and tribal governments, the bids must 
be opened publicly;
    (D) A firm fixed price contract award will be made in writing to the 
lowest responsive and responsible bidder. Where specified in bidding 
documents, factors such as discounts, transportation cost, and life 
cycle costs must be considered in determining which bid is lowest. 
Payment discounts will only be used to determine the low bid when prior 
experience indicates that such discounts are usually taken advantage of; 
and
    (E) Any or all bids may be rejected if there is a sound documented 
reason.
    (2) Proposals. A procurement method in which either a fixed price or 
cost-reimbursement type contract is awarded. Proposals are generally 
used when conditions are not appropriate for the use of sealed bids. 
They are awarded in accordance with the following requirements:
    (i) Requests for proposals must be publicized and identify all 
evaluation factors and their relative importance. Proposals must be 
solicited from an adequate number of qualified offerors. Any response to 
publicized requests for proposals must be considered to the maximum 
extent practical;
    (ii) The non-Federal entity must have a written method for 
conducting technical evaluations of the proposals received and making 
selections;
    (iii) Contracts must be awarded to the responsible offeror whose 
proposal is most advantageous to the non-Federal entity, with price and 
other factors considered; and

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    (iv) The non-Federal entity may use competitive proposal procedures 
for qualifications-based procurement of architectural/engineering (A/E) 
professional services whereby offeror's qualifications are evaluated and 
the most qualified offeror is selected, subject to negotiation of fair 
and reasonable compensation. The method, where price is not used as a 
selection factor, can only be used in procurement of A/E professional 
services. It cannot be used to purchase other types of services though 
A/E firms that are a potential source to perform the proposed effort.
    (c) Noncompetitive procurement. There are specific circumstances in 
which noncompetitive procurement can be used. Noncompetitive procurement 
can only be awarded if one or more of the following circumstances apply:
    (1) The acquisition of property or services, the aggregate dollar 
amount of which does not exceed the micro-purchase threshold (see 
paragraph (a)(1) of this section);
    (2) The item is available only from a single source;
    (3) The public exigency or emergency for the requirement will not 
permit a delay resulting from publicizing a competitive solicitation;
    (4) The Federal awarding agency or pass-through entity expressly 
authorizes a noncompetitive procurement in response to a written request 
from the non-Federal entity; or
    (5) After solicitation of a number of sources, competition is 
determined inadequate.



Sec.  200.321  Contracting with small and minority businesses, 
women's business enterprises, and labor surplus area firms.

    (a) The non-Federal entity must take all necessary affirmative steps 
to assure that minority businesses, women's business enterprises, and 
labor surplus area firms are used when possible.
    (b) Affirmative steps must include:
    (1) Placing qualified small and minority businesses and women's 
business enterprises on solicitation lists;
    (2) Assuring that small and minority businesses, and women's 
business enterprises are solicited whenever they are potential sources;
    (3) Dividing total requirements, when economically feasible, into 
smaller tasks or quantities to permit maximum participation by small and 
minority businesses, and women's business enterprises;
    (4) Establishing delivery schedules, where the requirement permits, 
which encourage participation by small and minority businesses, and 
women's business enterprises;
    (5) Using the services and assistance, as appropriate, of such 
organizations as the Small Business Administration and the Minority 
Business Development Agency of the Department of Commerce; and
    (6) Requiring the prime contractor, if subcontracts are to be let, 
to take the affirmative steps listed in paragraphs (b)(1) through (5) of 
this section.



Sec.  200.322  Domestic preferences for procurements.

    (a) As appropriate and to the extent consistent with law, the non-
Federal entity should, to the greatest extent practicable under a 
Federal award, provide a preference for the purchase, acquisition, or 
use of goods, products, or materials produced in the United States 
(including but not limited to iron, aluminum, steel, cement, and other 
manufactured products). The requirements of this section must be 
included in all subawards including all contracts and purchase orders 
for work or products under this award.
    (b) For purposes of this section:
    (1) ``Produced in the United States'' means, for iron and steel 
products, that all manufacturing processes, from the initial melting 
stage through the application of coatings, occurred in the United 
States.
    (2) ``Manufactured products'' means items and construction materials 
composed in whole or in part of non-ferrous metals such as aluminum; 
plastics and polymer-based products such as polyvinyl chloride pipe; 
aggregates such as concrete; glass, including optical fiber; and lumber.



Sec.  200.323  Procurement of recovered materials.

    A non-Federal entity that is a state agency or agency of a political 
subdivision of a state and its contractors must comply with section 6002 
of the Solid Waste Disposal Act, as amended by the

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Resource Conservation and Recovery Act. The requirements of Section 6002 
include procuring only items designated in guidelines of the 
Environmental Protection Agency (EPA) at 40 CFR part 247 that contain 
the highest percentage of recovered materials practicable, consistent 
with maintaining a satisfactory level of competition, where the purchase 
price of the item exceeds $10,000 or the value of the quantity acquired 
during the preceding fiscal year exceeded $10,000; procuring solid waste 
management services in a manner that maximizes energy and resource 
recovery; and establishing an affirmative procurement program for 
procurement of recovered materials identified in the EPA guidelines.



Sec.  200.324  Contract cost and price.

    (a) The non-Federal entity must perform a cost or price analysis in 
connection with every procurement action in excess of the Simplified 
Acquisition Threshold including contract modifications. The method and 
degree of analysis is dependent on the facts surrounding the particular 
procurement situation, but as a starting point, the non-Federal entity 
must make independent estimates before receiving bids or proposals.
    (b) The non-Federal entity must negotiate profit as a separate 
element of the price for each contract in which there is no price 
competition and in all cases where cost analysis is performed. To 
establish a fair and reasonable profit, consideration must be given to 
the complexity of the work to be performed, the risk borne by the 
contractor, the contractor's investment, the amount of subcontracting, 
the quality of its record of past performance, and industry profit rates 
in the surrounding geographical area for similar work.
    (c) Costs or prices based on estimated costs for contracts under the 
Federal award are allowable only to the extent that costs incurred or 
cost estimates included in negotiated prices would be allowable for the 
non-Federal entity under subpart E of this part. The non-Federal entity 
may reference its own cost principles that comply with the Federal cost 
principles.
    (d) The cost plus a percentage of cost and percentage of 
construction cost methods of contracting must not be used.



Sec.  200.325  Federal awarding agency or pass-through entity review.

    (a) The non-Federal entity must make available, upon request of the 
Federal awarding agency or pass-through entity, technical specifications 
on proposed procurements where the Federal awarding agency or pass-
through entity believes such review is needed to ensure that the item or 
service specified is the one being proposed for acquisition. This review 
generally will take place prior to the time the specification is 
incorporated into a solicitation document. However, if the non-Federal 
entity desires to have the review accomplished after a solicitation has 
been developed, the Federal awarding agency or pass-through entity may 
still review the specifications, with such review usually limited to the 
technical aspects of the proposed purchase.
    (b) The non-Federal entity must make available upon request, for the 
Federal awarding agency or pass-through entity pre-procurement review, 
procurement documents, such as requests for proposals or invitations for 
bids, or independent cost estimates, when:
    (1) The non-Federal entity'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 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 contract is more than the Simplified Acquisition 
Threshold and is to be awarded to other than the apparent low bidder 
under a sealed bid procurement; or
    (5) A proposed contract modification changes the scope of a contract 
or increases the contract amount by more than the Simplified Acquisition 
Threshold.

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    (c) The non-Federal entity is exempt from the pre-procurement review 
in paragraph (b) of this section if the Federal awarding agency or pass-
through entity determines that its procurement systems comply with the 
standards of this part.
    (1) The non-Federal entity may request that its procurement system 
be reviewed by the Federal awarding agency or pass-through entity to 
determine whether its system meets these standards in order for its 
system to be certified. Generally, these reviews must occur where there 
is continuous high-dollar funding, and third-party contracts are awarded 
on a regular basis;
    (2) The non-Federal entity may self-certify its procurement system. 
Such self-certification must not limit the Federal awarding agency's 
right to survey the system. Under a self-certification procedure, the 
Federal awarding agency may rely on written assurances from the non-
Federal entity that it is complying with these standards. The non-
Federal entity must cite specific policies, procedures, regulations, or 
standards as being in compliance with these requirements and have its 
system available for review.



Sec.  200.326  Bonding requirements.

    For construction or facility improvement contracts or subcontracts 
exceeding the Simplified Acquisition Threshold, the Federal awarding 
agency or pass-through entity may accept the bonding policy and 
requirements of the non-Federal entity provided that the Federal 
awarding agency or pass-through entity has made a determination that the 
Federal interest is adequately protected. If such a determination has 
not been made, the minimum requirements must be as follows:
    (a) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' must consist of a firm commitment 
such as a bid bond, certified check, or other negotiable instrument 
accompanying a bid as assurance that the bidder will, upon acceptance of 
the bid, execute such contractual documents as may be required within 
the time specified.
    (b) A performance bond on the part of the contractor for 100 percent 
of the contract price. A ``performance bond'' is one executed in 
connection with a contract to secure fulfillment of all the contractor's 
requirements under such contract.
    (c) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract to assure payment as required by law of all persons 
supplying labor and material in the execution of the work provided for 
in the contract.



Sec.  200.327  Contract provisions.

    The non-Federal entity's contracts must contain the applicable 
provisions described in appendix II to this part.

           Performance and Financial Monitoring and Reporting



Sec.  200.328  Financial reporting.

    Unless otherwise approved by OMB, the Federal awarding agency must 
solicit only the OMB-approved governmentwide data elements for 
collection of financial information (at time of publication the Federal 
Financial Report or such future, OMB-approved, governmentwide data 
elements available from the OMB-designated standards lead. This 
information must be collected with the frequency required by the terms 
and conditions of the Federal award, but no less frequently than 
annually nor more frequently than quarterly except in unusual 
circumstances, for example where more frequent reporting is necessary 
for the effective monitoring of the Federal award or could significantly 
affect program outcomes, and preferably in coordination with performance 
reporting. The Federal awarding agency must use OMB-approved common 
information collections, as applicable, when providing financial and 
performance reporting information.



Sec.  200.329  Monitoring and reporting program performance.

    (a) Monitoring by the non-Federal entity. The non-Federal entity is 
responsible for oversight of the operations of the Federal award 
supported activities. The non-Federal entity must monitor its activities 
under Federal awards to

[[Page 144]]

assure compliance with applicable Federal requirements and performance 
expectations are being achieved. Monitoring by the non-Federal entity 
must cover each program, function or activity. See also Sec.  200.332.
    (b) Reporting program performance. The Federal awarding agency must 
use OMB-approved common information collections, as applicable, when 
providing financial and performance reporting information. As 
appropriate and in accordance with above mentioned information 
collections, the Federal awarding agency must require the recipient to 
relate financial data and accomplishments to performance goals and 
objectives of the Federal award. Also, in accordance with above 
mentioned common information collections, and when required by the terms 
and conditions of the Federal award, recipients must provide cost 
information to demonstrate cost effective practices (e.g., through unit 
cost data). In some instances (e.g., discretionary research awards), 
this will be limited to the requirement to submit technical performance 
reports (to be evaluated in accordance with Federal awarding agency 
policy). Reporting requirements must be clearly articulated such that, 
where appropriate, performance during the execution of the Federal award 
has a standard against which non-Federal entity performance can be 
measured.
    (c) Non-construction performance reports. The Federal awarding 
agency must use standard, governmentwide OMB-approved data elements for 
collection of performance information including performance progress 
reports, Research Performance Progress Reports.
    (1) The non-Federal entity must submit performance reports at the 
interval required by the Federal awarding agency or pass-through entity 
to best inform improvements in program outcomes and productivity. 
Intervals must be no less frequent than annually nor more frequent than 
quarterly except in unusual circumstances, for example where more 
frequent reporting is necessary for the effective monitoring of the 
Federal award or could significantly affect program outcomes. Reports 
submitted annually by the non-Federal entity and/or pass-through entity 
must be due no later than 90 calendar days after the reporting period. 
Reports submitted quarterly or semiannually must be due no later than 30 
calendar days after the reporting period. Alternatively, the Federal 
awarding agency or pass-through entity may require annual reports before 
the anniversary dates of multiple year Federal awards. The final 
performance report submitted by the non-Federal entity and/or pass-
through entity must be due no later than 120 calendar days after the 
period of performance end date. A subrecipient must submit to the pass-
through entity, no later than 90 calendar days after the period of 
performance end date, all final performance reports as required by the 
terms and conditions of the Federal award. See also Sec.  200.344. If a 
justified request is submitted by a non-Federal entity, the Federal 
agency may extend the due date for any performance report.
    (2) As appropriate in accordance with above mentioned performance 
reporting, these reports will contain, for each Federal award, brief 
information on the following unless other data elements are approved by 
OMB in the agency information collection request:
    (i) A comparison of actual accomplishments to the objectives of the 
Federal award established for the period. Where the accomplishments of 
the Federal award can be quantified, a computation of the cost (for 
example, related to units of accomplishment) may be required if that 
information will be useful. Where performance trend data and analysis 
would be informative to the Federal awarding agency program, the Federal 
awarding agency should include this as a performance reporting 
requirement.
    (ii) The reasons why established goals were not met, if appropriate.
    (iii) Additional pertinent information including, when appropriate, 
analysis and explanation of cost overruns or high unit costs.
    (d) Construction performance reports. For the most part, onsite 
technical inspections and certified percentage of completion data are 
relied on heavily by Federal awarding agencies and pass-through entities 
to monitor progress under Federal awards and subawards

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for construction. The Federal awarding agency may require additional 
performance reports only when considered necessary.
    (e) Significant developments. Events may occur between the scheduled 
performance reporting dates that have significant impact upon the 
supported activity. In such cases, the non-Federal entity must inform 
the Federal awarding agency or pass-through entity as soon as the 
following types of conditions become known:
    (1) Problems, delays, or adverse conditions which will materially 
impair the ability to meet the objective of the Federal award. This 
disclosure must include a statement of the action taken, or 
contemplated, and any assistance needed to resolve the situation.
    (2) Favorable developments which enable meeting time schedules and 
objectives sooner or at less cost than anticipated or producing more or 
different beneficial results than originally planned.
    (f) Site visits. The Federal awarding agency may make site visits as 
warranted by program needs.
    (g) Performance report requirement waiver. The Federal awarding 
agency may waive any performance report required by this part if not 
needed.



Sec.  200.330  Reporting on real property.

    The Federal awarding agency or pass-through entity must require a 
non-Federal entity to submit reports at least annually on the status of 
real property in which the Federal Government retains an interest, 
unless the Federal interest in the real property extends 15 years or 
longer. In those instances where the Federal interest attached is for a 
period of 15 years or more, the Federal awarding agency or pass-through 
entity, at its option, may require the non-Federal entity to report at 
various multi-year frequencies (e.g., every two years or every three 
years, not to exceed a five-year reporting period; or a Federal awarding 
agency or pass-through entity may require annual reporting for the first 
three years of a Federal award and thereafter require reporting every 
five years).

                 Subrecipient Monitoring and Management



Sec.  200.331  Subrecipient and contractor determinations.

    The non-Federal entity may concurrently receive Federal awards as a 
recipient, a subrecipient, and a contractor, depending on the substance 
of its agreements with Federal awarding agencies and pass-through 
entities. Therefore, a pass-through entity must make case-by-case 
determinations whether each agreement it makes for the disbursement of 
Federal program funds casts the party receiving the funds in the role of 
a subrecipient or a contractor. The Federal awarding agency may supply 
and require recipients to comply with additional guidance to support 
these determinations provided such guidance does not conflict with this 
section.
    (a) Subrecipients. A subaward is for the purpose of carrying out a 
portion of a Federal award and creates a Federal assistance relationship 
with the subrecipient. See definition for Subaward in Sec.  200.1 of 
this part. Characteristics which support the classification of the non-
Federal entity as a subrecipient include when the non-Federal entity:
    (1) Determines who is eligible to receive what Federal assistance;
    (2) Has its performance measured in relation to whether objectives 
of a Federal program were met;
    (3) Has responsibility for programmatic decision-making;
    (4) Is responsible for adherence to applicable Federal program 
requirements specified in the Federal award; and
    (5) In accordance with its agreement, uses the Federal funds to 
carry out a program for a public purpose specified in authorizing 
statute, as opposed to providing goods or services for the benefit of 
the pass-through entity.
    (b) Contractors. A contract is for the purpose of obtaining goods 
and services for the non-Federal entity's own use and creates a 
procurement relationship with the contractor. See the definition of 
contract in Sec.  200.1 of this part. Characteristics indicative of a 
procurement relationship between the non-Federal entity and a contractor 
are when the contractor:

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    (1) Provides the goods and services within normal business 
operations;
    (2) Provides similar goods or services to many different purchasers;
    (3) Normally operates in a competitive environment;
    (4) Provides goods or services that are ancillary to the operation 
of the Federal program; and
    (5) Is not subject to compliance requirements of the Federal program 
as a result of the agreement, though similar requirements may apply for 
other reasons.
    (c) Use of judgment in making determination. In determining whether 
an agreement between a pass-through entity and another non-Federal 
entity casts the latter as a subrecipient or a contractor, the substance 
of the relationship is more important than the form of the agreement. 
All of the characteristics listed above may not be present in all cases, 
and the pass-through entity must use judgment in classifying each 
agreement as a subaward or a procurement contract.



Sec.  200.332  Requirements for pass-through entities.

    All pass-through entities must:
    (a) Ensure that every subaward is clearly identified to the 
subrecipient as a subaward and includes the following information at the 
time of the subaward and if any of these data elements change, include 
the changes in subsequent subaward modification. When some of this 
information is not available, the pass-through entity must provide the 
best information available to describe the Federal award and subaward. 
Required information includes:
    (1) Federal award identification.
    (i) Subrecipient name (which must match the name associated with its 
unique entity identifier);
    (ii) Subrecipient's unique entity identifier;
    (iii) Federal Award Identification Number (FAIN);
    (iv) Federal Award Date (see the definition of Federal award date in 
Sec.  200.1 of this part) of award to the recipient by the Federal 
agency;
    (v) Subaward Period of Performance Start and End Date;
    (vi) Subaward Budget Period Start and End Date;
    (vii) Amount of Federal Funds Obligated by this action by the pass-
through entity to the subrecipient;
    (viii) Total Amount of Federal Funds Obligated to the subrecipient 
by the pass-through entity including the current financial obligation;
    (ix) Total Amount of the Federal Award committed to the subrecipient 
by the pass-through entity;
    (x) Federal award project description, as required to be responsive 
to the Federal Funding Accountability and Transparency Act (FFATA);
    (xi) Name of Federal awarding agency, pass-through entity, and 
contact information for awarding official of the Pass-through entity;
    (xii) Assistance Listings number and Title; the pass-through entity 
must identify the dollar amount made available under each Federal award 
and the Assistance Listings Number at time of disbursement;
    (xiii) Identification of whether the award is R&D and
    (xiv) Indirect cost rate for the Federal award (including if the de 
minimis rate is charged) per Sec.  200.414.
    (2) All requirements imposed by the pass-through entity on the 
subrecipient so that the Federal award is used in accordance with 
Federal statutes, regulations and the terms and conditions of the 
Federal award;
    (3) Any additional requirements that the pass-through entity imposes 
on the subrecipient in order for the pass-through entity to meet its own 
responsibility to the Federal awarding agency including identification 
of any required financial and performance reports;
    (4)(i) An approved federally recognized indirect cost rate 
negotiated between the subrecipient and the Federal Government. If no 
approved rate exists, the pass-through entity must determine the 
appropriate rate in collaboration with the subrecipient, which is 
either:
    (A) The negotiated indirect cost rate between the pass-through 
entity and the subrecipient; which can be based on a prior negotiated 
rate between a different PTE and the same subrecipient. If basing the 
rate on a previously negotiated rate, the pass-through entity is

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not required to collect information justifying this rate, but may elect 
to do so;
    (B) The de minimis indirect cost rate.
    (ii) The pass-through entity must not require use of a de minimis 
indirect cost rate if the subrecipient has a Federally approved rate. 
Subrecipients can elect to use the cost allocation method to account for 
indirect costs in accordance with Sec.  200.405(d).
    (5) A requirement that the subrecipient permit the pass-through 
entity and auditors to have access to the subrecipient's records and 
financial statements as necessary for the pass-through entity to meet 
the requirements of this part; and
    (6) Appropriate terms and conditions concerning closeout of the 
subaward.
    (b) Evaluate each subrecipient's risk of noncompliance with Federal 
statutes, regulations, and the terms and conditions of the subaward for 
purposes of determining the appropriate subrecipient monitoring 
described in paragraphs (d) and (e) of this section, which may include 
consideration of such factors as:
    (1) The subrecipient's prior experience with the same or similar 
subawards;
    (2) The results of previous audits including whether or not the 
subrecipient receives a Single Audit in accordance with Subpart F of 
this part, and the extent to which the same or similar subaward has been 
audited as a major program;
    (3) Whether the subrecipient has new personnel or new or 
substantially changed systems; and
    (4) The extent and results of Federal awarding agency monitoring 
(e.g., if the subrecipient also receives Federal awards directly from a 
Federal awarding agency).
    (c) Consider imposing specific subaward conditions upon a 
subrecipient if appropriate as described in Sec.  200.208.
    (d) Monitor the activities of the subrecipient as necessary to 
ensure that the subaward is used for authorized purposes, in compliance 
with Federal statutes, regulations, and the terms and conditions of the 
subaward; and that subaward performance goals are achieved. Pass-through 
entity monitoring of the subrecipient must include:
    (1) Reviewing financial and performance reports required by the 
pass-through entity.
    (2) Following-up and ensuring that the subrecipient takes timely and 
appropriate action on all deficiencies pertaining to the Federal award 
provided to the subrecipient from the pass-through entity detected 
through audits, on-site reviews, and written confirmation from the 
subrecipient, highlighting the status of actions planned or taken to 
address Single Audit findings related to the particular subaward.
    (3) Issuing a management decision for applicable audit findings 
pertaining only to the Federal award provided to the subrecipient from 
the pass-through entity as required by Sec.  200.521.
    (4) The pass-through entity is responsible for resolving audit 
findings specifically related to the subaward and not responsible for 
resolving cross-cutting findings. If a subrecipient has a current Single 
Audit report posted in the Federal Audit Clearinghouse and has not 
otherwise been excluded from receipt of Federal funding (e.g., has been 
debarred or suspended), the pass-through entity may rely on the 
subrecipient's cognizant audit agency or cognizant oversight agency to 
perform audit follow-up and make management decisions related to cross-
cutting findings in accordance with section Sec.  300.513(a)(3)(vii). 
Such reliance does not eliminate the responsibility of the pass-through 
entity to issue subawards that conform to agency and award-specific 
requirements, to manage risk through ongoing subaward monitoring, and to 
monitor the status of the findings that are specifically related to the 
subaward.
    (e) Depending upon the pass-through entity's assessment of risk 
posed by the subrecipient (as described in paragraph (b) of this 
section), the following monitoring tools may be useful for the pass-
through entity to ensure proper accountability and compliance with 
program requirements and achievement of performance goals:

[[Page 148]]

    (1) Providing subrecipients with training and technical assistance 
on program-related matters; and
    (2) Performing on-site reviews of the subrecipient's program 
operations;
    (3) Arranging for agreed-upon-procedures engagements as described in 
Sec.  200.425.
    (f) Verify that every subrecipient is audited as required by Subpart 
F of this part when it is expected that the subrecipient's Federal 
awards expended during the respective fiscal year equaled or exceeded 
the threshold set forth in Sec.  200.501.
    (g) Consider whether the results of the subrecipient's audits, on-
site reviews, or other monitoring indicate conditions that necessitate 
adjustments to the pass-through entity's own records.
    (h) Consider taking enforcement action against noncompliant 
subrecipients as described in Sec.  200.339 of this part and in program 
regulations.



Sec.  200.333  Fixed amount subawards.

    With prior written approval from the Federal awarding agency, a 
pass-through entity may provide subawards based on fixed amounts up to 
the Simplified Acquisition Threshold, provided that the subawards meet 
the requirements for fixed amount awards in Sec.  200.201.

                       Record Retention and Access



Sec.  200.334  Retention requirements for records.

    Financial records, supporting documents, statistical records, and 
all other non-Federal entity records pertinent to a Federal award must 
be retained for a period of three years from the date of submission of 
the final expenditure report or, for Federal awards that are renewed 
quarterly or annually, from the date of the submission of the quarterly 
or annual financial report, respectively, as reported to the Federal 
awarding agency or pass-through entity in the case of a subrecipient. 
Federal awarding agencies and pass-through entities must not impose any 
other record retention requirements upon non-Federal entities. The only 
exceptions are the following:
    (a) If any litigation, claim, or audit is started before the 
expiration of the 3-year period, the records must be retained until all 
litigation, claims, or audit findings involving the records have been 
resolved and final action taken.
    (b) When the non-Federal entity is notified in writing by the 
Federal awarding agency, cognizant agency for audit, oversight agency 
for audit, cognizant agency for indirect costs, or pass-through entity 
to extend the retention period.
    (c) Records for real property and equipment acquired with Federal 
funds must be retained for 3 years after final disposition.
    (d) When records are transferred to or maintained by the Federal 
awarding agency or pass-through entity, the 3-year retention requirement 
is not applicable to the non-Federal entity.
    (e) Records for program income transactions after the period of 
performance. In some cases recipients must report program income after 
the period of performance. Where there is such a requirement, the 
retention period for the records pertaining to the earning of the 
program income starts from the end of the non-Federal entity's fiscal 
year in which the program income is earned.
    (f) Indirect cost rate proposals and cost allocations plans. This 
paragraph applies to the following types of documents and their 
supporting records: Indirect cost rate computations or proposals, cost 
allocation plans, and any similar accounting computations of the rate at 
which a particular group of costs is chargeable (such as computer usage 
chargeback rates or composite fringe benefit rates).
    (1) If submitted for negotiation. If the proposal, plan, or other 
computation is required to be submitted to the Federal Government (or to 
the pass-through entity) to form the basis for negotiation of the rate, 
then the 3-year retention period for its supporting records starts from 
the date of such submission.
    (2) If not submitted for negotiation. If the proposal, plan, or 
other computation is not required to be submitted to the Federal 
Government (or to the pass-through entity) for negotiation

[[Page 149]]

purposes, then the 3-year retention period for the proposal, plan, or 
computation and its supporting records starts from the end of the fiscal 
year (or other accounting period) covered by the proposal, plan, or 
other computation.



Sec.  200.335  Requests for transfer of records.

    The Federal awarding agency must request transfer of certain records 
to its custody from the non-Federal entity when it determines that the 
records possess long-term retention value. However, in order to avoid 
duplicate recordkeeping, the Federal awarding agency may make 
arrangements for the non-Federal entity to retain any records that are 
continuously needed for joint use.



Sec.  200.336  Methods for collection, transmission, and storage 
of information.

    The Federal awarding agency and the non-Federal entity should, 
whenever practicable, collect, transmit, and store Federal award-related 
information in open and machine-readable formats rather than in closed 
formats or on paper in accordance with applicable legislative 
requirements. A machine-readable format is a format in a standard 
computer language (not English text) that can be read automatically by a 
web browser or computer system. The Federal awarding agency or pass-
through entity must always provide or accept paper versions of Federal 
award-related information to and from the non-Federal entity upon 
request. If paper copies are submitted, the Federal awarding agency or 
pass-through entity must not require more than an original and two 
copies. When original records are electronic and cannot be altered, 
there is no need to create and retain paper copies. When original 
records are paper, electronic versions may be substituted through the 
use of duplication or other forms of electronic media provided that they 
are subject to periodic quality control reviews, provide reasonable 
safeguards against alteration, and remain readable.



Sec.  200.337  Access to records.

    (a) Records of non-Federal entities. The Federal awarding agency, 
Inspectors General, the Comptroller General of the United States, and 
the pass-through entity, or any of their authorized representatives, 
must have the right of access to any documents, papers, or other records 
of the non-Federal entity which are pertinent to the Federal award, in 
order to make audits, examinations, excerpts, and transcripts. The right 
also includes timely and reasonable access to the non-Federal entity's 
personnel for the purpose of interview and discussion related to such 
documents.
    (b) Extraordinary and rare circumstances. Only under extraordinary 
and rare circumstances would such access include review of the true name 
of victims of a crime. Routine monitoring cannot be considered 
extraordinary and rare circumstances that would necessitate access to 
this information. When access to the true name of victims of a crime is 
necessary, appropriate steps to protect this sensitive information must 
be taken by both the non-Federal entity and the Federal awarding agency. 
Any such access, other than under a court order or subpoena pursuant to 
a bona fide confidential investigation, must be approved by the head of 
the Federal awarding agency or delegate.
    (c) Expiration of right of access. The rights of access in this 
section are not limited to the required retention period but last as 
long as the records are retained. Federal awarding agencies and pass-
through entities must not impose any other access requirements upon non-
Federal entities.



Sec.  200.338  Restrictions on public access to records.

    No Federal awarding agency may place restrictions on the non-Federal 
entity that limit public access to the records of the non-Federal entity 
pertinent to a Federal award, except for protected personally 
identifiable information (PII) or when the Federal awarding agency can 
demonstrate that such records will be kept confidential and would have 
been exempted from disclosure pursuant to the Freedom of

[[Page 150]]

Information Act (5 U.S.C. 552) or controlled unclassified information 
pursuant to Executive Order 13556 if the records had belonged to the 
Federal awarding agency. The Freedom of Information Act (5 U.S.C. 552) 
(FOIA) does not apply to those records that remain under a non-Federal 
entity's control except as required under Sec.  200.315. Unless required 
by Federal, state, local, and tribal statute, non-Federal entities are 
not required to permit public access to their records. The non-Federal 
entity's records provided to a Federal agency generally will be subject 
to FOIA and applicable exemptions.

                       Remedies for Noncompliance



Sec.  200.339  Remedies for noncompliance.

    If a non-Federal entity fails to comply with the U.S. Constitution, 
Federal statutes, regulations or the terms and conditions of a Federal 
award, the Federal awarding agency or pass-through entity may impose 
additional conditions, as described in Sec.  200.208. If the Federal 
awarding agency or pass-through entity determines that noncompliance 
cannot be remedied by imposing additional conditions, the Federal 
awarding agency or pass-through entity may take one or more of the 
following actions, as appropriate in the circumstances:
    (a) Temporarily withhold cash payments pending correction of the 
deficiency by the non-Federal entity or more severe enforcement action 
by the Federal awarding agency or pass-through entity.
    (b) Disallow (that is, deny both use of funds and any applicable 
matching credit for) all or part of the cost of the activity or action 
not in compliance.
    (c) Wholly or partly suspend or terminate the Federal award.
    (d) Initiate suspension or debarment proceedings as authorized under 
2 CFR part 180 and Federal awarding agency regulations (or in the case 
of a pass-through entity, recommend such a proceeding be initiated by a 
Federal awarding agency).
    (e) Withhold further Federal awards for the project or program.
    (f) Take other remedies that may be legally available.



Sec.  200.340  Termination.

    (a) The Federal award may be terminated in whole or in part as 
follows:
    (1) By the Federal awarding agency or pass-through entity, if a non-
Federal entity fails to comply with the terms and conditions of a 
Federal award;
    (2) By the Federal awarding agency or pass-through entity, to the 
greatest extent authorized by law, if an award no longer effectuates the 
program goals or agency priorities;
    (3) By the Federal awarding agency or pass-through entity with the 
consent of the non-Federal entity, in which case the two parties must 
agree upon the termination conditions, including the effective date and, 
in the case of partial termination, the portion to be terminated;
    (4) By the non-Federal entity upon sending to the Federal awarding 
agency or pass-through entity written notification setting forth the 
reasons for such termination, the effective date, and, in the case of 
partial termination, the portion to be terminated. However, if the 
Federal awarding agency or pass-through entity determines in the case of 
partial termination that the reduced or modified portion of the Federal 
award or subaward will not accomplish the purposes for which the Federal 
award was made, the Federal awarding agency or pass-through entity may 
terminate the Federal award in its entirety; or
    (5) By the Federal awarding agency or pass-through entity pursuant 
to termination provisions included in the Federal award.
    (b) A Federal awarding agency should clearly and unambiguously 
specify termination provisions applicable to each Federal award, in 
applicable regulations or in the award, consistent with this section.
    (c) When a Federal awarding agency terminates a Federal award prior 
to the end of the period of performance due to the non-Federal entity's 
material failure to comply with the Federal award terms and conditions, 
the Federal awarding agency must report the termination to the OMB-
designated integrity and performance system accessible through SAM 
(currently FAPIIS).

[[Page 151]]

    (1) The information required under paragraph (c) of this section is 
not to be reported to designated integrity and performance system until 
the non-Federal entity either--
    (i) Has exhausted its opportunities to object or challenge the 
decision, see Sec.  200.342; or
    (ii) Has not, within 30 calendar days after being notified of the 
termination, informed the Federal awarding agency that it intends to 
appeal the Federal awarding agency's decision to terminate.
    (2) If a Federal awarding agency, after entering information into 
the designated integrity and performance system about a termination, 
subsequently:
    (i) Learns that any of that information is erroneous, the Federal 
awarding agency must correct the information in the system within three 
business days;
    (ii) Obtains an update to that information that could be helpful to 
other Federal awarding agencies, the Federal awarding agency is strongly 
encouraged to amend the information in the system to incorporate the 
update in a timely way.
    (3) Federal awarding agencies, must not post any information that 
will be made publicly available in the non-public segment of designated 
integrity and performance system that is covered by a disclosure 
exemption under the Freedom of Information Act. If the non-Federal 
entity asserts within seven calendar days to the Federal awarding agency 
who posted the information, that some of the information made publicly 
available is covered by a disclosure exemption under the Freedom of 
Information Act, the Federal awarding agency who posted the information 
must remove the posting within seven calendar days of receiving the 
assertion. Prior to reposting the releasable information, the Federal 
agency must resolve the issue in accordance with the agency's Freedom of 
Information Act procedures.
    (d) When a Federal award is terminated or partially terminated, both 
the Federal awarding agency or pass-through entity and the non-Federal 
entity remain responsible for compliance with the requirements in 
Sec. Sec.  200.344 and 200.345.



Sec.  200.341  Notification of termination requirement.

    (a) The Federal agency or pass-through entity must provide to the 
non-Federal entity a notice of termination.
    (b) If the Federal award is terminated for the non-Federal entity's 
material failure to comply with the U.S. Constitution, Federal statutes, 
regulations, or terms and conditions of the Federal award, the 
notification must state that--
    (1) The termination decision will be reported to the OMB-designated 
integrity and performance system accessible through SAM (currently 
FAPIIS);
    (2) The information will be available in the OMB-designated 
integrity and performance system for a period of five years from the 
date of the termination, then archived;
    (3) Federal awarding agencies that consider making a Federal award 
to the non-Federal entity during that five year period must consider 
that information in judging whether the non-Federal entity is qualified 
to receive the Federal award, when the Federal share of the Federal 
award is expected to exceed the simplified acquisition threshold over 
the period of performance;
    (4) The non-Federal entity may comment on any information the OMB-
designated integrity and performance system contains about the non-
Federal entity for future consideration by Federal awarding agencies. 
The non-Federal entity may submit comments to the awardee integrity and 
performance portal accessible through SAM (currently (CPARS).
    (5) Federal awarding agencies will consider non-Federal entity 
comments when determining whether the non-Federal entity is qualified 
for a future Federal award.
    (c) Upon termination of a Federal award, the Federal awarding agency 
must provide the information required under FFATA to the Federal website 
established to fulfill the requirements of FFATA, and update or notify 
any other relevant governmentwide systems or entities of any indications 
of poor performance as required by 41 U.S.C. 417b and 31 U.S.C. 3321 and 
implementing guidance at 2 CFR part 77

[[Page 152]]

(forthcoming at time of publication). See also the requirements for 
Suspension and Debarment at 2 CFR part 180.



Sec.  200.342  Opportunities to object, hearings, and appeals.

    Upon taking any remedy for non-compliance, the Federal awarding 
agency must provide the non-Federal entity an opportunity to object and 
provide information and documentation challenging the suspension or 
termination action, in accordance with written processes and procedures 
published by the Federal awarding agency. The Federal awarding agency or 
pass-through entity must comply with any requirements for hearings, 
appeals or other administrative proceedings to which the non-Federal 
entity is entitled under any statute or regulation applicable to the 
action involved.



Sec.  200.343  Effects of suspension and termination.

    Costs to the non-Federal entity resulting from financial obligations 
incurred by the non-Federal entity during a suspension or after 
termination of a Federal award or subaward are not allowable unless the 
Federal awarding agency or pass-through entity expressly authorizes them 
in the notice of suspension or termination or subsequently. However, 
costs during suspension or after termination are allowable if:
    (a) The costs result from financial obligations which were properly 
incurred by the non-Federal entity before the effective date of 
suspension or termination, are not in anticipation of it; and
    (b) The costs would be allowable if the Federal award was not 
suspended or expired normally at the end of the period of performance in 
which the termination takes effect.

                                Closeout



Sec.  200.344  Closeout.

    The Federal awarding agency or pass-through entity will close out 
the Federal award when it determines that all applicable administrative 
actions and all required work of the Federal award have been completed 
by the non-Federal entity. If the non-Federal entity fails to complete 
the requirements, the Federal awarding agency or pass-through entity 
will proceed to close out the Federal award with the information 
available. This section specifies the actions the non-Federal entity and 
Federal awarding agency or pass-through entity must take to complete 
this process at the end of the period of performance.
    (a) The recipient must submit, no later than 120 calendar days after 
the end date of the period of performance, all financial, performance, 
and other reports as required by the terms and conditions of the Federal 
award. A subrecipient must submit to the pass-through entity, no later 
than 90 calendar days (or an earlier date as agreed upon by the pass-
through entity and subrecipient) after the end date of the period of 
performance, all financial, performance, and other reports as required 
by the terms and conditions of the Federal award. The Federal awarding 
agency or pass-through entity may approve extensions when requested and 
justified by the non-Federal entity, as applicable.
    (b) Unless the Federal awarding agency or pass-through entity 
authorizes an extension, a non-Federal entity must liquidate all 
financial obligations incurred under the Federal award no later than 120 
calendar days after the end date of the period of performance as 
specified in the terms and conditions of the Federal award.
    (c) The Federal awarding agency or pass-through entity must make 
prompt payments to the non-Federal entity for costs meeting the 
requirements in Subpart E of this part under the Federal award being 
closed out.
    (d) The non-Federal entity must promptly refund any balances of 
unobligated cash that the Federal awarding agency or pass-through entity 
paid in advance or paid and that are not authorized to be retained by 
the non-Federal entity for use in other projects. See OMB Circular A-129 
and see Sec.  200.346, for requirements regarding unreturned amounts 
that become delinquent debts.
    (e) Consistent with the terms and conditions of the Federal award, 
the Federal awarding agency or pass-

[[Page 153]]

through entity must make a settlement for any upward or downward 
adjustments to the Federal share of costs after closeout reports are 
received.
    (f) The non-Federal entity must account for any real and personal 
property acquired with Federal funds or received from the Federal 
Government in accordance with Sec. Sec.  200.310 through 200.316 and 
200.330.
    (g) When a recipient or subrecipient completes all closeout 
requirements, the Federal awarding agency or pass-through entity must 
promptly complete all closeout actions for Federal awards. The Federal 
awarding agency must make every effort to complete closeout actions no 
later than one year after the end of the period of performance unless 
otherwise directed by authorizing statutes. Closeout actions include 
Federal awarding agency actions in the grants management and payment 
systems.
    (h) If the non-Federal entity does not submit all reports in 
accordance with this section and the terms and conditions of the Federal 
Award, the Federal awarding agency must proceed to close out with the 
information available within one year of the period of performance end 
date.
    (i) If the non-Federal entity does not submit all reports in 
accordance with this section within one year of the period of 
performance end date, the Federal awarding agency must report the non-
Federal entity's material failure to comply with the terms and 
conditions of the award with the OMB-designated integrity and 
performance system (currently FAPIIS). Federal awarding agencies may 
also pursue other enforcement actions per Sec.  200.339.

        Post-Closeout Adjustments and Continuing Responsibilities



Sec.  200.345  Post-closeout adjustments and continuing responsibilities.

    (a) The closeout of a Federal award does not affect any of the 
following:
    (1) The right of the Federal awarding agency or pass-through entity 
to disallow costs and recover funds on the basis of a later audit or 
other review. The Federal awarding agency or pass-through entity must 
make any cost disallowance determination and notify the non-Federal 
entity within the record retention period.
    (2) The requirement for the non-Federal entity to return any funds 
due as a result of later refunds, corrections, or other transactions 
including final indirect cost rate adjustments.
    (3) The ability of the Federal awarding agency to make financial 
adjustments to a previously closed award such as resolving indirect cost 
payments and making final payments.
    (4) Audit requirements in subpart F of this part.
    (5) Property management and disposition requirements in Sec. Sec.  
200.310 through 200.316 of this subpart.
    (6) Records retention as required in Sec. Sec.  200.334 through 
200.337 of this subpart.
    (b) After closeout of the Federal award, a relationship created 
under the Federal award may be modified or ended in whole or in part 
with the consent of the Federal awarding agency or pass-through entity 
and the non-Federal entity, provided the responsibilities of the non-
Federal entity referred to in paragraph (a) of this section, including 
those for property management as applicable, are considered and 
provisions made for continuing responsibilities of the non-Federal 
entity, as appropriate.

                        Collection of Amounts Due



Sec.  200.346  Collection of amounts due.

    (a) Any funds paid to the non-Federal entity in excess of the amount 
to which the non-Federal entity is finally determined to be entitled 
under the terms of the Federal award constitute a debt to the Federal 
Government. If not paid within 90 calendar days after demand, the 
Federal awarding agency may reduce the debt by:
    (1) Making an administrative offset against other requests for 
reimbursements;
    (2) Withholding advance payments otherwise due to the non-Federal 
entity; or
    (3) Other action permitted by Federal statute.
    (b) Except where otherwise provided by statutes or regulations, the 
Federal awarding agency will charge interest on an overdue debt in 
accordance with

[[Page 154]]

the Federal Claims Collection Standards (31 CFR parts 900 through 999). 
The date from which interest is computed is not extended by litigation 
or the filing of any form of appeal.



                        Subpart E_Cost Principles

                           General Provisions



Sec.  200.400  Policy guide.

    The application of these cost principles is based on the fundamental 
premises that:
    (a) The non-Federal entity is responsible for the efficient and 
effective administration of the Federal award through the application of 
sound management practices.
    (b) The non-Federal entity assumes responsibility for administering 
Federal funds in a manner consistent with underlying agreements, program 
objectives, and the terms and conditions of the Federal award.
    (c) The non-Federal entity, in recognition of its own unique 
combination of staff, facilities, and experience, has the primary 
responsibility for employing whatever form of sound organization and 
management techniques may be necessary in order to assure proper and 
efficient administration of the Federal award.
    (d) The application of these cost principles should require no 
significant changes in the internal accounting policies and practices of 
the non-Federal entity. However, the accounting practices of the non-
Federal entity must be consistent with these cost principles and support 
the accumulation of costs as required by the principles, and must 
provide for adequate documentation to support costs charged to the 
Federal award.
    (e) In reviewing, negotiating and approving cost allocation plans or 
indirect cost proposals, the cognizant agency for indirect costs should 
generally assure that the non-Federal entity is applying these cost 
accounting principles on a consistent basis during their review and 
negotiation of indirect cost proposals. Where wide variations exist in 
the treatment of a given cost item by the non-Federal entity, the 
reasonableness and equity of such treatments should be fully considered. 
See the definition of indirect (facilities & administrative (F&A)) costs 
in Sec.  200.1 of this part.
    (f) For non-Federal entities that educate and engage students in 
research, the dual role of students as both trainees and employees 
(including pre- and post-doctoral staff) contributing to the completion 
of Federal awards for research must be recognized in the application of 
these principles.
    (g) The non-Federal entity may not earn or keep any profit resulting 
from Federal financial assistance, unless explicitly authorized by the 
terms and conditions of the Federal award. See also Sec.  200.307.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 
85 FR 49561, Aug. 13, 2020]



Sec.  200.401  Application.

    (a) General. These principles must be used in determining the 
allowable costs of work performed by the non-Federal entity under 
Federal awards. These principles also must be used by the non-Federal 
entity as a guide in the pricing of fixed-price contracts and 
subcontracts where costs are used in determining the appropriate price. 
The principles do not apply to:
    (1) Arrangements under which Federal financing is in the form of 
loans, scholarships, fellowships, traineeships, or other fixed amounts 
based on such items as education allowance or published tuition rates 
and fees.
    (2) For IHEs, capitation awards, which are awards based on case 
counts or number of beneficiaries according to the terms and conditions 
of the Federal award.
    (3) Fixed amount awards. See also Sec.  200.1 Definitions and 
200.201.
    (4) Federal awards to hospitals (see appendix IX to this part).
    (5) Other awards under which the non-Federal entity is not required 
to account to the Federal Government for actual costs incurred.
    (b) Federal contract. Where a Federal contract awarded to a non-
Federal entity is subject to the Cost Accounting Standards (CAS), it 
incorporates the applicable CAS clauses, Standards, and CAS 
administration requirements per the 48 CFR Chapter 99 and 48 CFR part 30 
(FAR Part 30). CAS applies directly

[[Page 155]]

to the CAS-covered contract and the Cost Accounting Standards at 48 CFR 
parts 9904 or 9905 takes precedence over the cost principles in this 
subpart E with respect to the allocation of costs. When a contract with 
a non-Federal entity is subject to full CAS coverage, the allowability 
of certain costs under the cost principles will be affected by the 
allocation provisions of the Cost Accounting Standards (e.g., CAS 414--
48 CFR 9904.414, Cost of Money as an Element of the Cost of Facilities 
Capital, and CAS 417--48 CFR 9904.417, Cost of Money as an Element of 
the Cost of Capital Assets Under Construction), apply rather the 
allowability provisions of Sec.  200.449. In complying with those 
requirements, the non-Federal entity's application of cost accounting 
practices for estimating, accumulating, and reporting costs for other 
Federal awards and other cost objectives under the CAS-covered contract 
still must be consistent with its cost accounting practices for the CAS-
covered contracts. In all cases, only one set of accounting records 
needs to be maintained for the allocation of costs by the non-Federal 
entity.
    (c) Exemptions. Some nonprofit organizations, because of their size 
and nature of operations, can be considered to be similar to for-profit 
entities for purpose of applicability of cost principles. Such nonprofit 
organizations must operate under Federal cost principles applicable to 
for-profit entities located at 48 CFR 31.2. A listing of these 
organizations is contained in appendix VIII to this part. Other 
organizations, as approved by the cognizant agency for indirect costs, 
may be added from time to time.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49562, Aug. 13, 2020]

                          Basic Considerations



Sec.  200.402  Composition of costs.

    Total cost. The total cost of a Federal award is the sum of the 
allowable direct and allocable indirect costs less any applicable 
credits.



Sec.  200.403  Factors affecting allowability of costs.

    Except where otherwise authorized by statute, costs must meet the 
following general criteria in order to be allowable under Federal 
awards:
    (a) Be necessary and reasonable for the performance of the Federal 
award and be allocable thereto under these principles.
    (b) Conform to any limitations or exclusions set forth in these 
principles or in the Federal award as to types or amount of cost items.
    (c) Be consistent with policies and procedures that apply uniformly 
to both federally-financed and other activities of the non-Federal 
entity.
    (d) Be accorded consistent treatment. A cost may not be assigned to 
a Federal award as a direct cost if any other cost incurred for the same 
purpose in like circumstances has been allocated to the Federal award as 
an indirect cost.
    (e) Be determined in accordance with generally accepted accounting 
principles (GAAP), except, for state and local governments and Indian 
tribes only, as otherwise provided for in this part.
    (f) Not be included as a cost or used to meet cost sharing or 
matching requirements of any other federally-financed program in either 
the current or a prior period. See also Sec.  200.306(b).
    (g) Be adequately documented. See also Sec. Sec.  200.300 through 
200.309 of this part.
    (h) Cost must be incurred during the approved budget period. The 
Federal awarding agency is authorized, at its discretion, to waive prior 
written approvals to carry forward unobligated balances to subsequent 
budget periods pursuant to Sec.  200.308(e)(3).

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49562, Aug. 13, 2020]



Sec.  200.404  Reasonable costs.

    A cost is reasonable if, in its nature and amount, it does not 
exceed that which would be incurred by a prudent person under the 
circumstances prevailing at the time the decision was made to incur the 
cost. The question of reasonableness is particularly important when the 
non-Federal entity is predominantly federally-funded. In determining 
reasonableness of a given cost, consideration must be given to:

[[Page 156]]

    (a) Whether the cost is of a type generally recognized as ordinary 
and necessary for the operation of the non-Federal entity or the proper 
and efficient performance of the Federal award.
    (b) The restraints or requirements imposed by such factors as: sound 
business practices; arm's-length bargaining; Federal, state, local, 
tribal, and other laws and regulations; and terms and conditions of the 
Federal award.
    (c) Market prices for comparable goods or services for the 
geographic area.
    (d) Whether the individuals concerned acted with prudence in the 
circumstances considering their responsibilities to the non-Federal 
entity, its employees, where applicable its students or membership, the 
public at large, and the Federal Government.
    (e) Whether the non-Federal entity significantly deviates from its 
established practices and policies regarding the incurrence of costs, 
which may unjustifiably increase the Federal award's cost.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014]



Sec.  200.405  Allocable costs.

    (a) A cost is allocable to a particular Federal award or other cost 
objective if the goods or services involved are chargeable or assignable 
to that Federal award or cost objective in accordance with relative 
benefits received. This standard is met if the cost:
    (1) Is incurred specifically for the Federal award;
    (2) Benefits both the Federal award and other work of the non-
Federal entity and can be distributed in proportions that may be 
approximated using reasonable methods; and
    (3) Is necessary to the overall operation of the non-Federal entity 
and is assignable in part to the Federal award in accordance with the 
principles in this subpart.
    (b) All activities which benefit from the non-Federal entity's 
indirect (F&A) cost, including unallowable activities and donated 
services by the non-Federal entity or third parties, will receive an 
appropriate allocation of indirect costs.
    (c) Any cost allocable to a particular Federal award under the 
principles provided for in this part may not be charged to other Federal 
awards to overcome fund deficiencies, to avoid restrictions imposed by 
Federal statutes, regulations, or terms and conditions of the Federal 
awards, or for other reasons. However, this prohibition would not 
preclude the non-Federal entity from shifting costs that are allowable 
under two or more Federal awards in accordance with existing Federal 
statutes, regulations, or the terms and conditions of the Federal 
awards.
    (d) Direct cost allocation principles: If a cost benefits two or 
more projects or activities in proportions that can be determined 
without undue effort or cost, the cost must be allocated to the projects 
based on the proportional benefit. If a cost benefits two or more 
projects or activities in proportions that cannot be determined because 
of the interrelationship of the work involved, then, notwithstanding 
paragraph (c) of this section, the costs may be allocated or transferred 
to benefitted projects on any reasonable documented basis. Where the 
purchase of equipment or other capital asset is specifically authorized 
under a Federal award, the costs are assignable to the Federal award 
regardless of the use that may be made of the equipment or other capital 
asset involved when no longer needed for the purpose for which it was 
originally required. See also Sec. Sec.  200.310 through 200.316 and 
200.439.
    (e) If the contract is subject to CAS, costs must be allocated to 
the contract pursuant to the Cost Accounting Standards. To the extent 
that CAS is applicable, the allocation of costs in accordance with CAS 
takes precedence over the allocation provisions in this part.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 
85 FR 49562, Aug. 13, 2020]



Sec.  200.406  Applicable credits.

    (a) Applicable credits refer to those receipts or reduction-of-
expenditure-type transactions that offset or reduce expense items 
allocable to the Federal award as direct or indirect (F&A) costs. 
Examples of such transactions are: purchase discounts, rebates or 
allowances,

[[Page 157]]

recoveries or indemnities on losses, insurance refunds or rebates, and 
adjustments of overpayments or erroneous charges. To the extent that 
such credits accruing to or received by the non-Federal entity relate to 
allowable costs, they must be credited to the Federal award either as a 
cost reduction or cash refund, as appropriate.
    (b) In some instances, the amounts received from the Federal 
Government to finance activities or service operations of the non-
Federal entity should be treated as applicable credits. Specifically, 
the concept of netting such credit items (including any amounts used to 
meet cost sharing or matching requirements) must be recognized in 
determining the rates or amounts to be charged to the Federal award. 
(See Sec. Sec.  200.436 and 200.468, for areas of potential application 
in the matter of Federal financing of activities.)

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 
85 FR 49562, Aug. 13, 2020]



Sec.  200.407  Prior written approval (prior approval).

    Under any given Federal award, the reasonableness and allocability 
of certain items of costs may be difficult to determine. In order to 
avoid subsequent disallowance or dispute based on unreasonableness or 
nonallocability, the non-Federal entity may seek the prior written 
approval of the cognizant agency for indirect costs or the Federal 
awarding agency in advance of the incurrence of special or unusual 
costs. Prior written approval should include the timeframe or scope of 
the agreement. The absence of prior written approval on any element of 
cost will not, in itself, affect the reasonableness or allocability of 
that element, unless prior approval is specifically required for 
allowability as described under certain circumstances in the following 
sections of this part:
    (a) Sec.  200.201 Use of grant agreements (including fixed amount 
awards), cooperative agreements, and contracts, paragraph (b)(5);
    (b) Sec.  200.306 Cost sharing or matching;
    (c) Sec.  200.307 Program income;
    (d) Sec.  200.308 Revision of budget and program plans;
    (e) Sec.  200.311 Real property;
    (f) Sec.  200.313 Equipment;
    (g) Sec.  200.333 Fixed amount subawards;
    (h) Sec.  200.413 Direct costs, paragraph (c);
    (i) Sec.  200.430 Compensation--personal services, paragraph (h);
    (j) Sec.  200.431 Compensation--fringe benefits;
    (k) Sec.  200.438 Entertainment costs;
    (l) Sec.  200.439 Equipment and other capital expenditures;
    (m) Sec.  200.440 Exchange rates;
    (n) Sec.  200.441 Fines, penalties, damages and other settlements;
    (o) Sec.  200.442 Fund raising and investment management costs;
    (p) Sec.  200.445 Goods or services for personal use;
    (q) Sec.  200.447 Insurance and indemnification;
    (r) Sec.  200.454 Memberships, subscriptions, and professional 
activity costs, paragraph (c);
    (s) Sec.  200.455 Organization costs;
    (t) Sec.  200.456 Participant support costs;
    (u) Sec.  200.458 Pre-award costs;
    (v) Sec.  200.462 Rearrangement and reconversion costs;
    (w) Sec.  200.467 Selling and marketing costs;
    (x) Sec.  200.470 Taxes (including Value Added Tax); and
    (y) Sec.  200.475 Travel costs.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 
85 FR 49562, Aug. 13, 2020]



Sec.  200.408  Limitation on allowance of costs.

    The Federal award may be subject to statutory requirements that 
limit the allowability of costs. When the maximum amount allowable under 
a limitation is less than the total amount determined in accordance with 
the principles in this part, the amount not recoverable under the 
Federal award may not be charged to the Federal award.



Sec.  200.409  Special considerations.

    In addition to the basic considerations regarding the allowability 
of costs highlighted in this subtitle, other subtitles in this part 
describe special considerations and requirements applicable to states, 
local governments, Indian tribes, and IHEs. In addition, certain 
provisions among the items of cost in this subpart are only applicable 
to

[[Page 158]]

certain types of non-Federal entities, as specified in the following 
sections:
    (a) Direct and Indirect (F&A) Costs (Sec. Sec.  200.412-200.415) of 
this subpart;
    (b) Special Considerations for States, Local Governments and Indian 
Tribes (Sec. Sec.  200.416 and 200.417) of this subpart; and
    (c) Special Considerations for Institutions of Higher Education 
(Sec. Sec.  200.418 and 200.419) of this subpart.

[85 FR 49562, Aug. 13, 2020]



Sec.  200.410  Collection of unallowable costs.

    Payments made for costs determined to be unallowable by either the 
Federal awarding agency, cognizant agency for indirect costs, or pass-
through entity, either as direct or indirect costs, must be refunded 
(including interest) to the Federal Government in accordance with 
instructions from the Federal agency that determined the costs are 
unallowable unless Federal statute or regulation directs otherwise. See 
also Sec. Sec.  200.300 through 200.309 in subpart D of this part.

[85 FR 49562, Aug. 13, 2020]



Sec.  200.411  Adjustment of previously negotiated indirect (F&A)
cost rates containing unallowable costs.

    (a) Negotiated indirect (F&A) cost rates based on a proposal later 
found to have included costs that:
    (1) Are unallowable as specified by Federal statutes, regulations or 
the terms and conditions of a Federal award; or
    (2) Are unallowable because they are not allocable to the Federal 
award(s), must be adjusted, or a refund must be made, in accordance with 
the requirements of this section. These adjustments or refunds are 
designed to correct the proposals used to establish the rates and do not 
constitute a reopening of the rate negotiation. The adjustments or 
refunds will be made regardless of the type of rate negotiated 
(predetermined, final, fixed, or provisional).
    (b) For rates covering a future fiscal year of the non-Federal 
entity, the unallowable costs will be removed from the indirect (F&A) 
cost pools and the rates appropriately adjusted.
    (c) For rates covering a past period, the Federal share of the 
unallowable costs will be computed for each year involved and a cash 
refund (including interest chargeable in accordance with applicable 
regulations) will be made to the Federal Government. If cash refunds are 
made for past periods covered by provisional or fixed rates, appropriate 
adjustments will be made when the rates are finalized to avoid duplicate 
recovery of the unallowable costs by the Federal Government.
    (d) For rates covering the current period, either a rate adjustment 
or a refund, as described in paragraphs (b) and (c) of this section, 
must be required by the cognizant agency for indirect costs. The choice 
of method must be at the discretion of the cognizant agency for indirect 
costs, based on its judgment as to which method would be most practical.
    (e) The amount or proportion of unallowable costs included in each 
year's rate will be assumed to be the same as the amount or proportion 
of unallowable costs included in the base year proposal used to 
establish the rate.

                     Direct and Indirect (F&A) Costs



Sec.  200.412  Classification of costs.

    There is no universal rule for classifying certain costs as either 
direct or indirect (F&A) under every accounting system. A cost may be 
direct with respect to some specific service or function, but indirect 
with respect to the Federal award or other final cost objective. 
Therefore, it is essential that each item of cost incurred for the same 
purpose be treated consistently in like circumstances either as a direct 
or an indirect (F&A) cost in order to avoid possible double-charging of 
Federal awards. Guidelines for determining direct and indirect (F&A) 
costs charged to Federal awards are provided in this subpart.



Sec.  200.413  Direct costs.

    (a) General. Direct costs are those costs that can be identified 
specifically with a particular final cost objective, such as a Federal 
award, or other internally or externally funded activity, or that can be 
directly assigned to such activities relatively easily with a high

[[Page 159]]

degree of accuracy. Costs incurred for the same purpose in like 
circumstances must be treated consistently as either direct or indirect 
(F&A) costs. See also Sec.  200.405.
    (b) Application to Federal awards. Identification with the Federal 
award rather than the nature of the goods and services involved is the 
determining factor in distinguishing direct from indirect (F&A) costs of 
Federal awards. Typical costs charged directly to a Federal award are 
the compensation of employees who work on that award, their related 
fringe benefit costs, the costs of materials and other items of expense 
incurred for the Federal award. If directly related to a specific award, 
certain costs that otherwise would be treated as indirect costs may also 
be considered direct costs. Examples include extraordinary utility 
consumption, the cost of materials supplied from stock or services 
rendered by specialized facilities, program evaluation costs, or other 
institutional service operations.
    (c) The salaries of administrative and clerical staff should 
normally be treated as indirect (F&A) costs. Direct charging of these 
costs may be appropriate only if all of the following conditions are 
met:
    (1) Administrative or clerical services are integral to a project or 
activity;
    (2) Individuals involved can be specifically identified with the 
project or activity;
    (3) Such costs are explicitly included in the budget or have the 
prior written approval of the Federal awarding agency; and
    (4) The costs are not also recovered as indirect costs.
    (d) Minor items. Any direct cost of minor amount may be treated as 
an indirect (F&A) cost for reasons of practicality where such accounting 
treatment for that item of cost is consistently applied to all Federal 
and non-Federal cost objectives.
    (e) The costs of certain activities are not allowable as charges to 
Federal awards. However, even though these costs are unallowable for 
purposes of computing charges to Federal awards, they nonetheless must 
be treated as direct costs for purposes of determining indirect (F&A) 
cost rates and be allocated their equitable share of the non-Federal 
entity's indirect costs if they represent activities which:
    (1) Include the salaries of personnel,
    (2) Occupy space, and
    (3) Benefit from the non-Federal entity's indirect (F&A) costs.
    (f) For nonprofit organizations, the costs of activities performed 
by the non-Federal entity primarily as a service to members, clients, or 
the general public when significant and necessary to the non-Federal 
entity's mission must be treated as direct costs whether or not 
allowable, and be allocated an equitable share of indirect (F&A) costs. 
Some examples of these types of activities include:
    (1) Maintenance of membership rolls, subscriptions, publications, 
and related functions. See also Sec.  200.454.
    (2) Providing services and information to members, legislative or 
administrative bodies, or the public. See also Sec. Sec.  200.454 and 
200.450.
    (3) Promotion, lobbying, and other forms of public relations. See 
also Sec. Sec.  200.421 and 200.450.
    (4) Conferences except those held to conduct the general 
administration of the non-Federal entity. See also Sec.  200.432.
    (5) Maintenance, protection, and investment of special funds not 
used in operation of the non-Federal entity. See also Sec.  200.442.
    (6) Administration of group benefits on behalf of members or 
clients, including life and hospital insurance, annuity or retirement 
plans, and financial aid. See also Sec.  200.431.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 
85 FR 49562, Aug. 13, 2020]



Sec.  200.414  Indirect (F&A) costs.

    (a) Facilities and administration classification. For major 
Institutions of Higher Education (IHE) and major nonprofit 
organizations, indirect (F&A) costs must be classified within two broad 
categories: ``Facilities'' and ``Administration.'' ``Facilities'' is 
defined as depreciation on buildings, equipment and capital improvement, 
interest on debt associated with certain buildings, equipment and 
capital improvements, and operations and

[[Page 160]]

maintenance expenses. ``Administration'' is defined as general 
administration and general expenses such as the director's office, 
accounting, personnel and all other types of expenditures not listed 
specifically under one of the subcategories of ``Facilities'' (including 
cross allocations from other pools, where applicable). For nonprofit 
organizations, library expenses are included in the ``Administration'' 
category; for IHEs, they are included in the ``Facilities'' category. 
Major IHEs are defined as those required to use the Standard Format for 
Submission as noted in appendix III to this part, and Rate Determination 
for Institutions of Higher Education paragraph C. 11. Major nonprofit 
organizations are those which receive more than $10 million dollars in 
direct Federal funding.
    (b) Diversity of nonprofit organizations. Because of the diverse 
characteristics and accounting practices of nonprofit organizations, it 
is not possible to specify the types of cost which may be classified as 
indirect (F&A) cost in all situations. Identification with a Federal 
award rather than the nature of the goods and services involved is the 
determining factor in distinguishing direct from indirect (F&A) costs of 
Federal awards. However, typical examples of indirect (F&A) cost for 
many nonprofit organizations may include depreciation on buildings and 
equipment, the costs of operating and maintaining facilities, and 
general administration and general expenses, such as the salaries and 
expenses of executive officers, personnel administration, and 
accounting.
    (c) Federal Agency Acceptance of Negotiated Indirect Cost Rates. 
(See also Sec.  200.306.)
    (1) The negotiated rates must be accepted by all Federal awarding 
agencies. A Federal awarding agency may use a rate different from the 
negotiated rate for a class of Federal awards or a single Federal award 
only when required by Federal statute or regulation, or when approved by 
a Federal awarding agency head or delegate based on documented 
justification as described in paragraph (c)(3) of this section.
    (2) The Federal awarding agency head or delegate must notify OMB of 
any approved deviations.
    (3) The Federal awarding agency must implement, and make publicly 
available, the policies, procedures and general decision-making criteria 
that their programs will follow to seek and justify deviations from 
negotiated rates.
    (4) As required under Sec.  200.204, the Federal awarding agency 
must include in the notice of funding opportunity the policies relating 
to indirect cost rate reimbursement, matching, or cost share as approved 
under paragraph (e)(1) of this section. As appropriate, the Federal 
agency should incorporate discussion of these policies into Federal 
awarding agency outreach activities with non-Federal entities prior to 
the posting of a notice of funding opportunity.
    (d) Pass-through entities are subject to the requirements in Sec.  
200.332(a)(4).
    (e) Requirements for development and submission of indirect (F&A) 
cost rate proposals and cost allocation plans are contained in 
Appendices III-VII and Appendix IX as follows:
    (1) Appendix III to Part 200--Indirect (F&A) Costs Identification 
and Assignment, and Rate Determination for Institutions of Higher 
Education (IHEs);
    (2) Appendix IV to Part 200--Indirect (F&A) Costs Identification and 
Assignment, and Rate Determination for Nonprofit Organizations;
    (3) Appendix V to Part 200--State/Local Governmentwide Central 
Service Cost Allocation Plans;
    (4) Appendix VI to Part 200--Public Assistance Cost Allocation 
Plans;
    (5) Appendix VII to Part 200--States and Local Government and Indian 
Tribe Indirect Cost Proposals; and
    (6) Appendix IX to Part 200--Hospital Cost Principles.
    (f) In addition to the procedures outlined in the appendices in 
paragraph (e) of this section, any non-Federal entity that does not have 
a current negotiated (including provisional) rate, except for those non-
Federal entities described in appendix VII to this part, paragraph 
D.1.b, may elect to charge a de minimis rate of 10% of modified total 
direct costs (MTDC) which may be used indefinitely. No documentation

[[Page 161]]

is required to justify the 10% de minimis indirect cost rate. As 
described in Sec.  200.403, costs must be consistently charged as either 
indirect or direct costs, but may not be double charged or 
inconsistently charged as both. If chosen, this methodology once elected 
must be used consistently for all Federal awards until such time as a 
non-Federal entity chooses to negotiate for a rate, which the non-
Federal entity may apply to do at any time.
    (g) Any non-Federal entity that has a current federally-negotiated 
indirect cost rate may apply for a one-time extension of the rates in 
that agreement for a period of up to four years. This extension will be 
subject to the review and approval of the cognizant agency for indirect 
costs. If an extension is granted the non-Federal entity may not request 
a rate review until the extension period ends. At the end of the 4-year 
extension, the non-Federal entity must re-apply to negotiate a rate. 
Subsequent one-time extensions (up to four years) are permitted if a 
renegotiation is completed between each extension request.
    (h) The federally negotiated indirect rate, distribution base, and 
rate type for a non-Federal entity (except for the Indian tribes or 
tribal organizations, as defined in the Indian Self Determination, 
Education and Assistance Act, 25 U.S.C. 450b(1)) must be available 
publicly on an OMB-designated Federal website.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49563, Aug. 13, 2020]



Sec.  200.415  Required certifications.

    Required certifications include:
    (a) To assure that expenditures are proper and in accordance with 
the terms and conditions of the Federal award and approved project 
budgets, the annual and final fiscal reports or vouchers requesting 
payment under the agreements must include a certification, signed by an 
official who is authorized to legally bind the non-Federal entity, which 
reads as follows: ``By signing this report, I certify to the best of my 
knowledge and belief that the report is true, complete, and accurate, 
and the expenditures, disbursements and cash receipts are for the 
purposes and objectives set forth in the terms and conditions of the 
Federal award. I am aware that any false, fictitious, or fraudulent 
information, or the omission of any material fact, may subject me to 
criminal, civil or administrative penalties for fraud, false statements, 
false claims or otherwise. (U.S. Code Title 18, Section 1001 and Title 
31, Sections 3729-3730 and 3801-3812).''
    (b) Certification of cost allocation plan or indirect (F&A) cost 
rate proposal. Each cost allocation plan or indirect (F&A) cost rate 
proposal must comply with the following:
    (1) A proposal to establish a cost allocation plan or an indirect 
(F&A) cost rate, whether submitted to a Federal cognizant agency for 
indirect costs or maintained on file by the non-Federal entity, must be 
certified by the non-Federal entity using the Certificate of Cost 
Allocation Plan or Certificate of Indirect Costs as set forth in 
appendices III through VII, and IX of this part. The certificate must be 
signed on behalf of the non-Federal entity by an individual at a level 
no lower than vice president or chief financial officer of the non-
Federal entity that submits the proposal.
    (2) Unless the non-Federal entity has elected the option under Sec.  
200.414(f), the Federal Government may either disallow all indirect 
(F&A) costs or unilaterally establish such a plan or rate when the non-
Federal entity fails to submit a certified proposal for establishing 
such a plan or rate in accordance with the requirements. Such a plan or 
rate may be based upon audited historical data or such other data that 
have been furnished to the cognizant agency for indirect costs and for 
which it can be demonstrated that all unallowable costs have been 
excluded. When a cost allocation plan or indirect cost rate is 
unilaterally established by the Federal Government because the non-
Federal entity failed to submit a certified proposal, the plan or rate 
established will be set to ensure that potentially unallowable costs 
will not be reimbursed.
    (c) Certifications by nonprofit organizations as appropriate that 
they did not meet the definition of a major nonprofit organization as 
defined in Sec.  200.414(a).

[[Page 162]]

    (d) See also Sec.  200.450 for another required certification.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49563, Aug. 13, 2020]

 Special Considerations for States, Local Governments and Indian Tribes



Sec.  200.416  Cost allocation plans and indirect cost proposals.

    (a) For states, local governments and Indian tribes, certain 
services, such as motor pools, computer centers, purchasing, accounting, 
etc., are provided to operating agencies on a centralized basis. Since 
Federal awards are performed within the individual operating agencies, 
there needs to be a process whereby these central service costs can be 
identified and assigned to benefitted activities on a reasonable and 
consistent basis. The central service cost allocation plan provides that 
process.
    (b) Individual operating agencies (governmental department or 
agency), normally charge Federal awards for indirect costs through an 
indirect cost rate. A separate indirect cost rate(s) proposal for each 
operating agency is usually necessary to claim indirect costs under 
Federal awards. Indirect costs include:
    (1) The indirect costs originating in each department or agency of 
the governmental unit carrying out Federal awards and
    (2) The costs of central governmental services distributed through 
the central service cost allocation plan and not otherwise treated as 
direct costs.
    (c) The requirements for development and submission of cost 
allocation plans (for central service costs and public assistance 
programs) and indirect cost rate proposals are contained in appendices 
IV, V and VI to this part.



Sec.  200.417  Interagency service.

    The cost of services provided by one agency to another within the 
governmental unit may include allowable direct costs of the service plus 
a pro-rated share of indirect costs. A standard indirect cost allowance 
equal to ten percent of the direct salary and wage cost of providing the 
service (excluding overtime, shift premiums, and fringe benefits) may be 
used in lieu of determining the actual indirect costs of the service. 
These services do not include centralized services included in central 
service cost allocation plans as described in Appendix V to Part 200.

[85 FR 49564, Aug. 13, 2020]

       Special Considerations for Institutions of Higher Education



Sec.  200.418  Costs incurred by states and local governments.

    Costs incurred or paid by a state or local government on behalf of 
its IHEs for fringe benefit programs, such as pension costs and FICA and 
any other costs specifically incurred on behalf of, and in direct 
benefit to, the IHEs, are allowable costs of such IHEs whether or not 
these costs are recorded in the accounting records of the institutions, 
subject to the following:
    (a) The costs meet the requirements of Sec.  200.402-411 of this 
subpart;
    (b) The costs are properly supported by approved cost allocation 
plans in accordance with applicable Federal cost accounting principles 
in this part; and
    (c) The costs are not otherwise borne directly or indirectly by the 
Federal Government.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49564, Aug. 13, 2020]



Sec.  200.419  Cost accounting standards and disclosure statement.

    (a) An IHE that receive an aggregate total $50 million or more in 
Federal awards and instruments subject to this subpart (as specified in 
Sec.  200.101) in its most recently completed fiscal year must comply 
with the Cost Accounting Standards Board's cost accounting standards 
located at 48 CFR 9905.501, 9905.502, 9905.505, and 9905.506. CAS-
covered contracts and subcontracts awarded to the IHEs are subject to 
the broader range of CAS requirements at 48 CFR 9900 through 9999 and 48 
CFR part 30 (FAR Part 30).
    (b) Disclosure statement. An IHE that receives an aggregate total 
$50 million or more in Federal awards and instruments subject to this 
subpart (as specified in Sec.  200.101) during its most recently 
completed fiscal year must disclose their cost accounting practices by 
filing a Disclosure Statement (DS-

[[Page 163]]

2), which is reproduced in Appendix III to Part 200. With the approval 
of the cognizant agency for indirect costs, an IHE may meet the DS-2 
submission by submitting the DS-2 for each business unit that received 
$50 million or more in Federal awards and instruments.
    (1) The DS-2 must be submitted to the cognizant agency for indirect 
costs with a copy to the IHE's cognizant agency for audit. The initial 
DS-2 and revisions to the DS-2 must be submitted in coordination with 
the IHE's indirect (F&A) rate proposal, unless an earlier submission is 
requested by the cognizant agency for indirect costs. IHEs with CAS-
covered contracts or subcontracts meeting the dollar threshold in 48 CFR 
9903.202-1(f) must submit their initial DS-2 or revisions no later than 
prior to the award of a CAS-covered contract or subcontract.
    (2) An IHE must maintain an accurate DS-2 and comply with disclosed 
cost accounting practices. An IHE must file amendments to the DS-2 to 
the cognizant agency for indirect costs in advance of a disclosed 
practice being changed to comply with a new or modified standard, or 
when a practice is changed for other reasons. An IHE may proceed with 
implementing the change after it has notified the Federal cognizant 
agency for indirect costs. If the change represents a variation from 2 
CFR part 200, the change may require approval by the Federal cognizant 
agency for indirect costs, in accordance with Sec.  200.102(b). 
Amendments of a DS-2 may be submitted at any time. Resubmission of a 
complete, updated DS-2 is discouraged except when there are extensive 
changes to disclosed practices.
    (3) Cost and funding adjustments. Cost adjustments must be made by 
the cognizant agency for indirect costs if an IHE fails to comply with 
the cost policies in this part or fails to consistently follow its 
established or disclosed cost accounting practices when estimating, 
accumulating or reporting the costs of Federal awards, and the aggregate 
cost impact on Federal awards is material. The cost adjustment must 
normally be made on an aggregate basis for all affected Federal awards 
through an adjustment of the IHE's future F&A costs rates or other means 
considered appropriate by the cognizant agency for indirect costs. Under 
the terms of CAS covered contracts, adjustments in the amount of funding 
provided may also be required when the estimated proposal costs were not 
determined in accordance with established cost accounting practices.
    (4) Overpayments. Excess amounts paid in the aggregate by the 
Federal Government under Federal awards due to a noncompliant cost 
accounting practice used to estimate, accumulate, or report costs must 
be credited or refunded, as deemed appropriate by the cognizant agency 
for indirect costs. Interest applicable to the excess amounts paid in 
the aggregate during the period of noncompliance must also be determined 
and collected in accordance with applicable Federal agency regulations.
    (5) Compliant cost accounting practice changes. Changes from one 
compliant cost accounting practice to another compliant practice that 
are approved by the cognizant agency for indirect costs may require cost 
adjustments if the change has a material effect on Federal awards and 
the changes are deemed appropriate by the cognizant agency for indirect 
costs.
    (6) Responsibilities. The cognizant agency for indirect cost must:
    (i) Determine cost adjustments for all Federal awards in the 
aggregate on behalf of the Federal Government. Actions of the cognizant 
agency for indirect cost in making cost adjustment determinations must 
be coordinated with all affected Federal awarding agencies to the extent 
necessary.
    (ii) Prescribe guidelines and establish internal procedures to 
promptly determine on behalf of the Federal Government that a DS-2 
adequately discloses the IHE's cost accounting practices and that the 
disclosed practices are compliant with applicable CAS and the 
requirements of this part.
    (iii) Distribute to all affected Federal awarding agencies any DS-2 
determination of adequacy or noncompliance.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49564, Aug. 13, 2020]

[[Page 164]]

              General Provisions for Selected Items of Cost



Sec.  200.420  Considerations for selected items of cost.

    This section provides principles to be applied in establishing the 
allowability of certain items involved in determining cost, in addition 
to the requirements of Subtitle II of this subpart. These principles 
apply whether or not a particular item of cost is properly treated as 
direct cost or indirect (F&A) cost. Failure to mention a particular item 
of cost is not intended to imply that it is either allowable or 
unallowable; rather, determination as to allowability in each case 
should be based on the treatment provided for similar or related items 
of cost, and based on the principles described in Sec. Sec.  200.402 
through 200.411. In case of a discrepancy between the provisions of a 
specific Federal award and the provisions below, the Federal award 
governs. Criteria outlined in Sec.  200.403 must be applied in 
determining allowability. See also Sec.  200.102.

[85 FR 49564, Aug. 13, 2020]



Sec.  200.421  Advertising and public relations.

    (a) The term advertising costs means the costs of advertising media 
and corollary administrative costs. Advertising media include magazines, 
newspapers, radio and television, direct mail, exhibits, electronic or 
computer transmittals, and the like.
    (b) The only allowable advertising costs are those which are solely 
for:
    (1) The recruitment of personnel required by the non-Federal entity 
for performance of a Federal award (See also Sec.  200.463);
    (2) The procurement of goods and services for the performance of a 
Federal award;
    (3) The disposal of scrap or surplus materials acquired in the 
performance of a Federal award except when non-Federal entities are 
reimbursed for disposal costs at a predetermined amount; or
    (4) Program outreach and other specific purposes necessary to meet 
the requirements of the Federal award.
    (c) The term ``public relations'' includes community relations and 
means those activities dedicated to maintaining the image of the non-
Federal entity or maintaining or promoting understanding and favorable 
relations with the community or public at large or any segment of the 
public.
    (d) The only allowable public relations costs are:
    (1) Costs specifically required by the Federal award;
    (2) Costs of communicating with the public and press pertaining to 
specific activities or accomplishments which result from performance of 
the Federal award (these costs are considered necessary as part of the 
outreach effort for the Federal award); or
    (3) Costs of conducting general liaison with news media and 
government public relations officers, to the extent that such activities 
are limited to communication and liaison necessary to keep the public 
informed on matters of public concern, such as notices of funding 
opportunities, financial matters, etc.
    (e) Unallowable advertising and public relations costs include the 
following:
    (1) All advertising and public relations costs other than as 
specified in paragraphs (b) and (d) of this section;
    (2) Costs of meetings, conventions, convocations, or other events 
related to other activities of the entity (see also Sec.  200.432), 
including:
    (i) Costs of displays, demonstrations, and exhibits;
    (ii) Costs of meeting rooms, hospitality suites, and other special 
facilities used in conjunction with shows and other special events; and
    (iii) Salaries and wages of employees engaged in setting up and 
displaying exhibits, making demonstrations, and providing briefings;
    (3) Costs of promotional items and memorabilia, including models, 
gifts, and souvenirs;
    (4) Costs of advertising and public relations designed solely to 
promote the non-Federal entity.

[78 FR 76808, Dec. 26, 2013, as amended at 85 FR 49564, Aug. 13, 2020]



Sec.  200.422  Advisory councils.

    Costs incurred by advisory councils or committees are unallowable 
unless authorized by statute, the Federal

[[Page 165]]

awarding agency or as an indirect cost where allocable to Federal 
awards. See Sec.  200.444, applicable to States, local governments, and 
Indian tribes.

[85 FR 49564, Aug. 13, 2020]



Sec.  200.423  Alcoholic beverages.

    Costs of alcoholic beverages are unallowable.



Sec.  200.424  Alumni/ae activities.

    Costs incurred by IHEs for, or in support of, alumni/ae activities 
are unallowable.



Sec.  200.425  Audit services.

    (a) A reasonably proportionate share of the costs of audits required 
by, and performed in accordance with, the Single Audit Act Amendments of 
1996 (31 U.S.C. 7501-7507), as implemented by requirements of this part, 
are allowable. However, the following audit costs are unallowable:
    (1) Any costs when audits required by the Single Audit Act and 
subpart F of this part have not been conducted or have been conducted 
but not in accordance therewith; and
    (2) Any costs of auditing a non-Federal entity that is exempted from 
having an audit conducted under the Single Audit Act and subpart F of 
this part because its expenditures under Federal awards are less than 
$750,000 during the non-Federal entity's fiscal year.
    (b) The costs of a financial statement audit of a non-Federal entity 
that does not currently have a Federal award may be included in the 
indirect cost pool for a cost allocation plan or indirect cost proposal.
    (c) Pass-through entities may charge Federal awards for the cost of 
agreed-upon-procedures engagements to monitor subrecipients (in 
accordance with subpart D, Sec. Sec.  200.331-333) who are exempted from 
the requirements of the Single Audit Act and subpart F of this part. 
This cost is allowable only if the agreed-upon-procedures engagements 
are:
    (1) Conducted in accordance with GAGAS attestation standards;
    (2) Paid for and arranged by the pass-through entity; and
    (3) Limited in scope to one or more of the following types of 
compliance requirements: activities allowed or unallowed; allowable 
costs/cost principles; eligibility; and reporting.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49564, Aug. 13, 2020]



Sec.  200.426  Bad debts.

    Bad debts (debts which have been determined to be uncollectable), 
including losses (whether actual or estimated) arising from 
uncollectable accounts and other claims, are unallowable. Related 
collection costs, and related legal costs, arising from such debts after 
they have been determined to be uncollectable are also unallowable. See 
also Sec.  200.428.

[85 FR 49565, Aug. 13, 2020]



Sec.  200.427  Bonding costs.

    (a) Bonding costs arise when the Federal awarding agency requires 
assurance against financial loss to itself or others by reason of the 
act or default of the non-Federal entity. They arise also in instances 
where the non-Federal entity requires similar assurance, including: 
bonds as bid, performance, payment, advance payment, infringement, and 
fidelity bonds for employees and officials.
    (b) Costs of bonding required pursuant to the terms and conditions 
of the Federal award are allowable.
    (c) Costs of bonding required by the non-Federal entity in the 
general conduct of its operations are allowable as an indirect cost to 
the extent that such bonding is in accordance with sound business 
practice and the rates and premiums are reasonable under the 
circumstances.



Sec.  200.428  Collections of improper payments.

    The costs incurred by a non-Federal entity to recover improper 
payments are allowable as either direct or indirect costs, as 
appropriate. Amounts collected may be used by the non-Federal entity in 
accordance with cash management standards set forth in Sec.  200.305.

[85 FR 49565, Aug. 13, 2020]

[[Page 166]]



Sec.  200.429  Commencement and convocation costs.

    For IHEs, costs incurred for commencements and convocations are 
unallowable, except as provided for in (B)(9) Student Administration and 
Services, in appendix III to this part, as activity costs.

[85 FR 49565, Aug. 13, 2020]



Sec.  200.430  Compensation--personal services.

    (a) General. Compensation for personal services includes all 
remuneration, paid currently or accrued, for services of employees 
rendered during the period of performance under the Federal award, 
including but not necessarily limited to wages and salaries. 
Compensation for personal services may also include fringe benefits 
which are addressed in Sec.  200.431. Costs of compensation are 
allowable to the extent that they satisfy the specific requirements of 
this part, and that the total compensation for individual employees:
    (1) Is reasonable for the services rendered and conforms to the 
established written policy of the non-Federal entity consistently 
applied to both Federal and non-Federal activities;
    (2) Follows an appointment made in accordance with a non-Federal 
entity's laws and/or rules or written policies and meets the 
requirements of Federal statute, where applicable; and
    (3) Is determined and supported as provided in paragraph (i) of this 
section, when applicable.
    (b) Reasonableness. Compensation for employees engaged in work on 
Federal awards will be considered reasonable to the extent that it is 
consistent with that paid for similar work in other activities of the 
non-Federal entity. In cases where the kinds of employees required for 
Federal awards are not found in the other activities of the non-Federal 
entity, compensation will be considered reasonable to the extent that it 
is comparable to that paid for similar work in the labor market in which 
the non-Federal entity competes for the kind of employees involved.
    (c) Professional activities outside the non-Federal entity. Unless 
an arrangement is specifically authorized by a Federal awarding agency, 
a non-Federal entity must follow its written non-Federal entity-wide 
policies and practices concerning the permissible extent of professional 
services that can be provided outside the non-Federal entity for non-
organizational compensation. Where such non-Federal entity-wide written 
policies do not exist or do not adequately define the permissible extent 
of consulting or other non-organizational activities undertaken for 
extra outside pay, the Federal Government may require that the effort of 
professional staff working on Federal awards be allocated between:
    (1) Non-Federal entity activities, and
    (2) Non-organizational professional activities. If the Federal 
awarding agency considers the extent of non-organizational professional 
effort excessive or inconsistent with the conflicts-of-interest terms 
and conditions of the Federal award, appropriate arrangements governing 
compensation will be negotiated on a case-by-case basis.
    (d) Unallowable costs. (1) Costs which are unallowable under other 
sections of these principles must not be allowable under this section 
solely on the basis that they constitute personnel compensation.
    (2) The allowable compensation for certain employees is subject to a 
ceiling in accordance with statute. For the amount of the ceiling for 
cost-reimbursement contracts, the covered compensation subject to the 
ceiling, the covered employees, and other relevant provisions, see 10 
U.S.C. 2324(e)(1)(P), and 41 U.S.C. 1127 and 4304(a)(16). For other 
types of Federal awards, other statutory ceilings may apply.
    (e) Special considerations. Special considerations in determining 
allowability of compensation will be given to any change in a non-
Federal entity's compensation policy resulting in a substantial increase 
in its employees' level of compensation (particularly when the change 
was concurrent with an increase in the ratio of Federal awards to other 
activities) or any change in the treatment of allowability of specific 
types of compensation due to changes in Federal policy.
    (f) Incentive compensation. Incentive compensation to employees 
based on

[[Page 167]]

cost reduction, or efficient performance, suggestion awards, safety 
awards, etc., is allowable to the extent that the overall compensation 
is determined to be reasonable and such costs are paid or accrued 
pursuant to an agreement entered into in good faith between the non-
Federal entity and the employees before the services were rendered, or 
pursuant to an established plan followed by the non-Federal entity so 
consistently as to imply, in effect, an agreement to make such payment.
    (g) Nonprofit organizations. For compensation to members of 
nonprofit organizations, trustees, directors, associates, officers, or 
the immediate families thereof, determination must be made that such 
compensation is reasonable for the actual personal services rendered 
rather than a distribution of earnings in excess of costs. This may 
include director's and executive committee member's fees, incentive 
awards, allowances for off-site pay, incentive pay, location allowances, 
hardship pay, and cost-of-living differentials.
    (h) Institutions of Higher Education (IHEs). (1) Certain conditions 
require special consideration and possible limitations in determining 
allowable personnel compensation costs under Federal awards. Among such 
conditions are the following:
    (i) Allowable activities. Charges to Federal awards may include 
reasonable amounts for activities contributing and directly related to 
work under an agreement, such as delivering special lectures about 
specific aspects of the ongoing activity, writing reports and articles, 
developing and maintaining protocols (human, animals, etc.), managing 
substances/chemicals, managing and securing project-specific data, 
coordinating research subjects, participating in appropriate seminars, 
consulting with colleagues and graduate students, and attending meetings 
and conferences.
    (ii) Incidental activities. Incidental activities for which 
supplemental compensation is allowable under written institutional 
policy (at a rate not to exceed institutional base salary) need not be 
included in the records described in paragraph (i) of this section to 
directly charge payments of incidental activities, such activities must 
either be specifically provided for in the Federal award budget or 
receive prior written approval by the Federal awarding agency.
    (2) Salary basis. Charges for work performed on Federal awards by 
faculty members during the academic year are allowable at the IBS rate. 
Except as noted in paragraph (h)(1)(ii) of this section, in no event 
will charges to Federal awards, irrespective of the basis of 
computation, exceed the proportionate share of the IBS for that period. 
This principle applies to all members of faculty at an institution. IBS 
is defined as the annual compensation paid by an IHE for an individual's 
appointment, whether that individual's time is spent on research, 
instruction, administration, or other activities. IBS excludes any 
income that an individual earns outside of duties performed for the IHE. 
Unless there is prior approval by the Federal awarding agency, charges 
of a faculty member's salary to a Federal award must not exceed the 
proportionate share of the IBS for the period during which the faculty 
member worked on the award.
    (3) Intra-Institution of Higher Education (IHE) consulting. Intra-
IHE consulting by faculty should be undertaken as an IHE responsibility 
requiring no compensation in addition to IBS. However, in unusual cases 
where consultation is across departmental lines or involves a separate 
or remote operation, and the work performed by the faculty member is in 
addition to his or her regular responsibilities, any charges for such 
work representing additional compensation above IBS are allowable 
provided that such consulting arrangements are specifically provided for 
in the Federal award or approved in writing by the Federal awarding 
agency.
    (4) Extra Service Pay normally represents overload compensation, 
subject to institutional compensation policies for services above and 
beyond IBS. Where extra service pay is a result of Intra-IHE consulting, 
it is subject to the same requirements of paragraph (b) above. It is 
allowable if all of the following conditions are met:
    (i) The non-Federal entity establishes consistent written policies 
which

[[Page 168]]

apply uniformly to all faculty members, not just those working on 
Federal awards.
    (ii) The non-Federal entity establishes a consistent written 
definition of work covered by IBS which is specific enough to determine 
conclusively when work beyond that level has occurred. This may be 
described in appointment letters or other documentations.
    (iii) The supplementation amount paid is commensurate with the IBS 
rate of pay and the amount of additional work performed. See paragraph 
(h)(2) of this section.
    (iv) The salaries, as supplemented, fall within the salary structure 
and pay ranges established by and documented in writing or otherwise 
applicable to the non-Federal entity.
    (v) The total salaries charged to Federal awards including extra 
service pay are subject to the Standards of Documentation as described 
in paragraph (i) of this section.
    (5) Periods outside the academic year. (i) Except as specified for 
teaching activity in paragraph (h)(5)(ii) of this section, charges for 
work performed by faculty members on Federal awards during periods not 
included in the base salary period will be at a rate not in excess of 
the IBS.
    (ii) Charges for teaching activities performed by faculty members on 
Federal awards during periods not included in IBS period will be based 
on the normal written policy of the IHE governing compensation to 
faculty members for teaching assignments during such periods.
    (6) Part-time faculty. Charges for work performed on Federal awards 
by faculty members having only part-time appointments will be determined 
at a rate not in excess of that regularly paid for part-time 
assignments.
    (7) Sabbatical leave costs. Rules for sabbatical leave are as 
follow:
    (i) Costs of leaves of absence by employees for performance of 
graduate work or sabbatical study, travel, or research are allowable 
provided the IHE has a uniform written policy on sabbatical leave for 
persons engaged in instruction and persons engaged in research. Such 
costs will be allocated on an equitable basis among all related 
activities of the IHE.
    (ii) Where sabbatical leave is included in fringe benefits for which 
a cost is determined for assessment as a direct charge, the aggregate 
amount of such assessments applicable to all work of the institution 
during the base period must be reasonable in relation to the IHE's 
actual experience under its sabbatical leave policy.
    (8) Salary rates for non-faculty members. Non-faculty full-time 
professional personnel may also earn ``extra service pay'' in accordance 
with the non-Federal entity's written policy and consistent with 
paragraph (h)(1)(i) of this section.
    (i) Standards for Documentation of Personnel Expenses (1) Charges to 
Federal awards for salaries and wages must be based on records that 
accurately reflect the work performed. These records must:
    (i) Be supported by a system of internal control which provides 
reasonable assurance that the charges are accurate, allowable, and 
properly allocated;
    (ii) Be incorporated into the official records of the non-Federal 
entity;
    (iii) Reasonably reflect the total activity for which the employee 
is compensated by the non-Federal entity, not exceeding 100% of 
compensated activities (for IHE, this per the IHE's definition of IBS);
    (iv) Encompass federally-assisted and all other activities 
compensated by the non-Federal entity on an integrated basis, but may 
include the use of subsidiary records as defined in the non-Federal 
entity's written policy;
    (v) Comply with the established accounting policies and practices of 
the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of 
incidental work for IHEs.); and
    (vi) [Reserved]
    (vii) Support the distribution of the employee's salary or wages 
among specific activities or cost objectives if the employee works on 
more than one Federal award; a Federal award and non-Federal award; an 
indirect cost activity and a direct cost activity; two or more indirect 
activities which are allocated using different allocation bases; or an 
unallowable activity and a direct or indirect cost activity.
    (viii) Budget estimates (i.e., estimates determined before the 
services

[[Page 169]]

are performed) alone do not qualify as support for charges to Federal 
awards, but may be used for interim accounting purposes, provided that:
    (A) The system for establishing the estimates produces reasonable 
approximations of the activity actually performed;
    (B) Significant changes in the corresponding work activity (as 
defined by the non-Federal entity's written policies) are identified and 
entered into the records in a timely manner. Short term (such as one or 
two months) fluctuation between workload categories need not be 
considered as long as the distribution of salaries and wages is 
reasonable over the longer term; and
    (C) The non-Federal entity's system of internal controls includes 
processes to review after-the-fact interim charges made to a Federal 
award based on budget estimates. All necessary adjustment must be made 
such that the final amount charged to the Federal award is accurate, 
allowable, and properly allocated.
    (ix) Because practices vary as to the activity constituting a full 
workload (for IHEs, IBS), records may reflect categories of activities 
expressed as a percentage distribution of total activities.
    (x) It is recognized that teaching, research, service, and 
administration are often inextricably intermingled in an academic 
setting. When recording salaries and wages charged to Federal awards for 
IHEs, a precise assessment of factors that contribute to costs is 
therefore not always feasible, nor is it expected.
    (2) For records which meet the standards required in paragraph 
(i)(1) of this section, the non-Federal entity will not be required to 
provide additional support or documentation for the work performed, 
other than that referenced in paragraph (i)(3) of this section.
    (3) In accordance with Department of Labor regulations implementing 
the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the 
salaries and wages of nonexempt employees, in addition to the supporting 
documentation described in this section, must also be supported by 
records indicating the total number of hours worked each day.
    (4) Salaries and wages of employees used in meeting cost sharing or 
matching requirements on Federal awards must be supported in the same 
manner as salaries and wages claimed for reimbursement from Federal 
awards.
    (5) For states, local governments and Indian tribes, substitute 
processes or systems for allocating salaries and wages to Federal awards 
may be used in place of or in addition to the records described in 
paragraph (1) if approved by the cognizant agency for indirect cost. 
Such systems may include, but are not limited to, random moment 
sampling, ``rolling'' time studies, case counts, or other quantifiable 
measures of work performed.
    (i) Substitute systems which use sampling methods (primarily for 
Temporary Assistance for Needy Families (TANF), the Supplemental 
Nutrition Assistance Program (SNAP), Medicaid, and other public 
assistance programs) must meet acceptable statistical sampling standards 
including:
    (A) The sampling universe must include all of the employees whose 
salaries and wages are to be allocated based on sample results except as 
provided in paragraph (i)(5)(iii) of this section;
    (B) The entire time period involved must be covered by the sample; 
and
    (C) The results must be statistically valid and applied to the 
period being sampled.
    (ii) Allocating charges for the sampled employees' supervisors, 
clerical and support staffs, based on the results of the sampled 
employees, will be acceptable.
    (iii) Less than full compliance with the statistical sampling 
standards noted in subsection (5)(i) may be accepted by the cognizant 
agency for indirect costs if it concludes that the amounts to be 
allocated to Federal awards will be minimal, or if it concludes that the 
system proposed by the non-Federal entity will result in lower costs to 
Federal awards than a system which complies with the standards.
    (6) Cognizant agencies for indirect costs are encouraged to approve 
alternative proposals based on outcomes and milestones for program 
performance where these are clearly documented. Where approved by the 
Federal

[[Page 170]]

cognizant agency for indirect costs, these plans are acceptable as an 
alternative to the requirements of paragraph (i)(1) of this section.
    (7) For Federal awards of similar purpose activity or instances of 
approved blended funding, a non-Federal entity may submit performance 
plans that incorporate funds from multiple Federal awards and account 
for their combined use based on performance-oriented metrics, provided 
that such plans are approved in advance by all involved Federal awarding 
agencies. In these instances, the non-Federal entity must submit a 
request for waiver of the requirements based on documentation that 
describes the method of charging costs, relates the charging of costs to 
the specific activity that is applicable to all fund sources, and is 
based on quantifiable measures of the activity in relation to time 
charged.
    (8) For a non-Federal entity where the records do not meet the 
standards described in this section, the Federal Government may require 
personnel activity reports, including prescribed certifications, or 
equivalent documentation that support the records as required in this 
section.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49565, Aug. 13, 2020]



Sec.  200.431  Compensation--fringe benefits.

    (a) General. Fringe benefits are allowances and services provided by 
employers to their employees as compensation in addition to regular 
salaries and wages. Fringe benefits include, but are not limited to, the 
costs of leave (vacation, family-related, sick or military), employee 
insurance, pensions, and unemployment benefit plans. Except as provided 
elsewhere in these principles, the costs of fringe benefits are 
allowable provided that the benefits are reasonable and are required by 
law, non-Federal entity-employee agreement, or an established policy of 
the non-Federal entity.
    (b) Leave. The cost of fringe benefits in the form of regular 
compensation paid to employees during periods of authorized absences 
from the job, such as for annual leave, family-related leave, sick 
leave, holidays, court leave, military leave, administrative leave, and 
other similar benefits, are allowable if all of the following criteria 
are met:
    (1) They are provided under established written leave policies;
    (2) The costs are equitably allocated to all related activities, 
including Federal awards; and,
    (3) The accounting basis (cash or accrual) selected for costing each 
type of leave is consistently followed by the non-Federal entity or 
specified grouping of employees.
    (i) When a non-Federal entity uses the cash basis of accounting, the 
cost of leave is recognized in the period that the leave is taken and 
paid for. Payments for unused leave when an employee retires or 
terminates employment are allowable in the year of payment.
    (ii) The accrual basis may be only used for those types of leave for 
which a liability as defined by GAAP exists when the leave is earned. 
When a non-Federal entity uses the accrual basis of accounting, 
allowable leave costs are the lesser of the amount accrued or funded.
    (c) Fringe benefits. The cost of fringe benefits in the form of 
employer contributions or expenses for social security; employee life, 
health, unemployment, and worker's compensation insurance (except as 
indicated in Sec.  200.447); pension plan costs (see paragraph (i) of 
this section); and other similar benefits are allowable, provided such 
benefits are granted under established written policies. Such benefits, 
must be allocated to Federal awards and all other activities in a manner 
consistent with the pattern of benefits attributable to the individuals 
or group(s) of employees whose salaries and wages are chargeable to such 
Federal awards and other activities, and charged as direct or indirect 
costs in accordance with the non-Federal entity's accounting practices.
    (d) Cost objectives. Fringe benefits may be assigned to cost 
objectives by identifying specific benefits to specific individual 
employees or by allocating on the basis of entity-wide salaries and 
wages of the employees receiving the benefits. When the allocation 
method is used, separate allocations must be

[[Page 171]]

made to selective groupings of employees, unless the non-Federal entity 
demonstrates that costs in relationship to salaries and wages do not 
differ significantly for different groups of employees.
    (e) Insurance. See also Sec.  200.447(d)(1) and (2).
    (1) Provisions for a reserve under a self-insurance program for 
unemployment compensation or workers' compensation are allowable to the 
extent that the provisions represent reasonable estimates of the 
liabilities for such compensation, and the types of coverage, extent of 
coverage, and rates and premiums would have been allowable had insurance 
been purchased to cover the risks. However, provisions for self-insured 
liabilities which do not become payable for more than one year after the 
provision is made must not exceed the present value of the liability.
    (2) Costs of insurance on the lives of trustees, officers, or other 
employees holding positions of similar responsibility are allowable only 
to the extent that the insurance represents additional compensation. The 
costs of such insurance when the non-Federal entity is named as 
beneficiary are unallowable.
    (3) Actual claims paid to or on behalf of employees or former 
employees for workers' compensation, unemployment compensation, 
severance pay, and similar employee benefits (e.g., post-retirement 
health benefits), are allowable in the year of payment provided that the 
non-Federal entity follows a consistent costing policy.
    (f) Automobiles. That portion of automobile costs furnished by the 
non-Federal entity that relates to personal use by employees (including 
transportation to and from work) is unallowable as fringe benefit or 
indirect (F&A) costs regardless of whether the cost is reported as 
taxable income to the employees.
    (g) Pension plan costs. Pension plan costs which are incurred in 
accordance with the established policies of the non-Federal entity are 
allowable, provided that:
    (1) Such policies meet the test of reasonableness.
    (2) The methods of cost allocation are not discriminatory.
    (3) Except for State and Local Governments, the cost assigned to 
each fiscal year should be determined in accordance with GAAP.
    (4) The costs assigned to a given fiscal year are funded for all 
plan participants within six months after the end of that year. However, 
increases to normal and past service pension costs caused by a delay in 
funding the actuarial liability beyond 30 calendar days after each 
quarter of the year to which such costs are assignable are unallowable. 
Non-Federal entity may elect to follow the ``Cost Accounting Standard 
for Composition and Measurement of Pension Costs'' (48 CFR 9904.412).
    (5) Pension plan termination insurance premiums paid pursuant to the 
Employee Retirement Income Security Act (ERISA) of 1974 (29 U.S.C. 1301-
1461) are allowable. Late payment charges on such premiums are 
unallowable. Excise taxes on accumulated funding deficiencies and other 
penalties imposed under ERISA are unallowable.
    (6) Pension plan costs may be computed using a pay-as-you-go method 
or an acceptable actuarial cost method in accordance with established 
written policies of the non-Federal entity.
    (i) For pension plans financed on a pay-as-you-go method, allowable 
costs will be limited to those representing actual payments to retirees 
or their beneficiaries.
    (ii) Pension costs calculated using an actuarial cost-based method 
recognized by GAAP are allowable for a given fiscal year if they are 
funded for that year within six months after the end of that year. Costs 
funded after the six-month period (or a later period agreed to by the 
cognizant agency for indirect costs) are allowable in the year funded. 
The cognizant agency for indirect costs may agree to an extension of the 
six-month period if an appropriate adjustment is made to compensate for 
the timing of the charges to the Federal Government and related Federal 
reimbursement and the non-Federal entity's contribution to the pension 
fund. Adjustments may be made by cash refund or other equitable 
procedures to compensate the Federal Government

[[Page 172]]

for the time value of Federal reimbursements in excess of contributions 
to the pension fund.
    (iii) Amounts funded by the non-Federal entity in excess of the 
actuarially determined amount for a fiscal year may be used as the non-
Federal entity's contribution in future periods.
    (iv) When a non-Federal entity converts to an acceptable actuarial 
cost method, as defined by GAAP, and funds pension costs in accordance 
with this method, the unfunded liability at the time of conversion is 
allowable if amortized over a period of years in accordance with GAAP.
    (v) The Federal Government must receive an equitable share of any 
previously allowed pension costs (including earnings thereon) which 
revert or inure to the non-Federal entity in the form of a refund, 
withdrawal, or other credit.
    (h) Post-retirement health. Post-retirement health plans (PRHP) 
refers to costs of health insurance or health services not included in a 
pension plan covered by paragraph (g) of this section for retirees and 
their spouses, dependents, and survivors. PRHP costs may be computed 
using a pay-as-you-go method or an acceptable actuarial cost method in 
accordance with established written policies of the non-Federal entity.
    (1) For PRHP financed on a pay-as-you-go method, allowable costs 
will be limited to those representing actual payments to retirees or 
their beneficiaries.
    (2) PRHP costs calculated using an actuarial cost method recognized 
by GAAP are allowable if they are funded for that year within six months 
after the end of that year. Costs funded after the six-month period (or 
a later period agreed to by the cognizant agency) are allowable in the 
year funded. The Federal cognizant agency for indirect costs may agree 
to an extension of the six-month period if an appropriate adjustment is 
made to compensate for the timing of the charges to the Federal 
Government and related Federal reimbursements and the non-Federal 
entity's contributions to the PRHP fund. Adjustments may be made by cash 
refund, reduction in current year's PRHP costs, or other equitable 
procedures to compensate the Federal Government for the time value of 
Federal reimbursements in excess of contributions to the PRHP fund.
    (3) Amounts funded in excess of the actuarially determined amount 
for a fiscal year may be used as the non-Federal entity contribution in 
a future period.
    (4) When a non-Federal entity converts to an acceptable actuarial 
cost method and funds PRHP costs in accordance with this method, the 
initial unfunded liability attributable to prior years is allowable if 
amortized over a period of years in accordance with GAAP, or, if no such 
GAAP period exists, over a period negotiated with the cognizant agency 
for indirect costs.
    (5) To be allowable in the current year, the PRHP costs must be paid 
either to:
    (i) An insurer or other benefit provider as current year costs or 
premiums, or
    (ii) An insurer or trustee to maintain a trust fund or reserve for 
the sole purpose of providing post-retirement benefits to retirees and 
other beneficiaries.
    (6) The Federal Government must receive an equitable share of any 
amounts of previously allowed post-retirement benefit costs (including 
earnings thereon) which revert or inure to the non-Federal entity in the 
form of a refund, withdrawal, or other credit.
    (i) Severance pay. (1) Severance pay, also commonly referred to as 
dismissal wages, is a payment in addition to regular salaries and wages, 
by non-Federal entities to workers whose employment is being terminated. 
Costs of severance pay are allowable only to the extent that in each 
case, it is required by
    (i) Law;
    (ii) Employer-employee agreement;
    (iii) Established policy that constitutes, in effect, an implied 
agreement on the non-Federal entity's part; or
    (iv) Circumstances of the particular employment.
    (2) Costs of severance payments are divided into two categories as 
follows:
    (i) Actual normal turnover severance payments must be allocated to 
all activities; or, where the non-Federal entity provides for a reserve 
for normal

[[Page 173]]

severances, such method will be acceptable if the charge to current 
operations is reasonable in light of payments actually made for normal 
severances over a representative past period, and if amounts charged are 
allocated to all activities of the non-Federal entity.
    (ii) Measurement of costs of abnormal or mass severance pay by means 
of an accrual will not achieve equity to both parties. Thus, accruals 
for this purpose are not allowable. However, the Federal Government 
recognizes its responsibility to participate, to the extent of its fair 
share, in any specific payment. Prior approval by the Federal awarding 
agency or cognizant agency for indirect cost, as appropriate, is 
required.
    (3) Costs incurred in certain severance pay packages which are in an 
amount in excess of the normal severance pay paid by the non-Federal 
entity to an employee upon termination of employment and are paid to the 
employee contingent upon a change in management control over, or 
ownership of, the non-Federal entity's assets, are unallowable.
    (4) Severance payments to foreign nationals employed by the non-
Federal entity outside the United States, to the extent that the amount 
exceeds the customary or prevailing practices for the non-Federal entity 
in the United States, are unallowable, unless they are necessary for the 
performance of Federal programs and approved by the Federal awarding 
agency.
    (5) Severance payments to foreign nationals employed by the non-
Federal entity outside the United States due to the termination of the 
foreign national as a result of the closing of, or curtailment of 
activities by, the non-Federal entity in that country, are unallowable, 
unless they are necessary for the performance of Federal programs and 
approved by the Federal awarding agency.
    (j) For IHEs only. (1) Fringe benefits in the form of undergraduate 
and graduate tuition or remission of tuition for individual employees 
are allowable, provided such benefits are granted in accordance with 
established non-Federal entity policies, and are distributed to all non-
Federal entity activities on an equitable basis. Tuition benefits for 
family members other than the employee are unallowable.
    (2) Fringe benefits in the form of tuition or remission of tuition 
for individual employees not employed by IHEs are limited to the tax-
free amount allowed per section 127 of the Internal Revenue Code as 
amended.
    (3) IHEs may offer employees tuition waivers or tuition reductions, 
provided that the benefit does not discriminate in favor of highly 
compensated employees. Employees can exercise these benefits at other 
institutions according to institutional policy. See Sec.  200.466, for 
treatment of tuition remission provided to students.
    (k) Fringe benefit programs and other benefit costs. For IHEs whose 
costs are paid by state or local governments, fringe benefit programs 
(such as pension costs and FICA) and any other benefits costs 
specifically incurred on behalf of, and in direct benefit to, the non-
Federal entity, are allowable costs of such non-Federal entities whether 
or not these costs are recorded in the accounting records of the non-
Federal entities, subject to the following:
    (1) The costs meet the requirements of Basic Considerations in 
Sec. Sec.  200.402 through 200.411;
    (2) The costs are properly supported by approved cost allocation 
plans in accordance with applicable Federal cost accounting principles; 
and
    (3) The costs are not otherwise borne directly or indirectly by the 
Federal Government.

[85 FR 49565, Aug. 13, 2020]



Sec.  200.432  Conferences.

    A conference is defined as a meeting, retreat, seminar, symposium, 
workshop or event whose primary purpose is the dissemination of 
technical information beyond the non-Federal entity and is necessary and 
reasonable for successful performance under the Federal award. Allowable 
conference costs paid by the non-Federal entity as a sponsor or host of 
the conference may include rental of facilities, speakers' fees, costs 
of meals and refreshments, local transportation, and other items 
incidental to such conferences unless further restricted by the terms 
and conditions of the Federal award. As

[[Page 174]]

needed, the costs of identifying, but not providing, locally available 
dependent-care resources are allowable. Conference hosts/sponsors must 
exercise discretion and judgment in ensuring that conference costs are 
appropriate, necessary and managed in a manner that minimizes costs to 
the Federal award. The Federal awarding agency may authorize exceptions 
where appropriate for programs including Indian tribes, children, and 
the elderly. See also Sec. Sec.  200.438, 200.456, and 200.475.

[85 FR 49567, Aug. 13, 2020]



Sec.  200.433  Contingency provisions.

    (a) Contingency is that part of a budget estimate of future costs 
(typically of large construction projects, IT systems, or other items as 
approved by the Federal awarding agency) which is associated with 
possible events or conditions arising from causes the precise outcome of 
which is indeterminable at the time of estimate, and that experience 
shows will likely result, in aggregate, in additional costs for the 
approved activity or project. Amounts for major project scope changes, 
unforeseen risks, or extraordinary events may not be included.
    (b) It is permissible for contingency amounts other than those 
excluded in paragraph (a) of this section to be explicitly included in 
budget estimates, to the extent they are necessary to improve the 
precision of those estimates. Amounts must be estimated using broadly-
accepted cost estimating methodologies, specified in the budget 
documentation of the Federal award, and accepted by the Federal awarding 
agency. As such, contingency amounts are to be included in the Federal 
award. In order for actual costs incurred to be allowable, they must 
comply with the cost principles and other requirements in this part (see 
also Sec. Sec.  200.300 and 200.403 of this part); be necessary and 
reasonable for proper and efficient accomplishment of project or program 
objectives, and be verifiable from the non-Federal entity's records.
    (c) Payments made by the Federal awarding agency to the non-Federal 
entity's ``contingency reserve'' or any similar payment made for events 
the occurrence of which cannot be foretold with certainty as to the time 
or intensity, or with an assurance of their happening, are unallowable, 
except as noted in Sec. Sec.  200.431 and 200.447.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49567, Aug. 13, 2020]



Sec.  200.434  Contributions and donations.

    (a) Costs of contributions and donations, including cash, property, 
and services, from the non-Federal entity to other entities, are 
unallowable.
    (b) It is permissible for contingency amounts other than those 
excluded in paragraph (a) of this section to be explicitly included in 
budget estimates, to the extent they are necessary to improve the 
precision of those estimates. Amounts must be estimated using broadly-
accepted cost estimating methodologies, specified in the budget 
documentation of the Federal award, and accepted by the Federal awarding 
agency. As such, contingency amounts are to be included in the Federal 
award. In order for actual costs incurred to be allowable, they must 
comply with the cost principles and other requirements in this part (see 
also Sec. Sec.  200.300 and 200.403 of this part); be necessary and 
reasonable for proper and efficient accomplishment of project or program 
objectives, and be verifiable from the non-Federal entity's records.
    (c) Payments made by the Federal awarding agency to the non-Federal 
entity's ``contingency reserve'' or any similar payment made for events 
the occurrence of which cannot be foretold with certainty as to the time 
or intensity, or with an assurance of their happening, are unallowable, 
except as noted in Sec. Sec.  200.431 and 200.447.
    (d) To the extent feasible, services donated to the non-Federal 
entity will be supported by the same methods used to support the 
allocability of regular personnel services.
    (e) The following provisions apply to nonprofit organizations. The 
value of services donated to the nonprofit organization utilized in the 
performance of a direct cost activity must be considered in the 
determination of the non-Federal entity's indirect cost rate(s) and, 
accordingly, must be allocated a

[[Page 175]]

proportionate share of applicable indirect costs when the following 
circumstances exist:
    (1) The aggregate value of the services is material;
    (2) The services are supported by a significant amount of the 
indirect costs incurred by the non-Federal entity;
    (i) In those instances where there is no basis for determining the 
fair market value of the services rendered, the non-Federal entity and 
the cognizant agency for indirect costs must negotiate an appropriate 
allocation of indirect cost to the services.
    (ii) Where donated services directly benefit a project supported by 
the Federal award, the indirect costs allocated to the services will be 
considered as a part of the total costs of the project. Such indirect 
costs may be reimbursed under the Federal award or used to meet cost 
sharing or matching requirements.
    (f) Fair market value of donated services must be computed as 
described in Sec.  200.306.
    (g) Personal Property and Use of Space.
    (1) Donated personal property and use of space may be furnished to a 
non-Federal entity. The value of the personal property and space may not 
be charged to the Federal award either as a direct or indirect cost.
    (2) The value of the donations may be used to meet cost sharing or 
matching share requirements under the conditions described in Sec.  
200.300 of this part. The value of the donations must be determined in 
accordance with Sec.  200.300. Where donations are treated as indirect 
costs, indirect cost rates will separate the value of the donations so 
that reimbursement will not be made.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49567, Aug. 13, 2020]



Sec.  200.435  Defense and prosecution of criminal and civil 
proceedings, claims, appeals and patent infringements.

    (a) Definitions for the purposes of this section. (1) Conviction 
means a judgment or conviction of a criminal offense by any court of 
competent jurisdiction, whether entered upon verdict or a plea, 
including a conviction due to a plea of nolo contendere.
    (2) Costs include the services of in-house or private counsel, 
accountants, consultants, or others engaged to assist the non-Federal 
entity before, during, and after commencement of a judicial or 
administrative proceeding, that bear a direct relationship to the 
proceeding.
    (3) Fraud means:
    (i) Acts of fraud or corruption or attempts to defraud the Federal 
Government or to corrupt its agents,
    (ii) Acts that constitute a cause for debarment or suspension (as 
specified in agency regulations), and
    (iii) Acts which violate the False Claims Act (31 U.S.C. 3729-3732) 
or the Anti-kickback Act (41 U.S.C. 1320a-7b(b)).
    (4) Penalty does not include restitution, reimbursement, or 
compensatory damages.
    (5) Proceeding includes an investigation.
    (b) Costs. (1) Except as otherwise described herein, costs incurred 
in connection with any criminal, civil or administrative proceeding 
(including filing of a false certification) commenced by the Federal 
Government, a state, local government, or foreign government, or joined 
by the Federal Government (including a proceeding under the False Claims 
Act), against the non-Federal entity, (or commenced by third parties or 
a current or former employee of the non-Federal entity who submits a 
whistleblower complaint of reprisal in accordance with 10 U.S.C. 2409 or 
41 U.S.C. 4712), are not allowable if the proceeding:
    (i) Relates to a violation of, or failure to comply with, a Federal, 
state, local or foreign statute, regulation or the terms and conditions 
of the Federal award, by the non-Federal entity (including its agents 
and employees); and
    (ii) Results in any of the following dispositions:
    (A) In a criminal proceeding, a conviction.
    (B) In a civil or administrative proceeding involving an allegation 
of fraud or similar misconduct, a determination of non-Federal entity 
liability.

[[Page 176]]

    (C) In the case of any civil or administrative proceeding, the 
disallowance of costs or the imposition of a monetary penalty, or an 
order issued by the Federal awarding agency head or delegate to the non-
Federal entity to take corrective action under 10 U.S.C. 2409 or 41 
U.S.C. 4712.
    (D) A final decision by an appropriate Federal official to debar or 
suspend the non-Federal entity, to rescind or void a Federal award, or 
to terminate a Federal award by reason of a violation or failure to 
comply with a statute, regulation, or the terms and conditions of the 
Federal award.
    (E) A disposition by consent or compromise, if the action could have 
resulted in any of the dispositions described in paragraphs 
(b)(1)(ii)(A) through (D) of this section.
    (2) If more than one proceeding involves the same alleged 
misconduct, the costs of all such proceedings are unallowable if any 
results in one of the dispositions shown in paragraph (b) of this 
section.
    (c) If a proceeding referred to in paragraph (b) of this section is 
commenced by the Federal Government and is resolved by consent or 
compromise pursuant to an agreement by the non-Federal entity and the 
Federal Government, then the costs incurred may be allowed to the extent 
specifically provided in such agreement.
    (d) If a proceeding referred to in paragraph (b) of this section is 
commenced by a state, local or foreign government, the authorized 
Federal official may allow the costs incurred if such authorized 
official determines that the costs were incurred as a result of:
    (1) A specific term or condition of the Federal award, or
    (2) Specific written direction of an authorized official of the 
Federal awarding agency.
    (e) Costs incurred in connection with proceedings described in 
paragraph (b) of this section, which are not made unallowable by that 
subsection, may be allowed but only to the extent that:
    (1) The costs are reasonable and necessary in relation to the 
administration of the Federal award and activities required to deal with 
the proceeding and the underlying cause of action;
    (2) Payment of the reasonable, necessary, allocable and otherwise 
allowable costs incurred is not prohibited by any other provision(s) of 
the Federal award;
    (3) The costs are not recovered from the Federal Government or a 
third party, either directly as a result of the proceeding or otherwise; 
and,
    (4) An authorized Federal official must determine the percentage of 
costs allowed considering the complexity of litigation, generally 
accepted principles governing the award of legal fees in civil actions 
involving the United States, and such other factors as may be 
appropriate. Such percentage must not exceed 80 percent. However, if an 
agreement reached under paragraph (c) of this section has explicitly 
considered this 80 percent limitation and permitted a higher percentage, 
then the full amount of costs resulting from that agreement are 
allowable.
    (f) Costs incurred by the non-Federal entity in connection with the 
defense of suits brought by its employees or ex-employees under section 
2 of the Major Fraud Act of 1988 (18 U.S.C. 1031), including the cost of 
all relief necessary to make such employee whole, where the non-Federal 
entity was found liable or settled, are unallowable.
    (g) Costs of prosecution of claims against the Federal Government, 
including appeals of final Federal agency decisions, are unallowable.
    (h) Costs of legal, accounting, and consultant services, and related 
costs, incurred in connection with patent infringement litigation, are 
unallowable unless otherwise provided for in the Federal award.
    (i) Costs which may be unallowable under this section, including 
directly associated costs, must be segregated and accounted for 
separately. During the pendency of any proceeding covered by paragraphs 
(b) and (f) of this section, the Federal Government must generally 
withhold payment of such costs. However, if in its best interests, the 
Federal Government may provide for conditional payment upon provision of 
adequate security, or other adequate assurance, and agreement to repay 
all unallowable costs, plus interest, if the

[[Page 177]]

costs are subsequently determined to be unallowable.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014]



Sec.  200.436  Depreciation.

    (a) Depreciation is the method for allocating the cost of fixed 
assets to periods benefitting from asset use. The non-Federal entity may 
be compensated for the use of its buildings, capital improvements, 
equipment, and software projects capitalized in accordance with GAAP, 
provided that they are used, needed in the non-Federal entity's 
activities, and properly allocated to Federal awards. Such compensation 
must be made by computing depreciation.
    (b) The allocation for depreciation must be made in accordance with 
Appendices III through IX.
    (c) Depreciation is computed applying the following rules. The 
computation of depreciation must be based on the acquisition cost of the 
assets involved. For an asset donated to the non-Federal entity by a 
third party, its fair market value at the time of the donation must be 
considered as the acquisition cost. Such assets may be depreciated or 
claimed as matching but not both. For the computation of depreciation, 
the acquisition cost will exclude:
    (1) The cost of land;
    (2) Any portion of the cost of buildings and equipment borne by or 
donated by the Federal Government, irrespective of where title was 
originally vested or where it is presently located;
    (3) Any portion of the cost of buildings and equipment contributed 
by or for the non-Federal entity that are already claimed as matching or 
where law or agreement prohibits recovery;
    (4) Any asset acquired solely for the performance of a non-Federal 
award; and
    (d) When computing depreciation charges, the following must be 
observed:
    (1) The period of useful service or useful life established in each 
case for usable capital assets must take into consideration such factors 
as type of construction, nature of the equipment, technological 
developments in the particular area, historical data, and the renewal 
and replacement policies followed for the individual items or classes of 
assets involved.
    (2) The depreciation method used to charge the cost of an asset (or 
group of assets) to accounting periods must reflect the pattern of 
consumption of the asset during its useful life. In the absence of clear 
evidence indicating that the expected consumption of the asset will be 
significantly greater in the early portions than in the later portions 
of its useful life, the straight-line method must be presumed to be the 
appropriate method. Depreciation methods once used may not be changed 
unless approved in advance by the cognizant agency. The depreciation 
methods used to calculate the depreciation amounts for indirect (F&A) 
rate purposes must be the same methods used by the non-Federal entity 
for its financial statements.
    (3) The entire building, including the shell and all components, may 
be treated as a single asset and depreciated over a single useful life. 
A building may also be divided into multiple components. Each component 
item may then be depreciated over its estimated useful life. The 
building components must be grouped into three general components of a 
building: building shell (including construction and design costs), 
building services systems (e.g., elevators, HVAC, plumbing system and 
heating and air-conditioning system) and fixed equipment (e.g., 
sterilizers, casework, fume hoods, cold rooms and glassware/washers). In 
exceptional cases, a cognizant agency may authorize a non-Federal entity 
to use more than these three groupings. When a non-Federal entity elects 
to depreciate its buildings by its components, the same depreciation 
methods must be used for indirect (F&A) purposes and financial 
statements purposes, as described in paragraphs (d)(1) and (2) of this 
section.
    (4) No depreciation may be allowed on any assets that have outlived 
their depreciable lives.
    (5) Where the depreciation method is introduced to replace the use 
allowance method, depreciation must be computed as if the asset had been 
depreciated over its entire life (i.e., from the date the asset was 
acquired and ready for use to the date of disposal or

[[Page 178]]

withdrawal from service). The total amount of use allowance and 
depreciation for an asset (including imputed depreciation applicable to 
periods prior to the conversion from the use allowance method as well as 
depreciation after the conversion) may not exceed the total acquisition 
cost of the asset.
    (e) Charges for depreciation must be supported by adequate property 
records, and physical inventories must be taken at least once every two 
years to ensure that the assets exist and are usable, used, and needed. 
Statistical sampling techniques may be used in taking these inventories. 
In addition, adequate depreciation records showing the amount of 
depreciation must be maintained.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49568, Aug. 13, 2020]



Sec.  200.437  Employee health and welfare costs.

    (a) Costs incurred in accordance with the non-Federal entity's 
documented policies for the improvement of working conditions, employer-
employee relations, employee health, and employee performance are 
allowable.
    (b) Such costs will be equitably apportioned to all activities of 
the non-Federal entity. Income generated from any of these activities 
will be credited to the cost thereof unless such income has been 
irrevocably sent to employee welfare organizations.
    (c) Losses resulting from operating food services are allowable only 
if the non-Federal entity's objective is to operate such services on a 
break-even basis. Losses sustained because of operating objectives other 
than the above are allowable only:
    (1) Where the non-Federal entity can demonstrate unusual 
circumstances; and
    (2) With the approval of the cognizant agency for indirect costs.



Sec.  200.438  Entertainment costs.

    Costs of entertainment, including amusement, diversion, and social 
activities and any associated costs are unallowable, except where 
specific costs that might otherwise be considered entertainment have a 
programmatic purpose and are authorized either in the approved budget 
for the Federal award or with prior written approval of the Federal 
awarding agency.



Sec.  200.439  Equipment and other capital expenditures.

    (a) See Sec.  200.1 for the definitions of capital expenditures, 
equipment, special purpose equipment, general purpose equipment, 
acquisition cost, and capital assets.
    (b) The following rules of allowability must apply to equipment and 
other capital expenditures:
    (1) Capital expenditures for general purpose equipment, buildings, 
and land are unallowable as direct charges, except with the prior 
written approval of the Federal awarding agency or pass-through entity.
    (2) Capital expenditures for special purpose equipment are allowable 
as direct costs, provided that items with a unit cost of $5,000 or more 
have the prior written approval of the Federal awarding agency or pass-
through entity.
    (3) Capital expenditures for improvements to land, buildings, or 
equipment which materially increase their value or useful life are 
unallowable as a direct cost except with the prior written approval of 
the Federal awarding agency, or pass-through entity. See Sec.  200.436, 
for rules on the allowability of depreciation on buildings, capital 
improvements, and equipment. See also Sec.  200.465.
    (4) When approved as a direct charge pursuant to paragraphs (b)(1) 
through (3) of this section, capital expenditures will be charged in the 
period in which the expenditure is incurred, or as otherwise determined 
appropriate and negotiated with the Federal awarding agency.
    (5) The unamortized portion of any equipment written off as a result 
of a change in capitalization levels may be recovered by continuing to 
claim the otherwise allowable depreciation on the equipment, or by 
amortizing the amount to be written off over a period of years 
negotiated with the Federal cognizant agency for indirect cost.
    (6) Cost of equipment disposal. If the non-Federal entity is 
instructed by the Federal awarding agency to otherwise dispose of or 
transfer the equipment

[[Page 179]]

the costs of such disposal or transfer are allowable.
    (7) Equipment and other capital expenditures are unallowable as 
indirect costs. See Sec.  200.436.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49568, Aug. 13, 2020]



Sec.  200.440  Exchange rates.

    (a) Cost increases for fluctuations in exchange rates are allowable 
costs subject to the availability of funding. Prior approval of exchange 
rate fluctuations is required only when the change results in the need 
for additional Federal funding, or the increased costs result in the 
need to significantly reduce the scope of the project. The Federal 
awarding agency must however ensure that adequate funds are available to 
cover currency fluctuations in order to avoid a violation of the Anti-
Deficiency Act.
    (b) The non-Federal entity is required to make reviews of local 
currency gains to determine the need for additional federal funding 
before the expiration date of the Federal award. Subsequent adjustments 
for currency increases may be allowable only when the non-Federal entity 
provides the Federal awarding agency with adequate source documentation 
from a commonly used source in effect at the time the expense was made, 
and to the extent that sufficient Federal funds are available.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014]



Sec.  200.441  Fines, penalties, damages and other settlements.

    Costs resulting from non-Federal entity violations of, alleged 
violations of, or failure to comply with, Federal, state, tribal, local 
or foreign laws and regulations are unallowable, except when incurred as 
a result of compliance with specific provisions of the Federal award, or 
with prior written approval of the Federal awarding agency. See also 
Sec.  200.435.

[85 FR 49568, Aug. 13, 2020]



Sec.  200.442  Fund raising and investment management costs.

    (a) Costs of organized fund raising, including financial campaigns, 
endowment drives, solicitation of gifts and bequests, and similar 
expenses incurred to raise capital or obtain contributions are 
unallowable. Fund raising costs for the purposes of meeting the Federal 
program objectives are allowable with prior written approval from the 
Federal awarding agency. Proposal costs are covered in Sec.  200.460.
    (b) Costs of investment counsel and staff and similar expenses 
incurred to enhance income from investments are unallowable except when 
associated with investments covering pension, self-insurance, or other 
funds which include Federal participation allowed by this part.
    (c) Costs related to the physical custody and control of monies and 
securities are allowable.
    (d) Both allowable and unallowable fund-raising and investment 
activities must be allocated as an appropriate share of indirect costs 
under the conditions described in Sec.  200.413.

[85 FR 49568, Aug. 13, 2020]



Sec.  200.443  Gains and losses on disposition of depreciable assets.

    (a) Gains and losses on the sale, retirement, or other disposition 
of depreciable property must be included in the year in which they occur 
as credits or charges to the asset cost grouping(s) in which the 
property was included. The amount of the gain or loss to be included as 
a credit or charge to the appropriate asset cost grouping(s) is the 
difference between the amount realized on the property and the 
undepreciated basis of the property.
    (b) Gains and losses from the disposition of depreciable property 
must not be recognized as a separate credit or charge under the 
following conditions:
    (1) The gain or loss is processed through a depreciation account and 
is reflected in the depreciation allowable under Sec. Sec.  200.436 and 
200.439.
    (2) The property is given in exchange as part of the purchase price 
of a similar item and the gain or loss is taken into account in 
determining the depreciation cost basis of the new item.

[[Page 180]]

    (3) A loss results from the failure to maintain permissible 
insurance, except as otherwise provided in Sec.  200.447.
    (4) Compensation for the use of the property was provided through 
use allowances in lieu of depreciation.
    (5) Gains and losses arising from mass or extraordinary sales, 
retirements, or other dispositions must be considered on a case-by-case 
basis.
    (c) Gains or losses of any nature arising from the sale or exchange 
of property other than the property covered in paragraph (a) of this 
section, e.g., land, must be excluded in computing Federal award costs.
    (d) When assets acquired with Federal funds, in part or wholly, are 
disposed of, the distribution of the proceeds must be made in accordance 
with Sec. Sec.  200.310 through 200.316 of this part.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49568, Aug. 13, 2020]



Sec.  200.444  General costs of government.

    (a) For states, local governments, and Indian Tribes, the general 
costs of government are unallowable (except as provided in Sec.  
200.475). Unallowable costs include:
    (1) Salaries and expenses of the Office of the Governor of a state 
or the chief executive of a local government or the chief executive of 
an Indian tribe;
    (2) Salaries and other expenses of a state legislature, tribal 
council, or similar local governmental body, such as a county 
supervisor, city council, school board, etc., whether incurred for 
purposes of legislation or executive direction;
    (3) Costs of the judicial branch of a government;
    (4) Costs of prosecutorial activities unless treated as a direct 
cost to a specific program if authorized by statute or regulation 
(however, this does not preclude the allowability of other legal 
activities of the Attorney General as described in Sec.  200.435); and
    (5) Costs of other general types of government services normally 
provided to the general public, such as fire and police, unless provided 
for as a direct cost under a program statute or regulation.
    (b) For Indian tribes and Councils of Governments (COGs) (see 
definition for Local government in Sec.  200.1 of this part), up to 50% 
of salaries and expenses directly attributable to managing and operating 
Federal programs by the chief executive and his or her staff can be 
included in the indirect cost calculation without documentation.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49568, Aug. 13, 2020]



Sec.  200.445  Goods or services for personal use.

    (a) Costs of goods or services for personal use of the non-Federal 
entity's employees are unallowable regardless of whether the cost is 
reported as taxable income to the employees.
    (b) Costs of housing (e.g., depreciation, maintenance, utilities, 
furnishings, rent), housing allowances and personal living expenses are 
only allowable as direct costs regardless of whether reported as taxable 
income to the employees. In addition, to be allowable direct costs must 
be approved in advance by a Federal awarding agency.



Sec.  200.446  Idle facilities and idle capacity.

    (a) As used in this section the following terms have the meanings 
set forth in this section:
    (1) Facilities means land and buildings or any portion thereof, 
equipment individually or collectively, or any other tangible capital 
asset, wherever located, and whether owned or leased by the non-Federal 
entity.
    (2) Idle facilities means completely unused facilities that are 
excess to the non-Federal entity's current needs.
    (3) Idle capacity means the unused capacity of partially used 
facilities. It is the difference between:
    (i) That which a facility could achieve under 100 percent operating 
time on a one-shift basis less operating interruptions resulting from 
time lost for repairs, setups, unsatisfactory materials, and other 
normal delays and;
    (ii) The extent to which the facility was actually used to meet 
demands during the accounting period. A multi-shift basis should be used 
if it can be shown that this amount of usage would normally be expected 
for the type of facility involved.

[[Page 181]]

    (4) Cost of idle facilities or idle capacity means costs such as 
maintenance, repair, housing, rent, and other related costs, e.g., 
insurance, interest, and depreciation. These costs could include the 
costs of idle public safety emergency facilities, telecommunications, or 
information technology system capacity that is built to withstand major 
fluctuations in load, e.g., consolidated data centers.
    (b) The costs of idle facilities are unallowable except to the 
extent that:
    (1) They are necessary to meet workload requirements which may 
fluctuate and are allocated appropriately to all benefiting programs; or
    (2) Although not necessary to meet fluctuations in workload, they 
were necessary when acquired and are now idle because of changes in 
program requirements, efforts to achieve more economical operations, 
reorganization, termination, or other causes which could not have been 
reasonably foreseen. Under the exception stated in this subsection, 
costs of idle facilities are allowable for a reasonable period of time, 
ordinarily not to exceed one year, depending on the initiative taken to 
use, lease, or dispose of such facilities.
    (c) The costs of idle capacity are normal costs of doing business 
and are a factor in the normal fluctuations of usage or indirect cost 
rates from period to period. Such costs are allowable, provided that the 
capacity is reasonably anticipated to be necessary to carry out the 
purpose of the Federal award or was originally reasonable and is not 
subject to reduction or elimination by use on other Federal awards, 
subletting, renting, or sale, in accordance with sound business, 
economic, or security practices. Widespread idle capacity throughout an 
entire facility or among a group of assets having substantially the same 
function may be considered idle facilities.



Sec.  200.447  Insurance and indemnification.

    (a) Costs of insurance required or approved and maintained, pursuant 
to the Federal award, are allowable.
    (b) Costs of other insurance in connection with the general conduct 
of activities are allowable subject to the following limitations:
    (1) Types and extent and cost of coverage are in accordance with the 
non-Federal entity's policy and sound business practice.
    (2) Costs of insurance or of contributions to any reserve covering 
the risk of loss of, or damage to, Federal Government property are 
unallowable except to the extent that the Federal awarding agency has 
specifically required or approved such costs.
    (3) Costs allowed for business interruption or other similar 
insurance must exclude coverage of management fees.
    (4) Costs of insurance on the lives of trustees, officers, or other 
employees holding positions of similar responsibilities are allowable 
only to the extent that the insurance represents additional compensation 
(see Sec.  200.431). The cost of such insurance when the non-Federal 
entity is identified as the beneficiary is unallowable.
    (5) Insurance against defects. Costs of insurance with respect to 
any costs incurred to correct defects in the non-Federal entity's 
materials or workmanship are unallowable.
    (6) Medical liability (malpractice) insurance. Medical liability 
insurance is an allowable cost of Federal research programs only to the 
extent that the Federal research programs involve human subjects or 
training of participants in research techniques. Medical liability 
insurance costs must be treated as a direct cost and must be assigned to 
individual projects based on the manner in which the insurer allocates 
the risk to the population covered by the insurance.
    (c) Actual losses which could have been covered by permissible 
insurance (through a self-insurance program or otherwise) are 
unallowable, unless expressly provided for in the Federal award. 
However, costs incurred because of losses not covered under nominal 
deductible insurance coverage provided in keeping with sound management 
practice, and minor losses not covered by insurance, such as spoilage, 
breakage, and disappearance of small hand tools, which occur in the 
ordinary course of operations, are allowable.

[[Page 182]]

    (d) Contributions to a reserve for certain self-insurance programs 
including workers' compensation, unemployment compensation, and 
severance pay are allowable subject to the following provisions:
    (1) The type of coverage and the extent of coverage and the rates 
and premiums would have been allowed had insurance (including 
reinsurance) been purchased to cover the risks. However, provision for 
known or reasonably estimated self-insured liabilities, which do not 
become payable for more than one year after the provision is made, must 
not exceed the discounted present value of the liability. The rate used 
for discounting the liability must be determined by giving consideration 
to such factors as the non-Federal entity's settlement rate for those 
liabilities and its investment rate of return.
    (2) Earnings or investment income on reserves must be credited to 
those reserves.
    (3)(i) Contributions to reserves must be based on sound actuarial 
principles using historical experience and reasonable assumptions. 
Reserve levels must be analyzed and updated at least biennially for each 
major risk being insured and take into account any reinsurance, 
coinsurance, etc. Reserve levels related to employee-related coverages 
will normally be limited to the value of claims:
    (A) Submitted and adjudicated but not paid;
    (B) Submitted but not adjudicated; and
    (C) Incurred but not submitted.
    (ii) Reserve levels in excess of the amounts based on the above must 
be identified and justified in the cost allocation plan or indirect cost 
rate proposal.
    (4) Accounting records, actuarial studies, and cost allocations (or 
billings) must recognize any significant differences due to types of 
insured risk and losses generated by the various insured activities or 
agencies of the non-Federal entity. If individual departments or 
agencies of the non-Federal entity experience significantly different 
levels of claims for a particular risk, those differences are to be 
recognized by the use of separate allocations or other techniques 
resulting in an equitable allocation.
    (5) Whenever funds are transferred from a self-insurance reserve to 
other accounts (e.g., general fund or unrestricted account), refunds 
must be made to the Federal Government for its share of funds 
transferred, including earned or imputed interest from the date of 
transfer and debt interest, if applicable, chargeable in accordance with 
applicable Federal cognizant agency for indirect cost, claims collection 
regulations.
    (e) Insurance refunds must be credited against insurance costs in 
the year the refund is received.
    (f) Indemnification includes securing the non-Federal entity against 
liabilities to third persons and other losses not compensated by 
insurance or otherwise. The Federal Government is obligated to indemnify 
the non-Federal entity only to the extent expressly provided for in the 
Federal award, except as provided in paragraph (c) of this section.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49568, Aug. 13, 2020]



Sec.  200.448  Intellectual property.

    (a) Patent costs. (1) The following costs related to securing 
patents and copyrights are allowable:
    (i) Costs of preparing disclosures, reports, and other documents 
required by the Federal award, and of searching the art to the extent 
necessary to make such disclosures;
    (ii) Costs of preparing documents and any other patent costs in 
connection with the filing and prosecution of a United States patent 
application where title or royalty-free license is required by the 
Federal Government to be conveyed to the Federal Government; and
    (iii) General counseling services relating to patent and copyright 
matters, such as advice on patent and copyright laws, regulations, 
clauses, and employee intellectual property agreements (See also Sec.  
200.459).
    (2) The following costs related to securing patents and copyrights 
are unallowable:
    (i) Costs of preparing disclosures, reports, and other documents, 
and of searching the art to make disclosures not required by the Federal 
award;

[[Page 183]]

    (ii) Costs in connection with filing and prosecuting any foreign 
patent application, or any United States patent application, where the 
Federal award does not require conveying title or a royalty-free license 
to the Federal Government.
    (b) Royalties and other costs for use of patents and copyrights. (1) 
Royalties on a patent or copyright or amortization of the cost of 
acquiring by purchase a copyright, patent, or rights thereto, necessary 
for the proper performance of the Federal award are allowable unless:
    (i) The Federal Government already has a license or the right to 
free use of the patent or copyright.
    (ii) The patent or copyright has been adjudicated to be invalid, or 
has been administratively determined to be invalid.
    (iii) The patent or copyright is considered to be unenforceable.
    (iv) The patent or copyright is expired.
    (2) Special care should be exercised in determining reasonableness 
where the royalties may have been arrived at as a result of less-than-
arm's-length bargaining, such as:
    (i) Royalties paid to persons, including corporations, affiliated 
with the non-Federal entity.
    (ii) Royalties paid to unaffiliated parties, including corporations, 
under an agreement entered into in contemplation that a Federal award 
would be made.
    (iii) Royalties paid under an agreement entered into after a Federal 
award is made to a non-Federal entity.
    (3) In any case involving a patent or copyright formerly owned by 
the non-Federal entity, the amount of royalty allowed must not exceed 
the cost which would have been allowed had the non-Federal entity 
retained title thereto.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75886, Dec. 19, 2014; 
85 FR 49569, Aug. 13, 2020]



Sec.  200.449  Interest.

    (a) General. Costs incurred for interest on borrowed capital, 
temporary use of endowment funds, or the use of the non-Federal entity's 
own funds, however represented, are unallowable. Financing costs 
(including interest) to acquire, construct, or replace capital assets 
are allowable, subject to the conditions in this section.
    (b) Capital assets. (1) Capital assets is defined as noted in Sec.  
200.1 of this part. An asset cost includes (as applicable) acquisition 
costs, construction costs, and other costs capitalized in accordance 
with GAAP.
    (2) For non-Federal entity fiscal years beginning on or after 
January 1, 2016, intangible assets include patents and computer 
software. For software development projects, only interest attributable 
to the portion of the project costs capitalized in accordance with GAAP 
is allowable.
    (c) Conditions for all non-Federal entities. (1) The non-Federal 
entity uses the capital assets in support of Federal awards;
    (2) The allowable asset costs to acquire facilities and equipment 
are limited to a fair market value available to the non-Federal entity 
from an unrelated (arm's length) third party.
    (3) The non-Federal entity obtains the financing via an arm's-length 
transaction (that is, a transaction with an unrelated third party); or 
claims reimbursement of actual interest cost at a rate available via 
such a transaction.
    (4) The non-Federal entity limits claims for Federal reimbursement 
of interest costs to the least expensive alternative. For example, a 
lease contract that transfers ownership by the end of the contract may 
be determined less costly than purchasing through other types of debt 
financing, in which case reimbursement must be limited to the amount of 
interest determined if leasing had been used.
    (5) The non-Federal entity expenses or capitalizes allowable 
interest cost in accordance with GAAP.
    (6) Earnings generated by the investment of borrowed funds pending 
their disbursement for the asset costs are used to offset the current 
period's allowable interest cost, whether that cost is expensed or 
capitalized. Earnings subject to being reported to the Federal Internal 
Revenue Service under arbitrage requirements are excludable.
    (7) The following conditions must apply to debt arrangements over $1

[[Page 184]]

million to purchase or construct facilities, unless the non-Federal 
entity makes an initial equity contribution to the purchase of 25 
percent or more. For this purpose, ``initial equity contribution'' means 
the amount or value of contributions made by the non-Federal entity for 
the acquisition of facilities prior to occupancy.
    (i) The non-Federal entity must reduce claims for reimbursement of 
interest cost by an amount equal to imputed interest earnings on excess 
cash flow attributable to the portion of the facility used for Federal 
awards.
    (ii) The non-Federal entity must impute interest on excess cash flow 
as follows:
    (A) Annually, the non-Federal entity must prepare a cumulative (from 
the inception of the project) report of monthly cash inflows and 
outflows, regardless of the funding source. For this purpose, inflows 
consist of Federal reimbursement for depreciation, amortization of 
capitalized construction interest, and annual interest cost. Outflows 
consist of initial equity contributions, debt principal payments (less 
the pro-rata share attributable to the cost of land), and interest 
payments.
    (B) To compute monthly cash inflows and outflows, the non-Federal 
entity must divide the annual amounts determined in step (i) by the 
number of months in the year (usually 12) that the building is in 
service.
    (C) For any month in which cumulative cash inflows exceed cumulative 
outflows, interest must be calculated on the excess inflows for that 
month and be treated as a reduction to allowable interest cost. The rate 
of interest to be used must be the three-month Treasury bill closing 
rate as of the last business day of that month.
    (8) Interest attributable to a fully depreciated asset is 
unallowable.
    (d) Additional conditions for states, local governments and Indian 
tribes. For costs to be allowable, the non-Federal entity must have 
incurred the interest costs for buildings after October 1, 1980, or for 
land and equipment after September 1, 1995.
    (1) The requirement to offset interest earned on borrowed funds 
against current allowable interest cost (paragraph (c)(5), above) also 
applies to earnings on debt service reserve funds.
    (2) The non-Federal entity will negotiate the amount of allowable 
interest cost related to the acquisition of facilities with asset costs 
of $1 million or more, as outlined in paragraph (c)(7) of this section. 
For this purpose, a non-Federal entity must consider only cash inflows 
and outflows attributable to that portion of the real property used for 
Federal awards.
    (e) Additional conditions for IHEs. For costs to be allowable, the 
IHE must have incurred the interest costs after July 1, 1982, in 
connection with acquisitions of capital assets that occurred after that 
date.
    (f) Additional condition for nonprofit organizations. For costs to 
be allowable, the nonprofit organization incurred the interest costs 
after September 29, 1995, in connection with acquisitions of capital 
assets that occurred after that date.
    (g) The interest allowability provisions of this section do not 
apply to a nonprofit organization subject to ``full coverage'' under the 
Cost Accounting Standards (CAS), as defined at 48 CFR 9903.201-2(a). The 
non-Federal entity's Federal awards are instead subject to CAS 414 (48 
CFR 9904.414), ``Cost of Money as an Element of the Cost of Facilities 
Capital'', and CAS 417 (48 CFR 9904.417), ``Cost of Money as an Element 
of the Cost of Capital Assets Under Construction''.

[78 FR 78608, Dec. 26, 2013, as amended at 80 FR 54409, Sept. 10, 2015; 
85 FR 49569, Aug. 13, 2020]



Sec.  200.450  Lobbying.

    (a) The cost of certain influencing activities associated with 
obtaining grants, contracts, or cooperative agreements, or loans is an 
unallowable cost. Lobbying with respect to certain grants, contracts, 
cooperative agreements, and loans is governed by relevant statutes, 
including among others, the provisions of 31 U.S.C. 1352, as well as the 
common rule, ``New Restrictions on Lobbying'' published on February 26, 
1990, including definitions, and the Office of Management and Budget 
``Governmentwide Guidance for New Restrictions on Lobbying'' and notices 
published on December 20, 1989,

[[Page 185]]

June 15, 1990, January 15, 1992, and January 19, 1996.
    (b) Executive lobbying costs. Costs incurred in attempting to 
improperly influence either directly or indirectly, an employee or 
officer of the executive branch of the Federal Government to give 
consideration or to act regarding a Federal award or a regulatory matter 
are unallowable. Improper influence means any influence that induces or 
tends to induce a Federal employee or officer to give consideration or 
to act regarding a Federal award or regulatory matter on any basis other 
than the merits of the matter.
    (c) In addition to the above, the following restrictions are 
applicable to nonprofit organizations and IHEs:
    (1) Costs associated with the following activities are unallowable:
    (i) Attempts to influence the outcomes of any Federal, state, or 
local election, referendum, initiative, or similar procedure, through 
in-kind or cash contributions, endorsements, publicity, or similar 
activity;
    (ii) Establishing, administering, contributing to, or paying the 
expenses of a political party, campaign, political action committee, or 
other organization established for the purpose of influencing the 
outcomes of elections in the United States;
    (iii) Any attempt to influence:
    (A) The introduction of Federal or state legislation;
    (B) The enactment or modification of any pending Federal or state 
legislation through communication with any member or employee of the 
Congress or state legislature (including efforts to influence state or 
local officials to engage in similar lobbying activity);
    (C) The enactment or modification of any pending Federal or state 
legislation by preparing, distributing, or using publicity or 
propaganda, or by urging members of the general public, or any segment 
thereof, to contribute to or participate in any mass demonstration, 
march, rally, fund raising drive, lobbying campaign or letter writing or 
telephone campaign; or
    (D) Any government official or employee in connection with a 
decision to sign or veto enrolled legislation;
    (iv) Legislative liaison activities, including attendance at 
legislative sessions or committee hearings, gathering information 
regarding legislation, and analyzing the effect of legislation, when 
such activities are carried on in support of or in knowing preparation 
for an effort to engage in unallowable lobbying.
    (2) The following activities are excepted from the coverage of 
paragraph (c)(1) of this section:
    (i) Technical and factual presentations on topics directly related 
to the performance of a grant, contract, or other agreement (through 
hearing testimony, statements, or letters to the Congress or a state 
legislature, or subdivision, member, or cognizant staff member thereof), 
in response to a documented request (including a Congressional Record 
notice requesting testimony or statements for the record at a regularly 
scheduled hearing) made by the non-Federal entity's member of congress, 
legislative body or a subdivision, or a cognizant staff member thereof, 
provided such information is readily obtainable and can be readily put 
in deliverable form, and further provided that costs under this section 
for travel, lodging or meals are unallowable unless incurred to offer 
testimony at a regularly scheduled Congressional hearing pursuant to a 
written request for such presentation made by the Chairman or Ranking 
Minority Member of the Committee or Subcommittee conducting such 
hearings;
    (ii) Any lobbying made unallowable by paragraph (c)(1)(iii) of this 
section to influence state legislation in order to directly reduce the 
cost, or to avoid material impairment of the non-Federal entity's 
authority to perform the grant, contract, or other agreement; or
    (iii) Any activity specifically authorized by statute to be 
undertaken with funds from the Federal award.
    (iv) Any activity excepted from the definitions of ``lobbying'' or 
``influencing legislation'' by the Internal Revenue Code provisions that 
require nonprofit organizations to limit their participation in direct 
and ``grass roots'' lobbying activities in order to retain their 
charitable deduction status and avoid punitive excise taxes, I.R.C. 
Sec. Sec.  501(c)(3), 501(h), 4911(a), including:

[[Page 186]]

    (A) Nonpartisan analysis, study, or research reports;
    (B) Examinations and discussions of broad social, economic, and 
similar problems; and
    (C) Information provided upon request by a legislator for technical 
advice and assistance, as defined by I.R.C. Sec.  4911(d)(2) and 26 CFR 
56.4911-2(c)(1)-(c)(3).
    (v) When a non-Federal entity seeks reimbursement for indirect (F&A) 
costs, total lobbying costs must be separately identified in the 
indirect (F&A) cost rate proposal, and thereafter treated as other 
unallowable activity costs in accordance with the procedures of Sec.  
200.413.
    (vi) The non-Federal entity must submit as part of its annual 
indirect (F&A) cost rate proposal a certification that the requirements 
and standards of this section have been complied with. (See also Sec.  
200.415.)
    (vii)(A) Time logs, calendars, or similar records are not required 
to be created for purposes of complying with the record keeping 
requirements in Sec.  200.302 with respect to lobbying costs during any 
particular calendar month when:
    (1) The employee engages in lobbying (as defined in paragraphs 
(c)(1) and (c)(2) of this section) 25 percent or less of the employee's 
compensated hours of employment during that calendar month; and
    (2) Within the preceding five-year period, the non-Federal entity 
has not materially misstated allowable or unallowable costs of any 
nature, including legislative lobbying costs.
    (B) When conditions in paragraph (c)(2)(vii)(A)(1) and (2) of this 
section are met, non-Federal entities are not required to establish 
records to support the allowability of claimed costs in addition to 
records already required or maintained. Also, when conditions in 
paragraphs (c)(2)(vii)(A)(1) and (2) of this section are met, the 
absence of time logs, calendars, or similar records will not serve as a 
basis for disallowing costs by contesting estimates of lobbying time 
spent by employees during a calendar month.
    (viii) The Federal awarding agency must establish procedures for 
resolving in advance, in consultation with OMB, any significant 
questions or disagreements concerning the interpretation or application 
of this section. Any such advance resolutions must be binding in any 
subsequent settlements, audits, or investigations with respect to that 
grant or contract for purposes of interpretation of this part, provided, 
however, that this must not be construed to prevent a contractor or non-
Federal entity from contesting the lawfulness of such a determination.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49569, Aug. 13, 2020]



Sec.  200.451  Losses on other awards or contracts.

    Any excess of costs over income under any other award or contract of 
any nature is unallowable. This includes, but is not limited to, the 
non-Federal entity's contributed portion by reason of cost-sharing 
agreements or any under-recoveries through negotiation of flat amounts 
for indirect (F&A) costs. Also, any excess of costs over authorized 
funding levels transferred from any award or contract to another award 
or contract is unallowable. All losses are not allowable indirect (F&A) 
costs and are required to be included in the appropriate indirect cost 
rate base for allocation of indirect costs.



Sec.  200.452  Maintenance and repair costs.

    Costs incurred for utilities, insurance, security, necessary 
maintenance, janitorial services, repair, or upkeep of buildings and 
equipment (including Federal property unless otherwise provided for) 
which neither add to the permanent value of the property nor appreciably 
prolong its intended life, but keep it in an efficient operating 
condition, are allowable. Costs incurred for improvements which add to 
the permanent value of the buildings and equipment or appreciably 
prolong their intended life must be treated as capital expenditures (see 
Sec.  200.439). These costs are only allowable to the extent not paid 
through rental or other agreements.

[85 FR 49569, Aug. 13, 2020]

[[Page 187]]



Sec.  200.453  Materials and supplies costs, including costs of
computing devices.

    (a) Costs incurred for materials, supplies, and fabricated parts 
necessary to carry out a Federal award are allowable.
    (b) Purchased materials and supplies must be charged at their actual 
prices, net of applicable credits. Withdrawals from general stores or 
stockrooms must be charged at their actual net cost under any recognized 
method of pricing inventory withdrawals, consistently applied. Incoming 
transportation charges are a proper part of materials and supplies 
costs.
    (c) Materials and supplies used for the performance of a Federal 
award may be charged as direct costs. In the specific case of computing 
devices, charging as direct costs is allowable for devices that are 
essential and allocable, but not solely dedicated, to the performance of 
a Federal award.
    (d) Where federally-donated or furnished materials are used in 
performing the Federal award, such materials will be used without 
charge.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014]



Sec.  200.454  Memberships, subscriptions, and professional activity
costs.

    (a) Costs of the non-Federal entity's membership in business, 
technical, and professional organizations are allowable.
    (b) Costs of the non-Federal entity's subscriptions to business, 
professional, and technical periodicals are allowable.
    (c) Costs of membership in any civic or community organization are 
allowable with prior approval by the Federal awarding agency or pass-
through entity.
    (d) Costs of membership in any country club or social or dining club 
or organization are unallowable.
    (e) Costs of membership in organizations whose primary purpose is 
lobbying are unallowable. See also Sec.  200.450.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49569, Aug. 13, 2020]



Sec.  200.455  Organization costs.

    Costs such as incorporation fees, brokers' fees, fees to promoters, 
organizers or management consultants, attorneys, accountants, or 
investment counselor, whether or not employees of the non-Federal entity 
in connection with establishment or reorganization of an organization, 
are unallowable except with prior approval of the Federal awarding 
agency.



Sec.  200.456  Participant support costs.

    Participant support costs as defined in Sec.  200.1 are allowable 
with the prior approval of the Federal awarding agency.

[85 FR 49569, Aug. 13, 2020]



Sec.  200.457  Plant and security costs.

    Necessary and reasonable expenses incurred for protection and 
security of facilities, personnel, and work products are allowable. Such 
costs include, but are not limited to, wages and uniforms of personnel 
engaged in security activities; equipment; barriers; protective (non-
military) gear, devices, and equipment; contractual security services; 
and consultants. Capital expenditures for plant security purposes are 
subject to Sec.  200.439.

[85 FR 49569, Aug. 13, 2020]



Sec.  200.458  Pre-award costs.

    Pre-award costs are those incurred prior to the effective date of 
the Federal award or subaward directly pursuant to the negotiation and 
in anticipation of the Federal award where such costs are necessary for 
efficient and timely performance of the scope of work. Such costs are 
allowable only to the extent that they would have been allowable if 
incurred after the date of the Federal award and only with the written 
approval of the Federal awarding agency. If charged to the award, these 
costs must be charged to the initial budget period of the award, unless 
otherwise specified by the Federal awarding agency or pass-through 
entity.

[85 FR 49569, Aug. 13, 2020]

[[Page 188]]



Sec.  200.459  Professional service costs.

    (a) Costs of professional and consultant services rendered by 
persons who are members of a particular profession or possess a special 
skill, and who are not officers or employees of the non-Federal entity, 
are allowable, subject to paragraphs (b) and (c) of this section when 
reasonable in relation to the services rendered and when not contingent 
upon recovery of the costs from the Federal Government. In addition, 
legal and related services are limited under Sec.  200.435.
    (b) In determining the allowability of costs in a particular case, 
no single factor or any special combination of factors is necessarily 
determinative. However, the following factors are relevant:
    (1) The nature and scope of the service rendered in relation to the 
service required.
    (2) The necessity of contracting for the service, considering the 
non-Federal entity's capability in the particular area.
    (3) The past pattern of such costs, particularly in the years prior 
to Federal awards.
    (4) The impact of Federal awards on the non-Federal entity's 
business (i.e., what new problems have arisen).
    (5) Whether the proportion of Federal work to the non-Federal 
entity's total business is such as to influence the non-Federal entity 
in favor of incurring the cost, particularly where the services rendered 
are not of a continuing nature and have little relationship to work 
under Federal awards.
    (6) Whether the service can be performed more economically by direct 
employment rather than contracting.
    (7) The qualifications of the individual or concern rendering the 
service and the customary fees charged, especially on non-federally 
funded activities.
    (8) Adequacy of the contractual agreement for the service (e.g., 
description of the service, estimate of time required, rate of 
compensation, and termination provisions).
    (c) In addition to the factors in paragraph (b) of this section, to 
be allowable, retainer fees must be supported by evidence of bona fide 
services available or rendered.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49569, Aug. 13, 2020]



Sec.  200.460  Proposal costs.

    Proposal costs are the costs of preparing bids, proposals, or 
applications on potential Federal and non-Federal awards or projects, 
including the development of data necessary to support the non-Federal 
entity's bids or proposals. Proposal costs of the current accounting 
period of both successful and unsuccessful bids and proposals normally 
should be treated as indirect (F&A) costs and allocated currently to all 
activities of the non-Federal entity. No proposal costs of past 
accounting periods will be allocable to the current period.



Sec.  200.461  Publication and printing costs.

    (a) Publication costs for electronic and print media, including 
distribution, promotion, and general handling are allowable. If these 
costs are not identifiable with a particular cost objective, they should 
be allocated as indirect costs to all benefiting activities of the non-
Federal entity.
    (b) Page charges for professional journal publications are allowable 
where:
    (1) The publications report work supported by the Federal 
Government; and
    (2) The charges are levied impartially on all items published by the 
journal, whether or not under a Federal award.
    (3) The non-Federal entity may charge the Federal award during 
closeout for the costs of publication or sharing of research results if 
the costs are not incurred during the period of performance of the 
Federal award. If charged to the award, these costs must be charged to 
the final budget period of the award, unless otherwise specified by the 
Federal awarding agency.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49569, Aug. 13, 2020]



Sec.  200.462  Rearrangement and reconversion costs.

    (a) Costs incurred for ordinary and normal rearrangement and 
alteration of facilities are allowable as indirect

[[Page 189]]

costs. Special arrangements and alterations costs incurred specifically 
for a Federal award are allowable as a direct cost with the prior 
approval of the Federal awarding agency or pass-through entity.
    (b) Costs incurred in the restoration or rehabilitation of the non-
Federal entity's facilities to approximately the same condition existing 
immediately prior to commencement of Federal awards, less costs related 
to normal wear and tear, are allowable.



Sec.  200.463  Recruiting costs.

    (a) Subject to paragraphs (b) and (c) of this section, and provided 
that the size of the staff recruited and maintained is in keeping with 
workload requirements, costs of ``help wanted'' advertising, operating 
costs of an employment office necessary to secure and maintain an 
adequate staff, costs of operating an aptitude and educational testing 
program, travel costs of employees while engaged in recruiting 
personnel, travel costs of applicants for interviews for prospective 
employment, and relocation costs incurred incident to recruitment of new 
employees, are allowable to the extent that such costs are incurred 
pursuant to the non-Federal entity's standard recruitment program. Where 
the non-Federal entity uses employment agencies, costs not in excess of 
standard commercial rates for such services are allowable.
    (b) Special emoluments, fringe benefits, and salary allowances 
incurred to attract professional personnel that do not meet the test of 
reasonableness or do not conform with the established practices of the 
non-Federal entity, are unallowable.
    (c) Where relocation costs incurred incident to recruitment of a new 
employee have been funded in whole or in part to a Federal award, and 
the newly hired employee resigns for reasons within the employee's 
control within 12 months after hire, the non-Federal entity will be 
required to refund or credit the Federal share of such relocation costs 
to the Federal Government. See also Sec.  200.464.
    (d) Short-term, travel visa costs (as opposed to longer-term, 
immigration visas) are generally allowable expenses that may be proposed 
as a direct cost. Since short-term visas are issued for a specific 
period and purpose, they can be clearly identified as directly connected 
to work performed on a Federal award. For these costs to be directly 
charged to a Federal award, they must:
    (1) Be critical and necessary for the conduct of the project;
    (2) Be allowable under the applicable cost principles;
    (3) Be consistent with the non-Federal entity's cost accounting 
practices and non-Federal entity policy; and
    (4) Meet the definition of ``direct cost'' as described in the 
applicable cost principles.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 
85 FR 49569, Aug. 13, 2020]



Sec.  200.464  Relocation costs of employees.

    (a) Relocation costs are costs incident to the permanent change of 
duty assignment (for an indefinite period or for a stated period of not 
less than 12 months) of an existing employee or upon recruitment of a 
new employee. Relocation costs are allowable, subject to the limitations 
described in paragraphs (b), (c), and (d) of this section, provided 
that:
    (1) The move is for the benefit of the employer.
    (2) Reimbursement to the employee is in accordance with an 
established written policy consistently followed by the employer.
    (3) The reimbursement does not exceed the employee's actual (or 
reasonably estimated) expenses.
    (b) Allowable relocation costs for current employees are limited to 
the following:
    (1) The costs of transportation of the employee, members of his or 
her immediate family and his household, and personal effects to the new 
location.
    (2) The costs of finding a new home, such as advance trips by 
employees and spouses to locate living quarters and temporary lodging 
during the transition period, up to maximum period of 30 calendar days.
    (3) Closing costs, such as brokerage, legal, and appraisal fees, 
incident to the disposition of the employee's former home. These costs, 
together

[[Page 190]]

with those described in (4), are limited to 8 per cent of the sales 
price of the employee's former home.
    (4) The continuing costs of ownership (for up to six months) of the 
vacant former home after the settlement or lease date of the employee's 
new permanent home, such as maintenance of buildings and grounds 
(exclusive of fixing-up expenses), utilities, taxes, and property 
insurance.
    (5) Other necessary and reasonable expenses normally incident to 
relocation, such as the costs of canceling an unexpired lease, 
transportation of personal property, and purchasing insurance against 
loss of or damages to personal property. The cost of canceling an 
unexpired lease is limited to three times the monthly rental.
    (c) Allowable relocation costs for new employees are limited to 
those described in paragraphs (b)(1) and (2) of this section. When 
relocation costs incurred incident to the recruitment of new employees 
have been charged to a Federal award and the employee resigns for 
reasons within the employee's control within 12 months after hire, the 
non-Federal entity must refund or credit the Federal Government for its 
share of the cost. If dependents are not permitted at the location for 
any reason and the costs do not include costs of transporting household 
goods, the costs of travel to an overseas location must be considered 
travel costs in accordance with Sec.  200.474 Travel costs, and not this 
relocations costs of employees (See also Sec.  200.464).
    (d) The following costs related to relocation are unallowable:
    (1) Fees and other costs associated with acquiring a new home.
    (2) A loss on the sale of a former home.
    (3) Continuing mortgage principal and interest payments on a home 
being sold.
    (4) Income taxes paid by an employee related to reimbursed 
relocation costs.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 
85 FR 49570, Aug. 13, 2020]



Sec.  200.465  Rental costs of real property and equipment.

    (a) Subject to the limitations described in paragraphs (b) through 
(d) of this section, rental costs are allowable to the extent that the 
rates are reasonable in light of such factors as: rental costs of 
comparable property, if any; market conditions in the area; alternatives 
available; and the type, life expectancy, condition, and value of the 
property leased. Rental arrangements should be reviewed periodically to 
determine if circumstances have changed and other options are available.
    (b) Rental costs under ``sale and lease back'' arrangements are 
allowable only up to the amount that would be allowed had the non-
Federal entity continued to own the property. This amount would include 
expenses such as depreciation, maintenance, taxes, and insurance.
    (c) Rental costs under ``less-than-arm's-length'' leases are 
allowable only up to the amount (as explained in paragraph (b) of this 
section). For this purpose, a less-than-arm's-length lease is one under 
which one party to the lease agreement is able to control or 
substantially influence the actions of the other. Such leases include, 
but are not limited to those between:
    (1) Divisions of the non-Federal entity;
    (2) The non-Federal entity under common control through common 
officers, directors, or members; and
    (3) The non-Federal entity and a director, trustee, officer, or key 
employee of the non-Federal entity or an immediate family member, either 
directly or through corporations, trusts, or similar arrangements in 
which they hold a controlling interest. For example, the non-Federal 
entity may establish a separate corporation for the sole purpose of 
owning property and leasing it back to the non-Federal entity.
    (4) Family members include one party with any of the following 
relationships to another party:
    (i) Spouse, and parents thereof;
    (ii) Children, and spouses thereof;
    (iii) Parents, and spouses thereof;
    (iv) Siblings, and spouses thereof;
    (v) Grandparents and grandchildren, and spouses thereof;
    (vi) Domestic partner and parents thereof, including domestic 
partners of any individual in 2 through 5 of this definition; and

[[Page 191]]

    (vii) Any individual related by blood or affinity whose close 
association with the employee is the equivalent of a family 
relationship.
    (5) Rental costs under leases which are required to be treated as 
capital leases under GAAP are allowable only up to the amount (as 
explained in paragraph (b) of this section) that would be allowed had 
the non-Federal entity purchased the property on the date the lease 
agreement was executed. The provisions of GAAP must be used to determine 
whether a lease is a capital lease. Interest costs related to capital 
leases are allowable to the extent they meet the criteria in Sec.  
200.449 Interest. Unallowable costs include amounts paid for profit, 
management fees, and taxes that would not have been incurred had the 
non-Federal entity purchased the property.
    (6) The rental of any property owned by any individuals or entities 
affiliated with the non-Federal entity, to include commercial or 
residential real estate, for purposes such as the home office workspace 
is unallowable.
    (d) Rental costs under leases which are required to be accounted for 
as a financed purchase under GASB standards or a finance lease under 
FASB standards under GAAP are allowable only up to the amount (as 
explained in paragraph (b) of this section) that would be allowed had 
the non-Federal entity purchased the property on the date the lease 
agreement was executed. Interest costs related to these leases are 
allowable to the extent they meet the criteria in Sec.  200.449. 
Unallowable costs include amounts paid for profit, management fees, and 
taxes that would not have been incurred had the non-Federal entity 
purchased the property.
    (e) Rental or lease payments are allowable under lease contracts 
where the non-Federal entity is required to recognize an intangible 
right-to-use lease asset (per GASB) or right of use operating lease 
asset (per FASB) for purposes of financial reporting in accordance with 
GAAP.
    (f) The rental of any property owned by any individuals or entities 
affiliated with the non-Federal entity, to include commercial or 
residential real estate, for purposes such as the home office workspace 
is unallowable.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49569, Aug. 13, 2020]



Sec.  200.466  Scholarships and student aid costs.

    (a) Costs of scholarships, fellowships, and other programs of 
student aid at IHEs are allowable only when the purpose of the Federal 
award is to provide training to selected participants and the charge is 
approved by the Federal awarding agency. However, tuition remission and 
other forms of compensation paid as, or in lieu of, wages to students 
performing necessary work are allowable provided that:
    (1) The individual is conducting activities necessary to the Federal 
award;
    (2) Tuition remission and other support are provided in accordance 
with established policy of the IHE and consistently provided in a like 
manner to students in return for similar activities conducted under 
Federal awards as well as other activities; and
    (3) During the academic period, the student is enrolled in an 
advanced degree program at a non-Federal entity or affiliated 
institution and the activities of the student in relation to the Federal 
award are related to the degree program;
    (4) The tuition or other payments are reasonable compensation for 
the work performed and are conditioned explicitly upon the performance 
of necessary work; and
    (5) It is the IHE's practice to similarly compensate students under 
Federal awards as well as other activities.
    (b) Charges for tuition remission and other forms of compensation 
paid to students as, or in lieu of, salaries and wages must be subject 
to the reporting requirements in Sec.  200.430, and must be treated as 
direct or indirect cost in accordance with the actual work being 
performed. Tuition remission may be charged on an average rate basis. 
See also Sec.  200.431.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49569, Aug. 13, 2020]

[[Page 192]]



Sec.  200.467  Selling and marketing costs.

    Costs of selling and marketing any products or services of the non-
Federal entity (unless allowed under Sec.  200.421) are unallowable, 
except as direct costs, with prior approval by the Federal awarding 
agency when necessary for the performance of the Federal award.

[85 FR 49570, Aug. 13, 2020]



Sec.  200.468  Specialized service facilities.

    (a) The costs of services provided by highly complex or specialized 
facilities operated by the non-Federal entity, such as computing 
facilities, wind tunnels, and reactors are allowable, provided the 
charges for the services meet the conditions of either paragraph (b) or 
(c) of this section, and, in addition, take into account any items of 
income or Federal financing that qualify as applicable credits under 
Sec.  200.406.
    (b) The costs of such services, when material, must be charged 
directly to applicable awards based on actual usage of the services on 
the basis of a schedule of rates or established methodology that:
    (1) Does not discriminate between activities under Federal awards 
and other activities of the non-Federal entity, including usage by the 
non-Federal entity for internal purposes, and
    (2) Is designed to recover only the aggregate costs of the services. 
The costs of each service must consist normally of both its direct costs 
and its allocable share of all indirect (F&A) costs. Rates must be 
adjusted at least biennially, and must take into consideration over/
under-applied costs of the previous period(s).
    (c) Where the costs incurred for a service are not material, they 
may be allocated as indirect (F&A) costs.
    (d) Under some extraordinary circumstances, where it is in the best 
interest of the Federal Government and the non-Federal entity to 
establish alternative costing arrangements, such arrangements may be 
worked out with the Federal cognizant agency for indirect costs.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49569, Aug. 13, 2020]



Sec.  200.469  Student activity costs.

    Costs incurred for intramural activities, student publications, 
student clubs, and other student activities, are unallowable, unless 
specifically provided for in the Federal award.



Sec.  200.470  Taxes (including Value Added Tax).

    (a) For states, local governments and Indian tribes:
    (1) Taxes that a governmental unit is legally required to pay are 
allowable, except for self-assessed taxes that disproportionately affect 
Federal programs or changes in tax policies that disproportionately 
affect Federal programs.
    (2) Gasoline taxes, motor vehicle fees, and other taxes that are in 
effect user fees for benefits provided to the Federal Government are 
allowable.
    (3) This provision does not restrict the authority of the Federal 
awarding agency to identify taxes where Federal participation is 
inappropriate. Where the identification of the amount of unallowable 
taxes would require an inordinate amount of effort, the cognizant agency 
for indirect costs may accept a reasonable approximation thereof.
    (b) For nonprofit organizations and IHEs:
    (1) In general, taxes which the non-Federal entity is required to 
pay and which are paid or accrued in accordance with GAAP, and payments 
made to local governments in lieu of taxes which are commensurate with 
the local government services received are allowable, except for:
    (i) Taxes from which exemptions are available to the non-Federal 
entity directly or which are available to the non-Federal entity based 
on an exemption afforded the Federal Government and, in the latter case, 
when the Federal awarding agency makes available the necessary exemption 
certificates,
    (ii) Special assessments on land which represent capital 
improvements, and
    (iii) Federal income taxes.
    (2) Any refund of taxes, and any payment to the non-Federal entity 
of interest thereon, which were allowed as Federal award costs, will be 
credited either as a cost reduction or cash refund, as appropriate, to 
the Federal

[[Page 193]]

Government. However, any interest actually paid or credited to an non-
Federal entity incident to a refund of tax, interest, and penalty will 
be paid or credited to the Federal Government only to the extent that 
such interest accrued over the period during which the non-Federal 
entity has been reimbursed by the Federal Government for the taxes, 
interest, and penalties.
    (c) Value Added Tax (VAT) Foreign taxes charged for the purchase of 
goods or services that a non-Federal entity is legally required to pay 
in country is an allowable expense under Federal awards. Foreign tax 
refunds or applicable credits under Federal awards refer to receipts, or 
reduction of expenditures, which operate to offset or reduce expense 
items that are allocable to Federal awards as direct or indirect costs. 
To the extent that such credits accrued or received by the non-Federal 
entity relate to allowable cost, these costs must be credited to the 
Federal awarding agency either as costs or cash refunds. If the costs 
are credited back to the Federal award, the non-Federal entity may 
reduce the Federal share of costs by the amount of the foreign tax 
reimbursement, or where Federal award has not expired, use the foreign 
government tax refund for approved activities under the Federal award 
with prior approval of the Federal awarding agency.



Sec.  200.471  Telecommunication costs and video surveillance costs.

    (a) Costs incurred for telecommunications and video surveillance 
services or equipment such as phones, internet, video surveillance, 
cloud servers are allowable except for the following circumstances:
    (b) Obligating or expending covered telecommunications and video 
surveillance services or equipment or services as described in Sec.  
200.216 to:
    (1) Procure or obtain, extend or renew a contract to procure or 
obtain;
    (2) Enter into a contract (or extend or renew a contract) to 
procure; or
    (3) Obtain the equipment, services, or systems.

[85 FR 49570, Aug. 13, 2020]



Sec.  200.472  Termination costs.

    Termination of a Federal award generally gives rise to the 
incurrence of costs, or the need for special treatment of costs, which 
would not have arisen had the Federal award not been terminated. Cost 
principles covering these items are set forth in this section. They are 
to be used in conjunction with the other provisions of this part in 
termination situations.
    (a) The cost of items reasonably usable on the non-Federal entity's 
other work must not be allowable unless the non-Federal entity submits 
evidence that it would not retain such items at cost without sustaining 
a loss. In deciding whether such items are reasonably usable on other 
work of the non-Federal entity, the Federal awarding agency should 
consider the non-Federal entity's plans and orders for current and 
scheduled activity. Contemporaneous purchases of common items by the 
non-Federal entity must be regarded as evidence that such items are 
reasonably usable on the non-Federal entity's other work. Any acceptance 
of common items as allocable to the terminated portion of the Federal 
award must be limited to the extent that the quantities of such items on 
hand, in transit, and on order are in excess of the reasonable 
quantitative requirements of other work.
    (b) If in a particular case, despite all reasonable efforts by the 
non-Federal entity, certain costs cannot be discontinued immediately 
after the effective date of termination, such costs are generally 
allowable within the limitations set forth in this part, except that any 
such costs continuing after termination due to the negligent or willful 
failure of the non-Federal entity to discontinue such costs must be 
unallowable.
    (c) Loss of useful value of special tooling, machinery, and 
equipment is generally allowable if:
    (1) Such special tooling, special machinery, or equipment is not 
reasonably capable of use in the other work of the non-Federal entity,
    (2) The interest of the Federal Government is protected by transfer 
of title or by other means deemed appropriate by the Federal awarding 
agency (see also Sec.  200.313 (d)), and

[[Page 194]]

    (3) The loss of useful value for any one terminated Federal award is 
limited to that portion of the acquisition cost which bears the same 
ratio to the total acquisition cost as the terminated portion of the 
Federal award bears to the entire terminated Federal award and other 
Federal awards for which the special tooling, machinery, or equipment 
was acquired.
    (d) Rental costs under unexpired leases are generally allowable 
where clearly shown to have been reasonably necessary for the 
performance of the terminated Federal award less the residual value of 
such leases, if:
    (1) The amount of such rental claimed does not exceed the reasonable 
use value of the property leased for the period of the Federal award and 
such further period as may be reasonable, and
    (2) The non-Federal entity makes all reasonable efforts to 
terminate, assign, settle, or otherwise reduce the cost of such lease. 
There also may be included the cost of alterations of such leased 
property, provided such alterations were necessary for the performance 
of the Federal award, and of reasonable restoration required by the 
provisions of the lease.
    (e) Settlement expenses including the following are generally 
allowable:
    (1) Accounting, legal, clerical, and similar costs reasonably 
necessary for:
    (i) The preparation and presentation to the Federal awarding agency 
of settlement claims and supporting data with respect to the terminated 
portion of the Federal award, unless the termination is for cause (see 
subpart D, including Sec. Sec.  200.339-200.343); and
    (ii) The termination and settlement of subawards.
    (2) Reasonable costs for the storage, transportation, protection, 
and disposition of property provided by the Federal Government or 
acquired or produced for the Federal award.
    (f) Claims under subawards, including the allocable portion of 
claims which are common to the Federal award and to other work of the 
non-Federal entity, are generally allowable. An appropriate share of the 
non-Federal entity's indirect costs may be allocated to the amount of 
settlements with contractors and/or subrecipients, provided that the 
amount allocated is otherwise consistent with the basic guidelines 
contained in Sec.  200.414. The indirect costs so allocated must exclude 
the same and similar costs claimed directly or indirectly as settlement 
expenses.

[78 FR 78608, Dec. 26, 2013. Redesignated and amended at 85 FR 49570, 
Aug. 13, 2020]



Sec.  200.473  Training and education costs.

    The cost of training and education provided for employee development 
is allowable.

[78 FR 78608, Dec. 26, 2013. Redesignated at 85 FR 49570, Aug. 13, 2020]



Sec.  200.474  Transportation costs.

    Costs incurred for freight, express, cartage, postage, and other 
transportation services relating either to goods purchased, in process, 
or delivered, are allowable. When such costs can readily be identified 
with the items involved, they may be charged directly as transportation 
costs or added to the cost of such items. Where identification with the 
materials received cannot readily be made, inbound transportation cost 
may be charged to the appropriate indirect (F&A) cost accounts if the 
non-Federal entity follows a consistent, equitable procedure in this 
respect. Outbound freight, if reimbursable under the terms and 
conditions of the Federal award, should be treated as a direct cost.

[78 FR 78608, Dec. 26, 2013. Redesignated at 85 FR 49570, Aug. 13, 2020]



Sec.  200.475  Travel costs.

    (a) General. Travel costs are the expenses for transportation, 
lodging, subsistence, and related items incurred by employees who are in 
travel status on official business of the non-Federal entity. Such costs 
may be charged on an actual cost basis, on a per diem or mileage basis 
in lieu of actual costs incurred, or on a combination of the two, 
provided the method used is applied to an entire trip and not to 
selected days of the trip, and results in charges consistent with those 
normally allowed in like circumstances in the non-Federal entity's non-
federally-funded activities and in accordance with non-Federal entity's 
written travel reimbursement

[[Page 195]]

policies. Notwithstanding the provisions of Sec.  200.444, travel costs 
of officials covered by that section are allowable with the prior 
written approval of the Federal awarding agency or pass-through entity 
when they are specifically related to the Federal award.
    (b) Lodging and subsistence. Costs incurred by employees and 
officers for travel, including costs of lodging, other subsistence, and 
incidental expenses, must be considered reasonable and otherwise 
allowable only to the extent such costs do not exceed charges normally 
allowed by the non-Federal entity in its regular operations as the 
result of the non-Federal entity's written travel policy. In addition, 
if these costs are charged directly to the Federal award documentation 
must justify that:
    (1) Participation of the individual is necessary to the Federal 
award; and
    (2) The costs are reasonable and consistent with non-Federal 
entity's established travel policy.
    (c)(1) Temporary dependent care costs (as dependent is defined in 26 
U.S.C. 152) above and beyond regular dependent care that directly 
results from travel to conferences is allowable provided that:
    (i) The costs are a direct result of the individual's travel for the 
Federal award;
    (ii) The costs are consistent with the non-Federal entity's 
documented travel policy for all entity travel; and
    (iii) Are only temporary during the travel period.
    (2) Travel costs for dependents are unallowable, except for travel 
of duration of six months or more with prior approval of the Federal 
awarding agency. See also Sec.  200.432.
    (d) In the absence of an acceptable, written non-Federal entity 
policy regarding travel costs, the rates and amounts established under 5 
U.S.C. 5701-11, (``Travel and Subsistence Expenses; Mileage 
Allowances''), or by the Administrator of General Services, or by the 
President (or his or her designee) pursuant to any provisions of such 
subchapter must apply to travel under Federal awards (48 CFR 31.205-
46(a)).
    (e) Commercial air travel. (1) Airfare costs in excess of the basic 
least expensive unrestricted accommodations class offered by commercial 
airlines are unallowable except when such accommodations would:
    (i) Require circuitous routing;
    (ii) Require travel during unreasonable hours;
    (iii) Excessively prolong travel;
    (iv) Result in additional costs that would offset the transportation 
savings; or
    (v) Offer accommodations not reasonably adequate for the traveler's 
medical needs. The non-Federal entity must justify and document these 
conditions on a case-by-case basis in order for the use of first-class 
or business-class airfare to be allowable in such cases.
    (2) Unless a pattern of avoidance is detected, the Federal 
Government will generally not question a non-Federal entity's 
determinations that customary standard airfare or other discount airfare 
is unavailable for specific trips if the non-Federal entity can 
demonstrate that such airfare was not available in the specific case.
    (f) Air travel by other than commercial carrier. Costs of travel by 
non-Federal entity-owned, -leased, or -chartered aircraft include the 
cost of lease, charter, operation (including personnel costs), 
maintenance, depreciation, insurance, and other related costs. The 
portion of such costs that exceeds the cost of airfare as provided for 
in paragraph (d) of this section, is unallowable.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014. 
Redesignated and amended at 85 FR 49570, Aug. 13, 2020]



Sec.  200.476  Trustees.

    Travel and subsistence costs of trustees (or directors) at IHEs and 
nonprofit organizations are allowable. See also Sec.  200.475.

[85 FR 49571, Aug. 13, 2020]



                      Subpart F_Audit Requirements

                                 General



Sec.  200.500  Purpose.

    This part sets forth standards for obtaining consistency and 
uniformity among Federal agencies for the audit

[[Page 196]]

of non-Federal entities expending Federal awards.

                                 Audits



Sec.  200.501  Audit requirements.

    (a) Audit required. A non-Federal entity that expends $750,000 or 
more during the non-Federal entity's fiscal year in Federal awards must 
have a single or program-specific audit conducted for that year in 
accordance with the provisions of this part.
    (b) Single audit. A non-Federal entity that expends $750,000 or more 
during the non-Federal entity's fiscal year in Federal awards must have 
a single audit conducted in accordance with Sec.  200.514 except when it 
elects to have a program-specific audit conducted in accordance with 
paragraph (c) of this section.
    (c) Program-specific audit election. When an auditee expends Federal 
awards under only one Federal program (excluding R&D) and the Federal 
program's statutes, regulations, or the terms and conditions of the 
Federal award do not require a financial statement audit of the auditee, 
the auditee may elect to have a program-specific audit conducted in 
accordance with Sec.  200.507. A program-specific audit may not be 
elected for R&D unless all of the Federal awards expended were received 
from the same Federal agency, or the same Federal agency and the same 
pass-through entity, and that Federal agency, or pass-through entity in 
the case of a subrecipient, approves in advance a program-specific 
audit.
    (d) Exemption when Federal awards expended are less than $750,000. A 
non-Federal entity that expends less than $750,000 during the non-
Federal entity's fiscal year in Federal awards is exempt from Federal 
audit requirements for that year, except as noted in Sec.  200.503, but 
records must be available for review or audit by appropriate officials 
of the Federal agency, pass-through entity, and Government 
Accountability Office (GAO).
    (e) Federally Funded Research and Development Centers (FFRDC). 
Management of an auditee that owns or operates a FFRDC may elect to 
treat the FFRDC as a separate entity for purposes of this part.
    (f) Subrecipients and contractors. An auditee may simultaneously be 
a recipient, a subrecipient, and a contractor. Federal awards expended 
as a recipient or a subrecipient are subject to audit under this part. 
The payments received for goods or services provided as a contractor are 
not Federal awards. Section Sec.  200.331 sets forth the considerations 
in determining whether payments constitute a Federal award or a payment 
for goods or services provided as a contractor.
    (g) Compliance responsibility for contractors. In most cases, the 
auditee's compliance responsibility for contractors is only to ensure 
that the procurement, receipt, and payment for goods and services comply 
with Federal statutes, regulations, and the terms and conditions of 
Federal awards. Federal award compliance requirements normally do not 
pass through to contractors. However, the auditee is responsible for 
ensuring compliance for procurement transactions which are structured 
such that the contractor is responsible for program compliance or the 
contractor's records must be reviewed to determine program compliance. 
Also, when these procurement transactions relate to a major program, the 
scope of the audit must include determining whether these transactions 
are in compliance with Federal statutes, regulations, and the terms and 
conditions of Federal awards.
    (h) For-profit subrecipient. Since this part does not apply to for-
profit subrecipients, the pass-through entity is responsible for 
establishing requirements, as necessary, to ensure compliance by for-
profit subrecipients. The agreement with the for-profit subrecipient 
must describe applicable compliance requirements and the for-profit 
subrecipient's compliance responsibility. Methods to ensure compliance 
for Federal awards made to for-profit subrecipients may include pre-
award audits, monitoring during the agreement, and post-award audits. 
See also Sec.  200.332.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 
85 FR 49571, Aug. 13, 2020]

[[Page 197]]



Sec.  200.502  Basis for determining Federal awards expended.

    (a) Determining Federal awards expended. The determination of when a 
Federal award is expended must be based on when the activity related to 
the Federal award occurs. Generally, the activity pertains to events 
that require the non-Federal entity to comply with Federal statutes, 
regulations, and the terms and conditions of Federal awards, such as: 
expenditure/expense transactions associated with awards including 
grants, cost-reimbursement contracts under the FAR, compacts with Indian 
Tribes, cooperative agreements, and direct appropriations; the 
disbursement of funds to subrecipients; the use of loan proceeds under 
loan and loan guarantee programs; the receipt of property; the receipt 
of surplus property; the receipt or use of program income; the 
distribution or use of food commodities; the disbursement of amounts 
entitling the non-Federal entity to an interest subsidy; and the period 
when insurance is in force.
    (b) Loan and loan guarantees (loans). Since the Federal Government 
is at risk for loans until the debt is repaid, the following guidelines 
must be used to calculate the value of Federal awards expended under 
loan programs, except as noted in paragraphs (c) and (d) of this 
section:
    (1) Value of new loans made or received during the audit period; 
plus
    (2) Beginning of the audit period balance of loans from previous 
years for which the Federal Government imposes continuing compliance 
requirements; plus
    (3) Any interest subsidy, cash, or administrative cost allowance 
received.
    (c) Loan and loan guarantees (loans) at IHEs. When loans are made to 
students of an IHE but the IHE does not make the loans, then only the 
value of loans made during the audit period must be considered Federal 
awards expended in that audit period. The balance of loans for previous 
audit periods is not included as Federal awards expended because the 
lender accounts for the prior balances.
    (d) Prior loan and loan guarantees (loans). Loans, the proceeds of 
which were received and expended in prior years, are not considered 
Federal awards expended under this part when the Federal statutes, 
regulations, and the terms and conditions of Federal awards pertaining 
to such loans impose no continuing compliance requirements other than to 
repay the loans.
    (e) Endowment funds. The cumulative balance of Federal awards for 
endowment funds that are federally restricted are considered Federal 
awards expended in each audit period in which the funds are still 
restricted.
    (f) Free rent. Free rent received by itself is not considered a 
Federal award expended under this part. However, free rent received as 
part of a Federal award to carry out a Federal program must be included 
in determining Federal awards expended and subject to audit under this 
part.
    (g) Valuing non-cash assistance. Federal non-cash assistance, such 
as free rent, food commodities, donated property, or donated surplus 
property, must be valued at fair market value at the time of receipt or 
the assessed value provided by the Federal agency.
    (h) Medicare. Medicare payments to a non-Federal entity for 
providing patient care services to Medicare-eligible individuals are not 
considered Federal awards expended under this part.
    (i) Medicaid. Medicaid payments to a subrecipient for providing 
patient care services to Medicaid-eligible individuals are not 
considered Federal awards expended under this part unless a state 
requires the funds to be treated as Federal awards expended because 
reimbursement is on a cost-reimbursement basis.
    (j) Certain loans provided by the National Credit Union 
Administration. For purposes of this part, loans made from the National 
Credit Union Share Insurance Fund and the Central Liquidity Facility 
that are funded by contributions from insured non-Federal entities are 
not considered Federal awards expended.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014]



Sec.  200.503  Relation to other audit requirements.

    (a) An audit conducted in accordance with this part must be in lieu 
of any financial audit of Federal awards which

[[Page 198]]

a non-Federal entity is required to undergo under any other Federal 
statute or regulation. To the extent that such audit provides a Federal 
agency with the information it requires to carry out its 
responsibilities under Federal statute or regulation, a Federal agency 
must rely upon and use that information.
    (b) Notwithstanding subsection (a), a Federal agency, Inspectors 
General, or GAO may conduct or arrange for additional audits which are 
necessary to carry out its responsibilities under Federal statute or 
regulation. The provisions of this part do not authorize any non-Federal 
entity to constrain, in any manner, such Federal agency from carrying 
out or arranging for such additional audits, except that the Federal 
agency must plan such audits to not be duplicative of other audits of 
Federal awards. Prior to commencing such an audit, the Federal agency or 
pass-through entity must review the FAC for recent audits submitted by 
the non-Federal entity, and to the extent such audits meet a Federal 
agency or pass-through entity's needs, the Federal agency or pass-
through entity must rely upon and use such audits. Any additional audits 
must be planned and performed in such a way as to build upon work 
performed, including the audit documentation, sampling, and testing 
already performed, by other auditors.
    (c) The provisions of this part do not limit the authority of 
Federal agencies to conduct, or arrange for the conduct of, audits and 
evaluations of Federal awards, nor limit the authority of any Federal 
agency Inspector General or other Federal official. For example, 
requirements that may be applicable under the FAR or CAS and the terms 
and conditions of a cost-reimbursement contract may include additional 
applicable audits to be conducted or arranged for by Federal agencies.
    (d) Federal agency to pay for additional audits. A Federal agency 
that conducts or arranges for additional audits must, consistent with 
other applicable Federal statutes and regulations, arrange for funding 
the full cost of such additional audits.
    (e) Request for a program to be audited as a major program. A 
Federal awarding agency may request that an auditee have a particular 
Federal program audited as a major program in lieu of the Federal 
awarding agency conducting or arranging for the additional audits. To 
allow for planning, such requests should be made at least 180 calendar 
days prior to the end of the fiscal year to be audited. The auditee, 
after consultation with its auditor, should promptly respond to such a 
request by informing the Federal awarding agency whether the program 
would otherwise be audited as a major program using the risk-based audit 
approach described in Sec.  200.518 and, if not, the estimated 
incremental cost. The Federal awarding agency must then promptly confirm 
to the auditee whether it wants the program audited as a major program. 
If the program is to be audited as a major program based upon this 
Federal awarding agency request, and the Federal awarding agency agrees 
to pay the full incremental costs, then the auditee must have the 
program audited as a major program. A pass-through entity may use the 
provisions of this paragraph for a subrecipient.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49570, Aug. 13, 2020]



Sec.  200.504  Frequency of audits.

    Except for the provisions for biennial audits provided in paragraphs 
(a) and (b) of this section, audits required by this part must be 
performed annually. Any biennial audit must cover both years within the 
biennial period.
    (a) A state, local government, or Indian tribe that is required by 
constitution or statute, in effect on January 1, 1987, to undergo its 
audits less frequently than annually, is permitted to undergo its audits 
pursuant to this part biennially. This requirement must still be in 
effect for the biennial period.
    (b) Any nonprofit organization that had biennial audits for all 
biennial periods ending between July 1, 1992, and January 1, 1995, is 
permitted to undergo its audits pursuant to this part biennially.



Sec.  200.505  Sanctions.

    In cases of continued inability or unwillingness to have an audit 
conducted in accordance with this part, Federal

[[Page 199]]

agencies and pass-through entities must take appropriate action as 
provided in Sec.  200.339.

[85 FR 49571, Aug. 13, 2020]



Sec.  200.506  Audit costs.

    See Sec.  200.425.

[85 FR 49571, Aug. 13, 2020]



Sec.  200.507  Program-specific audits.

    (a) Program-specific audit guide available. In some cases, a 
program-specific audit guide will be available to provide specific 
guidance to the auditor with respect to internal controls, compliance 
requirements, suggested audit procedures, and audit reporting 
requirements. A listing of current program-specific audit guides can be 
found in the compliance supplement, Part 8, Appendix VI, Program-
Specific Audit Guides, which includes a website where a copy of the 
guide can be obtained. When a current program-specific audit guide is 
available, the auditor must follow GAGAS and the guide when performing a 
program-specific audit.
    (b) Program-specific audit guide not available. (1) When a current 
program-specific audit guide is not available, the auditee and auditor 
must have basically the same responsibilities for the Federal program as 
they would have for an audit of a major program in a single audit.
    (2) The auditee must prepare the financial statement(s) for the 
Federal program that includes, at a minimum, a schedule of expenditures 
of Federal awards for the program and notes that describe the 
significant accounting policies used in preparing the schedule, a 
summary schedule of prior audit findings consistent with the 
requirements of Sec.  200.511(b), and a corrective action plan 
consistent with the requirements of Sec.  200.511(c).
    (3) The auditor must:
    (i) Perform an audit of the financial statement(s) for the Federal 
program in accordance with GAGAS;
    (ii) Obtain an understanding of internal controls and perform tests 
of internal controls over the Federal program consistent with the 
requirements of Sec.  200.514(c) for a major program;
    (iii) Perform procedures to determine whether the auditee has 
complied with Federal statutes, regulations, and the terms and 
conditions of Federal awards that could have a direct and material 
effect on the Federal program consistent with the requirements of Sec.  
200.514(d) for a major program;
    (iv) Follow up on prior audit findings, perform procedures to assess 
the reasonableness of the summary schedule of prior audit findings 
prepared by the auditee in accordance with the requirements of Sec.  
200.511, and report, as a current year audit finding, when the auditor 
concludes that the summary schedule of prior audit findings materially 
misrepresents the status of any prior audit finding; and
    (v) Report any audit findings consistent with the requirements of 
Sec.  200.516.
    (4) The auditor's report(s) may be in the form of either combined or 
separate reports and may be organized differently from the manner 
presented in this section. The auditor's report(s) must state that the 
audit was conducted in accordance with this part and include the 
following:
    (i) An opinion (or disclaimer of opinion) as to whether the 
financial statement(s) of the Federal program is presented fairly in all 
material respects in accordance with the stated accounting policies;
    (ii) A report on internal control related to the Federal program, 
which must describe the scope of testing of internal control and the 
results of the tests;
    (iii) A report on compliance which includes an opinion (or 
disclaimer of opinion) as to whether the auditee complied with laws, 
regulations, and the terms and conditions of Federal awards which could 
have a direct and material effect on the Federal program; and
    (iv) A schedule of findings and questioned costs for the Federal 
program that includes a summary of the auditor's results relative to the 
Federal program in a format consistent with Sec.  200.515(d)(1) and 
findings and questioned costs consistent with the requirements of Sec.  
200.515(d)(3).
    (c) Report submission for program-specific audits. (1) The audit 
must be completed and the reporting required by paragraph (c)(2) or 
(c)(3) of this section

[[Page 200]]

submitted within the earlier of 30 calendar days after receipt of the 
auditor's report(s), or nine months after the end of the audit period, 
unless a different period is specified in a program-specific audit 
guide. Unless restricted by Federal law or regulation, the auditee must 
make report copies available for public inspection. Auditees and 
auditors must ensure that their respective parts of the reporting 
package do not include protected personally identifiable information.
    (2) When a program-specific audit guide is available, the auditee 
must electronically submit to the FAC the data collection form prepared 
in accordance with Sec.  200.512(b), as applicable to a program-specific 
audit, and the reporting required by the program-specific audit guide.
    (3) When a program-specific audit guide is not available, the 
reporting package for a program-specific audit must consist of the 
financial statement(s) of the Federal program, a summary schedule of 
prior audit findings, and a corrective action plan as described in 
paragraph (b)(2) of this section, and the auditor's report(s) described 
in paragraph (b)(4) of this section. The data collection form prepared 
in accordance with Sec.  200.512(b), as applicable to a program-specific 
audit, and one copy of this reporting package must be electronically 
submitted to the FAC.
    (d) Other sections of this part may apply. Program-specific audits 
are subject to:
    (1) 200.500 Purpose through 200.503 Relation to other audit 
requirements, paragraph (d);
    (2) 200.504 Frequency of audits through 200.506 Audit costs;
    (3) 200.508 Auditee responsibilities through 200.509 Auditor 
selection;
    (4) 200.511 Audit findings follow-up;
    (5) 200.512 Report submission, paragraphs (e) through (h);
    (6) 200.513 Responsibilities;
    (7) 200.516 Audit findings through 200.517 Audit documentation;
    (8) 200.521 Management decision; and
    (9) Other referenced provisions of this part unless contrary to the 
provisions of this section, a program-specific audit guide, or program 
statutes and regulations.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 
85 FR 49571, Aug. 13, 2020]

                                Auditees



Sec.  200.508  Auditee responsibilities.

    The auditee must:
    (a) Procure or otherwise arrange for the audit required by this part 
in accordance with Sec.  200.509, and ensure it is properly performed 
and submitted when due in accordance with Sec.  200.512.
    (b) Prepare appropriate financial statements, including the schedule 
of expenditures of Federal awards in accordance with Sec.  200.510.
    (c) Promptly follow up and take corrective action on audit findings, 
including preparation of a summary schedule of prior audit findings and 
a corrective action plan in accordance with Sec.  200.511(b) and (c), 
respectively.
    (d) Provide the auditor with access to personnel, accounts, books, 
records, supporting documentation, and other information as needed for 
the auditor to perform the audit required by this part.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49572, Aug. 13, 2020]



Sec.  200.509  Auditor selection.

    (a) Auditor procurement. In procuring audit services, the auditee 
must follow the procurement standards prescribed by the Procurement 
Standards in Sec. Sec.  200.317 through 200.326 of subpart D of this 
part or the FAR (48 CFR part 42), as applicable. When procuring audit 
services, the objective is to obtain high-quality audits. In requesting 
proposals for audit services, the objectives and scope of the audit must 
be made clear and the non-Federal entity must request a copy of the 
audit organization's peer review report which the auditor is required to 
provide under GAGAS. Factors to be considered in evaluating each 
proposal for audit services include the responsiveness to the request 
for proposal, relevant experience, availability of staff with 
professional qualifications and technical abilities, the results of peer 
and external quality control reviews, and price. Whenever possible, the 
auditee must

[[Page 201]]

make positive efforts to utilize small businesses, minority-owned firms, 
and women's business enterprises, in procuring audit services as stated 
in Sec.  200.321, or the FAR (48 CFR part 42), as applicable.
    (b) Restriction on auditor preparing indirect cost proposals. An 
auditor who prepares the indirect cost proposal or cost allocation plan 
may not also be selected to perform the audit required by this part when 
the indirect costs recovered by the auditee during the prior year 
exceeded $1 million. This restriction applies to the base year used in 
the preparation of the indirect cost proposal or cost allocation plan 
and any subsequent years in which the resulting indirect cost agreement 
or cost allocation plan is used to recover costs.
    (c) Use of Federal auditors. Federal auditors may perform all or 
part of the work required under this part if they comply fully with the 
requirements of this part.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49572, Aug. 13, 2020]



Sec.  200.510  Financial statements.

    (a) Financial statements. The auditee must prepare financial 
statements that reflect its financial position, results of operations or 
changes in net assets, and, where appropriate, cash flows for the fiscal 
year audited. The financial statements must be for the same 
organizational unit and fiscal year that is chosen to meet the 
requirements of this part. However, non-Federal entity-wide financial 
statements may also include departments, agencies, and other 
organizational units that have separate audits in accordance with Sec.  
200.514(a) and prepare separate financial statements.
    (b) Schedule of expenditures of Federal awards. The auditee must 
also prepare a schedule of expenditures of Federal awards for the period 
covered by the auditee's financial statements which must include the 
total Federal awards expended as determined in accordance with Sec.  
200.502. While not required, the auditee may choose to provide 
information requested by Federal awarding agencies and pass-through 
entities to make the schedule easier to use. For example, when a Federal 
program has multiple Federal award years, the auditee may list the 
amount of Federal awards expended for each Federal award year 
separately. At a minimum, the schedule must:
    (1) List individual Federal programs by Federal agency. For a 
cluster of programs, provide the cluster name, list individual Federal 
programs within the cluster of programs, and provide the applicable 
Federal agency name. For R&D, total Federal awards expended must be 
shown either by individual Federal award or by Federal agency and major 
subdivision within the Federal agency. For example, the National 
Institutes of Health is a major subdivision in the Department of Health 
and Human Services.
    (2) For Federal awards received as a subrecipient, the name of the 
pass-through entity and identifying number assigned by the pass-through 
entity must be included.
    (3) Provide total Federal awards expended for each individual 
Federal program and the Assistance Listings Number or other identifying 
number when the Assistance Listings information is not available. For a 
cluster of programs also provide the total for the cluster.
    (4) Include the total amount provided to subrecipients from each 
Federal program.
    (5) For loan or loan guarantee programs described in Sec.  
200.502(b), identify in the notes to the schedule the balances 
outstanding at the end of the audit period. This is in addition to 
including the total Federal awards expended for loan or loan guarantee 
programs in the schedule.
    (6) Include notes that describe that significant accounting policies 
used in preparing the schedule, and note whether or not the auditee 
elected to use the 10% de minimis cost rate as covered in Sec.  200.414.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 
85 FR 49572, Aug. 13, 2020]



Sec.  200.511  Audit findings follow-up.

    (a) General. The auditee is responsible for follow-up and corrective 
action on all audit findings. As part of this responsibility, the 
auditee must prepare a summary schedule of prior audit findings. The 
auditee must also prepare a

[[Page 202]]

corrective action plan for current year audit findings. The summary 
schedule of prior audit findings and the corrective action plan must 
include the reference numbers the auditor assigns to audit findings 
under Sec.  200.516(c). Since the summary schedule may include audit 
findings from multiple years, it must include the fiscal year in which 
the finding initially occurred. The corrective action plan and summary 
schedule of prior audit findings must include findings relating to the 
financial statements which are required to be reported in accordance 
with GAGAS.
    (b) Summary schedule of prior audit findings. The summary schedule 
of prior audit findings must report the status of all audit findings 
included in the prior audit's schedule of findings and questioned costs. 
The summary schedule must also include audit findings reported in the 
prior audit's summary schedule of prior audit findings except audit 
findings listed as corrected in accordance with paragraph (b)(1) of this 
section, or no longer valid or not warranting further action in 
accordance with paragraph (b)(3) of this section.
    (1) When audit findings were fully corrected, the summary schedule 
need only list the audit findings and state that corrective action was 
taken.
    (2) When audit findings were not corrected or were only partially 
corrected, the summary schedule must describe the reasons for the 
finding's recurrence and planned corrective action, and any partial 
corrective action taken. When corrective action taken is significantly 
different from corrective action previously reported in a corrective 
action plan or in the Federal agency's or pass-through entity's 
management decision, the summary schedule must provide an explanation.
    (3) When the auditee believes the audit findings are no longer valid 
or do not warrant further action, the reasons for this position must be 
described in the summary schedule. A valid reason for considering an 
audit finding as not warranting further action is that all of the 
following have occurred:
    (i) Two years have passed since the audit report in which the 
finding occurred was submitted to the FAC;
    (ii) The Federal agency or pass-through entity is not currently 
following up with the auditee on the audit finding; and
    (iii) A management decision was not issued.
    (c) Corrective action plan. At the completion of the audit, the 
auditee must prepare, in a document separate from the auditor's findings 
described in Sec.  200.516, a corrective action plan to address each 
audit finding included in the current year auditor's reports. The 
corrective action plan must provide the name(s) of the contact person(s) 
responsible for corrective action, the corrective action planned, and 
the anticipated completion date. If the auditee does not agree with the 
audit findings or believes corrective action is not required, then the 
corrective action plan must include an explanation and specific reasons.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49572, Aug. 13, 2020]



Sec.  200.512  Report submission.

    (a) General. (1) The audit must be completed and the data collection 
form described in paragraph (b) of this section and reporting package 
described in paragraph (c) of this section must be submitted within the 
earlier of 30 calendar days after receipt of the auditor's report(s), or 
nine months after the end of the audit period. If the due date falls on 
a Saturday, Sunday, or Federal holiday, the reporting package is due the 
next business day.
    (2) Unless restricted by Federal statutes or regulations, the 
auditee must make copies available for public inspection. Auditees and 
auditors must ensure that their respective parts of the reporting 
package do not include protected personally identifiable information.
    (b) Data collection. The FAC is the repository of record for subpart 
F of this part reporting packages and the data collection form. All 
Federal agencies, pass-through entities and others interested in a 
reporting package and data collection form must obtain it by accessing 
the FAC.
    (1) The auditee must submit required data elements described in 
Appendix X to Part 200, which state whether the audit was completed in 
accordance

[[Page 203]]

with this part and provides information about the auditee, its Federal 
programs, and the results of the audit. The data must include 
information available from the audit required by this part that is 
necessary for Federal agencies to use the audit to ensure integrity for 
Federal programs. The data elements and format must be approved by OMB, 
available from the FAC, and include collections of information from the 
reporting package described in paragraph (c) of this section. A senior 
level representative of the auditee (e.g., state controller, director of 
finance, chief executive officer, or chief financial officer) must sign 
a statement to be included as part of the data collection that says that 
the auditee complied with the requirements of this part, the data were 
prepared in accordance with this part (and the instructions accompanying 
the form), the reporting package does not include protected personally 
identifiable information, the information included in its entirety is 
accurate and complete, and that the FAC is authorized to make the 
reporting package and the form publicly available on a website.
    (2) Exception for Indian Tribes and Tribal Organizations. An auditee 
that is an Indian tribe or a tribal organization (as defined in the 
Indian Self-Determination, Education and Assistance Act (ISDEAA), 25 
U.S.C. 450b(l)) may opt not to authorize the FAC to make the reporting 
package publicly available on a Web site, by excluding the authorization 
for the FAC publication in the statement described in paragraph (b)(1) 
of this section. If this option is exercised, the auditee becomes 
responsible for submitting the reporting package directly to any pass-
through entities through which it has received a Federal award and to 
pass-through entities for which the summary schedule of prior audit 
findings reported the status of any findings related to Federal awards 
that the pass-through entity provided. Unless restricted by Federal 
statute or regulation, if the auditee opts not to authorize publication, 
it must make copies of the reporting package available for public 
inspection.
    (3) Using the information included in the reporting package 
described in paragraph (c) of this section, the auditor must complete 
the applicable data elements of the data collection form. The auditor 
must sign a statement to be included as part of the data collection form 
that indicates, at a minimum, the source of the information included in 
the form, the auditor's responsibility for the information, that the 
form is not a substitute for the reporting package described in 
paragraph (c) of this section, and that the content of the form is 
limited to the collection of information prescribed by OMB.
    (c) Reporting package. The reporting package must include the:
    (1) Financial statements and schedule of expenditures of Federal 
awards discussed in Sec.  200.510(a) and (b), respectively;
    (2) Summary schedule of prior audit findings discussed in Sec.  
200.511(b);
    (3) Auditor's report(s) discussed in Sec.  200.515; and
    (4) Corrective action plan discussed in Sec.  200.511(c).
    (d) Submission to FAC. The auditee must electronically submit to the 
FAC the data collection form described in paragraph (b) of this section 
and the reporting package described in paragraph (c) of this section.
    (e) Requests for management letters issued by the auditor. In 
response to requests by a Federal agency or pass-through entity, 
auditees must submit a copy of any management letters issued by the 
auditor.
    (f) Report retention requirements. Auditees must keep one copy of 
the data collection form described in paragraph (b) of this section and 
one copy of the reporting package described in paragraph (c) of this 
section on file for three years from the date of submission to the FAC.
    (g) FAC responsibilities. The FAC must make available the reporting 
packages received in accordance with paragraph (c) of this section and 
Sec.  200.507(c) to the public, except for Indian tribes exercising the 
option in (b)(2) of this section, and maintain a data base of completed 
audits, provide appropriate information to Federal agencies, and follow 
up with known auditees that have not submitted the required data 
collection forms and reporting packages.

[[Page 204]]

    (h) Electronic filing. Nothing in this part must preclude electronic 
submissions to the FAC in such manner as may be approved by OMB.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 
85 FR 49573, Aug. 13, 2020]

                            Federal Agencies



Sec.  200.513  Responsibilities.

    (a)(1) Cognizant agency for audit responsibilities. A non-Federal 
entity expending more than $50 million a year in Federal awards must 
have a cognizant agency for audit. The designated cognizant agency for 
audit must be the Federal awarding agency that provides the predominant 
amount of funding directly (direct funding) (as listed on the Schedule 
of expenditures of Federal awards, see Sec.  200.510(b)) to a non-
Federal entity unless OMB designates a specific cognizant agency for 
audit. When the direct funding represents less than 25 percent of the 
total expenditures (as direct and subawards) by the non-Federal entity, 
then the Federal agency with the predominant amount of total funding is 
the designated cognizant agency for audit.
    (2) To provide for continuity of cognizance, the determination of 
the predominant amount of direct funding must be based upon direct 
Federal awards expended in the non-Federal entity's fiscal years ending 
in 2019, and every fifth year thereafter.
    (3) Notwithstanding the manner in which audit cognizance is 
determined, a Federal awarding agency with cognizance for an auditee may 
reassign cognizance to another Federal awarding agency that provides 
substantial funding and agrees to be the cognizant agency for audit. 
Within 30 calendar days after any reassignment, both the old and the new 
cognizant agency for audit must provide notice of the change to the FAC, 
the auditee, and, if known, the auditor. The cognizant agency for audit 
must:
    (i) Provide technical audit advice and liaison assistance to 
auditees and auditors.
    (ii) Obtain or conduct quality control reviews on selected audits 
made by non-Federal auditors, and provide the results to other 
interested organizations. Cooperate and provide support to the Federal 
agency designated by OMB to lead a governmentwide project to determine 
the quality of single audits by providing a reliable estimate of the 
extent that single audits conform to applicable requirements, standards, 
and procedures; and to make recommendations to address noted audit 
quality issues, including recommendations for any changes to applicable 
requirements, standards and procedures indicated by the results of the 
project. The governmentwide project can rely on the current and on-going 
quality control review work performed by the agencies, State auditors, 
and professional audit associations. This governmentwide audit quality 
project must be performed once every 6 years (or at such other interval 
as determined by OMB), and the results must be public.
    (iii) Promptly inform other affected Federal agencies and 
appropriate Federal law enforcement officials of any direct reporting by 
the auditee or its auditor required by GAGAS or statutes and 
regulations.
    (iv) Advise the community of independent auditors of any noteworthy 
or important factual trends related to the quality of audits stemming 
from quality control reviews. Significant problems or quality issues 
consistently identified through quality control reviews of audit reports 
must be referred to appropriate state licensing agencies and 
professional bodies.
    (v) Advise the auditor, Federal awarding agencies, and, where 
appropriate, the auditee of any deficiencies found in the audits when 
the deficiencies require corrective action by the auditor. When advised 
of deficiencies, the auditee must work with the auditor to take 
corrective action. If corrective action is not taken, the cognizant 
agency for audit must notify the auditor, the auditee, and applicable 
Federal awarding agencies and pass-through entities of the facts and 
make recommendations for follow-up action. Major inadequacies or 
repetitive substandard performance by auditors must be referred to 
appropriate state licensing agencies and professional bodies for 
disciplinary action.
    (vi) Coordinate, to the extent practical, audits or reviews made by 
or for

[[Page 205]]

Federal agencies that are in addition to the audits made pursuant to 
this part, so that the additional audits or reviews build upon rather 
than duplicate audits performed in accordance with this part.
    (vii) Coordinate a management decision for cross-cutting audit 
findings (see in Sec.  200.1 of this part) that affect the Federal 
programs of more than one agency when requested by any Federal awarding 
agency whose awards are included in the audit finding of the auditee.
    (viii) Coordinate the audit work and reporting responsibilities 
among auditors to achieve the most cost-effective audit.
    (ix) Provide advice to auditees as to how to handle changes in 
fiscal years.
    (b) Oversight agency for audit responsibilities. An auditee who does 
not have a designated cognizant agency for audit will be under the 
general oversight of the Federal agency determined in accordance with 
Sec.  200.1 oversight agency for audit. A Federal agency with oversight 
for an auditee may reassign oversight to another Federal agency that 
agrees to be the oversight agency for audit. Within 30 calendar days 
after any reassignment, both the old and the new oversight agency for 
audit must provide notice of the change to the FAC, the auditee, and, if 
known, the auditor. The oversight agency for audit:
    (1) Must provide technical advice to auditees and auditors as 
requested.
    (2) May assume all or some of the responsibilities normally 
performed by a cognizant agency for audit.
    (c) Federal awarding agency responsibilities. The Federal awarding 
agency must perform the following for the Federal awards it makes (See 
also the requirements of Sec.  200.211):
    (1) Ensure that audits are completed and reports are received in a 
timely manner and in accordance with the requirements of this part.
    (2) Provide technical advice and counsel to auditees and auditors as 
requested.
    (3) Follow-up on audit findings to ensure that the recipient takes 
appropriate and timely corrective action. As part of audit follow-up, 
the Federal awarding agency must:
    (i) Issue a management decision as prescribed in Sec.  200.521;
    (ii) Monitor the recipient taking appropriate and timely corrective 
action;
    (iii) Use cooperative audit resolution mechanisms (see the 
definition of cooperative audit resolution in Sec.  200.1 of this part) 
to improve Federal program outcomes through better audit resolution, 
follow-up, and corrective action; and
    (iv) Develop a baseline, metrics, and targets to track, over time, 
the effectiveness of the Federal agency's process to follow-up on audit 
findings and on the effectiveness of Single Audits in improving non-
Federal entity accountability and their use by Federal awarding agencies 
in making award decisions.
    (4) Provide OMB annual updates to the compliance supplement and work 
with OMB to ensure that the compliance supplement focuses the auditor to 
test the compliance requirements most likely to cause improper payments, 
fraud, waste, abuse or generate audit finding for which the Federal 
awarding agency will take sanctions.
    (5) Provide OMB with the name of a single audit accountable official 
from among the senior policy officials of the Federal awarding agency 
who must be:
    (i) Responsible for ensuring that the agency fulfills all the 
requirements of paragraph (c) of this section and effectively uses the 
single audit process to reduce improper payments and improve Federal 
program outcomes.
    (ii) Held accountable to improve the effectiveness of the single 
audit process based upon metrics as described in paragraph (c)(3)(iv) of 
this section.
    (iii) Responsible for designating the Federal agency's key 
management single audit liaison.
    (6) Provide OMB with the name of a key management single audit 
liaison who must:
    (i) Serve as the Federal awarding agency's management point of 
contact for the single audit process both within and outside the Federal 
Government.
    (ii) Promote interagency coordination, consistency, and sharing in 
areas such as coordinating audit follow-up; identifying higher-risk non-
Federal entities; providing input on single audit and follow-up policy; 
enhancing the utility of the FAC; and studying ways

[[Page 206]]

to use single audit results to improve Federal award accountability and 
best practices.
    (iii) Oversee training for the Federal awarding agency's program 
management personnel related to the single audit process.
    (iv) Promote the Federal awarding agency's use of cooperative audit 
resolution mechanisms.
    (v) Coordinate the Federal awarding agency's activities to ensure 
appropriate and timely follow-up and corrective action on audit 
findings.
    (vi) Organize the Federal cognizant agency for audit's follow-up on 
cross-cutting audit findings that affect the Federal programs of more 
than one Federal awarding agency.
    (vii) Ensure the Federal awarding agency provides annual updates of 
the compliance supplement to OMB.
    (viii) Support the Federal awarding agency's single audit 
accountable official's mission.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 
85 FR 49573, Aug. 13, 2020]

                                Auditors



Sec.  200.514  Scope of audit.

    (a) General. The audit must be conducted in accordance with GAGAS. 
The audit must cover the entire operations of the auditee, or, at the 
option of the auditee, such audit must include a series of audits that 
cover departments, agencies, and other organizational units that 
expended or otherwise administered Federal awards during such audit 
period, provided that each such audit must encompass the financial 
statements and schedule of expenditures of Federal awards for each such 
department, agency, and other organizational unit, which must be 
considered to be a non-Federal entity. The financial statements and 
schedule of expenditures of Federal awards must be for the same audit 
period.
    (b) Financial statements. The auditor must determine whether the 
financial statements of the auditee are presented fairly in all material 
respects in accordance with generally accepted accounting principles. 
The auditor must also determine whether the schedule of expenditures of 
Federal awards is stated fairly in all material respects in relation to 
the auditee's financial statements as a whole.
    (c) Internal control. (1) The compliance supplement provides 
guidance on internal controls over Federal programs based upon the 
guidance in Standards for Internal Control in the Federal Government 
issued by the Comptroller General of the United States and the Internal 
Control--Integrated Framework, issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO).
    (2) In addition to the requirements of GAGAS, the auditor must 
perform procedures to obtain an understanding of internal control over 
Federal programs sufficient to plan the audit to support a low assessed 
level of control risk of noncompliance for major programs.
    (3) Except as provided in paragraph (c)(4) of this section, the 
auditor must:
    (i) Plan the testing of internal control over compliance for major 
programs to support a low assessed level of control risk for the 
assertions relevant to the compliance requirements for each major 
program; and
    (ii) Perform testing of internal control as planned in paragraph 
(c)(3)(i) of this section.
    (4) When internal control over some or all of the compliance 
requirements for a major program are likely to be ineffective in 
preventing or detecting noncompliance, the planning and performing of 
testing described in paragraph (c)(3) of this section are not required 
for those compliance requirements. However, the auditor must report a 
significant deficiency or material weakness in accordance with Sec.  
200.516 Audit findings, assess the related control risk at the maximum, 
and consider whether additional compliance tests are required because of 
ineffective internal control.
    (d) Compliance. (1) In addition to the requirements of GAGAS, the 
auditor must determine whether the auditee has complied with Federal 
statutes, regulations, and the terms and conditions of Federal awards 
that may have a direct and material effect on each of its major 
programs.

[[Page 207]]

    (2) The principal compliance requirements applicable to most Federal 
programs and the compliance requirements of the largest Federal programs 
are included in the compliance supplement.
    (3) For the compliance requirements related to Federal programs 
contained in the compliance supplement, an audit of these compliance 
requirements will meet the requirements of this part. Where there have 
been changes to the compliance requirements and the changes are not 
reflected in the compliance supplement, the auditor must determine the 
current compliance requirements and modify the audit procedures 
accordingly. For those Federal programs not covered in the compliance 
supplement, the auditor must follow the compliance supplement's guidance 
for programs not included in the supplement.
    (4) When internal control over some or all of the compliance 
requirements for a major program are likely to be ineffective in 
preventing or detecting noncompliance, the planning and performing of 
testing described in paragraph (c)(3) of this section are not required 
for those compliance requirements. However, the auditor must report a 
significant deficiency or material weakness in accordance with Sec.  
200.516, assess the related control risk at the
    (e) Audit follow-up. The auditor must follow-up on prior audit 
findings, perform procedures to assess the reasonableness of the summary 
schedule of prior audit findings prepared by the auditee in accordance 
with Sec.  200.511(b), and report, as a current year audit finding, when 
the auditor concludes that the summary schedule of prior audit findings 
materially misrepresents the status of any prior audit finding. The 
auditor must perform audit follow-up procedures regardless of whether a 
prior audit finding relates to a major program in the current year.
    (f) Data collection form. As required in Sec.  200.512(b)(3), the 
auditor must complete and sign specified sections of the data collection 
form.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 
85 FR 49574, Aug. 13, 2020]



Sec.  200.515  Audit reporting.

    The auditor's report(s) may be in the form of either combined or 
separate reports and may be organized differently from the manner 
presented in this section. The auditor's report(s) must state that the 
audit was conducted in accordance with this part and include the 
following:
    (a) Financial statements. The auditor must determine and provide an 
opinion (or disclaimer of opinion) whether the financial statements of 
the auditee are presented fairly in all materials respects in accordance 
with generally accepted accounting principles (or a special purpose 
framework such as cash, modified cash, or regulatory as required by 
state law). The auditor must also decide whether the schedule of 
expenditures of Federal awards is stated fairly in all material respects 
in relation to the auditee's financial statements as a whole.
    (b) A report on internal control over financial reporting and 
compliance with provisions of laws, regulations, contracts, and award 
agreements, noncompliance with which could have a material effect on the 
financial statements. This report must describe the scope of testing of 
internal control and compliance and the results of the tests, and, where 
applicable, it will refer to the separate schedule of findings and 
questioned costs described in paragraph (d) of this section.
    (c) A report on compliance for each major program and a report on 
internal control over compliance. This report must describe the scope of 
testing of internal control over compliance, include an opinion or 
disclaimer of opinion as to whether the auditee complied with Federal 
statutes, regulations, and the terms and conditions of Federal awards 
which could have a direct and material effect on each major program and 
refer to the separate schedule of findings and questioned costs 
described in paragraph (d) of this section.
    (d) A schedule of findings and questioned costs which must include 
the following three components:
    (1) A summary of the auditor's results, which must include:

[[Page 208]]

    (i) The type of report the auditor issued on whether the financial 
statements audited were prepared in accordance with GAAP (i.e., 
unmodified opinion, qualified opinion, adverse opinion, or disclaimer of 
opinion);
    (ii) Where applicable, a statement about whether significant 
deficiencies or material weaknesses in internal control were disclosed 
by the audit of the financial statements;
    (iii) A statement as to whether the audit disclosed any 
noncompliance that is material to the financial statements of the 
auditee;
    (iv) Where applicable, a statement about whether significant 
deficiencies or material weaknesses in internal control over major 
programs were disclosed by the audit;
    (v) The type of report the auditor issued on compliance for major 
programs (i.e., unmodified opinion, qualified opinion, adverse opinion, 
or disclaimer of opinion);
    (vi) A statement as to whether the audit disclosed any audit 
findings that the auditor is required to report under Sec.  200.516(a);
    (vii) An identification of major programs by listing each individual 
major program; however, in the case of a cluster of programs, only the 
cluster name as shown on the Schedule of Expenditures of Federal Awards 
is required;
    (viii) The dollar threshold used to distinguish between Type A and 
Type B programs, as described in Sec.  200.518(b)(1) or (3) when a 
recalculation of the Type A threshold is required for large loan or loan 
guarantees; and
    (ix) A statement as to whether the auditee qualified as a low-risk 
auditee under Sec.  200.520.
    (2) Findings relating to the financial statements which are required 
to be reported in accordance with GAGAS.
    (3) Findings and questioned costs for Federal awards which must 
include audit findings as defined in Sec.  200.516(a).
    (i) Audit findings (e.g., internal control findings, compliance 
findings, questioned costs, or fraud) that relate to the same issue must 
be presented as a single audit finding. Where practical, audit findings 
should be organized by Federal agency or pass-through entity.
    (ii) Audit findings that relate to both the financial statements and 
Federal awards, as reported under paragraphs (d)(2) and (d)(3) of this 
section, respectively, must be reported in both sections of the 
schedule. However, the reporting in one section of the schedule may be 
in summary form with a reference to a detailed reporting in the other 
section of the schedule.
    (e) Nothing in this part precludes combining of the audit reporting 
required by this section with the reporting required by Sec.  200.512(b) 
when allowed by GAGAS and appendix X to this part.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 
85 FR 49574, Aug. 13, 2020]



Sec.  200.516  Audit findings.

    (a) Audit findings reported. The auditor must report the following 
as audit findings in a schedule of findings and questioned costs:
    (1) Significant deficiencies and material weaknesses in internal 
control over major programs and significant instances of abuse relating 
to major programs. The auditor's determination of whether a deficiency 
in internal control is a significant deficiency or a material weakness 
for the purpose of reporting an audit finding is in relation to a type 
of compliance requirement for a major program identified in the 
Compliance Supplement.
    (2) Material noncompliance with the provisions of Federal statutes, 
regulations, or the terms and conditions of Federal awards related to a 
major program. The auditor's determination of whether a noncompliance 
with the provisions of Federal statutes, regulations, or the terms and 
conditions of Federal awards is material for the purpose of reporting an 
audit finding is in relation to a type of compliance requirement for a 
major program identified in the compliance supplement.
    (3) Known questioned costs that are greater than $25,000 for a type 
of compliance requirement for a major program. Known questioned costs 
are those specifically identified by the auditor. In evaluating the 
effect of questioned costs on the opinion on compliance, the auditor 
considers the best estimate of total costs questioned (likely questioned 
costs), not just the questioned costs specifically identified

[[Page 209]]

(known questioned costs). The auditor must also report known questioned 
costs when likely questioned costs are greater than $25,000 for a type 
of compliance requirement for a major program. In reporting questioned 
costs, the auditor must include information to provide proper 
perspective for judging the prevalence and consequences of the 
questioned costs.
    (4) Known questioned costs that are greater than $25,000 for a 
Federal program which is not audited as a major program. Except for 
audit follow-up, the auditor is not required under this part to perform 
audit procedures for such a Federal program; therefore, the auditor will 
normally not find questioned costs for a program that is not audited as 
a major program. However, if the auditor does become aware of questioned 
costs for a Federal program that is not audited as a major program 
(e.g., as part of audit follow-up or other audit procedures) and the 
known questioned costs are greater than $25,000, then the auditor must 
report this as an audit finding.
    (5) The circumstances concerning why the auditor's report on 
compliance for each major program is other than an unmodified opinion, 
unless such circumstances are otherwise reported as audit findings in 
the schedule of findings and questioned costs for Federal awards.
    (6) Known or likely fraud affecting a Federal award, unless such 
fraud is otherwise reported as an audit finding in the schedule of 
findings and questioned costs for Federal awards. This paragraph does 
not require the auditor to report publicly information which could 
compromise investigative or legal proceedings or to make an additional 
reporting when the auditor confirms that the fraud was reported outside 
the auditor's reports under the direct reporting requirements of GAGAS.
    (7) Instances where the results of audit follow-up procedures 
disclosed that the summary schedule of prior audit findings prepared by 
the auditee in accordance with Sec.  200.511(b) materially misrepresents 
the status of any prior audit finding.
    (b) Audit finding detail and clarity. Audit findings must be 
presented in sufficient detail and clarity for the auditee to prepare a 
corrective action plan and take corrective action, and for Federal 
agencies and pass-through entities to arrive at a management decision. 
The following specific information must be included, as applicable, in 
audit findings:
    (1) Federal program and specific Federal award identification 
including the Assistance Listings title and number, Federal award 
identification number and year, name of Federal agency, and name of the 
applicable pass-through entity. When information, such as the Assistance 
Listings title and number or Federal award identification number, is not 
available, the auditor must provide the best information available to 
describe the Federal award.
    (2) The criteria or specific requirement upon which the audit 
finding is based, including the Federal statutes, regulations, or the 
terms and conditions of the Federal awards. Criteria generally identify 
the required or desired state or expectation with respect to the program 
or operation. Criteria provide a context for evaluating evidence and 
understanding findings.
    (3) The condition found, including facts that support the deficiency 
identified in the audit finding.
    (4) A statement of cause that identifies the reason or explanation 
for the condition or the factors responsible for the difference between 
the situation that exists (condition) and the required or desired state 
(criteria), which may also serve as a basis for recommendations for 
corrective action.
    (5) The possible asserted effect to provide sufficient information 
to the auditee and Federal agency, or pass-through entity in the case of 
a subrecipient, to permit them to determine the cause and effect to 
facilitate prompt and proper corrective action. A statement of the 
effect or potential effect should provide a clear, logical link to 
establish the impact or potential impact of the difference between the 
condition and the criteria.
    (6) Identification of questioned costs and how they were computed. 
Known questioned costs must be identified by applicable Assistance 
Listings number(s) and applicable Federal award identification 
number(s).

[[Page 210]]

    (7) Information to provide proper perspective for judging the 
prevalence and consequences of the audit findings, such as whether the 
audit findings represent an isolated instance or a systemic problem. 
Where appropriate, instances identified must be related to the universe 
and the number of cases examined and be quantified in terms of dollar 
value. The auditor should report whether the sampling was a 
statistically valid sample.
    (8) Identification of whether the audit finding was a repeat of a 
finding in the immediately prior audit and if so any applicable prior 
year audit finding numbers.
    (9) Recommendations to prevent future occurrences of the deficiency 
identified in the audit finding.
    (10) Views of responsible officials of the auditee.
    (c) Reference numbers. Each audit finding in the schedule of 
findings and questioned costs must include a reference number in the 
format meeting the requirements of the data collection form submission 
required by Sec.  200.512(b) to allow for easy referencing of the audit 
findings during follow-up.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49574, Aug. 13, 2020]



Sec.  200.517  Audit documentation.

    (a) Retention of audit documentation. The auditor must retain audit 
documentation and reports for a minimum of three years after the date of 
issuance of the auditor's report(s) to the auditee, unless the auditor 
is notified in writing by the cognizant agency for audit, oversight 
agency for audit, cognizant agency for indirect costs, or pass-through 
entity to extend the retention period. When the auditor is aware that 
the Federal agency, pass-through entity, or auditee is contesting an 
audit finding, the auditor must contact the parties contesting the audit 
finding for guidance prior to destruction of the audit documentation and 
reports.
    (b) Access to audit documentation. Audit documentation must be made 
available upon request to the cognizant or oversight agency for audit or 
its designee, cognizant agency for indirect cost, a Federal agency, or 
GAO at the completion of the audit, as part of a quality review, to 
resolve audit findings, or to carry out oversight responsibilities 
consistent with the purposes of this part. Access to audit documentation 
includes the right of Federal agencies to obtain copies of audit 
documentation, as is reasonable and necessary.



Sec.  200.518  Major program determination.

    (a) General. The auditor must use a risk-based approach to determine 
which Federal programs are major programs. This risk-based approach must 
include consideration of: current and prior audit experience, oversight 
by Federal agencies and pass-through entities, and the inherent risk of 
the Federal program. The process in paragraphs (b) through (h) of this 
section must be followed.
    (b) Step one. (1) The auditor must identify the larger Federal 
programs, which must be labeled Type A programs. Type A programs are 
defined as Federal programs with Federal awards expended during the 
audit period exceeding the levels outlined in the table in this 
paragraph (b)(1):

------------------------------------------------------------------------
       Total Federal awards expended             Type A/B threshold
------------------------------------------------------------------------
 Equal to or exceed $750,000 but less than  $750,000.
 or equal to $25 million.
Exceed $25 million but less than or equal   Total Federal awards
 to $100 million.                            expended times .03.
Exceed $100 million but less than or equal  $3 million.
 to $1 billion.
Exceed $1 billion but less than or equal    Total Federal awards
 to $10 billion.                             expended times .003.
Exceed $10 billion but less than or equal   $30 million.
 to $20 billion.
Exceed $20 billion........................  Total Federal awards
                                             expended times .0015.
------------------------------------------------------------------------

    (2) Federal programs not labeled Type A under paragraph (b)(1) of 
this section must be labeled Type B programs.
    (3) The inclusion of large loan and loan guarantees (loans) must not 
result in the exclusion of other programs as Type A programs. When a 
Federal program providing loans exceeds four times the largest non-loan 
program it is considered a large loan program, and the auditor must 
consider this Federal program as a Type A program and exclude its values 
in determining other

[[Page 211]]

Type A programs. This recalculation of the Type A program is performed 
after removing the total of all large loan programs. For the purposes of 
this paragraph a program is only considered to be a Federal program 
providing loans if the value of Federal awards expended for loans within 
the program comprises fifty percent or more of the total Federal awards 
expended for the program. A cluster of programs is treated as one 
program and the value of Federal awards expended under a loan program is 
determined as described in Sec.  200.502.
    (4) For biennial audits permitted under Sec.  200.504, the 
determination of Type A and Type B programs must be based upon the 
Federal awards expended during the two-year period.
    (c) Step two. (1) The auditor must identify Type A programs which 
are low-risk. In making this determination, the auditor must consider 
whether the requirements in Sec.  200.519(c), the results of audit 
follow-up, or any changes in personnel or systems affecting the program 
indicate significantly increased risk and preclude the program from 
being low risk. For a Type A program to be considered low-risk, it must 
have been audited as a major program in at least one of the two most 
recent audit periods (in the most recent audit period in the case of a 
biennial audit), and, in the most recent audit period, the program must 
have not had:
    (i) Internal control deficiencies which were identified as material 
weaknesses in the auditor's report on internal control for major 
programs as required under Sec.  200.515(c);
    (ii) A modified opinion on the program in the auditor's report on 
major programs as required under Sec.  200.515(c); or
    (iii) Known or likely questioned costs that exceed five percent of 
the total Federal awards expended for the program.
    (2) Notwithstanding paragraph (c)(1) of this section, OMB may 
approve a Federal awarding agency's request that a Type A program may 
not be considered low risk for a certain recipient. For example, it may 
be necessary for a large Type A program to be audited as a major program 
each year at a particular recipient to allow the Federal awarding agency 
to comply with 31 U.S.C. 3515. The Federal awarding agency must notify 
the recipient and, if known, the auditor of OMB's approval at least 180 
calendar days prior to the end of the fiscal year to be audited.
    (d) Step three. (1) The auditor must identify Type B programs which 
are high-risk using professional judgment and the criteria in Sec.  
200.519. However, the auditor is not required to identify more high-risk 
Type B programs than at least one fourth the number of low-risk Type A 
programs identified as low-risk under Step 2 (paragraph (c) of this 
section). Except for known material weakness in internal control or 
compliance problems as discussed in Sec.  200.519(b)(1) and (2) and 
(c)(1), a single criterion in risk would seldom cause a Type B program 
to be considered high-risk. When identifying which Type B programs to 
risk assess, the auditor is encouraged to use an approach which provides 
an opportunity for different high-risk Type B programs to be audited as 
major over a period of time.
    (2) The auditor is not expected to perform risk assessments on 
relatively small Federal programs. Therefore, the auditor is only 
required to perform risk assessments on Type B programs that exceed 
twenty-five percent (0.25) of the Type A threshold determined in Step 1 
(paragraph (b) of this section).
    (e) Step four. At a minimum, the auditor must audit all of the 
following as major programs:
    (1) All Type A programs not identified as low risk under step two 
(paragraph (c)(1) of this section).
    (2) All Type B programs identified as high-risk under step three 
(paragraph (d) of this section).
    (3) Such additional programs as may be necessary to comply with the 
percentage of coverage rule discussed in paragraph (f) of this section. 
This may require the auditor to audit more programs as major programs 
than the number of Type A programs.
    (f) Percentage of coverage rule. If the auditee meets the criteria 
in Sec.  200.520, the auditor need only audit the major programs 
identified in Step 4 (paragraphs (e)(1) and (2) of this section) and 
such additional Federal programs with

[[Page 212]]

Federal awards expended that, in aggregate, all major programs encompass 
at least 20 percent (0.20) of total Federal awards expended. Otherwise, 
the auditor must audit the major programs identified in Step 4 
(paragraphs (e)(1) and (2) of this section) and such additional Federal 
programs with Federal awards expended that, in aggregate, all major 
programs encompass at least 40 percent (0.40) of total Federal awards 
expended.
    (g) Documentation of risk. The auditor must include in the audit 
documentation the risk analysis process used in determining major 
programs.
    (h) Auditor's judgment. When the major program determination was 
performed and documented in accordance with this Subpart, the auditor's 
judgment in applying the risk-based approach to determine major programs 
must be presumed correct. Challenges by Federal agencies and pass-
through entities must only be for clearly improper use of the 
requirements in this part. However, Federal agencies and pass-through 
entities may provide auditors guidance about the risk of a particular 
Federal program and the auditor must consider this guidance in 
determining major programs in audits not yet completed.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 
85 FR 49574, Aug. 13, 2020]



Sec.  200.519  Criteria for Federal program risk.

    (a) General. The auditor's determination should be based on an 
overall evaluation of the risk of noncompliance occurring that could be 
material to the Federal program. The auditor must consider criteria, 
such as described in paragraphs (b), (c), and (d) of this section, to 
identify risk in Federal programs. Also, as part of the risk analysis, 
the auditor may wish to discuss a particular Federal program with 
auditee management and the Federal agency or pass-through entity.
    (b) Current and prior audit experience. (1) Weaknesses in internal 
control over Federal programs would indicate higher risk. Consideration 
should be given to the control environment over Federal programs and 
such factors as the expectation of management's adherence to Federal 
statutes, regulations, and the terms and conditions of Federal awards 
and the competence and experience of personnel who administer the 
Federal programs.
    (i) A Federal program administered under multiple internal control 
structures may have higher risk. When assessing risk in a large single 
audit, the auditor must consider whether weaknesses are isolated in a 
single operating unit (e.g., one college campus) or pervasive throughout 
the entity.
    (ii) When significant parts of a Federal program are passed through 
to subrecipients, a weak system for monitoring subrecipients would 
indicate higher risk.
    (2) Prior audit findings would indicate higher risk, particularly 
when the situations identified in the audit findings could have a 
significant impact on a Federal program or have not been corrected.
    (3) Federal programs not recently audited as major programs may be 
of higher risk than Federal programs recently audited as major programs 
without audit findings.
    (c) Oversight exercised by Federal agencies and pass-through 
entities. (1) Oversight exercised by Federal agencies or pass-through 
entities could be used to assess risk. For example, recent monitoring or 
other reviews performed by an oversight entity that disclosed no 
significant problems would indicate lower risk, whereas monitoring that 
disclosed significant problems would indicate higher risk.
    (2) Federal agencies, with the concurrence of OMB, may identify 
Federal programs that are higher risk. OMB will provide this 
identification in the compliance supplement.
    (d) Inherent risk of the Federal program. (1) The nature of a 
Federal program may indicate risk. Consideration should be given to the 
complexity of the program and the extent to which the Federal program 
contracts for goods and services. For example, Federal programs that 
disburse funds through third-party contracts or have eligibility 
criteria may be of higher risk. Federal programs primarily involving 
staff payroll costs may have

[[Page 213]]

high risk for noncompliance with requirements of Sec.  200.430, but 
otherwise be at low risk.
    (2) The phase of a Federal program in its life cycle at the Federal 
agency may indicate risk. For example, a new Federal program with new or 
interim regulations may have higher risk than an established program 
with time-tested regulations. Also, significant changes in Federal 
programs, statutes, regulations, or the terms and conditions of Federal 
awards may increase risk.
    (3) The phase of a Federal program in its life cycle at the auditee 
may indicate risk. For example, during the first and last years that an 
auditee participates in a Federal program, the risk may be higher due to 
start-up or closeout of program activities and staff.
    (4) Type B programs with larger Federal awards expended would be of 
higher risk than programs with substantially smaller Federal awards 
expended.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49575, Aug. 13, 2020]



Sec.  200.520  Criteria for a low-risk auditee.

    An auditee that meets all of the following conditions for each of 
the preceding two audit periods must qualify as a low-risk auditee and 
be eligible for reduced audit coverage in accordance with Sec.  200.518.
    (a) Single audits were performed on an annual basis in accordance 
with the provisions of this Subpart, including submitting the data 
collection form and the reporting package to the FAC within the 
timeframe specified in Sec.  200.512. A non-Federal entity that has 
biennial audits does not qualify as a low-risk auditee.
    (b) The auditor's opinion on whether the financial statements were 
prepared in accordance with GAAP, or a basis of accounting required by 
state law, and the auditor's in relation to opinion on the schedule of 
expenditures of Federal awards were unmodified.
    (c) There were no deficiencies in internal control which were 
identified as material weaknesses under the requirements of GAGAS.
    (d) The auditor did not report a substantial doubt about the 
auditee's ability to continue as a going concern.
    (e) None of the Federal programs had audit findings from any of the 
following in either of the preceding two audit periods in which they 
were classified as Type A programs:
    (1) Internal control deficiencies that were identified as material 
weaknesses in the auditor's report on internal control for major 
programs as required under Sec.  200.515(c);
    (2) A modified opinion on a major program in the auditor's report on 
major programs as required under Sec.  200.515(c); or
    (3) Known or likely questioned costs that exceeded five percent of 
the total Federal awards expended for a Type A program during the audit 
period.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49575, Aug. 13, 2020]

                          Management Decisions



Sec.  200.521  Management decision.

    (a) General. The management decision must clearly state whether or 
not the audit finding is sustained, the reasons for the decision, and 
the expected auditee action to repay disallowed costs, make financial 
adjustments, or take other action. If the auditee has not completed 
corrective action, a timetable for follow-up should be given. Prior to 
issuing the management decision, the Federal agency or pass-through 
entity may request additional information or documentation from the 
auditee, including a request for auditor assurance related to the 
documentation, as a way of mitigating disallowed costs. The management 
decision should describe any appeal process available to the auditee. 
While not required, the Federal agency or pass-through entity may also 
issue a management decision on findings relating to the financial 
statements which are required to be reported in accordance with GAGAS.
    (b) Federal agency. As provided in Sec.  200.513(a)(3)(vii), the 
cognizant agency for audit must be responsible for coordinating a 
management decision for audit findings that affect the programs of more 
than one Federal agency. As provided in Sec.  200.513(c)(3)(i), a 
Federal

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awarding agency is responsible for issuing a management decision for 
findings that relate to Federal awards it makes to non-Federal entities.
    (c) Pass-through entity. As provided in Sec.  200.332(d), the pass-
through entity must be responsible for issuing a management decision for 
audit findings that relate to Federal awards it makes to subrecipients.
    (d) Time requirements. The Federal awarding agency or pass-through 
entity responsible for issuing a management decision must do so within 
six months of acceptance of the audit report by the FAC. The auditee 
must initiate and proceed with corrective action as rapidly as possible 
and corrective action should begin no later than upon receipt of the 
audit report.
    (e) Reference numbers. Management decisions must include the 
reference numbers the auditor assigned to each audit finding in 
accordance with Sec.  200.516(c).

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49575, Aug. 13, 2020]



 Sec. Appendix I to Part 200--Full Text of Notice of Funding Opportunity

    The full text of the notice of funding opportunity is organized in 
sections. The required format outlined in this appendix indicates 
immediately following the title of each section whether that section is 
required in every announcement or is a Federal awarding agency option. 
The format is designed so that similar types of information will appear 
in the same sections in announcements of different Federal funding 
opportunities. Toward that end, there is text in each of the following 
sections to describe the types of information that a Federal awarding 
agency would include in that section of an actual announcement.
    A Federal awarding agency that wishes to include information that 
the format does not specifically discuss may address that subject in 
whatever section(s) is most appropriate. For example, if a Federal 
awarding agency chooses to address performance goals in the 
announcement, it might do so in the funding opportunity description, the 
application content, or the reporting requirements.
    Similarly, when this format calls for a type of information to be in 
a particular section, a Federal awarding agency wishing to address that 
subject in other sections may elect to repeat the information in those 
sections or use cross references between the sections (there should be 
hyperlinks for cross-references in any electronic versions of the 
announcement). For example, a Federal awarding agency may want to 
include Section A information about the types of non-Federal entities 
who are eligible to apply. The format specifies a standard location for 
that information in Section C.1 but does not preclude repeating the 
information in Section A or creating a cross reference between Section A 
and C.1, as long as a potential applicant can find the information 
quickly and easily from the standard location.
    The sections of the full text of the announcement are described in 
the following paragraphs.

                    A. Program Description--Required

    This section contains the full program description of the funding 
opportunity. It may be as long as needed to adequately communicate to 
potential applicants the areas in which funding may be provided. It 
describes the Federal awarding agency's funding priorities or the 
technical or focus areas in which the Federal awarding agency intends to 
provide assistance. As appropriate, it may include any program history 
(e.g., whether this is a new program or a new or changed area of program 
emphasis). This section must include program goals and objectives, a 
reference to the relevant Assistance Listings, a description of how the 
award will contribute to the achievement of the program's goals and 
objectives, and the expected performance goals, indicators, targets, 
baseline data, data collection, and other outcomes such Federal awarding 
agency expects to achieve, and may include examples of successful 
projects that have been funded previously. This section also may include 
other information the Federal awarding agency deems necessary, and must 
at a minimum include citations for authorizing statutes and regulations 
for the funding opportunity.

                 B. Federal Award Information--Required

    This section provides sufficient information to help an applicant 
make an informed decision about whether to submit a proposal. Relevant 
information could include the total amount of funding that the Federal 
awarding agency expects to award through the announcement; the expected 
performance indicators, targets, baseline data, and data collection; the 
anticipated number of Federal awards; the expected amounts of individual 
Federal awards (which may be a range); the amount of funding per Federal 
award, on average, experienced in previous years; and the anticipated 
start dates and periods of performance for new Federal awards. This 
section also should address whether applications for renewal or 
supplementation of existing projects are eligible to compete with 
applications for new Federal awards.

[[Page 215]]

    This section also must indicate the type(s) of assistance instrument 
(e.g., grant, cooperative agreement) that may be awarded if applications 
are successful. If cooperative agreements may be awarded, this section 
either should describe the ``substantial involvement'' that the Federal 
awarding agency expects to have or should reference where the potential 
applicant can find that information (e.g., in the funding opportunity 
description in Section A. or Federal award administration information in 
Section D. If procurement contracts also may be awarded, this must be 
stated.

                       C. Eligibility Information

    This section addresses the considerations or factors that determine 
applicant or application eligibility. This includes the eligibility of 
particular types of applicant organizations, any factors affecting the 
eligibility of the principal investigator or project director, and any 
criteria that make particular projects ineligible. Federal agencies 
should make clear whether an applicant's failure to meet an eligibility 
criterion by the time of an application deadline will result in the 
Federal awarding agency returning the application without review or, 
even though an application may be reviewed, will preclude the Federal 
awarding agency from making a Federal award. Key elements to be 
addressed are:
    1. Eligible Applicants--Required. Announcements must clearly 
identify the types of entities that are eligible to apply. If there are 
no restrictions on eligibility, this section may simply indicate that 
all potential applicants are eligible. If there are restrictions on 
eligibility, it is important to be clear about the specific types of 
entities that are eligible, not just the types that are ineligible. For 
example, if the program is limited to nonprofit organizations subject to 
26 U.S.C. 501(c)(3) of the tax code (26 U.S.C. 501(c)(3)), the 
announcement should say so. Similarly, it is better to state explicitly 
that Native American tribal organizations are eligible than to assume 
that they can unambiguously infer that from a statement that nonprofit 
organizations may apply. Eligibility also can be expressed by exception, 
(e.g., open to all types of domestic applicants other than individuals). 
This section should refer to any portion of Section D specifying 
documentation that must be submitted to support an eligibility 
determination (e.g., proof of 501(c)(3) status as determined by the 
Internal Revenue Service or an authorizing tribal resolution). To the 
extent that any funding restriction in Section D.6 could affect the 
eligibility of an applicant or project, the announcement must either 
restate that restriction in this section or provide a cross-reference to 
its description in Section D.6.
    2. Cost Sharing or Matching--Required. Announcements must state 
whether there is required cost sharing, matching, or cost participation 
without which an application would be ineligible (if cost sharing is not 
required, the announcement must explicitly say so). Required cost 
sharing may be a certain percentage or amount, or may be in the form of 
contributions of specified items or activities (e.g., provision of 
equipment). It is important that the announcement be clear about any 
restrictions on the types of cost (e.g., in-kind contributions) that are 
acceptable as cost sharing. Cost sharing as an eligibility criterion 
includes requirements based in statute or regulation, as described in 
Sec.  200.306 of this Part. This section should refer to the appropriate 
portion(s) of section D. stating any pre-award requirements for 
submission of letters or other documentation to verify commitments to 
meet cost-sharing requirements if a Federal award is made.
    3. Other--Required, if applicable. If there are other eligibility 
criteria (i.e., criteria that have the effect of making an application 
or project ineligible for Federal awards, whether referred to as 
``responsiveness'' criteria, ``go-no go'' criteria, ``threshold'' 
criteria, or in other ways), must be clearly stated and must include a 
reference to the regulation of requirement that describes the 
restriction, as applicable. For example, if entities that have been 
found to be in violation of a particular Federal statute are ineligible, 
it is important to say so. This section must also state any limit on the 
number of applications an applicant may submit under the announcement 
and make clear whether the limitation is on the submitting organization, 
individual investigator/program director, or both. This section should 
also address any eligibility criteria for beneficiaries or for program 
participants other than Federal award recipients.

                D. Application and Submission Information

    1. Address to Request Application Package--Required. Potential 
applicants must be told how to get application forms, kits, or other 
materials needed to apply (if this announcement contains everything 
needed, this section need only say so). An Internet address where the 
materials can be accessed is acceptable. However, since high-speed 
Internet access is not yet universally available for downloading 
documents, and applicants may have additional accessibility 
requirements, there also should be a way for potential applicants to 
request paper copies of materials, such as a U.S. Postal Service mailing 
address, telephone or FAX number, Telephone Device for the Deaf (TDD), 
Text Telephone (TTY) number, and/or Federal Information Relay Service 
(FIRS) number.
    2. Content and Form of Application Submission--Required. This 
section must identify

[[Page 216]]

the required content of an application and the forms or formats that an 
applicant must use to submit it. If any requirements are stated 
elsewhere because they are general requirements that apply to multiple 
programs or funding opportunities, this section should refer to where 
those requirements may be found. This section also should include 
required forms or formats as part of the announcement or state where the 
applicant may obtain them.
    This section should specifically address content and form or format 
requirements for:
    i. Pre-applications, letters of intent, or white papers required or 
encouraged (see Section D.4), including any limitations on the number of 
pages or other formatting requirements similar to those for full 
applications.
    ii. The application as a whole. For all submissions, this would 
include any limitations on the number of pages, font size and typeface, 
margins, paper size, number of copies, and sequence or assembly 
requirements. If electronic submission is permitted or required, this 
could include special requirements for formatting or signatures.
    iii. Component pieces of the application (e.g., if all copies of the 
application must bear original signatures on the face page or the 
program narrative may not exceed 10 pages). This includes any pieces 
that may be submitted separately by third parties (e.g., references or 
letters confirming commitments from third parties that will be 
contributing a portion of any required cost sharing).
    iv. Information that successful applicants must submit after 
notification of intent to make a Federal award, but prior to a Federal 
award. This could include evidence of compliance with requirements 
relating to human subjects or information needed to comply with the 
National Environmental Policy Act (NEPA) (42 U.S.C. 4321-4370h).
    3. Unique entity identifier and System for Award Management (SAM)--
Required. This paragraph must state clearly that each applicant (unless 
the applicant is an individual or Federal awarding agency that is 
excepted from those requirements under 2 CFR 25.110(b) or (c), or has an 
exception approved by the Federal awarding agency under 2 CFR 25.110(d)) 
is required to: (i) Be registered in SAM before submitting its 
application; (ii) Provide a valid unique entity identifier in its 
application; and (iii) Continue to maintain an active SAM registration 
with current information at all times during which it has an active 
Federal award or an application or plan under consideration by a Federal 
awarding agency. It also must state that the Federal awarding agency may 
not make a Federal award to an applicant until the applicant has 
complied with all applicable unique entity identifier and SAM 
requirements and, if an applicant has not fully complied with the 
requirements by the time the Federal awarding agency is ready to make a 
Federal award, the Federal awarding agency may determine that the 
applicant is not qualified to receive a Federal award and use that 
determination as a basis for making a Federal award to another 
applicant.
    4. Submission Dates and Times--Required. Announcements must identify 
due dates and times for all submissions. This includes not only the full 
applications but also any preliminary submissions (e.g., letters of 
intent, white papers, or pre-applications). It also includes any other 
submissions of information before Federal award that are separate from 
the full application. If the funding opportunity is a general 
announcement that is open for a period of time with no specific due 
dates for applications, this section should say so. Note that the 
information on dates that is included in this section also must appear 
with other overview information in a location preceding the full text of 
the announcement (see Sec.  200.204 of this part).
    5. Intergovernmental Review--Required, if applicable. If the funding 
opportunity is subject to Executive Order 12372, ``Intergovernmental 
Review of Federal Programs,'' the notice must say so and applicants must 
contact their state's Single Point of Contact (SPOC) to find out about 
and comply with the state's process under Executive Order 12372, it may 
be useful to inform potential applicants that the names and addresses of 
the SPOCs are listed in the Office of Management and Budget's website.
    6. Funding Restrictions--Required. Notices must include information 
on funding restrictions in order to allow an applicant to develop an 
application and budget consistent with program requirements. Examples 
are whether construction is an allowable activity, if there are any 
limitations on direct costs such as foreign travel or equipment 
purchases, and if there are any limits on indirect costs (or facilities 
and administrative costs). Applicants must be advised if Federal awards 
will not allow reimbursement of pre-Federal award costs.
    7. Other Submission Requirements-- Required. This section must 
address any other submission requirements not included in the other 
paragraphs of this section. This might include the format of submission, 
i.e., paper or electronic, for each type of required submission. 
Applicants should not be required to submit in more than one format and 
this section should indicate whether they may choose whether to submit 
applications in hard copy or electronically, may submit only in hard 
copy, or may submit only electronically.
    This section also must indicate where applications (and any pre-
applications) must be submitted if sent by postal mail, electronic 
means, or hand-delivery. For postal mail

[[Page 217]]

submission, this must include the name of an office, official, 
individual or function (e.g., application receipt center) and a complete 
mailing address. For electronic submission, this must include the URL or 
email address; whether a password(s) is required; whether particular 
software or other electronic capabilities are required; what to do in 
the event of system problems and a point of contact who will be 
available in the event the applicant experiences technical difficulties. 
\1\
---------------------------------------------------------------------------

    \1\ With respect to electronic methods for providing information 
about funding opportunities or accepting applicants' submissions of 
information, each Federal awarding agency is responsible for compliance 
with Section 508 of the Rehabilitation Act of 1973 (29 U.S.C. 794d).
---------------------------------------------------------------------------

                    E. Application Review Information

    1. Criteria--Required. This section must address the criteria that 
the Federal awarding agency will use to evaluate applications. This 
includes the merit and other review criteria that evaluators will use to 
judge applications, including any statutory, regulatory, or other 
preferences (e.g., minority status or Native American tribal 
preferences) that will be applied in the review process. These criteria 
are distinct from eligibility criteria that are addressed before an 
application is accepted for review and any program policy or other 
factors that are applied during the selection process, after the review 
process is completed. The intent is to make the application process 
transparent so applicants can make informed decisions when preparing 
their applications to maximize fairness of the process. The announcement 
should clearly describe all criteria, including any sub-criteria. If 
criteria vary in importance, the announcement should specify the 
relative percentages, weights, or other means used to distinguish among 
them. For statutory, regulatory, or other preferences, the announcement 
should provide a detailed explanation of those preferences with an 
explicit indication of their effect (e.g., whether they result in 
additional points being assigned).
    If an applicant's proposed cost sharing will be considered in the 
review process (as opposed to being an eligibility criterion described 
in Section C.2), the announcement must specifically address how it will 
be considered (e.g., to assign a certain number of additional points to 
applicants who offer cost sharing, or to break ties among applications 
with equivalent scores after evaluation against all other factors). If 
cost sharing will not be considered in the evaluation, the announcement 
should say so, so that there is no ambiguity for potential applicants. 
Vague statements that cost sharing is encouraged, without clarification 
as to what that means, are unhelpful to applicants. It also is important 
that the announcement be clear about any restrictions on the types of 
cost (e.g., in-kind contributions) that are acceptable as cost sharing.
    2. Review and Selection Process--Required. This section may vary in 
the level of detail provided. The announcement must list any program 
policy or other factors or elements, other than merit criteria, that the 
selecting official may use in selecting applications for Federal award 
(e.g., geographical dispersion, program balance, or diversity). The 
Federal awarding agency may also include other appropriate details. For 
example, this section may indicate who is responsible for evaluation 
against the merit criteria (e.g., peers external to the Federal awarding 
agency or Federal awarding agency personnel) and/or who makes the final 
selections for Federal awards. If there is a multi-phase review process 
(e.g., an external panel advising internal Federal awarding agency 
personnel who make final recommendations to the deciding official), the 
announcement may describe the phases. It also may include: the number of 
people on an evaluation panel and how it operates, the way reviewers are 
selected, reviewer qualifications, and the way that conflicts of 
interest are avoided. With respect to electronic methods for providing 
information about funding opportunities or accepting applicants' 
submissions of information, each Federal awarding agency is responsible 
for compliance with Section 508 of the Rehabilitation Act of 1973 (29 
U.S.C. 794d).
    In addition, if the Federal awarding agency permits applicants to 
nominate suggested reviewers of their applications or suggest those they 
feel may be inappropriate due to a conflict of interest, that 
information should be included in this section.
    3. For any Federal award under a notice of funding opportunity, if 
the Federal awarding agency anticipates that the total Federal share 
will be greater than the simplified acquisition threshold on any Federal 
award under a notice of funding opportunity may include, over the period 
of performance, this section must also inform applicants:
    i. That the Federal awarding agency, prior to making a Federal award 
with a total amount of Federal share greater than the simplified 
acquisition threshold, is required to review and consider any 
information about the applicant that is in the designated integrity and 
performance system accessible through SAM (currently FAPIIS) (see 41 
U.S.C. 2313);
    ii. That an applicant, at its option, may review information in the 
designated integrity and performance systems accessible through SAM and 
comment on any information about itself that a Federal awarding agency 
previously entered and is currently in the designated integrity and 
performance system accessible through SAM;

[[Page 218]]

    iii. That the Federal awarding agency will consider any comments by 
the applicant, in addition to the other information in the designated 
integrity and performance system, in making a judgment about the 
applicant's integrity, business ethics, and record of performance under 
Federal awards when completing the review of risk posed by applicants as 
described in Sec.  200.206.
    4. Anticipated Announcement and Federal Award Dates--Optional. This 
section is intended to provide applicants with information they can use 
for planning purposes. If there is a single application deadline 
followed by the simultaneous review of all applications, the Federal 
awarding agency can include in this section information about the 
anticipated dates for announcing or notifying successful and 
unsuccessful applicants and for having Federal awards in place. If 
applications are received and evaluated on a ``rolling'' basis at 
different times during an extended period, it may be appropriate to give 
applicants an estimate of the time needed to process an application and 
notify the applicant of the Federal awarding agency's decision.

               F. Federal Award Administration Information

    1. Federal Award Notices--Required. This section must address what a 
successful applicant can expect to receive following selection. If the 
Federal awarding agency's practice is to provide a separate notice 
stating that an application has been selected before it actually makes 
the Federal award, this section would be the place to indicate that the 
letter is not an authorization to begin performance (to the extent that 
it allows charging to Federal awards of pre-award costs at the non-
Federal entity's own risk). This section should indicate that the notice 
of Federal award signed by the grants officer (or equivalent) is the 
authorizing document, and whether it is provided through postal mail or 
by electronic means and to whom. It also may address the timing, form, 
and content of notifications to unsuccessful applicants. See also Sec.  
200.211.
    2. Administrative and National Policy Requirements--Required. This 
section must identify the usual administrative and national policy 
requirements the Federal awarding agency's Federal awards may include. 
Providing this information lets a potential applicant identify any 
requirements with which it would have difficulty complying if its 
application is successful. In those cases, early notification about the 
requirements allows the potential applicant to decide not to apply or to 
take needed actions before receiving the Federal award. The announcement 
need not include all of the terms and conditions of the Federal award, 
but may refer to a document (with information about how to obtain it) or 
Internet site where applicants can see the terms and conditions. If this 
funding opportunity will lead to Federal awards with some special terms 
and conditions that differ from the Federal awarding agency's usual 
(sometimes called ``general'') terms and conditions, this section should 
highlight those special terms and conditions. Doing so will alert 
applicants that have received Federal awards from the Federal awarding 
agency previously and might not otherwise expect different terms and 
conditions. For the same reason, the announcement should inform 
potential applicants about special requirements that could apply to 
particular Federal awards after the review of applications and other 
information, based on the particular circumstances of the effort to be 
supported (e.g., if human subjects were to be involved or if some 
situations may justify special terms on intellectual property, data 
sharing or security requirements).
    3. Reporting--Required. This section must include general 
information about the type (e.g., financial or performance), frequency, 
and means of submission (paper or electronic) of post-Federal award 
reporting requirements. Highlight any special reporting requirements for 
Federal awards under this funding opportunity that differ (e.g., by 
report type, frequency, form/format, or circumstances for use) from what 
the Federal awarding agency's Federal awards usually require. Federal 
awarding agencies must also describe in this section all relevant 
requirements such as those at 2 CFR 180.335 and 180.350.
    If the Federal share of any Federal award may include more than 
$500,000 over the period of performance, this section must inform 
potential applicants about the post award reporting requirements 
reflected in appendix XII to this part.

             G. Federal Awarding Agency Contact(s)--Required

    The announcement must give potential applicants a point(s) of 
contact for answering questions or helping with problems while the 
funding opportunity is open. The intent of this requirement is to be as 
helpful as possible to potential applicants, so the Federal awarding 
agency should consider approaches such as giving:
    i. Points of contact who may be reached in multiple ways (e.g., by 
telephone, FAX, and/or email, as well as regular mail).
    ii. A fax or email address that multiple people access, so that 
someone will respond even if others are unexpectedly absent during 
critical periods.
    iii. Different contacts for distinct kinds of help (e.g., one for 
questions of programmatic content and a second for administrative 
questions).

[[Page 219]]

                     H. Other Information--Optional

    This section may include any additional information that will assist 
a potential applicant. For example, the section might:
    i. Indicate whether this is a new program or a one-time initiative.
    ii. Mention related programs or other upcoming or ongoing Federal 
awarding agency funding opportunities for similar activities.
    iii. Include current Internet addresses for Federal awarding agency 
Web sites that may be useful to an applicant in understanding the 
program.
    iv. Alert applicants to the need to identify proprietary information 
and inform them about the way the Federal awarding agency will handle 
it.
    v. Include certain routine notices to applicants (e.g., that the 
Federal Government is not obligated to make any Federal award as a 
result of the announcement or that only grants officers can bind the 
Federal Government to the expenditure of funds).

[78 FR 78608, Dec. 26, 2013, as amended at 80 FR 43310, July 22, 2015; 
85 FR 49575, Aug. 13, 2020]



Sec. Appendix II to Part 200--Contract Provisions for Non-Federal Entity 
                     Contracts Under Federal Awards

    In addition to other provisions required by the Federal agency or 
non-Federal entity, all contracts made by the non-Federal entity under 
the Federal award must contain provisions covering the following, as 
applicable.
    (A) Contracts for more than the simplified acquisition threshold, 
which is the inflation adjusted amount determined by the Civilian Agency 
Acquisition Council and the Defense Acquisition Regulations Council 
(Councils) as authorized by 41 U.S.C. 1908, must address administrative, 
contractual, or legal remedies in instances where contractors violate or 
breach contract terms, and provide for such sanctions and penalties as 
appropriate.
    (B) All contracts in excess of $10,000 must address termination for 
cause and for convenience by the non-Federal entity including the manner 
by which it will be effected and the basis for settlement.
    (C) Equal Employment Opportunity. Except as otherwise provided under 
41 CFR Part 60, all contracts that meet the definition of ``federally 
assisted construction contract'' in 41 CFR Part 60-1.3 must include the 
equal opportunity clause provided under 41 CFR 60-1.4(b), in accordance 
with Executive Order 11246, ``Equal Employment Opportunity'' (30 FR 
12319, 12935, 3 CFR Part, 1964-1965 Comp., p. 339), as amended by 
Executive Order 11375, ``Amending Executive Order 11246 Relating to 
Equal Employment Opportunity,'' and implementing regulations at 41 CFR 
part 60, ``Office of Federal Contract Compliance Programs, Equal 
Employment Opportunity, Department of Labor.''
    (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required 
by Federal program legislation, all prime construction contracts in 
excess of $2,000 awarded by non-Federal entities must include a 
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, 
and 3146-3148) as supplemented by Department of Labor regulations (29 
CFR Part 5, ``Labor Standards Provisions Applicable to Contracts 
Covering Federally Financed and Assisted Construction''). In accordance 
with the statute, contractors must be required to pay wages to laborers 
and mechanics at a rate not less than the prevailing wages specified in 
a wage determination made by the Secretary of Labor. In addition, 
contractors must be required to pay wages not less than once a week. The 
non-Federal entity must place a copy of the current prevailing wage 
determination issued by the Department of Labor in each solicitation. 
The decision to award a contract or subcontract must be conditioned upon 
the acceptance of the wage determination. The non-Federal entity must 
report all suspected or reported violations to the Federal awarding 
agency. The contracts must also include a provision for compliance with 
the Copeland ``Anti-Kickback'' Act (40 U.S.C. 3145), as supplemented by 
Department of Labor regulations (29 CFR Part 3, ``Contractors and 
Subcontractors on Public Building or Public Work Financed in Whole or in 
Part by Loans or Grants from the United States''). The Act provides that 
each contractor or subrecipient must be prohibited from inducing, by any 
means, any person employed in the construction, completion, or repair of 
public work, to give up any part of the compensation to which he or she 
is otherwise entitled. The non-Federal entity must report all suspected 
or reported violations to the Federal awarding agency.
    (E) Contract Work Hours and Safety Standards Act (40 U.S.C. 3701-
3708). Where applicable, all contracts awarded by the non-Federal entity 
in excess of $100,000 that involve the employment of mechanics or 
laborers must include a provision for compliance with 40 U.S.C. 3702 and 
3704, as supplemented by Department of Labor regulations (29 CFR Part 
5). Under 40 U.S.C. 3702 of the Act, each contractor must be required to 
compute the wages of every mechanic and laborer on the basis of a 
standard work week of 40 hours. Work in excess of the standard work week 
is permissible provided that the worker is compensated at a rate of not 
less than one and a half times the basic rate of pay for all hours 
worked in excess of 40 hours in the work week. The requirements of 40 
U.S.C. 3704 are applicable to construction work and provide that no 
laborer or mechanic must be required to work in surroundings or under 
working conditions which are unsanitary,

[[Page 220]]

hazardous or dangerous. These requirements do not apply to the purchases 
of supplies or materials or articles ordinarily available on the open 
market, or contracts for transportation or transmission of intelligence.
    (F) Rights to Inventions Made Under a Contract or Agreement. If the 
Federal award meets the definition of ``funding agreement'' under 37 CFR 
Sec.  401.2 (a) and the recipient or subrecipient wishes to enter into a 
contract with a small business firm or nonprofit organization regarding 
the substitution of parties, assignment or performance of experimental, 
developmental, or research work under that ``funding agreement,'' the 
recipient or subrecipient must comply with the requirements of 37 CFR 
Part 401, ``Rights to Inventions Made by Nonprofit Organizations and 
Small Business Firms Under Government Grants, Contracts and Cooperative 
Agreements,'' and any implementing regulations issued by the awarding 
agency.
    (G) Clean Air Act (42 U.S.C. 7401-7671q.) and the Federal Water 
Pollution Control Act (33 U.S.C. 1251-1387), as amended--Contracts and 
subgrants of amounts in excess of $150,000 must contain a provision that 
requires the non-Federal award to agree to comply with all applicable 
standards, orders or regulations issued pursuant to the Clean Air Act 
(42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as 
amended (33 U.S.C. 1251-1387). Violations must be reported to the 
Federal awarding agency and the Regional Office of the Environmental 
Protection Agency (EPA).
    (H) Debarment and Suspension (Executive Orders 12549 and 12689)--A 
contract award (see 2 CFR 180.220) must not be made to parties listed on 
the governmentwide exclusions in the System for Award Management (SAM), 
in accordance with the OMB guidelines at 2 CFR 180 that implement 
Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR 
part 1989 Comp., p. 235), ``Debarment and Suspension.'' SAM Exclusions 
contains the names of parties debarred, suspended, or otherwise excluded 
by agencies, as well as parties declared ineligible under statutory or 
regulatory authority other than Executive Order 12549.
    (I) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--Contractors that 
apply or bid for an award exceeding $100,000 must file the required 
certification. Each tier certifies to the tier above that it will not 
and has not used Federal appropriated funds to pay any person or 
organization for influencing or attempting to influence an officer or 
employee of any agency, a member of Congress, officer or employee of 
Congress, or an employee of a member of Congress in connection with 
obtaining any Federal contract, grant or any other award covered by 31 
U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal 
funds that takes place in connection with obtaining any Federal award. 
Such disclosures are forwarded from tier to tier up to the non-Federal 
award.
    (J) See Sec.  200.323.
    (K) See Sec.  200.216.
    (L) See Sec.  200.322.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75888, Dec. 19, 2014; 
85 FR 49577, Aug. 13, 2020]



 Sec. Appendix III to Part 200--Indirect (F&A) Costs Identification and 
Assignment, and Rate Determination for Institutions of Higher Education 
                                 (IHEs)

                               A. General

    This appendix provides criteria for identifying and computing 
indirect (or indirect (F&A)) rates at IHEs (institutions). Indirect 
(F&A) costs are those that are incurred for common or joint objectives 
and therefore cannot be identified readily and specifically with a 
particular sponsored project, an instructional activity, or any other 
institutional activity. See subsection B.1 for a discussion of the 
components of indirect (F&A) costs.

                  1. Major Functions of an Institution

    Refers to instruction, organized research, other sponsored 
activities and other institutional activities as defined in this 
section:
    a. Instruction means the teaching and training activities of an 
institution. Except for research training as provided in subsection b, 
this term includes all teaching and training activities, whether they 
are offered for credits toward a degree or certificate or on a non-
credit basis, and whether they are offered through regular academic 
departments or separate divisions, such as a summer school division or 
an extension division. Also considered part of this major function are 
departmental research, and, where agreed to, university research.
    (1) Sponsored instruction and training means specific instructional 
or training activity established by grant, contract, or cooperative 
agreement. For purposes of the cost principles, this activity may be 
considered a major function even though an institution's accounting 
treatment may include it in the instruction function.
    (2) Departmental research means research, development and scholarly 
activities that are not organized research and, consequently, are not 
separately budgeted and accounted for. Departmental research, for 
purposes of this document, is not considered as a major function, but as 
a part of the instruction function of the institution.
    (3) Only mandatory cost sharing or cost sharing specifically 
committed in the project budget must be included in the organized 
research base for computing the indirect (F&A)

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cost rate or reflected in any allocation of indirect costs. Salary costs 
above statutory limits are not considered cost sharing.
    b. Organized research means all research and development activities 
of an institution that are separately budgeted and accounted for. It 
includes:
    (1) Sponsored research means all research and development activities 
that are sponsored by Federal and non-Federal agencies and 
organizations. This term includes activities involving the training of 
individuals in research techniques (commonly called research training) 
where such activities utilize the same facilities as other research and 
development activities and where such activities are not included in the 
instruction function.
    (2) University research means all research and development 
activities that are separately budgeted and accounted for by the 
institution under an internal application of institutional funds. 
University research, for purposes of this document, must be combined 
with sponsored research under the function of organized research.
    c. Other sponsored activities means programs and projects financed 
by Federal and non-Federal agencies and organizations which involve the 
performance of work other than instruction and organized research. 
Examples of such programs and projects are health service projects and 
community service programs. However, when any of these activities are 
undertaken by the institution without outside support, they may be 
classified as other institutional activities.
    d. Other institutional activities means all activities of an 
institution except for instruction, departmental research, organized 
research, and other sponsored activities, as defined in this section; 
indirect (F&A) cost activities identified in this Appendix paragraph B, 
Identification and assignment of indirect (F&A) costs; and specialized 
services facilities described in Sec.  200.468 of this part.

                      2. Criteria for Distribution

    a. Base period. A base period for distribution of indirect (F&A) 
costs is the period during which the costs are incurred. The base period 
normally should coincide with the fiscal year established by the 
institution, but in any event the base period should be so selected as 
to avoid inequities in the distribution of costs.
    b. Need for cost groupings. The overall objective of the indirect 
(F&A) cost allocation process is to distribute the indirect (F&A) costs 
described in Section B, Identification and assignment of indirect (F&A) 
costs, to the major functions of the institution in proportions 
reasonably consistent with the nature and extent of their use of the 
institution's resources. In order to achieve this objective, it may be 
necessary to provide for selective distribution by establishing separate 
groupings of cost within one or more of the indirect (F&A) cost 
categories referred to in subsection B.1. In general, the cost groupings 
established within a category should constitute, in each case, a pool of 
those items of expense that are considered to be of like nature in terms 
of their relative contribution to (or degree of remoteness from) the 
particular cost objectives to which distribution is appropriate. Cost 
groupings should be established considering the general guides provided 
in subsection c of this section. Each such pool or cost grouping should 
then be distributed individually to the related cost objectives, using 
the distribution base or method most appropriate in light of the 
guidelines set forth in subsection d of this section.
    c. General considerations on cost groupings. The extent to which 
separate cost groupings and selective distribution would be appropriate 
at an institution is a matter of judgment to be determined on a case-by-
case basis. Typical situations which may warrant the establishment of 
two or more separate cost groupings (based on account classification or 
analysis) within an indirect (F&A) cost category include but are not 
limited to the following:
    (1) If certain items or categories of expense relate solely to one 
of the major functions of the institution or to less than all functions, 
such expenses should be set aside as a separate cost grouping for direct 
assignment or selective allocation in accordance with the guides 
provided in subsections b and d.
    (2) If any types of expense ordinarily treated as general 
administration or departmental administration are charged to Federal 
awards as direct costs, expenses applicable to other activities of the 
institution when incurred for the same purposes in like circumstances 
must, through separate cost groupings, be excluded from the indirect 
(F&A) costs allocable to those Federal awards and included in the direct 
cost of other activities for cost allocation purposes.
    (3) If it is determined that certain expenses are for the support of 
a service unit or facility whose output is susceptible of measurement on 
a workload or other quantitative basis, such expenses should be set 
aside as a separate cost grouping for distribution on such basis to 
organized research, instructional, and other activities at the 
institution or within the department.
    (4) If activities provide their own purchasing, personnel 
administration, building maintenance or similar service, the 
distribution of general administration and general expenses, or 
operation and maintenance expenses to such activities should be 
accomplished through cost groupings which include only that portion of 
central indirect (F&A) costs (such as for overall management) which are 
properly allocable to such activities.

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    (5) If the institution elects to treat fringe benefits as indirect 
(F&A) charges, such costs should be set aside as a separate cost 
grouping for selective distribution to related cost objectives.
    (6) The number of separate cost groupings within a category should 
be held within practical limits, after taking into consideration the 
materiality of the amounts involved and the degree of precision 
attainable through less selective methods of distribution.
    d. Selection of distribution method.
    (1) Actual conditions must be taken into account in selecting the 
method or base to be used in distributing individual cost groupings. The 
essential consideration in selecting a base is that it be the one best 
suited for assigning the pool of costs to cost objectives in accordance 
with benefits derived; with a traceable cause-and-effect relationship; 
or with logic and reason, where neither benefit nor a cause-and-effect 
relationship is determinable.
    (2) If a cost grouping can be identified directly with the cost 
objective benefitted, it should be assigned to that cost objective.
    (3) If the expenses in a cost grouping are more general in nature, 
the distribution may be based on a cost analysis study which results in 
an equitable distribution of the costs. Such cost analysis studies may 
take into consideration weighting factors, population, or space occupied 
if appropriate. Cost analysis studies, however, must (a) be 
appropriately documented in sufficient detail for subsequent review by 
the cognizant agency for indirect costs, (b) distribute the costs to the 
related cost objectives in accordance with the relative benefits 
derived, (c) be statistically sound, (d) be performed specifically at 
the institution at which the results are to be used, and (e) be reviewed 
periodically, but not less frequently than rate negotiations, updated if 
necessary, and used consistently. Any assumptions made in the study must 
be stated and explained. The use of cost analysis studies and periodic 
changes in the method of cost distribution must be fully justified.
    (4) If a cost analysis study is not performed, or if the study does 
not result in an equitable distribution of the costs, the distribution 
must be made in accordance with the appropriate base cited in Section B, 
unless one of the following conditions is met:
    (a) It can be demonstrated that the use of a different base would 
result in a more equitable allocation of the costs, or that a more 
readily available base would not increase the costs charged to Federal 
awards, or
    (b) The institution qualifies for, and elects to use, the simplified 
method for computing indirect (F&A) cost rates described in Section D.
    (5) Notwithstanding subsection (3), effective July 1, 1998, a cost 
analysis or base other than that in Section B must not be used to 
distribute utility or student services costs. Instead, subsection B.4.c, 
may be used in the recovery of utility costs.
    e. Order of distribution.
    (1) Indirect (F&A) costs are the broad categories of costs discussed 
in Section B.1.
    (2) Depreciation, interest expenses, operation and maintenance 
expenses, and general administrative and general expenses should be 
allocated in that order to the remaining indirect (F&A) cost categories 
as well as to the major functions and specialized service facilities of 
the institution. Other cost categories may be allocated in the order 
determined to be most appropriate by the institutions. When cross 
allocation of costs is made as provided in subsection (3), this order of 
allocation does not apply.
    (3) Normally an indirect (F&A) cost category will be considered 
closed once it has been allocated to other cost objectives, and costs 
may not be subsequently allocated to it. However, a cross allocation of 
costs between two or more indirect (F&A) cost categories may be used if 
such allocation will result in a more equitable allocation of costs. If 
a cross allocation is used, an appropriate modification to the 
composition of the indirect (F&A) cost categories described in Section B 
is required.

        B. Identification and Assignment of Indirect (F&A) Costs

             1. Definition of Facilities and Administration

    See Sec.  200.414 which provides the basis for these indirect cost 
requirements.

                             2. Depreciation

    a. The expenses under this heading are the portion of the costs of 
the institution's buildings, capital improvements to land and buildings, 
and equipment which are computed in accordance with Sec.  200.436.
    b. In the absence of the alternatives provided for in Section A.2.d, 
the expenses included in this category must be allocated in the 
following manner:
    (1) Depreciation on buildings used exclusively in the conduct of a 
single function, and on capital improvements and equipment used in such 
buildings, must be assigned to that function.
    (2) Depreciation on buildings used for more than one function, and 
on capital improvements and equipment used in such buildings, must be 
allocated to the individual functions performed in each building on the 
basis of usable square feet of space, excluding common areas such as 
hallways, stairwells, and rest rooms.
    (3) Depreciation on buildings, capital improvements and equipment 
related to space (e.g., individual rooms, laboratories) used jointly by 
more than one function (as determined by the users of the space) must be

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treated as follows. The cost of each jointly used unit of space must be 
allocated to benefitting functions on the basis of:
    (a) The employee full-time equivalents (FTEs) or salaries and wages 
of those individual functions benefitting from the use of that space; or
    (b) Institution-wide employee FTEs or salaries and wages applicable 
to the benefitting major functions (see Section A.1) of the institution.
    (4) Depreciation on certain capital improvements to land, such as 
paved parking areas, fences, sidewalks, and the like, not included in 
the cost of buildings, must be allocated to user categories of students 
and employees on a full-time equivalent basis. The amount allocated to 
the student category must be assigned to the instruction function of the 
institution. The amount allocated to the employee category must be 
further allocated to the major functions of the institution in 
proportion to the salaries and wages of all employees applicable to 
those functions.

                               3. Interest

    Interest on debt associated with certain buildings, equipment and 
capital improvements, as defined in Sec.  200.449, must be classified as 
an expenditure under the category Facilities. These costs must be 
allocated in the same manner as the depreciation on the buildings, 
equipment and capital improvements to which the interest relates.

                  4. Operation and Maintenance Expenses

    a. The expenses under this heading are those that have been incurred 
for the administration, supervision, operation, maintenance, 
preservation, and protection of the institution's physical plant. They 
include expenses normally incurred for such items as janitorial and 
utility services; repairs and ordinary or normal alterations of 
buildings, furniture and equipment; care of grounds; maintenance and 
operation of buildings and other plant facilities; security; earthquake 
and disaster preparedness; environmental safety; hazardous waste 
disposal; property, liability and all other insurance relating to 
property; space and capital leasing; facility planning and management; 
and central receiving. The operation and maintenance expense category 
should also include its allocable share of fringe benefit costs, 
depreciation, and interest costs.
    b. In the absence of the alternatives provided for in Section A.2.d, 
the expenses included in this category must be allocated in the same 
manner as described in subsection 2.b for depreciation.
    c. A utility cost adjustment of up to 1.3 percentage points may be 
included in the negotiated indirect cost rate of the IHE for organized 
research, per the computation alternatives in paragraphs (c)(1) and (2) 
of this section:
    (1) Where space is devoted to a single function and metering allows 
unambiguous measurement of usage related to that space, costs must be 
assigned to the function located in that space.
    (2) Where space is allocated to different functions and metering 
does not allow unambiguous measurement of usage by function, costs must 
be allocated as follows:
    (i) Utilities costs should be apportioned to functions in the same 
manner as depreciation, based on the calculated difference between the 
site or building actual square footage for monitored research laboratory 
space (site, building, floor, or room), and a separate calculation 
prepared by the IHE using the ``effective square footage'' described in 
subsection (c)(2)(ii) of this section.
    (ii) ``Effective square footage'' allocated to research laboratory 
space must be calculated as the actual square footage times the relative 
energy utilization index (REUI) posted on the OMB Web site at the time 
of a rate determination.
    A. This index is the ratio of a laboratory energy use index (lab 
EUI) to the corresponding index for overall average college or 
university space (college EUI).
    B. In July 2012, values for these two indices (taken respectively 
from the Lawrence Berkeley Laboratory ``Labs for the 21st Century'' 
benchmarking tool and the US Department of Energy ``Buildings Energy 
Databook'' and were 310 kBtu/sq ft-yr. and 155 kBtu/sq ft-yr., so that 
the adjustment ratio is 2.0 by this methodology. To retain currency, OMB 
will adjust the EUI numbers from time to time (no more often than 
annually nor less often than every 5 years), using reliable and publicly 
disclosed data. Current values of both the EUIs and the REUI will be 
posted on the OMB website.

             5. General Administration and General Expenses

    a. The expenses under this heading are those that have been incurred 
for the general executive and administrative offices of educational 
institutions and other expenses of a general character which do not 
relate solely to any major function of the institution; i.e., solely to 
(1) instruction, (2) organized research, (3) other sponsored activities, 
or (4) other institutional activities. The general administration and 
general expense category should also include its allocable share of 
fringe benefit costs, operation and maintenance expense, depreciation, 
and interest costs. Examples of general administration and general 
expenses include: Those expenses incurred by administrative offices that 
serve the entire university system of which the institution is a part; 
central offices of the institution such as the President's or 
Chancellor's office, the offices for institution-wide financial 
management, business

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services, budget and planning, personnel management, and safety and risk 
management; the office of the General Counsel; and the operations of the 
central administrative management information systems. General 
administration and general expenses must not include expenses incurred 
within non-university-wide deans' offices, academic departments, 
organized research units, or similar organizational units. (See 
subsection 6.)
    b. In the absence of the alternatives provided for in Section A.2.d, 
the expenses included in this category must be grouped first according 
to common major functions of the institution to which they render 
services or provide benefits. The aggregate expenses of each group must 
then be allocated to serviced or benefitted functions on the modified 
total cost basis. Modified total costs consist of the same elements as 
those in Section C.2. When an activity included in this indirect (F&A) 
cost category provides a service or product to another institution or 
organization, an appropriate adjustment must be made to either the 
expenses or the basis of allocation or both, to assure a proper 
allocation of costs.

                 6. Departmental Administration Expenses

    a. The expenses under this heading are those that have been incurred 
for administrative and supporting services that benefit common or joint 
departmental activities or objectives in academic deans' offices, 
academic departments and divisions, and organized research units. 
Organized research units include such units as institutes, study 
centers, and research centers. Departmental administration expenses are 
subject to the following limitations.
    (1) Academic deans' offices. Salaries and operating expenses are 
limited to those attributable to administrative functions.
    (2) Academic departments:
    (a) Salaries and fringe benefits attributable to the administrative 
work (including bid and proposal preparation) of faculty (including 
department heads) and other professional personnel conducting research 
and/or instruction, must be allowed at a rate of 3.6 percent of modified 
total direct costs. This category does not include professional business 
or professional administrative officers. This allowance must be added to 
the computation of the indirect (F&A) cost rate for major functions in 
Section C; the expenses covered by the allowance must be excluded from 
the departmental administration cost pool. No documentation is required 
to support this allowance.
    (b) Other administrative and supporting expenses incurred within 
academic departments are allowable provided they are treated 
consistently in like circumstances. This would include expenses such as 
the salaries of secretarial and clerical staffs, the salaries of 
administrative officers and assistants, travel, office supplies, 
stockrooms, and the like.
    (3) Other fringe benefit costs applicable to the salaries and wages 
included in subsections (1) and (2) are allowable, as well as an 
appropriate share of general administration and general expenses, 
operation and maintenance expenses, and depreciation.
    (4) Federal agencies may authorize reimbursement of additional costs 
for department heads and faculty only in exceptional cases where an 
institution can demonstrate undue hardship or detriment to project 
performance.
    b. The following guidelines apply to the determination of 
departmental administrative costs as direct or indirect (F&A) costs.
    (1) In developing the departmental administration cost pool, special 
care should be exercised to ensure that costs incurred for the same 
purpose in like circumstances are treated consistently as either direct 
or indirect (F&A) costs. For example, salaries of technical staff, 
laboratory supplies (e.g., chemicals), telephone toll charges, animals, 
animal care costs, computer costs, travel costs, and specialized shop 
costs must be treated as direct costs wherever identifiable to a 
particular cost objective. Direct charging of these costs may be 
accomplished through specific identification of individual costs to 
benefitting cost objectives, or through recharge centers or specialized 
service facilities, as appropriate under the circumstances. See 
Sec. Sec.  200.413(c) and 200.468.
    (2) Items such as office supplies, postage, local telephone costs, 
and memberships must normally be treated as indirect (F&A) costs.
    c. In the absence of the alternatives provided for in Section A.2.d, 
the expenses included in this category must be allocated as follows:
    (1) The administrative expenses of the dean's office of each college 
and school must be allocated to the academic departments within that 
college or school on the modified total cost basis.
    (2) The administrative expenses of each academic department, and the 
department's share of the expenses allocated in subsection (1) must be 
allocated to the appropriate functions of the department on the modified 
total cost basis.

                  7. Sponsored Projects Administration

    a. The expenses under this heading are limited to those incurred by 
a separate organization(s) established primarily to administer sponsored 
projects, including such functions as grant and contract administration 
(Federal and non-Federal), special security, purchasing, personnel, 
administration, and editing and publishing of research and other 
reports. They include the salaries and expenses of the head of such 
organization, assistants, and immediate staff, together with the 
salaries and expenses of personnel engaged in

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supporting activities maintained by the organization, such as stock 
rooms, print shops, and the like. This category also includes an 
allocable share of fringe benefit costs, general administration and 
general expenses, operation and maintenance expenses, and depreciation. 
Appropriate adjustments will be made for services provided to other 
functions or organizations.
    b. In the absence of the alternatives provided for in Section A.2.d, 
the expenses included in this category must be allocated to the major 
functions of the institution under which the sponsored projects are 
conducted on the basis of the modified total cost of sponsored projects.
    c. An appropriate adjustment must be made to eliminate any duplicate 
charges to Federal awards when this category includes similar or 
identical activities as those included in the general administration and 
general expense category or other indirect (F&A) cost items, such as 
accounting, procurement, or personnel administration.

                           8. Library Expenses

    a. The expenses under this heading are those that have been incurred 
for the operation of the library, including the cost of books and 
library materials purchased for the library, less any items of library 
income that qualify as applicable credits under Sec.  200.406. The 
library expense category should also include the fringe benefits 
applicable to the salaries and wages included therein, an appropriate 
share of general administration and general expense, operation and 
maintenance expense, and depreciation. Costs incurred in the purchases 
of rare books (museum-type books) with no value to Federal awards should 
not be allocated to them.
    b. In the absence of the alternatives provided for in Section A.2.d, 
the expenses included in this category must be allocated first on the 
basis of primary categories of users, including students, professional 
employees, and other users.
    (1) The student category must consist of full-time equivalent 
students enrolled at the institution, regardless of whether they earn 
credits toward a degree or certificate.
    (2) The professional employee category must consist of all faculty 
members and other professional employees of the institution, on a full-
time equivalent basis. This category may also include post-doctorate 
fellows and graduate students.
    (3) The other users category must consist of a reasonable factor as 
determined by institutional records to account for all other users of 
library facilities.
    c. Amount allocated in paragraph b of this section must be assigned 
further as follows:
    (1) The amount in the student category must be assigned to the 
instruction function of the institution.
    (2) The amount in the professional employee category must be 
assigned to the major functions of the institution in proportion to the 
salaries and wages of all faculty members and other professional 
employees applicable to those functions.
    (3) The amount in the other users category must be assigned to the 
other institutional activities function of the institution.

                 9. Student Administration and Services

    a. The expenses under this heading are those that have been incurred 
for the administration of student affairs and for services to students, 
including expenses of such activities as deans of students, admissions, 
registrar, counseling and placement services, student advisers, student 
health and infirmary services, catalogs, and commencements and 
convocations. The salaries of members of the academic staff whose 
responsibilities to the institution require administrative work that 
benefits sponsored projects may also be included to the extent that the 
portion charged to student administration is determined in accordance 
with subpart E of this Part. This expense category also includes the 
fringe benefit costs applicable to the salaries and wages included 
therein, an appropriate share of general administration and general 
expenses, operation and maintenance, interest expense, and depreciation.
    b. In the absence of the alternatives provided for in Section A.2.d, 
the expenses in this category must be allocated to the instruction 
function, and subsequently to Federal awards in that function.

  10. Offset for Indirect (F&A) Expenses Otherwise Provided for by the 
                           Federal Government

    a. The items to be accumulated under this heading are the 
reimbursements and other payments from the Federal Government which are 
made to the institution to support solely, specifically, and directly, 
in whole or in part, any of the administrative or service activities 
described in subsections 2 through 9.
    b. The items in this group must be treated as a credit to the 
affected individual indirect (F&A) cost category before that category is 
allocated to benefitting functions.

  C. Determination and Application of Indirect (F&A) Cost Rate or Rates

                      1. Indirect (F&A) Cost Pools

    a. (1) Subject to subsection b, the separate categories of indirect 
(F&A) costs allocated to each major function of the institution as 
prescribed in Section B, must be aggregated and treated as a common pool 
for that function. The amount in each pool must be divided by the 
distribution base described in

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subsection 2 to arrive at a single indirect (F&A) cost rate for each 
function.
    (2) The rate for each function is used to distribute indirect (F&A) 
costs to individual Federal awards of that function. Since a common pool 
is established for each major function of the institution, a separate 
indirect (F&A) cost rate would be established for each of the major 
functions described in Section A.1 under which Federal awards are 
carried out.
    (3) Each institution's indirect (F&A) cost rate process must be 
appropriately designed to ensure that Federal sponsors do not in any way 
subsidize the indirect (F&A) costs of other sponsors, specifically 
activities sponsored by industry and foreign governments. Accordingly, 
each allocation method used to identify and allocate the indirect (F&A) 
cost pools, as described in Sections A.2 and B.2 through B.9, must 
contain the full amount of the institution's modified total costs or 
other appropriate units of measurement used to make the computations. In 
addition, the final rate distribution base (as defined in subsection 2) 
for each major function (organized research, instruction, etc., as 
described in Section A.1 functions of an institution) must contain all 
the programs or activities which utilize the indirect (F&A) costs 
allocated to that major function. At the time an indirect (F&A) cost 
proposal is submitted to a cognizant agency for indirect costs, each 
institution must describe the process it uses to ensure that Federal 
funds are not used to subsidize industry and foreign government funded 
programs.

                        2. The Distribution Basis

    Indirect (F&A) costs must be distributed to applicable Federal 
awards and other benefitting activities within each major function (see 
section A.1) on the basis of modified total direct costs (MTDC), 
consisting of all salaries and wages, fringe benefits, materials and 
supplies, services, travel, and up to the first $25,000 of each subaward 
(regardless of the period covered by the subaward). MTDC is defined in 
Sec.  200.1. For this purpose, an indirect (F&A) cost rate should be 
determined for each of the separate indirect (F&A) cost pools developed 
pursuant to subsection 1. The rate in each case should be stated as the 
percentage which the amount of the particular indirect (F&A) cost pool 
is of the modified total direct costs identified with such pool.

             3. Negotiated Lump Sum for Indirect (F&A) Costs

    A negotiated fixed amount in lieu of indirect (F&A) costs may be 
appropriate for self-contained, off-campus, or primarily subcontracted 
activities where the benefits derived from an institution's indirect 
(F&A) services cannot be readily determined. Such negotiated indirect 
(F&A) costs will be treated as an offset before allocation to 
instruction, organized research, other sponsored activities, and other 
institutional activities. The base on which such remaining expenses are 
allocated should be appropriately adjusted.

             4. Predetermined Rates for Indirect (F&A) Costs

    Public Law 87-638 (76 Stat. 437) as amended (41 U.S.C. 4708) 
authorizes the use of predetermined rates in determining the ``indirect 
costs'' (indirect (F&A) costs) applicable under research agreements with 
educational institutions. The stated objectives of the law are to 
simplify the administration of cost-type research and development 
contracts (including grants) with educational institutions, to 
facilitate the preparation of their budgets, and to permit more 
expeditious closeout of such contracts when the work is completed. In 
view of the potential advantages offered by this procedure, negotiation 
of predetermined rates for indirect (F&A) costs for a period of two to 
four years should be the norm in those situations where the cost 
experience and other pertinent facts available are deemed sufficient to 
enable the parties involved to reach an informed judgment as to the 
probable level of indirect (F&A) costs during the ensuing accounting 
periods.

         5. Negotiated Fixed Rates and Carry-Forward Provisions

    When a fixed rate is negotiated in advance for a fiscal year (or 
other time period), the over- or under-recovery for that year may be 
included as an adjustment to the indirect (F&A) cost for the next rate 
negotiation. When the rate is negotiated before the carry-forward 
adjustment is determined, the carry-forward amount may be applied to the 
next subsequent rate negotiation. When such adjustments are to be made, 
each fixed rate negotiated in advance for a given period will be 
computed by applying the expected indirect (F&A) costs allocable to 
Federal awards for the forecast period plus or minus the carry-forward 
adjustment (over- or under-recovery) from the prior period, to the 
forecast distribution base. Unrecovered amounts under lump-sum 
agreements or cost-sharing provisions of prior years must not be carried 
forward for consideration in the new rate negotiation. There must, 
however, be an advance understanding in each case between the 
institution and the cognizant agency for indirect costs as to whether 
these differences will be considered in the rate negotiation rather than 
making the determination after the differences are known. Further, 
institutions electing to use this carry-forward provision may not 
subsequently change without prior approval of the cognizant agency for 
indirect costs. In the event that an institution returns to a post-
determined rate, any

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over- or under-recovery during the period in which negotiated fixed 
rates and carry-forward provisions were followed will be included in the 
subsequent post-determined rates. Where multiple rates are used, the 
same procedure will be applicable for determining each rate.

         6. Provisional and Final Rates for Indirect (F&A) Costs

    Where the cognizant agency for indirect costs determines that cost 
experience and other pertinent facts do not justify the use of 
predetermined rates, or a fixed rate with a carry-forward, or if the 
parties cannot agree on an equitable rate, a provisional rate must be 
established. To prevent substantial overpayment or underpayment, the 
provisional rate may be adjusted by the cognizant agency for indirect 
costs during the institution's fiscal year. Predetermined or fixed rates 
may replace provisional rates at any time prior to the close of the 
institution's fiscal year. If a provisional rate is not replaced by a 
predetermined or fixed rate prior to the end of the institution's fiscal 
year, a final rate will be established and upward or downward 
adjustments will be made based on the actual allowable costs incurred 
for the period involved.

         7. Fixed Rates for the Life of the Sponsored Agreement

    a. Except as provided in paragraph (c)(1) of Sec.  200.414, Federal 
agencies must use the negotiated rates in effect at the time of the 
initial award throughout the life of the Federal award. Award levels for 
Federal awards may not be adjusted in future years as a result of 
changes in negotiated rates. ``Negotiated rates'' per the rate agreement 
include final, fixed, and predetermined rates and exclude provisional 
rates. ``Life'' for the purpose of this subsection means each 
competitive segment of a project. A competitive segment is a period of 
years approved by the Federal awarding agency at the time of the Federal 
award. If negotiated rate agreements do not extend through the life of 
the Federal award at the time of the initial award, then the negotiated 
rate for the last year of the Federal award must be extended through the 
end of the life of the Federal award.
    b. Except as provided in Sec.  200.414, when an educational 
institution does not have a negotiated rate with the Federal Government 
at the time of an award (because the educational institution is a new 
recipient or the parties cannot reach agreement on a rate), the 
provisional rate used at the time of the award must be adjusted once a 
rate is negotiated and approved by the cognizant agency for indirect 
costs.

         8. Limitation on Reimbursement of Administrative Costs

    a. Notwithstanding the provisions of subsection C.1.a, the 
administrative costs charged to Federal awards awarded or amended 
(including continuation and renewal awards) with effective dates 
beginning on or after the start of the institution's first fiscal year 
which begins on or after October 1, 1991, must be limited to 26% of 
modified total direct costs (as defined in subsection 2) for the total 
of General Administration and General Expenses, Departmental 
Administration, Sponsored Projects Administration, and Student 
Administration and Services (including their allocable share of 
depreciation, interest costs, operation and maintenance expenses, and 
fringe benefits costs, as provided by Section B, and all other types of 
expenditures not listed specifically under one of the subcategories of 
facilities in Section B.
    b. Institutions should not change their accounting or cost 
allocation methods if the effect is to change the charging of a 
particular type of cost from F&A to direct, or to reclassify costs, or 
increase allocations from the administrative pools identified in 
paragraph B.1 of this Appendix to the other F&A cost pools or fringe 
benefits. Cognizant agencies for indirect cost are authorized to allow 
changes where an institution's charging practices are at variance with 
acceptable practices followed by a substantial majority of other 
institutions.

             9. Alternative Method for Administrative Costs

    a. Notwithstanding the provisions of subsection C.1.a, an 
institution may elect to claim a fixed allowance for the 
``Administration'' portion of indirect (F&A) costs. The allowance could 
be either 24% of modified total direct costs or a percentage equal to 
95% of the most recently negotiated fixed or predetermined rate for the 
cost pools included under ``Administration'' as defined in Section B.1, 
whichever is less. Under this alternative, no cost proposal need be 
prepared for the ``Administration'' portion of the indirect (F&A) cost 
rate nor is further identification or documentation of these costs 
required (see subsection c). Where a negotiated indirect (F&A) cost 
agreement includes this alternative, an institution must make no further 
charges for the expenditure categories described in Section B.5, Section 
B.6, Section B.7, and Section B.9.
    b. In negotiations of rates for subsequent periods, an institution 
that has elected the option of subsection a may continue to exercise it 
at the same rate without further identification or documentation of 
costs.
    c. If an institution elects to accept a threshold rate as defined in 
subsection a of this section, it is not required to perform a detailed 
analysis of its administrative costs.

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However, in order to compute the facilities components of its indirect 
(F&A) cost rate, the institution must reconcile its indirect (F&A) cost 
proposal to its financial statements and make appropriate adjustments 
and reclassifications to identify the costs of each major function as 
defined in Section A.1, as well as to identify and allocate the 
facilities components. Administrative costs that are not identified as 
such by the institution's accounting system (such as those incurred in 
academic departments) will be classified as instructional costs for 
purposes of reconciling indirect (F&A) cost proposals to financial 
statements and allocating facilities costs.

                     10. Individual Rate Components

    In order to provide mutually agreed-upon information for management 
purposes, each indirect (F&A) cost rate negotiation or determination 
must include development of a rate for each indirect (F&A) cost pool as 
well as the overall indirect (F&A) cost rate.

           11. Negotiation and Approval of Indirect (F&A) Rate

    a. Cognizant agency for indirect costs is defined in Subpart A.
    (1) Cost negotiation cognizance is assigned to the Department of 
Health and Human Services (HHS) or the Department of Defense's Office of 
Naval Research (DOD), normally depending on which of the two agencies 
(HHS or DOD) provides more funds directly to the educational institution 
for the most recent three years. Information on funding must be derived 
from relevant data gathered by the National Science Foundation. In cases 
where neither HHS nor DOD provides Federal funding directly to an 
educational institution, the cognizant agency for indirect costs 
assignment must default to HHS. Notwithstanding the method for 
cognizance determination described in this section, other arrangements 
for cognizance of a particular educational institution may also be based 
in part on the types of research performed at the educational 
institution and must be decided based on mutual agreement between HHS 
and DOD. Where a non-Federal entity only receives funds as a 
subrecipient, see Sec.  200.332.
    (2) After cognizance is established, it must continue for a five-
year period.
    b. Acceptance of rates. See Sec.  200.414.
    c. Correcting deficiencies. The cognizant agency for indirect costs 
must negotiate changes needed to correct systems deficiencies relating 
to accountability for Federal awards. Cognizant agencies for indirect 
costs must address the concerns of other affected agencies, as 
appropriate, and must negotiate special rates for Federal agencies that 
are required to limit recovery of indirect costs by statute.
    d. Resolving questioned costs. The cognizant agency for indirect 
costs must conduct any necessary negotiations with an educational 
institution regarding amounts questioned by audit that are due the 
Federal Government related to costs covered by a negotiated agreement.
    e. Reimbursement. Reimbursement to cognizant agencies for indirect 
costs for work performed under this Part may be made by reimbursement 
billing under the Economy Act, 31 U.S.C. 1535.
    f. Procedure for establishing facilities and administrative rates 
must be established by one of the following methods:
    (1) Formal negotiation. The cognizant agency for indirect costs is 
responsible for negotiating and approving rates for an educational 
institution on behalf of all Federal agencies. Federal awarding agencies 
that do not have cognizance for indirect costs must notify the cognizant 
agency for indirect costs of specific concerns (i.e., a need to 
establish special cost rates) which could affect the negotiation 
process. The cognizant agency for indirect costs must address the 
concerns of all interested agencies, as appropriate. A pre-negotiation 
conference may be scheduled among all interested agencies, if necessary. 
The cognizant agency for indirect costs must then arrange a negotiation 
conference with the educational institution.
    (2) Other than formal negotiation. The cognizant agency for indirect 
costs and educational institution may reach an agreement on rates 
without a formal negotiation conference; for example, through 
correspondence or use of the simplified method described in this section 
D of this Appendix.
    g. Formalizing determinations and agreements. The cognizant agency 
for indirect costs must formalize all determinations or agreements 
reached with an educational institution and provide copies to other 
agencies having an interest. Determinations should include a description 
of any adjustments, the actual amount, both dollar and percentage 
adjusted, and the reason for making adjustments.
    h. Disputes and disagreements. Where the cognizant agency for 
indirect costs is unable to reach agreement with an educational 
institution with regard to rates or audit resolution, the appeal system 
of the cognizant agency for indirect costs must be followed for 
resolution of the disagreement.

                   12. Standard Format for Submission

    For facilities and administrative (indirect (F&A)) rate proposals, 
educational institutions must use the standard format, shown in section 
E of this appendix, to submit their indirect (F&A) rate proposal to the 
cognizant agency for indirect costs. The cognizant agency for indirect 
costs may, on an institution-by-institution basis, grant exceptions from 
all or portions of Part II of the

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standard format requirement. This requirement does not apply to 
educational institutions that use the simplified method for calculating 
indirect (F&A) rates, as described in Section D of this Appendix.
    As provided in section C.10 of this appendix, each F&A cost rate 
negotiation or determination must include development of a rate for each 
F&A cost pool as well as the overall F&A rate.

               D. Simplified Method for Small Institutions

                               1. General

    a. Where the total direct cost of work covered by this Part at an 
institution does not exceed $10 million in a fiscal year, the simplified 
procedure described in subsections 2 or 3 may be used in determining 
allowable indirect (F&A) costs. Under this simplified procedure, the 
institution's most recent annual financial report and immediately 
available supporting information must be utilized as a basis for 
determining the indirect (F&A) cost rate applicable to all Federal 
awards. The institution may use either the salaries and wages (see 
subsection 2) or modified total direct costs (see subsection 3) as the 
distribution basis.
    b. The simplified procedure should not be used where it produces 
results which appear inequitable to the Federal Government or the 
institution. In any such case, indirect (F&A) costs should be determined 
through use of the regular procedure.

            2. Simplified Procedure--Salaries and Wages Base

    a. Establish the total amount of salaries and wages paid to all 
employees of the institution.
    b. Establish an indirect (F&A) cost pool consisting of the 
expenditures (exclusive of capital items and other costs specifically 
identified as unallowable) which customarily are classified under the 
following titles or their equivalents:
    (1) General administration and general expenses (exclusive of costs 
of student administration and services, student activities, student aid, 
and scholarships).
    (2) Operation and maintenance of physical plant and depreciation 
(after appropriate adjustment for costs applicable to other 
institutional activities).
    (3) Library.
    (4) Department administration expenses, which will be computed as 20 
percent of the salaries and expenses of deans and heads of departments.
    In those cases where expenditures classified under subsection (1) 
have previously been allocated to other institutional activities, they 
may be included in the indirect (F&A) cost pool. The total amount of 
salaries and wages included in the indirect (F&A) cost pool must be 
separately identified.
    c. Establish a salary and wage distribution base, determined by 
deducting from the total of salaries and wages as established in 
subsection a from the amount of salaries and wages included under 
subsection b.
    d. Establish the indirect (F&A) cost rate, determined by dividing 
the amount in the indirect (F&A) cost pool, subsection b, by the amount 
of the distribution base, subsection c.
    e. Apply the indirect (F&A) cost rate to direct salaries and wages 
for individual agreements to determine the amount of indirect (F&A) 
costs allocable to such agreements.

        3. Simplified Procedure--Modified Total Direct Cost Base

    a. Establish the total costs incurred by the institution for the 
base period.
    b. Establish an indirect (F&A) cost pool consisting of the 
expenditures (exclusive of capital items and other costs specifically 
identified as unallowable) which customarily are classified under the 
following titles or their equivalents:
    (1) General administration and general expenses (exclusive of costs 
of student administration and services, student activities, student aid, 
and scholarships).
    (2) Operation and maintenance of physical plant and depreciation 
(after appropriate adjustment for costs applicable to other 
institutional activities).
    (3) Library.
    (4) Department administration expenses, which will be computed as 20 
percent of the salaries and expenses of deans and heads of departments. 
In those cases where expenditures classified under subsection (1) have 
previously been allocated to other institutional activities, they may be 
included in the indirect (F&A) cost pool. The modified total direct 
costs amount included in the indirect (F&A) cost pool must be separately 
identified.
    c. Establish a modified total direct cost distribution base, as 
defined in Section C.2, The distribution basis, that consists of all 
institution's direct functions.
    d. Establish the indirect (F&A) cost rate, determined by dividing 
the amount in the indirect (F&A) cost pool, subsection b, by the amount 
of the distribution base, subsection c.
    e. Apply the indirect (F&A) cost rate to the modified total direct 
costs for individual agreements to determine the amount of indirect 
(F&A) costs allocable to such agreements.

                      E. Documentation Requirements

    The standard format for documentation requirements for indirect 
(indirect (F&A)) rate

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proposals for claiming costs under the regular method is available on 
the OMB website.

                            F. Certification

                       1. Certification of Charges

    To assure that expenditures for Federal awards are proper and in 
accordance with the agreement documents and approved project budgets, 
the annual and/or final fiscal reports or vouchers requesting payment 
under the agreements will include a certification, signed by an 
authorized official of the university, which reads ``By signing this 
report, I certify to the best of my knowledge and belief that the report 
is true, complete, and accurate, and the expenditures, disbursements and 
cash receipts are for the purposes and intent set forth in the award 
documents. I am aware that any false, fictitious, or fraudulent 
information, or the omission of any material fact, may subject me to 
criminal, civil or administrative penalties for fraud, false statements, 
false claims or otherwise. (U.S. Code, Title 18, Section 1001 and Title 
31, Sections 3729-3733 and 3801-3812)''.

                2. Certification of Indirect (F&A) Costs

    a. Policy. Cognizant agencies must not accept a proposed indirect 
cost rate unless such costs have been certified by the educational 
institution using the Certificate of indirect (F&A) Costs set forth in 
subsection F.2.c
    b. The certificate must be signed on behalf of the institution by 
the chief financial officer or an individual designated by an individual 
at a level no lower than vice president or chief financial officer.
    An indirect (F&A) cost rate is not binding upon the Federal 
Government if the most recent required proposal from the institution has 
not been certified. Where it is necessary to establish indirect (F&A) 
cost rates, and the institution has not submitted a certified proposal 
for establishing such rates in accordance with the requirements of this 
section, the Federal Government must unilaterally establish such rates. 
Such rates may be based upon audited historical data or such other data 
that have been furnished to the cognizant agency for indirect costs and 
for which it can be demonstrated that all unallowable costs have been 
excluded. When indirect (F&A) cost rates are unilaterally established by 
the Federal Government because of failure of the institution to submit a 
certified proposal for establishing such rates in accordance with this 
section, the rates established will be set at a level low enough to 
ensure that potentially unallowable costs will not be reimbursed.
    c. Certificate. The certificate required by this section must be in 
the following form:

                   Certificate of Indirect (F&A) Costs

    This is to certify that to the best of my knowledge and belief:
    (1) I have reviewed the indirect (F&A) cost proposal submitted 
herewith;
    (2) All costs included in this proposal [identify date] to establish 
billing or final indirect (F&A) costs rate for [identify period covered 
by rate] are allowable in accordance with the requirements of the 
Federal agreement(s) to which they apply and with the cost principles 
applicable to those agreements.
    (3) This proposal does not include any costs which are unallowable 
under subpart E of this part such as (without limitation): Public 
relations costs, contributions and donations, entertainment costs, fines 
and penalties, lobbying costs, and defense of fraud proceedings; and
    (4) All costs included in this proposal are properly allocable to 
Federal agreements on the basis of a beneficial or causal relationship 
between the expenses incurred and the agreements to which they are 
allocated in accordance with applicable requirements.
    I declare that the foregoing is true and correct.

Institution of Higher Education:
 Signature:_____________________________________________________________
 Name of Official:______________________________________________________
 Title:_________________________________________________________________
 Date of Execution:_____________________________________________________

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75888, Dec. 19, 2014; 
80 FR 54409, Sept. 10, 2015; 85 FR 49577, Aug. 13, 2020]



 Sec. Appendix IV to Part 200--Indirect (F&A) Costs Identification and 
     Assignment, and Rate Determination for Nonprofit Organizations

                               A. General

    1. Indirect costs are those that have been incurred for common or 
joint objectives and cannot be readily identified with a particular 
final cost objective. Direct cost of minor amounts may be treated as 
indirect costs under the conditions described in Sec.  200.413(d). After 
direct costs have been determined and assigned directly to awards or 
other work as appropriate, indirect costs are those remaining to be 
allocated to benefitting cost objectives. A cost may not be allocated to 
a Federal award as an indirect cost if any other cost incurred for the 
same purpose, in like circumstances, has been assigned to a Federal 
award as a direct cost.
    2. ``Major nonprofit organizations'' are defined in paragraph (a) of 
Sec.  200.414. See indirect cost rate reporting requirements in sections 
B.2.e and B.3.g of this Appendix.

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B. Allocation of Indirect Costs and Determination of Indirect Cost Rates

                               1. General

    a. If a nonprofit organization has only one major function, or where 
all its major functions benefit from its indirect costs to approximately 
the same degree, the allocation of indirect costs and the computation of 
an indirect cost rate may be accomplished through simplified allocation 
procedures, as described in section B.2 of this Appendix.
    b. If an organization has several major functions which benefit from 
its indirect costs in varying degrees, allocation of indirect costs may 
require the accumulation of such costs into separate cost groupings 
which then are allocated individually to benefitting functions by means 
of a base which best measures the relative degree of benefit. The 
indirect costs allocated to each function are then distributed to 
individual Federal awards and other activities included in that function 
by means of an indirect cost rate(s).
    c. The determination of what constitutes an organization's major 
functions will depend on its purpose in being; the types of services it 
renders to the public, its clients, and its members; and the amount of 
effort it devotes to such activities as fundraising, public information 
and membership activities.
    d. Specific methods for allocating indirect costs and computing 
indirect cost rates along with the conditions under which each method 
should be used are described in section B.2 through B.5 of this 
Appendix.
    e. The base period for the allocation of indirect costs is the 
period in which such costs are incurred and accumulated for allocation 
to work performed in that period. The base period normally should 
coincide with the organization's fiscal year but, in any event, must be 
so selected as to avoid inequities in the allocation of the costs.

                     2. Simplified Allocation Method

    a. Where an organization's major functions benefit from its indirect 
costs to approximately the same degree, the allocation of indirect costs 
may be accomplished by (i) separating the organization's total costs for 
the base period as either direct or indirect, and (ii) dividing the 
total allowable indirect costs (net of applicable credits) by an 
equitable distribution base. The result of this process is an indirect 
cost rate which is used to distribute indirect costs to individual 
Federal awards. The rate should be expressed as the percentage which the 
total amount of allowable indirect costs bears to the base selected. 
This method should also be used where an organization has only one major 
function encompassing a number of individual projects or activities, and 
may be used where the level of Federal awards to an organization is 
relatively small.
    b. Both the direct costs and the indirect costs must exclude capital 
expenditures and unallowable costs. However, unallowable costs which 
represent activities must be included in the direct costs under the 
conditions described in Sec.  200.413(e).
    c. The distribution base may be total direct costs (excluding 
capital expenditures and other distorting items, such as subawards for 
$25,000 or more), direct salaries and wages, or other base which results 
in an equitable distribution. The distribution base must exclude 
participant support costs as defined in Sec.  200.1.
    d. Except where a special rate(s) is required in accordance with 
section B.5 of this Appendix, the indirect cost rate developed under the 
above principles is applicable to all Federal awards of the 
organization. If a special rate(s) is required, appropriate 
modifications must be made in order to develop the special rate(s).
    e. For an organization that receives more than $10 million in direct 
Federal funding in a fiscal year, a breakout of the indirect cost 
component into two broad categories, Facilities and Administration as 
defined in paragraph (a) of Sec.  200.414, is required. The rate in each 
case must be stated as the percentage which the amount of the particular 
indirect cost category (i.e., Facilities or Administration) is of the 
distribution base identified with that category.

                   3. Multiple Allocation Base Method

    a. General. Where an organization's indirect costs benefit its major 
functions in varying degrees, indirect costs must be accumulated into 
separate cost groupings, as described in subparagraph b. Each grouping 
must then be allocated individually to benefitting functions by means of 
a base which best measures the relative benefits. The default allocation 
bases by cost pool are described in section B.3.c of this Appendix.
    b. Identification of indirect costs. Cost groupings must be 
established so as to permit the allocation of each grouping on the basis 
of benefits provided to the major functions. Each grouping must 
constitute a pool of expenses that are of like character in terms of 
functions they benefit and in terms of the allocation base which best 
measures the relative benefits provided to each function. The groupings 
are classified within the two broad categories: ``Facilities'' and 
``Administration,'' as described in section A.3 of this Appendix. The 
indirect cost pools are defined as follows:
    (1) Depreciation. The expenses under this heading are the portion of 
the costs of the organization's buildings, capital improvements to land 
and buildings, and equipment which are computed in accordance with Sec.  
200.436.

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    (2) Interest. Interest on debt associated with certain buildings, 
equipment and capital improvements are computed in accordance with Sec.  
200.449.
    (3) Operation and maintenance expenses. The expenses under this 
heading are those that have been incurred for the administration, 
operation, maintenance, preservation, and protection of the 
organization's physical plant. They include expenses normally incurred 
for such items as: janitorial and utility services; repairs and ordinary 
or normal alterations of buildings, furniture and equipment; care of 
grounds; maintenance and operation of buildings and other plant 
facilities; security; earthquake and disaster preparedness; 
environmental safety; hazardous waste disposal; property, liability and 
other insurance relating to property; space and capital leasing; 
facility planning and management; and central receiving. The operation 
and maintenance expenses category must also include its allocable share 
of fringe benefit costs, depreciation, and interest costs.
    (4) General administration and general expenses. The expenses under 
this heading are those that have been incurred for the overall general 
executive and administrative offices of the organization and other 
expenses of a general nature which do not relate solely to any major 
function of the organization. This category must also include its 
allocable share of fringe benefit costs, operation and maintenance 
expense, depreciation, and interest costs. Examples of this category 
include central offices, such as the director's office, the office of 
finance, business services, budget and planning, personnel, safety and 
risk management, general counsel, management information systems, and 
library costs.
    In developing this cost pool, special care should be exercised to 
ensure that costs incurred for the same purpose in like circumstances 
are treated consistently as either direct or indirect costs. For 
example, salaries of technical staff, project supplies, project 
publication, telephone toll charges, computer costs, travel costs, and 
specialized services costs must be treated as direct costs wherever 
identifiable to a particular program. The salaries and wages of 
administrative and pooled clerical staff should normally be treated as 
indirect costs. Direct charging of these costs may be appropriate as 
described in Sec.  200.413. Items such as office supplies, postage, 
local telephone costs, periodicals and memberships should normally be 
treated as indirect costs.
    c. Allocation bases. Actual conditions must be taken into account in 
selecting the base to be used in allocating the expenses in each 
grouping to benefitting functions. The essential consideration in 
selecting a method or a base is that it is the one best suited for 
assigning the pool of costs to cost objectives in accordance with 
benefits derived; a traceable cause and effect relationship; or logic 
and reason, where neither the cause nor the effect of the relationship 
is determinable. When an allocation can be made by assignment of a cost 
grouping directly to the function benefitted, the allocation must be 
made in that manner. When the expenses in a cost grouping are more 
general in nature, the allocation must be made through the use of a 
selected base which produces results that are equitable to both the 
Federal Government and the organization. The distribution must be made 
in accordance with the bases described herein unless it can be 
demonstrated that the use of a different base would result in a more 
equitable allocation of the costs, or that a more readily available base 
would not increase the costs charged to Federal awards. The results of 
special cost studies (such as an engineering utility study) must not be 
used to determine and allocate the indirect costs to Federal awards.
    (1) Depreciation. Depreciation expenses must be allocated in the 
following manner:
    (a) Depreciation on buildings used exclusively in the conduct of a 
single function, and on capital improvements and equipment used in such 
buildings, must be assigned to that function.
    (b) Depreciation on buildings used for more than one function, and 
on capital improvements and equipment used in such buildings, must be 
allocated to the individual functions performed in each building on the 
basis of usable square feet of space, excluding common areas, such as 
hallways, stairwells, and restrooms.
    (c) Depreciation on buildings, capital improvements and equipment 
related space (e.g., individual rooms, and laboratories) used jointly by 
more than one function (as determined by the users of the space) must be 
treated as follows. The cost of each jointly used unit of space must be 
allocated to the benefitting functions on the basis of:
    (i) the employees and other users on a full-time equivalent (FTE) 
basis or salaries and wages of those individual functions benefitting 
from the use of that space; or
    (ii) organization-wide employee FTEs or salaries and wages 
applicable to the benefitting functions of the organization.
    (d) Depreciation on certain capital improvements to land, such as 
paved parking areas, fences, sidewalks, and the like, not included in 
the cost of buildings, must be allocated to user categories on a FTE 
basis and distributed to major functions in proportion to the salaries 
and wages of all employees applicable to the functions.
    (2) Interest. Interest costs must be allocated in the same manner as 
the depreciation on the buildings, equipment and capital equipment to 
which the interest relates.
    (3) Operation and maintenance expenses. Operation and maintenance 
expenses must

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be allocated in the same manner as the depreciation.
    (4) General administration and general expenses. General 
administration and general expenses must be allocated to benefitting 
functions based on modified total costs (MTC). The MTC is the modified 
total direct costs (MTDC), as described in Sec.  200.1, plus the 
allocated indirect cost proportion. The expenses included in this 
category could be grouped first according to major functions of the 
organization to which they render services or provide benefits. The 
aggregate expenses of each group must then be allocated to benefitting 
functions based on MTC.
    d. Order of distribution.
    (1) Indirect cost categories consisting of depreciation, interest, 
operation and maintenance, and general administration and general 
expenses must be allocated in that order to the remaining indirect cost 
categories as well as to the major functions of the organization. Other 
cost categories should be allocated in the order determined to be most 
appropriate by the organization. This order of allocation does not apply 
if cross allocation of costs is made as provided in section B.3.d.2 of 
this Appendix.
    (2) Normally, an indirect cost category will be considered closed 
once it has been allocated to other cost objectives, and costs must not 
be subsequently allocated to it. However, a cross allocation of costs 
between two or more indirect costs categories could be used if such 
allocation will result in a more equitable allocation of costs. If a 
cross allocation is used, an appropriate modification to the composition 
of the indirect cost categories is required.
    e. Application of indirect cost rate or rates. Except where a 
special indirect cost rate(s) is required in accordance with section B.5 
of this Appendix, the separate groupings of indirect costs allocated to 
each major function must be aggregated and treated as a common pool for 
that function. The costs in the common pool must then be distributed to 
individual Federal awards included in that function by use of a single 
indirect cost rate.
    f. Distribution basis. Indirect costs must be distributed to 
applicable Federal awards and other benefitting activities within each 
major function on the basis of MTDC (see definition in Sec.  200.1).
    g. Individual Rate Components. An indirect cost rate must be 
determined for each separate indirect cost pool developed. The rate in 
each case must be stated as the percentage which the amount of the 
particular indirect cost pool is of the distribution base identified 
with that pool. Each indirect cost rate negotiation or determination 
agreement must include development of the rate for each indirect cost 
pool as well as the overall indirect cost rate. The indirect cost pools 
must be classified within two broad categories: ``Facilities'' and 
``Administration,'' as described in Sec.  200.414(a).

                       4. Direct Allocation Method

    a. Some nonprofit organizations treat all costs as direct costs 
except general administration and general expenses. These organizations 
generally separate their costs into three basic categories: (i) General 
administration and general expenses, (ii) fundraising, and (iii) other 
direct functions (including projects performed under Federal awards). 
Joint costs, such as depreciation, rental costs, operation and 
maintenance of facilities, telephone expenses, and the like are prorated 
individually as direct costs to each category and to each Federal award 
or other activity using a base most appropriate to the particular cost 
being prorated.
    b. This method is acceptable, provided each joint cost is prorated 
using a base which accurately measures the benefits provided to each 
Federal award or other activity. The bases must be established in 
accordance with reasonable criteria and be supported by current data. 
This method is compatible with the Standards of Accounting and Financial 
Reporting for Voluntary Health and Welfare Organizations issued jointly 
by the National Health Council, Inc., the National Assembly of Voluntary 
Health and Social Welfare Organizations, and the United Way of America.
    c. Under this method, indirect costs consist exclusively of general 
administration and general expenses. In all other respects, the 
organization's indirect cost rates must be computed in the same manner 
as that described in section B.2 of this Appendix.

                     5. Special Indirect Cost Rates

    In some instances, a single indirect cost rate for all activities of 
an organization or for each major function of the organization may not 
be appropriate, since it would not take into account those different 
factors which may substantially affect the indirect costs applicable to 
a particular segment of work. For this purpose, a particular segment of 
work may be that performed under a single Federal award or it may 
consist of work under a group of Federal awards performed in a common 
environment. These factors may include the physical location of the 
work, the level of administrative support required, the nature of the 
facilities or other resources employed, the scientific disciplines or 
technical skills involved, the organizational arrangements used, or any 
combination thereof. When a particular segment of work is performed in 
an environment which appears to generate a significantly different level 
of indirect costs, provisions should be made for a separate indirect 
cost pool applicable to such work. The separate indirect cost pool 
should be developed during the course of the regular allocation process, 
and

[[Page 234]]

the separate indirect cost rate resulting therefrom should be used, 
provided it is determined that (i) the rate differs significantly from 
that which would have been obtained under sections B.2, B.3, and B.4 of 
this Appendix, and (ii) the volume of work to which the rate would apply 
is material.

           C. Negotiation and Approval of Indirect Cost Rates

                             1. Definitions

    As used in this section, the following terms have the meanings set 
forth in this section:
    a. Cognizant agency for indirect costs means the Federal agency 
responsible for negotiating and approving indirect cost rates for a 
nonprofit organization on behalf of all Federal agencies.
    b. Predetermined rate means an indirect cost rate, applicable to a 
specified current or future period, usually the organization's fiscal 
year. The rate is based on an estimate of the costs to be incurred 
during the period. A predetermined rate is not subject to adjustment.
    c. Fixed rate means an indirect cost rate which has the same 
characteristics as a predetermined rate, except that the difference 
between the estimated costs and the actual costs of the period covered 
by the rate is carried forward as an adjustment to the rate computation 
of a subsequent period.
    d. Final rate means an indirect cost rate applicable to a specified 
past period which is based on the actual costs of the period. A final 
rate is not subject to adjustment.
    e. Provisional rate or billing rate means a temporary indirect cost 
rate applicable to a specified period which is used for funding, interim 
reimbursement, and reporting indirect costs on Federal awards pending 
the establishment of a final rate for the period.
    f. Indirect cost proposal means the documentation prepared by an 
organization to substantiate its claim for the reimbursement of indirect 
costs. This proposal provides the basis for the review and negotiation 
leading to the establishment of an organization's indirect cost rate.
    g. Cost objective means a function, organizational subdivision, 
contract, Federal award, or other work unit for which cost data are 
desired and for which provision is made to accumulate and measure the 
cost of processes, projects, jobs and capitalized projects.

                  2. Negotiation and Approval of Rates

    a. Unless different arrangements are agreed to by the Federal 
agencies concerned, the Federal agency with the largest dollar value of 
Federal awards directly funded to an organization will be designated as 
the cognizant agency for indirect costs for the negotiation and approval 
of the indirect cost rates and, where necessary, other rates such as 
fringe benefit and computer charge-out rates. Once an agency is assigned 
cognizance for a particular nonprofit organization, the assignment will 
not be changed unless there is a shift in the dollar volume of the 
Federal awards directly funded to the organization for at least three 
years. All concerned Federal agencies must be given the opportunity to 
participate in the negotiation process but, after a rate has been agreed 
upon, it will be accepted by all Federal agencies. When a Federal agency 
has reason to believe that special operating factors affecting its 
Federal awards necessitate special indirect cost rates in accordance 
with section B.5 of this Appendix, it will, prior to the time the rates 
are negotiated, notify the cognizant agency for indirect costs. (See 
also Sec.  200.414.) If the nonprofit does not receive any funding from 
any Federal agency, the pass-through entity is responsible for the 
negotiation of the indirect cost rates in accordance with Sec.  
200.332(a)(4).
    b. Except as otherwise provided in Sec.  200.414(f), a nonprofit 
organization which has not previously established an indirect cost rate 
with a Federal agency must submit its initial indirect cost proposal 
immediately after the organization is advised that a Federal award will 
be made and, in no event, later than three months after the effective 
date of the Federal award.
    c. Unless approved by the cognizant agency for indirect costs in 
accordance with Sec.  200.414(g), organizations that have previously 
established indirect cost rates must submit a new indirect cost proposal 
to the cognizant agency for indirect costs within six months after the 
close of each fiscal year.
    d. A predetermined rate may be negotiated for use on Federal awards 
where there is reasonable assurance, based on past experience and 
reliable projection of the organization's costs, that the rate is not 
likely to exceed a rate based on the organization's actual costs.
    e. Fixed rates may be negotiated where predetermined rates are not 
considered appropriate. A fixed rate, however, must not be negotiated if 
(i) all or a substantial portion of the organization's Federal awards 
are expected to expire before the carry-forward adjustment can be made; 
(ii) the mix of Federal and non-Federal work at the organization is too 
erratic to permit an equitable carry-forward adjustment; or (iii) the 
organization's operations fluctuate significantly from year to year.
    f. Provisional and final rates must be negotiated where neither 
predetermined nor fixed rates are appropriate. Predetermined or fixed 
rates may replace provisional rates at any time prior to the close of 
the organization's fiscal year. If that event does not occur, a final 
rate will be established and upward or downward adjustments will be made 
based on the actual allowable costs incurred for the period involved.

[[Page 235]]

    g. The results of each negotiation must be formalized in a written 
agreement between the cognizant agency for indirect costs and the 
nonprofit organization. The cognizant agency for indirect costs must 
make available copies of the agreement to all concerned Federal 
agencies.
    h. If a dispute arises in a negotiation of an indirect cost rate 
between the cognizant agency for indirect costs and the nonprofit 
organization, the dispute must be resolved in accordance with the 
appeals procedures of the cognizant agency for indirect costs.
    i. To the extent that problems are encountered among the Federal 
agencies in connection with the negotiation and approval process, OMB 
will lend assistance as required to resolve such problems in a timely 
manner.

                D. Certification of Indirect (F&A) Costs

    (1) Required Certification. No proposal to establish indirect (F&A) 
cost rates must be acceptable unless such costs have been certified by 
the nonprofit organization using the Certificate of Indirect (F&A) Costs 
set forth in section j. of this appendix. The certificate must be signed 
on behalf of the organization by an individual at a level no lower than 
vice president or chief financial officer for the organization.
    (2) Each indirect cost rate proposal must be accompanied by a 
certification in the following form:

                   Certificate of Indirect (F&A) Costs

    This is to certify that to the best of my knowledge and belief:
    (1) I have reviewed the indirect (F&A) cost proposal submitted 
herewith;
    (2) All costs included in this proposal [identify date] to establish 
billing or final indirect (F&A) costs rate for [identify period covered 
by rate] are allowable in accordance with the requirements of the 
Federal awards to which they apply and with subpart E of this part.
    (3) This proposal does not include any costs which are unallowable 
under subpart E of this part such as (without limitation): Public 
relations costs, contributions and donations, entertainment costs, fines 
and penalties, lobbying costs, and defense of fraud proceedings; and
    (4) All costs included in this proposal are properly allocable to 
Federal awards on the basis of a beneficial or causal relationship 
between the expenses incurred and the Federal awards to which they are 
allocated in accordance with applicable requirements.

    I declare that the foregoing is true and correct.

 Nonprofit Organization:________________________________________________
 Signature:_____________________________________________________________
 Name of Official:______________________________________________________
 Title:_________________________________________________________________
 Date of Execution:_____________________________________________________

[78 FR 78608, Dec. 26, 2013, as amended at 80 FR 54410, Sept. 10, 2015; 
85 FR 49579, Aug. 13, 2020]



Sec. Appendix V to Part 200--State/Local Governmentwide Central Service 
                          Cost Allocation Plans

                               A. General

    1. Most governmental units provide certain services, such as motor 
pools, computer centers, purchasing, accounting, etc., to operating 
agencies on a centralized basis. Since federally-supported awards are 
performed within the individual operating agencies, there needs to be a 
process whereby these central service costs can be identified and 
assigned to benefitted activities on a reasonable and consistent basis. 
The central service cost allocation plan provides that process. All 
costs and other data used to distribute the costs included in the plan 
should be supported by formal accounting and other records that will 
support the propriety of the costs assigned to Federal awards.
    2. Guidelines and illustrations of central service cost allocation 
plans are provided in a brochure published by the Department of Health 
and Human Services entitled ``A Guide for State, Local and Indian Tribal 
Governments: Cost Principles and Procedures for Developing Cost 
Allocation Plans and Indirect Cost Rates for Agreements with the Federal 
Government.'' A copy of this brochure may be obtained from the HHS Cost 
Allocation Services or at their website.

                             B. Definitions

    1. Agency or operating agency means an organizational unit or sub-
division within a governmental unit that is responsible for the 
performance or administration of Federal awards or activities of the 
governmental unit.
    2. Allocated central services means central services that benefit 
operating agencies but are not billed to the agencies on a fee-for-
service or similar basis. These costs are allocated to benefitted 
agencies on some reasonable basis. Examples of such services might 
include general accounting, personnel administration, purchasing, etc.
    3. Billed central services means central services that are billed to 
benefitted agencies or programs on an individual fee-for-service or 
similar basis. Typical examples of billed central services include 
computer services, transportation services, insurance, and fringe 
benefits.
    4. Cognizant agency for indirect costs is defined in Sec.  200.1. 
The determination of cognizant agency for indirect costs for states and 
local governments is described in section F.1.

[[Page 236]]

    5. Major local government means local government that receives more 
than $100 million in direct Federal awards subject to this Part.

          C. Scope of the Central Service Cost Allocation Plans

    The central service cost allocation plan will include all central 
service costs that will be claimed (either as a billed or an allocated 
cost) under Federal awards and will be documented as described in 
section E. omitted from the plan will not be reimbursed.

                       D. Submission Requirements

    1. Each state will submit a plan to the Department of Health and 
Human Services for each year in which it claims central service costs 
under Federal awards. The plan should include (a) a projection of the 
next year's allocated central service cost (based either on actual costs 
for the most recently completed year or the budget projection for the 
coming year), and (b) a reconciliation of actual allocated central 
service costs to the estimated costs used for either the most recently 
completed year or the year immediately preceding the most recently 
completed year.
    2. Each major local government is also required to submit a plan to 
its cognizant agency for indirect costs annually.
    3. All other local governments claiming central service costs must 
develop a plan in accordance with the requirements described in this 
Part and maintain the plan and related supporting documentation for 
audit. These local governments are not required to submit their plans 
for Federal approval unless they are specifically requested to do so by 
the cognizant agency for indirect costs. Where a local government only 
receives funds as a subrecipient, the pass-through entity will be 
responsible for monitoring the subrecipient's plan.
    4. All central service cost allocation plans will be prepared and, 
when required, submitted within six months prior to the beginning of 
each of the governmental unit's fiscal years in which it proposes to 
claim central service costs. Extensions may be granted by the cognizant 
agency for indirect costs on a case-by-case basis.

            E. Documentation Requirements for Submitted Plans

    The documentation requirements described in this section may be 
modified, expanded, or reduced by the cognizant agency for indirect 
costs on a case-by-case basis. For example, the requirements may be 
reduced for those central services which have little or no impact on 
Federal awards. Conversely, if a review of a plan indicates that certain 
additional information is needed, and will likely be needed in future 
years, it may be routinely requested in future plan submissions. Items 
marked with an asterisk (*) should be submitted only once; subsequent 
plans should merely indicate any changes since the last plan.

                               1. General

    All proposed plans must be accompanied by the following: an 
organization chart sufficiently detailed to show operations including 
the central service activities of the state/local government whether or 
not they are shown as benefitting from central service functions; a copy 
of the Comprehensive Annual Financial Report (or a copy of the Executive 
Budget if budgeted costs are being proposed) to support the allowable 
costs of each central service activity included in the plan; and, a 
certification (see subsection 4.) that the plan was prepared in 
accordance with this Part, contains only allowable costs, and was 
prepared in a manner that treated similar costs consistently among the 
various Federal awards and between Federal and non-Federal awards/
activities.

                      2. Allocated Central Services

    For each allocated central service*, the plan must also include the 
following: a brief description of the service, an identification of the 
unit rendering the service and the operating agencies receiving the 
service, the items of expense included in the cost of the service, the 
method used to distribute the cost of the service to benefitted 
agencies, and a summary schedule showing the allocation of each service 
to the specific benefitted agencies. If any self-insurance funds or 
fringe benefits costs are treated as allocated (rather than billed) 
central services, documentation discussed in subsections 3.b. and c. 
must also be included.

                           3. Billed Services

    a. General. The information described in this section must be 
provided for all billed central services, including internal service 
funds, self-insurance funds, and fringe benefit funds.
    b. Internal service funds.
    (1) For each internal service fund or similar activity with an 
operating budget of $5 million or more, the plan must include: A brief 
description of each service; a balance sheet for each fund based on 
individual accounts contained in the governmental unit's accounting 
system; a revenue/expenses statement, with revenues broken out by 
source, e.g., regular billings, interest earned, etc.; a listing of all 
non-operating transfers (as defined by GAAP) into and out of the fund; a 
description of the procedures (methodology) used to charge the costs of 
each service to users, including how billing rates are determined; a 
schedule of current rates; and, a schedule comparing total revenues 
(including imputed revenues) generated by the service to the allowable 
costs of the service, as

[[Page 237]]

determined under this part, with an explanation of how variances will be 
handled.
    (2) Revenues must consist of all revenues generated by the service, 
including unbilled and uncollected revenues. If some users were not 
billed for the services (or were not billed at the full rate for that 
class of users), a schedule showing the full imputed revenues associated 
with these users must be provided. Expenses must be broken out by object 
cost categories (e.g., salaries, supplies, etc.).
    c. Self-insurance funds. For each self-insurance fund, the plan must 
include: the fund balance sheet; a statement of revenue and expenses 
including a summary of billings and claims paid by agency; a listing of 
all non-operating transfers into and out of the fund; the type(s) of 
risk(s) covered by the fund (e.g., automobile liability, workers' 
compensation, etc.); an explanation of how the level of fund 
contributions are determined, including a copy of the current actuarial 
report (with the actuarial assumptions used) if the contributions are 
determined on an actuarial basis; and, a description of the procedures 
used to charge or allocate fund contributions to benefitted activities. 
Reserve levels in excess of claims (1) submitted and adjudicated but not 
paid, (2) submitted but not adjudicated, and (3) incurred but not 
submitted must be identified and explained.
    d. Fringe benefits. For fringe benefit costs, the plan must include: 
a listing of fringe benefits provided to covered employees, and the 
overall annual cost of each type of benefit; current fringe benefit 
policies; and procedures used to charge or allocate the costs of the 
benefits to benefitted activities. In addition, for pension and post-
retirement health insurance plans, the following information must be 
provided: the governmental unit's funding policies, e.g., legislative 
bills, trust agreements, or state-mandated contribution rules, if 
different from actuarially determined rates; the pension plan's costs 
accrued for the year; the amount funded, and date(s) of funding; a copy 
of the current actuarial report (including the actuarial assumptions); 
the plan trustee's report; and, a schedule from the activity showing the 
value of the interest cost associated with late funding.

                        4. Required Certification

    Each central service cost allocation plan will be accompanied by a 
certification in the following form:

                   CERTIFICATE OF COST ALLOCATION PLAN

    This is to certify that I have reviewed the cost allocation plan 
submitted herewith and to the best of my knowledge and belief:
    (1) All costs included in this proposal [identify date] to establish 
cost allocations or billings for [identify period covered by plan] are 
allowable in accordance with the requirements of this Part and the 
Federal award(s) to which they apply. Unallowable costs have been 
adjusted for in allocating costs as indicated in the cost allocation 
plan.
    (2) All costs included in this proposal are properly allocable to 
Federal awards on the basis of a beneficial or causal relationship 
between the expenses incurred and the Federal awards to which they are 
allocated in accordance with applicable requirements. Further, the same 
costs that have been treated as indirect costs have not been claimed as 
direct costs. Similar types of costs have been accounted for 
consistently.

I declare that the foregoing is true and correct.

 Governmental Unit:_____________________________________________________
 Signature:_____________________________________________________________
 Name of Official:______________________________________________________
 Title:_________________________________________________________________
 Date of Execution:_____________________________________________________

          F. Negotiation and Approval of Central Service Plans

  1. Federal Cognizant Agency for Indirect Costs Assignments for Cost 
                               Negotiation

    In general, unless different arrangements are agreed to by the 
concerned Federal agencies, for central service cost allocation plans, 
the cognizant agency responsible for review and approval is the Federal 
agency with the largest dollar value of total Federal awards with a 
governmental unit. For indirect cost rates and departmental indirect 
cost allocation plans, the cognizant agency is the Federal agency with 
the largest dollar value of direct Federal awards with a governmental 
unit or component, as appropriate. Once designated as the cognizant 
agency for indirect costs, the Federal agency must remain so for a 
period of five years. In addition, the following Federal agencies 
continue to be responsible for the indicated governmental entities:
    Department of Health and Human Services--Public assistance and 
state-wide cost allocation plans for all states (including the District 
of Columbia and Puerto Rico), state and local hospitals, libraries and 
health districts.
    Department of the Interior--Indian tribal governments, territorial 
governments, and state and local park and recreational districts.
    Department of Labor--State and local labor departments.
    Department of Education--School districts and state and local 
education agencies.
    Department of Agriculture--State and local agriculture departments.
    Department of Transportation--State and local airport and port 
authorities and transit districts.

[[Page 238]]

    Department of Commerce--State and local economic development 
districts.
    Department of Housing and Urban Development--State and local housing 
and development districts.
    Environmental Protection Agency--State and local water and sewer 
districts.

                                2. Review

    All proposed central service cost allocation plans that are required 
to be submitted will be reviewed, negotiated, and approved by the 
cognizant agency for indirect costs on a timely basis. The cognizant 
agency for indirect costs will review the proposal within six months of 
receipt of the proposal and either negotiate/approve the proposal or 
advise the governmental unit of the additional documentation needed to 
support/evaluate the proposed plan or the changes required to make the 
proposal acceptable. Once an agreement with the governmental unit has 
been reached, the agreement will be accepted and used by all Federal 
agencies, unless prohibited or limited by statute. Where a Federal 
awarding agency has reason to believe that special operating factors 
affecting its Federal awards necessitate special consideration, the 
funding agency will, prior to the time the plans are negotiated, notify 
the cognizant agency for indirect costs.

                              3. Agreement

    The results of each negotiation must be formalized in a written 
agreement between the cognizant agency for indirect costs and the 
governmental unit. This agreement will be subject to re-opening if the 
agreement is subsequently found to violate a statute or the information 
upon which the plan was negotiated is later found to be materially 
incomplete or inaccurate. The results of the negotiation must be made 
available to all Federal agencies for their use.

                             4. Adjustments

    Negotiated cost allocation plans based on a proposal later found to 
have included costs that: (a) are unallowable (i) as specified by law or 
regulation, (ii) as identified in subpart F, General Provisions for 
selected Items of Cost of this Part, or (iii) by the terms and 
conditions of Federal awards, or (b) are unallowable because they are 
clearly not allocable to Federal awards, must be adjusted, or a refund 
must be made at the option of the cognizant agency for indirect costs, 
including earned or imputed interest from the date of transfer and debt 
interest, if applicable, chargeable in accordance with applicable 
Federal cognizant agency for indirect costs regulations. Adjustments or 
cash refunds may include, at the option of the cognizant agency for 
indirect costs, earned or imputed interest from the date of expenditure 
and delinquent debt interest, if applicable, chargeable in accordance 
with applicable cognizant agency claims collection regulations. These 
adjustments or refunds are designed to correct the plans and do not 
constitute a reopening of the negotiation.

                            G. Other Policies

                  1. Billed Central Service Activities

    Each billed central service activity must separately account for all 
revenues (including imputed revenues) generated by the service, expenses 
incurred to furnish the service, and profit/loss.

                       2. Working Capital Reserves

    Internal service funds are dependent upon a reasonable level of 
working capital reserve to operate from one billing cycle to the next. 
Charges by an internal service activity to provide for the establishment 
and maintenance of a reasonable level of working capital reserve, in 
addition to the full recovery of costs, are allowable. A working capital 
reserve as part of retained earnings of up to 60 calendar days cash 
expenses for normal operating purposes is considered reasonable. A 
working capital reserve exceeding 60 calendar days may be approved by 
the cognizant agency for indirect costs in exceptional cases.

     3. Carry-Forward Adjustments of Allocated Central Service Costs

    Allocated central service costs are usually negotiated and approved 
for a future fiscal year on a ``fixed with carry-forward'' basis. Under 
this procedure, the fixed amounts for the future year covered by 
agreement are not subject to adjustment for that year. However, when the 
actual costs of the year involved become known, the differences between 
the fixed amounts previously approved and the actual costs will be 
carried forward and used as an adjustment to the fixed amounts 
established for a later year. This ``carry-forward'' procedure applies 
to all central services whose costs were fixed in the approved plan. 
However, a carry-forward adjustment is not permitted, for a central 
service activity that was not included in the approved plan, or for 
unallowable costs that must be reimbursed immediately.

                4. Adjustments of Billed Central Services

    Billing rates used to charge Federal awards must be based on the 
estimated costs of providing the services, including an estimate of the 
allocable central service costs. A comparison of the revenue generated 
by each billed service (including total revenues whether or not billed 
or collected) to the actual allowable costs of the service will be made 
at least annually, and an adjustment will be made for the difference 
between the

[[Page 239]]

revenue and the allowable costs. These adjustments will be made through 
one of the following adjustment methods: (a) a cash refund including 
earned or imputed interest from the date of transfer and debt interest, 
if applicable, chargeable in accordance with applicable Federal 
cognizant agency for indirect costs regulations to the Federal 
Government for the Federal share of the adjustment, (b) credits to the 
amounts charged to the individual programs, (c) adjustments to future 
billing rates, or (d) adjustments to allocated central service costs. 
Adjustments to allocated central services will not be permitted where 
the total amount of the adjustment for a particular service (Federal 
share and non-Federal) share exceeds $500,000. Adjustment methods may 
include, at the option of the cognizant agency, earned or imputed 
interest from the date of expenditure and delinquent debt interest, if 
applicable, chargeable in accordance with applicable cognizant agency 
claims collection regulations.

                          5. Records Retention

    All central service cost allocation plans and related documentation 
used as a basis for claiming costs under Federal awards must be retained 
for audit in accordance with the records retention requirements 
contained in subpart D of this part.

                               6. Appeals

    If a dispute arises in the negotiation of a plan between the 
cognizant agency for indirect costs and the governmental unit, the 
dispute must be resolved in accordance with the appeals procedures of 
the cognizant agency for indirect costs.

                            7. OMB Assistance

    To the extent that problems are encountered among the Federal 
agencies or governmental units in connection with the negotiation and 
approval process, OMB will lend assistance, as required, to resolve such 
problems in a timely manner.

[78 FR 78608, Dec. 26, 2013, as amended at 80 FR 54410, Sept. 10, 2015; 
85 FR 49581, Aug. 13, 2020]



  Sec. Appendix VI to Part 200--Public Assistance Cost Allocation Plans

                               A. General

    Federally-financed programs administered by state public assistance 
agencies are funded predominately by the Department of Health and Human 
Services (HHS). In support of its stewardship requirements, HHS has 
published requirements for the development, documentation, submission, 
negotiation, and approval of public assistance cost allocation plans in 
Subpart E of 45 CFR Part 95. All administrative costs (direct and 
indirect) are normally charged to Federal awards by implementing the 
public assistance cost allocation plan. This Appendix extends these 
requirements to all Federal awarding agencies whose programs are 
administered by a state public assistance agency. Major federally-
financed programs typically administered by state public assistance 
agencies include: Temporary Aid to Needy Families (TANF), Medicaid, Food 
Stamps, Child Support Enforcement, Adoption Assistance and Foster Care, 
and Social Services Block Grant.

                             B. Definitions

    1. State public assistance agency means a state agency administering 
or supervising the administration of one or more public assistance 
programs operated by the state as identified in Subpart E of 45 CFR Part 
95. For the purpose of this Appendix, these programs include all 
programs administered by the state public assistance agency.
    2. State public assistance agency costs means all costs incurred by, 
or allocable to, the state public assistance agency, except expenditures 
for financial assistance, medical contractor payments, food stamps, and 
payments for services and goods provided directly to program recipients.

                                C. Policy

    State public assistance agencies will develop, document and 
implement, and the Federal Government will review, negotiate, and 
approve, public assistance cost allocation plans in accordance with 
Subpart E of 45 CFR Part 95. The plan will include all programs 
administered by the state public assistance agency. Where a letter of 
approval or disapproval is transmitted to a state public assistance 
agency in accordance with Subpart E, the letter will apply to all 
Federal agencies and programs. The remaining sections of this Appendix 
(except for the requirement for certification) summarize the provisions 
of Subpart E of 45 CFR Part 95.

  D. Submission, Documentation, and Approval of Public Assistance Cost 
                            Allocation Plans

    1. State public assistance agencies are required to promptly submit 
amendments to the cost allocation plan to HHS for review and approval.
    2. Under the coordination process outlined in section E, affected 
Federal agencies will review all new plans and plan amendments and 
provide comments, as appropriate, to HHS. The effective date of the plan 
or plan amendment will be the first day of the calendar quarter 
following the event that required the amendment, unless another date is 
specifically approved by HHS. HHS, as the cognizant agency for indirect 
costs acting on behalf of all affected Federal agencies, will,

[[Page 240]]

as necessary, conduct negotiations with the state public assistance 
agency and will inform the state agency of the action taken on the plan 
or plan amendment.

              E. Review of Implementation of Approved Plans

    1. Since public assistance cost allocation plans are of a narrative 
nature, the review during the plan approval process consists of 
evaluating the appropriateness of the proposed groupings of costs (cost 
centers) and the related allocation bases. As such, the Federal 
Government needs some assurance that the cost allocation plan has been 
implemented as approved. This is accomplished by reviews by the Federal 
awarding agencies, single audits, or audits conducted by the cognizant 
agency for indirect costs.
    2. Where inappropriate charges affecting more than one Federal 
awarding agency are identified, the cognizant HHS cost negotiation 
office will be advised and will take the lead in resolving the issue(s) 
as provided for in Subpart E of 45 CFR Part 95.
    3. If a dispute arises in the negotiation of a plan or from a 
disallowance involving two or more Federal awarding agencies, the 
dispute must be resolved in accordance with the appeals procedures set 
out in 45 CFR Part 16. Disputes involving only one Federal awarding 
agency will be resolved in accordance with the Federal awarding agency's 
appeal process.
    4. To the extent that problems are encountered among the Federal 
awarding agencies or governmental units in connection with the 
negotiation and approval process, the Office of Management and Budget 
will lend assistance, as required, to resolve such problems in a timely 
manner.

                          F. Unallowable Costs

    Claims developed under approved cost allocation plans will be based 
on allowable costs as identified in this Part. Where unallowable costs 
have been claimed and reimbursed, they will be refunded to the program 
that reimbursed the unallowable cost using one of the following methods: 
(a) a cash refund, (b) offset to a subsequent claim, or (c) credits to 
the amounts charged to individual Federal awards. Cash refunds, offsets, 
and credits may include at the option of the cognizant agency for 
indirect cost, earned or imputed interest from the date of expenditure 
and delinquent debt interest, if applicable, chargeable in accordance 
with applicable cognizant agency for indirect cost claims collection 
regulations.

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49581, Aug. 13, 2020]



 Sec. Appendix VII to Part 200--States and Local Government and Indian 
                      Tribe Indirect Cost Proposals

                               A. General

    1. Indirect costs are those that have been incurred for common or 
joint purposes. These costs benefit more than one cost objective and 
cannot be readily identified with a particular final cost objective 
without effort disproportionate to the results achieved. After direct 
costs have been determined and assigned directly to Federal awards and 
other activities as appropriate, indirect costs are those remaining to 
be allocated to benefitted cost objectives. A cost may not be allocated 
to a Federal award as an indirect cost if any other cost incurred for 
the same purpose, in like circumstances, has been assigned to a Federal 
award as a direct cost.
    2. Indirect costs include (a) the indirect costs originating in each 
department or agency of the governmental unit carrying out Federal 
awards and (b) the costs of central governmental services distributed 
through the central service cost allocation plan (as described in 
Appendix V to this part) and not otherwise treated as direct costs.
    3. Indirect costs are normally charged to Federal awards by the use 
of an indirect cost rate. A separate indirect cost rate(s) is usually 
necessary for each department or agency of the governmental unit 
claiming indirect costs under Federal awards. Guidelines and 
illustrations of indirect cost proposals are provided in a brochure 
published by the Department of Health and Human Services entitled ``A 
Guide for States and Local Government Agencies: Cost Principles and 
Procedures for Establishing Cost Allocation Plans and Indirect Cost 
Rates for Grants and Contracts with the Federal Government.'' A copy of 
this brochure may be obtained from HHS Cost Allocation Services or at 
their website.
    4. Because of the diverse characteristics and accounting practices 
of governmental units, the types of costs which may be classified as 
indirect costs cannot be specified in all situations. However, typical 
examples of indirect costs may include certain state/local-wide central 
service costs, general administration of the non-Federal entity 
accounting and personnel services performed within the non-Federal 
entity, depreciation on buildings and equipment, the costs of operating 
and maintaining facilities.
    5. This Appendix does not apply to state public assistance agencies. 
These agencies should refer instead to Appendix VI to this part.

                             B. Definitions

    1. Base means the accumulated direct costs (normally either total 
direct salaries and wages or total direct costs exclusive of any 
extraordinary or distorting expenditures)

[[Page 241]]

used to distribute indirect costs to individual Federal awards. The 
direct cost base selected should result in each Federal award bearing a 
fair share of the indirect costs in reasonable relation to the benefits 
received from the costs.
    2. Base period for the allocation of indirect costs is the period in 
which such costs are incurred and accumulated for allocation to 
activities performed in that period. The base period normally should 
coincide with the governmental unit's fiscal year, but in any event, 
must be so selected as to avoid inequities in the allocation of costs.
    3. Cognizant agency for indirect costs means the Federal agency 
responsible for reviewing and approving the governmental unit's indirect 
cost rate(s) on the behalf of the Federal Government. The cognizant 
agency for indirect costs assignment is described in Appendix V, section 
F.
    4. Final rate means an indirect cost rate applicable to a specified 
past period which is based on the actual allowable costs of the period. 
A final audited rate is not subject to adjustment.
    5. Fixed rate means an indirect cost rate which has the same 
characteristics as a predetermined rate, except that the difference 
between the estimated costs and the actual, allowable costs of the 
period covered by the rate is carried forward as an adjustment to the 
rate computation of a subsequent period.
    6. Indirect cost pool is the accumulated costs that jointly benefit 
two or more programs or other cost objectives.
    7. Indirect cost rate is a device for determining in a reasonable 
manner the proportion of indirect costs each program should bear. It is 
the ratio (expressed as a percentage) of the indirect costs to a direct 
cost base.
    8. Indirect cost rate proposal means the documentation prepared by a 
governmental unit or subdivision thereof to substantiate its request for 
the establishment of an indirect cost rate.
    9. Predetermined rate means an indirect cost rate, applicable to a 
specified current or future period, usually the governmental unit's 
fiscal year. This rate is based on an estimate of the costs to be 
incurred during the period. Except under very unusual circumstances, a 
predetermined rate is not subject to adjustment. (Because of legal 
constraints, predetermined rates are not permitted for Federal 
contracts; they may, however, be used for grants or cooperative 
agreements.) Predetermined rates may not be used by governmental units 
that have not submitted and negotiated the rate with the cognizant 
agency for indirect costs. In view of the potential advantages offered 
by this procedure, negotiation of predetermined rates for indirect costs 
for a period of two to four years should be the norm in those situations 
where the cost experience and other pertinent facts available are deemed 
sufficient to enable the parties involved to reach an informed judgment 
as to the probable level of indirect costs during the ensuing accounting 
periods.
    10. Provisional rate means a temporary indirect cost rate applicable 
to a specified period which is used for funding, interim reimbursement, 
and reporting indirect costs on Federal awards pending the establishment 
of a ``final'' rate for that period.

C. Allocation of Indirect Costs and Determination of Indirect Cost Rates

                               1. General

    a. Where a governmental unit's department or agency has only one 
major function, or where all its major functions benefit from the 
indirect costs to approximately the same degree, the allocation of 
indirect costs and the computation of an indirect cost rate may be 
accomplished through simplified allocation procedures as described in 
subsection 2.
    b. Where a governmental unit's department or agency has several 
major functions which benefit from its indirect costs in varying 
degrees, the allocation of indirect costs may require the accumulation 
of such costs into separate cost groupings which then are allocated 
individually to benefitted functions by means of a base which best 
measures the relative degree of benefit. The indirect costs allocated to 
each function are then distributed to individual Federal awards and 
other activities included in that function by means of an indirect cost 
rate(s).
    c. Specific methods for allocating indirect costs and computing 
indirect cost rates along with the conditions under which each method 
should be used are described in subsections 2, 3 and 4.

                          2. Simplified Method

    a. Where a non-Federal entity's major functions benefit from its 
indirect costs to approximately the same degree, the allocation of 
indirect costs may be accomplished by (1) classifying the non-Federal 
entity's total costs for the base period as either direct or indirect, 
and (2) dividing the total allowable indirect costs (net of applicable 
credits) by an equitable distribution base. The result of this process 
is an indirect cost rate which is used to distribute indirect costs to 
individual Federal awards. The rate should be expressed as the 
percentage which the total amount of allowable indirect costs bears to 
the base selected. This method should also be used where a governmental 
unit's department or agency has only one major function encompassing a 
number of individual projects or activities, and may be used where the 
level of Federal awards to that department or agency is relatively 
small.
    b. Both the direct costs and the indirect costs must exclude capital 
expenditures and

[[Page 242]]

unallowable costs. However, unallowable costs must be included in the 
direct costs if they represent activities to which indirect costs are 
properly allocable.
    c. The distribution base may be (1) total direct costs (excluding 
capital expenditures and other distorting items, such as pass-through 
funds, subcontracts in excess of $25,000, participant support costs, 
etc.), (2) direct salaries and wages, or (3) another base which results 
in an equitable distribution.

                   3. Multiple Allocation Base Method

    a. Where a non-Federal entity's indirect costs benefit its major 
functions in varying degrees, such costs must be accumulated into 
separate cost groupings. Each grouping must then be allocated 
individually to benefitted functions by means of a base which best 
measures the relative benefits.
    b. The cost groupings should be established so as to permit the 
allocation of each grouping on the basis of benefits provided to the 
major functions. Each grouping should constitute a pool of expenses that 
are of like character in terms of the functions they benefit and in 
terms of the allocation base which best measures the relative benefits 
provided to each function. The number of separate groupings should be 
held within practical limits, taking into consideration the materiality 
of the amounts involved and the degree of precision needed.
    c. Actual conditions must be taken into account in selecting the 
base to be used in allocating the expenses in each grouping to 
benefitted functions. When an allocation can be made by assignment of a 
cost grouping directly to the function benefitted, the allocation must 
be made in that manner. When the expenses in a grouping are more general 
in nature, the allocation should be made through the use of a selected 
base which produces results that are equitable to both the Federal 
Government and the governmental unit. In general, any cost element or 
related factor associated with the governmental unit's activities is 
potentially adaptable for use as an allocation base provided that: (1) 
it can readily be expressed in terms of dollars or other quantitative 
measures (total direct costs, direct salaries and wages, staff hours 
applied, square feet used, hours of usage, number of documents 
processed, population served, and the like), and (2) it is common to the 
benefitted functions during the base period.
    d. Except where a special indirect cost rate(s) is required in 
accordance with paragraph (C)(4) of this Appendix, the separate 
groupings of indirect costs allocated to each major function must be 
aggregated and treated as a common pool for that function. The costs in 
the common pool must then be distributed to individual Federal awards 
included in that function by use of a single indirect cost rate.
    e. The distribution base used in computing the indirect cost rate 
for each function may be (1) total direct costs (excluding capital 
expenditures and other distorting items such as pass-through funds, 
subawards in excess of $25,000, participant support costs, etc.), (2) 
direct salaries and wages, or (3) another base which results in an 
equitable distribution. An indirect cost rate should be developed for 
each separate indirect cost pool developed. The rate in each case should 
be stated as the percentage relationship between the particular indirect 
cost pool and the distribution base identified with that pool.

                     4. Special Indirect Cost Rates

    a. In some instances, a single indirect cost rate for all activities 
of a non-Federal entity or for each major function of the agency may not 
be appropriate. It may not take into account those different factors 
which may substantially affect the indirect costs applicable to a 
particular program or group of programs. The factors may include the 
physical location of the work, the level of administrative support 
required, the nature of the facilities or other resources employed, the 
organizational arrangements used, or any combination thereof. When a 
particular Federal award is carried out in an environment which appears 
to generate a significantly different level of indirect costs, 
provisions should be made for a separate indirect cost pool applicable 
to that Federal award. The separate indirect cost pool should be 
developed during the course of the regular allocation process, and the 
separate indirect cost rate resulting therefrom should be used, provided 
that: (1) The rate differs significantly from the rate which would have 
been developed under paragraphs (C)(2) and (C)(3) of this Appendix, and 
(2) the Federal award to which the rate would apply is material in 
amount.
    b. Where Federal statutes restrict the reimbursement of certain 
indirect costs, it may be necessary to develop a special rate for the 
affected Federal award. Where a ``restricted rate'' is required, the 
same procedure for developing a non-restricted rate will be used except 
for the additional step of the elimination from the indirect cost pool 
those costs for which the law prohibits reimbursement.

              D. Submission and Documentation of Proposals

              1. Submission of Indirect Cost Rate Proposals

    a. All departments or agencies of the governmental unit desiring to 
claim indirect costs under Federal awards must prepare an indirect cost 
rate proposal and related documentation to support those costs. The 
proposal and related documentation must be retained for audit in 
accordance with the

[[Page 243]]

records retention requirements contained in Sec.  200.334.
    b. A governmental department or agency unit that receives more than 
$35 million in direct Federal funding must submit its indirect cost rate 
proposal to its cognizant agency for indirect costs. Other governmental 
department or agency must develop an indirect cost proposal in 
accordance with the requirements of this Part and maintain the proposal 
and related supporting documentation for audit. These governmental 
departments or agencies are not required to submit their proposals 
unless they are specifically requested to do so by the cognizant agency 
for indirect costs. Where a non-Federal entity only receives funds as a 
subrecipient, the pass-through entity will be responsible for 
negotiating and/or monitoring the subrecipient's indirect costs.
    c. Each Indian tribal government desiring reimbursement of indirect 
costs must submit its indirect cost proposal to the Department of the 
Interior (its cognizant agency for indirect costs).
    d. Indirect cost proposals must be developed (and, when required, 
submitted) within six months after the close of the governmental unit's 
fiscal year, unless an exception is approved by the cognizant agency for 
indirect costs. If the proposed central service cost allocation plan for 
the same period has not been approved by that time, the indirect cost 
proposal may be prepared including an amount for central services that 
is based on the latest federally-approved central service cost 
allocation plan. The difference between these central service amounts 
and the amounts ultimately approved will be compensated for by an 
adjustment in a subsequent period.

                      2. Documentation of Proposals

    The following must be included with each indirect cost proposal:
    a. The rates proposed, including subsidiary work sheets and other 
relevant data, cross referenced and reconciled to the financial data 
noted in subsection b. Allocated central service costs will be supported 
by the summary table included in the approved central service cost 
allocation plan. This summary table is not required to be submitted with 
the indirect cost proposal if the central service cost allocation plan 
for the same fiscal year has been approved by the cognizant agency for 
indirect costs and is available to the funding agency.
    b. A copy of the financial data (financial statements, comprehensive 
annual financial report, executive budgets, accounting reports, etc.) 
upon which the rate is based. Adjustments resulting from the use of 
unaudited data will be recognized, where appropriate, by the Federal 
cognizant agency for indirect costs in a subsequent proposal.
    c. The approximate amount of direct base costs incurred under 
Federal awards. These costs should be broken out between salaries and 
wages and other direct costs.
    d. A chart showing the organizational structure of the agency during 
the period for which the proposal applies, along with a functional 
statement(s) noting the duties and/or responsibilities of all units that 
comprise the agency. (Once this is submitted, only revisions need be 
submitted with subsequent proposals.)

                       3. Required certification.

    Each indirect cost rate proposal must be accompanied by a 
certification in the following form:

                      Certificate of Indirect Costs

    This is to certify that I have reviewed the indirect cost rate 
proposal submitted herewith and to the best of my knowledge and belief:
    (1) All costs included in this proposal [identify date] to establish 
billing or final indirect costs rates for [identify period covered by 
rate] are allowable in accordance with the requirements of the Federal 
award(s) to which they apply and the provisions of this Part. 
Unallowable costs have been adjusted for in allocating costs as 
indicated in the indirect cost proposal
    (2) All costs included in this proposal are properly allocable to 
Federal awards on the basis of a beneficial or causal relationship 
between the expenses incurred and the agreements to which they are 
allocated in accordance with applicable requirements. Further, the same 
costs that have been treated as indirect costs have not been claimed as 
direct costs. Similar types of costs have been accounted for 
consistently and the Federal Government will be notified of any 
accounting changes that would affect the predetermined rate.

I declare that the foregoing is true and correct.

 Governmental Unit:_____________________________________________________
 Signature:_____________________________________________________________
 Name of Official:______________________________________________________
 Title:_________________________________________________________________
 Date of Execution:_____________________________________________________

                  E. Negotiation and Approval of Rates

    1. Indirect cost rates will be reviewed, negotiated, and approved by 
the cognizant agency on a timely basis. Once a rate has been agreed 
upon, it will be accepted and used by all Federal agencies unless 
prohibited or limited by statute. Where a Federal awarding agency has 
reason to believe that special operating factors affecting its Federal 
awards necessitate special indirect cost rates, the funding agency will, 
prior to the time the rates are negotiated, notify the cognizant agency 
for indirect costs.

[[Page 244]]

    2. The use of predetermined rates, if allowed, is encouraged where 
the cognizant agency for indirect costs has reasonable assurance based 
on past experience and reliable projection of the non-Federal entity's 
costs, that the rate is not likely to exceed a rate based on actual 
costs. Long-term agreements utilizing predetermined rates extending over 
two or more years are encouraged, where appropriate.
    3. The results of each negotiation must be formalized in a written 
agreement between the cognizant agency for indirect costs and the 
governmental unit. This agreement will be subject to re-opening if the 
agreement is subsequently found to violate a statute, or the information 
upon which the plan was negotiated is later found to be materially 
incomplete or inaccurate. The agreed upon rates must be made available 
to all Federal agencies for their use.
    4. Refunds must be made if proposals are later found to have 
included costs that (a) are unallowable (i) as specified by law or 
regulation, (ii) as identified in Sec.  200.420, or (iii) by the terms 
and conditions of Federal awards, or (b) are unallowable because they 
are clearly not allocable to Federal awards. These adjustments or 
refunds will be made regardless of the type of rate negotiated 
(predetermined, final, fixed, or provisional).

                            F. Other Policies

                         1. Fringe Benefit Rates

    If overall fringe benefit rates are not approved for the 
governmental unit as part of the central service cost allocation plan, 
these rates will be reviewed, negotiated and approved for individual 
recipient agencies during the indirect cost negotiation process. In 
these cases, a proposed fringe benefit rate computation should accompany 
the indirect cost proposal. If fringe benefit rates are not used at the 
recipient agency level (i.e., the agency specifically identifies fringe 
benefit costs to individual employees), the governmental unit should so 
advise the cognizant agency for indirect costs.

           2. Billed Services Provided by the Recipient Agency

    In some cases, governmental departments or agencies (components of 
the governmental unit) provide and bill for services similar to those 
covered by central service cost allocation plans (e.g., computer 
centers). Where this occurs, the governmental departments or agencies 
(components of the governmental unit)should be guided by the 
requirements in Appendix V relating to the development of billing rates 
and documentation requirements, and should advise the cognizant agency 
for indirect costs of any billed services. Reviews of these types of 
services (including reviews of costing/billing methodology, profits or 
losses, etc.) will be made on a case-by-case basis as warranted by the 
circumstances involved.

              3. Indirect Cost Allocations Not Using Rates

    In certain situations, governmental departments or agencies 
(components of the governmental unit), because of the nature of their 
Federal awards, may be required to develop a cost allocation plan that 
distributes indirect (and, in some cases, direct) costs to the specific 
funding sources. In these cases, a narrative cost allocation methodology 
should be developed, documented, maintained for audit, or submitted, as 
appropriate, to the cognizant agency for indirect costs for review, 
negotiation, and approval.

                               4. Appeals

    If a dispute arises in a negotiation of an indirect cost rate (or 
other rate) between the cognizant agency for indirect costs and the 
governmental unit, the dispute must be resolved in accordance with the 
appeals procedures of the cognizant agency for indirect costs.

        5. Collection of Unallowable Costs and Erroneous Payments

    Costs specifically identified as unallowable and charged to Federal 
awards either directly or indirectly will be refunded (including 
interest chargeable in accordance with applicable Federal cognizant 
agency for indirect costs regulations).

                            6. OMB Assistance

    To the extent that problems are encountered among the Federal 
agencies or governmental units in connection with the negotiation and 
approval process, OMB will lend assistance, as required, to resolve such 
problems in a timely manner.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75889, Dec. 19, 2014; 
85 FR 49581, Aug. 13, 2020]



 Sec. Appendix VIII to Part 200-- Nonprofit Organizations Exempted From 
                          Subpart E of Part 200

1. Advance Technology Institute (ATI), Charleston, South Carolina
2. Aerospace Corporation, El Segundo, California
3. American Institutes of Research (AIR), Washington, DC
4. Argonne National Laboratory, Chicago, Illinois
5. Atomic Casualty Commission, Washington, DC
6. Battelle Memorial Institute, Headquartered in Columbus, Ohio
7. Brookhaven National Laboratory, Upton, New York

[[Page 245]]

8. Charles Stark Draper Laboratory, Incorporated, Cambridge, 
Massachusetts
9. CNA Corporation (CNAC), Alexandria, Virginia
10. Environmental Institute of Michigan, Ann Arbor, Michigan
11. Georgia Institute of Technology/Georgia Tech Applied Research 
Corporation/Georgia Tech Research Institute, Atlanta, Georgia
12. Hanford Environmental Health Foundation, Richland, Washington
13. IIT Research Institute, Chicago, Illinois
14. Institute of Gas Technology, Chicago, Illinois
15. Institute for Defense Analysis, Alexandria, Virginia
16. LMI, McLean, Virginia
17. Mitre Corporation, Bedford, Massachusetts
18. Noblis, Inc., Falls Church, Virginia
19. National Radiological Astronomy Observatory, Green Bank, West 
Virginia
20. National Renewable Energy Laboratory, Golden, Colorado
21. Oak Ridge Associated Universities, Oak Ridge, Tennessee
22. Rand Corporation, Santa Monica, California
23. Research Triangle Institute, Research Triangle Park, North Carolina
24. Riverside Research Institute, New York, New York
25. South Carolina Research Authority (SCRA), Charleston, South Carolina
26. Southern Research Institute, Birmingham, Alabama
27. Southwest Research Institute, San Antonio, Texas
28. SRI International, Menlo Park, California
29. Syracuse Research Corporation, Syracuse, New York
30. Universities Research Association, Incorporated (National 
Acceleration Lab), Argonne, Illinois
31. Urban Institute, Washington DC
32. Nonprofit insurance companies, such as Blue Cross and Blue Shield 
Organizations
33. Other nonprofit organizations as negotiated with Federal awarding 
agencies

[78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49582, Aug. 13, 2020]



         Sec. Appendix IX to Part 200--Hospital Cost Principles

    Based on initial feedback, OMB proposes to establish a review 
process to consider existing hospital cost determine how best to update 
and align them with this Part. Until such time as revised guidance is 
proposed and implemented for hospitals, the existing principles located 
at 45 CFR Part 75 Appendix E, entitled ``Principles for Determining Cost 
Applicable to Research and Development Under Grants and Contracts with 
Hospitals,'' remain in effect.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75889, Dec. 19, 2014]



     Sec. Appendix X to Part 200--Data Collection Form (Form SF-SAC)

    The Data Collection Form SF-SAC is available on the FAC Web site.



           Sec. Appendix XI to Part 200--Compliance Supplement

    The compliance supplement is available on the OMB website.

[85 FR 49582, Aug. 13, 2020]



 Sec. Appendix XII to Part 200--Award Term and Condition for Recipient 
                    Integrity and Performance Matters

 A. Reporting of Matters Related to Recipient Integrity and Performance

                    1. General Reporting Requirement

    If the total value of your currently active grants, cooperative 
agreements, and procurement contracts from all Federal awarding agencies 
exceeds $10,000,000 for any period of time during the period of 
performance of this Federal award, then you as the recipient during that 
period of time must maintain the currency of information reported to the 
System for Award Management (SAM) that is made available in the 
designated integrity and performance system (currently the Federal 
Awardee Performance and Integrity Information System (FAPIIS)) about 
civil, criminal, or administrative proceedings described in paragraph 2 
of this award term and condition. This is a statutory requirement under 
section 872 of Public Law 110-417, as amended (41 U.S.C. 2313). As 
required by section 3010 of Public Law 111-212, all information posted 
in the designated integrity and performance system on or after April 15, 
2011, except past performance reviews required for Federal procurement 
contracts, will be publicly available.

               2. Proceedings About Which You Must Report

    Submit the information required about each proceeding that:
    a. Is in connection with the award or performance of a grant, 
cooperative agreement, or procurement contract from the Federal 
Government;
    b. Reached its final disposition during the most recent five-year 
period; and
    c. Is one of the following:
    (1) A criminal proceeding that resulted in a conviction, as defined 
in paragraph 5 of this award term and condition;

[[Page 246]]

    (2) A civil proceeding that resulted in a finding of fault and 
liability and payment of a monetary fine, penalty, reimbursement, 
restitution, or damages of $5,000 or more;
    (3) An administrative proceeding, as defined in paragraph 5. of this 
award term and condition, that resulted in a finding of fault and 
liability and your payment of either a monetary fine or penalty of 
$5,000 or more or reimbursement, restitution, or damages in excess of 
$100,000; or
    (4) Any other criminal, civil, or administrative proceeding if:
    (i) It could have led to an outcome described in paragraph 2.c.(1), 
(2), or (3) of this award term and condition;
    (ii) It had a different disposition arrived at by consent or 
compromise with an acknowledgment of fault on your part; and
    (iii) The requirement in this award term and condition to disclose 
information about the proceeding does not conflict with applicable laws 
and regulations.

                         3. Reporting Procedures

    Enter in the SAM Entity Management area the information that SAM 
requires about each proceeding described in paragraph 2 of this award 
term and condition. You do not need to submit the information a second 
time under assistance awards that you received if you already provided 
the information through SAM because you were required to do so under 
Federal procurement contracts that you were awarded.

                         4. Reporting Frequency

    During any period of time when you are subject to the requirement in 
paragraph 1 of this award term and condition, you must report 
proceedings information through SAM for the most recent five year 
period, either to report new information about any proceeding(s) that 
you have not reported previously or affirm that there is no new 
information to report. Recipients that have Federal contract, grant, and 
cooperative agreement awards with a cumulative total value greater than 
$10,000,000 must disclose semiannually any information about the 
criminal, civil, and administrative proceedings.

                             5. Definitions

    For purposes of this award term and condition:
    a. Administrative proceeding means a non-judicial process that is 
adjudicatory in nature in order to make a determination of fault or 
liability (e.g., Securities and Exchange Commission Administrative 
proceedings, Civilian Board of Contract Appeals proceedings, and Armed 
Services Board of Contract Appeals proceedings). This includes 
proceedings at the Federal and State level but only in connection with 
performance of a Federal contract or grant. It does not include audits, 
site visits, corrective plans, or inspection of deliverables.
    b. Conviction, for purposes of this award term and condition, means 
a judgment or conviction of a criminal offense by any court of competent 
jurisdiction, whether entered upon a verdict or a plea, and includes a 
conviction entered upon a plea of nolo contendere.
    c. Total value of currently active grants, cooperative agreements, 
and procurement contracts includes--
    (1) Only the Federal share of the funding under any Federal award 
with a recipient cost share or match; and
    (2) The value of all expected funding increments under a Federal 
award and options, even if not yet exercised.
    B. [Reserved]

[80 FR 43310, July 22, 2015, as amended at 85 FR 49582, Aug. 13, 2020]

                        PARTS 201	299 [RESERVED]

[[Page 247]]

    Subtitle B--Federal Agency Regulations for Grants and Agreements

[[Page 249]]



          CHAPTER III--DEPARTMENT OF HEALTH AND HUMAN SERVICES




  --------------------------------------------------------------------
Part                                                                Page
300              Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         251
301-375

[Reserved]

376             Nonprocurement debarment and suspension.....         251
382             Requirements for drug-free workplace 
                    (financial assistance)..................         253
383-399

[Reserved]

[[Page 251]]



PART 300_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND 
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 5 U.S.C. 301, 2 CFR part 200.

    Source: 79 FR 75889, Dec. 19, 2014, unless otherwise noted.



Sec.  300.1  Adoption of 2 CFR Part 200.

    Under the authority listed above, the Department of Health and Human 
Services adopts the Office of Management and Budget (OMB) Guidance in 2 
CFR part 200, and has codified the text, with HHS-specific amendments in 
45 CFR part 75. Thus, this part gives regulatory effect to the OMB 
guidance and supplements the guidance as needed for the Department.

                        PARTS 301	375 [RESERVED]



PART 376_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
376.10 What does this part do?
376.20 Does this part apply to me?
376.30 What policies and procedures must I follow?

                            Subpart A_General

376.137 Who in the Department of Health and Human Services (HHS) may 
          grant an exception to let an excluded person participate in a 
          covered transaction?
376.147 Does an exclusion from participation in Federal health care 
          programs under Title XI of the Social Security Act affect a 
          person's eligibility to participate in nonprocurement and 
          procurement transactions?

                     Subpart B_Covered Transactions

376.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

376.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?
376.370 What are the obligations of Medicare carriers and 
          intermediaries?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

376.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subpart E--Excluded Parties List System [Reserved]

Subpart F--General Principles Relating to Suspension and Debarment Actions 
[Reserved]

Subpart G--Suspension [Reserved]

Subpart H--Debarment [Reserved]

                          Subpart I_Definitions

376.935 Disqualified (HHS supplement to government-wide definition at 2 
          CFR 180.935).
376.995 Principal (HHS supplement to government-wide definition at 2 CFR 
          180.995).

Subpart J [Reserved]

    Authority: 5 U.S.C. 301; 31 U.S.C. 6101 (note); E.O. 12689 (3 CFR, 
1989 Comp., p. 235); E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O. 11738 
(3 CFR, 1973 Comp., p. 799).

    Source: 72 FR 9234, Mar. 1, 2007, unless otherwise noted.



Sec.  376.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Department of Health and Human Services (HHS or Department) 
policies and procedures for nonprocurement debarment and suspension. HHS 
thereby gives regulatory effect to the OMB guidance as supplemented by 
this part. This part satisfies the requirements in 2 CFR 180.20, section 
3 of Executive Order 12549, ``Debarment and Suspension'', Executive 
Order 12689, ``Debarment and Suspension'' and 31 U.S.C. 6101 note 
(Section 2455, Pub. L. 103-355, 108 Stat. 3327).

[72 FR 9234, Mar. 1, 2007, as amended at 85 FR 72906, Nov. 16, 2020]



Sec.  376.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180

[[Page 252]]

(see table at 2 CFR 180.100(b)), apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' under 
subpart B of 2 CFR part 180, as supplemented by this part, and the 
definition of nonprocurement transaction'' at 2 CFR 180.970.
    (b) Respondent in HHS suspension or debarment action;
    (c) HHS debarment or suspension official;
    (d) HHS grants officer, agreements officer, or other HHS official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  376.30  What policies and procedures must I follow?

    The policies and procedures that you must follow are the policies 
and procedures specified in each applicable section of the OMB guidance 
in subparts A through I of 2 CFR part 180, including the corresponding 
section that HHS published in 2 CFR part 376 identified by the same 
section number. The contracts under a nonprocurement transaction, that 
are covered transactions, for example, are specified by section 220 of 
the OMB guidance (i.e., 2 CFR 180.220) as supplemented by section 220 in 
this part (i.e., 2 CFR 376.220). For any section of OMB guidance in 
subparts A through I of 2 CFR part 180 that has no corresponding section 
in this part, HHS policies and procedures are those in the OMB guidance 
at 2 CFR part 180.



                            Subpart A_General



Sec.  376.137  Who in the Department of Health and Human Services 
(HHS) may grant an exception to let an excluded person participate in 
a covered transaction?

    The HHS Debarring/Suspension Official has the authority to grant an 
exception to let an excluded person participate in a covered transaction 
as provided at 2 CFR 180.135.



Sec.  376.147  Does an exclusion from participation in Federal health
care programs under Title XI of the Social Security Act affect a
person's eligibility to participate in nonprocurement and procurement
transactions?

    Any individual or entity excluded from participation in Medicare, 
Medicaid, and other Federal health care programs under Title XI of the 
Social Security Act, 42 U.S.C. 1320a-7, 1320a-7a, 1320c-5, or 1395ccc, 
and implementing regulation at 42 CFR part 1001, will be subject to the 
prohibitions against participating in covered transactions, as set forth 
in this part and part 180, and is prohibited from participating in all 
Federal Government procurement programs and nonprocurement programs. For 
example, if an individual or entity is excluded by the HHS Office of the 
Inspector General from participation in Medicare, Medicaid, and/or other 
Federal health care programs, in accordance with 42 U.S.C. 1320a-7, then 
that individual or entity is prohibited from participating in all 
Federal Government procurement and nonprocurement programs (42 CFR part 
1001).



                     Subpart B_Covered Transactions



Sec.  376.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.220(b), this 
part also applies to all lower tiers of subcontracts under covered 
nonprocurement transactions, as permitted under the OMB guidance at 2 
CFR 180.220(c). (See optional lower tier coverage in the diagram in the 
appendix to 2 CFR part 180.)



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  376.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    To communicate the requirements to lower-tier participants, you must 
include a term or condition in the lower-

[[Page 253]]

tier transaction requiring the lower-tier participant's compliance with 
2 CFR part 180, as supplemented by this subpart.



Sec.  376.370  What are the obligations of Medicare carriers and
intermediaries?

    Because Medicare carriers, intermediaries and other Medicare 
contractors undertake responsibilities on behalf of the Medicare program 
(Title XVIII of the Social Security Act), these entities assume the same 
obligations and responsibilities as the HHS Medicare officials 
responsible for the Medicare Program with respect to actions under 2 CFR 
part 376. This would include the requirement for these entities to check 
the Excluded Parties List System (EPLS) and take necessary steps to 
effect this part.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  376.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435, you must include a term or condition in the transaction that 
requires the participant's compliance with subpart C of 2 CFR part 180, 
as supplemented by subpart C of this part, and require the participant 
to include a similar term or condition in lower-tier covered 
transactions.

Subpart E--Excluded Parties List System [Reserved]

Subpart F--General Principles Relating to Suspension and Debarment Actions 
[Reserved]

Subpart G--Suspension [Reserved]

Subpart H--Debarment [Reserved]



                          Subpart I_Definitions



Sec.  376.935  Disqualified. (HHS supplement to government-wide 
definition at 2 CFR 180.935).

    Disqualified means persons prohibited from participating in 
specified federal procurement and nonprocurement transactions pursuant 
to the statutes listed in 2 CFR 180.935, and pursuant to Title XI of the 
Social Security Act (42 U.S.C. 1320a-7, 1320a-7a, 1320c-5, and 1395ccc) 
as enforced by the HHS Office of the Inspector General.



Sec.  376.995  Principal (HHS supplement to government-wide 
definition at 2 CFR 180.995).

    Principal means individuals, in addition to those listed at 2 CFR 
180.995, who participate in HHS covered transactions including:
    (a) Providers of federally required audit services; and
    (b) Researchers.

Subpart J [Reserved]



PART 382_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
382.10 What does this part do?
382.20 Does this part apply to me?
382.30 What policies and procedures must I follow?

Subpart A [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

382.225 Whom in HHS does a recipient other than an individual notify 
          about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

382.300 Whom in HHS does a recipient who is an individual notify about a 
          criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

382.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

[[Page 254]]

           Subpart E_Violations of This Part and Consequences

382.500 Who in HHS determines that a recipient other than an individual 
          violated the requirements of this part?
382.505 Who in HHS determines that a recipient who is an individual 
          violated the requirements of this part?

Subpart F [Reserved]

    Authority: 41 U.S.C. 701-707.

    Source: 74 FR 58190, Nov. 12, 2009, unless otherwise noted.



Sec.  382.10  What does this part do?

    This part requires that the award and administration of HHS grants 
and cooperative agreements comply with Office of Management and Budget 
(OMB) guidance implementing the portion of the Drug-Free Workplace Act 
of 1988 (41 U.S.C. 701-707, as amended, hereafter referred to as ``the 
Act'') that applies to grants. It thereby--
    (a) Gives regulatory effect to the OMB guidance (Subparts A through 
F of 2 CFR part 182) for the HHS grants and cooperative agreements; and
    (b) Establishes HHS policies and procedures for compliance with the 
Act that are the same as those of other Federal agencies, in conformance 
with the requirement in 41 U.S.C. 705 for Governmentwide implementing 
regulations.



Sec.  382.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of an HHS grant or cooperative agreement; or
    (b) HHS awarding official.



Sec.  382.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table. For each 
of those sections, you must follow the policies and procedures in the 
OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   382.225.  Whom in HHS a recipient
                                                 other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   382.300.  Whom in HHS a recipient
                                                 who is an individual
                                                 must notify if he or
                                                 she is convicted of a
                                                 criminal drug offense
                                                 resulting from a
                                                 violation occurring
                                                 during the conduct of
                                                 any award activity.
(3) 2 CFR 182.500............  Sec.   382.500.  Who in HHS is authorized
                                                 to determine that a
                                                 recipient other than an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(4) 2 CFR 182.505............  Sec.   382.505.  Who in HHS is authorized
                                                 to determine that a
                                                 recipient who is an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, HHS policies 
and procedures are the same as those in the OMB guidance.

Subpart A [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  382.225  Whom in HHS does a recipient other than an individual
notify about a criminal drug conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal

[[Page 255]]

drug offense must notify each HHS office from which it currently has an 
award.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  382.300  Whom in HHS does a recipient who is an individual
notify about a criminal drug conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify each HHS office from which it currently has an 
award.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  382.400  What method do I use as an agency awarding official
to obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award:
    Drug-free workplace. You as the recipient must comply with drug-free 
workplace requirements in Subpart B (or Subpart C, if the recipient is 
an individual) of part 382, which adopts the Governmentwide 
implementation (2 CFR part 182) of sec. 5152-5158 of the Drug-Free 
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 
701-707).



           Subpart E_Violations of This Part and Consequences



Sec.  382.500  Who in HHS determines that a recipient other than
an individual violated the requirements of this part?

    The agency head is the official authorized to make the determination 
under 2 CFR 182.500.



Sec.  382.505  Who in HHS determines that a recipient who is an
individual violated the requirements of this part?

    The agency head is the official authorized to make the determination 
under 2 CFR 182.505.

Subpart F [Reserved]

                        PARTS 383	399 [RESERVED]

[[Page 257]]



                  CHAPTER IV--DEPARTMENT OF AGRICULTURE




  --------------------------------------------------------------------
Part                                                                Page
400             Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         259
401-414

[Reserved]

415             General program administrative regulations..         259
416             General program administrative regulations 
                    for grants and cooperative agreements to 
                    state and local governments.............         264
417             Nonprocurement debarment and suspension.....         265
418             New restrictions on lobbying................         276
421             Requirements for drug-free workplace 
                    (financial assistance)..................         288
422             Research institutions conducting USDA-funded 
                    extramural research; research 
                    misconducts.............................         289
423-499

[Reserved]

[[Page 259]]



PART 400_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



Sec.
400.1 What does this part do?
400.2 Conflict of interest.

    Authority: 31 U.S.C. 503.

    Source: 79 FR 75982, Dec. 19, 2014, unless otherwise noted.



Sec.  400.1  What does this part do?

    This part adopts the OMB guidance in subparts A through F of 2 CFR 
part 200, as supplemented by this part, as USDA policies and procedures 
for uniform administrative requirements, cost principles, and audit 
requirements for Federal awards. It thereby gives regulatory effect for 
the USDA to the OMB guidance, as supplemented by this part.



Sec.  400.2  Conflict of interest.

    (a) Each USDA awarding agency must establish conflict of interest 
policies for its Federal awards.
    (b) Non-Federal entities must disclose in writing any potential 
conflicts of interest to the USDA awarding agency or pass-through 
entity.
    (1) The non-Federal entity must maintain written standards of 
conduct covering conflicts of interest and governing the performance of 
its employees in the selection, award and administration of Federal 
awards. No employee, officer or agent may participate in the selection, 
award, or administration of a Federal award if he or she has a real or 
apparent conflict of interest. Such a conflict of interest 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 or a tangible personal benefit from a non-Federal entity 
considered for a Federal award. The non-Federal entity 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 
must provide for disciplinary actions to be applied for violations of 
such standards by officers, employees, or agents of the non-Federal 
entity.
    (2) If the non-Federal entity has a parent, affiliate, or subsidiary 
organization that is not a state, local government, or Indian tribe, the 
non-Federal entity must also maintain written standards of conduct 
covering organizational conflicts of interest. Organizational conflicts 
of interest means that because of the relationships with a parent 
company, affiliate, or subsidiary organization, is unable or appears to 
be unable to be impartial in conducting a Federal award action involving 
a related organization.

                        PARTS 401	414 [RESERVED]



PART 415_GENERAL PROGRAM ADMINISTRATIVE REGULATIONS--Table of Contents



              Subpart A_Application for Federal Assistance

Sec.
415.1 Competition in the awarding of discretionary grants and 
          cooperative agreements.

                         Subpart B_Miscellaneous

415.2 Acknowledgement of Support on Publications and Audiovisuals.

Subpart C_Intergovernmental Review of Department of Agriculture Programs 
                             and Activities

415.3 Purpose.
415.4 Definitions.
415.5 Applicability.
415.6 Secretary's general responsibilities.
415.7 Federal interagency coordination.
415.8 State selection of programs and activities.
415.9 Communication with State and local elected officials.
415.10 State comments on proposed Federal financial assistance and 
          direct Federal development.
415.11 Processing comments.
415.12 Accommodation of intergovernmental concerns.
415.13 Interstate situations.
415.14 Simplification, consolidation, or substitution of State plans.
415.15 Waivers.

    Authority: 5 U.S.C. 301; 31 U.S.C. 901-903; 7 CFR 2.28.

    Source: 79 FR 75982, Dec. 19, 2014, unless otherwise noted.

[[Page 260]]



              Subpart A_Application for Federal Assistance



Sec.  415.1  Competition in the awarding of discretionary grants
and cooperative agreements.

    (a) Standards for competition. Except as provided in paragraph (d) 
of this section, awarding agencies shall enter into discretionary grants 
and cooperative agreements only after competition. An awarding agency's 
competitive award process shall adhere to the following standards:
    (1) Potential applicants must be invited to submit proposals through 
publications such as the Federal Register, OMB-designated governmentwide 
website as described in 2 CFR 200.204, professional trade journals, 
agency or program handbooks, the Assistance Listings, or any other 
appropriate means of solicitation. In so doing, awarding agencies should 
consider the broadest dissemination of project solicitations in order to 
reach the highest number of potential applicants.
    (2) Proposals are to be evaluated objectively by independent 
reviewers in accordance with written criteria set forth by the awarding 
agency. Reviewers should make written comments, as appropriate, on each 
application. Independent reviewers may be from the private sector, 
another agency, or within the awarding agency, as long as they do not 
include anyone who has approval authority for the applications being 
reviewed or anyone who might appear to have a conflict of interest in 
the role of reviewer of applications. A conflict of interest might arise 
when the reviewer or the reviewer's immediate family members have been 
associated with the applicant or applicant organization within the past 
two years as an owner, partner, officer, director, employee, or 
consultant; has any financial interest in the applicant or applicant 
organization; or is negotiating for, or has any arrangement, concerning 
prospective employment.
    (3) An unsolicited application, which is not unique and innovative, 
shall be competed under the project solicitation it comes closest to 
fitting. Awarding agency officials will determine the solicitation under 
which the application is to be evaluated. When the awarding agency 
official decides that the unsolicited application does not fall under a 
recent, current, or planned solicitation, a noncompetitive award may be 
made, if appropriate to do so under the criteria of this section. 
Otherwise, the application should be returned to the applicant.
    (b) Project solicitations. A project solicitation by the awarding 
agency shall include or reference the following, as appropriate:
    (1) A description of the eligible activities which the awarding 
agency proposes to support and the program priorities;
    (2) Eligible applicants;
    (3) The dates and amounts of funds expected to be available for 
awards;
    (4) Evaluation criteria and weights, if appropriate, assigned to 
each;
    (5) Methods for evaluating and ranking applications;
    (6) Name and address where proposals should be mailed or emailed and 
submission deadline(s);
    (7) Any required forms and how to obtain them;
    (8) Applicable cost principles and administrative requirements;
    (9) Type of funding instrument intended to be used (grant or 
cooperative agreement); and
    (10) The Assistance Listings number and title.
    (c) Approval of applications. The final decision to award is at the 
discretion of the awarding/approving official in each agency. The 
awarding/approving official shall consider the ranking, comments, and 
recommendations from the independent review group, and any other 
pertinent information before deciding which applications to approve and 
their order of approval. Any appeals by applicants regarding the award 
decision shall be handled by the awarding agency using existing agency 
appeal procedures or good administrative practice and sound business 
judgment.
    (d) Exceptions. The awarding/approving official may make a 
determination in writing that competition is not deemed appropriate for 
a particular transaction. Such determination shall be limited to 
transactions where it can

[[Page 261]]

be adequately justified that a noncompetitive award is in the best 
interest of the Government and necessary to the accomplishment of the 
goals of the program. Reasons for considering noncompetitive awards may 
include, but are not necessarily limited to, the following:
    (1) Nonmonetary awards of property or services;
    (2) Awards of less than $75,000;
    (3) Awards to fund continuing work already started under a previous 
award;
    (4) Awards which cannot be delayed due to an emergency or a 
substantial danger to health or safety;
    (5) Awards when it is impracticable to secure competition; or
    (6) Awards to fund unique and innovative unsolicited applications.

[79 FR 75982, Dec. 19, 2014, as amended at 85 FR 72912, Nov. 16, 2020]



                         Subpart B_Miscellaneous



Sec.  415.2  Acknowledgement of USDA Support on Publications and
Audiovisuals.

    (a) Definitions. (1) ``Audiovisual'' means a product containing 
visual imagery or sound or both. Examples of audiovisuals are motion 
pictures, live or prerecorded radio or television programs, slide shows, 
filmstrips, audio recordings, and multimedia presentations.
    (2) ``Production of an audiovisual'' means any of the steps that 
lead to a finished audiovisual, including design, layout, script-
writing, filming, editing, fabrication, sound recording or taping. The 
term does not include the placing of captions for the hearing impaired 
on films or videotapes not originally produced for use with the hearing 
impaired.
    (3) ``Publication'' means a published book, periodical, pamphlet, 
brochure, flier, or similar item. It does not include any audiovisuals.
    (b) Publications. Recipients shall have an acknowledgement of USDA 
awarding agency support placed on any publications written or published 
with grant support and, if feasible, on any publication reporting the 
results of, or describing, a grant-supported activity.
    (c) Audiovisuals. Recipients shall have an acknowledgement of USDA 
awarding agency support placed on any audiovisual which is produced with 
grant support and which has a direct production cost to the recipient of 
over $5,000. Unless the other provisions of the grant award make it 
apply, this requirement does not apply to:
    (1) Audiovisuals produced as research instruments or for documenting 
experimentation or findings and not intended for presentation or 
distribution to the general public.
    (2) [Reserved]
    (d) Waivers. USDA awarding agencies may waive any requirement of 
this section.



Subpart C_Intergovernmental Review of Department of Agriculture Programs 
                             and Activities



Sec.  415.3  Purpose.

    (a) The regulations in this part implement Executive Order 12372, 
``Intergovernmental Review of Federal Programs'', issued July 14, 1982, 
and amended on April 8, 1983. These regulations also implement 
applicable provisions of section 401 of the Intergovernmental 
Cooperation Act of 1968 and section 204 of the Demonstration Cities and 
Metropolitan Development Act of 1966.
    (b) These regulations are intended to foster an intergovernmental 
partnership and a strengthened Federalism by relying on State processes 
and on State, areawide, regional and local coordination for review of 
proposed Federal financial assistance and direct Federal development.
    (c) The regulations are intended to aid the internal management of 
the Department, and are not intended to create any right or benefit 
enforceable at law by a party against the Department or its officers.



Sec.  415.4  Definitions.

    As used in this part, the following definitions apply:
    Department means the U.S. Department of Agriculture.
    Order means Executive Order 12372, issued July 14, 1982, and amended 
April

[[Page 262]]

8, 1983, and titled Intergovernmental Review of Federal Programs.
    Secretary means the Secretary of the U.S. Department of Agriculture 
or an official or employee of the Department acting for the Secretary 
under a delegation of authority.
    State means any of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, American Samoa, and the U.S. Virgin Islands.



Sec.  415.5  Applicability.

    The Secretary publishes in the Federal Register a list of the 
Department's programs and activities that are subject to these 
regulations and identifies which of these are subject to the 
requirements of section 204 of the Demonstration Cities and Metropolitan 
Development Act.



Sec.  415.6  Secretary's general responsibilities.

    (a) The Secretary provides opportunities for consultation by elected 
officials of those State and local governments that would provide the 
non-Federal funds for, or that would be directly affected by, proposed 
Federal financial assistance from, or direct Federal development by, the 
Department.
    (b) If a State adopts a process under the Order to review and 
coordinate proposed Federal financial assistance and direct Federal 
development, the Secretary, to the extent permitted by law:
    (1) Uses the State process to determine official views of State and 
local elected officials;
    (2) Communicates with State and local elected officials as early in 
a program planning cycle as is reasonably feasible to explain specific 
plans and actions;
    (3) Makes efforts to accommodate State and local elected officials' 
concerns with proposed Federal financial assistance and direct Federal 
development that are communicated through the State process;
    (4) Allows the States to simplify and consolidate existing Federally 
required State plan submissions;
    (5) Where State planning and budgeting systems are sufficient and 
where permitted by law, encourages the substitution of State plans for 
Federally required State plans;
    (6) Seeks the coordination of views of affected State and local 
elected officials in one State with those of another State when proposed 
Federal financial assistance or direct Federal development has an impact 
on interstate metropolitan urban centers or other interstate areas; and
    (7) Supports State and local governments by discouraging the 
reauthorization or creation of any planning organization which is 
Federally-funded, which has a limited purpose, and which is not 
adequately representative of, or accountable to, State or local elected 
officials.



Sec.  415.7  Federal interagency coordination.

    The Secretary, to the extent practicable, consults with and seeks 
advice from all other substantially affected Federal departments and 
agencies in an effort to assure full coordination between such agencies 
and the Department regarding programs and activities covered under these 
regulations.



Sec.  415.8  State selection of programs and activities.

    (a) A State may select any program or activity published in the 
Federal Register in accordance with Sec.  415.5 for intergovernmental 
review under these regulations. Each State, before selecting programs 
and activities, shall consult with local elected officials.
    (b) Each State that adopts a process shall notify the secretary of 
the Department's programs and activities selected for that process.
    (c) A State may notify the Secretary of changes in its selections at 
any time. For each change, the State shall submit to the Secretary an 
assurance that the State has consulted with elected local officials 
regarding the change. The Department may establish deadlines by which 
States are required to inform the Secretary of changes in their program 
selections.
    (d) The Secretary uses a State's process as soon as feasible, 
depending on individual programs and activities, after the Secretary is 
notified of its selections.

[[Page 263]]



Sec.  415.9  Communication with State and local elected officials.

    (a) The Secretary provides notice to directly affected State, 
areawide, regional, and local entities in a State of proposed Federal 
financial assistance or direct Federal development if:
    (1) The State has not adopted a process under the Order; or
    (2) The assistance or development involves a program or an activity 
that is not covered under the State process.
    (b) This notice may be made by publication in the Federal Register 
or other appropriate means, which the Department in its discretion deems 
appropriate.
    (c) In order to facilitate communication with State and local 
officials the Secretary has established an office within the Department 
to receive all communications pertinent to this Order. All 
communications should be sent to the Office of the Chief Financial 
Officer, Room 143-W, 1400 Independence Avenue SW., Washington, DC 20250, 
Attention: E.O. 12372.



Sec.  415.10  State comments on proposed Federal financial assistance
and direct Federal development.

    (a) Except in unusual circumstances, the Secretary gives State 
processes or directly affected State, areawide, regional, and local 
officials and entities:
    (1) At least 30 days from the date established by the Secretary to 
comment on proposed Federal financial assistance in the form of 
noncompeting continuation awards; and
    (2) At least 60 days from the date established by the Secretary to 
comment on proposed direct Federal development or Federal financial 
assistance other than noncompeting continuation awards.
    (b) This section also applies to comments in cases in which the 
review, coordination and communication with the Department have been 
delegated.
    (c) Applicants for programs and activities subject to section 204 of 
the Demonstration Cities and Metropolitan Development Act shall allow 
areawide agencies a 60-day opportunity for review and comment.



Sec.  415.11  Processing comments.

    (a) The Secretary follows the procedures in Sec.  415.12 if:
    (1) A State office or official is designated to act as a single 
point of contact between a State process and all Federal agencies; and
    (2) That office or official transmits a State process recommendation 
for a program selected under Sec.  415.8.
    (b)(1) The single point of contact is not obligated to transmit 
comments from State, areawide, regional or local officials and entities 
where there is no State process recommendation.
    (2) If a State process recommendation is transmitted by a single 
point of contact, all comments from State, areawide, regional and local 
officials and entities that differ from it must also be transmitted.
    (c) If a State has not established a process, or is unable to submit 
a State process recommendation, State, areawide, regional and local 
officials and entities may submit comments either to the applicant or to 
the Department.
    (d) If a program or activity is not selected by a State process, 
State, areawide, regional and local officials and entities may submit 
comments either to the applicant or to the Department. In addition, if a 
State process recommendation for a non-selected program or activity is 
transmitted to the Department by the single point of contact, the 
Secretary follows the procedures of Sec.  415.12.
    (e) The Secretary considers comments which do not constitute a State 
process recommendation submitted under these regulations and for which 
the Secretary is not required to apply the procedures of Sec.  415.12, 
when such comments are provided by a single point of contact by the 
applicant, or directly to the Department by a commenting party.



Sec.  415.12  Accommodation of intergovernmental concerns.

    (a) If a State process provides a State process recommendation to 
the Department through its single point of contact, the Secretary 
either--
    (1) Accepts the recommendations;
    (2) Reaches a mutually agreeable solution with the State process; or

[[Page 264]]

    (3) Provides the single point of contact with a written explanation 
of the decision, as the Secretary in his or her discretion deems 
appropriate. The Secretary may also supplement the written explanation 
by also providing the explanation to the single point of contact by 
telephone, other telecommunication, or other means.
    (b) In any explanation under paragraph (a)(3) of this section, the 
Secretary informs the single point of contact that:
    (1) The Department will not implement its decision for at least ten 
days after the single point of contact receives the explanation; or
    (2) The Secretary has reviewed the decision and determined that, 
because of unusual circumstances, the waiting period of at least ten 
days is not feasible.
    (c) For purposes of computing the waiting period under paragraph 
(b)(1) of this section, a single point of contact is presumed to have 
received written notification five days after the date of mailing of 
such notification.



Sec.  415.13  Interstate situations.

    (a) The Secretary is responsible for:
    (1) Identifying proposed Federal financial assistance and direct 
Federal development that have an impact on interstate areas;
    (2) Notifying appropriate officials in States which have adopted a 
process and which selected the Department's program or activity;
    (3) Making efforts to identify and notify the affected State, 
areawide, regional and local officials and entities in those States that 
have not adopted a process under the Order or do not select the 
Department's program or activity; and
    (4) Responding, pursuant to Sec.  415.12, if the Secretary receives 
a recommendation from a designated areawide agency transmitted by a 
single point of contact, in cases in which the review, coordination, and 
communication with the Department have been delegated.
    (b) The Secretary uses the procedures in Sec.  415.12 if a State 
process provides a State process recommendation to the Department 
through a single point of contact.



Sec.  415.14  Simplification, consolidation, or substitution of
State plans.

    (a) As used in this section:
    (1) Simplify means that a State may develop its own format, choose 
its own submission date, and select the planning period for a State 
plan.
    (2) Consolidate means that a State may meet statutory and regulatory 
requirements by combining two or more plans into one document and that 
the State can select the format, submission date, and the planning 
period for the consolidated plan.
    (3) Substitute means that a State may use a plan or other document 
that it has developed for its own purposes to meet Federal requirements.
    (b) If not inconsistent with law, a State may decide to try to 
simplify, consolidate, or substitute Federally required State plans 
without prior approval by the Secretary.
    (c) The Secretary reviews each State plan a State has simplified, 
consolidated or substituted and accepts the plan only if its contents 
meet Federal requirements.



Sec.  415.15  Waivers.

    In an emergency, the Secretary may waive any provision in Subpart 
C--Intergovernmental Review of Department of Agriculture Programs and 
Activities, 2 CFR 415.3 to 415.14.



PART 416_GENERAL PROGRAM ADMINISTRATIVE REGULATIONS FOR GRANTS AND
COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS-
-Table of Contents



    Authority: 5 U.S.C. 301; 31 U.S.C. 901-903; 7 CFR 2.28.

    Source: 79 FR 75985, Dec. 19, 2014, unless otherwise noted.



Sec.  416.1  Special Procurement Provisions.

    (a) In order to ensure objective contractor performance and 
eliminate unfair competitive advantage, a prospective contractor that 
develops or drafts specifications, requirements, statements of work, 
invitations for bids, request for proposals, contract term and 
conditions or other documents for use

[[Page 265]]

by a State in conducting a procurement under the USDA entitlement 
programs specified in 2 CFR 200.101(f)(4) through (6) shall be excluded 
from competing for such procurements. Such prospective contractors are 
ineligible for contract awards resulting from such procurements 
regardless of the procurement method used. However, prospective 
contractors may provide States with specification information related to 
a State procurement under the USDA entitlement programs specified in 2 
CFR 200.101(f)(4) through (6) and still compete for the procurement if 
the State, and not the prospective contractor, develops or drafts the 
specifications, requirements, statements of work, invitations for bid, 
and/or requests for proposals used to conduct the procurement.
    (b) Procurements by States under USDA entitlement programs specified 
in 2 CFR 200.101(f)(4) through (6) shall be conducted in a manner that 
prohibits the use of statutorily or administratively imposed in-State or 
local geographic preferences except as provided for in 2 CFR 200.319(c).

[79 FR 75985, Dec. 19, 2014, as amended at 85 FR 72912, Nov. 16, 2020]



PART 417_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
417.10 What does this part do?
417.20 Does this part apply to me?
417.30 What policies and procedures must I follow?

                            Subpart A_General

417.137 Who in the USDA may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

417.210 Which nonprocurement transactions are covered transactions?
417.215 Which nonprocurement transactions, in addition to those listed 
          in 2 CFR 180.215, are not covered transactions?
417.220 Are any procurement contracts included as covered transactions?
417.221 How would the exclusions from coverage for the USDA's foreign 
          assistance programs apply?
417.222 How would the exclusions from coverage for the USDA's export 
          credit guarantee and direct credit programs apply?

    Subpart C_Responsibilities of Participants Regarding Transactions

417.332 What methods must I use to pass down requirements to 
          participants in lower-tier covered transactions with whom I 
          intend to do business?

   Subpart D_Responsibilities of Department of Agriculture Officials 
                         Regarding Transactions

417.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

            Subpart E_System for Award Management Exclusions

417.500 What is the purpose of the System for Award Management 
          Exclusions (SAM Exclusions)?
417.505 Who uses SAM Exclusions?
417.510 Who maintains SAM Exclusions?
417.515 What specific information is in SAM Exclusions?
417.520 Who places the information into SAM Exclusions?
417.525 Whom do I ask if I have questions about a person in SAM 
          Exclusions?
417.530 Where can I find SAM Exclusions?

   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions

417.600 How do suspension and debarment actions start?
417.605 How does suspension differ from debarment?
417.610 What procedures does a Federal agency use in suspension and 
          debarment actions?
417.615 How does a Federal agency notify a person of a suspension or 
          debarment action?
417.620 Do Federal agencies coordinate suspension and debarment actions?
417.625 What is the scope of a suspension or debarment?
417.630 May a Federal agency impute the conduct of one person to 
          another?
417.635 May a Federal agency settle a debarment or suspension action?
417.640 May a settlement include a voluntary exclusion?
417.645 Do other Federal agencies know if an agency agrees to a 
          voluntary exclusion?
417.650 May an administrative agreement be the result of a settlement?
417.655 How will other Federal awarding agencies know about an 
          administrative agreement that is the result of a settlement?

[[Page 266]]

417.660 Will administrative agreement information about me in the 
          designated integrity and performance system accessible through 
          SAM be corrected or updated?

                          Subpart G_Suspension

417.755 When will I know whether the USDA suspension is continued or 
          terminated?

                           Subpart H_Debarment

417.800 What are the USDA causes for debarment?
417.865 How long may my debarment last?
417.870 When do I know if the USDA debarring official debars me?

                          Subpart I_Definitions

417.930 Debarring official (USDA supplement to governmentwide definition 
          at 2 CFR 180.930).
417.935 Disqualified (USDA supplement to governmentwide definition at 2 
          CFR 180.935).
417.970 Nonprocurement transaction.
417.1010 Suspending official (USDA supplement to governmentwide 
          definition at 2 CFR 180.1010).

Appendix 1 to Part 417--Covered Transactions

Subpart J [Reserved]

    Authority: 5 U.S.C. 301; Pub. L. 101-576, 104 Stat. 2838; Sec. 2455, 
Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); 7 U.S.C. 2209j; 
E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O. 12698 (3 CFR, Comp., p. 
235); 7 CFR 2.28.

    Source: 75 FR 29185, May 25, 2010, unless otherwise noted.



Sec.  417.10  What does this part do?

    This part adopts the OMB guidance in subparts A through I of 2 CFR 
part 180, as supplemented by this part, as the USDA policies and 
procedures for nonprocurement debarment and suspension. It thereby gives 
regulatory effect for the USDA to the OMB guidance, as supplemented by 
this part. This part satisfies the requirements in section 3 of 
Executive Order 12549, ``Debarment and Suspension'' (3 CFR 1986 Comp., 
p. 189), Executive Order 12689, ``Debarment and Suspension'' (3 CFR 1989 
Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Pub. L. 103-355, 
108 Stat. 3327).



Sec.  417.20  Does this part apply to me?

    Through this part, pertinent portions of the OMB guidance in 
subparts A through I of 2 CFR part 180 (see table at 2 CFR 180.100(b)) 
apply to you if you are a:
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970, as supplemented by Sec. Sec.  417.215 
and 417.220 of this part);
    (b) Respondent in a USDA debarment and suspension action;
    (c) USDA debarment or suspension official; or
    (d) USDA grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  417.30  What policies and procedures must I follow?

    The USDA policies and procedures that you must follow are the 
policies and procedures specified in this regulation and each applicable 
section of the OMB guidance in subparts A through I of 2 CFR part 180, 
as that section is supplemented by the section in this part with the 
same section number. The contracts that are covered transactions, for 
example, are specified by section 220 of the OMB guidance (i.e., 2 CFR 
180.220) as supplemented by section 220 in this part (i.e., Sec.  
417.220). For any section of OMB guidance in subparts A through I of 2 
CFR part 180 that has no corresponding section in this part, USDA 
policies and procedures are those in the OMB guidance.



                            Subpart A_General



Sec.  417.137  Who in the USDA may grant an exception to let an
excluded person participate in a covered transaction?

    Within the USDA, a debarring official may grant an exception to let 
an excluded person participate in a covered transaction as provided 
under 2 CFR 180.135.

[[Page 267]]



                     Subpart B_Covered Transactions



Sec.  417.210  Which nonprocurement transactions are covered 
transactions?

    All nonprocurement transactions, as defined in Sec.  417.970, are 
covered transactions unless listed in Sec.  417.215.



Sec.  417.215  Which nonprocurement transactions, in addition to
those listed in 2 CFR 180.215, are not covered transactions?

    (a) Transactions not covered. In addition to the nonprocurement 
transactions listed in 2 CFR 180.215, the following nonprocurement 
transactions are not covered transactions:
    (1) An entitlement or mandatory award required by a statute, 
including a lower tier entitlement or mandatory award that is required 
by a statute.
    (2) The export or substitution of Federal timber governed by the 
Forest Resources Conservation and Shortage Relief Act of 1990, 16 U.S.C. 
620 et seq. (The ``Export Act''), which prevents a debarred person from 
entering into any contract for the purchase of unprocessed timber from 
Federal lands. See 16 U.S.C. 620d(d)(1)(A).
    (3) The receipt of licenses, permits, certificates, and 
indemnification under regulatory programs conducted in the interest of 
public health and safety, and animal and plant health and safety.
    (4) The receipt of official grading and inspection services, animal 
damage control services, public health and safety inspection services, 
and animal and plant health and safety inspection services.
    (5) If the person is a State or local government, the provision of 
official grading and inspection services, animal damage control 
services, animal and plant health and safety inspection services.
    (6) The receipt of licenses, permits, or certificates under 
regulatory programs conducted in the interest of ensuring fair trade 
practices.
    (7) Permits, licenses, exchanges and other acquisitions of real 
property, rights of way, and easements under natural resource management 
programs.
    (8) Any transaction to be implemented outside the United States that 
is below the primary tier covered transaction in a USDA foreign 
assistance program.
    (9) Any transaction to be implemented outside the United States that 
is below the primary tier covered transaction in a USDA export credit 
guarantee program or direct credit program.
    (b) Limited requirement to check EPLS. Notwithstanding the fact that 
transactions to be implemented outside the United States that are below 
the primary tier covered transaction in a USDA foreign assistance 
program, export credit guarantee program or direct credit program are 
not covered transactions, pursuant to paragraphs (a)(8) and (9) of this 
section, primary tier participants under these programs must check the 
EPLS prior to entering into any transaction with a person at the first 
lower tier and shall not enter into such a transaction if the person is 
excluded or disqualified under the EPLS.
    (c) Exception. A cause for suspension or debarment under Sec.  
180.700 or Sec.  180.800 of this title (as supplemented by Sec.  
417.800) may be based on the actions of a person with respect to a 
procurement or nonprocurement transaction under a USDA program even if 
such transaction has been excluded from covered transaction status by 
this section or Sec.  417.220.



Sec.  417.220  Are any procurement contracts included as covered
transactions?

    (a) Covered transactions under this part:
    (1) Do not include any procurement contracts awarded directly by a 
Federal agency; but
    (2) Do include some procurement contracts awarded by non-Federal 
participants in nonprocurement covered transactions (see appendix to 
this part).
    (b) Specifically, a contract for goods or services is a covered 
transaction if any of the following applies:
    (1) The contract is awarded by a participant in a nonprocurement 
transaction that is covered under Sec.  417.210, and the amount of the 
contract is expected to equal or exceed $25,000.

[[Page 268]]

    (2) The contract requires the consent of a USDA official. In that 
case, the contract, regardless of the amount, always is a covered 
transaction, and it does not matter who awarded it. For example, it 
could be a subcontract awarded by a contractor at a tier below a 
nonprocurement transaction, as shown in the appendix to this part.
    (3) The contract is for federally-required audit services.
    (c) Any procurement contract to be implemented outside the United 
States that is below the primary tier covered transaction in a USDA 
foreign assistance program is not a covered transaction, notwithstanding 
the provisions in paragraphs (a) and (b) of this section.
    (d) Any procurement contract to be implemented outside the United 
States that is below the primary tier covered transaction in a USDA 
export credit guarantee program or direct credit program is not a 
covered transaction, notwithstanding the provisions in paragraphs (a) 
and (b) of this section.
    (e) Notwithstanding the fact that procurement contracts to be 
implemented outside the United States that are below the primary tier 
covered transaction in a USDA foreign assistance program, export credit 
guarantee program or direct credit program are not covered transactions, 
pursuant to paragraphs (c) and (d) of this section, primary tier 
participants under these programs must check the EPLS prior to entering 
into any procurement contract that is expected to equal or exceed 
$25,000 with a person at the first lower tier and shall not enter into 
such a procurement contract if the person is excluded or disqualified 
under the EPLS.



Sec.  417.221  How would the exclusions from coverage for the
USDA's foreign assistance programs apply?

    The primary tier covered transaction would be the food aid grant 
agreement entered into between USDA and a program participant, such as a 
U.S. private voluntary organization. USDA would have to check the EPLS 
before entering into the food aid grant agreement to ensure that the 
U.S. private voluntary organization that would be the primary tier 
participant is not excluded or disqualified. A transaction at the first 
lower tier might be a subrecipient agreement between the U.S. private 
voluntary organization and a foreign subrecipient of the commodities 
that were provided under the food aid grant agreement. Pursuant to Sec.  
417.215(a)(8), this nonprocurement transaction would not be a covered 
transaction. In addition, a transaction at the first lower tier might be 
a procurement contract entered into between the U.S. private voluntary 
organization and a foreign entity to provide supplies or services that 
are expected to equal or exceed $25,000 in value and that are needed by 
such organization to implement activities under the food aid grant 
agreement. Pursuant to Sec.  417.220(c), this procurement contract would 
not be a covered transaction. However, pursuant to Sec. Sec.  417.215(b) 
and 417.220(e), the U.S. private voluntary organization would be 
prohibited from entering into, at the first lower tier, an agreement 
with a subrecipient or a procurement contract that is expected to equal 
or exceed $25,000 with an entity that appears on the EPLS as excluded or 
disqualified.



Sec.  417.222  How would the exclusions from coverage for USDA's
export credit guarantee and direct credit programs apply?

    (a) Export credit guarantee program. In the case of the export 
credit guarantee program, the primary tier covered transaction would be 
the guarantee issued by the USDA to a U.S. exporter. The U.S. exporter 
usually assigns the guarantee to a U.S. financial institution, and this 
would create another primary tier covered transaction between USDA and 
the U.S. financial institution. USDA would have to check the EPLS before 
issuing a guarantee or accepting a guarantee assignment to ensure that 
the U.S. exporter or financial institution that would be the primary 
tier participant is not excluded or disqualified. A transaction at the 
first lower tier under the export credit guarantee program might be a 
payment obligation of a foreign bank to the U.S. exporter to pay on 
behalf of the importer for the exported U.S. commodities that are 
covered by the guarantee. Similarly, a transaction at the first

[[Page 269]]

lower tier might be a payment obligation of a foreign bank under an 
instrument, such as a loan agreement or letter of credit, to the U.S. 
financial institution assigned the guarantee, which has paid the 
exporter for the exported U.S. commodities and, in so doing, issued a 
loan to the foreign bank, which the foreign bank is obligated to repay 
on deferred payment terms. Pursuant to Sec.  417.215(a)(9), these 
nonprocurement transactions would not be covered transactions. In 
addition, a transaction at the first lower tier under the export credit 
guarantee program might be a procurement contract (i.e., a contract for 
the purchase and sale of goods) that is expected to equal or exceed 
$25,000 entered into between the U.S. exporter and the foreign importer 
for the U.S. commodities, the payment for which is covered by the 
guarantee. Pursuant to Sec.  417.220(d), this procurement contract would 
not be a covered transaction. However, pursuant to Sec. Sec.  417.215(b) 
and 417.220(e), the U.S. exporter or U.S. financial institution would be 
prohibited from entering into, at the first lower tier, an agreement 
with an importer (or intervening purchaser) or foreign bank or a 
procurement contract that is expected to equal or exceed $25,000 with an 
entity that appears on the EPLS as excluded or disqualified.
    (b) Direct credit program. In the case of the direct credit program, 
the primary tier covered transaction would be the financing agreement 
between the USDA and the U.S. exporter. USDA purchases the exporter's 
account receivable in a particular transaction pursuant to the financing 
agreement. On occasion, such transaction may contemplate a payment 
obligation of a U.S. or foreign bank to make the required payments. USDA 
would have to check the EPLS before entering into a financing agreement 
or accepting such a payor to ensure that the U.S. exporter or the bank, 
if any, that would be the primary tier participant is not excluded or 
disqualified. A transaction at the first lower tier might be a payment 
obligation of the importer to pay the exporter for the exported U.S. 
commodities that are covered by the financing agreement. Pursuant to 
Sec.  417.215(a)(9), this nonprocurement transaction would not be a 
covered transaction. In addition, a transaction at the first lower tier 
might be a procurement contract that is expected to equal or exceed 
$25,000 entered into between the U.S. exporter and the foreign importer 
for the U.S. commodities, the payment for which is covered by the 
financing agreement. Pursuant to Sec.  417.220(d), this procurement 
contract would not be a covered transaction. However, pursuant to 
Sec. Sec.  417.215(b) and 417.220(e), the U.S. exporter would be 
prohibited from entering into, at the first lower tier, an agreement 
with an importer (or intervening purchaser) or bank, or a procurement 
contract that is expected to equal or exceed $25,000 with an entity that 
appears on the EPLS as excluded or disqualified.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  417.332  What methods must I use to pass down requirements to
participants in lower tier covered transactions with whom I intend
to do business?

    You as a participant must include a term or condition in lower tier 
covered transactions requiring lower tier participants to comply with 
subpart C of the OMB guidance in 2 CFR part 180, as supplemented by 
subpart C of this part.



   Subpart D_Responsibilities of Department of Agriculture Officials 
                         Regarding Transactions



Sec.  417.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435, you must include a term or condition in the transaction that 
requires the participant's compliance with subpart C of 2 CFR part 180, 
as supplemented by subpart C of this part, and requires the participant 
to include a similar term or condition in lower tier covered 
transactions.

[[Page 270]]



            Subpart E_System for Award Management Exclusions

    Source: 84 FR 52994, Oct. 4, 2019, unless otherwise noted.



Sec.  417.500  What is the purpose of the System for Award Management
Exclusions (SAM Exclusions)?

    SAM Exclusions is a widely available source of the most current 
information about persons who are excluded or disqualified from covered 
transactions.



Sec.  417.505  Who uses SAM Exclusions?

    (a) Federal agency officials use SAM Exclusions to determine whether 
to enter into a transaction with a person, as required under Sec.  
180.430 of this title.
    (b) Participants also may, but are not required to, use SAM 
Exclusions to determine if--
    (1) Principals of their transactions are excluded or disqualified, 
as required under Sec.  180.320 of this title; or
    (2) Persons with whom they are entering into covered transactions at 
the next lower tier are excluded or disqualified.
    (c) SAM Exclusions are available to the general public.



Sec.  417.510  Who maintains SAM Exclusions?

    The General Services Administration (GSA) maintains SAM Exclusions. 
When a Federal agency takes an action to exclude a person under the 
nonprocurement or procurement debarment and suspension system, the 
agency enters the information about the excluded person into SAM 
Exclusions.



Sec.  417.515  What specific information is in SAM Exclusions?

    (a) At a minimum, SAM Exclusions indicates--
    (1) The full name (where available) and address of each excluded and 
disqualified person, in alphabetical order, with cross references if 
more than one name is involved in a single action;
    (2) The type of action;
    (3) The cause for the action;
    (4) The scope of the action;
    (5) Any termination date for the action;
    (6) The Federal agency and name and telephone number of the agency 
point of contact for the action; and
    (7) The unique entity identifier approved by the GSA, of the 
excluded or disqualified person, if available.
    (b)(1) The database for SAM Exclusions includes a field for the 
Taxpayer Identification Number (TIN) (the social security number (SSN) 
for an individual) of an excluded or disqualified person.
    (2) Agencies disclose the SSN of an individual to verify the 
identity of an individual, only if permitted under the Privacy Act of 
1974 and, if appropriate, the Computer Matching and Privacy Protection 
Act of 1988, as codified in 5 U.S.C. 552(a).



Sec.  417.520  Who places the information into SAM Exclusions?

    Federal agency officials who take actions to exclude persons under 
this part or officials who are responsible for identifying disqualified 
persons must enter the following information about those persons into 
SAM Exclusions:
    (a) Information required by Sec.  180.515(a) of this title;
    (b) The Taxpayer Identification Number (TIN) of the excluded or 
disqualified person, including the social security number (SSN) for an 
individual, if the number is available and may be disclosed under law;
    (c) Information about an excluded or disqualified person, within 
three business days, after--
    (1) Taking an exclusion action;
    (2) Modifying or rescinding an exclusion action;
    (3) Finding that a person is disqualified; or
    (4) Finding that there has been a change in the status of a person 
who is listed as disqualified.



Sec.  417.525  Whom do I ask if I have questions about a person in
SAM Exclusions?

    If you have questions about a listed person in SAM Exclusions, ask 
the point of contact for the Federal agency that placed the person's 
name into SAM Exclusions. You may find the agency point of contact from 
SAM Exclusions.

[[Page 271]]



Sec.  417.530  Where can I find SAM Exclusions?

    You may access SAM Exclusions through the internet, currently at 
https://www.sam.gov.



   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions

    Source: 84 FR 52994, Oct. 4, 2019, unless otherwise noted.



Sec.  417.600  How do suspension and debarment actions start?

    When Federal agency officials receive information from any source 
concerning a cause for suspension or debarment, they will promptly 
report it and the agency will investigate. The officials refer the 
question of whether to suspend or debar you to their suspending or 
debarring official for consideration, if appropriate.



Sec.  417.605  How does suspension differ from debarment?

               Suspension Differs From Debarment in That--
------------------------------------------------------------------------
      A suspending official . . .           A debarring official . . .
------------------------------------------------------------------------
(a) Imposes suspension as a temporary    Imposes debarment for a
 status of ineligibility for              specified period as a final
 procurement and nonprocurement           determination that a person is
 transactions, pending completion of an   not presently responsible.
 investigation or legal proceedings.
(b) Must--
    (1) Have ``adequate evidence'' that
     there may be a cause for debarment
     of a person; and.
    (2) Conclude that ``immediate        Must conclude, based on a
     action'' is necessary to protect     ``preponderance of the
     the Federal interest.                evidence,'' that the person
                                          has engaged in conduct that
                                          warrants debarment.
(c) Usually imposes the suspension       Imposes debarment ``after''
 ``first,'' and then promptly notifies    giving the respondent notice
 the suspended person, giving the         of the action and an
 person an opportunity to contest the     opportunity to contest the
 suspension and have it lifted.           proposed debarment.
------------------------------------------------------------------------



Sec.  417.610  What procedures does a Federal agency use in suspension
and debarment actions?

    In deciding whether to suspend or debar you, a Federal agency 
handles the actions as informally as practicable, consistent with 
principles of fundamental fairness.
    (a) For suspension actions, a Federal agency uses the procedures in 
this subpart and subpart G of this part.
    (b) For debarment actions, a Federal agency uses the procedures in 
this subpart and subpart H of this part.



Sec.  417.615  How does a Federal agency notify a person of a 
suspension or debarment action?

    (a) The suspending or debarring official sends a written notice to 
the last known street address, facsimile number, or email address of--
    (1) You or your identified counsel; or
    (2) Your agent for service of process, or any of your partners, 
officers, directors, owners, or joint venturers.
    (b) The notice is effective if sent to any of these persons.



Sec.  417.620  Do Federal agencies coordinate suspension and 
debarment actions?

    Yes, when more than one Federal agency has an interest in a 
suspension or debarment, the agencies may consider designating one 
agency as the lead agency for making the decision. Agencies are 
encouraged to establish methods and procedures for coordinating their 
suspension and debarment actions.



Sec.  417.625  What is the scope of a suspension or debarment?

    If you are suspended or debarred, the suspension or debarment is 
effective as follows:
    (a) Your suspension or debarment constitutes suspension or debarment 
of all of your divisions and other organizational elements from all 
covered transactions, unless the suspension or debarment decision is 
limited--
    (1) By its terms to one or more specifically identified individuals, 
divisions, or other organizational elements; or
    (2) To specific types of transactions.

[[Page 272]]

    (b) Any affiliate of a participant may be included in a suspension 
or debarment action if the suspending or debarring official--
    (1) Officially names the affiliate in the notice; and
    (2) Gives the affiliate an opportunity to contest the action.



Sec.  417.630  May a Federal agency impute the conduct of one
person to another?

    For purposes of actions taken under this part, a Federal agency may 
impute conduct as follows:
    (a) Conduct imputed from an individual to an organization. A Federal 
agency may impute the fraudulent, criminal, or other improper conduct of 
any officer, director, shareholder, partner, employee, or other 
individual associated with an organization, to that organization when 
the improper conduct occurred in connection with the individual's 
performance of duties for or on behalf of that organization, or with the 
organization's knowledge, approval or acquiescence. The organization's 
acceptance of the benefits derived from the conduct is evidence of 
knowledge, approval or acquiescence.
    (b) Conduct imputed from an organization to an individual, or 
between individuals. A Federal agency may impute the fraudulent, 
criminal, or other improper conduct of any organization to an 
individual, or from one individual to another individual, if the 
individual to whom the improper conduct is imputed either participated 
in, had knowledge of, or reason to know of the improper conduct.
    (c) Conduct imputed from one organization to another organization. A 
Federal agency may impute the fraudulent, criminal, or other improper 
conduct of one organization to another organization when the improper 
conduct occurred in connection with a partnership, joint venture, joint 
application, association or similar arrangement, or when the 
organization to whom the improper conduct is imputed has the power to 
direct, manage, control, or influence the activities of the organization 
responsible for the improper conduct. Acceptance of the benefits derived 
from the conduct is evidence of knowledge, approval, or acquiescence.



Sec.  417.635  May a Federal agency settle a debarment or 
suspension action?

    Yes, a Federal agency may settle a debarment or suspension action at 
any time if it is in the best interest of the Federal Government.



Sec.  417.640  May a settlement include a voluntary exclusion?

    Yes, if a Federal agency enters into a settlement with you in which 
you agree to be excluded, it is called a voluntary exclusion and has 
governmentwide effect.



Sec.  417.645  Do other Federal agencies know if an agency agrees
to a voluntary exclusion?

    (a) Yes, the Federal agency agreeing to the voluntary exclusion 
enters information about it into SAM Exclusions.
    (b) Also, any agency or person may contact the Federal agency that 
agreed to the voluntary exclusion to find out the details of the 
voluntary exclusion.



Sec.  417.650  May an administrative agreement be the result of
a settlement?

    Yes, a Federal agency may enter into an administrative agreement 
with you as part of the settlement of a debarment or suspension action.



Sec.  417.655  How will other Federal awarding agencies know about
an administrative agreement that is the result of a settlement?

    The suspending or debarring official who enters into an 
administrative agreement with you must report information about the 
agreement to the designated integrity and performance system within 
three business days after entering into the agreement. This information 
is required by section 872 of the Duncan Hunter National Defense 
Authorization Act for Fiscal Year 2009 (41 U.S.C. 2313).



Sec.  417.660  Will administrative agreement information about
me in the designated integrity and performance system accessible
through SAM be corrected or updated?

    Yes, the suspending or debarring official who entered information 
into the designated integrity and performance system about an 
administrative agreement with you:

[[Page 273]]

    (a) Must correct the information within three business days if he or 
she subsequently learns that any of the information is erroneous.
    (b) Must correct in the designated integrity and performance system, 
within three business days, the ending date of the period during which 
the agreement is in effect, if the agreement is amended to extend that 
period.
    (c) Must report to the designated integrity and performance system, 
within three business days, any other modification to the administrative 
agreement.
    (d) Is strongly encouraged to amend the information in the 
designated integrity and performance system in a timely way to 
incorporate any update that he or she obtains that could be helpful to 
Federal awarding agencies who must use the system.



                          Subpart G_Suspension



Sec.  417.755  When will I know whether the USDA suspension is 
continued or terminated?

    The suspending official must make a written decision whether to 
continue, modify, or terminate your suspension within 45 days of closing 
the official record. The official record closes upon the suspending 
official's receipt of final submissions, information and findings of 
fact, if any. The suspending official may extend that period for good 
cause. However, the record will remain open for the full 30 days, as 
called for in Sec.  180.725, even when you make a submission before the 
30 days expire.



                           Subpart H_Debarment



Sec.  417.800  What are the USDA causes for debarment?

    A Federal agency may debar a person for--
    (a) Conviction of or civil judgment for--
    (1) Commission of fraud or a criminal offense in connection with 
obtaining, attempting to obtain, or performing a public or private 
agreement or transaction;
    (2) Violation of Federal or State antitrust statutes, including 
those proscribing price fixing between competitors, allocation of 
customers between competitors, and bid rigging;
    (3) Commission of embezzlement, theft, forgery, bribery, 
falsification or destruction of records, making false statements, tax 
evasion, receiving stolen property, making false claims, or obstruction 
of justice; or
    (4) Commission of any other offense indicating a lack of business 
integrity or business honesty that seriously and directly affects your 
present responsibility;
    (b) Violation of the terms of a public agreement or transaction so 
serious as to affect the integrity of an agency program, such as--
    (1) A willful failure to perform in accordance with the terms of one 
or more public agreements or transactions;
    (2) A history of failure to perform or of unsatisfactory performance 
of one or more public agreements or transactions; or
    (3) A willful violation of a statutory or regulatory provision or 
requirement applicable to a public agreement or transaction;
    (c) Any of the following causes:
    (1) A nonprocurement debarment by any Federal agency taken before 
March 1, 1989, or a procurement debarment by any Federal agency taken 
pursuant to 48 CFR part 9, subpart 9.4, before August 25, 1995;
    (2) Knowingly doing business with an ineligible person, except as 
permitted under Sec.  180.135;
    (3) Failure to pay a single substantial debt, or a number of 
outstanding debts (including disallowed costs and overpayments, but not 
including sums owed the Federal Government under the Internal Revenue 
Code) owed to any Federal agency or instrumentality, provided the debt 
is uncontested by the debtor or, if contested, provided that the 
debtor's legal and administrative remedies have been exhausted;
    (4) Violation of a material provision of a voluntary exclusion 
agreement entered into under Sec.  180.640 or of any settlement of a 
debarment or suspension action; or
    (5) Violation of the provisions of the Drug-Free Workplace Act of 
1988 (41 U.S.C. 701); or

[[Page 274]]

    (d) Any other cause of so serious or compelling a nature that it 
affects your present responsibility.



Sec.  417.865  How long may my debarment last?

    (a) If the debarring official decides to debar you, your period of 
debarment will be based on the seriousness of the cause(s) upon which 
your debarment is based. Generally, debarment should not exceed 3 years. 
However, if circumstances warrant, the debarring official may impose a 
longer period of debarment.
    (b) In determining the period of debarment, the debarring official 
may consider the factors in 2 CFR 180.860. If a suspension has preceded 
your debarment, the debarring official must consider the time you were 
suspended.
    (c) If the debarment is for a violation of the provisions of the 
Drug-Free Workplace Act of 1988, your period of debarment may not exceed 
5 years.
    (d) The Secretary shall permanently debar from participation in USDA 
programs any individual, organization, corporation, or other entity 
convicted of a felony for knowingly defrauding the United States in 
connection with any program administered by USDA.
    (1) Reduction. If the Secretary considers it appropriate s/he may 
reduce a debarment under this subsection to a period of not less than 10 
years.
    (2) Exemption. A debarment under this subsection shall not apply 
with regard to participation in USDA domestic food assistance programs. 
For purposes of this paragraph, participation in a domestic food 
assistance program does not include acting as an authorized retail food 
store in the Supplemental Nutrition Assistance Program (SNAP), the 
Special Supplemental Nutrition Assistance Program for Women, Infants, 
and Children (WIC), or as a nonbeneficiary entity in any of the domestic 
food assistance programs. The programs include:
    (i) Special Nutrition Assistance Program, 7 U.S.C. 2011, et seq.;
    (ii) Food Distribution Program on Indian Reservations, 7 U.S.C. 
2013(b);
    (iii) National School Lunch Program, 42 U.S.C. 1751, et seq.;
    (iv) Summer Food Service Program for Children, 42 U.S.C. 1761; Child 
and Adult Care Food Program, 42 U.S.C. 1766;
    (v) Special Milk Program for Children, 42 U.S.C. 1772; School 
Breakfast Program, 42 U.S.C. 1773;
    (vi) Special Supplemental Nutrition Program for Women, Infants, and 
Children, 42 U.S.C. 1786;
    (vii) Commodity Supplemental Food Program, 42 U.S.C. 612c note;
    (viii) WIC Farmers Market Nutrition Program, 42 U.S.C. 1786;
    (ix) Senior Farmers' Market Nutrition Program, 7 U.S.C. 3007; and
    (x) Emergency Food Assistance Program, 7 U.S.C. 7501, et. seq.



Sec.  417.870  When do I know if the USDA debarring official debars me?

    (a) The debarring official must make a written decision whether to 
debar within 45 days of closing the official record. The official record 
closes upon the debarring official's receipt of final submissions, 
information and findings of fact, if any. The debarring official may 
extend that period for good cause. However, the record will remain open 
for the full 30 days, as called for in Sec.  180.820, even when you make 
a submission before the 30 days expire.
    (b) The debarring official sends you written notice, pursuant to 
Sec.  180.615, that the official decided, either:
    (1) Not to debar you; or
    (2) To debar you. In this event, the notice:
    (i) Refers to the Notice of Proposed Debarment;
    (ii) Specifies the reasons for your debarment;
    (iii) States the period of your debarment, including the effective 
dates; and
    (iv) Advises you that your debarment is effective for covered 
transactions and contracts that are subject to the Federal Acquisition 
Regulation (48 CFR chapter 1), throughout the Executive Branch of the 
Federal Government unless an agency head or an authorized designee 
grants an exception.

[[Page 275]]



                          Subpart I_Definitions



Sec.  417.930  Debarring official (USDA supplement to governmentwide 
definition at 2 CFR 180.930).

    (a) Debarring official means an agency official who is authorized to 
impose debarment. The debarring official is either:
    (1) The agency head; or
    (2) An official designated by the agency head.
    (b) The head of an organizational unit within USDA (e.g., 
Administrator, Food and Nutrition Service), who has been delegated 
authority in 7 CFR part 2 to carry out a covered transaction, is 
delegated authority to act as the debarring official in connection with 
such transaction. This authority to act as a debarring official may not 
be redelegated below the head of the organizational unit, except that, 
in the case of the Forest Service, the Chief may redelegate the 
authority to act as a debarring official to the Deputy Chief for the 
National Forest System or an Associate Deputy Chief for the National 
Forest System.



Sec.  417.935  Disqualified (USDA supplement to governmentwide
definition at 2 CFR 180.935).

    ``Disqualified'' means that a person is prohibited from 
participating in specified Federal procurement or nonprocurement 
transactions as required under a statute, Executive order (other than 
Executive Orders 12549 and 12689) or other authority. Examples of 
disqualifications include persons prohibited under--
    (a) The Davis-Bacon Act (40 U.S.C. 276(a));
    (b) The equal employment opportunity acts and Executive orders; or
    (c) The Clean Air Act (42 U.S.C. 7606), Clean Water Act (33 U.S.C. 
1368) and Executive Order 11738 (3 CFR, 1973 Comp., p. 799);
    (d) 515(h) of the Federal Crop Insurance Act (7 U.S.C. 1515(h));
    (e) Section 12 of the Food and Nutrition Act of 2008 (7 U.S.C. 
2021).

[84 FR 52996, Oct. 4, 2019]



Sec.  417.970  Nonprocurement transaction.

    (a) ``Nonprocurement transaction'' means any transaction, regardless 
of type (except procurement contracts), including, but not limited to 
the following:
    (1) Grants.
    (2) Cooperative agreements.
    (3) Scholarships.
    (4) Fellowships.
    (5) Contracts of assistance.
    (6) Loans.
    (7) Loan guarantees.
    (8) Subsidies.
    (9) Insurances.
    (10) Payments for specified uses.
    (11) Donation agreements.
    (b) A nonprocurement transaction at any tier does not require the 
transfer of Federal funds.

[84 FR 52996, Oct. 4, 2019]



Sec.  417.1010  Suspending official (USDA supplement to governmentwide
definition at 2 CFR 180.1010).

    (a) Suspending official means an agency official who is authorized 
to impose suspension. The suspending official is either:
    (1) The agency head; or
    (2) An official designated by the agency head.
    (b) The head of an organizational unit within USDA (e.g., 
Administrator, Food and Nutrition Service), who has been delegated 
authority in 7 CFR part 2 of this title to carry out a covered 
transaction, is delegated authority to act as the suspending official in 
connection with such transaction. This authority to act as a suspending 
official may not be redelegated below the head of the organizational 
unit, except that, in the case of the Forest Service, the Chief may 
redelegate the authority to act as a suspending official to the Deputy 
Chief for the National Forest System or an Associate Deputy Chief for 
the National Forest System.



            Sec. Appendix 1 to Part 417--Covered Transactions

                          Covered Transactions

[[Page 276]]

[GRAPHIC] [TIFF OMITTED] TR04OC19.006


[84 FR 52996, Oct. 4, 2019]

Subpart J [Reserved]



PART 418_NEW RESTRICTIONS ON LOBBYING--Table of Contents



                            Subpart A_General

Sec.
418.100 Conditions on use of funds.
418.105 Definitions.
418.110 Certification and disclosure.

                  Subpart B_Activities by Own Employees

418.200 Agency and legislative liaison.
418.205 Professional and technical services.
418.210 Reporting.

            Subpart C_Activities by Other Than Own Employees

418.300 Professional and technical services.

                   Subpart D_Penalties and Enforcement

418.400 Penalties.
418.405 Penalty procedures.
418.410 Enforcement.

                          Subpart E_Exemptions

418.500 Secretary of Defense.

                        Subpart F_Agency Reports

418.600 Semi-annual compilation.
418.605 Inspector General report.

Appendix A to Part 418--Certification Regarding Lobbying
Appendix B to Part 418--Disclosure Form to Report Lobbying

    Authority: 31 U.S.C. 1352; 5 U.S.C. 301.

    Source: 79 FR 75985, Dec. 19, 2014, unless otherwise noted.



                            Subpart A_General



Sec.  418.100  Conditions on use of funds.

    (a) No appropriated funds may be expended by the recipient of a 
Federal contract, grant, loan, or cooperative

[[Page 277]]

agreement 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 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.  418.105  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. (1) Covered Federal action means any of 
the following Federal actions:
    (i) The awarding of any Federal contract;
    (ii) The making of any Federal grant;
    (iii) The making of any Federal loan;
    (iv) The entering into of any cooperative agreement; and,
    (v) The extension, continuation, renewal, amendment, or modification 
of any Federal contract, grant, loan, or cooperative agreement.
    (2) 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.

[[Page 278]]

    (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 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 professional 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.

[[Page 279]]



Sec.  418.110  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
    (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)(1) Each person shall file a certification, and a disclosure 
form, if required, upon receipt by such person of:
    (i) A Federal contract, grant, or cooperative agreement exceeding 
$100,000; or
    (ii) A Federal loan or a commitment providing for the United States 
to insure or guarantee a loan exceeding $150,000,
    (2) 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 shall file a certification, and a disclosure form, if 
required, to the next tier above 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.
    (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 of this part.

[[Page 280]]



                  Subpart B_Activities by Own Employees



Sec.  418.200  Agency and legislative liaison.

    (a) The prohibition on the use of appropriated funds, in Sec.  
418.100 (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.
    (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.



Sec.  418.205  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec.  
418.100 (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

[[Page 281]]

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 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.



Sec.  418.210  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.  418.300  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec.  
418.100 (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 requirements in Sec.  418.110 (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.

[[Page 282]]



                   Subpart D_Penalties and Enforcement



Sec.  418.400  Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be 
subject to a civil penalty of not less than $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.  418.405  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.s 3803 
(except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 3812, insofar 
as these provisions are not inconsistent with the requirements herein.



Sec.  418.410  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.  418.500  Secretary of Defense.

    (a) 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) The Department of Defense may issue supplemental regulations to 
implement paragraph (a) of this section.



                        Subpart F_Agency Reports



Sec.  418.600  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 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

[[Page 283]]

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.  418.605  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 418--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 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

[[Page 284]]

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 285]]



     Sec. Appendix B to Part 418--Disclosure Form To Report Lobbying
[GRAPHIC] [TIFF OMITTED] TR19DE14.001


[[Page 286]]


[GRAPHIC] [TIFF OMITTED] TR19DE14.002


[[Page 287]]


[GRAPHIC] [TIFF OMITTED] TR19DE14.003


[[Page 288]]





PART 421_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
421.10 What does this part do?
421.20 Does this part apply to me?
421.30 What policies and procedures must I follow?

Subpart A--Purpose and Coverage [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

421.225 Whom in the USDA does a recipient other than an individual 
          notify about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

421.300 Whom in the USDA does a recipient who is an individual notify 
          about a criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

421.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of This Part and Consequences

421.500 Who in the USDA determines that a recipient other than an 
          individual violated the requirements of this part?
421.505 Who in the USDA determines that a recipient who is an individual 
          violated the requirements of this part?

    Authority: 41 U.S.C. 701-707.

    Source: 76 FR 76610, Dec. 8, 2011, unless otherwise noted.



Sec.  421.10  What does this part do?

    This part requires that the award and administration of USDA grants 
and cooperative agreements comply with Office of Management and Budget 
(OMB) guidance implementing the portion of the Drug-Free Workplace Act 
of 1988 (41 U.S.C. 701-707, as amended, hereafter referred to as ``the 
Act'') that applies to grants. It thereby--
    (a) Gives regulatory effect to the OMB guidance (Subparts A through 
F of 2 CFR part 182) for USDA's grants and cooperative agreements; and
    (b) Establishes USDA policies and procedures for compliance with the 
Act that are the same as those of other Federal agencies, in conformance 
with the requirement in 41 U.S.C. 705 for Governmentwide implementing 
regulations.



Sec.  421.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in Subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of a USDA grant or cooperative agreement; or
    (b) USDA awarding official.



Sec.  421.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table. For each 
of those sections, you must follow the policies and procedures in the 
OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   421.225.  Whom in the USDA a
                                                 recipient other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   421.300.  Whom in the USDA a
                                                 recipient who is an
                                                 individual must notify
                                                 if he or she is
                                                 convicted of a criminal
                                                 drug offense resulting
                                                 from a violation
                                                 occurring during the
                                                 conduct of any award
                                                 activity.
(3) 2 CFR 182.500............  Sec.   421.500.  Who in the USDA is
                                                 authorized to determine
                                                 that a recipient other
                                                 than an individual is
                                                 in violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.

[[Page 289]]

 
(4) 2 CFR 182.505............  Sec.   421.505.  Who in the USDA is
                                                 authorized to determine
                                                 that a recipient who is
                                                 an individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in Subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, USDA policies 
and procedures are the same as those in the OMB guidance.

Subpart A--Purpose and Coverage [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  421.225  Whom in the USDA does a recipient other than an 
individual notify about a criminal drug conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify the awarding official for each USDA 
agency from which the recipient currently has an award.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  421.300  Whom in the USDA does a recipient who is an individual
notify about a criminal drug conviction?

    A recipient who is an individual that is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify the awarding official for each USDA agency from 
which the recipient currently has an award.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  421.400  What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award:
    Drug-free workplace. You as the recipient must comply with drug-free 
workplace requirements in Subpart B (or Subpart C, if the recipient is 
an individual) of part 421, which adopts the Governmentwide 
implementation (2 CFR part 182) of sec. 5152-5158 of the Drug-Free 
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 
701-707).



           Subpart E_Violations of This Part and Consequences



Sec.  421.500  Who in the USDA determines that a recipient other than
an individual violated the requirements of this part?

    The Secretary of Agriculture and the Secretary's designee or 
designees are authorized to make the determination under 2 CFR 182.500.



Sec.  421.505  Who in the USDA determines that a recipient who is an 
individual violated the requirements of this part?

    The Secretary of Agriculture and the Secretary's designee or 
designees are authorized to make the determination under 2 CFR 182.505.



PART 422_RESEARCH INSTITUTIONS CONDUCTING USDA-FUNDED EXTRAMURAL 
RESEARCH; RESEARCH MISCONDUCTS--Table of Contents



Sec.
422.1 Definitions.
422.2 Procedures.
422.3 Inquiry, investigation, and adjudication.
422.4 USDA Panel to determine appropriateness of research misconduct 
          policy.
422.5 Reservation of right to conduct subsequent inquiry, investigation, 
          and adjudication.
422.6 Notification of USDA of allegations of research misconduct.
422.7 Notification of ARIO during an inquiry of investigation.

[[Page 290]]

422.8 Communication of research misconduct policies and procedures.
422.9 Documents required.
422.10 Reporting to USDA.
422.11 Research records and evidence.
422.12 Remedies for noncompliance.
422.13 Appeals.
422.14 Relationship to other requirements.

    Authority: 5 U.S.C. 301; Office of Science and Technology Policy (65 
FR 76260); USDA Secretary's Memorandum (SM) 2400-007; and USDA OIG, 7 
CFR 2610.1(c)(4)(ix).

    Source: 79 FR 75992, Dec. 19, 2014, unless otherwise noted.



Sec.  422.1  Definitions.

    The following definitions apply to this part:
    Adjudication. The stage in response to an allegation of research 
misconduct when the outcome of the investigation is reviewed, and 
appropriate corrective actions, if any, are determined. Corrective 
actions generally will be administrative in nature, such as termination 
of an award, debarment, award restrictions, recovery of funds, or 
correction of the research record. However, if there is an indication of 
violation of civil or criminal statutes, civil or criminal sanctions may 
be pursued.
    Agency Research Integrity Officer (ARIO). The individual appointed 
by a USDA agency that conducts research and who is responsible for:
    (1) Receiving and processing allegations of research misconduct as 
assigned by the USDA RIO;
    (2) Informing OIG and the USDA RIO and the research institution 
associated with the alleged research misconduct, of allegations of 
research misconduct in the event it is reported to the USDA agency;
    (3) Ensuring that any records, documents and other materials 
relating to a research misconduct allegation are provided to OIG when 
requested;
    (4) Coordinating actions taken to address allegations of research 
misconduct with respect to extramural research with the research 
institution(s) at which time the research misconduct is alleged to have 
occurred, and with the USDA RIO;
    (5) Overseeing proceedings to address allegations of extramurally 
funded research misconduct at intramural research institutions and 
research institutions where extramural research occurs;
    (6) Ensuring that agency action to address allegations of research 
misconduct at USDA agencies performing extramurally funded research is 
performed at an organizational level that allows an independent, 
unbiased, and equitable process;
    (7) Immediately notifying OIG, the USDA RIO, and the applicable 
research institution if:
    (i) Public health or safety is at risk;
    (ii) USDA's resources, reputation, or other interests need 
protecting;
    (iii) Research activities should be suspended;
    (iv) Federal action may be needed to protect the interest of a 
subject of the investigation or of others potentially affected;
    (v) A premature public disclosure of the inquiry into or 
investigation of the allegation may compromise the process;
    (vi) The scientific community or the public should be informed; or
    (vii) Behavior that is or may be criminal in nature is discovered at 
any point during the inquiry, investigation, or adjudication phases of 
the research misconduct proceedings;
    (8) Documenting the dismissal of the allegation, and ensuring that 
the name of the accused individual and/or institution is cleared if an 
allegation of research misconduct is dismissed at any point during the 
inquiry or investigation phase of the proceedings;
    (9) Other duties relating to research misconduct proceedings as 
assigned.
    Allegation. A disclosure of possible research misconduct through any 
means of communication. The disclosure may be by written or oral 
statement, or by other means of communication to an institutional or 
USDA official.
    Applied research. Systematic study to gain knowledge or 
understanding necessary to determine the means by which a recognized and 
specific need may be met.
    Assistant Inspector General for Investigations. The individual in 
OIG who is responsible for OIG's domestic and foreign investigative 
operations through a headquarters office and the six regional offices.

[[Page 291]]

    Basic research. Systematic study directed toward fuller knowledge or 
understanding of the fundamental aspects of phenomena and of observable 
facts without specific applications towards processes or products in 
mind.
    Extramural research. Research conducted by any research institution 
other than the Federal agency to which the funds supporting the research 
were appropriated. Research institutions conducting extramural research 
may include Federal research facilities.
    Fabrication. Making up data or results and recording or reporting 
them.
    Falsification. Manipulating research materials, equipment, or 
processes, or changing or omitting data or results such that the 
research is not accurately represented in the research record.
    Finding of research misconduct. The conclusion, proven by a 
preponderance of the evidence, that research misconduct occurred, that 
such research misconduct represented a significant departure from 
accepted practices of the relevant research community, and that such 
research misconduct was committed intentionally, knowingly, or 
recklessly.
    Inquiry. The stage in the response to an allegation of research 
misconduct when an assessment is made to determine whether the 
allegation has substance and whether an investigation is warranted.
    Intramural research. Research conducted by a Federal Agency, to 
which funds were appropriated for the purpose of conducting research.
    Investigation. The stage in the response to an allegation of 
research misconduct when the factual record is formally developed and 
examined to determine whether to dismiss the case, recommend a finding 
of research misconduct, and/or take other appropriate remedies.
    Office of Inspector General (OIG). The Office of Inspector General 
of the United States Department of Agriculture.
    Office of Science and Technology Policy (OSTP). The Office of 
Science and Technology Policy of the Executive Office of the President.
    Plagiarism. The appropriation of another person's ideas, processes, 
results, or words without giving appropriate credit.
    Preponderance of the evidence. Proof by information that, compared 
with that opposing it, leads to the conclusion that the fact at issue is 
more probably true than not.
    Research. All basic, applied, and demonstration research in all 
fields of science, engineering, and mathematics. This includes, but is 
not limited to, research in economics, education, linguistics, medicine, 
psychology, social sciences, statistics, and research involving human 
subjects or animals regardless of the funding mechanism used to support 
it.
    Research institution. All organizations using Federal funds for 
research, including, for example, colleges and universities, Federally 
funded research and development centers, national user facilities, 
industrial laboratories, or other research institutes.
    Research misconduct. Fabrication, falsification, or plagiarism in 
proposing, performing, or reviewing research, or in reporting research 
results. Research misconduct does not include honest error or 
differences of opinion.
    Research record. The record of data or results that embody the facts 
resulting from scientific inquiry, and includes, but is not limited to, 
research proposals, research records (including data, notes, journals, 
laboratory records (both physical and electronic)), progress reports, 
abstracts, theses, oral presentations, internal reports, and journal 
articles.
    USDA. United States Department of Agriculture.
    USDA Research Integrity Officer (USDA RIO). The individual 
designated by the Office of the Under Secretary for Research, Education, 
and Economics (REE) who is responsible for:
    (1) Overseeing USDA agency responses to allegations of research 
misconduct;
    (2) Ensuring that agency research misconduct procedures are 
consistent with this part;
    (3) Receiving and assigning allegations of research misconduct 
reported by the public;
    (4) Developing Memoranda of Understanding with agencies that elect 
not

[[Page 292]]

to develop their own research misconduct procedures;
    (5) Monitoring the progress of all research misconduct cases; and
    (6) Serving as liaison with OIG to receive allegations of research 
misconduct when they are received via the OIG Hotline.



Sec.  422.2  Procedures.

    Research institutions that conduct extramural research funded by 
USDA must foster an atmosphere conducive to research integrity. They 
must develop or have procedures in place to respond to allegations of 
research misconduct that ensure:
    (a) Appropriate separations of responsibility for inquiry, 
investigation, and adjudication;
    (b) Objectivity;
    (c) Due process;
    (d) Whistleblower protection;
    (e) Confidentiality. To the extent possible and consistent with a 
fair and thorough investigation and as allowed by law, knowledge about 
the identity of subjects and informants is limited to those who need to 
know; and
    (f) Timely resolution.



Sec.  422.3  Inquiry, investigation, and adjudication.

    A research institution that conducts extramural research funded by 
USDA bears primary responsibility for prevention and detection of 
research misconduct and for the inquiry, investigation, and adjudication 
of research misconduct allegations reported directly to it. The research 
institution must perform an inquiry in response to an allegation, and 
must follow the inquiry with an investigation if the inquiry determines 
that the allegation or apparent instance of research misconduct has 
substance. The responsibilities for adjudication must be separate from 
those for inquiry and investigation. In most instances, USDA will rely 
on a research institution conducting extramural research to promptly:
    (a) Initiate an inquiry into any suspected or alleged research 
misconduct;
    (b) Conduct a subsequent investigation, if warranted;
    (c) Acquire, prepare, and maintain appropriate records of 
allegations of extramural research misconduct and all related inquiries, 
investigations, and findings; and
    (d) Take action to ensure the following:
    (1) The integrity of research;
    (2) The rights and interests of the subject of the investigation and 
the public are protected;
    (3) The observance of legal requirements or responsibilities 
including cooperation with criminal investigations; and
    (4) Appropriate safeguards for subjects of allegations, as well as 
informants (see Sec.  422.6). These safeguards should include timely 
written notification of subjects regarding substantive allegations made 
against them; a description of all such allegations; reasonable access 
to the data and other evidence supporting the allegations; and the 
opportunity to respond to allegations, the supporting evidence and the 
proposed findings of research misconduct, if any.



Sec.  422.4  USDA Panel to determine appropriateness of research 
misconduct policy.

    Before USDA will rely on a research institution to conduct an 
inquiry, investigation, and adjudication of an allegation in accordance 
with this part, the research institution where the research misconduct 
is alleged must provide the ARIO its policies and procedures related to 
research misconduct at the institution. The research institution has the 
option of providing either a written copy of such policies and 
procedures or a Web site address where such policies and procedures can 
be accessed. The ARIO to whom the policies and procedures were made 
available shall convene a panel comprised of the USDA RIO and ARIOs from 
the Forest Service, the Agricultural Research Service, and the National 
Institute of Food and Agriculture. The Panel will review the research 
institution's policies and procedures for compliance with the OSTP 
Policy and render a decision regarding the research institution's 
ability to adequately resolve research misconduct allegations. The ARIO 
will inform the research institution of the Panel's determination that 
its inquiry, investigation, and adjudication procedures are

[[Page 293]]

sufficient. If the Panel determines that the research institution does 
not have sufficient policies and procedures in place to conduct inquiry, 
investigation, and adjudication proceedings, or that the research 
institution is in any way unfit or unprepared to handle the inquiry, 
investigation, and adjudication in a prompt, unbiased, fair, and 
independent manner, the ARIO will inform the research institution in 
writing of the Panel's decision. An appropriate USDA agency, as 
determined by the Panel, will then conduct the inquiry, investigation, 
and adjudication of research misconduct in accordance with this part. If 
an allegation of research misconduct is made regarding extramural 
research conducted at a Federal research institution (whether USDA or 
not), it is presumed that the Federal research institution has research 
misconduct procedures consistent with the OSTP Policy. USDA reserves the 
right to convene the Panel to assess the sufficiency of a Federal 
agency's research misconduct procedures, should there be any question 
whether the agency's procedures will ensure a fair, unbiased, equitable, 
and independent inquiry, investigation, and adjudication process.



Sec.  422.5  Reservation of right to conduct subsequent inquiry,
investigation, and adjudication.

    (a) USDA reserves the right to conduct its own inquiry, 
investigation, and adjudication into allegations of research misconduct 
at a research institution conducting extramural research subsequent to 
the proceedings of the research institution related to the same 
allegation. This may be necessary if the USDA RIO or ARIO believes, in 
his or her sound discretion, that despite the Panel's finding that the 
research institution in question had appropriate and OSTP-compliant 
research misconduct procedures in place, the research institution 
conducting the extramural research at issue:
    (1) Did not adhere to its own research misconduct procedures;
    (2) Did not conduct research misconduct proceedings in a fair, 
unbiased, or independent manner; or
    (3) Has not completed research misconduct inquiry, investigation, or 
adjudication in a timely manner.
    (b) Additionally, USDA reserves the right to conduct its own 
inquiry, investigation, and adjudication into allegations of research 
misconduct at a research institution conducting extramural research 
subsequent to the proceedings of the research institution related to the 
same allegation for any other reason that the USDA RIO or ARIO considers 
it appropriate to conduct research misconduct proceedings in lieu of the 
research institution's conducting the extramural research at issue. This 
right is subject to paragraph (c) of this section.
    (c) In cases where the USDA RIO or ARIO believes it is necessary for 
USDA to conduct its own inquiry, investigation, and adjudication 
subsequent to the proceedings of the research institution related to the 
same allegation, the USDA RIO or ARIO shall reconvene the Panel, which 
will determine whether it is appropriate for the relevant USDA agency to 
conduct the research misconduct proceedings related to the allegation(s) 
of research misconduct. If the Panel determines that it is appropriate 
for a USDA agency to conduct the proceedings, the ARIO will immediately 
notify the research institution in question. The research institution 
must then promptly provide the relevant USDA agency with documentation 
of the research misconduct proceedings the research institution has 
conducted to that point, and the USDA agency will conduct research 
misconduct proceedings in accordance with the Agency research misconduct 
procedures.



Sec.  422.6  Notification of USDA of allegations of research misconduct.

    (a) Research institutions that conduct USDA-funded extramural 
research must promptly notify OIG and the USDA RIO of all allegations of 
research misconduct involving USDA funds when the institution inquiry 
into the allegation warrants the institution moving on to an 
investigation.
    (b) Individuals at research institutions who suspect research 
misconduct at the institution should report allegations in accordance 
with the institution's research misconduct policies and procedures. 
Anyone else who suspects

[[Page 294]]

that researchers or research institutions performing Federally-funded 
research may have engaged in research misconduct is encouraged to make a 
formal allegation of research misconduct to OIG.
    (1) OIG may be notified using any of the following methods:
    (i) Via the OIG Hotline: Telephone: (202) 690-1622, (800) 424-9121, 
(202) 690-1202 (TDD).
    (ii) Email: [email protected].
    (iii) U.S. Mail: United States Department of Agriculture, Office of 
Inspector General, P.O. Box 23399, Washington, DC 20026-3399.
    (2) The USDA RIO may be reached at: USDA Research Integrity Officer, 
214W Whitten Building, Washington, DC 20250; telephone: 202-720-5923; 
Email: [email protected].
    (c) To the extent known, the following details should be included in 
any formal allegation:
    (1) The name of the research projects involved, the nature of the 
alleged misconduct, and the names of the individual or individuals 
alleged to be involved in the misconduct;
    (2) The source or sources of funding for the research project or 
research projects involved in the alleged misconduct;
    (3) Important dates;
    (4) Any documentation that bears upon the allegation; and
    (5) Any other potentially relevant information.
    (d) Safeguards for informants give individuals the confidence that 
they can bring allegations of research misconduct made in good faith to 
the attention of appropriate authorities or serve as informants to an 
inquiry or an investigation without suffering retribution. Safeguards 
include protection against retaliation for informants who make good 
faith allegations, fair and objective procedures for the examination and 
resolution of allegations of research misconduct, and diligence in 
protecting the positions and reputations of those persons who make 
allegations of research misconduct in good faith. The identity of 
informants who wish to remain anonymous will be kept confidential to the 
extent permitted by law or regulation.



Sec.  422.7  Notification of ARIO during an inquiry or investigation.

    (a) Research institutions that conduct USDA-funded extramural 
research must promptly notify the ARIO should the institution become 
aware during an inquiry or investigation that:
    (1) Public health or safety is at risk;
    (2) The resources, reputation, or other interests of USDA are in 
need of protection;
    (3) Research activities should be suspended;
    (4) Federal action may be needed to protect the interest of a 
subject of the investigation or of others potentially affected;
    (5) A premature public disclosure of the inquiry into or 
investigation of the allegation may compromise the process;
    (6) The scientific community or the public should be informed; or
    (7) There is reasonable indication of possible violations of civil 
or criminal law.
    (b) If research misconduct proceedings reveal behavior that may be 
criminal in nature at any point during the proceedings, the institution 
must promptly notify the ARIO.



Sec.  422.8  Communication of research misconduct policies and 
procedures.

    Institutions that conduct USDA-funded extramural research are to 
maintain and effectively communicate to their staffs policies and 
procedures relating to research misconduct, including the guidelines in 
this part. The institution is to inform their researchers and staff 
members who conduct USDA-funded extramural research when and under what 
circumstances USDA is to be notified of allegations of research 
misconduct, and when and under what circumstances USDA is to be updated 
on research misconduct proceedings.



Sec.  422.9  Documents required.

    (a) A research institution that conducts USDA-funded extramural 
research must maintain the following documents related to an allegation 
of research misconduct at the research institution:

[[Page 295]]

    (1) A written statement describing the original allegation;
    (2) A copy of the formal notification presented to the subject of 
the allegation;
    (3) A written report describing the inquiry stage and its outcome 
including copies of all supporting documentation;
    (4) A description of the methods and procedures used to gather and 
evaluate information pertinent to the alleged misconduct during inquiry 
and investigation stages;
    (5) A written report of the investigation, including the evidentiary 
record and supporting documentation;
    (6) A written statement of the findings; and
    (7) If applicable, a statement of recommended corrective actions, 
and any response to such a statement by the subject of the original 
allegation, and/or other interested parties, including any corrective 
action plan.
    (b) The research institution must retain the documents specified in 
paragraph (a) of this section for at least 3 years following the final 
adjudication of the alleged research misconduct.



Sec.  422.10  Reporting to USDA.

    Following completion of an investigation into allegations of 
research misconduct, the institution conducting extramural research must 
provide to the ARIO a copy of the evidentiary record, the report of the 
investigation, recommendations made to the institution's adjudicating 
official, the adjudicating official's determination, the institution's 
corrective action taken or planned, and the written response of the 
individual who is the subject of the allegation to any recommendations.



Sec.  422.11  Research records and evidence.

    (a) A research institution that conducts extramural research 
supported by USDA funds, as the responsible legal entity for the USDA-
supported research, has a continuing obligation to create and maintain 
adequate records (including documents and other evidentiary matter) as 
may be required by any subsequent inquiry, investigation, finding, 
adjudication, or other proceeding.
    (b) Whenever an investigation is initiated, the research institution 
must promptly take all reasonable and practical steps to obtain custody 
of all relevant research records and evidence as may be necessary to 
conduct the research misconduct proceedings. This must be accomplished 
before the research institution notifies the researcher/respondent of 
the allegation, or immediately thereafter.
    (c) The original research records and evidence taken into custody by 
the research institution shall be inventoried and stored in a secure 
place and manner. Research records involving raw data shall include the 
devices or instruments on which they reside. However, if deemed 
appropriate by the research institution or investigator, research data 
or records that reside on or in instruments or devices may be copied and 
removed from those instruments or devices as long as the copies are 
complete, accurate, and have substantially equivalent evidentiary value 
as the data or records have when the data or records reside on the 
instruments or devices. Such copies of data or records shall be made by 
a disinterested, qualified technician and not by the subject of the 
original allegation or other interested parties. When the relevant data 
or records have been removed from the devices or instruments, the 
instruments or devices need not be maintained as evidence.



Sec.  422.12  Remedies for noncompliance.

    USDA agencies' implementation procedures identify the administrative 
actions available to remedy a finding of research misconduct. Such 
actions may include the recovery of funds, correction of the research 
record, debarment of the researcher(s) that engaged in the research 
misconduct, proper attribution, or any other action deemed appropriate 
to remedy the instance(s) of research misconduct. The agency should 
consider the seriousness of the misconduct, including, but not limited 
to, the degree to which the misconduct was knowingly conducted, 
intentional, or reckless; was an isolated event or part of a pattern; or 
had significant impact on the research record, research

[[Page 296]]

subjects, other researchers, institutions, or the public welfare. In 
determining the appropriate administrative action, the appropriate 
agency must impose a remedy that is commensurate with the infraction as 
described in the finding of research misconduct.



Sec.  422.13  Appeals.

    (a) If USDA relied on an institution to conduct an inquiry, 
investigation, and adjudication, the alleged person(s) should first 
follow the institution's appeal policy and procedures.
    (b) USDA agencies' implementation procedures identify the appeal 
process when a finding of research misconduct is elevated to the agency.



Sec.  422.14  Relationship to other requirements.

    Some of the research covered by this part also may be subject to 
regulations of other governmental agencies (e.g., a university that 
receives funding from a USDA agency and also under a grant from another 
Federal agency). If more than one agency of the Federal Government has 
jurisdiction, USDA will cooperate with the other agency(ies) in 
designating a lead agency. When USDA is not the lead agency, it will 
rely on the lead agency following its policies and procedures in 
determining whether there is a finding of research misconduct. Further, 
USDA may, in consultation with the lead agency, take action to protect 
the health and safety of the public, to promote the integrity of the 
USDA-supported research and research process, or to conserve public 
funds. When appropriate, USDA will seek to resolve allegations jointly 
with the other agency or agencies.

                        PARTS 423	499 [RESERVED]

[[Page 297]]



                     CHAPTER VI--DEPARTMENT OF STATE




  --------------------------------------------------------------------
Part                                                                Page
600             The uniform administrative requirements, 
                    cost principles, and audit requirements 
                    for Federal awards......................         299
601             Nonprocurement debarment and suspension.....         299
602-699

[Reserved]

[[Page 299]]



PART 600_THE UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



Sec.
600.101 Applicability.
600.205 Federal awarding agency review of risk posed by applicants.
600.315 Intangible property.
600.407 Prior written approval (prior approval).

    Authority: 5 U.S.C. 301; 22 U.S.C 2651a, 22 U.S.C. 2151, 22 U.S.C. 
2451, 22 U.S.C. 1461, 2 CFR part 200.

    Source: 79 FR 76019, Dec. 19, 2014, unless otherwise noted.



Sec.  600.101  Applicability.

    Under the authority listed above, the Department of State adopts the 
Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except 
for:
    (a) The Uniform Administrative Requirements, Cost Principles, and 
Audit Requirements for Federal Awards set forth in 2 CFR part 200 
(Subparts A through F) shall apply to all non-Federal entities, except 
as noted below.
    (b) Subparts A through E of 2 CFR part 200 shall apply to all 
foreign organizations not recognized as Foreign Public Entities and 
Subparts A through D of 2 CFR part 200 shall apply to all U.S. and 
foreign for-profit entities, except where the Federal awarding agency 
determines that the application of these subparts would be inconsistent 
with the international obligations of the United States or the statute 
or regulations of a foreign government. The Federal Acquisition 
Regulation (FAR) at 48 CFR part 30, Cost Accounting Standards, and Part 
31 Contract Cost Principles and Procedures takes precedence over the 
cost principles in Subpart E for Federal awards to U.S. and foreign for-
profit entities. Thus, this part gives regulatory effect to the OMB 
guidance and supplements the guidance as needed for the Department.



Sec.  600.205  Federal awarding agency review of risk posed by applicants.

    Use of 2 CFR 200.205 (the DOS review of risk posed by applicants) is 
required for all selected competitive and non-competitive awards.



Sec.  600.315  Intangible property.

    If the DOS obtains research data solely in response to a FOIA 
request, the DOS may charge the requester fees consistent with the FOIA 
and applicable DOS regulations and policies.



Sec.  600.407  Prior written approval (prior approval).

    The non-Federal entity must seek the prior written approval for 
indirect or special or unusual costs prior to incurring such costs where 
DOS is the cognizant agency.



PART 601_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
601.10 What does this part do?
601.20 Does this part apply to me?
601.30 What policies and procedures must I follow?

                            Subpart A_General

601.137 Who in the Department of State may grant an exception to let an 
          excluded person participate in a covered transaction?

                     Subpart B_Covered Transactions

601.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

601.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

601.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-H [Reserved]

                          Subpart I_Definitions

601.930 Debarring Official (Department of State supplement to 
          government-wide definition at 2 CFR 180.930).

[[Page 300]]

601.1010 Suspending Official (Department of State supplement to 
          government-wide definition at 2 CFR 180.1010).

Subpart J [Reserved]

    Authority: Sec. 2455, Pub. L. 103-355, 108; Stat. 3327 (31 U.S.C. 
6101 note); E.O. 12549; (3 CFR, 1986 Comp., p. 189); E.O. 12689 (3); 
CFR, 1989 Comp., p. 235).

    Source: 72 FR 10034, Mar. 7, 2007, unless otherwise noted.



Sec.  601.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the DOS policies and procedures for nonprocurement debarment and 
suspension. It thereby gives regulatory effect for DOS to the OMB 
guidance as supplemented by this part. This part satisfies the 
requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189); Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235); and section 
2455 of the Federal Acquisition Streamlining Act of 1994, Pub. L. 103-
355 (31 U.S.C. 6101 note).



Sec.  601.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in a DOS suspension or debarment action;
    (c) DOS debarment or suspension official; and
    (d) DOS grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  601.30  What policies and procedures must I follow?

    The DOS policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180 and any supplemental 
policies and procedures set forth in this part.



                            Subpart A_General



Sec.  601.137  Who in the Department of State may grant an exception
to let an excluded person participate in a covered transaction?

    The Procurement Executive, Office of the Procurement Executive, DOS, 
may grant an exception permitting an excluded person to participate in a 
particular covered transaction. If the Procurement Executive, Office of 
the Procurement Executive, DOS, grants an exception, the exception must 
be in writing and state the reason(s) for deviating from the government-
wide policy in Executive Order 12549.



                     Subpart B_Covered Transactions



Sec.  601.220  What contracts and subcontracts, in addition to those 
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.220(b) of the 
OMB guidance, this part applies to any contract, regardless of tier, 
that is awarded by a contractor, subcontractor, supplier, consultant, or 
its agent or representative in any transaction, if the contract is to be 
funded or provided by the DOS under a covered nonprocurement transaction 
and the amount of the contract is expected to equal or exceed $25,000. 
This extends the coverage of the DOS nonprocurement suspension and 
debarment requirements to all lower tiers of subcontracts under covered 
nonprocurement transactions, as permitted under the OMB guidance at 2 
CFR 180.220(c) (see optional lower tier coverage in the figure in the 
appendix to 2 CFR part 180).

[[Page 301]]



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  601.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You, as a participant, must include a term or condition in lower-
tier transactions requiring lower-tier participants to comply with 
subpart C of the OMB guidance in 2 CFR part 180, as supplemented by this 
subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  601.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-H [Reserved]



                          Subpart I_Definitions



Sec.  601.930  Debarring Official (Department of State supplement to
government-wide definition at 2 CFR 180.930).

    The Debarring Official for the Department of State is the 
Procurement Executive, Office of the Procurement Executive (A/OPE).



Sec.  601.1010  Suspending Official (Department of Energy supplement
to government-wide definition at 2 CFR 180.1010).

    The Debarring Official for the Department of State is the 
Procurement Executive, Office of the Procurement Executive (A/OPE).

Subpart J [Reserved]

                        PARTS 602	699 [RESERVED]

[[Page 303]]



            CHAPTER VII--AGENCY FOR INTERNATIONAL DEVELOPMENT




  --------------------------------------------------------------------
Part                                                                Page
700             Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         305
701             Partner vetting in USAID assistance.........         312
702-779

[Reserved]

780             Nonprocurement debarment and suspension.....         316
782             Requirements for drug-free workplace 
                    (financial assistance)..................         317
783-799

[Reserved]

[[Page 305]]



PART 700_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



                   Subpart A_Acronyms and Definitions

Sec.
700.1 Definitions.

                      Subpart B_General Provisions

700.2 Adoption of 2 CFR part 200.
700.3 Applicability.
700.4 Exceptions.
700.5 Supersession.

 Subpart C_Pre-Federal Award Requirements and Contents of Federal Awards

700.6 Metric system of measurement.
700.7 Advance payment.

                Subpart D_Post Federal Award Requirements

700.8 Payment.
700.9 Property standards.
700.10 Cost sharing or matching.
700.11 Contracting with small and minority businesses, women's business 
          enterprises, and labor surplus area firms.
700.12 Contract provisions.
700.13 Additional provisions for awards to for-profit entities.

                        Termination and Disputes

700.14 Termination.
700.15 Disputes.

                      USAID--Specific Requirements

700.16 Marking.

    Authority: Sec. 621, Public L. 87-195, 75 Stat 445, (22 U.S.C. 2381) 
as amended, E.O. 12163, Sept 29, 1979, 44 FR 56673; 2 CFR 1979 Comp., p. 
435.

    Source: 80 FR 55722, Sept. 17, 2015, unless otherwise noted.



                   Subpart A_Acronyms and Definitions



Sec.  700.1  Definitions.

    These are the definitions for terms used in this part. Different 
definitions may be found in Federal statutes or regulations that apply 
more specifically to particular programs or activities.
    Activity means a set of actions through which inputs--such as 
commodities, technical assistance, training, or resource transfers--are 
mobilized to produce specific outputs, such as vaccinations given, 
schools built, microenterprise loans issued, or policies changed. 
Activities are undertaken to achieve objectives that have been formally 
approved and notified to Congress.
    Agreement Officer means a person with the authority to enter into, 
administer, terminate and/or closeout assistance agreements subject to 
this part, and make related determinations and findings on behalf of 
USAID. An Agreement Officer can only act within the scope of a duly 
authorized warrant or other valid delegation of authority. The term 
``Agreement Officer'' includes persons warranted as ``Grant Officers.'' 
It also includes certain authorized representatives of the Agreement 
Officer acting within the limits of their authority as delegated by the 
Agreement Officer.
    Apparently successful applicant(s) means the applicant(s) for USAID 
funding recommended for an award after merit review, but who has not yet 
been awarded a grant, cooperative agreement or other assistance award by 
the Agreement Officer. Apparently successful applicant status confers no 
right and constitutes no USAID commitment to an award, which still must 
be executed by the Agreement Officer.
    Award means financial assistance that provides support or 
stimulation to accomplish a public purpose. Awards include grants, 
cooperative agreements, 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; contracts which are required to be 
entered into and administered under procurement laws and regulations.
    Branding strategy means a strategy the apparently successful 
applicant submits at the specific request of an USAID Agreement Officer 
after merit review of an application for USAID funding, describing how 
the program,

[[Page 306]]

project, or activity is named and positioned, as well as how it is 
promoted and communicated to beneficiaries and cooperating country 
citizens. It identifies all donors and explains how they will be 
acknowledged. A Branding Strategy is required even if a Presumptive 
Exception is approved in the Marking Plan.
    Commodities mean any material, article, supply, goods or equipment, 
excluding recipient offices, vehicles, and non-deliverable items for 
recipient's internal use in administration of the USAID-funded grant, 
cooperative agreement, or other agreement or subagreement.
    Date of completion means the date on which all work under an award 
is completed or the date on the award document, or any supplement or 
amendment, on which USAID sponsorship ends.
    Marking plan means a plan that the apparently successful applicant 
submits at the specific request of a USAID Agreement Officer after merit 
review of an application for USAID funding, detailing the public 
communications, commodities, and program materials and other items that 
will visibly bear the USAID Identity. Recipients may request approval of 
Presumptive Exceptions to marking requirements in the Marking Plan.
    Principal officer means the most senior officer in an USAID 
Operating Unit in the field, e.g., USAID Mission Director or USAID 
Representative. For global programs managed from Washington but executed 
across many countries such as disaster relief and assistance to 
internally displaced persons, humanitarian emergencies or immediate post 
conflict and political crisis response, the cognizant Principal Officer 
may be an Office Director, for example, the Directors of USAID/W/Office 
of Foreign Disaster Assistance and Office of Transition Initiatives. For 
non-presence countries, the cognizant Principal Officer is the Senior 
USAID officer in a regional USAID Operating Unit responsible for the 
non-presence country, or in the absence of such a responsible operating 
unit, the Principle U.S Diplomatic Officer in the non-presence country 
exercising delegated authority from USAID.
    Program means an organized set of activities and allocation of 
resources directed toward a common purpose, objective, or goal 
undertaken or proposed by an organization to carry out the 
responsibilities assigned to it. Projects include all the marginal costs 
of inputs (including the proposed investment) technically required to 
produce a discrete marketable output or a desired result (for example, 
services from a fully functional water/sewage treatment facility).
    Public communications are documents and messages intended for 
distribution to audiences external to the recipient's organization. They 
include, but are not limited to, correspondence, publications, studies, 
reports, audio visual productions, and other informational products; 
applications, forms, press and promotional materials used in connection 
with USAID funded programs, projects or activities, including signage 
and plaques; Web sites/Internet activities; and events such as training 
courses, conferences, seminars, press conferences and the like.
    Suspension means an action by USAID that temporarily withdraws 
Federal sponsorship under an award, pending corrective action by the 
recipient or pending a decision to terminate the award. Suspension of an 
award is a separate action from suspension under USAID regulations 
implementing E.O.'s 12549 and 12689, ``Debarment and Suspension.'' See 2 
CFR part 780.
    Unrecovered indirect cost means the difference between the amount 
awarded and the amount which could have been awarded under the 
recipient's approved negotiated indirect cost rate.
    USAID means the United States Agency for International Development.
    USAID Identity (Identity) means the official marking for the United 
States Agency for International Development (USAID) comprised of the 
USAID logo or seal and new brandmark with the tagline that clearly 
communicates our assistance is ``from the American people.'' In 
exceptional circumstances, upon a written determination by the USAID 
Administrator, the definition of the USAID Identity may be amended to 
include additional or substitute use of a logo or seal and tagline 
representing a presidential initiative or other high

[[Page 307]]

level interagency Federal initiative that requires consistent and 
uniform branding and marking by all participating agencies. The USAID 
Identity (including any required presidential initiative or related 
identity) is available on the USAID Web site at http://www.usaid.gov/
branding and is provided without royalty, license or other fee to 
recipients of USAID funded grants or cooperative agreements or other 
assistance awards.



                      Subpart B_General Provisions



Sec.  700.2  Adoption of 2 CFR Part 200.

    Under the authority listed above the Agency for International 
Development adopts the Office of Management and Budget (OMB) guidance 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards to Non-Federal Entities (subparts A 
through F of 2 CFR part 200), as supplemented by this part, as the 
Agency for International Development (USAID) policies and procedures for 
financial assistance administration. This part satisfies the 
requirements of 2 CFR 200.110(a) and gives regulatory effect to the OMB 
guidance as supplemented by this part.



Sec.  700.3  Applicability.

    (a) Subparts A through D of 2 CFR part 200 apply to for-profit 
entities. The Federal Acquisition Regulation (FAR) at 48 CFR part 30, 
Cost Accounting Standards, and Part 31, Contract Cost Principles and 
Procedures, takes precedence over the cost principles in Subpart E for 
Federal awards to for-profit entities.
    (b) Subpart E applies to foreign organizations and foreign public 
entities, except where the Federal awarding agency determines that the 
application of these subparts would be inconsistent with the 
international obligations of the United States or the statute or 
regulations of a foreign government.



Sec.  700.4  Exceptions.

    Consistent with 2 CFR 200.102(b):
    (a) Exceptions on a case-by-case basis for individual non-Federal 
entities may be authorized by USAID's Assistant Administrator, Bureau 
for Management, or designee as delegated in Agency policy, except where 
otherwise required by law or where OMB or other approval is expressly 
required by this Part. No case-by-case exceptions may be granted to the 
provisions of Subpart F--Audit Requirements of this Part.
    (b) USAID's Assistant Administrator, Bureau for Management, or 
designee as delegated in Agency policy, is also authorized to approve 
exceptions, on a class or an individual case basis, to USAID program 
specific assistance regulations other than those which implement 
statutory and executive order requirements.
    (c) The Federal awarding agency may apply more restrictive 
requirements to a class of Federal awards or non-Federal entities when 
approved by OMB, required by Federal statutes or regulations except for 
the requirements in Subpart F--Audit Requirements of this part. A 
Federal awarding agency may apply less restrictive requirements when 
making awards at or below the simplified acquisition threshold, or when 
making fixed amount awards as defined in Subpart A--Acronyms and 
Definitions of 2 CFR part 200, except for those requirements imposed by 
statute or in Subpart F--Audit Requirements of this part.



Sec.  700.5  Supersession.

    Effective December 26, 2014, this part supersedes the following 
regulations under Title 22 of the Code of Federal Regulations: 22 CFR 
part 226, ``Administration of Assistance Awards To U.S. Non-Governmental 
Organizations.''



 Subpart C_Pre-Federal Award Requirements and Contents of Federal Awards



Sec.  700.6  Metric system of measurement.

    (a) 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.
    (b) Wherever measurements are required or authorized, they must be 
made, computed, and recorded in metric system units of measurement, 
unless otherwise authorized by the Agreement Officer in writing when it 
has

[[Page 308]]

been found that such usage is impractical or is likely to cause U.S. 
firms to experience significant inefficiencies or the loss of markets. 
Where the metric system is not the predominant standard for a particular 
application, measurements may be expressed in both the metric and the 
traditional equivalent units, provided the metric units are listed 
first.



Sec.  700.7  Advance payment.

    Advance payment mechanisms include, but are not limited to, Letter 
of Credit, Treasury check and electronic funds transfer and must comply 
with applicable guidance in 31 CFR part 205.



                Subpart D_Post Federal Award Requirements



Sec.  700.8  Payment.

    (a) Use of resources before requesting advance payments. To the 
extent available, the non-Federal entity must disburse funds available 
from program income (including repayments to a revolving fund), rebates, 
refunds, contract settlements, audit recoveries, and interest earned on 
such funds before requesting additional cash payments. This paragraph is 
not applicable to such earnings which are generated as foreign 
currencies.
    (b) Standards governing the use of banks and other institutions as 
depositories of advance payments under Federal awards are as follows:
    (1) Except for situations described in paragraph (b)(2) of this 
section, USAID does not require separate depository accounts for funds 
provided to a non-Federal entity or establish any eligibility 
requirements for depositories for funds provided to the non-Federal 
entity. However, the non-Federal entity must be able to account for 
receipt, obligation and expenditure of funds.
    (2) Advance payments of Federal funds must be deposited and 
maintained in insured accounts whenever possible.



Sec.  700.9  Property standards.

    (a) Real property. Unless the agreement provides otherwise, title to 
real property will vest in accordance with 2 CFR 200.311.
    (b) Equipment. Unless the agreement provides otherwise, title to 
equipment will vest in accordance with 2 CFR 200.313.



Sec.  700.10  Cost sharing or matching.

    Unrecovered indirect costs, including indirect costs on cost sharing 
or matching may be included as part of cost sharing or matching. 
Unrecovered indirect cost means the difference between the amount 
charged to the Federal award and the amount which would have been 
charged to the Federal award under the non-Federal entity's approved 
negotiated indirect cost rate.



Sec.  700.11  Contracting with small and minority businesses, 
women's business enterprises, and labor surplus area firms.

    (a) 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. To permit USAID, in accordance with the 
small business provisions of the Foreign Assistance Act of 1961, as 
amended, to give United States small business firms an opportunity to 
participate in supplying commodities and services procured under the 
award, the recipient must to the maximum extent possible provide the 
following information to the Office of Small Disadvantaged Business 
Utilization (OSDBU), USAID, Washington, DC 20523, at least 45 days prior 
to placing any order or contract in excess of the simplified acquisition 
threshold:
    (1) Brief general description and quantity of goods or services;
    (2) Closing date for receiving quotations, proposals or bids; and
    (3) Address where solicitations or specifications can be obtained.
    (b) [Reserved]



Sec.  700.12  Contract provisions.

    (a) The non-Federal entity's contracts must contain the applicable 
provisions described in Appendix II to Part 200--Contract Provisions for 
non-Federal Entity Contracts Under Federal Awards.

[[Page 309]]

    (b) All negotiated contracts (except those for less than the 
simplified acquisition threshold) awarded by the non-Federal entity must 
include a provision to the effect that the non-Federal Entity, USAID, 
the Comptroller General of the United States, or any of their duly 
authorized representatives, must have access to any books, documents, 
papers and records of the contractor which are directly pertinent to a 
specific program for the purpose of making audits, examinations, 
excerpts and transcriptions.



Sec.  700.13  Additional provisions for awards to for-profit entities.

    (a) This paragraph contains additional provisions that apply to 
awards to for-profit entities. These provisions supplement and make 
exceptions for awards to for-profit entities from other provisions of 
this part.
    (1) Prohibition against profit. No funds will be paid as profit to 
any for-profit entity receiving or administering Federal financial 
assistance as a recipient or subrecipient. Federal financial assistance 
does not include contracts as defined at 2 CFR 200.22, other contracts a 
Federal agency uses to buy goods or services from a contractor, or 
contracts to operate Federal government owned, contractor operated 
facilities (GOCOs). Profit is any amount in excess of allowable direct 
and indirect costs.
    (2) Program income. As described in Sec.  200.307(e)(2), program 
income earned by a for-profit entity may not be added to the Federal 
award.
    (b) [Reserved]

                        Termination and Disputes



Sec.  700.14  Termination.

    If at any time USAID determines that continuation of all or part of 
the funding for a program should be suspended or terminated because such 
assistance would not be in the national interest of the United States or 
would be in violation of an applicable law, then USAID may, following 
notice to the recipient, suspend or terminate the award in whole or in 
part and prohibit the recipient from incurring additional obligations 
chargeable to the award other than those costs specified in the notice 
of suspension. If a suspension is put into effect and the situation 
causing the suspension continues for 60 calendar days or more, then 
USAID may terminate the award in whole or in part on written notice to 
the recipient and cancel any portion of the award which has not been 
disbursed or irrevocably committed to third parties.



Sec.  700.15  Disputes.

    (a) Any dispute under or relating to a grant or agreement will be 
decided by the USAID Agreement Officer. The Agreement Officer must 
furnish the recipient a written copy of the decision.
    (b) Decisions of the USAID Agreement Officer will be final unless, 
within 30 calendar days of receipt of the decision, the recipient 
appeals the decision to USAID's Assistant Administrator, Bureau for 
Management, or designee as delegated in Agency policy. Appeals must be 
in writing with a copy concurrently furnished to the Agreement Officer.
    (c) In order to facilitate review of the record by the USAID's 
Assistant Administrator, Bureau for Management, or designee as delegated 
in Agency policy, the recipient will be given an opportunity to submit 
written evidence in support of its appeal. No hearing will be provided.
    (d) Decisions by the Assistant Administrator, Bureau for Management, 
or designee as delegated in Agency policy, will be final.

                      USAID--Specific Requirements



Sec.  700.16  Marking.

    (a) USAID policy is that all programs, projects, activities, public 
communications, and commodities, specified further at paragraphs (c) 
through (f) of this section, partially or fully funded by a USAID grant 
or cooperative agreement or other assistance award or subaward must be 
marked appropriately overseas with the USAID Identity, of a size and 
prominence equivalent to or greater than the recipient's, other donor's 
or any other third party's identity or logo.
    (1) USAID reserves the right to require the USAID Identity to be 
larger

[[Page 310]]

and more prominent if it is the majority donor, or to require that a 
cooperating country government's identity be larger and more prominent 
if circumstances warrant; any such requirement will be on a case-by-case 
basis depending on the audience, program goals and materials produced.
    (2) USAID reserves the right to request pre-production review of 
USAID funded public communications and program materials for compliance 
with the approved Marking Plan.
    (3) USAID reserves the right to require marking with the USAID 
Identity in the event the recipient does not choose to mark with its own 
identity or logo.
    (4) To ensure that the marking requirements ``flow down'' to 
subrecipients of subawards, recipients of USAID funded grants and 
cooperative agreements or other assistance awards are required to 
include a USAID-approved marking provision in any USAID funded subaward, 
to read as follows:

    As a condition of receipt of this subaward, marking with the USAID 
Identity of a size and prominence equivalent to or greater than the 
recipient's, subrecipient's, other donor's or third party's is required. 
In the event the recipient chooses not to require marking with its own 
identity or logo by the subrecipient, USAID may, at its discretion, 
require marking by the subrecipient with the USAID Identity.

    (b) Subject to Sec.  700.16(a), (h), and (j), program, project, or 
activity sites funded by USAID, including visible infrastructure 
projects (for example, roads, bridges, buildings) or other programs, 
projects, or activities that are physical in nature (for example, 
agriculture, forestry, water management), must be marked with the USAID 
Identity. Temporary signs or plaques should be erected early in the 
construction or implementation phase. When construction or 
implementation is complete, a permanent, durable sign, plaque or other 
marking must be installed.
    (c) Subject to Sec.  700.16(a), (h), and (j), technical assistance, 
studies, reports, papers, publications, audio-visual productions, public 
service announcements, Web sites/Internet activities and other 
promotional, informational, media, or communications products funded by 
USAID must be marked with the USAID Identity.
    (1) Any ``public communications'' as defined in Sec.  700.1, funded 
by USAID, in which the content has not been approved by USAID, must 
contain the following disclaimer:

    This study/report/audio/visual/other information/media product 
(specify) is made possible by the generous support of the American 
people through the United States Agency for International Development 
(USAID). The contents are the responsibility of [insert recipient name] 
and do not necessarily reflect the views of USAID or the United States 
Government.

    (2) The recipient must provide the Agreement Officer's 
Representative (AOR) or other USAID personnel designated in the grant or 
cooperative agreement with at least two copies of all program and 
communications materials produced under the award. In addition, the 
recipient must submit one electronic and/or one hard copy of all final 
documents to USAID's Development Experience Clearinghouse.
    (d) Subject to Sec.  700.16(a), (h), and (j), events financed by 
USAID such as training courses, conferences, seminars, exhibitions, 
fairs, workshops, press conferences and other public activities, must be 
marked appropriately with the USAID Identity. Unless directly prohibited 
and as appropriate to the surroundings, recipients should display 
additional materials such as signs and banners with the USAID Identity. 
In circumstances in which the USAID Identity cannot be displayed 
visually, recipients are encouraged otherwise to acknowledge USAID and 
the American people's support.
    (e) Subject to Sec.  700.16(a), (h), and (j), all commodities 
financed by USAID, including commodities or equipment provided under 
humanitarian assistance or disaster relief programs, and all other 
equipment, supplies and other materials funded by USAID, and their 
export packaging, must be marked with the USAID Identity.
    (f) After merit review of applications for USAID funding, USAID 
Agreement Officers will request apparently successful applicants to 
submit a Branding Strategy, defined in Sec.  700.1. The proposed 
Branding Strategy will not be

[[Page 311]]

evaluated competitively. The Agreement Officer will review for adequacy 
the proposed Branding Strategy, and will negotiate, approve and include 
the Branding Strategy in the award. Failure to submit or negotiate a 
Branding Strategy within the time specified by the Agreement Officer 
will make the apparently successful applicant ineligible for award.
    (g) After merit review of applications for USAID funding, USAID 
Agreement Officers will request apparently successful applicants to 
submit a Marking Plan, defined in Sec.  700.1. The Marking Plan may 
include requests for approval of Presumptive Exceptions, paragraph (h) 
of this section. All estimated costs associated with branding and 
marking USAID programs, such as plaques, labels, banners, press events, 
promotional materials, and the like, must be included in the total cost 
estimate of the grant or cooperative agreement or other assistance 
award, and are subject to revision and negotiation with the Agreement 
Officer upon submission of the Marking Plan. The Marking Plan will not 
be evaluated competitively. The Agreement Officer will review for 
adequacy the proposed Marking Plan, and will negotiate, approve and 
include the Marking Plan in the award. Failure to submit or negotiate a 
Marking Plan within the time specified by the Agreement Officer will 
make the apparently successful applicant ineligible for award. Agreement 
Officers have the discretion to suspend the implementation requirements 
of the Marking Plan if circumstances warrant. Recipients of USAID funded 
grant or cooperative agreement or other assistance award or subaward 
should retain copies of any specific marking instructions or waivers in 
their project, program or activity files. Agreement Officer's 
Representatives will be assigned responsibility to monitor marking 
requirements on the basis of the approved Marking Plan.
    (h) Presumptive exceptions:
    (1) The above marking requirements in Sec.  700.16(a) through (e) 
may not apply if marking would:
    (i) Compromise the intrinsic independence or neutrality of a program 
or materials where independence or neutrality is an inherent aspect of 
the program and materials, such as election monitoring or ballots, and 
voter information literature; political party support or public policy 
advocacy or reform; independent media, such as television and radio 
broadcasts, newspaper articles and editorials; public service 
announcements or public opinion polls and surveys.
    (ii) Diminish the credibility of audits, reports, analyses, studies, 
or policy recommendations whose data or findings must be seen as 
independent.
    (iii) Undercut host-country government ``ownership'' of 
constitutions, laws, regulations, policies, studies, assessments, 
reports, publications, surveys or audits, public service announcements, 
or other communications better positioned as ``by'' or ``from'' a 
cooperating country ministry or government official.
    (iv) Impair the functionality of an item, such as sterilized 
equipment or spare parts.
    (v) Incur substantial costs or be impractical, such as items too 
small or other otherwise unsuited for individual marking, such as food 
in bulk.
    (vi) Offend local cultural or social norms, or be considered 
inappropriate on such items as condoms, toilets, bed pans, or similar 
commodities.
    (vii) Conflict with international law.
    (2) These exceptions are presumptive, not automatic and must be 
approved by the Agreement Officer. Apparently successful applicants may 
request approval of one or more of the presumptive exceptions, depending 
on the circumstances, in their Marking Plan. The Agreement Officer will 
review requests for presumptive exceptions for adequacy, along with the 
rest of the Marking Plan. When reviewing a request for approval of a 
presumptive exception, the Agreement Officer may review how program 
materials will be marked (if at all) if the USAID identity is removed. 
Exceptions approved will apply to subrecipients unless otherwise 
provided by USAID.
    (i) In cases where the Marking Plan has not been complied with, the 
Agreement Officer will initiate corrective action. Such action may 
involve informing the recipient of a USAID grant or cooperative 
agreement or other assistance award or subaward of instances of

[[Page 312]]

noncompliance and requesting that the recipient carry out its 
responsibilities as set forth in the Marking Plan and award. Major or 
repeated non-compliance with the Marking Plan will be governed by the 
uniform suspension and termination procedures set forth at 2 CFR 200.338 
through 2 CFR 200.342, and 2 CFR 700.14.
    (j)(1) Waivers. USAID Principal Officers, defined for purposes of 
this provision at Sec.  700.1, may at any time after award waive in 
whole or in part the USAID approved Marking Plan, including USAID 
marking requirements for each USAID funded program, project, activity, 
public communication or commodity, or in exceptional circumstances may 
make a waiver by region or country, if the Principal Officer determines 
that otherwise USAID required marking would pose compelling political, 
safety, or security concerns, or marking would have an adverse impact in 
the cooperating country. USAID recipients may request waivers of the 
Marking Plan in whole or in part, through the AOR. No marking is 
required while a waiver determination is pending. The waiver 
determination on safety or security grounds must be made in consultation 
with U.S. Government security personnel if available, and must consider 
the same information that applies to determinations of the safety and 
security of U.S. Government employees in the cooperating country, as 
well as any information supplied by the AOR or the recipient for whom 
the waiver is sought. When reviewing a request for approval of a waiver, 
the Principal Officer may review how program materials will be marked 
(if at all) if the USAID Identity is removed. Approved waivers are not 
limited in duration but are subject to Principal Officer review at any 
time due to changed circumstances. Approved waivers ``flow down'' to 
recipients of subawards unless specified otherwise. Principal Officers 
may also authorize the removal of USAID markings already affixed if 
circumstances warrant. Principal Officers' determinations regarding 
waiver requests are subject to appeal to the Principal Officer's 
cognizant Assistant Administrator. Recipients may appeal by submitting a 
written request to reconsider the Principal Officer's waiver 
determination to the cognizant Assistant Administrator.
    (2) Non-retroactivity. Marking requirements apply to any obligation 
of USAID funds for new awards as of January 2, 2006. Marking 
requirements also will apply to new obligations under existing awards, 
such as incremental funding actions, as of January 2, 2006, when the 
total estimated cost of the existing award has been increased by USAID 
or the scope of effort is changed to accommodate any costs associated 
with marking. In the event a waiver is rescinded, the marking 
requirements will apply from the date forward that the waiver is 
rescinded. In the event a waiver is rescinded after the period of 
performance as defined in 2 CFR 200.77 but before closeout as defined in 
2 CFR 200.16., the USAID mission or operating unit with initial 
responsibility to administer the marking requirements must make a cost 
benefit analysis as to requiring USAID marking requirements after the 
date of completion of the affected programs, projects, activities, 
public communications or commodities.
    (k) The USAID Identity and other guidance will be provided at no 
cost or fee to recipients of USAID grants, cooperative agreements or 
other assistance awards or subawards. Additional costs associated with 
marking requirements will be met by USAID if reasonable, allowable, and 
allocable under 2 CFR part 200, subpart E. The standard cost 
reimbursement provisions of the grant, cooperative agreement, other 
assistance award or subaward must be followed when applying for 
reimbursement of additional marking costs.

                           (End of award term)



PART 701_PARTNER VETTING IN USAID ASSISTANCE--Table of Contents



Sec.
701.1 Definitions.
701.2 Applicability.
701.3 Partner vetting.

Appendix B to Part 701--Partner Vetting Pre-Award Requirements and Award 
          Term.


[[Page 313]]


    Authority: 22 U.S.C. 2251 et seq.; 22 U.S.C. 2151t, 22 U.S.C. 2151a, 
2151b, 2151c, and 2151d; 22 U.S.C. 2395(b).

    Source: 80 FR 36705, June 26, 2015, unless otherwise noted.



Sec.  701.1  Definitions.

    This section contains the definitions for terms used in this part. 
Other terms used in the part are defined at 2 CFR part 200. Different 
definitions may be found in Federal statutes or regulations that apply 
more specifically to particular programs or activities.
    Key individual means the principal officer of the organization's 
governing body (for example, chairman, vice chairman, treasurer and 
secretary of the board of directors or board of trustees); the principal 
officer and deputy principal officer of the organization (for example, 
executive director, deputy director, president, vice president); the 
program manager or chief of party for the USG-financed program; and any 
other person with significant responsibilities for administration of the 
USG-financed activities or resources, such as key personnel as 
identified in the solicitation or resulting cooperative agreement. Key 
personnel, whether or not they are employees of the prime recipient, 
must be vetted.
    Key personnel means those individuals identified for approval as 
part of substantial involvement in a cooperative agreement whose 
positions are essential to the successful implementation of an award. 
Vetting official means the USAID employee identified in the application 
or award as having responsibility for receiving vetting information, 
responding to questions about information to be included on the Partner 
Information Form, coordinating with the USAID Office of Security (SEC), 
and conveying the vetting determination to each applicant, potential 
subrecipients and contractors subject to vetting, and the agreement 
officer. The vetting official is not part of the office making the award 
selection and has no involvement in the selection process.



Sec.  701.2  Applicability.

    The requirements established in this part apply to non-Federal 
entities, non-profit organizations, for-profit entities, and foreign 
organizations.



Sec.  701.3  Partner vetting.

    (a) It is USAID policy that USAID may determine that a particular 
award is subject to vetting in the interest of national security. In 
that case, USAID may require vetting of the key individuals of 
applicants, including key personnel, whether or not they are employees 
of the applicant, first tier subrecipients, contractors, and any other 
class of subawards and procurements as identified in the assistance 
solicitation and resulting award. When USAID conducts partner vetting, 
it will not award to any applicant who determined ineligible by the 
vetting process.
    (b) When USAID determines an award to be subject to vetting, the 
agreement officer determines the appropriate stage of the award cycle to 
require applicants to submit the completed USAID Partner Information 
Form, USAID Form 500-13, to the vetting official identified in the 
assistance solicitation. The agreement officer must specify in the 
assistance solicitation the stage at which the applicants will be 
required to submit the USAID Partner Information Form, USAID Form 500-
13. As a general matter those applicants who will be vetted will be 
typically the applicants that have been determined to be apparently 
successful.
    (c) Selection of the successful applicant proceeds separately from 
vetting. The agreement officer makes the selection determination 
separately from the vetting process and without knowledge of vetting-
related information other than that, based on the vetting results, the 
apparently successful applicant is eligible or ineligible for an award. 
However, no applicants will be excluded from an award until after 
vetting has been completed.
    (d) For those awards the agency has determined are subject to 
vetting, the agreement officer may only award to an applicant that has 
been determined to be eligible after completion of the vetting process.
    (e)(1) For those awards the agency has determined are subject to 
vetting, the recipient must submit the completed USAID Partner 
Information Form any time it changes:

[[Page 314]]

    (i) Key individuals; or
    (ii) Subrecipients and contractors for which vetting is required.
    (2) The recipient must submit the completed Partner Information Form 
within 15 days of the change in either paragraph (e)(1)(i) or (ii) of 
this section.
    (f) USAID may vet key individuals of the recipient, subrecipients 
and contractors periodically during program implementation using 
information already submitted on the Form.
    (g) When the prime recipient is subject to vetting, vetting may be 
required for key individuals of subawards when the prime recipient 
requests prior approval in accordance with 2 CFR 200.308(c)(6) for the 
subaward, transfer, or contracting out of any work.
    (h) When the prime recipient is subject to vetting, vetting may be 
required for key individuals of contractors of certain services. The 
agreement officer must identify these services in the assistance 
solicitation and any resulting award.
    (i) When vetting of subawards is required, the agreement officer 
must not approve the subaward, transfer, or contracting out, or the 
procurement of certain classes of items until the organization subject 
to vetting has been determined eligible. When vetting of contractors is 
required, the recipient may not procure the identified services until 
the contractor has been determined to be eligible.
    (j) The recipient may instruct prospective subrecipients or, when 
applicable contractors who are subject to vetting to submit the USAID 
Partner Information Form to the vetting official as soon as the 
recipient submits the USAID Partner Information Form for its key 
individuals.
    (k) Pre-award provision and award term. (1) The agreement officer 
must insert the pre-award provision Partner Vetting Pre-Award 
Requirements in Appendix B of this part in all assistance solicitations 
USAID identifies as subject to vetting.
    (2) The agreement officer must insert the award term Partner Vetting 
in Appendix B in all assistance solicitations and awards USAID 
identifies as subject to vetting.



Sec. Appendix B to Part 701--Partner Vetting Pre-Award Requirements and 
                               Award Term

                 Partner Vetting Pre-Award Requirements

    (a) USAID has determined that any award resulting from this 
assistance solicitation is subject to vetting. An applicant that has not 
passed vetting is ineligible for award.
    (b) The following are the vetting procedures for this solicitation:
    (1) Prospective applicants review the attached USAID Partner 
Information Form, USAID Form 500-13, and submit any questions about the 
USAID Partner Information Form or these procedures to the agreement 
officer by the deadline in the solicitation.
    (2) The agreement officer notifies the applicant when to submit the 
USAID Partner Information Form. For this solicitation, USAID will vet 
[insert in the provision the applicable stage of the selection process 
at which the Agreement Officer will notify the applicant(s) who must be 
vetted]. Within the timeframe set by the agreement officer in the 
notification, the applicant must complete and submit the USAID Partner 
Information Form to the vetting official. The designated vetting 
official is:

Vetting official:_______________________________________________________

Address:________________________________________________________________

Email:__________________________________________________________________
(for inquiries only).

    (3) The applicants must notify proposed subrecipients and 
contractors of this requirement when the subrecipients or contractors 
are subject to vetting.

    Note: Applicants who submit using non-secure methods of transmission 
do so at their own risk.

    (c) Selection proceeds separately from vetting. Vetting is conducted 
independently from any discussions the agreement officer may have with 
an applicant. The applicant and any proposed subrecipient or contractor 
subject to vetting must not provide vetting information to anyone other 
than the vetting official. The applicant and any proposed subrecipient 
or contractor subject to vetting will communicate only with the vetting 
official regarding their vetting submission(s) and not with any other 
USAID or USG personnel, including the agreement officer or the agreement 
officer's representatives. The agreement officer designates the vetting 
official as the only individual authorized to clarify the applicant's 
and proposed subrecipient's and contractor's vetting information.
    (d)(1) The vetting official notifies the applicant that it: (i) Is 
eligible based on the vetting results, (ii) is ineligible based on the 
vetting results, or (iii) must provide additional information, and 
resubmit the USAID

[[Page 315]]

Partner Information Form with the additional information within the 
number of days the vetting official specified in the notification.
    (2) The vetting official will coordinate with the agency that 
provided the data being used for vetting prior to notifying the 
applicant or releasing any information. In any determination for release 
of information, the classification and sensitivity of the information, 
the need to protect sources and methods, and the status of ongoing law 
enforcement and intelligence community investigations or operations will 
be taken into consideration.
    (e) Reconsideration: (1) Within 7 calendar days after the date of 
the vetting official's notification, an applicant that vetting has 
determined to be ineligible may request in writing to the vetting 
official that the Agency reconsider the vetting determination. The 
request should include any written explanation, legal documentation and 
any other relevant written material for reconsideration.
    (2) Within 7 calendar days after the vetting official receives the 
request for reconsideration, the Agency will determine whether the 
applicant's additional information merits a revised decision.
    (3) The Agency's determination of whether reconsideration is 
warranted is final.
    (f) Revisions to vetting information: (1) Applicants who change key 
individuals, whether the applicant has previously been determined 
eligible or not, must submit a revised USAID Partner Information Form to 
the vetting official. This includes changes to key personnel resulting 
from revisions to the technical portion of the application.
    (2) The vetting official will follow the vetting process of this 
provision for any revision of the applicant's Form.
    (g) Award. At the time of award, the agreement officer will confirm 
with the vetting official that the apparently successful applicant is 
eligible after vetting. The agreement officer may award only to an 
apparently successful applicant that is eligible after vetting.

                             Partner Vetting

    (a) The recipient must comply with the vetting requirements for key 
individuals under this award.
    (b) Definitions: As used in this provision, ``key individual,'' 
``key personnel,'' and ``vetting official'' have the meaning contained 
in 22 CFR 701.1.
    (c) The Recipient must submit within 15 days a USAID Partner 
Information Form, USAID Form 500-13, to the vetting official identified 
below when the Recipient replaces key individuals with individuals who 
have not been previously vetted for this award. Note: USAID will not 
approve any key personnel who are not eligible for approval after 
vetting. The designated vetting official is:

Vetting official:_______________________________________________________

Address:________________________________________________________________

Email:__________________________________________________________________
(for inquiries only).

    (d)(1) The vetting official will notify the Recipient that it--
    (i) Is eligible based on the vetting results,
    (ii) Is ineligible based on the vetting results, or
    (iii) Must provide additional information, and resubmit the USAID 
Partner Information Form with the additional information within the 
number of days the vetting official specifies.
    (2) The vetting official will include information that USAID 
determines releasable. USAID will determine what information may be 
released consistent with applicable law and Executive Orders, and with 
the concurrence of relevant agencies.
    (e) The inability to be deemed eligible as described in this award 
term may be determined to be a material failure to comply with the terms 
and conditions of the award and may subject the recipient to suspension 
or termination as specified in the subpart ``Remedies for 
Noncompliance'' at 2 CFR part 200.
    (f) Reconsideration: (1) Within 7 calendar days after the date of 
the vetting official's notification, the recipient or prospective 
subrecipient or contractor that has not passed vetting may request in 
writing to the vetting official that the Agency reconsider the vetting 
determination. The request should include any written explanation, legal 
documentation and any other relevant written material for 
reconsideration.
    (2) Within 7 calendar days after the vetting official receives the 
request for reconsideration, the Agency will determine whether the 
recipient's additional information merits a revised decision.
    (3) The Agency's determination of whether reconsideration is 
warranted is final.
    (g) A notification that the Recipient has passed vetting does not 
constitute any other approval under this award.
    Alternate I. When subrecipients will be subject to vetting, add the 
following paragraphs to the basic award term:
    (h) When the prime recipient anticipates that it will require prior 
approval for a subaward in accordance with 2 CFR 200.308(c)(6) the 
subaward is subject to vetting. The prospective subrecipient must submit 
a USAID Partner Information Form, USAID Form 500-13, to the vetting 
official identified in paragraph (c) of this provision. The agreement 
officer must not approve a subaward to any organization that has not 
passed vetting when required.
    (i) The recipient agrees to incorporate the substance of paragraphs 
(a) through (i) of this award term in all first tier subawards under 
this award.

[[Page 316]]

    Alternate II. When specific classes of services are subject to 
vetting, add the following paragraph:
    (j) Prospective contractors at any tier providing the following 
classes of services
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
must pass vetting. Recipients must not procure these services until they 
receive confirmation from the vetting official that the prospective 
contractor has passed vetting. (End of award term)

                        PARTS 702	779 [RESERVED]



PART 780_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
780.10 What does this part do?
780.20 Does this part apply to me?
780.30 What policies and procedures must I follow?

                            Subpart A_General

780.137 Who in USAID may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

780.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

780.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

780.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-H [Reserved]

                          Subpart I_Definitions

780.930 Debarring Official (Agency for International Development 
          supplement to government-wide definition at 2 CFR 180.930).
780.1010 Suspending Official (Agency for International Development 
          supplement to government-wide definition at 2 CFR 180.1010).

Subpart J [Reserved]

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235.

    Source: 76 FR 34144, June 13, 2011, unless otherwise noted.



Sec.  780.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the USAID policies and procedures for non-procurement debarment and 
suspension. It thereby gives regulatory effect for USAID to the OMB 
guidance as supplemented by this part. This part satisfies the 
requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189); Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235); and section 
2455 of the Federal Acquisition Streamlining Act of 1994, Public Law 
103-355 (31 U.S.C. 6101 note).



Sec.  780.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``non-procurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in a USAID suspension or debarment action;
    (c) USAID debarment or suspension official; and
    (d) USAID grants officer, agreements officer, or other official 
authorized to enter into any type of non-procurement transaction that is 
a covered transaction.



Sec.  780.30  What policies and procedures must I follow?

    The USAID policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180 and any supplemental 
policies and procedures set forth in this part.

[[Page 317]]



                            Subpart A_General



Sec.  780.137  Who in USAID may grant an exception to let an excluded
person participate in a covered transaction?

    The Assistant Administrator, Bureau for Management, or designee as 
delegated in Agency policy found in ADS 103--Delegations of Authority, 
may grant an exception permitting an excluded person to participate in a 
particular covered transaction. If the Assistant Administrator, Bureau 
for Management or designee, grants an exception, the exception must be 
in writing and state the reason(s) for deviating from the government-
wide policy in Executive Order 12549.

[80 FR 12915, Mar. 12, 2015]



                     Subpart B_Covered Transactions



Sec.  780.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.220(b) of the 
OMB guidance, this part applies to any contract, regardless of tier, 
that is awarded by a contractor, subcontractor, supplier, consultant, or 
its agent or representative in any transaction, if the contract is to be 
funded or provided by the USAID under a covered non-procurement 
transaction and the amount of the contract is expected to equal or 
exceed $25,000. This extends the coverage of the USAID non-procurement 
suspension and debarment requirements to all lower tiers of subcontracts 
under covered non-procurement transactions, as permitted under the OMB 
guidance at 2 CFR 180.220(c) (see optional lower tier coverage in the 
figure in the appendix to 2 CFR part 180).



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  780.332  What requirements must I pass down to persons at lower
tiers with whom I intend to do business?

    You, as a participant, must include a term or condition in lower-
tier transactions requiring lower-tier participants to comply with 
subpart C of the OMB guidance in 2 CFR part 180, as supplemented by this 
subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  780.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, and supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-H [Reserved]



                          Subpart I_Definitions



Sec.  780.930  Debarring Official (Agency for International Development
supplement to government-wide definition at 2 CFR 180.930).

    The Debarring Official for USAID is the Assistant Administrator, 
Bureau for Management, or designee as delegated in Agency policy found 
in ADS 103--Delegations of Authority.

[80 FR 12916, Mar. 12, 2015]



Sec.  780.1010  Suspending Official (Agency for International
Development supplement to government-wide definition at 2 CFR 180.1010).

    The Suspending Official for USAID is the Assistant Administrator, 
Bureau for Management, or designee as delegated in Agency policy found 
in ADS 103--Delegations of Authority.

[80 FR 12916, Mar. 12, 2015]

Subpart J [Reserved]



PART 782_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
782.10 What does this part do?
782.20 Does this part apply to me?

[[Page 318]]

782.30 What policies and procedures must I follow?

Subpart A--Purpose and Coverage [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

782.225 Whom in USAID does a recipient other than an individual notify 
          about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

782.300 Whom in USAID does a recipient who is an individual notify about 
          a criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

782.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of This Part and Consequences

782.500 Who in USAID determines that a recipient other than an 
          individual violated the requirements of this part?
782.505 Who in USAID determines that a recipient who is an individual 
          violated the requirements of this part?

                          Subpart F_Definitions

782.605 Award (USAID Supplement to Government Wide Definition at 2 CFR 
          182.605).

    Authority: 41 U.S.C. 701-707.

    Source: 76 FR 34574, June 14, 2011, unless otherwise noted.



Sec.  782.10  What does this part do?

    This part requires that the award and administration of USAID grants 
and cooperative agreements comply with Office of Management and Budget 
(OMB) guidance implementing the portion of the Drug-Free Workplace Act 
of 1988 (41 U.S.C. 701-707, as amended, hereafter referred to as ``the 
Act'') that applies to grants. It thereby--
    (a) Gives regulatory effect to the OMB guidance (Subparts A through 
F of 2 CFR Part 182) for USAID's grants and cooperative agreements; and
    (b) Establishes USAID policies and procedures for compliance with 
the Act that are the same as those of other Federal agencies, in 
conformance with the requirement in 41 U.S.C. 705 for Government wide 
implementing regulations.



Sec.  782.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of a USAID grant or cooperative agreement; or
    (b) USAID awarding official.



Sec.  782.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table. For each 
of those sections, you must follow the policies and procedures in the 
OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   782.225.  Whom in USAID a
                                                 recipient other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   782.300.  Whom in USAID a
                                                 recipient who is an
                                                 individual must notify
                                                 if he or she is
                                                 convicted of a criminal
                                                 drug offense resulting
                                                 from a violation
                                                 occurring during the
                                                 conduct of any award
                                                 activity.
(3) 2 CFR 182.500............  Sec.   782.500.  Who in USAID is
                                                 authorized to determine
                                                 that a recipient other
                                                 than an individual is
                                                 in violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(4) 2 CFR 182.505............  Sec.   782.505.  Who in USAID is
                                                 authorized to determine
                                                 that a recipient who is
                                                 an individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------


[[Page 319]]

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in Subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, USAID policies 
and procedures are the same as those in the OMB guidance.

Subpart A--Purpose and Coverage [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  782.225  Whom in USAID does a recipient other than an individual
notify about a criminal drug conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify--
    (a) Federal agencies if an employee who is engaged in the 
performance of an award informs you about a conviction, 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) 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.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  782.300  Whom in USAID does a recipient who is an individual
notify about a criminal drug conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify each USAID office from which it currently has 
an award.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  782.400  What method do I use as an agency awarding official
to obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award:
    Drug-free workplace. You as the recipient must comply with drug-free 
workplace requirements in subpart B (or subpart C, if the recipient is 
an individual) of 782, which adopts the Government-wide implementation 
(2 CFR part 182) of sec. 5152-5158 of the Drug-Free Workplace Act of 
1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 701-707).



           Subpart E_Violations of This Part and Consequences



Sec.  782.500  Who in USAID determines that a recipient other than an
individual violated the requirements of this part?

    The Director of the Office of Acquisition and Assistance is the 
official authorized to make the determination under 2 CFR 182.500.



Sec.  782.505  Who in USAID determines that a recipient who is an
individual violated the requirements of this part?

    The Director of the Office of Acquisition and Assistance is the 
official authorized to make the determination under 2 CFR 182.505.

[[Page 320]]



                          Subpart F_Definitions



Sec.  782.605  Award (USAID supplement to Government-wide definition
at 2 CFR 182.605)

    Award means an award of financial assistance by the U.S. Agency for 
International Development 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 Government-wide rule 
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.
    (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).
    (c) Notwithstanding paragraph (a)(2) of this section, this paragraph 
is not applicable to AID.

                        PARTS 783	799 [RESERVED]

[[Page 321]]



              CHAPTER VIII--DEPARTMENT OF VETERANS AFFAIRS




  --------------------------------------------------------------------
Part                                                                Page
800

[Reserved]

801             Nonprocurement debarment and suspension.....         323
802             Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         327
803-899

[Reserved]

[[Page 323]]

                           PART 800 [RESERVED]



PART 801_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
801.10 What does this part do?
801.20 Does this part apply to me?
801.30 What policies and procedures must I follow?

                            Subpart A_General

801.137 Who in the Department of Veterans Affairs may grant an exception 
          to allow an excluded person to participate in a covered 
          transaction?

                     Subpart B_Covered Transactions

801.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

801.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

801.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-H [Reserved]

                          Subpart I_Definitions

801.930 Debarring official (Department of Veterans Affairs supplement to 
          government-wide definition at 2 CFR 180.930).
801.995 Principal (Department of Veterans Affairs supplement to 
          government-wide definition at 2 CFR 180.995).
801.1010 Suspending official (Department of Veterans Affairs supplement 
          to government-wide definition at 2 CFR 180.1010).

   Subpart J_Limited Denial of Participation (Department of Veterans 
      Affairs Optional Subpart for OMB Guidance at 2 CFR Part 180).

801.1100 General.
801.1105 Cause for a limited denial of participation.
801.1110 Scope and period of a limited denial of participation.
801.1111 Notice.
801.1112 Conference.
801.1113 Appeal.

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235; 38 
U.S.C. 501(a) and 3703(c).

    Source: 72 FR 30240, May 31, 2007, unless otherwise noted.



Sec.  801.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Department of Veterans Affairs (VA) policies and procedures for 
nonprocurement debarment and suspension. It thereby gives regulatory 
effect for the Department of Veterans Affairs to the OMB guidance as 
supplemented by this part. This part satisfies the requirements in 
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3 CFR 
1986 Comp., p. 189), Executive Order 12689, ``Debarment and Suspension'' 
(3 CFR 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Pub. 
L. 103-355, 108 Stat. 3327).



Sec.  801.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
Subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970, as supplemented by Subpart B of this 
part);
    (b) Respondent in a Department of Veterans Affairs debarment or 
suspension action;
    (c) Department of Veterans Affairs debarment or suspension official; 
or
    (d) Department of Veterans affairs grants officer, agreements 
officer, or other official authorized to enter into any type of 
nonprocurement transaction that is a covered transaction.



Sec.  801.30  What policies and procedures must I follow?

    For any section of OMB guidance in subparts A through I of 2 CFR 
part 180 that has no corresponding section in this part, Department of 
Veterans Affairs policies and procedures are those in the OMB guidance. 
For any such section where there is a corresponding

[[Page 324]]

section in this part, the Department of Veterans Affairs policies and 
procedures that you must follow are the policies and procedures 
specified in each applicable section of the OMB guidance in subparts A 
through I of 2 CFR part 180, and as supplemented by the section in this 
part with the same section number. The contracts that are covered 
transactions, for example, are specified by Sec.  180.220 of the OMB 
guidance (2 CFR 180.220) as supplemented by Sec.  801.220 in this part 
(2 CFR 801.220).



                            Subpart A_General



Sec.  801.137  Who in the Department of Veterans Affairs may grant
an exception to allow an excluded person to participate in a covered
transaction?

    Within the Department of Veterans Affairs, the Secretary of Veterans 
Affairs, the Under Secretary for Health, the Under Secretary for 
Benefits, and the Under Secretary for Memorial Affairs each has the 
authority to grant an exception to allow an excluded person to 
participate in a covered transaction, as provided in the OMB guidance at 
2 CFR 180.135.



                     Subpart B_Covered Transactions



Sec.  801.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    VA does not extend coverage of nonprocurement suspension and 
debarment requirements beyond first-tier procurement contracts under a 
covered nonprocurement transaction, although the OMB guidance at 2 CFR 
180.220(c) allows a Federal agency to do so (also see optional lower 
tier coverage in the figure in the appendix to 2 CFR part 180).



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  801.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  801.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180 (as supplemented by subpart C of this part) and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-H [Reserved]



                          Subpart I_Definitions



Sec.  801.930  Debarring official (Department of Veterans Affairs
supplement to government-wide definition at 2 CFR 180.930).

    In addition to the debarring official listed at 2 CFR 180.930, the 
debarring official for the Department of Veterans Affairs is:
    (a) For the Veterans Health Administration, the Under Secretary for 
Health;
    (b) For the Veterans Benefits Administration, the Under Secretary 
for Benefits; and
    (c) For the National Cemetery Administration, the Under Secretary 
for Memorial Affairs.



Sec.  801.995  Principal (Department of Veterans Affairs supplement
to government-wide definition at 2 CFR 180.995.)

    In addition to the principals identified at 2 CFR 180.995, for the 
Department of Veterans Affairs loan guaranty program, principals 
include, but are not limited to the following:
    (a) Loan officers.
    (b) Loan solicitors.
    (c) Loan processors.
    (d) Loan servicers.
    (e) Loan supervisors.

[[Page 325]]

    (f) Mortgage brokers.
    (g) Office managers.
    (h) Staff appraisers and inspectors.
    (i) Fee Appraisers and inspectors.
    (j) Underwriters.
    (k) Bonding companies.
    (l) Real estate agents and brokers.
    (m) Management and marketing agents.
    (n) Accountants, consultants, investment bankers, architects, 
engineers, attorneys, and others in a business relationship with 
participants in connection with a covered transaction under the 
Department of Veterans Affairs loan guaranty program.
    (o) Contractors involved in the construction, improvement or repair 
of properties financed with Department of Veterans Affairs guaranteed 
loans.
    (p) Closing agents.



Sec.  801.1010  Suspending official (Department of Veterans Affairs
supplement to government-wide definition at 2 CFR 180.1010).

    In addition to the suspending official listed at 2 CFR 180.1010, the 
suspending official for the Department of Veterans Affairs is:
    (a) For the Veterans Health Administration, the Under Secretary for 
Health;
    (b) For the Veterans Benefits Administration, the Under Secretary 
for Benefits; and
    (c) For the National Cemetery Administration, the Under Secretary 
for Memorial Affairs.



   Subpart J_Limited Denial of Participation (Department of Veterans 
      Affairs Optional Subpart for OMB Guidance at 2 CFR Part 180).



Sec.  801.1100  General.

    Field facility directors are authorized to order a limited denial of 
participation affecting any participant or contractor and its affiliates 
except lenders and manufactured home manufacturers. In each case, even 
if the offense or violation is of a criminal, fraudulent or other 
serious nature, the decision to order a limited denial of participation 
shall be discretionary and in the best interests of the Government.



Sec.  801.1105  Cause for a limited denial of participation.

    (a) Causes. A limited denial of participation shall be based upon 
adequate evidence of any of the following causes:
    (1) Irregularities in a participant's or contractor's performance in 
the VA loan guaranty program;
    (2) Denial of participation in programs administered by the 
Department of Housing and Urban Development or the Department of 
Agriculture, Rural Housing Service;
    (3) Failure to satisfy contractual obligations or to proceed in 
accordance with contract specifications;
    (4) Failure to proceed in accordance with VA requirements or to 
comply with VA regulations;
    (5) Construction deficiencies deemed by VA to be the participant's 
responsibility;
    (6) Falsely certifying in connection with any VA program, whether or 
not the certification was made directly to VA;
    (7) Commission of an offense or other cause listed in Sec.  180.800;
    (8) Violation of any law, regulation, or procedure relating to the 
application for guaranty, or to the performance of the obligations 
incurred pursuant to a commitment to guaranty;
    (9) Making or procuring to be made any false statement for the 
purpose of influencing in any way an action of the Department.
    (10) Imposition of a limited denial of participation by any other VA 
field facility.
    (b) Indictment. A criminal indictment or information shall 
constitute adequate evidence for the purpose of limited denial of 
participation actions.
    (c) Limited denial of participation. Imposition of a limited denial 
of participation by a VA field facility shall, at the discretion of any 
other VA field facility, constitute adequate evidence for a concurrent 
limited denial of participation. Where such a concurrent limited denial 
of participation is imposed, participation may be restricted on the same 
basis without the need for an additional conference or further hearing.

[[Page 326]]



Sec.  801.1110  Scope and period of a limited denial of participation.

    (a) Scope and period. The scope of a limited denial of participation 
shall be as follows:
    (1) A limited denial of participation extends only to participation 
in the VA Loan Guaranty Program and shall be effective only within the 
geographic jurisdiction of the office or offices imposing it.
    (2) The sanction may be imposed for a period not to exceed 12 months 
except for unresolved construction deficiencies. In cases involving 
construction deficiencies, the builder may be excluded for either a 
period not to exceed 12 months or for an indeterminate period which ends 
when the deficiency has been corrected or otherwise resolved in a manner 
acceptable to VA.
    (b) Effectiveness. The sanction shall be effective immediately upon 
issuance and shall remain effective for the prescribed period. If the 
cause for the limited denial of participation is resolved before the 
expiration of the prescribed period, the official who imposed the 
sanction may terminate it. The imposition of a limited denial of 
participation shall not affect the right of the Department to suspend or 
debar any person under this part.
    (c) Affiliates. An affiliate or organizational element may be 
included in a limited denial of participation solely on the basis of its 
affiliation, and regardless of its knowledge of or participation in the 
acts providing cause for the sanction. The burden of proving that a 
particular affiliate or organizational element is capable of meeting VA 
requirements and is currently a responsible entity and not controlled by 
the primary sanctioned party (or by an entity that itself is controlled 
by the primary sanctioned party) is on the affiliate or organizational 
element.



Sec.  801.1111  Notice.

    (a) Generally. A limited denial of participation shall be initiated 
by advising a participant or contractor, and any specifically named 
affiliate, by certified mail, return receipt requested:
    (1) That the sanction is effective as of the date of the notice;
    (2) Of the reasons for the sanction in terms sufficient to put the 
participant or contractor on notice of the conduct or transaction(s) 
upon which it is based;
    (3) Of the cause(s) relied upon under Sec.  801.1105 for imposing 
the sanction;
    (4) Of the right to request in writing, within 30 days of receipt of 
the notice, a conference on the sanction, and the right to have such 
conference held within 10 business days of receipt of the request;
    (5) Of the potential effect of the sanction and the impact on the 
participant's or contractor's participation in Departmental programs, 
specifying the program(s) involved and the geographical area affected by 
the action.
    (b) Notification of action. After 30 days, if no conference has been 
requested, the official imposing the limited denial of participation 
will notify VA Central Office of the action taken and of the fact that 
no conference has been requested. If a conference is requested within 
the 30-day period, VA Central Office need not be notified unless a 
decision to affirm all or a portion of the remaining period of exclusion 
is issued. VA Central Office will notify all VA field offices of 
sanctions imposed and still in effect under this subpart.



Sec.  801.1112  Conference.

    Upon receipt of a request for a conference, the official imposing 
the sanction shall arrange such a conference with the participant or 
contractor and may designate another official to conduct the conference. 
The participant shall be given the opportunity to be heard within 10 
business days of receipt of the request. This conference precedes, and 
is in addition to, the formal hearing provided if an appeal is taken 
under Sec.  801.1113. Although formal rules of procedure do not apply to 
the conference, the participant or contractor may be represented by 
counsel and may present all relevant information and materials to the 
official or designee. After consideration of the information and 
materials presented, the official shall, in writing, advise the 
participant or contractor of the decision to withdraw, modify or affirm 
the limited denial of participation. If the decision is made to affirm 
all or a portion

[[Page 327]]

of the remaining period of exclusion, the participant shall be advised 
of the right to request a formal hearing in writing within 30 days of 
receipt of the notice of decision. This decision shall be issued 
promptly, but in no event later than 20 days after the conference and 
receipt of materials.



Sec.  801.1113  Appeal.

    Where the decision is made to affirm all or a portion of the 
remaining period of exclusion, any participant desiring an appeal shall 
file a written request for a hearing with the Under Secretary for 
Benefits, Department of Veterans Affairs, 810 Vermont Avenue, NW., 
Washington, DC 20420. This request shall be filed within 30 days of 
receipt of the decision to affirm. If a hearing is requested, it shall 
be held in accordance with the procedures in Sec. Sec.  108.825 through 
108.855. Where a limited denial of participation is followed by a 
suspension or debarment, the limited denial of participation shall be 
superseded and the appeal shall be heard solely as an appeal of the 
suspension or debarment.



PART 802_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 5 U.S.C. 301; 38 U.S.C. 501, 2 CFR part 200, and as noted 
in specific sections.

    Source: 79 FR 76024, Dec. 19, 2014, unless otherwise noted.



Sec.  802.101  Applicable regulations.

    The Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards set forth in 2 CFR part 200 shall apply 
to the Department of Veterans Affairs.

                        PARTS 803	899 [RESERVED]

[[Page 329]]



                    CHAPTER IX--DEPARTMENT OF ENERGY




  --------------------------------------------------------------------
Part                                                                Page
900

[Reserved]

901             Nonprocurement debarment and suspension.....         331
902             Requirements for drug-free workplace 
                    (financial assistance)..................         332
903-909

[Reserved]

910             Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         335
911-999

[Reserved]

[[Page 331]]

                           PART 900 [RESERVED]



PART 901_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
901.10 What does this part do?
901.20 Does this part apply to me?
901.30 What policies and procedures must I follow?

                            Subpart A_General

901.137 Who in the Department of Energy may grant an exception to let an 
          excluded person participate in a covered transaction?

                     Subpart B_Covered Transactions

901.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

901.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

901.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-H [Reserved]

                          Subpart I_Definitions

901.930 Debarring official (Department of Energy supplement to 
          government-wide definition at 2 CFR 180.935).
901.950 Federal agency (Department of Energy supplement to government-
          wide definition at 2 CFR 180.910).
901.1010 Suspending official (Department of Energy supplement to 
          government-wide definition at 2 CFR 180.1010).

Subpart J [Reserved]

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 
6101 note); E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O. 12689 (3 CFR, 
1989 Comp., p. 235); 42 U.S.C. 7101 et seq.; 50 U.S.C. 2401 et seq.

    Source: 71 FR 70459, Dec. 5, 2006, unless otherwise noted.



Sec.  901.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the DOE policies and procedures for nonprocurement debarment and 
suspension. It thereby gives regulatory effect for DOE to the OMB 
guidance as supplemented by this part. This part satisfies the 
requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189); Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235); and section 
2455 of the Federal Acquisition Streamlining Act of 1994, Pub. L. 103-
355 (31 U.S.C. 6101 note).



Sec.  901.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in a DOE suspension or debarment action;
    (c) DOE debarment or suspension official; and
    (d) DOE grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  901.30  What policies and procedures must I follow?

    The DOE policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180 and any supplemental 
policies and procedures set forth in this part.



                            Subpart A_General



Sec.  901.137  Who in the Department of Energy may grant an exception
to let an excluded person participate in a covered transaction?

    The Director, Office of Procurement and Assistance Management, DOE, 
for DOE actions, and the Director, Office

[[Page 332]]

of Acquisition and Supply Management, NNSA, for NNSA actions, may grant 
an exception permitting an excluded person to participate in a 
particular covered transaction. If the Director, Office of Procurement 
and Assistance Management, DOE, for DOE actions, and Director, Office of 
Acquisition and Supply Management, NNSA, for NNSA actions, grants an 
exception, the exception must be in writing and state the reason(s) for 
deviating from the government-wide policy in Executive Order 12549.



                     Subpart B_Covered Transactions



Sec.  901.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR180.220(c) allows a Federal agency 
to do so (also see optional lower tier coverage in the figure in the 
appendix to 2 CFR part 180), DOE does not extend coverage of 
nonprocurement suspension and debarment requirements beyond first-tier 
procurement contracts under a covered nonprocurement transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  901.332  What methods must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?

    You, as a participant, must include a term or condition in lower-
tier transactions requiring lower-tier participants to comply with 
subpart C of the OMB guidance in 2 CFR part 180, as supplemented by this 
subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  901.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-H [Reserved]



                          Subpart I_Definitions



Sec.  901.930  Debarring official (Department of Energy supplement to
government-wide definition at 2 CFR 180.930).

    The Debarring Official for the Department of Energy, exclusive of 
NNSA, is the Director, Office of Procurement and Assistance Management, 
DOE. The Debarring Official for NNSA is the Director, Office of 
Acquisition and Supply Management, NNSA.



Sec.  901.950  Federal agency (Department of Energy supplement to
government-wide definition at 2 CFR 180.950).

    DOE means the U.S. Department of Energy, including the NNSA.
    NNSA means the National Nuclear Security Administration.



Sec.  901.1010  Suspending official (Department of Energy supplement
to government-wide definition at 2 CFR 180.1010).

    The suspending official for the Department of Energy, exclusive of 
NNSA, is the Director, Office of Procurement and Assistance Management, 
DOE. The suspending official for NNSA is the Director, Office of 
Acquisition and Supply Management, NNSA.

Subpart J [Reserved]



PART 902_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
902.10 What does this part do?
902.20 Does this part apply to me?
902.30 What policies and procedures must I follow?

Subpart A--Purpose and Coverage [Reserved]

[[Page 333]]

      Subpart B_Requirements for Recipients Other Than Individuals

902.225 Whom in the DOE does a recipient other than an individual notify 
          about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

902.300 Whom in the DOE does a recipient who is an individual notify 
          about a criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

902.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of this Part and Consequences

902.500 Who in the DOE determines that a recipient other than an 
          individual violated the requirements of this part?
902.505 Who in the DOE determines that a recipient who is an individual 
          violated the requirements of this part?

                          Subpart F_Definitions

902.605 Award (DOE supplement to Governmentwide definition at 2 CFR 
          182.605).
902.645 Federal agency or agency.

    Authority: 41 U.S.C. 701; 42 U.S.C. 7101 et seq.; 50 U.S.C. 2401 et 
seq.

    Source: 75 FR 39444, July 9, 2010, unless otherwise noted.



Sec.  902.10  What does this part do?

    This part requires that the award and administration of DOE grants 
and cooperative agreements comply with Office of Management and Budget 
(OMB) guidance implementing the portion of the Drug-Free Workplace Act 
of 1988 (41 U.S.C. 701-707, as amended, hereafter referred to as ``the 
Act'') that applies to grants. It thereby--
    (a) Gives regulatory effect to the OMB guidance (Subparts A through 
F of 2 CFR part 182) for the DOE's grants and cooperative agreements; 
and
    (b) Establishes DOE policies and procedures for compliance with the 
Act that are the same as those of other Federal agencies, in conformance 
with the requirement in 41 U.S.C. 705 for Governmentwide implementing 
regulations.



Sec.  902.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in Subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of a DOE grant or cooperative agreement; or
    (b) DOE awarding official.



Sec.  902.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table. For each 
of those sections, you must follow the policies and procedures in the 
OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   902.225.  Whom in the DOE a
                                                 recipient other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   902.300.  Whom in the DOE a
                                                 recipient who is an
                                                 individual must notify
                                                 if he or she is
                                                 convicted of a criminal
                                                 drug offense resulting
                                                 from a violation
                                                 occurring during the
                                                 conduct of any award
                                                 activity.
(3) 2 CFR 182.500............  Sec.   902.500.  Who in the DOE is
                                                 authorized to determine
                                                 that a recipient other
                                                 than an individual is
                                                 in violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(4) 2 CFR 182.505............  Sec.   902.505.  Who in the DOE is
                                                 authorized to determine
                                                 that a recipient who is
                                                 an individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(5) 2 CFR 182.605............  Sec.   902.605.  Definition of ``Award''.
(6) 2 CFR 182.645............  Sec.   902.645.  Definition of ``Federal
                                                 agency or agency''.
------------------------------------------------------------------------


[[Page 334]]

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in Subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, DOE policies 
and procedures are the same as those in the OMB guidance.

Subpart A--Purpose and Coverage [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  902.225  Whom in the DOE does a recipient other than an 
individual notify about a criminal drug conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify each DOE office from which it 
currently has an award.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  902.300  Whom in the DOE does a recipient who is an individual
notify about a criminal drug conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify each DOE office from which it currently has an 
award.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  902.400  What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award:
    Drug-free workplace. You as the recipient must comply with drug-free 
workplace requirements in Subpart B (or Subpart C, if the recipient is 
an individual) of Part 902, which adopts the Governmentwide 
implementation (2 CFR part 182) of sec. 5152-5158 of the Drug-Free 
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 
701-707).



           Subpart E_Violations of this Part and Consequences



Sec.  902.500  Who in the DOE determines that a recipient other than
an individual violated the requirements of this part?

    The Secretary of the Department of Energy and the Secretary's 
designee or designees are authorized to make the determinations under 2 
CFR 182.500 for DOE, including NNSA.



Sec.  902.505  Who in the DOE determines that a recipient who is an
individual violated the requirements of this part?

    The Secretary of the Department of Energy and the Secretary's 
designee or designees are authorized to make the determinations under 2 
CFR 182.500 for DOE, including NNSA.



                          Subpart F_Definitions



Sec.  902.605  Award (DOE supplement to Governmentwide definition at
2 CFR 182.605).

    The term award also includes Technology Investment Agreements (TIA). 
A TIA is a special type of assistance instrument used to increase the 
involvement of commercial firms in the Department's RD&D programs. A TIA 
may be either a type of cooperative agreement or a type of assistance 
transaction other than a cooperative agreement, depending on the 
intellectual property provisions. A TIA may be either expenditure based 
or fixed support.



Sec.  902.645  Federal agency or agency.

    Department of Energy means the U.S. Department of Energy (DOE), 
including the National Nuclear Security Administration (NNSA).

                        PARTS 903	909 [RESERVED]

[[Page 335]]



PART 910_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



Subpart A [Reserved]

                      Subpart B_General Provisions

Sec.
910.120 Adoption of 2 CFR part 200.
910.122 Applicability.
910.124 Eligibility.
910.126 Competition.
910.127 Legal authority and effect.
910.128 Disputes and appeals.
910.130 Cost sharing (EPACT).
910.132 Research misconduct.
910.133 Deviation authority.

Subpart C [Reserved]

    Subpart D_Post Award Federal Requirements for For-Profit Entities

910.350 Applicability of 2 CFR part 200.
910.352 Cost principles.
910.354 Payments.
910.356 Audits.
910.358 Profit or fee for SBIR/STTR.
910.360 Real property and equipment.
910.362 Intellectual property.
910.364 Reporting on utilization of subject inventions.
910.366 Export Control and U.S. Manufacturing and Competitiveness.
910.368 Change of control.
910.370 Novation of financial assistance agreements.
910.372 Special award conditions.

Appendix A to Subpart D of Part 910--Patents and Data Provisions for 
          For-Profit Organizations

                        Subpart E_Cost Principles

910.401 Application to M&O's.

          Subpart F_Audit Requirements for For-Profit Entities

                                 General

910.500 Purpose.

                                 Audits

910.501 Audit requirements.
910.502 Basis for determining DOE awards expended.
910.503 Relation to other audit requirements.
910.504 Frequency of audits.
910.505 Sanctions.
910.506 Audit costs.
910.507 Compliance audits.

                                Auditees

910.508 Auditee responsibilities.
910.509 Auditor selection.
910.510 Financial statements.
910.511 Audit findings follow-up.
910.512 Report submission.

                            Federal Agencies

910.513 Responsibilities.

                                Auditors

910.514 Scope of audit.
910.515 Audit reporting.
910.516 Audit findings.
910.517 Audit documentation.
910.518 [Reserved]
910.519 Criteria for Federal program risk.
910.520 Criteria for a low-risk auditee.

                          Management Decisions

910.521 Management decision.

    Authority: 42 U.S.C. 7101, et seq.; 31 U.S.C. 6301-6308; 50 U.S.C. 
2401 et seq.; 2 CFR part 200.

    Source: 79 FR 76024, Dec. 19, 2014, unless otherwise noted.

Subpart A [Reserved]



                      Subpart B_General Provisions



Sec.  910.120  Adoption of 2 CFR part 200.

    (a) Under the authority listed above, the Department of Energy 
adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 
200, with the following additions. Thus, this part gives regulatory 
effect to the OMB guidance and supplements the guidance as needed for 
the Department.
    (b) The additions include: Expanding the definition of non-Federal 
entity for DOE to include For-profit entities; adding back additional 
coverage from 10 CFR part 600 required by DOE statute; adding back 
coverage specific for For-Profit entities which existed in 10 CFR part 
600 which still applies.



Sec.  910.122  Applicability.

    (a) For DOE, unless otherwise noted in Part 910, the definition of 
Non-Federal entity found in 2 CFR 200.69 is expanded to include for-
profit organizations in addition to states, local governments, Indian 
tribes, institutions of higher education (IHE), and nonprofit 
organizations.
    (b) A for-profit organization is defined as one that distributes any 
profit

[[Page 336]]

not reinvested into the business as profit or dividends to its employees 
or shareholders.



Sec.  910.124  Eligibility.

    (a) Purpose and scope. This section implements section 2306 of the 
Energy Policy Act of 1992, 42 U.S.C. 13525, and sets forth a general 
statement of policy, including procedures and interpretations, for the 
guidance of implementing DOE officials in making mandatory pre-award 
determinations of eligibility for financial assistance under Titles XX 
through XXIII of that Act.
    (b) Definitions. The definitions in Subpart A of 2 CFR part 200, 
including the definition of the term ``Federal financial assistance,'' 
are applicable to this section. In addition, as used in this section:
    Act means the Energy Policy Act of 1992.
    Company means any business entity other than an organization of the 
type described in section 501(c) (3) of the Internal Revenue Code of 
1954 (26 U.S.C. 501(c)(3)).
    Covered program means a program under Titles XX through XXIII of the 
Act. (A list of covered programs, updated periodically as appropriate, 
is maintained and published by the Department of Energy.)
    Parent company means a company that:
    (1) Exercises ultimate ownership of the applicant company either 
directly, by ownership of a majority of that company's voting 
securities, or indirectly, by control over a majority of that company's 
voting securities through one or more intermediate subsidiary companies 
or otherwise, and
    (2) Is not itself subject to the ultimate ownership control of 
another company.
    United States means the several States, the District of Columbia, 
and all commonwealths, territories, and possessions of the United 
States.
    United States-owned company means:
    (1) A company that has majority ownership by individuals who are 
citizens of the United States, or
    (2) A company organized under the laws of a State that either has no 
parent company or has a parent company organized under the laws of a 
State.
    Voting security has the meaning given the term in the Public Utility 
Holding Company Act (15 U.S.C. 15b(17)).
    (c) What must DOE determine. A company shall be eligible to receive 
an award of financial assistance under a covered program only if DOE 
finds that--
    (1) Consistent with Sec.  910.124(d), the company's participation in 
a covered program would be in the economic interest of the United 
States; and
    (2) The company is either--
    (i) A United States-owned company; or
    (ii) Incorporated or organized under the laws of any State and has a 
parent company which is incorporated or organized under the laws of a 
country which--
    (A) Affords to the United States-owned companies opportunities, 
comparable to those afforded to any other company, to participate in any 
joint venture similar to those authorized under the Act;
    (B) Affords to United States-owned companies local investment 
opportunities comparable to those afforded to any other company; and
    (C) Affords adequate and effective protection for the intellectual 
property rights of United States-owned companies.
    (d) Determining the economic interest of the United States. In 
determining whether participation of an applicant company in a covered 
program would be in the economic interest of the United States under 
Sec.  910.124(c)(1), DOE may consider any evidence showing that a 
financial assistance award would be in the economic interest of the 
United States including, but not limited to--
    (1) Investments by the applicant company and its affiliates in the 
United States in research, development, and manufacturing (including, 
for example, the manufacture of major components or subassemblies in the 
United States);
    (2) Significant contributions to employment in the United States by 
the applicant company and its affiliates; and

[[Page 337]]

    (3) An agreement by the applicant company, with respect to any 
technology arising from the financial assistance being sought--
    (i) To promote the manufacture within the United States of products 
resulting from that technology (taking into account the goals of 
promoting the competitiveness of United States industry); and
    (ii) To procure parts and materials from competitive suppliers.
    (e) Information an applicant must submit.
    (1) Any applicant for Federal financial assistance under a covered 
program shall submit with the application for Federal financial 
assistance, or at such later time as may be specified by DOE, evidence 
for DOE to consider in making findings required under Sec.  910.124 
(c)(1) and findings concerning ownership status under Sec.  
910.124(c)(2).
    (2) If an applicant for Federal financial assistance is submitting 
evidence relating to future undertakings, such as an agreement under 
Sec.  910.124(d)(3) to promote manufacture in the United States of 
products resulting from a technology developed with financial assistance 
or to procure parts and materials from competitive suppliers, the 
applicant shall submit a representation affirming acceptance of these 
undertakings. The applicant should also briefly describe its plans, if 
any, for any manufacturing of products arising from the program-
supported research and development, including the location where such 
manufacturing is expected to occur.
    (3) If an applicant for Federal financial assistance is claiming to 
be a United States-owned company, the applicant must submit a 
representation affirming that it falls within the definition of that 
term provided in Sec.  910.124(b).
    (4) DOE may require submission of additional information deemed 
necessary to make any portion of the determination required by Sec.  
910.124(b) 2.
    (f) Other information DOE may consider.
    In making the determination under Sec.  910.124(c)(2)(ii), DOE may--
    (1) Consider information on the relevant international and domestic 
law obligations of the country of incorporation of the parent company of 
an applicant;
    (2) Consider information relating to the policies and practices of 
the country of incorporation of the parent company of an applicant with 
respect to:
    (i) The eligibility criteria for, and the experience of United 
States-owned company participation in, energy-related research and 
development programs;
    (ii) Local investment opportunities afforded to United States-owned 
companies; and
    (iii) Protection of intellectual property rights of United States-
owned companies;
    (3) Seek and consider advice from other federal agencies, as 
appropriate; and
    (4) Consider any publicly available information in addition to the 
information provided by the applicant.



Sec.  910.126  Competition.

    (a) General. DOE shall solicit applications for Federal financial 
assistance in a manner which provides for the maximum amount of 
competition feasible.
    (b) Restricted eligibility. If DOE restricts eligibility, an 
explanation of why the restriction of eligibility is considered 
necessary shall be included in the notice of funding opportunity or, 
program rule. Such restriction of eligibility shall be:
    (1) Supported by a written determination initiated by the program 
office;
    (2) Concurred in by legal counsel and the Contracting Officer; and
    (3) Approved, prior to award, by an approver at least one level 
above the Contracting Officer.
    (c) Noncompetitive Federal financial assistance. DOE may award a 
grant or cooperative agreement on a noncompetitive basis only if the 
application satisfies one or more of the follow selection criteria:
    (1) The activity to be funded is necessary to the satisfactory 
completion of, or is a continuation or renewal of, an activity presently 
being funded by DOE or another Federal agency, and for which competition 
for support would have a significant adverse effect

[[Page 338]]

on continuity or completion of the activity.
    (2) The activity is being or would be conducted by the applicant 
using its own resources or those donated or provided by third parties; 
however, DOE support of that activity would enhance the public benefits 
to be derived and DOE knows of no other entity which is conducting or is 
planning to conduct such an activity.
    (3) The applicant is a unit of government and the activity to be 
supported is related to performance of a governmental function within 
the subject jurisdiction, thereby precluding DOE provision of support to 
another entity.
    (4) The applicant has exclusive domestic capability to perform the 
activity successfully, based upon unique equipment, proprietary data, 
technical expertise, or other such unique qualifications.
    (5) The award implements an agreement between the United States 
Government and a foreign government to fund a foreign applicant.
    (6) Time constraints associated with a public health, safety, 
welfare or national security requirement preclude competition.
    (7) The proposed project was submitted as an unsolicited proposal 
and represents a unique or innovative idea, method, or approach that 
would not be eligible for financial assistance under a recent, current, 
or planned notice of funding opportunity, and if, as determined by DOE, 
a competitive notice of funding opportunity would not be appropriate.
    (8) The responsible program Assistant Secretary, Deputy 
Administrator, or other official of equivalent authority has determined 
that making the award non-competitively is in the public interest. This 
authority cannot not be delegated.
    (d) Approval requirements. Determinations of noncompetitive awards 
shall be:
    (1) Documented in writing;
    (2) Concurred in by the responsible program technical official and 
local legal counsel; and
    (3) Approved, prior to award, by the Contracting Officer and an 
approver at least one level above the CO.
    (e) Definitions. For purposes of this section, the following 
definitions are applicable:
    Continuation Award--A financial assistance award authorizing a 
second or subsequent budget period within an existing project period.
    Renewal Award--A financial assistance award authorizing the first 
budget period of an extended project period.

[79 FR 76024, Dec. 19, 2014, as amended at 80 FR 57511, Sept. 24, 2015]



Sec.  910.127  Legal authority and effect.

    (a) A DOE financial assistance award is valid only if it is in 
writing and is signed, either in writing or electronically, by a DOE 
Contracting Officer.
    (b) Recipients are free to accept or reject the award. A request to 
draw down DOE funds constitutes the Recipient's acceptance of the terms 
and conditions of this Award.

[80 FR 57511, Sept. 24, 2015]



Sec.  910.128  Disputes and appeals.

    (a) Informal dispute resolution. Whenever practicable, DOE shall 
attempt to resolve informally any dispute over the award or 
administration of Federal financial assistance. Informal resolution, 
including resolution through an alternative dispute resolution 
mechanism, shall be preferred over formal procedures, to the extent 
practicable.
    (b) Alternative dispute resolution (ADR). Before issuing a final 
determination in any dispute in which informal resolution has not been 
achieved, the Contracting Officer shall suggest that the other party 
consider the use of voluntary consensual methods of dispute resolution, 
such as mediation. The DOE dispute resolution specialist is available to 
provide assistance for such disputes, as are trained mediators of other 
federal agencies. ADR may be used at any stage of a dispute.
    (c) Final determination. Whenever a dispute is not resolved 
informally or through an alternative dispute resolution process, DOE 
shall mail (by certified mail) a brief written determination signed by a 
Contracting Officer, setting forth DOE's final disposition of such 
dispute. Such determination shall contain the following information:

[[Page 339]]

    (1) A summary of the dispute, including a statement of the issues 
and of the positions taken by DOE and the party or parties to the 
dispute; and
    (2) The factual, legal and, if appropriate, policy reasons for DOE's 
disposition of the dispute.
    (d) Right of appeal. Except as provided in paragraph (f)(1) of this 
section, the final determination under paragraph (c) of this section may 
be appealed to the cognizant Senior Procurement Executive (SPE) for 
either DOE or the National Nuclear Security Administration (NNSA). The 
appeal must be received by DOE within 90 days of the receipt of the 
final determination. The mailing address for the DOE SPE is Office of 
Acquisition and Project Management, 1000 Independence Ave., SW., 
Washington, DC 20585. The mailing address for the NNSA SPE is Office of 
Acquisition Management, National Nuclear Security Administration (NNSA), 
1000 Independence Ave. SW., Washington, DC 20585.
    (e) Effect of appeal. The filing of an appeal with the SPE shall not 
stay any determination or action taken by DOE which is the subject of 
the appeal. Consistent with its obligation to protect the interests of 
the Federal Government, DOE may take such authorized actions as may be 
necessary to preserve the status quo pending decision by the SPE, or to 
preserve its ability to provide relief in the event the SPE decides in 
favor of the appellant.
    (f) Review on appeal. (1) The SPE shall have no jurisdiction to 
review:
    (i) Any preaward dispute (except as provided in paragraph (f)(2)(ii) 
of this section), including use of any special restrictive condition 
pursuant to 2 CFR 200.207 Specific Conditions ;
    (ii) DOE denial of a request for an Exception under 2 CFR 200.102;
    (iii) DOE denial of a request for a budget revision or other change 
in the approved project under 2 CFR 200.308 or 200.403 or under another 
term or condition of the award;
    (iv) Any DOE action authorized under 2 CFR 200.338, Remedies for 
Noncompliance, or such actions authorized by program rule;
    (v) Any DOE decision about an action requiring prior DOE approval 
under 2 CFR 200.324 or under another term or condition of the award;
    (2) In addition to any right of appeal established by program rule, 
or by the terms and conditions (not inconsistent with paragraph (f)(1) 
of this section) of an award, the SPE shall have jurisdiction to review:
    (i) A DOE determination that the recipient has failed to comply with 
the applicable requirements of this part, the program statute or rules, 
or other terms and conditions of the award;
    (ii) A DOE decision not to make a continuation award based on any of 
the determinations described in paragraph (f)(2)(i) of this section;
    (iii) Termination of an award, in whole or in part, by DOE under 2 
CFR 200.339 (a)(1)-(2);
    (iv) A DOE determination that an award is void or invalid;
    (v) The application by DOE of an indirect cost rate; and
    (vi) DOE disallowance of costs.
    (3) In reviewing disputes authorized under paragraph (f)(2) of this 
section, the SPE shall be bound by the applicable law, statutes, and 
rules, including the requirements of this part, and by the terms and 
conditions of the award.
    (4) The decision of the SPE shall be the final decision of DOE.



Sec.  910.130  Cost sharing (EPACT).

    In addition to the requirements of 2 CFR 200.306 the following 
requirements apply to research, development, demonstration and 
commercial application activities:
    (a) Cost sharing is required for most financial assistance awards 
for research, development, demonstration and commercial applications 
activities initiated after the enactment of the Energy Policy Act of 
2005 on August 8, 2005. This requirement does not apply to:
    (1) An award under the small business innovation research program 
(SBIR) or the small business technology transfer program (STTR); or
    (2) A program with cost sharing requirements defined by other than 
Section 988 of the Energy Policy Act of 2005 including other sections of 
the 2005 Act and the Energy Policy Act of 1992.
    (b) A cost share of at least 20 percent of the cost of the activity 
is required

[[Page 340]]

for research and development except where:
    (1) A research or development activity of a basic or fundamental 
nature has been excluded by an appropriate officer of DOE, generally an 
Under Secretary;
    (2) The Secretary has determined it is necessary and appropriate to 
reduce or eliminate the cost sharing requirement for a research and 
development activity of an applied nature; or
    (3) The research or development activity is to be performed by an 
institution of higher education or nonprofit institution (as defined in 
section 4 of the Stevenson-Wydler Technology Innovation Act of 1980 (15 
U.S.C. 3703)) during the two-year period ending September 27, 2020.
    (c) A cost share of at least 50 percent of the cost of a 
demonstration or commercial application activity is required unless the 
Secretary has determined it is necessary and appropriate to reduce the 
cost sharing requirements, taking into consideration any technological 
risk relating to the activity.
    (d) Cost share shall be provided by non-Federal funds unless 
otherwise authorized by statute. In calculating the amount of the non-
Federal contribution:
    (1) Base the non-Federal contribution on total project costs, 
including the cost of work where funds are provided directly to a 
partner, consortium member or subrecipient, such as a Federally Funded 
Research and Development Center;
    (2) Include the following costs as allowable in accordance with the 
applicable cost principles:
    (i) Cash;
    (ii) Personnel costs;
    (iii) The value of a service, other resource, or third party in-kind 
contribution determined in accordance with Subpart E--Cost Principles--
of 2 CFR part 200. For recipients that are for-profit organizations as 
defined by 2 CFR 910.122, the Cost Principles which apply are contained 
in 48 CFR 31.2. See Sec.  910.352 for further information;
    (iv) Indirect costs or facilities and administrative costs; and/or
    (v) Any funds received under the power program of the Tennessee 
Valley Authority (except to the extent that such funds are made 
available under an annual appropriation Act);
    (3) Exclude the following costs:
    (i) Revenues or royalties from the prospective operation of an 
activity beyond the time considered in the award;
    (ii) Proceeds from the prospective sale of an asset of an activity; 
or
    (iii) Other appropriated Federal funds.
    (iv) Repayment of the Federal share of a cost-shared activity under 
Section 988 of the Energy Policy Act of 2005 shall not be a condition of 
the award.
    (e) For purposes of this section, the following definitions are 
applicable:
    Demonstration means a project designed to determine the technical 
feasibility and economic potential of a technology on either a pilot or 
prototype scale.
    Development is defined in 2 CFR 200.87.
    Research is also defined in 2 CFR 200.87.

[79 FR 76024, Dec. 19, 2014, as amended at 84 FR 12049, Apr. 1, 2019]



Sec.  910.132  Research misconduct.

    (a) A recipient is responsible for maintaining the integrity of 
research of any kind under an award from DOE including the prevention, 
detection, and remediation of research misconduct, and the conduct of 
inquiries, investigations, and adjudication of allegations of research 
misconduct in accordance with the requirements of this section.
    (b) For purposes of this section, the following definitions are 
applicable:
    Adjudication means a formal review of a record of investigation of 
alleged research misconduct to determine whether and what corrective 
actions and sanctions should be taken.
    Fabrication means making up data or results and recording or 
reporting them.
    Falsification means manipulating research materials, equipment, or 
processes, or changing or omitting data or results such that the 
research is not accurately represented in the research record.
    Finding of Research Misconduct means a determination, based on a 
preponderance of the evidence, that research

[[Page 341]]

misconduct has occurred. Such a finding requires a conclusion that there 
has been a significant departure from accepted practices of the relevant 
research community and that it be knowingly, intentionally, or 
recklessly committed.
    Inquiry means information gathering and initial fact-finding to 
determine whether an allegation or apparent instance of misconduct 
warrants an investigation.
    Investigation means the formal examination and evaluation of the 
relevant facts.
    Plagiarism means the appropriation of another person's ideas, 
processes, results, or words without giving appropriate credit.
    Research misconduct means fabrication, falsification, or plagiarism 
in proposing, performing, or reviewing research, or in reporting 
research results, but does not include honest error or differences of 
opinion.
    Research record means the record of all data or results that embody 
the facts resulting from scientists' inquiries, including, but not 
limited to, research proposals, laboratory records, both physical and 
electronic, progress reports, abstracts, theses, oral presentations, 
internal reports, and journal articles.
    (c) Unless otherwise instructed by the Contracting Officer, the 
recipient must conduct an initial inquiry into any allegation of 
research misconduct. If the recipient determines that there is 
sufficient evidence to proceed to an investigation, it must notify the 
Contracting Officer and, unless otherwise instructed, the recipient 
must:
    (1) Conduct an investigation to develop a complete factual record 
and an examination of such record leading to either a finding of 
research misconduct and an identification of appropriate remedies or a 
determination that no further action is warranted;
    (2) Inform the Contracting Officer if an initial inquiry supports an 
investigation and, if requested by the Contracting Officer thereafter, 
keep the Contracting Officer informed of the results of the 
investigation and any subsequent adjudication. When an investigation is 
complete, the recipient will forward to the Contracting Officer a copy 
of the evidentiary record, the investigative report, any recommendations 
made to the recipient's adjudicating official, and the adjudicating 
official's decision and notification of any corrective action taken or 
planned, and the subject's written response to the recommendations (if 
any).
    (3) If the investigation leads to a finding of research misconduct, 
conduct an adjudication by a responsible official who was not involved 
in the inquiry or investigation and is separated organizationally from 
the element which conducted the investigation. The adjudication must 
include a review of the investigative record and, as warranted, a 
determination of appropriate corrective actions and sanctions.
    (d) DOE may elect to act in lieu of the recipient in conducting an 
inquiry or investigation into an allegation of research misconduct if 
the Contracting Officer finds that:
    (1) The research organization is not prepared to handle the 
allegation in a manner consistent with this section;
    (2) The allegation involves an entity of sufficiently small size 
that it cannot reasonably conduct the inquiry;
    (3) DOE involvement is necessary to ensure the public health, 
safety, and security, or to prevent harm to the public interest; or,
    (4) The allegation involves possible criminal misconduct.
    (e) DOE reserves the right to pursue such remedies and other actions 
as it deems appropriate, consistent with the terms and conditions of the 
award instrument and applicable laws and regulations. However, the 
recipient's good faith administration of this section and the 
effectiveness of its remedial actions and sanctions shall be positive 
considerations and shall be taken into account as mitigating factors in 
assessing the need for such actions. If DOE pursues any such action, it 
will inform the subject of the action of the outcome and any applicable 
appeal procedures.
    (f) In conducting the activities in paragraph (c) of this section, 
the recipient and DOE, if it elects to conduct the inquiry or 
investigation, shall adhere to the following guidelines:
    (1) Safeguards for information and subjects of allegations. The 
recipient shall

[[Page 342]]

provide safeguards to ensure that individuals may bring allegations of 
research misconduct made in good faith to the attention of the recipient 
without suffering retribution. Safeguards include: Protection against 
retaliation; fair and objective procedures for examining and resolving 
allegations; and diligence in protecting positions and reputations. The 
recipient shall also provide the subjects of allegations confidence that 
their rights are protected and that the mere filing of an allegation of 
research misconduct will not result in an adverse action. Safeguards 
include timely written notice regarding substantive allegations against 
them, a description of the allegation and reasonable access to any 
evidence submitted to support the allegation or developed in response to 
an allegation and notice of any findings of research misconduct.
    (2) Objectivity and expertise. The recipient shall select 
individual(s) to inquire, investigate, and adjudicate allegations of 
research misconduct who have appropriate expertise and have no 
unresolved conflict of interest. The individual(s) who conducts an 
adjudication must not be the same individual(s) who conducted the 
inquiry or investigation, and must be separate organizationally from the 
element that conducted the inquiry or investigation.
    (3) Timeliness. The recipient shall coordinate, inquire, investigate 
and adjudicate allegations of research misconduct promptly, but 
thoroughly. Generally, an investigation should be completed within 120 
days of initiation, and adjudication should be complete within 60 days 
of receipt of the record of investigation.
    (4) Confidentiality. To the extent possible, consistent with fair 
and thorough processing of allegations of research misconduct and 
applicable law and regulation, knowledge about the identity of the 
subjects of allegations and informants should be limited to those with a 
need to know.
    (5) Remediation and sanction. If the recipient finds that research 
misconduct has occurred, it shall assess the seriousness of the 
misconduct and its impact on the research completed or in process. The 
recipient must take all necessary corrective actions. Such action may 
include but are not limited to, correcting the research record and as 
appropriate imposing restrictions, controls, or other parameters on 
research in process or to be conducted in the future. The recipient must 
coordinate remedial actions with the Contracting Officer. The recipient 
must also consider whether personnel sanctions are appropriate. Any such 
sanction must be consistent with any applicable personnel laws, 
policies, and procedures, and must take into account the seriousness of 
the misconduct and its impact, whether it was done knowingly or 
intentionally, and whether it was an isolated event or pattern of 
conduct.
    (g) By executing this agreement, the recipient provides its 
assurance that it has established an administrative process for 
performing an inquiry, mediating if possible, investigating, and 
reporting allegations of research misconduct; and that it will comply 
with its own administrative process and the requirements and definitions 
of 10 CFR part 733 for performing an inquiry, possible mediation, 
investigation and reporting of allegations of research misconduct.
    (h) The recipient must insert or have inserted the substance of this 
section, including paragraph (g), in subawards at all tiers that involve 
research.



Sec.  910.133  Deviation authority.

    (a) General. (1) A deviation is the use of any policy, procedure, 
form, standard, term, or condition which varies from a requirement of 
this part, or the waiver of any such requirement, unless such use or 
waiver is authorized or precluded by Federal statute. The use of 
optional or discretionary provisions of this part, including special 
restrictive conditions used in accordance with Sec.  910.372, exceptions 
under 2 CFR 200.102, and the waiver of the cost sharing requirements in 
Sec.  910.130 are not deviations. Awards to foreign entities are not 
subject to this section.
    (2) A single-case deviation is a deviation which applies to one 
financial assistance transaction and one applicant, recipient, or 
subrecipient only.

[[Page 343]]

    (3) A class deviation is a deviation which applies to more than one 
financial assistance transaction, applicant, recipient, or subrecipient.
    (b) Conditions for approval. The DOE/NNSA officials specified in 
paragraph (c) of this section may authorize a deviation only upon a 
written determination that the deviation is--
    (1) Necessary to achieve program objectives;
    (2) Necessary to conserve public funds;
    (3) Otherwise essential to the public interest; or
    (4) Necessary to achieve equity.
    (c) Approval procedures. (1) A deviation request must be in writing 
and must be submitted to the responsible DOE/NNSA Contracting Officer. 
An applicant for a subaward or a subrecipient shall submit any such 
request through the recipient.
    (2) Except as provided in paragraph (c)(3) of this section--
    (i) A single-case deviation may be authorized by the responsible 
HCA.
    (ii) A class deviation may be authorized by the Director, Office of 
Acquisition Management, for DOE actions, and the Deputy Associate 
Administrator for the Office of Acquisition and Project Management for 
NNSA, for NNSA actions, or designee.
    (3) Whenever the approval of OMB, other Federal agency, or other 
DOE/NNSA office is required to authorize a deviation, the proposed 
deviation must be submitted to the Director, Office of Acquisition 
Management, for DOE actions, and the Deputy Associate Administrator for 
the Office of Acquisition and Project Management for NNSA, for NNSA 
actions, or designee for concurrence prior to submission to the 
authorizing official.
    (d) Notice. Whenever a request for a class deviation is approved, 
DOE/NNSA will identify this class deviation (as applicable) in the 
Notice of Funding Opportunity(s) that may be affected.
    (e) Subawards. A recipient may use a deviation in a subaward only 
with the prior written approval of a DOE/NNSA Contracting Officer.

[85 FR 32979, June 1, 2020]

Subpart C [Reserved]



    Subpart D_Post Award Federal Requirements for For-Profit Entities



Sec.  910.350  Applicability of 2 CFR part 200.

    (a) As stated in 2 CFR 910.122, unless otherwise noted in part 910, 
the definition of Non-Federal entity found in 2 CFR 200.69 is expanded 
for DOE to include for-profit organizations in addition to states, local 
governments, Indian tribes, institutions of higher education (IHE), and 
nonprofit organizations.
    (b) A for-profit organization is defined as one that distributes any 
profit not reinvested into the business as profit or dividends to its 
employees or shareholders.
    (c) Subpart D of 2 CFR part 910 contains specific changes to 2 CFR 
part 200 that apply only to For-Profit Recipients and, unless otherwise 
specified, subrecipients. In some cases, the coverage in Subpart D will 
replace the language in a specific section of 2 CFR part 200.



Sec.  910.352  Cost Principles.

    For For-Profit Entities, the Cost Principles contained in 48 CFR 
31.2 (Contracts with Commercial Organizations) must be followed in lieu 
of the Cost principles contained in 2 CFR 200.400 through 200.475, 
except that patent prosecution costs are not allowable unless 
specifically authorized in the award document. This applies to For-
Profit entities whether they are recipients or subrecipients.



Sec.  910.354  Payment.

    (a) For-Profit Recipients are an exception to 2 CFR 200.305(b)(1) 
which requires that non-Federal entities be paid in advance as long as 
certain conditions are met.
    (b) For For-Profit Recipients who are paid directly by DOE, 
reimbursement is the preferred method of payment. Under the 
reimbursement method of payment, the Federal awarding agency must 
reimburse the non-Federal entity for its actual cash disbursements. When 
the reimbursement method is used, the Federal awarding agency must make 
payment within 30 calendar days after receipt of the billing, unless

[[Page 344]]

the Federal awarding agency reasonably believes the request to be 
improper.



Sec.  910.356  Audits.

    See Subpart F of this part (Sections 910.500 through 910.521) for 
specific DOE regulations which apply to audits of DOE's For-Profit 
Recipients. For-Profit entities are an exception to the Single Audit 
requirements contained in Subpart F of 2 CFR 200 and therefore the 
regulations contained in 2 CFR 910 Subpart F apply instead.



Sec.  910.358  Profit or fee for SBIR/STTR.

    (a) As authorized by 2 CFR 200.400 (g), DOE may expressly allow non-
federal entities to earn a profit or fee resulting from Federal 
financial assistance.
    (b) DOE allows a profit or fee to be paid under two of its financial 
assistance programs only: Small Business Innovation Research (SBIR) and 
Small Business Technology Transfer Research (STTR).
    (c) Awards under these programs will contain a specific provision 
which allows a profit or fee to be paid.
    (d) Profit or Fee is unallowable for all other DOE programs which 
award grants and cooperative agreements.



Sec.  910.360  Real property and equipment.

    (a) Prior approvals for acquisition with Federal funds. Recipients 
may purchase real property or equipment with an acquisition cost per 
unit of $5,000 or more in whole or in part with Federal funds only with 
the prior written approval of the contracting officer or in accordance 
with express award terms.
    (b) Title. Unless a statute specifically authorizes and the award 
specifies that title to property vests unconditionally in the recipient, 
title to real property or equipment vests in the recipient, subject to 
all terms and conditions of the award and that the recipient shall:
    (1) Use the real property or equipment for the authorized purposes 
of the project until funding for the project ceases, or until the real 
property or equipment is no longer needed for the purposes of the 
project, as may be determined by the contracting officer;
    (2) Not encumber or permit any encumbrance on the real property or 
equipment without the prior written approval of the contracting officer;
    (3) Use and dispose of the real property or equipment in accordance 
with paragraphs (e), (f), and (g) of this section; and
    (4) Properly record, and consent to the Department's ability to 
properly record if the recipient fails to do so, UCC financing 
statement(s) for all equipment purchased with Federal funds (Financial 
assistance awards made under the Small Business Innovation Research/
Small Business Technology Transfer (SBIR/STTR) program are exempt from 
this requirement unless otherwise specified within the grant agreement); 
such a filing is required when the Federal share of the financial 
assistance agreement is more than $1,000,000, and the Contracting 
Officer may require it in his or her discretion when the Federal share 
is less than $1,000,000. These financing statement(s) must be approved 
in writing by the contracting officer prior to the recording, and they 
shall provide notice that the recipient's title to all equipment (not 
real property) purchased with Federal funds under the financial 
assistance agreement is conditional pursuant to the terms of this 
section, and that the Government retains an undivided reversionary 
interest in the equipment. The UCC financing statement(s) must be filed 
before the contracting officer may reimburse the recipient for the 
Federal share of the equipment unless otherwise provided for in the 
relevant financial assistance agreement. The recipient shall further 
make any amendments to the financing statements or additional 
recordings, including appropriate continuation statements, as necessary 
or as the contracting officer may direct.
    (c) Remedies. If the recipient fails at any time to comply with any 
of the conditions or requirements of paragraph (b) of this section, then 
the contracting officer may:
    (1) Notify the recipient of noncompliance in accordance with 2 CFR 
200.338, which may lead to suspension or termination of the award;
    (2) Impose special award conditions pursuant to 2 CFR 200.205 and 
200.207 as amended by 2 CFR 910.372;

[[Page 345]]

    (3) Issue instructions to the recipient for disposition of the 
property in accordance with paragraph (g) of this section;
    (4) In the case of a failure to properly record UCC financing 
statement(s) in accordance with paragraph (b)(4) of this section, effect 
such a recording; and
    (5) Apply other remedies that may be legally available.
    (d) Title to and Federal interest in real property or equipment 
offered as cost-share. As provided in 2 CFR 200.306(h), depending upon 
the purpose of the Federal award, a recipient may offer the fair market 
value of real property or equipment that is purchased with recipient's 
funds or that is donated by a third party to meet a portion of any 
required cost sharing or matching. If a resulting award includes such 
property as a portion of the recipient's cost share, the recipient holds 
conditional title to the property and the Government has an undivided 
reversionary interest in the share of the property value equal to the 
Federal participation in the project. The property is treated as if it 
had been acquired in part with Federal funds, and is subject to the 
provisions of paragraph (b) of this section and to the provisions of 2 
CFR 200.311 and 200.313.
    (e) Insurance. Recipients must, 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.
    (f) Additional uses during and after the project period. Unless a 
statute and the award terms expressly provide for the vesting of 
unconditional title to real property or equipment with the recipient, 
the real property or equipment acquired wholly or in part with Federal 
funds is subject to the following:
    (1) During the Project Period, the recipient must make real property 
and equipment available for use on other projects or programs, if such 
other use does not interfere with the work on the project or program for 
which the real property or equipment was originally acquired. Use of the 
real property or equipment on other projects is subject to the following 
order of priority:
    (i) Activities sponsored by DOE grants, cooperative agreements, or 
other assistance awards;
    (ii) Activities sponsored by other Federal agencies' grants, 
cooperative agreements, or other assistance awards;
    (iii) Activities under Federal procurement contracts or activities 
not sponsored by any Federal agency. If so used, use charges must be 
assessed to those activities. For real property or equipment, the use 
charges must be at rates equivalent to those for which comparable real 
property or equipment may be leased.
    (2) After Federal funding for the project ceases, or if, as may be 
determined by the contracting officer, the real property or equipment is 
no longer needed for the purposes of the project, or if the recipient 
suspends work on the project, the recipient may use the real property or 
equipment for other projects, if:
    (i) There are Federally sponsored projects for which the real 
property or equipment may be used;
    (ii) The recipient obtains written approval from the contracting 
officer to do so. The contracting officer must ensure that there is a 
formal change of accountability for the real property or equipment to a 
currently funded Federal award; and
    (iii) The recipient's use of the real property or equipment for 
other projects is in the same order of priority as described in 
paragraph (e)(1) of this section.
    (iv) If the only use for the real property or equipment is for 
projects that have no Federal sponsorship, the recipient must proceed 
with disposition of the real property or equipment in accordance with 
paragraph (g) of this section.
    (g) Disposition. (1) If, as determined by the contracting officer, 
an item of real property or equipment is no longer needed for Federally 
sponsored projects, or if the recipient has suspended work on the 
project, the recipient has the following options:
    (i) If the property is equipment with a current per unit fair market 
value of less than $5,000, it may be retained, sold, or otherwise 
disposed of with no further obligation to DOE.

[[Page 346]]

    (ii) If the property is equipment (rather than real property) and 
with the written approval of the contracting officer, the recipient may 
replace it with an item that is needed currently for the project by 
trading in or selling to offset the costs of the replacement equipment.
    (iii) The recipient may elect to retain title, without further 
obligation to the Federal Government, by compensating the Federal 
Government for that percentage of the current fair market value of the 
real property or equipment that is attributable to the Federal 
participation in the project.
    (iv) If the recipient does not elect to retain title to real 
property or equipment or does not request approval to use equipment as 
trade-in or offset for replacement equipment, the recipient must request 
disposition instructions from the responsible agency.
    (2) If a recipient requests disposition instructions, the 
contracting officer must:
    (i) For either real property or equipment, issue instructions to the 
recipient for disposition of the property no later than 120 calendar 
days after the recipient's request. The contracting officer's options 
for disposition are to direct the recipient to:
    (A) Transfer title to the real property or equipment to the Federal 
Government or to a third party designated by the contracting officer 
provided that, in such cases, the recipient is entitled to compensation 
for its attributable percentage of the current fair market value of the 
real property or equipment, plus any reasonable shipping or interim 
storage costs incurred; or
    (B) Sell the real property or equipment and pay the Federal 
Government for that percentage of the current fair market value of the 
property that is attributable to the Federal participation in the 
project (after deducting actual and reasonable selling and fix-up 
expenses, if any, from the sale proceeds). If the recipient is 
authorized or required to sell the real property or equipment, the 
recipient must use competitive procedures that result in the highest 
practicable return.
    (3) If the contracting officer fails to issue disposition 
instructions within 120 calendar days of the recipient's request, the 
recipient must dispose of the real property or equipment through the 
option described in paragraph (g)(2)(i)(B) of this section.

[80 FR 53237, Sept. 3, 2015]



Sec.  910.362  Intellectual property.

    (a) Scope. This section sets forth the policies with regard to 
disposition of rights to data and to inventions conceived or first 
actually reduced to practice in the course of, or under, a grant or 
cooperative agreement made to a For-Profit entity by DOE.
    (b) Patents right--small business concerns. In accordance with 35 
U.S.C. 202, if the recipient is a small business concern and receives a 
grant, cooperative agreement, subaward, or contract for research, 
developmental, or demonstration activities, then, unless there are 
``exceptional circumstances'' as described in 35 U.S.C. 202(e), the 
award must contain the standard clause in appendix A to this subpart, 
entitled ``Patents Rights (Small Business Firms and Nonprofit 
Organizations'' which provides to the recipient the right to elect 
ownership of inventions made under the award.
    (c) Patent rights--other than small business concerns, e.g., large 
businesses--
    (1) No Patent Waiver. Except as provided by paragraph (c)(2) of this 
section, if the recipient is a for-profit organization other than a 
small business concern, as defined in 35 U.S.C. 201(h) and receives an 
award or a subaward for research, development, and demonstration 
activities, then, pursuant to statute, the award must contain the 
standard clause in appendix A to this subpart, entitled ``Patent Rights 
(Large Business Firms)--No Waiver'' which provides that DOE owns the 
patent rights to inventions made under the award.
    (2) Patent Waiver Granted. Paragraph (c)(1) of this section does not 
apply if:
    (i) DOE grants a class waiver for a particular program under 10 CFR 
part 784;
    (ii) The applicant requests and receives an advance patent waiver 
under 10 CFR part 784; or
    (iii) A subaward is covered by a waiver granted under the prime 
award.
    (3) Special Provision. Normally, an award will not include a 
background

[[Page 347]]

patent and data provision. However, under special circumstances, in 
order to provide heightened assurance of commercialization, a provision 
providing for a right to require licensing of third parties to 
background inventions, limited rights data and/or restricted computer 
software, may be included. Inclusion of a background patent and/or a 
data provision to assure commercialization will be done only with the 
written concurrence of the DOE program official setting forth the need 
for such assurance. An award may include the right to license the 
Government and third party contractors for special Government purposes 
when future availability of the technology would also benefit the 
government, e.g., clean-up of DOE facilities. The scope of any such 
background patent and/or data licensing provision is subject to 
negotiation.
    (d) Rights in data--general rule. (1) Subject to paragraphs (d)(2) 
and (3) of this section, and except as otherwise provided by paragraphs 
(e) and (f) of this section or other law, any award under this subpart 
must contain the standard clause in appendix A to this subpart, entitled 
``Rights in Data--General''.
    (2) Normally, an award will not require the delivery of limited 
rights data or restricted computer software. However, if the contracting 
officer, in consultation with DOE patent counsel and the DOE program 
official, determines that delivery of limited rights data or restricted 
computer software is necessary, the contracting officer, after 
negotiation with the applicant, may insert in the award the standard 
clause as modified by Alternates I and/or II set forth in appendix A to 
this subpart.
    (3) If software is specified for delivery to DOE, or if other 
special circumstances exist, e.g., DOE specifying ``open-source'' 
treatment of software, then the contracting officer, after negotiation 
with the recipient, may include in the award special provisions 
requiring the recipient to obtain written approval of the contracting 
officer prior to asserting copyright in the software, modifying the 
retained Government license, and/or otherwise altering the copyright 
provisions.
    (e) Rights in data--programs covered under special protected data 
statutes. (1) If a statute, other than those providing for the Small 
Business Innovation Research (SBIR) and Small Business Technology 
Transfer Research (STTR) programs, provides for a period of time, 
typically up to five years, during which data produced under an award 
for research, development, and demonstration may be protected from 
public disclosure, then the contracting officer must insert in the award 
the standard clause in appendix A to this subpart entitled ``Rights in 
Data--Programs Covered Under Special Protected Data Statutes'' or, as 
determined in consultation with DOE patent counsel and the DOE program 
official, a modified version of such clause which may identify data or 
categories of data that the recipient must make available to the public.
    (2) An award under paragraph (e)(1) of this section is subject to 
the provisions of paragraphs (d)(2) and (3) of this section.
    (f) Rights in data--SBIR/STTR programs. If an applicant receives an 
award under the SBIR or STTR program, then the contracting officer must 
insert in the award the standard data clause in the General Terms and 
Conditions for SBIR Grants, entitled ``Rights in Data--SBIR Program''.
    (g) Authorization and consent. (1) Work performed by a recipient 
under a grant is not subject to authorization and consent to the use of 
a patented invention, and the Government assumes no liability for patent 
infringement by the recipient under 28 U.S.C. 1498.
    (2) Work performed by a recipient under a cooperative agreement is 
subject to authorization and consent to the use of a patented invention 
consistent with the principles set forth in 48 CFR 27.201-1.
    (3) The contracting officer, in consultation with patent counsel, 
may also include clauses in the cooperative agreement addressing other 
patent matters related to authorization and consent, such as patent 
indemnification of the Government by recipient and notice and assistance 
regarding patent and copyright infringement. The policies and clauses 
for these other

[[Page 348]]

patent matters will be the same or consistent with those in 48 CFR part 
927.



Sec.  910.364  Reporting on utilization of subject inventions.

    (a) Unless otherwise instructed, a recipient that obtains title to 
an invention made under an award shall submit annual reports on the 
utilization or efforts to obtain utilization of the invention for at 
least 10 years from the date the invention was first disclosed to DOE 
(Utilization Reports). Utilization Reports shall include at least the 
following information:
    (1) Status of development;
    (2) Date of first commercial sale or use;
    (3) Gross royalties received by the recipient;
    (4) The location of any manufacture of products embodying the 
subject invention; and
    (5) Any such other data and information as DOE may reasonably 
specify.
    (b) To the extent data or information supplied in a Utilization 
Report is considered by the recipient to be privileged and confidential 
and is so marked by the recipient, DOE agrees that, to the extent 
permitted by law, it shall not disclose such information to persons 
outside the Government.

[80 FR 53238, Sept. 3, 2015]



Sec.  910.366  Export Control and U.S. Manufacturing and Competitiveness.

    (a) Export Control. Any recipient of any award for research, 
development and/or demonstration must comply with all applicable U.S. 
laws regarding export control.
    (b) U.S. Manufacturing and Competitiveness. It is the policy of DOE 
to ensure that DOE-funded research, development, and/or demonstration 
projects foster domestic manufacturing. Funding opportunity 
announcements (FOAs), therefore, may require that applicants submit a 
``U.S. Manufacturing Plan'' in their applications. Such FOAs may 
encourage U.S. Manufacturing Plans to include proposals by recipients 
and any sub-recipients to manufacture DOE-funded technologies in the 
United States; however, the FOAs will also state that these plans should 
not include requirements regarding the source of inputs used during the 
manufacturing process. Regardless of whether such plans will be part of 
the merit review criteria or a program policy factor, and to the extent 
legally permissible, all awards subject to this subpart, including 
subawards, for research, development, and/or demonstration, must include 
a provision that provides plans by the recipient and any subrecipients 
to support manufacturing in the United States of technology developed 
under the award. The recipient and any subrecipients must agree to make 
those plans binding on any assignee or licensee or any entity otherwise 
acquiring rights to any subject invention or developed technology 
covered under the award. A recipient, subrecipient, assignee, licensee, 
or any entity otherwise acquiring the rights to any subject invention or 
developed technology may request a waiver or modification of U.S. 
manufacturing plans from DOE. DOE will determine whether to approve such 
a waiver in light of equitable considerations, including, for example, 
whether the requester satisfactorily shows that the planned support is 
not economically feasible and whether there is a satisfactory 
alternative net benefit to the U.S. economy if the requested waiver or 
modification is approved.

[80 FR 53239, Sept. 3, 2015]



Sec.  910.368  Change of control.

    (a) Change of control is defined as any of the following:
    (1) Any event by which any individual or entity other than the 
recipient becomes the beneficial owner of more than 50% of the total 
voting power of the voting stock of the recipient;
    (2) The recipient merges with or into any entity other than in a 
transaction in which the shares of the recipient's voting stock are 
converted into a majority of the voting stock of the surviving entity;
    (3) The sale, lease or transfer of all or substantially all of the 
assets of the recipient to any individual or entity other than the 
recipient in one or a series of related transactions;
    (4) The adoption of a plan relating to the liquidation or 
dissolution of the recipient; or

[[Page 349]]

    (5) Where the recipient is a wholly-owned subsidiary at the time of 
award or novation, and the recipient's parent entity undergoes a change 
of control as defined in this section.
    (b) When the Federal share of the financial assistance agreement is 
more than $10,000,000 or DOE requests the information in writing, the 
recipient must provide the contracting officer with documentation 
identifying all parties who exercise control in the recipient at the 
time of award.
    (c) When there is a change of control of a recipient, or the 
recipient has reason to know a change of control is likely, the 
recipient must notify the contracting officer within 30 days of its 
knowledge of such change of control. Such notification must include, at 
a minimum, copies of documents necessary to reflect the transaction that 
resulted or will result in the change of control, and identification of 
all entities, individuals or other parties to such transaction. Failure 
to notify the contracting officer of a change of control is grounds for 
suspension or termination of the award for failure to comply with the 
terms and conditions of the award.
    (d) The contracting officer must authorize a change of control for 
the purposes of the award. Failure to receive the contracting officer's 
authorization for a change of control may lead to a suspension of the 
award, termination for failure to comply with the terms and conditions 
of the award, or imposition of special award conditions pursuant to 2 
CFR 910.372. Special award conditions may include but are not limited 
to:
    (1) Additional reporting requirements related to the change of 
control; and
    (2) Suspension of payments due to the recipient.

[80 FR 53239, Sept. 3, 2015]



Sec.  910.370  Novation of financial assistance agreements.

    (a) Financial assistance agreements are not assignable absent 
written consent from the contracting officer. At his or her sole 
discretion, the contracting officer may, through novation, recognize a 
third party as the successor in interest to a financial assistance 
agreement if such recognition is in the Government's interest, conforms 
with all applicable laws and the third party's interest in the agreement 
arises out of the transfer of:
    (1) All of the recipient's assets; or
    (2) The entire portion of the assets necessary to perform the 
project described in the agreement.
    (b) When the contracting officer determines that it is not in the 
Government's interest to consent to the novation of a financial 
assistance agreement from the original recipient to a third party, the 
original recipient remains subject to the terms of the financial 
assistance agreement, and the Department may exercise all legally 
available remedies under 2 CFR 200.338 through 200.342, or that may be 
otherwise available, should the original recipient not perform.
    (c) The contracting officer may require submission of any 
documentation in support of a request for novation, including but not 
limited to documents identified in 48 CFR Subpart 42.12. The contracting 
officer may use the format in 48 CFR 42.1204 as guidance for novation 
agreements identified in paragraph (a) of this section.

[80 FR 53239, Sept. 3, 2015]



Sec.  910.372  Special award conditions.

    (a) In addition to the requirements of 2 CFR 200.205, the following 
actions may require the use of Specific Conditions as identified in 2 
CFR 200.207:
    (1) Has not conformed to the terms and conditions of a previous 
award;
    (2) Has a change of control as defined in Sec.  910.368;
    (3) Fails to comply with real property and equipment requirements at 
Sec.  910.360; or
    (4) Is not otherwise responsible.

[80 FR 53239, Sept. 3, 2015]



  Sec. Appendix A to Subpart D of Part 910--Patent and Data Provisions

1. Patent Rights (Small Business Firms and Nonprofit Organizations)
2. Patent Rights (Large Business Firms)--No Waiver
3. Rights in Data--General
4. Rights in Data--Programs Covered Under Special Protected Data 
Statutes

[[Page 350]]

   1. Patent Rights (Small Business Firms and Nonprofit Organizations)

    (a) Definitions
    Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under title 35 of the United States 
Code, or any novel variety of plant which is or may be protected under 
the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).
    Made when used in relation to any invention means the conception or 
first actual reduction to practice of such invention.
    Nonprofit organization is defined in 2 CFR 200.70.
    Practical application means to manufacture in the case of a 
composition or product, to practice in the case of a process or method, 
or to operate in the case of a machine or system; and, in each case, 
under such conditions as to establish that the invention is being 
utilized and that its benefits are to the extent permitted by law or 
Government regulations available to the public on reasonable terms.
    Small business firm means a small business concern as defined at 
section 2 of Public Law 85-536 (16 U.S.C. 632) and implementing 
regulations of the Administrator of the Small Business Administration. 
For the purpose of this clause, the size standards for small business 
concerns involved in Government procurement and subcontracting at 13 CFR 
121.3 through 121.8 and 13 CFR 121.3 through 121.12, respectively, will 
be used.
    Subject invention means any invention of the Recipient conceived or 
first actually reduced to practice in the performance of work under this 
award, provided that in the case of a variety of plant, the date of 
determination (as defined in section 41(d) of the Plant Variety 
Protection Act, 7 U.S.C. 2401(d) must also occur during the period of 
award performance.
    (b) Allocation of Principal Rights
    The Recipient may retain the entire right, title, and interest 
throughout the world to each subject invention subject to the provisions 
of this Patent Rights clause and 35 U.S.C. 203. With respect to any 
subject invention in which the Recipient retains title, the Federal 
Government shall have a non-exclusive, nontransferable, irrevocable, 
paid-up license to practice or have practiced for or on behalf of the 
U.S. the subject invention throughout the world.
    (c) Invention Disclosure, Election of Title and Filing of Patent 
Applications by Recipient
    (1) The Recipient will disclose each subject invention to DOE within 
two months after the inventor discloses it in writing to Recipient 
personnel responsible for the administration of patent matters. The 
disclosure to DOE shall be in the form of a written report and shall 
identify the award under which the invention was made and the 
inventor(s). It shall be sufficiently complete in technical detail to 
convey a clear understanding to the extent known at the time of 
disclosure, of the nature, purpose, operation, and the physical, 
chemical, biological or electrical characteristics of the invention. The 
disclosure shall also identify any publication, on sale or public use of 
the invention and whether a manuscript describing the invention has been 
submitted for publication and, if so, whether it has been accepted for 
publication at the time of disclosure. In addition, after disclosure to 
DOE, the Recipient will promptly notify DOE of the acceptance of any 
manuscript describing the invention for publication or of any on sale or 
public use planned by the Recipient.
    (2) The Recipient will elect in writing whether or not to retain 
title to any such invention by notifying DOE within two years of 
disclosure to DOE. However, in any case where publication, on sale, or 
public use has initiated the one-year statutory period wherein valid 
patent protection can still be obtained in the U.S., the period for 
election of title may be shortened by the agency to a date that is no 
more than 60 days prior to the end of the statutory period.
    (3) The Recipient will file its initial patent application on an 
invention to which it elects to retain title within one year after 
election of title or, if earlier, prior to the end of any statutory 
period wherein valid patent protection can be obtained in the U.S. after 
a publication, on sale, or public use. The Recipient will file patent 
applications in additional countries or international patent offices 
within either ten months of the corresponding initial patent 
application, or six months from the date when permission is granted by 
the Commissioner of Patents and Trademarks to file foreign patent 
applications when such filing has been prohibited by a Secrecy Order.
    (4) Requests for extension of the time for disclosure to DOE, 
election, and filing under subparagraphs (c)(1), (2), and (3) of this 
clause may, at the discretion of DOE, be granted.
    (d) Conditions When the Government May Obtain Title
    The Recipient will convey to DOE, upon written request, title to any 
subject invention:
    (1) If the Recipient fails to disclose or elect the subject 
invention within the times specified in paragraph (c) of this patent 
rights clause, or elects not to retain title; provided that DOE may only 
request title within 60 days after learning of the failure of the 
Recipient to disclose or elect within the specified times;
    (2) In those countries in which the Recipient fails to file patent 
applications within the times specified in paragraph (c) of this Patent 
Rights clause; provided, however,

[[Page 351]]

that if the Recipient has filed a patent application in a country after 
the times specified in paragraph (c) of this Patent Rights clause, but 
prior to its receipt of the written request of DOE, the Recipient shall 
continue to retain title in that country; or
    (3) In any country in which the Recipient decides not to continue 
the prosecution of any application for, to pay the maintenance fees on, 
or defend in a reexamination or opposition proceeding on, a patent on a 
subject invention.
    (e) Minimum Rights to Recipient and Protection of the Recipient 
Right To File
    (1) The Recipient will retain a non-exclusive royalty-free license 
throughout the world in each subject invention to which the Government 
obtains title, except if the Recipient fails to disclose the subject 
invention within the times specified in paragraph (c) of this Patent 
Rights clause. The Recipient's license extends to its domestic 
subsidiaries and affiliates, if any, within the corporate structure of 
which the Recipient is a party and includes the right to grant 
sublicenses of the same scope of the extent the Recipient was legally 
obligated to do so at the time the award was awarded. The license is 
transferable only with the approval of DOE except when transferred to 
the successor of that part of the Recipient's business to which the 
invention pertains.
    (2) The Recipient's domestic license may be revoked or modified by 
DOE to the extent necessary to achieve expeditious practical application 
of the subject invention pursuant to an application for an exclusive 
license submitted in accordance with applicable provisions at 37 CFR 
part 404 and the agency's licensing regulation, if any. This license 
will not be revoked in that field of use or the geographical areas in 
which the Recipient has achieved practical application and continues to 
make the benefits of the invention reasonably accessible to the public. 
The license in any foreign country may be revoked or modified at 
discretion of the funding Federal agency to the extent the Recipient, 
its licensees, or its domestic subsidiaries or affiliates have failed to 
achieve practical application in that foreign country.
    (3) Before revocation or modification of the license, the funding 
Federal agency will furnish the Recipient a written notice of its 
intention to revoke or modify the license, and the Recipient will be 
allowed thirty days (or such other time as may be authorized by DOE for 
good cause shown by the Recipient) after the notice to show cause why 
the license should not be revoked or modified. The Recipient has the 
right to appeal, in accordance with applicable regulations in 37 CFR 
part 404 and the agency's licensing regulations, if any, concerning the 
licensing of Government-owned inventions, any decision concerning the 
revocation or modification of its license.
    (f) Recipient Action To Protect Government's Interest
    (1) The Recipient agrees to execute or to have executed and promptly 
deliver to DOE all instruments necessary to:
    (i) Establish or confirm the rights the Government has throughout 
the world in those subject inventions for which the Recipient retains 
title; and
    (ii) Convey title to DOE when requested under paragraph (d) of this 
Patent Rights clause, and to enable the government to obtain patent 
protection throughout the world in that subject invention.
    (2) The Recipient agrees to require, by written agreement, its 
employees, other than clerical and non-technical employees, to disclose 
promptly in writing to personnel identified as responsible for the 
administration of patent matters and in a format suggested by the 
Recipient each subject invention made under this award in order that the 
Recipient can comply with the disclosure provisions of paragraph (c) of 
this Patent Rights clause, and to execute all papers necessary to file 
patent applications on subject inventions and to establish the 
Government's rights in the subject inventions. The disclosure format 
should require, as a minimum, the information requested by paragraph 
(c)(1) of this Patent Rights clause. The Recipient shall instruct such 
employees through the employee agreements or other suitable educational 
programs on the importance of reporting inventions in sufficient time to 
permit the filing of patent applications prior to U.S. or foreign 
statutory bars.
    (3) The Recipient will notify DOE of any decision not to continue 
prosecution of a patent application, pay maintenance fees, or defend in 
a reexamination or opposition proceeding on a patent, in any country, 
not less than 30 days before the expiration of the response period 
required by the relevant patent office.
    (4) The Recipient agrees to include, within the specification of any 
U.S. patent application and any patent issuing thereon covering a 
subject invention, the following statement: ``This invention was made 
with Government support under (identify the award) awarded by (identify 
DOE). The Government has certain rights in this invention.''
    (g) Subaward/Contract
    (1) The Recipient will include this Patent Rights clause, suitably 
modified to identify the parties, in all subawards/contracts, regardless 
of tier, for experimental, developmental or research work to be 
performed by a small business firm or nonprofit organization. The 
subrecipient/contractor will retain all rights provided for the 
Recipient in this Patent Rights clause, and the Recipient will not, as 
part of the consideration for awarding the subcontract, obtain rights in 
the subcontractors' subject inventions.

[[Page 352]]

    (2) The Recipient will include in all other subawards/contracts, 
regardless of tier, for experimental, developmental or research work, 
the patent rights clause required by 2 CFR 910.362(c).
    (3) In the case of subawards/contracts at any tier, DOE, the 
Recipient, and the subrecipient/contractor agree that the mutual 
obligations of the parties created by this clause constitute a contract 
between the subrecipient/contractor and DOE with respect to those 
matters covered by the clause.
    (h) Reporting on Utilization of Subject Inventions
    The Recipient agrees to submit on request periodic reports no more 
frequently than annually on the utilization of a subject invention or on 
efforts at obtaining such utilization that are being made by the 
Recipient or its licensees or assignees. Such reports shall include 
information regarding the status of development, date of first 
commercial sale or use, gross royalties received by the Recipient and 
such other data and information as DOE may reasonably specify. The 
Recipient also agrees to provide additional reports in connection with 
any march-in proceeding undertaken by DOE in accordance with paragraph 
(j) of this Patent Rights clause. As required by 35 U.S.C. 202(c)(5), 
DOE agrees it will not disclose such information to persons outside the 
Government without the permission of the Recipient.
    (i) Preference for United States Industry.
    Notwithstanding any other provision of this Patent Rights clause, 
the Recipient agrees that neither it nor any assignee will grant to any 
person the exclusive right to use or sell any subject invention in the 
U.S. unless such person agrees that any products embodying the subject 
invention or produced through the use of the subject invention will be 
manufactured substantially in the U.S. However, in individual cases, the 
requirement for such an agreement may be waived by DOE upon a showing by 
the Recipient or its assignee that reasonable but unsuccessful efforts 
have been made to grant licenses on similar terms to potential licensees 
that would be likely to manufacture substantially in the U.S. or that 
under the circumstances domestic manufacture is not commercially 
feasible.
    (j) March-in-Rights
    The Recipient agrees that with respect to any subject invention in 
which it has acquired title, DOE has the right in accordance with 
procedures at 37 CFR 401.6 and any supplemental regulations of the 
Agency to require the Recipient, an assignee or exclusive licensee of a 
subject invention to grant a non-exclusive, partially exclusive, or 
exclusive license in any field of use to a responsible applicant or 
applicants, upon terms that are reasonable under the circumstances and 
if the Recipient, assignee, or exclusive licensee refuses such a 
request, DOE has the right to grant such a license itself if DOE 
determines that:
    (1) Such action is necessary because the Recipient or assignee has 
not taken or is not expected to take within a reasonable time, effective 
steps to achieve practical application of the subject invention in such 
field of use;
    (2) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Recipient, assignee, or their 
licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Recipient, assignee, or licensee; or
    (4) Such action is necessary because the agreement required by 
paragraph (i) of this Patent Rights clause has not been obtained or 
waived or because a licensee of the exclusive right to use or sell any 
subject invention in the U.S. is in breach of such agreement.
    (k) Special Provisions for Awards With Nonprofit Organizations
    If the Recipient is a nonprofit organization, it agrees that:
    (1) Rights to a subject invention in the U.S. may not be assigned 
without the approval of DOE, except where such assignment is made to an 
organization which has as one of its primary functions the management of 
inventions, provided that such assignee will be subject to the same 
provisions as the Recipient;
    (2) The Recipient will share royalties collected on a subject 
invention with the inventor, including Federal employee co-inventors 
(when DOE deems it appropriate) when the subject invention is assigned 
in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;
    (3) The balance of any royalties or income earned by the Recipient 
with respect to subject inventions, after payment of expenses (including 
payments to inventors) incidental to the administration of subject 
inventions, will be utilized for the support of scientific or 
engineering research or education; and
    (4) It will make efforts that are reasonable under the circumstances 
to attract licensees of subject inventions that are small business firms 
and that it will give preference to a small business firm if the 
Recipient determines that the small business firm has a plan or proposal 
for marketing the invention which, if executed, is equally likely to 
bring the invention to practical application as any plans or proposals 
from applicants that are not small business firms; provided that the 
Recipient is also satisfied that the small business firm has the 
capability and resources to carry out its plan or proposal. The decision 
whether to give a preference in any specific case will be at the 
discretion of the Recipient. However, the Recipient agrees that the 
Secretary of Commerce may review

[[Page 353]]

the Recipient's licensing program and decisions regarding small business 
applicants, and the Recipient will negotiate changes to its licensing 
policies, procedures or practices with the Secretary when the 
Secretary's review discloses that the Recipient could take reasonable 
steps to implement more effectively the requirements of this paragraph 
(k)(4).
    (l) Communications
    All communications required by this Patent Rights clause should be 
sent to the DOE Patent Counsel address listed in the Award Document.
    (m) Electronic Filing
    Unless otherwise specified in the award, the information identified 
in paragraphs (f)(2) and (f)(3) may be electronically filed.

                             (End of clause)

           2. Patent Rights (Large Business Firms)--No Waiver

    (a) Definitions
    DOE patent waiver regulations, as used in this clause, means the 
Department of Energy patent waiver regulations in effect on the date of 
award. See 10 CFR part 784.
    Invention, as used in this clause, means any invention or discovery 
which is or may be patentable of otherwise protectable under title 35 of 
the United States Code or any novel variety of plant that is or may be 
protectable under the Plant Variety Protection Act (7 U.S.C. 2321, et 
seq.).
    Patent Counsel, as used in this clause, means the Department of 
Energy Patent Counsel assisting the awarding activity.
    Subject invention, as used in this clause, means any invention of 
the Recipient conceived or first actually reduced to practice in the 
course of or under this agreement.
    (b) Allocations of Principal Rights
    (1) Assignment to the Government. The Recipient agrees to assign to 
the Government the entire right, title, and interest throughout the 
world in and to each subject invention, except to the extent that rights 
are retained by the Recipient under subparagraph (b)(2) and paragraph 
(d) of this clause.
    (2) Greater rights determinations. The Recipient, or an employee-
inventor after consultation with the Recipient, may request greater 
rights than the nonexclusive license and the foreign patent rights 
provided in paragraph (d) of this clause on identified inventions in 
accordance with the DOE patent waiver regulation. Each determination of 
greater rights under this agreement shall be subject to paragraph (c) of 
this clause, unless otherwise provided in the greater rights 
determination, and to the reservations and conditions deemed to be 
appropriate by the Secretary of Energy or designee.
    (c) Minimum Rights Acquired by the Government
    With respect to each subject invention to which the Department of 
Energy grants the Recipient principal or exclusive rights, the Recipient 
agrees to grant to the Government: A nonexclusive, nontransferable, 
irrevocable, paid-up license to practice or have practiced each subject 
invention throughout the world by or on behalf of the Government of the 
United States (including any Government agency); ``march-in rights'' as 
set forth in 37 CFR 401.14(a)(J)); preference for U.S. industry as set 
forth in 37 CFR 401.14(a)(I); periodic reports upon request, no more 
frequently than annually, on the utilization or intent of utilization of 
a subject invention in a manner consistent with 35 U.S.C. 202(c)(50); 
and such Government rights in any instrument transferring rights in a 
subject invention.
    (d) Minimum Rights to the Recipient
    (1) The Recipient is hereby granted a revocable, nonexclusive, 
royalty-free license in each patent application filed in any country on 
a subject invention and any resulting patent in which the Government 
obtains title, unless the Recipient fails to disclose the subject 
invention within the times specified in subparagraph (e)(2) of this 
clause. The Recipient's license extends to its domestic subsidiaries and 
affiliates, if any, within the corporate structure of which the 
Recipient is a part and includes the right to grant sublicenses of the 
same scope to the extent the Recipient was legally obligated to do so at 
the time the agreement was awarded. The license is transferable only 
with the approval of DOE except when transferred to the successor of 
that part of the Recipient's business to which the invention pertains.
    (2) The Recipient may request the right to acquire patent rights to 
a subject invention in any foreign country where the Government has 
elected not to secure such rights, subject to the minimum rights 
acquired by the Government similar to paragraph (c) of this clause. Such 
request must be made in writhing to the Patent Counsel as part of the 
disclosure required by subparagraph (e)(2) of this clause, with a copy 
to the DOE Contracting Officer. DOE approval, if given, will be based on 
a determination that this would best serve the national interest.
    (e) Invention Identification, Disclosures, and Reports
    (1) The Recipient shall establish and maintain active and effective 
procedures to assure that subject inventions are promptly identified and 
disclosed to Recipient personnel responsible for patent matters within 6 
months of conception and/or first actual reduction to practice, 
whichever occurs first in the performance of work under this agreement. 
These procedures shall include the maintenance of laboratory notebooks 
or equivalent records and other records as are reasonably necessary to 
document the conception and/or the first actual reduction to

[[Page 354]]

practice of subject inventions, and records that show that the 
procedures for identifying and disclosing the inventions are followed. 
Upon request, the Recipient shall furnish the Contracting Officer a 
description of such procedures for evaluation and for determination as 
to their effectiveness.
    (2) The Recipient shall disclose each subject invention to the DOE 
Patent Counsel with a copy to the Contracting Officer within 2 months 
after the inventor discloses it in writing to Recipient personnel 
responsible for patent matters or, if earlier, within 6 months after the 
Recipient becomes aware that a subject invention has been made, but in 
any event before any on sale, public use, or publication of such 
invention known to the Recipient. The disclosure to DOE shall be in the 
form of a written report and shall identify the agreement under which 
the invention was made and the inventor(s). It shall be sufficiently 
complete in technical detail to convey a clear understanding, to the 
extent known at the time of the disclosure, of the nature, purpose, 
operation, and physical, chemical, biological, or electrical 
characteristics of the invention. The disclosure shall also identify any 
publication, on sale, or public use of the invention and whether a 
manuscript describing the invention has been submitted for publication 
and, if so, whether it has been accepted for publication at the time of 
disclosure. In addition, after disclosure to DOE, the Recipient shall 
promptly notify Patent Counsel of the acceptance of any manuscript 
describing the invention for publication or of any on sale or public use 
planned by the Recipient. The report should also include any request for 
a greater rights determination in accordance with subparagraph (b)(2) of 
this clause. When an invention is disclosed to DOE under this paragraph, 
it shall be deemed to have been made in the manner specified in Sections 
(a)(1) and (a)(2) of 42 U.S.C. 5908, unless the Recipient contends in 
writing at the time the invention is disclosed that it was not so made.
    (3) The Recipient shall furnish the Contracting Officer a final 
report, within 3 months after completion of the work listing all subject 
inventions or containing a statement that there were no such inventions, 
and listing all subawards/contracts at any tier containing a patent 
rights clause or containing a statement that there were no such 
subawards/contracts.
    (4) The Recipient agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to disclose 
promptly in writing to personnel identified as responsible for the 
administration of patent matters and in a format suggested by the 
Recipient each subject invention made under subaward/contract in order 
that the Recipient can comply with the disclosure provisions of 
paragraph (c) of this clause, and to execute all papers necessary to 
file patent applications on subject inventions and to establish the 
Government's rights in the subject inventions. This disclosure format 
should require, as a minimum, the information required by subparagraph 
(e)(2) of this clause.
    (5) The Recipient agrees, subject to FAR 27.302(j), that the 
Government may duplicate and disclose subject invention disclosures and 
all other reports and papers furnished or required to be furnished 
pursuant to this clause.
    (f) Examination of Records Relating to Inventions
    (1) The Contracting Officer or any authorized representative shall, 
until 3 years after final payment under this agreement, have the right 
to examine any books (including laboratory notebooks), records, and 
documents of the Recipient relating to the conception or first actual 
reduction to practice of inventions in the same field of technology as 
the work under this agreement to determine whether--(i) Any such 
inventions are subject inventions; (ii) The Recipient has established 
and maintains the procedures required by subparagraphs (e)(1) and (4) of 
this clause; (iii) The Recipient and its inventors have complied with 
the procedures.
    (2) If the Contracting Officer learns of an unreported Recipient 
invention which the Contracting Officer believes may be a subject 
invention, the Recipient may be required to disclose the invention to 
DOE for a determination of ownership rights.
    (3) Any examination of records under this paragraph will be subject 
to appropriate conditions to protect the confidentiality of the 
information involved.
    (g) Subaward/Contract
    (1) The recipient shall include the clause PATENT RIGHTS (SMALL 
BUSINESS FIRMS AND NONPROFIT ORGANIZATIONS) (suitably modified to 
identify the parties) in all subawards/contracts, regardless of tier, 
for experimental, developmental, demonstration, or research work to be 
performed by a small business firm or domestic nonprofit organization, 
except where the work of the subaward/contract is subject to an 
Exceptional Circumstances Determination by DOE. In all other subawards/
contracts, regardless of tier, for experimental, developmental, 
demonstration, or research work, the Recipient shall include this clause 
(suitably modified to identify the parties), or an alternate clause as 
directed by the contracting officer. The Recipient shall not, as part of 
the consideration for awarding the subaward/contract, obtain rights in 
the subrecipient's/contractor's subject inventions.
    (2) In the event of a refusal by a prospective subrecipient/
contractor to accept such a

[[Page 355]]

clause the Recipient: (i) Shall promptly submit a written notice to the 
Contracting Officer setting forth the subrecipient/contractor's reasons 
for such refusal and other pertinent information that may expedite 
disposition of the matter; and (ii) Shall not proceed with such 
subaward/contract without the written authorization of the Contracting 
Officer.
    (3) In the case of subawards/contracts at any tier, DOE, the 
subrecipient/contractor, and Recipient agree that the mutual obligations 
of the parties created by this clause constitute a contract between the 
subrecipient/contractor and DOE with respect to those matters covered by 
this clause.
    (4) The Recipient shall promptly notify the Contracting Officer in 
writing upon the award of any subaward/contract at any tier containing a 
patent rights clause by identifying the subrecipient/contractor, the 
applicable patent rights clause, the work to be performed under the 
subaward/contract, and the dates of award and estimated completion. Upon 
request of the Contracting Officer, the Recipient shall furnish a copy 
of such subaward/contract, and, no more frequently than annually, a 
listing of the subawards/contracts that have been awarded.
    (5) The Recipient shall identify all subject inventions of a 
subrecipient/contractor of which it acquires knowledge in the 
performance of this agreement and shall notify the Patent Counsel, with 
a copy to the contracting officer, promptly upon identification of the 
inventions.
    (h) Atomic Energy
    (1) No claim for pecuniary award of compensation under the 
provisions of the Atomic Energy Act of 1954, as amended, shall be 
asserted with respect to any invention or discovery made or conceived in 
the course of or under this agreement.
    (2) Except as otherwise authorized in writing by the Contracting 
Officer, the Recipient will obtain patent agreements to effectuate the 
provisions of subparagraph (h)(1) of this clause from all persons who 
perform any part of the work under this agreement, except nontechnical 
personnel, such as clerical employees and manual laborers.
    (i) Publication
    It is recognized that during the course of the work under this 
agreement, the Recipient or its employees may from time to time desire 
to release or publish information regarding scientific or technical 
developments conceived or first actually reduced to practice in the 
course of or under this agreement. In order that public disclosure of 
such information will not adversely affect the patent interests of DOE 
or the Recipient, patent approval for release of publication shall be 
secured from Patent Counsel prior to any such release or publication.
    (j) Forfeiture of Rights in Unreported Subject Inventions
    (1) The Recipient shall forfeit and assign to the Government, at the 
request of the Secretary of Energy or designee, all rights in any 
subject invention which the Recipient fails to report to Patent Counsel 
within six months after the time the Recipient: (i) Files or causes to 
be filed a United States or foreign patent application thereon; or (ii) 
Submits the final report required by subparagraph (e)(3) of this clause, 
whichever is later.
    (2) However, the Recipient shall not forfeit rights in a subject 
invention if, within the time specified in subparagraph (e)(2) of this 
clause, the Recipient: (i) Prepares a written decision based upon a 
review of the record that the invention was neither conceived nor first 
actually reduced to practice in the course of or under the agreement and 
delivers the decision to Patent Counsel, with a copy to the Contracting 
Officer, or (ii) Contending that the invention is not a subject 
invention, the Recipient nevertheless discloses the invention and all 
facts pertinent to this contention to the Patent Counsel, with a copy of 
the Contracting Officer; or (iii) Establishes that the failure to 
disclose did not result from the Recipient's fault or negligence.
    (3) Pending written assignment of the patent application and patents 
on a subject invention determined by the Secretary of Energy or designee 
to be forfeited (such determination to be a final decision under the 
Disputes clause of this agreement), the Recipient shall be deemed to 
hold the invention and the patent applications and patents pertaining 
thereto in trust for the Government. The forfeiture provision of this 
paragraph (j) shall be in addition to and shall not supersede other 
rights and remedies which the Government may have with respect to 
subject inventions.

                             (End of clause)

                       3. Rights in Data--General

    (a) Definitions
    Computer Data Bases, as used in this clause, means a collection of 
data in a form capable of, and for the purpose of, being stored in, 
processed, and operated on by a computer. The term does not include 
computer software.
    Computer software, as used in this clause, means (i) computer 
programs which are data comprising a series of instructions, rules, 
routines or statements, regardless of the media in which recorded, that 
allow or cause a computer to perform a specific operation or series of 
operations and (ii) data comprising source code listings, design 
details, algorithms, processes, flow charts, formulae, and related 
material that would enable the computer program to be produced, created 
or compiled. The term does not include computer data bases.

[[Page 356]]

    Data, as used in this clause, means recorded information, regardless 
of form or the media on which it may be recorded. The term includes 
technical data and computer software. The term does not include 
information incidental to administration, such as financial, 
administrative, cost or pricing, or management information.
    Form, fit, and function data, as used in this clause, means data 
relating to items, components, or processes that are sufficient to 
enable physical and functional interchangeability, as well as data 
identifying source, size, configuration, mating, and attachment 
characteristics, functional characteristics, and performance 
requirements; except that for computer software it means data 
identifying source, functional characteristics, and performance 
requirements but specifically excludes the source code, algorithm, 
process, formulae, and flow charts of the software.
    Limited rights, as used in this clause, means the rights of the 
Government in limited rights data as set forth in the Limited Rights 
Notice of subparagraph (g)(2) if included in this clause.
    Limited rights data, as used in this clause, means data (other than 
computer software) developed at private expense that embody trade 
secrets or are commercial or financial and confidential or privileged.
    Restricted computer software, as used in this clause, means computer 
software developed at private expense and that is a trade secret; is 
commercial or financial and is confidential or privileged; or is 
published copyrighted computer software; including minor modifications 
of such computer software.
    Restricted rights, as used in this clause, means the rights of the 
Government in restricted computer software, as set forth in a Restricted 
Rights Notice of subparagraph (g)(3) if included in this clause, or as 
otherwise may be provided in a collateral agreement incorporated in and 
made part of this contract, including minor modifications of such 
computer software.
    Technical data, as used in this clause, means data (other than 
computer software) which are of a scientific or technical nature. 
Technical data does not include computer software, but does include 
manuals and instructional materials and technical data formatted as a 
computer data base.
    Unlimited rights, as used in this clause, means the right of the 
Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, and perform publicly and display 
publicly, in any manner and for any purpose, and to have or permit 
others to do so.
    (b) Allocations of Rights
    (1) Except as provided in paragraph (c) of this clause regarding 
copyright, the Government shall have unlimited rights in--
    (i) Data first produced in the performance of this agreement;
    (ii) Form, fit, and function data delivered under this agreement;
    (iii) Data delivered under this agreement (except for restricted 
computer software) that constitute manuals or instructional and training 
material for installation, operation, or routine maintenance and repair 
of items, components, or processes delivered or furnished for use under 
this agreement; and
    (iv) All other data delivered under this agreement unless provided 
otherwise for limited rights data or restricted computer software in 
accordance with paragraph (g) of this clause.
    (2) The Recipient shall have the right to--
    (i) Use, release to others, reproduce, distribute, or publish any 
data first produced or specifically used by the Recipient in the 
performance of this agreement, unless provided otherwise in paragraph 
(d) of this clause;
    (ii) Protect from unauthorized disclosure and use those data which 
are limited rights data or restricted computer software to the extent 
provided in paragraph (g) of this clause;
    (iii) Substantiate use of, add or correct limited rights, restricted 
rights, or copyright notices and to take over appropriate action, in 
accordance with paragraphs (e) and (f) of this clause; and
    (iv) Establish claim to copyright subsisting in data first produced 
in the performance of this agreement to the extent provided in paragraph 
(c)(1) of this clause.
    (c) Copyright
    (1) Data first produced in the performance of this agreement. Unless 
provided otherwise in paragraph (d) of this clause, the Recipient may 
establish, without prior approval of the Contracting Officer, claim to 
copyright subsisting in data first produced in the performance of this 
agreement. When claim to copyright is made, the Recipient shall affix 
the applicable copyright notices of 17 U.S.C. 401 or 402 and 
acknowledgement of Government sponsorship (including agreement number) 
to the data when such data are delivered to the Government, as well as 
when the data are published or deposited for registration as a published 
work in the U.S. Copyright Office. For such copyrighted data, including 
computer software, the Recipient grants to the Government, and others 
acting on its behalf, a paid-up nonexclusive, irrevocable worldwide 
license in such copyrighted data to reproduce, prepare derivative works, 
distribute copies to the public, and perform publicly and display 
publicly, by or on behalf of the Government.
    (2) Data not first produced in the performance of this agreement. 
The Recipient shall not, without prior written permission of the 
Contracting Officer, incorporate in data delivered under this agreement 
any data not first produced in the performance of this agreement and 
which contains the copyright

[[Page 357]]

notice of 17 U.S.C. 401 or 402, unless the Recipient identifies such 
data and grants to the Government, or acquires on its behalf, a license 
of the same scope as set forth in paragraph (c)(1) of this clause; 
provided, however, that if such data are computer software the 
Government shall acquire a copyright license as set forth in paragraph 
(g)(3) of this clause if included in this agreement or as otherwise may 
be provided in a collateral agreement incorporated in or made part of 
this agreement.
    (3) Removal of copyright notices. The Government agrees not to 
remove any copyright notices placed on data pursuant to this paragraph 
(c), and to include such notices on all reproductions of the data.
    (d) Release, Publication and Use of Data
    (1) The Recipient shall have the right to use, release to others, 
reproduce, distribute, or publish any data first produced or 
specifically used by the Recipient in the performance of this agreement, 
except to the extent such data may be subject to the Federal export 
control or national security laws or regulations, or unless otherwise 
provided in this paragraph of this clause or expressly set forth in this 
agreement.
    (2) The Recipient agrees that to the extent it receives or is given 
access to data necessary for the performance of this award, which 
contain restrictive markings, the Recipient shall treat the data in 
accordance with such markings unless otherwise specifically authorized 
in writing by the contracting officer.
    (e) Unauthorized Marking of Data
    (1) Notwithstanding any other provisions of this agreement 
concerning inspection or acceptance, if any data delivered under this 
agreement are marked with the notices specified in paragraph (g)(2) or 
(g)(3) of this clause and use of such is not authorized by this clause, 
or if such data bears any other restrictive or limiting markings not 
authorized by this agreement, the Contracting Officer may at any time 
either return the data to the Recipient or cancel or ignore the 
markings. However, the following procedures shall apply prior to 
canceling or ignoring the markings.
    (i) The Contracting Officer shall make written inquiry to the 
Recipient affording the Recipient 30 days from receipt of the inquiry to 
provide written justification to substantiate the propriety of the 
markings;
    (ii) If the Recipient fails to respond or fails to provide written 
justification to substantiate the propriety of the markings within the 
30-day period (or a longer time not exceeding 90 days approved in 
writing by the Contracting Officer for good cause shown), the Government 
shall have the right to cancel or ignore the markings at any time after 
said period and the data will no longer be made subject to any 
disclosure prohibitions.
    (iii) If the Recipient provides written justification to 
substantiate the propriety of the markings within the period set in 
paragraph (e)(1)(i) of this clause, the Contracting Officer shall 
consider such written justification and determine whether or not the 
markings are to be cancelled or ignored. If the Contracting Officer 
determines that the markings are authorized, the Recipient shall be so 
notified in writing. If the Contracting Officer determines, with 
concurrence of the head of the contracting activity, that the markings 
are not authorized, the Contracting Officer shall furnish the Recipient 
a written determination, which determination shall become the final 
agency decision regarding the appropriateness of the markings unless the 
Recipient files suit in a court of competent jurisdiction within 90 days 
of receipt of the Contracting Officer's decision. The Government shall 
continue to abide by the markings under this paragraph (e)(1)(iii) until 
final resolution of the matter either by the Contracting Officer's 
determination becoming final (in which instance the Government shall 
thereafter have the right to cancel or ignore the markings at any time 
and the data will no longer be made subject to any disclosure 
prohibitions), or by final disposition of the matter by court decision 
if suit is filed.
    (2) The time limits in the procedures set forth in paragraph (e)(1) 
of this clause may be modified in accordance with agency regulations 
implementing the Freedom of Information Act (5 U.S.C. 552) if necessary 
to respond to a request thereunder.
    (f) Omitted or Incorrect Markings
    (1) Data delivered to the Government without either the limited 
rights or restricted rights notice as authorized by paragraph (g) of 
this clause, or the copyright notice required by paragraph (c) of this 
clause, shall be deemed to have been furnished with unlimited rights, 
and the Government assumes no liability for the disclosure, use, or 
reproduction of such data. However, to the extent the data has not been 
disclosed without restriction outside the Government, the Recipient may 
request, within 6 months (or a longer time approved by the Contracting 
Officer for good cause shown) after delivery or such data, permission to 
have notices placed on qualifying data at the Recipient's expense, and 
the Contracting Officer may agree to do so if the Recipient:
    (i) Identifies the data to which the omitted notice is to be 
applied;
    (ii) Demonstrates that the omission of the notice was inadvertent;
    (iii) Establishes that the use of the proposed notice is authorized; 
and
    (iv) Acknowledges that the Government has no liability with respect 
to the disclosure, use, or reproduction of any such data made prior to 
the addition of the notice or resulting from the omission of the notice.

[[Page 358]]

    (2) The Contracting Officer may also:
    (i) Permit correction at the Recipient's expense of incorrect 
notices if the Recipient identifies the data on which correction of the 
notice is to be made, and demonstrates that the correct notice is 
authorized, or
    (ii) Correct any incorrect notices.
    (g) Protection of Limited Rights Data and Restricted Computer 
Software
    When data other than that listed in paragraphs (b)(1)(i), (ii), and 
(iii) of this clause are specified to be delivered under this agreement 
and qualify as either limited rights data or restricted computer 
software, if the Recipient desires to continue protection of such data, 
the Recipient shall withhold such data and not furnish them to the 
Government under this agreement. As a condition to this withholding, the 
Recipient shall identify the data being withheld and furnish form, fit, 
and function data in lieu thereof. Limited rights data that are 
formatted as a computer data base for delivery to the Government are to 
be treated as limited rights data and not restricted computer software.
    (h) Subaward/Contract
    The Recipient has the responsibility to obtain from its 
subrecipients/contractors all data and rights therein necessary to 
fulfill the Recipient's obligations to the Government under this 
agreement. If a subrecipient/contractor refuses to accept terms 
affording the Government such rights, the Recipient shall promptly bring 
such refusal to the attention of the Contracting Officer and not proceed 
with the subaward/contract award without further authorization.
    (i) Additional Data Requirements
    In addition to the data specified elsewhere in this agreement to be 
delivered, the Contracting Officer may, at any time during agreement 
performance or within a period of 3 years after acceptance of all items 
to be delivered under this agreement, order any data first produced or 
specifically used in the performance of this agreement. This clause is 
applicable to all data ordered under this subparagraph. Nothing 
contained in this subparagraph shall require the Recipient to deliver 
any data the withholding of which is authorized by this clause, or data 
which are specifically identified in this agreement as not subject to 
this clause. When data are to be delivered under this subparagraph, the 
Recipient will be compensated for converting the data into the 
prescribed form, for reproduction, and for delivery.
    (j) The recipient agrees, except as may be otherwise specified in 
this award for specific data items listed as not subject to this 
paragraph, that the Contracting Officer or an authorized representative 
may, up to three years after acceptance of all items to be delivered 
under this award, inspect at the Recipient's facility any data withheld 
pursuant to paragraph (g) of this clause, for purposes of verifying the 
Recipient's assertion pertaining to the limited rights or restricted 
rights status of the data or for evaluating work performance. Where the 
Recipient whose data are to be inspected demonstrates to the Contracting 
Officer that there would be a possible conflict of interest if the 
inspection were made by a particular representative, the Contracting 
Officer shall designate an alternate inspector.
    As prescribed in 2 CFR 910.362(d)(1), the following Alternate I and/
or II may be inserted in the clause in the award instrument.

                              Alternate I:

    (g)(2) Notwithstanding paragraph (g)(1) of this clause, the 
agreement may identify and specify the delivery of limited rights data, 
or the Contracting Officer may require by written request the delivery 
of limited rights data that has been withheld or would otherwise be 
withholdable. If delivery of such data is so required, the Recipient may 
affix the following ``Limited Rights Notice'' to the data and the 
Government will thereafter treat the data, in accordance with such 
Notice:

                          Limited Rights Notice

    (a) These data are submitted with limited rights under Government 
agreement No. __ (and subaward/contract No. ___, if appropriate). These 
data may be reproduced and used by the Government with the express 
limitation that they will not, without written permission of the 
Recipient, be used for purposes of manufacture nor disclosed outside the 
Government; except that the Government may disclose these data outside 
the Government for the following purposes, if any, provided that the 
Government makes such disclosure subject to prohibition against further 
use and disclosure:
    (1) Use (except for manufacture) by Federal support services 
contractors within the scope of their contracts;
    (2) This ``limited rights data'' may be disclosed for evaluation 
purposes under the restriction that the ``limited rights data'' be 
retained in confidence and not be further disclosed;
    (3) This ``limited rights data'' may be disclosed to other 
contractors participating in the Government's program of which this 
Recipient is a part for information or use (except for manufacture) in 
connection with the work performed under their awards and under the 
restriction that the ``limited rights data'' be retained in confidence 
and not be further disclosed;
    (4) This ``limited rights data'' may be used by the Government or 
others on its behalf for emergency repair or overhaul work under the 
restriction that the ``limited rights data'' be retained in confidence 
and not be further disclosed; and

[[Page 359]]

    (5) Release to a foreign government, or instrumentality thereof, as 
the interests of the United States Government may require, for 
information or evaluation, or for emergency repair or overhaul work by 
such government. This Notice shall be marked on any reproduction of this 
data in whole or in part.
    (b) This Notice shall be marked on any reproduction of these data, 
in whole or in part.

                             (End of notice)

                              Alternate II:

    (g)(3)(i) Notwithstanding paragraph (g)(1) of this clause, the 
agreement may identify and specify the delivery of restricted computer 
software, or the Contracting Officer may require by written request the 
delivery of restricted computer software that has been withheld or would 
otherwise be withholdable. If delivery of such computer software is so 
required, the Recipient may affix the following ``Restricted Rights 
Notice'' to the computer software and the Government will thereafter 
treat the computer software, subject to paragraphs (e) and (f) of this 
clause, in accordance with the Notice.

                        Restricted Rights Notice

    (a) This computer software is submitted with restricted rights under 
Government Agreement No.____ (and subaward/contract ____, if 
appropriate). It may not be used, reproduced, or disclosed by the 
Government except as provided in paragraph (b) of this Notice or as 
otherwise expressly stated in the agreement.
    (b) This computer software may be--
    (1) Used or copies for use in or with the computer or computers for 
which it was acquired, including use at any Government installation to 
which such computer or computers may be transferred;
    (2) Used or copied for use in a backup computer if any computer or 
which it was acquired is inoperative;
    (3) Reproduced for safekeeping (archives) or backup purposes;
    (4) Modified, adapted, or combined with other computer software, 
provided that the modified, combined, or adapted portions of the 
derivative software are made subject to the same restricted rights;
    (5) Disclosed to and reproduced for use by support service 
Recipients in accordance with paragraph (b)(1) through (4) of this 
clause, provided the Government makes such disclosure or reproduction 
subject to these restricted rights; and
    (6) Used or copied for use in or transferred to a replacement 
computer.
    (c) Notwithstanding the foregoing, if this computer software is 
published copyrighted computer software, it is licensed to the 
Government, without disclosure prohibitions, with the minimum rights set 
forth in paragraph (b) of this clause.
    (d) Any other rights or limitations regarding the use, duplication, 
or disclosure of this computer software are to be expressly stated, in, 
or incorporated in, the agreement.
    (e) This Notice shall be marked on any reproduction of this computer 
software, in whole or in part.

                             (End of notice)

    (ii) Where it is impractical to include the Restricted Rights Notice 
on restricted computer software, the following short-form Notice may be 
used in lieu thereof:

                        Restricted Rights Notice

    Use, reproduction, or disclosure is subject to restrictions set 
forth in agreement No. ___ (and subaward/contract___, If appropriate) 
with ___(name of Recipient and subrecipient/contractor).

                             (End of notice)

    (iii) If restricted computer software is delivered with the 
copyright notice of 17 U.S.C. 401, it will be presumed to be published 
copyrighted computer software licensed to the government without 
disclosure prohibitions, with the minimum rights set forth in paragraph 
(b) of this clause, unless the Recipient includes the following 
statement with such copyright notice: ``Unpublished--rights reserved 
under the Copyright Laws of the United States.''

                             (End of clause)

     4. Rights in Data--Programs Covered Under Special Data Statutes

    (a) Definitions
    Computer Data Bases, as used in this clause, means a collection of 
data in a form capable of, and for the purpose of, being stored in, 
processed, and operated on by a computer. The term does not include 
computer software.
    Computer software, as used in this clause, means
    (i) computer programs which are data comprising a series of 
instructions, rules, routines, or statements, regardless of the media in 
which recorded, that allow or cause a computer to perform a specific 
operation or series of operations and
    (ii) data comprising source code listings, design details, 
algorithms, processes, flow charts, formulae and related material that 
would enable the computer program to be produced, created or compiled. 
The term does not include computer data bases.
    Data, as used in this clause, means recorded information, regardless 
of form or the media on which it may be recorded. The term includes 
technical data and computer

[[Page 360]]

software. The term does not include information incidental to 
administration, such as financial, administrative, cost or pricing or 
management information.
    Form, fit, and function data, as used in this clause, means data 
relating to items, components, or processes that are sufficient to 
enable physical and functional interchangeability as well as data 
identifying source, size, configuration, mating and attachment 
characteristics, functional characteristics, and performance 
requirements except that for computer software it means data identifying 
source, functional characteristics, and performance requirements but 
specifically excludes the source code, algorithm, process, formulae, and 
flow charts of the software.
    Limited rights data, as used in this clause, means data (other than 
computer software) developed at private expense that embody trade 
secrets or are commercial or financial and confidential or privileged.
    Restricted computer software, as used in this clause, means computer 
software developed at private expense and that is a trade secret; is 
commercial or financial and confidential or privileged; or is published 
copyrighted computer software; including modifications of such computer 
software.
    Protected data, as used in this clause, means technical data or 
commercial or financial data first produced in the performance of the 
award which, if it had been obtained from and first produced by a non-
federal party, would be a trade secret or commercial or financial 
information that is privileged or confidential under the meaning of 5 
U.S.C. 552(b)(4) and which data is marked as being protected data by a 
party to the award.
    Protected rights, as used in this clause, mean the rights in 
protected data set forth in the Protected Rights Notice of paragraph (g) 
of this clause.
    Technical data, as used in this clause, means that data which are of 
a scientific or technical nature. Technical data does not include 
computer software, but does include manuals and instructional materials 
and technical data formatted as a computer data base.
    Unlimited rights, as used in this clause, means the right of the 
Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, and perform publicly and display 
publicly, in any manner and for any purpose whatsoever, and to have or 
permit others to do so.
    (b) Allocation of Rights
    (1) Except as provided in paragraph (c) of this clause regarding 
copyright, the Government shall have unlimited rights in--
    (i) Data specifically identified in this agreement as data to be 
delivered without restriction;
    (ii) Form, fit, and function data delivered under this agreement;
    (iii) Data delivered under this agreement (except for restricted 
computer software) that constitute manuals or instructional and training 
material for installation, operation, or routine maintenance and repair 
of items, components, or processes delivered or furnished for use under 
this agreement; and
    (iv) All other data delivered under this agreement unless provided 
otherwise for protected data in accordance with paragraph (g) of this 
clause or for limited rights data or restricted computer software in 
accordance with paragraph (h) of this clause.
    (2) The Recipient shall have the right to--
    (i) Protect rights in protected data delivered under this agreement 
in the manner and to the extent provided in paragraph (g) of this 
clause;
    (ii) Withhold from delivery those data which are limited rights data 
or restricted computer software to the extent provided in paragraph (h) 
of this clause;
    (iii) Substantiate use of, add, or correct protected rights or 
copyrights notices and to take other appropriate action, in accordance 
with paragraph (e) of this clause; and
    (iv) Establish claim to copyright subsisting in data first produced 
in the performance of this agreement to the extent provided in paragraph 
(c)(1) of this clause.
    (c) Copyright
    (1) Data first produced in the performance of this agreement. Except 
as otherwise specifically provided in this agreement, the Recipient may 
establish, without the prior approval of the Contracting Officer, claim 
to copyright subsisting in any data first produced in the performance of 
this agreement. If claim to copyright is made, the Recipient shall affix 
the applicable copyright notice of 17 U.S.C. 401 or 402 and 
acknowledgment of Government sponsorship (including agreement number) to 
the data when such data are delivered to the Government, as well as when 
the data are published or deposited for registration as a published work 
in the U.S. Copyright Office. For such copyrighted data, including 
computer software, the Recipient grants to the Government, and others 
acting on its behalf, a paid-up nonexclusive, irrevocable, worldwide 
license to reproduce, prepare derivative works, distribute copies to the 
public, and perform publicly and display publicly, by or on behalf of 
the Government, for all such data.
    (2) Data not first produced in the performance of this agreement. 
The Recipient shall not, without prior written permission of the 
Contracting Officer, incorporate in data delivered under this agreement 
any data that are not first produced in the performance of this 
agreement and that contain the copyright notice of 17 U.S.C. 401 or 402, 
unless the Recipient identifies such data and grants to the Government, 
or acquires on its behalf, a license of the same scope as set forth in 
paragraph (c)(1) of this clause; provided,

[[Page 361]]

however, that if such data are computer software, the Government shall 
acquire a copyright license as set forth in paragraph (h)(3) of this 
clause if included in this agreement or as otherwise may be provided in 
a collateral agreement incorporated or made a part of this agreement.
    (3) Removal of copyright notices. The Government agrees not to 
remove any copyright notices placed on data pursuant to this paragraph 
(c), and to include such notices on all reproductions of the data.
    (d) Release, Publication and Use of Data
    (1) The Receipt shall have the right to use, release to others, 
reproduce, distribute, or publish any data first produced or 
specifically used by the Recipient in the performance of this contract, 
except to the extent such data may be subject to the Federal export 
control or national security laws or regulations, or unless otherwise 
provided in this paragraph of this clause or expressly set forth in this 
contract.
    (2) The Recipient agrees that to the extent it receives or is given 
access to data necessary for the performance of this agreement which 
contain restrictive markings, the Recipient shall treat the data in 
accordance with such markings unless otherwise specifically authorized 
in writing by the Contracting Officer.
    (e) Unauthorized Marking of Data
    (1) Notwithstanding any other provisions of this agreement 
concerning inspection or acceptance, if any data delivered under this 
agreement are marked with the notices specified in paragraph (g)(2) or 
(g)(3) of this clause and use of such is not authorized by this clause, 
or if such data bears any other restrictive or limiting markings not 
authorized by this agreement, the Contracting Officer may at any time 
either return the data to the Recipient or cancel or ignore the 
markings. However, the following procedures shall apply prior to 
canceling or ignoring the markings.
    (i) The Contracting Officer shall make written inquiry to the 
Recipient affording the Recipient 30 days from receipt of the inquiry to 
provide written justification to substantiate the propriety of the 
markings;
    (ii) If the Recipient fails to respond or fails to provide written 
justification to substantiate the propriety of the markings within the 
30-day period (or a longer time not exceeding 90 days approved in 
writing by the Contracting Officer for good cause shown), the Government 
shall have the right to cancel or ignore the markings at any time after 
said period and the data will no longer be made subject to any 
disclosure prohibitions.
    (iii) If the Recipient provides written justification to 
substantiate the propriety of the markings within the period set in 
subdivision (e)(1)(i) of this clause, the Contracting Officer shall 
consider such written justification and determine whether or not the 
markings are to be cancelled or ignored. If the Contracting Officer 
determines that the markings are authorized, the Recipient shall be so 
notified in writing. If the Contracting Officer determines, with 
concurrence of the head of the contracting activity, that the markings 
are not authorized, the Contracting Officer shall furnish the Recipient 
a written determination, which determination shall become the final 
agency decision regarding the appropriateness of the markings unless the 
Recipient files suit in a court of competent jurisdiction within 90 days 
of receipt of the Contracting Officer's decision. The Government shall 
continue to abide by the markings under this subdivision (e)(1)(iii) 
until final resolution of the matter either by the Contracting Officer's 
determination become final (in which instance the Government shall 
thereafter have the right to cancel or ignore the markings at any time 
and the data will no longer be made subject to any disclosure 
prohibitions), or by final disposition of the matter by court decision 
if suit is filed.
    (2) The time limits in the procedures set forth in paragraph (e)(1) 
of this clause may be modified in accordance with agency regulations 
implementing the Freedom of Information Act (5 U.S.C. 552) if necessary 
to respond to a request thereunder.
    (f) Omitted or Incorrect Markings
    (1) Data delivered to the Government without either the limited 
rights or restricted rights notice as authorized by paragraph (g) of 
this clause, or the copyright notice required by paragraph (c) of this 
clause, shall be deemed to have been furnished with unlimited rights, 
and the Government assumes no liability for the disclosure, use, or 
reproduction of such data. However, to the extent the data has not been 
disclosed without restriction outside the Government, the Recipient may 
request, within 6 months (or a longer time approved by the Contracting 
Officer for good cause shown) after delivery of such data, permission to 
have notices placed on qualifying data at the Recipient's expense, and 
the Contracting Officer may agree to do so if the Recipient--
    (i) Identifies the data to which the omitted notice is to be 
applied;
    (ii) Demonstrates that the omission of the notice was inadvertent;
    (iii) Establishes that the use of the proposed notice is authorized; 
and
    (iv) Acknowledges that the Government has no liability with respect 
to the disclosure, use, or reproduction of any such data made prior to 
the addition of the notice or resulting from the omission of the notice.
    (2) The Contracting Officer may also:
    (i) Permit correction at the Recipient's expense of incorrect 
notices if the Recipient identifies the data on which correction of the 
notice is to be made, and demonstrates that the correct notice is 
authorized; or

[[Page 362]]

    (ii) Correct any incorrect notices.
    (g) Rights to Protected Data
    (1) The Recipient may, with the concurrence of DOE, claim and mark 
as protected data, any data first produced in the performance of this 
award that would have been treated as a trade secret if developed at 
private expense. Any such claimed ``protected data'' will be clearly 
marked with the following Protected Rights Notice, and will be treated 
in accordance with such Notice, subject to the provisions of paragraphs 
(e) and (f) of this clause.

                         Protected Rights Notice

    These protected data were produced under agreement no. ___ with the 
U.S. Department of Energy and may not be published, disseminated, or 
disclosed to others outside the Government until (Note:) The period of 
protection of such data is fully negotiable, but cannot exceed the 
applicable statutorily authorized maximum), unless express written 
authorization is obtained from the recipient. Upon expiration of the 
period of protection set forth in this Notice, the Government shall have 
unlimited rights in this data. This Notice shall be marked on any 
reproduction of this data, in whole or in part.

                             (End of notice)

    (2) Any such marked Protected Data may be disclosed under 
obligations of confidentiality for the following purposes:
    (a) For evaluation purposes under the restriction that the 
``Protected Data'' be retained in confidence and not be further 
disclosed; or
    (b) To subcontractors or other team members performing work under 
the Government's (insert name of program or other applicable activity) 
program of which this award is a part, for information or use in 
connection with the work performed under their activity, and under the 
restriction that the Protected Data be retained in confidence and not be 
further disclosed.
    (3) The obligations of confidentiality and restrictions on 
publication and dissemination shall end for any Protected Data.
    (a) At the end of the protected period;
    (b) If the data becomes publicly known or available from other 
sources without a breach of the obligation of confidentiality with 
respect to the Protected Data;
    (c) If the same data is independently developed by someone who did 
not have access to the Protected Data and such data is made available 
without obligations of confidentiality; or
    (d) If the Recipient disseminates or authorizes another to 
disseminate such data without obligations of confidentiality.
    (4) However, the Recipient agrees that the following types of data 
are not considered to be protected and shall be provided to the 
Government when required by this award without any claim that the data 
are Protected Data. The parties agree that notwithstanding the following 
lists of types of data, nothing precludes the Government from seeking 
delivery of additional data in accordance with this award, or from 
making publicly available additional non-protected data, nor does the 
following list constitute any admission by the Government that technical 
data not on the list is Protected Data. (Note: It is expected that this 
paragraph will specify certain types of mutually agreed upon data that 
will be available to the public and will not be asserted by the 
recipient/contractor as limited rights or protected data).
    (5) The Government's sole obligation with respect to any protected 
data shall be as set forth in this paragraph (g).
    (h) Protection of Limited Rights Data
    When data other than that listed in paragraphs (b)(1)(i), (ii), and 
(iii) of this clause are specified to be delivered under this agreement 
and such data qualify as either limited rights data or restricted 
computer software, the Recipient, if the Recipient desires to continue 
protection of such data, shall withhold such data and not furnish them 
to the Government under this agreement. As a condition to this 
withholding the Recipient shall identify the data being withheld and 
furnish form, fit, and function data in lieu thereof.
    (i) Subaward/Contract
    The Recipient has the responsibility to obtain from its 
subrecipients/contractors all data and rights therein necessary to 
fulfill the Recipient's obligations to the Government under this 
agreement. If a subrecipient/contractor refuses to accept terms 
affording the Government such rights, the Recipient shall promptly bring 
such refusal to the attention of the Contracting Officer and not proceed 
with subaward/contract award without further authorization.
    (j) Additional Data Requirements
    In addition to the data specified elsewhere in this agreement to be 
delivered, the Contracting Officer may, at any time during agreement 
performance or within a period of 3 years after acceptance of all items 
to be delivered under this agreement, order any data first produced or 
specifically used in the performance of this agreement. This clause is 
applicable to all data ordered under this subparagraph. Nothing 
contained in this subparagraph shall require the Recipient to deliver 
any data the withholding of which is authorized by this clause or data 
which are specifically identified in this agreement as not subject to 
this clause. When data are to be delivered under this subparagraph, the 
Recipient will be compensated for converting the data into the 
prescribed form, for reproduction, and for delivery.
    (k) The Recipient agrees, except as may be otherwise specified in 
this agreement for

[[Page 363]]

specific data items listed as not subject to this paragraph, that the 
Contracting Officer or an authorized representative may, up to three 
years after acceptance of all items to be delivered under this contract, 
inspect at the Recipient's facility any data withheld pursuant to 
paragraph (h) of this clause, for purposes of verifying the Recipient's 
assertion pertaining to the limited rights or restricted rights status 
of the data or for evaluating work performance. Where the Recipient 
whose data are to be inspected demonstrates to the Contracting Officer 
that there would be a possible conflict of interest if the inspection 
were made by a particular representative, the Contracting Officer shall 
designate an alternate inspector.
    As prescribed in 2 CFR 910.362(e)(2), the following Alternate I and/
or II may be inserted in the clause in the award instrument.

                               Alternate I

    (h)(2) Notwithstanding paragraph (h)(1) of this clause, the 
agreement may identify and specify the delivery of limited rights data, 
or the Contracting Officer may require by written request the delivery 
of limited rights data that has been withheld or would otherwise be 
withholdable. If delivery of such data is so required, the Recipient may 
affix the following ``Limited Rights Notice'' to the data and the 
Government will thereafter treat the data, in accordance with such 
Notice:

                          Limited Rights Notice

    (a) These data are submitted with limited rights under Government 
agreement No.___ (and subaward/contract No. ___, if appropriate). These 
data may be reproduced and used by the Government with the express 
limitation that they will not, without written permission of the 
Recipient, be used for purposes of manufacture nor disclosed outside the 
Government; except that the Government may disclose these data outside 
the Government for the following purposes, if any, provided that the 
Government makes such disclosure subject to prohibition against further 
use and disclosure:
    (1) Use (except for manufacture) by Federal support services 
contractors within the scope of their contracts;
    (2) This ``limited rights data'' may be disclosed for evaluation 
purposes under the restriction that the ``limited rights data'' be 
retained in confidence and not be further disclosed;
    (3) This ``limited rights data'' may be disclosed to other 
contractors participating in the Government's program of which this 
Recipient is a part for information or use (except for manufacture) in 
connection with the work performed under their awards and under the 
restriction that the ``limited rights data'' be retained in confidence 
and not be further disclosed;
    (4) This ``limited rights data'' may be used by the Government or 
others on its behalf for emergency repair or overhaul work under the 
restriction that the ``limited rights data'' be retained in confidence 
and not be further disclosed; and
    (5) Release to a foreign government, or instrumentality thereof, as 
the interests of the United States Government may require, for 
information or evaluation, or for emergency repair or overhaul work by 
such government. This Notice shall be marked on any reproduction of this 
data in whole or in part.
    (b) This Notice shall be marked on any reproduction of these data, 
in whole or in part.

                             (End of notice)

                              Alternate II

    (h)(3)(i) Notwithstanding paragraph (h)(1) of this clause, the 
agreement may identify and specify the delivery of restricted computer 
software, or the Contracting Officer may require by written request the 
delivery of restricted computer software that has been withheld or would 
otherwise be withholdable. If delivery of such computer software is so 
required, the Recipient may affix the following ``Restricted Rights 
Notice'' to the computer software and the Government will thereafter 
treat the computer software, subject to paragraphs (d) and (e) of this 
clause, in accordance with the Notice:

                        Restricted Rights Notice

    (a) This computer software is submitted with restricted rights under 
Government Agreement No.___ (and subaward/contract ___, if appropriate). 
It may not be used, reproduced, or disclosed by the Government except as 
provided in paragraph (c) of this Notice or as otherwise expressly 
stated in the agreement.
    (b) This computer software may be--
    (1) Used or copied for use in or with the computer or computers for 
which it was acquired, including use at any Government installation to 
which such computer or computers may be transferred;
    (2) Used or copies for use in a backup computer if any computer for 
which it was acquired is inoperative
    (3) Reproduced for safekeeping (archives) or backup purposes;
    (4) Modified, adapted, or combined with other computer software, 
provided that the modified, combined, or adapted portions of the 
derivative software are made subject to the same restricted rights;
    (5) Disclosed to and reproduced for use by Federal support service 
Contractors in accordance with paragraphs (b)(1) through (4) of this 
clause, provided the Government makes such disclosure or reproduction 
subject to these restricted rights; and

[[Page 364]]

    (6) Used or copies for use in or transferred to a replacement 
computer.
    (c) Notwithstanding the foregoing, if this computer software is 
published copyrighted computer software, it is licensed to the 
Government, without disclosure prohibitions, with the minimum rights set 
forth in paragraph (b) of this clause.
    (d) Any other rights or limitations regarding the use, duplication, 
or disclosure of this computer software are to be expressly stated in, 
or incorporated in, the agreement.
    (e) This Notice shall be marked on any reproduction of this computer 
software, in whole or in part.

                             (End of notice)

    (ii) Where it is impractical to include the Restricted Rights Notice 
on restricted computer software, the following short-form Notice may be 
used in lieu thereof:

                        Restricted Rights Notice

    Use, reproduction, or disclosure is subject to restrictions set 
forth in Agreement No.______ (and subaward/contract_________, if 
appropriate) with______ (name of Recipient and subrecipient/contractor).

                             (End of notice)

    (iii) If restricted computer software is delivered with the 
copyright notice of 17 U.S.C. 401, it will be presumed to be published 
copyrighted computer software licensed to the Government without 
disclosure prohibitions, with the minimum rights set forth in paragraph 
(b) of this clause, unless the Recipient includes the following 
statement with such copyright notice: ``Unpublished--rights reserved 
under the Copyright Laws of the United States.''

                             (End of clause)



                        Subpart E_Cost Principles



Sec.  910.401  Application to M&O's.

    In accordance with 48 CFR 970.3002-1 and 970.3101-00-70, a Federally 
Funded Research Center (FFRDC) which is also a designated DOE Management 
and Operating (M&O) contract must follow the cost accounting standards 
(CAS) contained in 48 CFR part 30 and must follow the appropriate Cost 
Principles contained in 48 CFR part 31.



          Subpart F_Audit Requirements for For-Profit Entities

                                 General



Sec.  910.500  Purpose.

    This Part follows the same format as 2 CFR 200.500. We purposely did 
not renumber the paragraphs within this part so that auditors and 
recipients can compare this to the single audit requirements contained 
in 2 CFR 200.500.

                                 Audits



Sec.  910.501  Audit requirements.

    (a) Audit required. A for-profit entity that expends $750,000 or 
more during the non-Federal entity's fiscal year in DOE awards must have 
a compliance audit conducted for that year in accordance with the 
provisions of this Part.
    (b) Compliance audit. (1) If a for-profit entity has one or more DOE 
awards with expenditures of $750,000 or more during the for-profit 
entity's fiscal year, they must have a compliance audit for each of the 
awards with $750,000 or more in expenditures. A compliance audit should 
comply with the applicable provisions in Sec.  910.514--Scope of Audit. 
The remaining awards do not require, individually or in the aggregate, a 
compliance audit.
    (2) If a for-profit entity receives more than one award from DOE 
with a sum total of expenditures of $750,000 or more during the for-
profit entity's fiscal year, but does not have any single award with 
expenditures of $750,000 or more; the entity must determine whether any 
or all of the awards have common compliance requirements (i.e., are 
considered a cluster of awards) and determine the total expenditures of 
the awards with common compliance requirements. A compliance audit is 
required for the largest cluster of awards (if multiple clusters of 
awards exist) or the largest award not in a cluster of awards, whichever 
corresponding expenditure total is greater. A compliance audit should 
comply with the applicable provisions in Sec.  910.514--Scope of Audit. 
The remaining awards do not require, individually or in the aggregate, a 
compliance audit;

[[Page 365]]

    (3) If a for-profit entity receives one or more awards from DOE with 
a sum total of expenditures less than $750,000, no compliance audit is 
required;
    (4) If the for-profit entity is a sub-recipient, 2 CFR 200.501(h) 
requires that the pass-through entity establish appropriate monitoring 
and controls to ensure the sub-recipient complies with award 
requirements. These compliance audits must be conducted in accordance 
with 2 CFR 200.514 Scope of audit
    (c) Program-specific audit election. Not applicable.
    (d) Exemption when Federal awards expended are less than $750,000. A 
for-profit entity that expends less than $750,000 during the for-
profit's fiscal year in DOE awards is exempt from DOE audit requirements 
for that year, except as noted in Sec.  910.503 Relation to other audit 
requirements, but records must be available for review or audit by 
appropriate officials of the Federal agency, pass-through entity, and 
Government Accountability Office (GAO).
    (e) Federally Funded Research and Development Centers (FFRDC). 
Management of an auditee that owns or operates a FFRDC may elect to 
treat the FFRDC as a separate entity for purposes of this Part.
    (f) Subrecipients and Contractors. An auditee may simultaneously be 
a recipient, a subrecipient, and a contractor. Federal awards expended 
as a recipient are subject to audit under this Part. The payments 
received for goods or services provided as a contractor are not Federal 
awards. Section 2 CFR 200.330 Subrecipient and contractor determinations 
should be considered in determining whether payments constitute a 
Federal award or a payment for goods or services provided as a 
contractor.
    (g) Compliance responsibility for contractors. In most cases, the 
auditee's compliance responsibility for contractors is only to ensure 
that the procurement, receipt, and payment for goods and services comply 
with Federal statutes, regulations, and the terms and conditions of 
Federal awards. Federal award compliance requirements normally do not 
pass through to contractors. However, the auditee is responsible for 
ensuring compliance for procurement transactions which are structured 
such that the contractor is responsible for program compliance or the 
contractor's records must be reviewed to determine program compliance. 
Also, when these procurement transactions relate to a major program, the 
scope of the audit must include determining whether these transactions 
are in compliance with Federal statutes, regulations, and the terms and 
conditions of Federal awards.
    (h) For-profit subrecipient. Since this Part does not apply to for-
profit subrecipients, the pass-through entity is responsible for 
establishing requirements, as necessary, to ensure compliance by for-
profit subrecipients to DOE Federal award requirements. The agreement 
with the for-profit subrecipient should describe applicable compliance 
requirements and the for- profit subrecipient's compliance 
responsibility. Methods to ensure compliance for Federal awards made to 
for-profit subrecipients may include pre-award audits, monitoring during 
the agreement, and post-award audits. See also 2 CFR 200.331 
Requirements for pass- through entities.

[79 FR 76024, Dec. 19, 2014, as amended at 80 FR 57511, Sept. 24, 2015]



Sec.  910.502  Basis for determining DOE awards expended.

    Determining Federal awards expended. The determination of when a 
Federal award is expended must be based on when the activity related to 
the DOE award occurs. Generally, the activity pertains to events that 
require the non-Federal entity to comply with Federal statutes, 
regulations, and the terms and conditions of DOE awards, such as: 
expenditure/expense transactions associated with awards including 
grants, cost-reimbursement contracts under the FAR, compacts with Indian 
Tribes, cooperative agreements, and direct appropriations; the 
disbursement of funds to subrecipients; the use of loan proceeds under 
loan and loan guarantee programs; the receipt of property; the receipt 
of surplus property; the receipt or use of program income; the 
distribution or use of food commodities; the disbursement of amounts 
entitling the for-profit entity to an interest subsidy; and the period 
when insurance is in force.

[[Page 366]]

    (a) Loan and loan guarantees (loans). Loan and loan guarantees 
issued by the DOE Loan Program Office corresponding to Title XVII of the 
Energy Policy Act of 2005, as amended, 42 U.S.C. 16511-16516 (``Title 
XVII'') are exempt from these provisions.
    (1) Not applicable.
    (2) Not applicable.
    (3) Not applicable.
    (b) Not applicable.
    (c) Not applicable.
    (d) Endowment funds. The cumulative balance of DOE awards for 
endowment funds that are federally restricted are considered DOE awards 
expended in each audit period in which the funds are still restricted.
    (e) Free rent. Free rent received by itself is not considered a DOE 
award expended under this Part. However, free rent received as part of a 
DOE award to carry out a DOE program must be included in determining DOE 
awards expended and subject to audit under this Part.
    (f) Valuing non-cash assistance. DOE non-cash assistance, such as 
free rent, food commodities, donated property, or donated surplus 
property, must be valued at fair market value at the time of receipt or 
the assessed value provided by DOE.
    (g) Not applicable.
    (h) Not applicable.
    (i) Not applicable.

[79 FR 76024, Dec. 19, 2014, as amended at 80 FR 57512, Sept. 24, 2015]



Sec.  910.503  Relation to other audit requirements.

    (a) An audit conducted in accordance with this Part must be in lieu 
of any financial audit of DOE awards which a for-profit entity is 
required to undergo under any other Federal statute or regulation. To 
the extent that such audit provides DOE with the information it requires 
to carry out its responsibilities under Federal statute or regulation, 
DOE must rely upon and use that information.
    (b) Notwithstanding paragraph (a) of this section, DOE, Inspectors 
General, or GAO may conduct or arrange for additional audits which are 
necessary to carry out its responsibilities under Federal statute or 
regulation. The provisions of this Part do not authorize any for-profit 
entity to constrain, in any manner, DOE from carrying out or arranging 
for such additional audits, except that DOE must plan such audits to not 
be duplicative of other audits of DOE. Any additional audits must be 
planned and performed in such a way as to build upon work performed, 
including the audit documentation, sampling, and testing already 
performed, by other auditors.
    (c) The provisions of this Part do not limit the authority of DOE to 
conduct, or arrange for the conduct of, audits and evaluations of DOE 
awards, nor limit the authority of any Federal agency Inspector General 
or other Federal official.
    (d) DOE to pay for additional audits. If DOE conducts or arranges 
for additional audits it must, consistent with other applicable Federal 
statutes and regulations, arrange for funding the full cost of such 
additional audits.
    (e) Not applicable.



Sec.  910.504  Frequency of audits.

    Audits required by this Part must be performed annually.
    (a) Not applicable.
    (b) Not applicable.



Sec.  910.505  Sanctions.

    In cases of continued inability or unwillingness to have an audit 
conducted in accordance with this Part, DOE and pass-through entities 
must take appropriate action as provided in 2 CFR 200.338 Remedies for 
noncompliance.



Sec.  910.506  Audit costs.

    See 2 CFR 200.425 Audit services.



Sec.  910.507  Compliance audits.

    (a) Program-specific audit guide available. In many cases, a 
program-specific audit guide will be available to provide specific 
guidance to the auditor with respect to internal controls, compliance 
requirements, suggested audit procedures, and audit reporting 
requirements. A listing of current program-specific audit guides can be 
found in the compliance supplement beginning with the 2014 supplement 
including Federal awarding agency contact information and a Web site 
where a copy of the guide can be obtained. When a current program- 
specific audit

[[Page 367]]

guide is available, the auditor must follow GAGAS and the guide when 
performing a compliance audit.
    (1) Program-specific audit guide not available. When a program-
specific audit guide is not available, the auditee and auditor must 
conduct the compliance audit in accordance with GAAS and GAGAS.
    (2) If audited financial statements are available, for-profit 
recipients should submit audited financial statements to DOE as a part 
of the compliance audit. (If the recipient is a subsidiary for which 
separate financial statements are not available, the recipient may 
submit the financial statements of the consolidated group.)
    (3) The auditor must:
    (i) Not applicable.
    (ii) Obtain an understanding of internal controls and perform tests 
of internal controls over the DOE program consistent with the 
requirements of Sec.  910.514 Scope of audit.,
    (iii) Perform procedures to determine whether the auditee has 
complied with Federal statutes, regulations, and the terms and 
conditions of DOE awards that could have a direct and material effect on 
the DOE program consistent with the requirements of Sec.  910.514 Scope 
of audit.
    (iv) Follow up on prior audit findings, perform procedures to assess 
the reasonableness of the summary schedule of prior audit findings 
prepared by the auditee in accordance with the requirements of Sec.  
910.511 Audit findings follow-up, and report, as a current year audit 
finding, when the auditor concludes that the summary schedule of prior 
audit findings materially misrepresents the status of any prior audit 
finding; and
    (v) Report any audit findings consistent with the requirements of 
Sec.  910.516 Audit findings.
    (4) The auditor's report(s) may be in the form of either combined or 
separate reports and may be organized differently from the manner 
presented in this section. The auditor's report(s) must state that the 
audit was conducted in accordance with this Part and include the 
following:
    (i) An opinion (or disclaimer of opinion) as to whether the 
financial statement(s) (if available) of the DOE program is presented 
fairly in all material respects in accordance with the stated accounting 
policies;
    (ii) A report on internal control related to the DOE program, which 
must describe the scope of testing of internal control and the results 
of the tests;
    (iii) A report on compliance which includes an opinion (or 
disclaimer of opinion) as to whether the auditee complied with laws, 
regulations, and the terms and conditions of DOE awards which could have 
a direct and material effect on the DOE program; and
    (iv) A schedule of findings and questioned costs for the DOE program 
that includes a summary of the auditor's results relative to the DOE 
program in a format consistent with Sec.  910.515 Audit reporting, 
paragraph (d)(1) and findings and questioned costs consistent with the 
requirements of Sec.  910.515 Audit reporting, paragraph (d)(3).
    (5) Report submission for program-specific audits. The audit must be 
completed and the reporting required by paragraph (c)(2) or (c)(3) of 
this section submitted within the earlier of 30 calendar days after 
receipt of the auditor's report(s), or nine months after the end of the 
audit period, unless a different period is specified in a program-
specific audit guide. Unless restricted by Federal law or regulation, 
the auditee must make report copies available for public inspection. 
Auditees and auditors must ensure that their respective parts of the 
reporting package do not include protected personally identifiable 
information.
    (6) When a program-specific audit guide is available, the compliance 
audits must be submitted (along with audited financial statements if 
audited financial statements are available), to the appropriate DOE 
Contracting Officer as well as to the DOE Office of the Chief Financial 
Officer.
    (7) When a program-specific audit guide is not available, the 
reporting package for a program-specific audit must consist of, a 
summary schedule of prior audit findings, and a corrective action plan 
as described in paragraph (b)(2) of this section, and the auditor's 
report(s) described in paragraph (b)(4) of this section. The compliance 
audit

[[Page 368]]

must be submitted (along with audited financial statements if audited 
financial statements are available), to the appropriate DOE Contracting 
Officer as well as to the DOE Office of the Chief Financial Officer.
    (b) Other sections of this Part may apply. Compliance audits are 
subject to:
    (1) 910.500 Purpose through 910.503 Relation to other audit 
requirements, paragraph (d);
    (2) 910.504 Frequency of audits through 910.506 Audit costs;
    (3) 910.508 Auditee responsibilities through 910.509 Auditor 
selection;
    (4) 910.511 Audit findings follow-up;
    (5) 910.512 Report submission, paragraphs (e) through (h);
    (6) 910.513 Responsibilities;
    (7) 910.516 Audit findings through 910.517 Audit documentation;
    (8) 910.521 Management decision, and
    (9) Other referenced provisions of this Part unless contrary to the 
provisions of this section, a program-specific audit guide, or program 
statutes and regulations.

[79 FR 76024, Dec. 19, 2014, as amended at 80 FR 57512, Sept. 24, 2015]

                                Auditees



Sec.  910.508  Auditee responsibilities.

    The auditee must:
    (a) Procure or otherwise arrange for the audit required by this Part 
in accordance with Sec.  910.509 Auditor selection, and ensure it is 
properly performed and submitted when due in accordance with Sec.  
910.512 Report submission.
    (b) Submit appropriate financial statements (if available).
    (c) Submit the schedule of expenditures of DOE awards in accordance 
with Sec.  910.510 Financial statements.
    (d) Promptly follow up and take corrective action on audit findings, 
including preparation of a summary schedule of prior audit findings and 
a corrective action plan in accordance with Sec.  910.511 Audit findings 
follow- up, paragraph (b) and Sec.  910.511 Audit findings follow-up, 
paragraph (c), respectively.
    (e) Provide the auditor with access to personnel, accounts, books, 
records, supporting documentation, and other information as needed for 
the auditor to perform the audit required by this Part.



Sec.  910.509  Auditor selection.

    (a) Auditor procurement. When procuring audit services, the 
objective is to obtain high-quality audits. In requesting proposals for 
audit services, the objectives and scope of the audit must be made clear 
and the for-profit entity must request a copy of the audit 
organization's peer review report which the auditor is required to 
provide under GAGAS. Factors to be considered in evaluating each 
proposal for audit services include the responsiveness to the request 
for proposal, relevant experience, availability of staff with 
professional qualifications and technical abilities, the results of peer 
and external quality control reviews, and price. Whenever possible, the 
auditee must make positive efforts to utilize small businesses, 
minority-owned firms, and women's business enterprises, in procuring 
audit services as stated in 2 CFR 200.321 Contracting with small and 
minority businesses, women's business enterprises, and labor surplus 
area firms, or the FAR (48 CFR part 42), as applicable.
    (b) Restriction on auditor preparing indirect cost proposals. An 
auditor who prepares the indirect cost proposal or cost allocation plan 
may not also be selected to perform the audit required by this Part when 
the indirect costs recovered by the auditee during the prior year 
exceeded $1 million. This restriction applies to the base year used in 
the preparation of the indirect cost proposal or cost allocation plan 
and any subsequent years in which the resulting indirect cost agreement 
or cost allocation plan is used to recover costs.
    (c) Use of Federal auditors. Federal auditors may perform all or 
part of the work required under this Part if they comply fully with the 
requirements of this Part.



Sec.  910.510  Financial statements.

    (a) Financial statements. If available, the auditee must submit 
financial statements that reflect its financial position, results of 
operations or changes in net assets, and, where appropriate, cash flows 
for the fiscal year

[[Page 369]]

audited. The financial statements must be for the same organizational 
unit and fiscal year that is chosen to meet the requirements of this 
Part. However, for-profit entity-wide financial statements may also 
include departments, agencies, and other organizational units that have 
separate audits in accordance with Sec.  910.514 Scope of audit, 
paragraph (a) and prepare separate financial statements.
    (b) Schedule of expenditures of DOE awards. The auditee must prepare 
a schedule of expenditures of DOE awards for the period covered by the 
auditee's fiscal year which must include the total DOE awards expended 
as determined in accordance with Sec.  910.502 Basis for determining DOE 
awards expended. While not required, the auditee may choose to provide 
information requested by DOE and pass- through entities to make the 
schedule easier to use. For example, when a DOE program has multiple DOE 
award years, the auditee may list the amount of DOE awards expended for 
each DOE award year separately. At a minimum, the schedule must:
    (1) List individual DOE programs. For a cluster of programs, provide 
the cluster name, list individual DOE programs within the cluster of 
programs. For R&D, total DOE awards expended must be shown by individual 
DOE award and major subdivision within DOE. For example, the National 
Institutes of Health is a major subdivision in the Department of Health 
and Human Services.
    (2) Not applicable.
    (3) Provide total DOE awards expended for each individual DOE 
program and the CFDA number For a cluster of programs also provide the 
total for the cluster.
    (4) Not applicable.
    (5) Not applicable.
    (6) Include notes that describe that significant accounting policies 
used in preparing the schedule, and note whether or not the for-profit 
entity elected to use the 10% de minimis cost rate as covered in 2 CFR 
200.414 Indirect (F&A) costs.



Sec.  910.511  Audit findings follow-up.

    (a) General. The auditee is responsible for follow-up and corrective 
action on all audit findings. As part of this responsibility, the 
auditee must prepare a summary schedule of prior audit findings. The 
auditee must also prepare a corrective action plan for current year 
audit findings. The summary schedule of prior audit findings and the 
corrective action plan must include the reference numbers the auditor 
assigns to audit findings under Sec.  910.516 Audit findings, paragraph 
(c). Since the summary schedule may include audit findings from multiple 
years, it must include the fiscal year in which the finding initially 
occurred. The corrective action plan and summary schedule of prior audit 
findings must include findings relating to the financial statements 
which are required to be reported in accordance with GAGAS.
    (b) Summary schedule of prior audit findings. The summary schedule 
of prior audit findings must report the status of all audit findings 
included in the prior audit's schedule of findings and questioned costs. 
The summary schedule must also include audit findings reported in the 
prior audit's summary schedule of prior audit findings except audit 
findings listed as corrected in accordance with paragraph (b)(1) of this 
section, or no longer valid or not warranting further action in 
accordance with paragraph (b)(3) of this section.
    (1) When audit findings were fully corrected, the summary schedule 
need only list the audit findings and state that corrective action was 
taken.
    (2) When audit findings were not corrected or were only partially 
corrected, the summary schedule must describe the reasons for the 
finding's recurrence and planned corrective action, and any partial 
corrective action taken. When corrective action taken is significantly 
different from corrective action previously reported in a corrective 
action plan or in DOE's or pass-through entity's management decision, 
the summary schedule must provide an explanation.
    (3) When the auditee believes the audit findings are no longer valid 
or do not warrant further action, the reasons for this position must be 
described in the summary schedule. A valid reason for considering an 
audit finding as not

[[Page 370]]

warranting further action is that all of the following have occurred:
    (i) Two years have passed since the audit report in which the 
finding occurred was submitted to DOE;
    (ii) DOE is not currently following up with the auditee on the audit 
finding; and
    (iii) A management decision was not issued.
    (c) Corrective action plan. At the completion of the audit, the 
auditee must prepare, in a document separate from the auditor's findings 
described in Sec.  910.516 Audit findings, a corrective action plan to 
address each audit finding included in the current year auditor's 
reports. The corrective action plan must provide the name(s) of the 
contact person(s) responsible for corrective action, the corrective 
action planned, and the anticipated completion date. If the auditee does 
not agree with the audit findings or believes corrective action is not 
required, then the corrective action plan must include an explanation 
and specific reasons.



Sec.  910.512  Report submission.

    (a) General. (1) The audit must be completed and the reporting 
package described in paragraph (c) of this section must be submitted 
within the earlier of 30 calendar days after receipt of the auditor's 
report(s), or nine months after the end of the audit period. If the due 
date falls on a Saturday, Sunday, or Federal holiday, the reporting 
package is due the next business day.
    (2) Unless restricted by Federal statutes or regulations, the 
auditee must make copies available for public inspection. Auditees and 
auditors must ensure that their respective parts of the reporting 
package do not include protected personally identifiable information.
    (b) Data collection. See paragraph (b)(1) of this section:
    (1) A senior level representative of the auditee (e.g., director of 
finance, chief executive officer, or chief financial officer) must sign 
a statement to be included as part of the reporting package that says 
that the auditee complied with the requirements of this Part, the 
reporting package does not include protected personally identifiable 
information, and the information included in its entirety is accurate 
and complete.
    (2) Not applicable.
    (3) Not applicable.
    (c) Reporting package. The reporting package must include the:
    (1) Financial statements (if available) and schedule of expenditures 
of DOE awards discussed in Sec.  910.510 Financial statements, 
paragraphs (a) and (b), respectively;
    (2) Summary schedule of prior audit findings discussed in Sec.  
910.511 Audit findings follow-up, paragraph (b);
    (3) Auditor's report(s) discussed in Sec.  910.515 Audit reporting; 
and
    (4) Corrective action plan discussed in Sec.  910.511 Audit findings 
follow-up, paragraph (c).
    (d) Submission to DOE. The auditee must electronically submit the 
compliance reporting package described in paragraph (c) of this section 
compliance audits must be submitted (along with audited financial 
statements if audited financial statements are available), to the 
appropriate DOE Contracting Officer as well as to the DOE Office of the 
Chief Financial Officer.
    (e) Requests for management letters issued by the auditor. In 
response to requests by a Federal agency, auditees must submit a copy of 
any management letters issued by the auditor.
    (f) Report retention requirements. Auditees must keep one copy of 
the reporting package described in paragraph (c) of this section on file 
for three years from the date of submission to DOE.
    (g) Not applicable.
    (h) Not applicable.

                            Federal Agencies



Sec.  910.513  Responsibilities.

    (a)(1) Not applicable.
    (2) Not applicable.
    (3) Not applicable.
    (i) Not applicable.
    (ii) Not applicable.
    (iii) Not applicable.
    (iv) Not applicable.
    (v) Not applicable.
    (vi) Not applicable.
    (vii) Not applicable.
    (viii) Not applicable.
    (ix) Not applicable.
    (b) Not applicable
    (1) Not applicable

[[Page 371]]

    (2) Not applicable.
    (c) DOE responsibilities. DOE must perform the following for the 
awards it makes (See also the requirements of 2 CFR 200.210 Information 
contained in a Federal award):
    (1) Ensure that audits are completed and reports are received in a 
timely manner and in accordance with the requirements of this Part.
    (2) Provide technical advice and counsel to auditees and auditors as 
requested.
    (3) Follow-up on audit findings to ensure that the recipient takes 
appropriate and timely corrective action. As part of audit follow-up, 
the DOE must:
    (i) Issue a management decision as prescribed in Sec.  910.521 
Management decision;
    (ii) Monitor the recipient taking appropriate and timely corrective 
action;
    (iii) Use cooperative audit resolution mechanisms (see 2 CFR 200.25 
Cooperative audit resolution) to improve DOE program outcomes through 
better audit resolution, follow-up, and corrective action; and
    (iv) Develop a baseline, metrics, and targets to track, over time, 
the effectiveness of the DOE's process to follow-up on audit findings 
and on the effectiveness of Compliance Audits in improving non-Federal 
entity accountability and their use by DOE in making award decisions.
    (4) Not applicable.
    (5) Not applicable:
    (i) Not applicable
    (ii) Not applicable
    (6) Not applicable
    (7) Not applicable
    (i) Not applicable
    (ii) Not applicable.
    (iii) Not applicable.
    (iv) Not applicable
    (v) Not applicable
    (vi) Not applicable
    (vii) Not applicable.
    (viii) Not applicable

                                Auditors



Sec.  910.514  Scope of audit.

    (a) General. The audit must be conducted in accordance with GAGAS. 
The audit must cover the entire operations of the auditee, or, at the 
option of the auditee, such audit must include a series of audits that 
cover departments, agencies, and other organizational units that 
expended or otherwise administered DOE awards during such audit period, 
provided that each such audit must encompass the schedule of 
expenditures of DOE awards for each such department, agency, and other 
organizational unit, which must be considered to be a for-profit entity. 
The financial statements (if available) and schedule of expenditures of 
DOE awards must be for the same audit period.
    (b) Financial statements. If financial statements are available, the 
auditor must determine whether the schedule of expenditures of DOE 
awards is stated fairly in all material respects in relation to the 
auditee's financial statements as a whole.
    (1) Internal control. The compliance supplement provides guidance on 
internal controls over Federal programs based upon the guidance in 
Standards for Internal Control in the Federal Government issued by the 
Comptroller General of the United States and the Internal Control-- 
Integrated Framework, issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO).
    (2) In addition to the requirements of GAGAS the auditor must 
perform procedures to obtain an understanding of internal control over 
DOE programs sufficient to plan the audit to support a low assessed 
level of control risk of noncompliance for major programs.
    (3) Except as provided in paragraph (c)(4) of this section, the 
auditor must:
    (i) Plan the testing of internal control over compliance to support 
a low assessed level of control risk for the assertions relevant to the 
compliance requirements.
    (ii) Perform testing of internal control as planned in paragraph 
(c)(3)(i) of this section.
    (4) When internal control over some or all of the compliance 
requirements are likely to be ineffective in preventing or detecting 
noncompliance, the planning and performing of testing described in 
paragraph (c)(3) of this section are not required for those compliance 
requirements. However, the

[[Page 372]]

auditor must report a significant deficiency or material weakness in 
accordance with Sec.  910.516 Audit findings, assess the related control 
risk at the maximum, and consider whether additional compliance tests 
are required because of ineffective internal control.
    (5) Compliance. In addition to the requirements of GAGAS, the 
auditor must determine whether the auditee has complied with Federal 
statutes, regulations, and the terms and conditions of Federal awards 
that may have a direct and material effect.
    (6) The principal compliance requirements applicable to most Federal 
programs and the compliance requirements of the largest Federal programs 
are included in the compliance supplement.
    (7) For the compliance requirements related to Federal programs 
contained in the compliance supplement, an audit of these compliance 
requirements will meet the requirements of this Part. Where there have 
been changes to the compliance requirements and the changes are not 
reflected in the compliance supplement, the auditor must determine the 
current compliance requirements and modify the audit procedures 
accordingly. For those Federal programs not covered in the compliance 
supplement, the auditor should follow the compliance supplement's 
guidance for programs not included in the supplement.
    (8) The compliance testing must include tests of transactions and 
such other auditing procedures necessary to provide the auditor 
sufficient appropriate audit evidence to support an opinion on 
compliance.
    (c) Audit follow-up. The auditor must follow-up on prior audit 
findings, perform procedures to assess the reasonableness of the summary 
schedule of prior audit findings prepared by the auditee in accordance 
with Sec.  910.511 Audit findings follow-up paragraph (b), and report, 
as a current year audit finding, when the auditor concludes that the 
summary schedule of prior audit findings materially misrepresents the 
status of any prior audit finding. The auditor must perform audit 
follow-up procedures.



Sec.  910.515  Audit reporting.

    The auditor's report(s) may be in the form of either combined or 
separate reports and may be organized differently from the manner 
presented in this section. The auditor's report(s) must state that the 
audit was conducted in accordance with this Part and include the 
following:
    (a) An opinion (or disclaimer of opinion) as to whether the 
financial statements (if available) are presented fairly in all material 
respects in accordance with generally accepted accounting principles and 
an opinion (or disclaimer of opinion) as to whether the schedule of 
expenditures of DOE awards is fairly stated in all material respects in 
relation to the financial statements (if available) as a whole.
    (b) A report on internal control over financial reporting and 
compliance with Federal statutes, regulations, and the terms and 
conditions of the DOE award, noncompliance with which could have a 
material effect on the financial statements. This report must describe 
the scope of testing of internal control and compliance and the results 
of the tests, and, where applicable, it will refer to the separate 
schedule of findings and questioned costs described in paragraph (d) of 
this section.
    (c) A report on compliance and report and internal control over 
compliance. This report must describe the scope of testing of internal 
control over compliance, include an opinion or modified opinion as to 
whether the auditee complied with Federal statutes, regulations, and the 
terms and conditions of DOE awards which could have a direct and 
material effect and refer to the separate schedule of findings and 
questioned costs described in paragraph (d) of this section.
    (d) A schedule of findings and questioned costs which must include 
the following three components:
    (1) A summary of the auditor's results, which must include:
    (i) The type of report the auditor issued (if applicable)on whether 
the financial statements (if available) audited were prepared in 
accordance with GAAP (i.e., unmodified opinion, qualified opinion, 
adverse opinion, or disclaimer of opinion);

[[Page 373]]

    (ii) Where applicable, a statement about whether significant 
deficiencies or material weaknesses in internal control were disclosed 
by the audit of the financial statements (if available);
    (iii) A statement (if applicable) as to whether the audit disclosed 
any noncompliance that is material to the financial statements (if 
available) of the auditee;
    (iv) Where applicable, a statement about whether significant 
deficiencies or material weaknesses in internal control over major 
programs were disclosed by the audit;
    (v) The type of report the auditor issued on compliance (i.e., 
unmodified opinion, qualified opinion, adverse opinion, or disclaimer of 
opinion);
    (vi) A statement as to whether the audit disclosed any audit 
findings that the auditor is required to report under Sec.  910.516 
Audit findings paragraph (a);
    (vii) Not applicable.
    (viii) Not applicable.
    (ix) Not applicable.
    (2) Findings relating to the financial Statements (if available) 
which are required to be reported in accordance with GAGAS.
    (i) Findings and questioned costs for DOE awards which must include 
audit findings as defined in Sec.  910.516 Audit findings, paragraph 
(a).Audit findings (e.g., internal control findings, compliance 
findings, questioned costs, or fraud) that relate to the same issue 
should be presented as a single audit finding.
    (ii) Audit findings that relate to both the financial statements (if 
available) and DOE awards, as reported under paragraphs (d)(2) and 
(d)(3) of this section, respectively, should be reported in both 
sections of the schedule. However, the reporting in one section of the 
schedule may be in summary form with a reference to a detailed reporting 
in the other section of the schedule.
    (e) Nothing in this Part precludes combining of the audit reporting 
required by this section with the reporting required by Sec.  910.512 
Report submission, paragraph (b) Data Collection when allowed by GAGAS.



Sec.  910.516  Audit findings.

    (a) Audit findings reported. The auditor must report the following 
as audit findings in a schedule of findings and questioned costs:
    (1) Significant deficiencies and material weaknesses in internal 
control over major programs and significant instances of abuse relating 
to major programs. The auditor's determination of whether a deficiency 
in internal control is a significant deficiency or material weakness for 
the purpose of reporting an audit finding is in relation to a type of 
compliance requirement for a major program identified in the Compliance 
Supplement.
    (2) Material noncompliance with the provisions of Federal statutes, 
regulations, or the terms and conditions of DOE awards related to a 
major program. The auditor's determination of whether a noncompliance 
with the provisions of Federal statutes, regulations, or the terms and 
conditions of DOE awards is material for the purpose of reporting an 
audit finding is in relation to a type of compliance requirement for a 
major program identified in the compliance supplement.
    (3) Known questioned costs that are greater than $25,000 for a type 
of compliance requirement for a major program. Known questioned costs 
are those specifically identified by the auditor. In evaluating the 
effect of questioned costs on the opinion on compliance, the auditor 
considers the best estimate of total costs questioned (likely questioned 
costs), not just the questioned costs specifically identified (known 
questioned costs). The auditor must also report known questioned costs 
when likely questioned costs are greater than $25,000 for a type of 
compliance requirement for a major program. In reporting questioned 
costs, the auditor must include information to provide proper 
perspective for judging the prevalence and consequences of the 
questioned costs.
    (4) Known questioned costs that are greater than $25,000 for a DOE 
program. which is not audited as a major program. Except for audit 
follow-up, the auditor is not required under this Part to perform audit 
procedures for such a DOE program; therefore, the auditor will normally 
not find questioned costs for a program that is not audited as a major 
program. However, if the auditor does become aware of questioned costs

[[Page 374]]

for a DOE program that is not audited as a major program (e.g., as part 
of audit follow-up or other audit procedures) and the known questioned 
costs are greater than $25,000, then the auditor must report this as an 
audit finding.
    (5) Not applicable.
    (6) Known or likely fraud affecting a DOE award, unless such fraud 
is otherwise reported as an audit finding in the schedule of findings 
and questioned costs for DOE awards. This paragraph does not require the 
auditor to report publicly information which could compromise 
investigative or legal proceedings or to make an additional reporting 
when the auditor confirms that the fraud was reported outside the 
auditor's reports under the direct reporting requirements of GAGAS.
    (7) Instances where the results of audit follow-up procedures 
disclosed that the summary schedule of prior audit findings prepared by 
the auditee in accordance with Sec.  910.511 Audit findings follow-up, 
paragraph (b) materially misrepresents the status of any prior audit 
finding.
    (b) Audit finding detail and clarity. Audit findings must be 
presented in sufficient detail and clarity for the auditee to prepare a 
corrective action plan and take corrective action, and for DOE to arrive 
at a management decision. The following specific information must be 
included, as applicable, in audit findings:
    (1) Federal program and specific Federal award identification 
including the CFDA title and number, and Federal award identification 
number and year. When information, such as the CFDA title and number or 
DOE award identification number, is not available, the auditor must 
provide the best information available to describe the Federal award.
    (2) The criteria or specific requirement upon which the audit 
finding is based, including the Federal statutes, regulations, or the 
terms and conditions of the DOE awards. Criteria generally identify the 
required or desired state or expectation with respect to the program or 
operation. Criteria provide a context for evaluating evidence and 
understanding findings.
    (3) The condition found, including facts that support the deficiency 
identified in the audit finding.
    (4) A statement of cause that identifies the reason or explanation 
for the condition or the factors responsible for the difference between 
the situation that exists (condition) and the required or desired state 
(criteria), which may also serve as a basis for recommendations for 
corrective action.
    (5) The possible asserted effect to provide sufficient information 
to the auditee and DOE to permit them to determine the cause and effect 
to facilitate prompt and proper corrective action. A statement of the 
effect or potential effect should provide a clear, logical link to 
establish the impact or potential impact of the difference between the 
condition and the criteria.
    (6) Identification of questioned costs and how they were computed. 
Known questioned costs must be identified by applicable CFDA number(s) 
and applicable DOE award identification number(s).
    (7) Information to provide proper perspective for judging the 
prevalence and consequences of the audit findings, such as whether the 
audit findings represent an isolated instance or a systemic problem. 
Where appropriate, instances identified must be related to the universe 
and the number of cases examined and be quantified in terms of dollar 
value. The auditor should report whether the sampling was a 
statistically valid sample.
    (8) Identification of whether the audit finding was a repeat of a 
finding in the immediately prior audit and if so any applicable prior 
year audit finding numbers.
    (9) Recommendations to prevent future occurrences of the deficiency 
identified in the audit finding.
    (10) Views of responsible officials of the auditee.
    (c) Reference numbers. Each audit finding in the schedule of 
findings and questioned costs must include a reference number in the 
format meeting the requirements of the data collection form submission 
required by Sec.  910.512 Report submission, paragraph (b) to allow for 
easy referencing of the audit findings during follow-up.

[[Page 375]]



Sec.  910.517  Audit documentation.

    (a) Retention of audit documentation. The auditor must retain audit 
documentation and reports for a minimum of three years after the date of 
issuance of the auditor's report(s) to the auditee, unless the auditor 
is notified in writing by DOE or the cognizant agency for indirect costs 
to extend the retention period. When the auditor is aware that the 
Federal agency or auditee is contesting an audit finding, the auditor 
must contact the parties contesting the audit finding for guidance prior 
to destruction of the audit documentation and reports.
    (b) Access to audit documentation. Audit documentation must be made 
available upon request to the cognizant agency for indirect cost, DOE, 
or GAO at the completion of the audit, as part of a quality review, to 
resolve audit findings, or to carry out oversight responsibilities 
consistent with the purposes of this Part. Access to audit documentation 
includes the right of Federal agencies to obtain copies of audit 
documentation, as is reasonable and necessary.



Sec.  910.518  [Reserved]



Sec.  910.519  Criteria for Federal program risk.

    (a) General. The auditor's determination should be based on an 
overall evaluation of the risk of noncompliance occurring that could be 
material to the DOE program. The auditor must consider criteria, such as 
described in paragraphs (b), (c), and (d) of this section, to identify 
risk in Federal programs. Also, as part of the risk analysis, the 
auditor may wish to discuss a particular DOE program with auditee 
management and DOE.
    (1) Current and prior audit experience. Weaknesses in internal 
control over DOE programs would indicate higher risk. Consideration 
should be given to the control environment over DOE programs and such 
factors as the expectation of management's adherence to Federal 
statutes, regulations, and the terms and conditions of DOE awards and 
the competence and experience of personnel who administer the DOE 
programs.
    (i) A DOE program administered under multiple internal control 
structures may have higher risk. The auditor must consider whether 
weaknesses are isolated in a single operating unit (e.g., one college 
campus) or pervasive throughout the entity.
    (ii) When significant parts of a DOE program are passed through to 
subrecipients, a weak system for monitoring subrecipients would indicate 
higher risk.
    (2) Prior audit findings would indicate higher risk, particularly 
when the situations identified in the audit findings could have a 
significant impact on a DOE program or have not been corrected.
    (3) DOE programs not recently audited as major programs may be of 
higher risk than Federal programs recently audited as major programs 
without audit findings.
    (4) Oversight exercised by DOE. Oversight exercised by DOE could be 
used to assess risk. For example, recent monitoring or other reviews 
performed by an oversight entity that disclosed no significant problems 
would indicate lower risk, whereas monitoring that disclosed significant 
problems would indicate higher risk.
    (5) Federal agencies, with the concurrence of OMB, may identify 
Federal programs that are higher risk. OMB will provide this 
identification in the compliance supplement.
    (6) Inherent risk of the Federal program. The nature of a Federal 
program may indicate risk. Consideration should be given to the 
complexity of the program and the extent to which the Federal program 
contracts for goods and services. For example, Federal programs that 
disburse funds through third party contracts or have eligibility 
criteria may be of higher risk. Federal programs primarily involving 
staff payroll costs may have high risk for noncompliance with 
requirements of 2 CFR 200.430 Compensation--personal services, but 
otherwise be at low risk.
    (7) The phase of a Federal program in its life cycle at the Federal 
agency may indicate risk. For example, a new Federal program with new or 
interim regulations may have higher risk than

[[Page 376]]

an established program with time-tested regulations. Also, significant 
changes in Federal programs, statutes, regulations, or the terms and 
conditions of Federal awards may increase risk.
    (8) The phase of a Federal program in its life cycle at the auditee 
may indicate risk. For example, during the first and last years that an 
auditee participates in a Federal program, the risk may be higher due to 
start-up or closeout of program activities and staff.
    (9) Programs with larger Federal awards expended would be of higher 
risk than programs with substantially smaller Federal awards expended.



Sec.  910.520  Criteria for a low-risk auditee.

    (a) An auditee that meets all of the following conditions for each 
of the preceding two audit periods may qualify as a low-risk auditee and 
be eligible for reduced audit coverage. Compliance audits were performed 
on an annual basis in accordance with the provisions of this Subpart, 
including submitting the data collection form to DOE within the 
timeframe specified in Sec.  910.512 Report submission. A for-profit 
entity that has biennial audits does not qualify as a low-risk auditee.
    (b) The auditor's opinion on whether the financial statements (if 
available) were prepared in accordance with GAAP, or a basis of 
accounting required by state law, and the auditor's in relation to 
opinion on the schedule of expenditures of DOE awards were unmodified.
    (c) There were no deficiencies in internal control which were 
identified as material weaknesses under the requirements of GAGAS.
    (d) The auditor did not report a substantial doubt about the 
auditee's ability to continue as a going concern.
    (e) None of the DOE programs had audit findings from any of the 
following in either of the preceding two audit periods:
    (1) Internal control deficiencies that were identified as material 
weaknesses in the auditor's report on internal control as required under 
Sec.  910.515 Audit reporting, paragraph (c);
    (2) Not applicable.
    (3) Not applicable.

                          Management Decisions



Sec.  910.521  Management decision.

    (a) General. The management decision must clearly state whether or 
not the audit finding is sustained, the reasons for the decision, and 
the expected auditee action to repay disallowed costs, make financial 
adjustments, or take other action. If the auditee has not completed 
corrective action, a timetable for follow-up should be given. Prior to 
issuing the management decision, the Federal agency may request 
additional information or documentation from the auditee, including a 
request for auditor assurance related to the documentation, as a way of 
mitigating disallowed costs. The management decision should describe any 
appeal process available to the auditee. While not required, DOE agency 
may also issue a management decision on findings relating to the 
financial statements (if they were available) which are required to be 
reported in accordance with GAGAS.
    (b) As provided in Sec.  910.513 Responsibilities, paragraph (c)(3), 
DOE is responsible for issuing a management decision for findings that 
relate to DOE awards it makes to for-profit entities.
    (c) Not applicable.
    (d) Time requirements. DOE must issue a management decision within 
six months of acceptance of the audit report. The auditee must initiate 
and proceed with corrective action as rapidly as possible and corrective 
action should begin no later than upon receipt of the audit report.
    (e) Reference numbers. Management decisions must include the 
reference numbers the auditor assigned to each audit finding in 
accordance with Sec.  910.516 Audit findings paragraph (c).

                        PARTS 911	999 [RESERVED]

[[Page 377]]



                    CHAPTER X--DEPARTMENT OF TREASURY




  --------------------------------------------------------------------
Part                                                                Page
1000            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         379
1001-1099

 [Reserved]

[[Page 379]]



PART 1000_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



Sec.
1000.10 Applicable regulations.
1000.306 Cost sharing or matching.
1000.336 Access to records.

    Authority: 5 U.S.C. 301; 31 U.S.C. 301; 2 CFR part 200.

    Source: 79 FR 76047, Dec. 19, 2014, unless otherwise noted.



Sec.  1000.10  Applicable regulations.

    Except for the deviations set forth elsewhere in this Part, the 
Department of the Treasury adopts the Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards, set forth at 2 CFR part 200.



Sec.  1000.306  Cost sharing or matching.

    Notwithstanding 2 CFR 200.306(e), Low Income Taxpayer Clinic 
grantees may use the rates found in 26 U.S.C. 7430 so long as:
    (a) The grantee is funded to provide controversy representation;
    (b) The services are provided by a qualified representative, which 
includes any individual, whether or not an attorney, who is authorized 
to represent taxpayers before the Internal Revenue Service or an 
applicable court;
    (c) The qualified representative is not a student; and
    (d) The qualified representative is acting in a representative 
capacity and is advocating for a taxpayer.



Sec.  1000.336  Access to records.

    The right of access under 2 CFR 200.336 shall not extend to client 
information held by attorneys or federally authorized tax practitioners 
under the Low Income Taxpayer Clinic program.

                       PARTS 1001	1099 [RESERVED]

[[Page 381]]



                    CHAPTER XI--DEPARTMENT OF DEFENSE




  --------------------------------------------------------------------

              SUBCHAPTER A--GENERAL MATTERS AND DEFINITIONS
Part                                                                Page
1100-1103

 [Reserved]

1104            Implementation of governmentwide guidance 
                    for grants and cooperative agreements...         383
1105-1107

 [Reserved]

1108            Definitions of terms used in subchapters A 
                    through F of this chapter...............         384
1109

[Reserved]

                         SUBCHAPTER B [RESERVED]
1110-1119

 [Reserved]

SUBCHAPTER C--AWARD FORMAT AND NATIONAL POLICY TERMS AND CONDITIONS FOR 
                  ALL GRANTS AND COOPERATIVE AGREEMENTS
1120            Award format for DOD grants and cooperative 
                    agreements..............................         398
1121

[Reserved]

1122            National policy requirements: General award 
                    terms and conditions....................         406
1123-1124

 [Reserved]

1125            Nonprocurement debarment and suspension.....         412
SUBCHAPTER D--ADMINISTRATIVE REQUIREMENTS TERMS AND CONDITIONS FOR COST-
  TYPE GRANTS AND COOPERATIVE AGREEMENTS TO NONPROFIT AND GOVERNMENTAL 
                                ENTITIES
1126            Subchapter D overview.......................         415
1128            Recipient financial and program management: 
                    General award terms and conditions......         417
1130            Property administration: General award terms 
                    and conditions..........................         439
1132            Recipient procurement procedures: General 
                    award terms and conditions..............         452
1134            Financial, programmatic, and property 
                    reporting: General award terms and 
                    conditions..............................         458
1136            Other administrative requirements: General 
                    award terms and conditions..............         471

[[Page 382]]

1138            Requirements related to subawards: General 
                    award terms and conditions..............         483
1140

[Reserved]

                         SUBCHAPTER E [RESERVED]
1141-1155

 [Reserved]

                         SUBCHAPTER F [RESERVED]
1156-1170

 [Reserved]

                         SUBCHAPTER G [RESERVED]
1171[n
dash]1199

 [Reserved]

[[Page 383]]



              SUBCHAPTER A_GENERAL MATTERS AND DEFINITIONS



    Source: 85 FR 51160, Aug. 19, 2020, unless otherwise noted.

                       PARTS 1100	1103 [RESERVED]



PART 1104_IMPLEMENTATION OF GOVERNMENTWIDE GUIDANCE FOR GRANTS AND
COOPERATIVE AGREEMENTS--Table of Contents



Sec.
1104.1 Purpose of this part.
1104.100 Award format for DoD Components' grants and cooperative 
          agreements.
1104.105 Regulations governing DoD Components' general terms and 
          conditions.
1104.110 Regulations governing DoD Components' award-specific terms and 
          conditions.
1104.115 Regulations governing DoD Components' internal procedures.
1104.120 Definitions.

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51160, Aug. 19, 2020, unless otherwise noted.



Sec.  1104.1  Purpose of this part.

    This part provides an update to the DoD interim implementation of 
Office of Management and Budget (OMB) guidance in 2 CFR part 200. It 
supersedes the initial interim implementation of that guidance that DoD 
adopted in 2 CFR part 1103 on December 19, 2014.



Sec.  1104.100  Award format for DoD Components' grants and cooperative
agreements.

    DoD Components must conform the format of new grants and cooperative 
agreements to the standard award format specified in part 1120 of the 
DoD Grant and Agreement Regulations (DoDGARS) (2 CFR part 1120). The 
standard format provides locations within the award for:
    (a) General terms and conditions, including the administrative and 
national policy requirements discussed in Sec.  1104.105(a) and (b), 
respectively.
    (b) Any award-specific terms and conditions discussed in Sec.  
1104.110.



Sec.  1104.105  Regulations governing DoD Components' general terms
and conditions.

    (a) Administrative requirements. On an interim basis pending 
completion of the update of the DoDGARs to implement OMB guidance 
published in 2 CFR part 200, the following regulatory provisions govern 
the administrative requirements to be included in general terms and 
conditions of DoD Components' new grants and cooperative agreements:
    (1) The provisions of parts 1126 through 1138 of the DoDGARs (2 CFR 
parts 1126 through 1138, which comprise subchapter D of this chapter) 
govern the administrative requirements to be included in the general 
terms and conditions of DoD Components' new grants and cooperative 
agreements awarded to institutions of higher education, nonprofit 
organizations, States, local governments, and Indian tribes.
    (2) Part 34 of the DoDGARs (32 CFR part 34) governs the 
administrative requirements to be included in general terms and 
conditions of DoD Components' grants and cooperative agreements awarded 
to for-profit entities.
    (b) National policy requirements. Part 1122 of the DoDGARs (2 CFR 
part 1122) governs the national policy requirements to be included in 
DoD Components' new grants and cooperative agreements awarded to all 
types of entities.



Sec.  1104.110  Regulations governing DoD Components' award-specific
terms and conditions.

    On an interim basis pending completion of the update of the DoDGARs 
to implement OMB guidance published in 2 CFR part 200:
    (a) The guidance in 2 CFR part 200 governs administrative 
requirements to be included in any award-specific terms and conditions 
used to supplement the general terms and conditions of a new grant or 
cooperative agreement awarded to an institution of higher education, 
nonprofit organization, State, local government, or Indian tribe.

[[Page 384]]

    (b) Part 34 of the DoDGARs (32 CFR part 34) governs the 
administrative requirements to be included in any award-specific terms 
and conditions of DoD Components' grants and cooperative agreements 
awarded to for-profit entities.



Sec.  1104.115  Regulations governing DoD Components' internal procedures.

    On an interim basis pending completion of the update of the DoDGARs 
to implement OMB guidance published in 2 CFR part 200, DoD Components' 
internal pre-award, time-of-award, and post-award procedures will 
continue to comply with requirements in parts 21 and 22 of the DoDGARs 
(32 CFR parts 21 and 22) and other applicable Defense Grant and 
Agreement Regulatory System (DGARS) policies.



Sec.  1104.120  Definitions.

    (a) DoD Grant and Agreement Regulations or DoDGARs means the 
regulations in chapter I, subchapter C of title 32, Code of Federal 
Regulations, and chapter XI of title 2, Code of Federal Regulations.
    (b) Other terms. See part 1108 of the DoDGARs for definitions of 
other terms used in this part.

                       PARTS 1105	1107 [RESERVED]



PART 1108_DEFINITIONS OF TERMS USED IN SUBCHAPTERS A THROUGH F OF
THIS CHAPTER--Table of Contents



                            Subpart A_General

Sec.
1108.1 Purpose of this part.
1108.2 Precedence of definitions of terms in national policy 
          requirements.
1108.3 Definitions of terms used in the Governmentwide cost principles 
          or single audit requirements.
1108.4 Definitions of terms that vary depending on context.

                          Subpart B_Definitions

1108.10 Acquire.
1108.15 Acquisition.
1108.20 Acquisition cost.
1108.25 Administrative offset.
1108.30 Advance payment.
1108.35 Advanced research.
1108.40 Agreements officer.
1108.45 Applied research.
1108.50 Approved budget.
1108.55 Assistance.
1108.60 Award.
1108.65 Award administration office.
1108.70 Basic research.
1108.75 Capital asset.
1108.80 Claim.
1108.85 Cognizant agency for indirect costs.
1108.90 Contract.
1108.95 Contracting activity.
1108.100 Contracting officer.
1108.105 Contractor.
1108.110 Cooperative agreement.
1108.115 Co-principal investigator.
1108.120 Cost allocation plan.
1108.125 Cost sharing or matching.
1108.128 Cost-type award.
1108.130 Cost-type contract.
1108.135 Cost-type subaward.
1108.140 Debarment.
1108.145 Debt.
1108.150 Delinquent debt.
1108.155 Development.
1108.160 Direct costs.
1108.165 DoD Components.
1108.170 Equipment.
1108.175 Exempt property.
1108.180 Expenditures.
1108.185 Federal interest.
1108.190 Federal share.
1108.195 Fixed-amount award.
1108.200 Fixed-amount subaward.
1108.205 Foreign organization.
1108.210 Foreign public entity.
1108.215 Grant.
1108.220 Grants officer.
1108.225 Indian tribe.
1108.230 Indirect costs (also known as ``Facilities and 
          Administrative,'' or F&A, costs).
1108.235 Institution of higher education.
1108.240 Intangible property.
1108.245 Local government.
1108.250 Management decision.
1108.255 Nonprocurement instrument.
1108.260 Nonprofit organization.
1108.265 Obligation.
1108.270 Office of Management and Budget.
1108.275 Outlays.
1108.280 Participant support costs.
1108.285 Period of performance.
1108.290 Personal property.
1108.295 Principal investigator.
1108.298 Prior approval.
1108.300 Procurement contract.
1108.305 Procurement transaction.
1108.310 Program income.
1108.315 Project costs.
1108.320 Property.
1108.325 Real property.
1108.330 Recipient.
1108.335 Research.
1108.340 Simplified acquisition threshold.
1108.345 Small award.
1108.350 State.
1108.355 Subaward.
1108.360 Subrecipient.

[[Page 385]]

1108.365 Supplies.
1108.370 Suspension.
1108.375 Technology investment agreement.
1108.380 Termination.
1108.385 Third-party in-kind contribution.
1108.390 Total value.
1108.395 Unique entity identifier.
1108.400 Unobligated balance.
1108.405 Voluntary (committed or uncommitted) cost sharing.
1108.410 Working capital advance.

Appendix A to Part 1108--Background on Assistance, Acquisition, and 
          Terms for Types of Legal Instruments

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51230, Aug. 19, 2020, unless otherwise noted.



                            Subpart A_General



Sec.  1108.1  Purpose of this part.

    (a) This part provides:
    (1) Definitions of terms used in subchapters A through F of this 
chapter; and
    (2) Background information as context for understanding terms 
related to assistance and acquisition purposes, legal instruments that 
DoD Components make at the prime tier, and lower-tier transactions into 
which recipients and subrecipients enter when carrying out programs at 
lower tiers under DoD awards.
    (b) This part is, for DoD, the regulatory implementation of OMB 
guidance in subpart A of 2 CFR part 200.



Sec.  1108.2  Precedence of definitions of terms in national policy
requirements.

    (a) General. Some portions of the DoD Grant and Agreement 
Regulations (DoDGARs) may use a term in relation to compliance with a 
national policy requirement in a statute, Executive order, or other 
source that defines the term differently than it is defined in subpart B 
of this part. For purposes of that particular national policy 
requirement, the definition of a term provided by the source of the 
requirement and any regulation specifically implementing it takes 
precedence over the definition in subpart B of this part. Using the 
definition of a term that takes precedence for each national policy 
requirement is therefore important when determining the applicability 
and effect of that requirement.
    (b) Examples. (1) Current portions of the DoDGARs that specifically 
implement national policy requirements, as described in paragraph (a) of 
this section, are:
    (i) A Governmentwide regulation currently codified by DoD at 32 CFR 
part 26, which implements the Drug-Free Workplace Act of 1988 as it 
applies to grants (41 U.S.C. chapter 81, as amended);
    (ii) A Government regulation currently codified by DoD at 32 CFR 
part 28, which implements restrictions on lobbying in 31 U.S.C. 1352;
    (iii) A DoD regulation at part 1125 of this chapter, which 
implements Governmentwide guidance on nonprocurement debarment and 
suspension (2 CFR part 180) that has bases both in statute (section 2455 
of Public Law 103-355, 108 Stat. 3327) and in Executive orders 12549 and 
12689; and
    (iv) Part 1122 of this chapter, which provides standard wording of 
terms and conditions related to a number of national policy 
requirements.
    (2) To illustrate that a term may be defined differently in 
conjunction with specific national policy requirements than it is in 
this part, the term ``State'' is defined differently in the drug-free 
workplace requirements at 32 CFR part 26, the lobbying restrictions at 
32 CFR part 28, and Subpart B of this part.



Sec.  1108.3  Definitions of terms used in the Governmentwide cost
principles or single audit requirements.

    (a) Some DoDGARs provisions state that DoD Components or recipients 
must comply with single audit or cost principles requirements in a 
Governmentwide issuance that contains defined terms and include the 
requirements by reference to the issuance without restating them.
    (b) For any term in one of those issuances, this part includes the 
definition of the term only if the DoDGARs also use that term directly.
    (c) If the DoDGARs only use the term indirectly, i.e., through the 
DoDGARs' reference to the issuance, then this part will not include a 
definition and a user of the DoDGARs should consult definitions in the 
pertinent Governmentwide source, as follows:

[[Page 386]]

    (1) The Single Audit Act requirements for audits of recipients and 
subrecipients that are in subpart F of OMB guidance in 2 CFR part 200;
    (2) The Governmentwide cost principles for institutions of higher 
education, nonprofit organizations, States, local governments, and 
Indian tribes that are contained in subpart E of OMB guidance in 2 CFR 
part 200; and
    (3) The cost principles for for-profit entities at Subpart 31.2 of 
the Federal Acquisition Regulation (FAR) at 48 CFR part 31, as 
supplemented by provisions of the Defense Federal Acquisition Regulation 
Supplement at subpart 231.2 of 48 CFR part 231.



Sec.  1108.4  Definitions of terms that vary depending on context.

    DoDGARs definitions of some terms related to types of legal 
instruments (e.g., ``contract'') and purposes for which they are used 
(e.g., ``procurement'' or ``acquisition'') may vary, depending on the 
context. Appendix A to this part provides additional information about 
those terms and their definitions.



                          Subpart B_Definitions



Sec.  1108.10  Acquire.

    Acquire means to:
    (a) When the term is used in connection with a DoD Component action 
at the prime tier, obtain property or services by purchase, lease, or 
barter for the direct benefit or use of the United States Government.
    (b) When the term is used in connection with a recipient action or a 
subrecipient action at a tier under a DoD Component's award:
    (1) Purchase services;
    (2) Obtain property under the award by:
    (i) Purchase;
    (ii) Construction;
    (iii) Fabrication;
    (iv) Development;
    (v) The recipient's or subrecipient's donation of the property to 
the project or program under the award to meet a cost-sharing or 
matching requirement (i.e., including within the entity's share of the 
award's project costs the value of the remaining life of the property or 
its fair market value, rather than charging depreciation); or
    (vi) Otherwise.



Sec.  1108.15  Acquisition.

    Acquisition means the process of acquiring as described in:
    (a) Paragraph (a) of Sec.  1108.10 when used in connection with DoD 
Component actions at the prime tier.
    (b) Paragraph (b) of Sec.  1108.10 when used in connection with 
recipient or subrecipient actions at a lower tier under a DoD 
Component's award.



Sec.  1108.20  Acquisition cost.

    Acquisition cost means the cost of an asset to a recipient or 
subrecipient, including the cost to ready the asset for its intended 
use.
    (a) For example, when used in conjunction with:
    (1) The purchase of equipment, the term means the net invoice price 
of the equipment, including the cost of any modifications, attachments, 
accessories, or auxiliary apparatus necessary to make it usable for the 
purpose for which it is acquired.
    (2) Equipment that a recipient or subrecipient constructs or 
fabricates--or software that it develops--under an award, the term 
includes, when capitalized in accordance with generally accepted 
accounting principles (GAAP):
    (i) The construction and fabrication costs of that equipment; and
    (ii) The development costs of that software.
    (b) Ancillary charges, such as taxes, duty, protective in-transit 
insurance, freight, and installation may be included in, or excluded 
from, the acquisition cost in accordance with the recipient's or 
subrecipient's regular accounting practices.



Sec.  1108.25  Administrative offset.

    Administrative offset means 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.



Sec.  1108.30  Advance payment.

    Advance payment means a payment that DoD or a recipient or 
subrecipient makes by any appropriate payment mechanism, including a 
predetermined

[[Page 387]]

payment schedule, before the recipient or subrecipient disburses the 
funds for project or program purposes.



Sec.  1108.35  Advanced research.

    Advanced research means 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) programs within DoD's Research, 
Development, Test and Evaluation (RDT&E) appropriations.



Sec.  1108.40  Agreements officer.

    Agreements officer means a DoD official with the authority to enter 
into, administer, and/or terminate technology investment agreements.



Sec.  1108.45  Applied research.

    Applied research means 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) programs within DoD's 
Research, Development, Test and Evaluation (RDT&E) appropriations. 
Applied research often 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, efforts that are within the definition of 
``development.''



Sec.  1108.50  Approved budget.

    Approved budget means, in conjunction with a DoD Component award to 
a recipient, the most recent version of the budget the recipient 
submitted, and the DoD Component approved (either at the time of the 
initial award or subsequently), to summarize planned expenditures for 
the project or program under the award. It includes:
    (a) All Federal funding made available to the recipient under the 
award to use for project or program purposes.
    (b) Any cost sharing or matching that the recipient is required to 
provide under the award.
    (c) Any options that have been exercised but not any options that 
have not yet been exercised.



Sec.  1108.55  Assistance.

    Assistance means 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 that DoD Components use to provide assistance.



Sec.  1108.60  Award.

    Award means a grant, cooperative agreement, technology investment 
agreement, or other nonprocurement instrument subject to one or more 
parts of the DoDGARs. Within each part of the regulations, the term 
includes only the types of instruments subject to that part.



Sec.  1108.65  Award administration office.

    Award administration office means a DoD Component office that 
performs post-award functions related to the administration of grants, 
cooperative agreements, technology investment agreements, or other 
nonprocurement instruments subject to one or more parts of the DoDGARs.



Sec.  1108.70  Basic research.

    Basic research means 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) programs within DoD's 
Research, Development,

[[Page 388]]

Test and Evaluation (RDT&E) appropriations. For the purposes of the 
DoDGARs, basic research includes:
    (a) Research-related, science and engineering education and 
training, including graduate fellowships and research traineeships; and
    (b) Research instrumentation and other activities designed to 
enhance the infrastructure for science and engineering research.



Sec.  1108.75  Capital asset.

    Capital asset means a tangible or intangible asset used in 
operations having a useful life of more than one year which is 
capitalized in accordance with GAAP. Capital assets include:
    (a) Land, buildings (facilities), equipment, and intellectual 
property (including software) whether acquired by purchase, 
construction, manufacture, lease-purchase, exchange, or through capital 
leases; and
    (b) Additions, improvements, modifications, replacements, 
rearrangements, reinstallations, renovations or alterations to capital 
assets that materially increase their value or useful life (not ordinary 
repairs and maintenance).



Sec.  1108.80  Claim.

    Claim means a written demand or written assertion by one of the 
parties to an award seeking as a matter of right, the payment of money 
in a sum certain, the adjustment or interpretation of an award term or 
condition, or other relief arising under or relating to the award. 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 or agreements officer if it is disputed either as to 
liability or amount or is not acted upon in a reasonable time.



Sec.  1108.85  Cognizant agency for indirect costs.

    Cognizant agency for indirect costs means the Federal agency 
responsible for reviewing, negotiating, and approving cost allocation 
plans and indirect cost proposals on behalf of all Federal agencies. The 
cognizant agency for indirect costs for a particular entity may be 
different than the cognizant agency for audit. The cognizant agency for 
indirect costs:
    (a) For an institution of higher education, nonprofit organization, 
State, local government, or Indian tribe is assigned as described in the 
appendices to 2 CFR part 200. See 2 CFR 200.19 for specific citations to 
those appendices.
    (b) For a for-profit entity, normally will be the agency with the 
largest dollar amount of pertinent business, as described in the Federal 
Acquisition Regulation at 48 CFR 42.003.



Sec.  1108.90  Contract.

    Contract means a procurement transaction, as that term is defined in 
this subpart. A contract is a transaction into which a recipient or 
subrecipient enters. It is therefore distinct from the term 
``procurement contract,'' which is a transaction that a DoD Component 
awards at the prime tier.



Sec.  1108.95  Contracting activity.

    Contracting activity means an activity to which the Head of a DoD 
Component has delegated broad authority regarding acquisition functions 
pursuant to 48 CFR 1.601.



Sec.  1108.100  Contracting officer.

    Contracting officer means a DoD official with the authority to enter 
into, administer, and/or terminate procurement contracts and make 
related determinations and findings.



Sec.  1108.105  Contractor.

    Contractor means an entity to which a recipient or subrecipient 
awards a procurement transaction (also known as a contract).



Sec.  1108.110  Cooperative agreement.

    Cooperative agreement means 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 of ``grant'' in this subpart), except that 
substantial involvement is expected between DoD 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.

[[Page 389]]



Sec.  1108.115  Co-principal investigator.

    Co-principal investigator means any one of a group of individuals 
whom an organization that is carrying out a research project with DoD 
support designates as sharing the authority and responsibility for 
leading and directing the research intellectually and logistically, 
other than the one among the group identified as the primary contact for 
scientific, technical, and related budgetary matters (see the definition 
of ``principal investigator'').



Sec.  1108.120  Cost allocation plan.

    Cost allocation plan means either a:
    (a) Central service cost allocation plan, as defined at 2 CFR 200.9 
and described in Appendix V to 2 CFR part 200; or
    (b) Public assistance cost allocation plan as described in Appendix 
VI to 2 CFR part 200.



Sec.  1108.125  Cost sharing or matching.

    Cost sharing or matching means the portion of project costs not 
borne by the Federal Government, unless a Federal statute authorizes use 
of any Federal funds for cost sharing or matching.



Sec.  1108.128  Cost type award.

    Cost-type award means an award that a DoD Component makes that 
provides for the recipient to be paid based on the actual, allowable 
costs it incurs in carrying out the award.



Sec.  1108.130  Cost-type contract.

    Cost-type contract means a procurement transaction awarded by a 
recipient or a subrecipient at any tier under a DoD Component's grant or 
cooperative agreement that provides for the contractor to be paid on the 
basis of the actual, allowable costs it incurs (plus any fee or profit 
for which the contract provides).



Sec.  1108.135  Cost-type subaward.

    Cost-type subaward means a subaward that:
    (a) A recipient or subrecipient makes to another entity at the next 
lower tier; and
    (b) Provides for payments to the entity that receives the cost-type 
subaward based on the actual, allowable costs it incurs in carrying out 
the subaward.



Sec.  1108.140  Debarment.

    Debarment means an action taken by a Federal agency debarring 
official to exclude a person or entity from participating in covered 
Federal transactions, in accordance with debarment and suspension 
policies and procedures for:
    (a) Nonprocurement instruments, which are in OMB guidance at 2 CFR 
part 180, as implemented by the DoD at 2 CFR part 1125; or
    (b) Procurement contracts, which are in the Federal Acquisition 
Regulation at 48 CFR 9.4.



Sec.  1108.145  Debt.

    Debt means 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. For the purposes of this chapter, amounts due a non-
appropriated fund instrumentality are not debts owed the United States.



Sec.  1108.150  Delinquent debt.

    Delinquent debt means a debt:
    (a) 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
    (b) With respect to which the debtor has elected not to exercise any 
available appeals or has exhausted all agency appeal processes.



Sec.  1108.155  Development.

    Development means, when used in the context of ``research and 
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,

[[Page 390]]

prototyping, and engineering testing. It typically is funded within 
programs in Budget Activities 4 through 7 of DoD's Research, 
Development, Test and Evaluation (RDT&E) appropriations.



Sec.  1108.160  Direct costs.

    Direct costs means any costs that are identified specifically with a 
particular final cost objective, such as an award, in accordance with 
the applicable cost principles.



Sec.  1108.165  DoD Components.

    DoD Components means the Office of the Secretary of Defense; the 
Military Departments; the National Guard Bureau (NGB); and all Defense 
Agencies, DoD Field Activities, and other organizational entities within 
the DoD that are authorized to award or administer grants, cooperative 
agreements, and other non-procurement instruments subject to the 
DoDGARs.



Sec.  1108.170  Equipment.

    Equipment means tangible personal property (including information 
technology systems) having a useful life of more than one year and a 
per-unit acquisition cost which equals or exceeds the lesser of:
    (a) $5,000; or
    (b) The recipient's or subrecipient's capitalization threshold for 
financial statement purposes.



Sec.  1108.175  Exempt property.

    (a) Exempt property means tangible personal property acquired in 
whole or in part with Federal funds under a DoD Component's awards, for 
which the DoD Component:
    (1) Has statutory authority to vest title in recipients (or allow 
for vesting in subrecipients) without further obligation to the Federal 
Government or subject to conditions the DoD Component considers 
appropriate; and
    (2) Elects to use that authority to do so.
    (b) An example of exempt property authority is contained in the 
Federal Grant and Cooperative Agreement Act (31 U.S.C. 6306) for 
tangible personal property acquired under an award to conduct basic or 
applied research by a nonprofit institution of higher education or 
nonprofit organization whose primary purpose is conducting scientific 
research.



Sec.  1108.180  Expenditures.

    Expenditures mean charges made by a recipient or subrecipient to a 
project or program under an award.
    (a) The charges may be reported on a cash or accrual basis, as long 
as the methodology is disclosed and is consistently applied.
    (b) For reports prepared on a cash basis, expenditures are the sum 
of:
    (1) Cash disbursements for direct charges for property and services;
    (2) The amount of indirect expense charged;
    (3) The value of third-party in-kind contributions applied; and
    (4) The amount of cash advance payments and payments made to 
subrecipients.
    (c) For reports prepared on an accrual basis, expenditures are the 
sum of:
    (1) Cash disbursements for direct charges for property and services;
    (2) The amount of indirect expense incurred;
    (3) The value of third-party in-kind contributions applied; and
    (4) The net increase or decrease in the amounts owed by the 
recipient or subrecipient for:
    (i) Goods and other property received;
    (ii) Services performed by employees, contractors, subrecipients, 
and other payees; and
    (iii) Programs for which no current services or performance are 
required, such as annuities, insurance claims, or other benefit 
payments.



Sec.  1108.185  Federal interest.

    Federal interest means, in relation to real property, equipment, or 
supplies acquired or improved under an award or subaward, the dollar 
amount that is the product of the:
    (a) Federal share of total project costs; and
    (b) Current fair market value of the property, improvements, or 
both, to the extent the costs of acquiring or improving the property 
were included as project costs.

[[Page 391]]



Sec.  1108.190  Federal share.

    Federal share means the portion of the project costs under an award 
that is paid by Federal funds.



Sec.  1108.195  Fixed-amount award.

    Fixed-amount award means a DoD Component grant or cooperative 
agreement that provides for the recipient to be paid on the basis of 
performance and results, rather than the actual, allowable costs the 
recipient incurs.



Sec.  1108.200  Fixed-amount subaward.

    Fixed-amount subaward means a subaward:
    (a) That a recipient or subrecipient makes to another entity at the 
next lower tier; and
    (b) Under which the total amount to be paid to the other entity is 
based on performance and results, and not on the actual, allowable costs 
that entity incurs.



Sec.  1108.205  Foreign organization.

    Foreign organization means an entity that is:
    (a) A public or private organization that is located in a country 
other than the United States and its territories and is subject to the 
laws of the country in which it is located, irrespective of the 
citizenship of project staff or place of performance;
    (b) A private nongovernmental organization located in a country 
other than the United States and its territories that solicits and 
receives cash contributions from the general public;
    (c) A charitable organization located in a country other than the 
United States and its territories that is nonprofit and tax exempt under 
the laws of its country of domicile and operation, and is not a 
university, college, accredited degree-granting institution of 
education, private foundation, hospital, organization engaged 
exclusively in research or scientific activities, church, synagogue, 
mosque or other similar entity organized primarily for religious 
purposes; or
    (d) An organization located in a country other than the United 
States and its territories that is not recognized as a foreign public 
entity.



Sec.  1108.210  Foreign public entity.

    Foreign public entity means:
    (a) A foreign government or foreign governmental entity;
    (b) A public international organization, which is an organization 
entitled to enjoy privileges, exemptions, and immunities as an 
international organization under the International Organizations 
Immunities Act (22 U.S.C. 288-288f);
    (c) An entity owned (in whole or in part) or controlled by a foreign 
government; or
    (d) Any other entity consisting wholly or partially of one or more 
foreign governments or foreign governmental entities.



Sec.  1108.215  Grant.

    Grant means 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 DoD's direct benefit or use.
    (b) In which substantial involvement is not expected between DoD and 
the recipient when carrying out the activity contemplated by the award.



Sec.  1108.220  Grants officer.

    Grants officer means a DoD official with the authority to enter 
into, administer, and/or terminate grants or cooperative agreements.



Sec.  1108.225  Indian tribe.

    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant to 
the Alaska Native Claims Settlement Act (43 U.S.C. Chapter 33), which is 
recognized as eligible for the special programs and services provided by 
the United States to Indians because of their status as Indians (25 
U.S.C. 450b(e)). See the annually published Bureau of Indian Affairs 
list of Indian Entities Recognized and Eligible to Receive Services.

[[Page 392]]



Sec.  1108.230  Indirect costs (also known as ``Facilities and
Administrative,'' or F&A, costs).

    Indirect costs means those costs incurred for a common or joint 
purpose benefitting more than one cost objective, and not readily 
assignable to the cost objectives specifically benefitted, without 
effort disproportionate to the results achieved.



Sec.  1108.235  Institution of higher education.

    Institution of higher education has the meaning specified at 20 
U.S.C. 1001.



Sec.  1108.240  Intangible property.

    Intangible property means:
    (a) Property having no physical existence, such as trademarks, 
copyrights, patents and patent applications; and
    (b) Property such as loans, notes and other debt instruments, lease 
agreements, stock and other instruments of property ownership, whether 
the property is considered tangible or intangible.



Sec.  1108.245  Local government.

    Local government means any unit of government within a State, 
including a:
    (a) County;
    (b) Borough;
    (c) Municipality;
    (d) City;
    (e) Town;
    (f) Township;
    (g) Parish;
    (h) Local public authority, including any public housing agency 
under the United States Housing Act of 1937;
    (i) Special district;
    (j) School district;
    (k) Intrastate district;
    (l) Council of governments, whether or not incorporated as a 
nonprofit corporation under State law; and
    (m) Any other agency or instrumentality of a multi-, regional, or 
intra-state or local government.



Sec.  1108.250  Management decision.

    Management decision means a written decision issued to an audited 
entity by a DoD Component, another Federal agency that has audit or 
indirect cost cognizance or oversight responsibilities for the audited 
entity, or a recipient or subrecipient from which the audited entity 
received an award or subaward. The DoD Component, cognizant or oversight 
agency, recipient, or subrecipient issues the management decision to 
specify the corrective actions that are necessary after evaluating the 
audit findings and the audited entity's corrective action plan.



Sec.  1108.255  Nonprocurement instrument.

    Nonprocurement instrument means a legal instrument other than a 
procurement contract that a DoD Component may award. Examples include an 
instrument of financial assistance, such as a grant or cooperative 
agreement, or an instrument of technical assistance, which provides 
services in lieu of money.



Sec.  1108.260  Nonprofit organization.

    Nonprofit organization means any corporation, trust, association, 
cooperative, or other organization, not including an institution of 
higher education, that:
    (a) Is operated primarily for scientific, educational, service, 
charitable, or similar purposes in the public interest;
    (b) Is not organized primarily for profit; and
    (c) Uses net proceeds to maintain, improve, or expand the operations 
of the organization.



Sec.  1108.265  Obligation.

    Obligation means:
    (a) When used in conjunction with a DoD Component's award, a legally 
binding agreement that will result in outlays, either immediately or in 
the future. Examples of actions through which a DoD Component incurs an 
obligation include the grants or agreements officer's signature of a 
grant, cooperative agreement, or technology investment agreement (or 
modification of such an award) authorizing the recipient to use funds 
under the award.
    (b) When used in conjunction with a recipient's or subrecipient's 
use of funds under an award or subaward, an order placed for property 
and services, a contract or subaward made, or a

[[Page 393]]

similar transaction, during a given period that requires payment during 
the same or a future period.



Sec.  1108.270  Office of Management and Budget.

    Office of Management and Budget means the Executive Office of the 
President, United States Office of Management and Budget.



Sec.  1108.275  Outlays.

    Outlays means ``expenditures,'' as defined in this subpart.



Sec.  1108.280  Participant support costs.

    Participant support costs means direct costs for items such as 
stipends or subsistence allowances, travel allowances, and registration 
fees paid to or on behalf of participants or trainees (but not 
employees) in connection with conferences or training projects.



Sec.  1108.285  Period of performance.

    Period of performance means the time during which a recipient or 
subrecipient may incur new obligations to carry out the work authorized 
under an award or subaward, respectively.



Sec.  1108.290  Personal property.

    Personal property means property other than real property. It may be 
tangible, having physical existence, or intangible, such as copyrights, 
patents, and securities.



Sec.  1108.295  Principal investigator.

    Principal investigator means either:
    (a) The single individual whom an organization that is carrying out 
a research project with DoD support designates as having an appropriate 
level of authority and responsibility for leading and directing the 
research intellectually and logistically, which includes the proper 
conduct of the research, the appropriate use of funds, and compliance 
with administrative requirements such as the submission of performance 
reports to DoD; or
    (b) If the organization designates more than one individual as 
sharing that authority and responsibility, the individual within that 
group identified by the organization as the one with whom the DoD 
Component's program manager generally should communicate as the primary 
contact for scientific, technical, and related budgetary matters 
concerning the project (others within the group are ``co-principal 
investigators,'' as defined in this subpart).



Sec.  1108.298  Prior approval.

    Prior approval means written or electronic approval by a DoD grants 
or agreements officer evidencing prior consent. When prior approval is 
required for an activity or expenditure that would result in a direct 
cost to a DoD award, the grants or agreements officer's signature on an 
award that includes the planned activity or expenditure in the scope of 
work or approved budget satisfies the requirement for prior approval. 
Otherwise, a recipient is required to obtain such approval after award.



Sec.  1108.300  Procurement contract.

    Procurement contract means 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. A procurement contract 
is a prime-tier transaction and therefore distinct from a recipient's or 
subrecipient's ``procurement transaction'' or ``contract'' as defined in 
this subpart.



Sec.  1108.305  Procurement transaction.

    Procurement transaction means a legal instrument by which a 
recipient or subrecipient purchases property or services it needs to 
carry out the project or program under its award or subaward, 
respectively. A procurement transaction is distinct both from 
``subaward'' and ``procurement contract,'' as those terms are defined in 
this subpart.



Sec.  1108.310  Program income.

    Program income means gross income earned by a recipient or 
subrecipient that is directly generated by a supported activity or 
earned as a result of an award or subaward (during the period of 
performance unless the award

[[Page 394]]

or subaward specifies continuing requirements concerning disposition of 
program income after the end of that period).
    (a) Program income includes, but is not limited to, income from:
    (1) Fees for services performed;
    (2) The use or rental of real or personal property for which the 
recipient or subrecipient is accountable under the award or subaward 
(whether acquired under the award or subaward, or other Federal awards 
from which accountability for the property was transferred);
    (3) The sale of commodities or items fabricated under the award or 
subaward;
    (4) License fees and royalties on patents and copyrights; and
    (5) Payments of principal and interest on loans made with award or 
subaward funds.
    (b) Program income does not include:
    (1) Interest earned on advances of Federal funds;
    (2) Proceeds from the sale of real property or equipment under the 
award; or
    (3) Unless otherwise specified in Federal statute or regulation, or 
the terms and conditions of the award or subaward:
    (i) Rebates, credits, discounts, and interest earned on any of them; 
or
    (ii) Governmental revenues, taxes, special assessments, levies, 
fines, and similar revenues raised by the recipient or subrecipient.



Sec.  1108.315  Project costs.

    Project costs means the total of:
    (a) Allowable costs incurred under an award by the recipient, 
including costs of any subawards and contracts under the award; and
    (b) Cost-sharing or matching contributions that are required under 
the award, which includes voluntary committed (but not voluntary 
uncommitted) contributions and the value of any third-party in-kind 
contributions.



Sec.  1108.320  Property.

    Property means real property and personal property (equipment, 
supplies, intangible property, and debt instruments), unless stated 
otherwise.



Sec.  1108.325  Real property.

    Real property means land, including land improvements, structures 
and appurtenances thereto, but excluding moveable machinery and 
equipment.



Sec.  1108.330  Recipient.

    Recipient means an entity that receives an award directly from a DoD 
Component. The term does not include subrecipients.



Sec.  1108.335  Research.

    Research means basic, applied, and advanced research.



Sec.  1108.340  Simplified acquisition threshold.

    Simplified acquisition threshold means the dollar amount set by the 
Federal Acquisition Regulation at 48 CFR subpart 2.1, which is adjusted 
periodically for inflation in accordance with 41 U.S.C. 1908.



Sec.  1108.345  Small award.

    Small award means a DoD grant or cooperative agreement or a subaward 
with a total value over the life of the award that does not exceed the 
simplified acquisition threshold.



Sec.  1108.350  State.

    State, for purposes of applying the administrative requirements in 
these regulations, means any State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, 
Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, 
and any agency or instrumentality thereof exclusive of local 
governments.



Sec.  1108.355  Subaward.

    Subaward means a legal instrument by which a recipient or 
subrecipient at any tier transfers--for performance by an entity at the 
next lower tier--a portion of the substantive program for which the DoD 
Component made an award.



Sec.  1108.360  Subrecipient.

    Subrecipient means an entity that receives a subaward.

[[Page 395]]



Sec.  1108.365  Supplies.

    Supplies means all tangible personal property, including computing 
devices, acquired under an award that does not meet the definition of 
equipment in this subpart.



Sec.  1108.370  Suspension.

    Suspension means either:
    (a) When used in the context of a specific award or subaward, the 
temporary withdrawal of authority for that recipient or subrecipient to 
obligate funds under the award or subaward, pending its taking 
corrective action or a decision to terminate the award or subaward.
    (b) When used in the context of an entity, an action by a DoD 
Component's suspending official under 2 CFR part 1125, DoD's regulation 
implementing OMB guidance on nonprocurement debarment and suspension in 
2 CFR part 180, to immediately exclude the entity from participating in 
covered Federal Government transactions, pending completion of an 
investigation and any legal or debarment proceedings that ensue.



Sec.  1108.375  Technology investment agreement.

    Technology investment agreement means one of a special class of 
assistance instruments used to increase involvement of commercial firms 
in defense research programs and for other purposes related to 
integration of 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 assistance transaction other 
than a grant or cooperative agreement. Technology investment agreements 
are subject to, and described more fully in, 32 CFR part 37.



Sec.  1108.380  Termination.

    Termination means the ending of an award or subaward, in whole or in 
part, at any time prior to the planned end of period of performance.



Sec.  1108.385  Third-party in-kind contribution.

    Third-party in-kind contribution means the value of a non-cash 
contribution (i.e., property or services) that:
    (a) A non-Federal third party contributes, without charge, either to 
a recipient or subrecipient at any tier under a DoD Component's award; 
and
    (b) Is identified and included in the approved budget of the DoD 
Component's award, as a contribution being used toward meeting the 
award's cost-sharing or matching requirement (which includes voluntary 
committed, but not voluntary uncommitted, contributions).



Sec.  1108.390  Total value.

    Total value of a DoD grant, cooperative agreement, or TIA means the 
total amount of costs that are currently expected to be charged to the 
award over its life, which includes amounts for:
    (a) The Federal share and any non-Federal cost sharing or matching 
required under the award; and
    (b) Any options, even if not yet exercised, for which the costs have 
been established in the award.



Sec.  1108.395  Unique entity identifier.

    Unique entity identifier means the identifier required for System 
for Award Management registration to uniquely identify entities with 
which the Federal Government does business (currently the Dun and 
Bradstreet Data Universal Numbering System, or DUNS, number).



Sec.  1108.400  Unobligated balance.

    Unobligated balance means the amount of funds under an award or 
subaward that the recipient or subrecipient has not obligated. The 
amount is computed by subtracting the cumulative amount of the 
recipient's or subrecipient's unliquidated obligations and expenditures 
of funds from the cumulative amount of funds that it was authorized to 
obligate under the award or subaward.



Sec.  1108.405  Voluntary (committed or uncommitted) cost sharing.

    (a) Voluntary cost sharing means cost sharing that an entity pledges 
voluntarily in its application (i.e., not due to

[[Page 396]]

a stated cost-sharing requirement in the notice of funding opportunity 
to which the entity's application responds).
    (b) Voluntary committed cost sharing means voluntary cost sharing 
that a DoD Component accepts through inclusion in the approved budget 
for the project or program and as a binding requirement of the terms and 
conditions of the award made to the entity in response to its 
application.
    (c) Voluntary uncommitted cost sharing means voluntary cost sharing 
that does not meet the criteria in paragraph (b) of this section.



Sec.  1108.410  Working capital advance.

    Working capital advance means a payment method under which funds are 
advanced to a recipient or subrecipient to cover its estimated 
disbursement needs for a given initial period, after which the DoD 
component making the award makes payment to the recipient or 
subrecipient by way of reimbursement.



Sec. Appendix A to Part 1108--Background on Assistance, Acquisition, and 
                  Terms for Types of Legal Instruments

                       I. Purpose of This Appendix

    This appendix provides background intended to clarify some terms:
    A. That are used in this chapter to describe either types of legal 
instruments that DoD Components, recipients, and subrecipients issue, or 
the purposes for which those types of instruments are used; and
    B. For which this part provides definitions that vary depending on 
the context within which the terms are used.

         II. Why Definitions of Some Terms Are Context-Dependent

    A. The DoDGARs contain both:
    1. Direction to DoD Components concerning their award of grants and 
cooperative agreements at the prime tier; and
    2. Terms and conditions that DoD Components include in their grants 
and cooperative agreements to specify the Government's and recipients' 
rights and responsibilities, including post-award requirements with 
which recipients' actions must comply.
    B. In some cases, the same defined term or two closely related terms 
are used in relation to both DoD Component actions at the prime tier and 
recipient or subrecipient actions at lower tiers under DoD Components' 
awards. But a given defined term may have meanings that differ at the 
two tiers. For example, in part because the Federal Grant and 
Cooperative Agreement Act applies to DoD Component actions at the prime 
tier but not to recipient or subrecipient actions at lower tiers (see 
sections III and IV of this appendix):
    1. The terms ``acquire'' and ``acquisition'' do not have precisely 
the same meaning in conjunction with actions at the prime and lower 
tiers.
    2. The meaning of the term ``procurement contract'' used to describe 
DoD Component prime-tier actions is not precisely the same as the 
meaning of ``procurement transaction'' or ``contract'' used to describe 
recipient or subrecipient actions at lower tiers.

   III. Background: Distinguishing Prime-Tier Relationships and Legal 
                               Instruments

    A. The Federal Grant and Cooperative Agreement Act (31 U.S.C. 
chapter 63) specifies that the type of legal instrument a DoD Component 
is to use is based on the nature of the relationship between the DoD 
Component and the recipient.
    B. Specifically, except where another statute authorizes DoD to do 
otherwise, 31 U.S.C. chapter 63 specifies use of:
    1. A procurement contract as the legal instrument reflecting a 
relationship between a DoD Component and a recipient when the principal 
purpose of the relationship is to acquire property or services for the 
direct benefit or use of the Federal Government.
    2. A grant or cooperative agreement as the legal instrument 
reflecting a relationship between those two parties when the principal 
purpose of the relationship is to transfer a thing of value to the 
recipient to carry out a public purpose of support or stimulation 
authorized by Federal statute.
    C. The terms ``acquisition'' and ``assistance'' are defined in this 
part to correspond to the principal purposes described in paragraphs 
III.B.1 and 2 of this section, respectively. Using those terms, 
paragraphs III.B.1 and B.2 may be restated to say that grants and 
cooperative agreements are assistance instruments that DoD Components 
use, as distinct from procurement contracts they use for acquisition.

 IV. Background: Distinguishing Types of Recipients' and Subrecipients' 
                               Instruments

    A. While the Federal Grant and Cooperative Agreement Act applies to 
Federal agencies, it does not govern types of instruments that 
recipients and subrecipients of any tier use. That statute does not 
require a recipient or subrecipient to:
    1. Consider any instrument it makes at a lower tier under a Federal 
assistance award to be a grant or cooperative agreement.

[[Page 397]]

Therefore, at its option, a recipient or subrecipient may consider all 
of its lower-tier instruments to be ``contracts.''
    2. Associate an ``assistance'' relationship, as that term is defined 
in this part and used in this chapter, with any lower-tier transaction 
that it makes.
    B. However, the DoDGARs in this chapter do distinguish between two 
classes of lower-tier transactions that recipients and subrecipients 
make: Subawards and procurement transactions. The distinction promotes 
uniformity in requirements for lower-tier transactions under DoD grants 
and cooperative agreements. It is based on a long-standing distinction 
in OMB guidance to Federal agencies, currently at 2 CFR part 200, which 
DoD implements in this chapter.
    C. The distinction between a subaward and procurement transaction is 
based on the primary purpose of that transaction.
    1. The transaction is a subaward if a recipient or subrecipient 
enters into it with another entity at the next lower tier in order to 
transfer--for performance by that lower-tier entity--a portion of the 
substantive program for which the DoD grant or cooperative agreement 
provided financial assistance to the recipient. Because the Federal 
Grant and Cooperative Agreement Act does not apply to the recipient or 
subrecipient, it may make a subaward as defined in this part using an 
instrument that it considers a contract.
    2. The transaction is a procurement transaction if the recipient or 
subrecipient enters into it in order to purchase goods or services from 
the lower-tier entity that the recipient or subrecipient needs to 
perform its portion of the substantive program supported by the DoD 
award.

                          PART 1109 [RESERVED]



                         SUBCHAPTER B [RESERVED]



                       PARTS 1110	1119 [RESERVED]

[[Page 398]]



 SUBCHAPTER C_AWARD FORMAT AND NATIONAL POLICY TERMS AND CONDITIONS FOR 
                  ALL GRANTS AND COOPERATIVE AGREEMENTS





PART 1120_AWARD FORMAT FOR DOD GRANTS AND COOPERATIVE AGREEMENTS-
-Table of Contents



Sec.
1120.1 Purpose of this part.
1120.2 Applicability of this part.
1120.3 DoD Component implementation.
1120.4 Elements and subelements of the standard award format in relation 
          to the organization of this part.

                       Subpart A_Award Cover Pages

1120.100 Purpose of the award cover pages.
1120.105 Content of the award cover pages.
1120.110 Use of alternative to DoD form.

              Subpart B_Award-Specific Terms and Conditions

1120.200 Purpose and inclusion of award-specific terms and conditions.
1120.205 Organization and wording of award-specific terms and 
          conditions.

                 Subpart C_General Terms and Conditions

1120.300 Purpose of general terms and conditions.
1120.305 Requirement for general terms and conditions.
1120.310 Use of plain language.
1120.315 Availability of general terms and conditions.

         Subpart D_Preamble to the General Terms and Conditions

1120.400 Requirement to include a preamble.
1120.405 Content of the preamble.

 Subpart E_Administrative Requirements Portion of the General Terms and 
                               Conditions

1120.500 Scope of administrative requirements.
1120.505 Location of administrative requirements in the standard award 
          format.
1120.510 Sources of administrative requirements.
1120.515 Incorporation of administrative requirements into general terms 
          and conditions by reference.

Subpart F_National Policy Requirements Portion of the General Terms and 
                               Conditions

1120.600 Scope of national policy requirements.
1120.605 Location of national policy requirements in the standard award 
          format.
1120.610 Source of national policy requirements.
1120.615 Incorporation of national policy requirements into general 
          terms and conditions by reference.

  Subpart G_Programmatic Requirements Portion of the General Terms and 
                               Conditions

1120.700 Scope of programmatic requirements.
1120.705 Location of programmatic requirements in the standard award 
          format.
1120.710 Examples of programmatic requirements.

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51163, Aug. 19, 2020, unless otherwise noted.



Sec.  1120.1  Purpose of this part.

    This part of the DoD Grant and Agreement Regulations (DoDGARs) 
establishes a standard award format for DoD Components' grants and 
cooperative agreements. It thereby makes the content easier for a 
recipient to locate in different DoD Components' awards.



Sec.  1120.2  Applicability of this part.

    (a) To whom it applies. This part:
    (1) Sets forth requirements for DoD Components that award grants and 
cooperative agreements.
    (2) Does not impose requirements on recipients of DoD Components' 
awards.
    (b) To what awards it applies. This part applies to grants and 
cooperative agreements, other than technology investment agreements 
(TIAs), awarded to any type of recipient entity.

[[Page 399]]



Sec.  1120.3  DoD Component implementation.

    Each DoD Component that awards grants or cooperative agreements 
must:
    (a) Conform the format of its awards to the standard format 
established by this part no later than [18 months after the effective 
date of the final rule].
    (b) Update electronic systems it maintains for generating awards 
within 18 months of the issuance of a new or updated DoD form for the 
award cover pages, in order to implement that form in those systems, 
unless it has an approved deviation in accordance with Sec.  1120.110.



Sec.  1120.4  Elements and subelements of the standard award format
in relation to the organization of this part.

    (a) The standard award format has three major elements that are 
designated as Divisions I through III of the award.
    (1) The first major element of the standard award format is 
comprised of the award cover pages. It is designated as Division I of 
the award.
    (2) The second major element is comprised of any award-specific 
terms and conditions. That element is designated as Division II of the 
award.
    (3) The last of the three major elements of the standard award 
format is comprised of the general terms and conditions. That element is 
designated as Division III of the award. It has four subelements that 
are designated as Subdivisions A through D of the general terms and 
conditions.
    (i) The first subelement of the general terms and conditions is the 
preamble, which is designated as Subdivision A.
    (ii) The second subelement of the general terms and conditions is 
comprised of terms and conditions addressing administrative 
requirements. That subelement is designated as Subdivision B of the 
general terms and conditions.
    (iii) The third subelement of the general terms and conditions is 
comprised of terms and conditions addressing national policy 
requirements. That subelement is designated as Subdivision C of the 
general terms and conditions.
    (iv) The last of the four subelements of the general terms and 
conditions is comprised of any programmatic requirements that apply to 
awards using those general terms and conditions. That subelement is 
designated as Subdivision D of the general terms and conditions.
    (b) This part has seven subparts. Each subpart addresses one major 
element or subelement of the standard award format, as shown in Table 1:

                        Table 1 to Paragraph (b)
------------------------------------------------------------------------
    Major element or subelement of the
           standard award format                Subpart of this part
------------------------------------------------------------------------
(1) Division I--Award cover pages.........  Subpart A.
(2) Division II--Award-specific terms and   Subpart B.
 conditions, if any.
(3) Division III--General terms and         Subpart C.
 conditions, comprised of four
 subelements:.
(i) Subdivision A--The preamble to the      Subpart D.
 general terms and conditions.
(ii) Subdivision B--General terms and       Subpart E.
 conditions for administrative
 requirements.
(iii) Subdivision C of the--General terms   Subpart F.
 and conditions for national policy
 requirements.
(iv) Subdivision D--General terms and       Subpart G.
 conditions for programmatic requirements,
 if any.
------------------------------------------------------------------------



                       Subpart A_Award Cover Pages



Sec.  1120.100  Purpose of the award cover pages.

    The award cover pages comprise the portion of each DoD Component 
award of a grant or cooperative agreement or modification to an award 
that the DoD Component transmits to the recipient when it makes the 
award or modification. It:
    (a) Contains basic information about the award or modification and 
the recipient, as described in Sec.  1120.105;
    (b) Is signed by a DoD grants officer; and
    (c) Also is signed by the recipient's authorized organizational 
representative if the award or modification is a bilateral action that 
is to be signed on behalf of both the DoD Component and recipient.

[[Page 400]]



Sec.  1120.105  Content of the award cover pages.

    The award cover pages of each DoD Component grant or cooperative 
agreement or modification:
    (a) Must include, as a minimum, the following information about the 
award or modification:
    (1) The name of the DoD Component awarding office that made the 
award or modification.
    (2) The award number (Federal Award Identification Number or FAIN) 
and, if the action is a modification, the modification number.
    (3) The type of award--i.e., grant or cooperative agreement.
    (4) The type of award action--e.g., new award, funding modification, 
or administrative (non-funding) modification. For an administrative 
modification, the award cover pages should include a brief description 
of the purpose of the modification (e.g., a no-cost extension of the end 
date of the period of performance).
    (5) For a new award or funding modification:
    (i) A brief description of the project or program supported by the 
award.
    (ii) The amount of the obligation or deobligation of Federal funds 
due to the current action and any accompanying change in the total 
amount of cost sharing or matching required under the award.
    (iii) The cumulative amounts of Federal funds and any corresponding 
non-Federal share obligated to date (i.e., the sums of the amounts of 
the current action and the cumulative amounts of prior obligations and 
deobligations).
    (iv) The total amount of the project costs in the currently approved 
budget through the end of the period of performance, the Federal share 
of that amount, and the non-Federal share even if that share is 
``zero.''
    (v) The total value of the award; the Federal share of that total 
value (which includes Federal funding obligated to date; future 
incremental funding actions; and options for which amounts have been 
predetermined, whether or not they have been exercised yet); and the 
non-Federal share of that total value (i.e., total cost sharing or 
matching required under the award).
    (vi) A table such as the following may be helpful in clearly 
presenting the information described in paragraphs (a)(5)(ii) through 
(vi) of this section:

----------------------------------------------------------------------------------------------------------------
                                                                                   Corresponding
                                                                   Federal funds    non-Federal    Total amount
                                                                                       share
----------------------------------------------------------------------------------------------------------------
(A) Obligated or deobligated this action........................  ..............
(B) Cumulative obligations to date, including this and previous   ..............
 actions........................................................
(C) Planned project costs in the currently approved budget        ..............
 through the end of the period of performance, to include any
 future incremental funding obligations.........................
(D) Total value, which includes any unexercised options for       ..............  ..............  ..............
 which amounts were established in the award....................
----------------------------------------------------------------------------------------------------------------

    (6) The obligation date (i.e., the date of the grants officer's 
signature) and, if different, the effective date.
    (7) The start date and current end date of the period of 
performance.
    (8) The statutory authority or authorities under which the award or 
modification was made.
    (9) The number and title of the program listed in the Catalog of 
Federal Domestic Assistance under which the award or modification was 
made.
    (10) For a new award (or, as needed, in a modification that amends 
any of the following information):
    (i) Whether the project or program under the award is research and 
development (R&D). This information is needed by auditors performing 
single audits of recipients because the OMB guidance to the auditors 
treats all Federal agencies' R&D programs as a single group (or 
``cluster'') of programs for audit sampling purposes (see the Single 
Audit Act requirements implemented in subpart E of 2 CFR part 1128 and 
FMS Article V in appendix E to part 1128).
    (ii) What the award includes in addition to the cover pages--i.e., 
the:

[[Page 401]]

    (A) Scope of work or other appropriate content to specify the goals 
and objectives of the project or program supported by the award;
    (B) Approved budget; and
    (C) General, and any award specific, terms and conditions of the 
award.
    (iii) Where the portions of the award listed in paragraph 
(a)(10)(ii) of this section are located, which content the DoD Component 
generally should incorporate into the award by reference. When 
incorporating that content into the award by reference, the DoD 
Component must both:
    (A) Indicate in the award cover pages that the award incorporates 
those items into the award by reference, thereby making them an integral 
part of the award; and
    (B) Specify their location (see Sec.  1120.315), rather than 
transmit them in their entirety with each award.
    (iv) The order of precedence in the event of conflict among the 
general and any award-specific terms and conditions and other potential 
sources of requirements (e.g., Federal statutes).
    (v) The name of, and contact information for, the individual or 
office in the DoD responsible for post-award administration of the 
award. If there are multiple individuals and offices for different post-
award functions (e.g., payments and property administration), the award 
cover pages should provide information about each.
    (vi) The name of, and contact information for, the DoD Component's 
program manager or other point of contact for programmatic matters.
    (b) Must include, as a minimum, the following information about the 
recipient entity:
    (1) The recipient's unique entity identifier required for its 
registration in the System for Award Management (SAM). Currently, that 
is the Dun and Bradstreet Data Universal Numbering System (DUNS) number.
    (2) The recipient's business name and address, which must be the 
legal business or ``doing business as'' name and physical address in SAM 
at the time of award corresponding to the recipient's unique entity 
identifier.
    (3) The name and title of the recipient's authorized representative, 
either the individual who signed the application or proposal on behalf 
of the recipient entity or another individual designated by that entity.
    (4) The name of the recipient's Project or Program Director (PD) or 
Principal Investigator (PI) and his or her organization, if different 
from the name of the recipient organization. If there are multiple PDs 
or co-PIs, the name and organization of each should be included.
    (5) The indirect cost rate in effect at the start of the performance 
period for the award, which generally is a Governmentwide rate 
negotiated by the recipient's cognizant agency for indirect costs. 
However, this requirement does not apply--i.e., the award cover pages 
need not include the recipient's indirect cost rate--if the recipient 
entity affirms that it treats its indirect cost rate as proprietary 
information.
    (c) May also include, as applicable, elements such as:
    (1) A statement that the award can be amended only by a grants 
officer. The statement might also explain how amendments are issued.
    (2) Information about any planned, future incremental funding or 
options for which amounts were pre-determined.



Sec.  1120.110  Use of alternative to DoD form.

    (a) A DoD Component may use something other than a DoD form as its 
award cover pages only if:
    (1) There is not currently any DoD form for the award cover pages; 
or
    (2) The DoD Component obtains approval for a deviation from the 
requirement to use a DoD form from the Office of the Assistant Secretary 
of Defense for Research and Engineering, in accordance with the 
procedures specified in 32 CFR 21.340.
    (b) If a DoD Component does not use a DoD form for its award cover 
pages, as described in paragraph (a) of this section, its award cover 
pages must include all information specified in Sec.  1120.105.

[[Page 402]]



              Subpart B_Award-specific Terms and Conditions



Sec.  1120.200  Purpose and inclusion of award-specific terms and 
conditions.

    A DoD Component must include with each award, for transmission to 
the recipient, any terms and conditions needed to communicate 
requirements specific to the individual award as distinct from the more 
broadly applicable requirements in the general terms and conditions. For 
a modification to an award, only changes to previously transmitted terms 
and conditions must be included.



Sec.  1120.205  Organization and wording of award-specific terms and
conditions.

    DoD Components should organize and word award-specific terms and 
conditions to make them as clear and easy to understand as possible for 
the benefit of recipients, award administrators, auditors, and others 
who may need to use them. The DoDGARs specify neither a standard 
organization nor standard wording for award-specific terms and 
conditions.



                 Subpart C_General Terms and Conditions



Sec.  1120.300  Purpose of general terms and conditions.

    The general terms and conditions comprise the portion of the award 
with requirements that apply to a class of awards (e.g., awards under a 
particular program or type of program activity, such as research or 
education, or for a class of recipients, such as for-profit entities).



Sec.  1120.305  Requirement for general terms and conditions.

    Each DoD Component must establish at least one set of general terms 
and conditions. A DoD Component may have more than one set, as it deems 
appropriate to reflect differences in its award terms and conditions 
across different programs, classes of recipients, or types of activity.



Sec.  1120.310  Use of plain language.

    (a) DoD Components must use plain language in:
    (1) General terms and conditions of grants and cooperative 
agreements to institutions of higher education, nonprofit organizations, 
States, local governments, and Indian tribes. Those awards are subject 
to the DoDGARs provisions in:
    (i) 2 CFR parts 1128 through 1138, the appendices to which provide 
standard wording for general terms and conditions addressing 
administrative requirements. That standard wording uses personal 
pronouns.
    (ii) 2 CFR part 1122, the appendices to which provide standard 
wording for general terms and conditions addressing commonly applicable 
national policy requirements. That standard wording also uses personal 
pronouns.
    (2) The national policy requirements in Subdivision B of general 
terms and conditions of grants and cooperative agreements to for-profit 
entities, which also are subject to 2 CFR part 1122.
    (b) Although the DoDGARs currently do not provide standard wording 
for terms and conditions addressing administrative requirements for use 
in awards to for-profit entities, DoD Components are strongly encouraged 
to use plain language and personal pronouns in their terms and 
conditions of those other awards. The DoDGARs provisions that specify 
the administrative requirements to incorporate into those terms and 
conditions are listed in Sec.  1120.510(b).



Sec.  1120.315  Availability of general terms and conditions.

    (a) A DoD Component that issues a funding opportunity announcement 
under which grants or cooperative agreements may be awarded must 
maintain on the internet the general terms and conditions for those 
awards if:
    (1) The distribution of the funding opportunity announcement is 
unlimited; and
    (2) The DoD Component anticipates making 10 or more awards per year 
using those general terms and conditions.

[[Page 403]]

    (b) Each DoD Component that maintains a set of general terms and 
conditions on the internet must also maintain an archive of previous 
versions of that set at the same internet location, for use by 
recipients, post-award administrators, auditors, and others. Each 
version must be labeled with its effective dates.
    (c) If a DoD Component has a set of general terms and conditions 
that is not subject to the requirement in paragraph (a) of this section 
and the DoD Component chooses not to maintain that set on the internet:
    (1) It must tell potential applicants or proposers in the funding 
opportunity announcement, if there is one, how they may view or obtain a 
copy of the general terms and conditions; or
    (2) If there is no funding opportunity announcement (e.g., if it is 
a noncompetitive program for which all recipients are known in advance), 
the DoD Component must provide the general terms and conditions to each 
recipient no later than the time of award.



         Subpart D_Preamble to the General Terms and Conditions



Sec.  1120.400  Requirement to include a preamble.

    Each DoD Component must include a preamble as Subdivision A of each 
set of general terms and conditions it maintains, to provide information 
to help recipients understand how to use those terms and conditions.



Sec.  1120.405  Content of the preamble.

    The preamble for each set of general terms and conditions must 
include at least the following information elements, organized in the 
order shown:
    (a) Table of contents. This should show the articles within each 
other subdivision of the general terms and conditions (Subdivisions B 
and C for administrative and national policy requirements and, if 
needed, Subdivision D for programmatic requirements).
    (b) Scope. This element identifies the programs, types of awards, 
and types of recipient entities that are subject to the set of general 
terms and conditions.
    (c) Effective date. This is the date on which the particular version 
of the set of general terms and conditions became effective, which 
enables a recipient to easily distinguish it from any earlier or 
subsequent versions. The version date of each article within the general 
terms and conditions must be indicated in parentheses following the 
title of the article, to help a recipient identify the articles that 
changed from previous versions of the general terms and conditions.
    (d) English language. The purpose of this element of the preamble is 
to implement OMB guidance in 2 CFR 200.111(b) by informing each 
recipient that:
    (1) It must translate any of the award content (including 
attachments to it and any material incorporated into the award by 
reference) into another language to the extent that the recipient's 
compliance with the award's terms and conditions depends upon a 
significant number of its employees who are not fluent in English being 
able to read and comprehend that content.
    (2) If it does translate any award content into another language, 
either as required by paragraph (d)(1) of this section or at its own 
initiative, the original award content in the English language will take 
precedence in the event of an inconsistency between the award 
requirements in the English and translated versions.
    (e) Plain language. This section of the preamble is required when 
the general terms and conditions use personal pronouns, in accordance 
with Sec.  1120.310. Its purpose is to inform recipients about the 
meanings of those personal pronouns.
    (f) Definitions. Providing the definitions of words and phrases that 
are used in the general terms and conditions and defined in the DoDGARs 
is more helpful to recipients than referring them to the DoDGARs to find 
the definitions.

[[Page 404]]



 Subpart E_Administrative Requirements Portion of the General Terms and 
                               Conditions



Sec.  1120.500  Scope of administrative requirements.

    The administrative requirements in an award are post-award and 
after-the-award requirements for recipients in the following subject 
matter areas:
    (a) Financial and program management, to include financial 
management system standards, payment, allowable costs, program and 
budget revisions, audits, cost sharing or matching, and program income.
    (b) Property administration, to include title vesting, property 
management system standards, and use and disposition of tangible and 
intangible property.
    (c) Recipient procurement procedures.
    (d) Financial, programmatic, property, and other reporting.
    (e) Records retention and access, remedies, claims and disputes, and 
closeout.



Sec.  1120.505  Location of administrative requirements in the standard
award format.

    As shown in the table in Sec.  1120.4(b), the standard award format 
includes administrative requirements as Subdivision B of the general 
terms and conditions.



Sec.  1120.510  Sources of administrative requirements.

    The source of administrative requirements is:
    (a) Subchapter D of this chapter for cost-type grant and cooperative 
agreement awards to institutions of higher education, nonprofit 
organizations, States, local governments, and Indian tribes. Subchapter 
D provides a standard set of articles into which a DoD Component 
organizes the administrative requirements. It also provides standard 
wording for the general terms and conditions in those articles, as 
explained in the overview of subchapter D in 2 CFR part 1126.
    (b) 32 CFR part 34 for grant and cooperative agreement awards to 
for-profit entities. That part of the DoDGARs specifies the 
administrative requirements for awards to those entities but does not 
provide standard articles or terms and conditions.



Sec.  1120.515  Incorporation of administrative requirements into 
general terms and conditions by reference.

    (a) For cost-type awards to institutions of higher education, 
nonprofit organizations, States, local governments, and Indian tribes, 
DoD Components are strongly encouraged to construct the portion of their 
general terms and conditions addressing administrative requirements by:
    (1) Incorporating the standard wording of each article of 
administrative requirements provided in subchapter D of this chapter 
(the standard wording of the articles is in the appendices to 2 CFR 
parts 1128 through 1138) into those general terms and conditions by 
reference; and
    (2) Stating any variations from that standard wording (e.g., any 
sections or paragraphs that the DoD Component adds, revises, or omits, 
consistent with the DoDGARs prescription for use of the standard 
wording).
    (b) Incorporating that standard wording into general terms and 
conditions by reference, rather than including the full text of each 
article of the general terms and conditions, will make it easier for 
those who must use terms and conditions of multiple DoD Components' 
awards (e.g., recipients, DoD Components' post-award administrators, and 
auditors) to quickly identify how each Component's general terms and 
conditions differ from the DoD standard wording.



Subpart F_National Policy Requirements Portion of the General Terms and 
                               Conditions



Sec.  1120.600  Scope of national policy requirements.

    National policy requirements, as defined in 2 CFR 1122.2, are 
requirements:
    (a) That are prescribed by a statute, Executive order, policy 
guidance issued by the Executive Office of the President, or regulation 
that specifically

[[Page 405]]

refer to grants, cooperative agreements, or financial assistance in 
general;
    (b) With which a recipient of a grant or cooperative agreement must 
comply during the period of performance; and
    (c) That are outside subject matter areas covered by administrative 
requirements, as described in Sec.  1120.500.



Sec.  1120.605  Location of national policy requirements in the standard
award format.

    As shown in the table in Sec.  1120.4(b), the standard award format 
includes national policy requirements as Subdivision C of the general 
terms and conditions.



Sec.  1120.610  Source of national policy requirements.

    The source of national policy requirements to be included in a grant 
or cooperative agreement is 2 CFR part 1122.



Sec.  1120.615  Incorporation of national policy requirements into 
general terms and conditions by reference.

    For the same reason given in Sec.  1120.515(b), DoD Components are 
strongly encouraged to construct the portion of their general terms and 
conditions addressing national policy requirements for awards to all 
types of recipient entities, including for-profit entities, by:
    (a) Incorporating the standard wording of each article of national 
policy requirements provided in the appendices to 2 CFR part 1122 into 
those general terms and conditions by reference; and
    (b) Stating any variations from that standard wording (e.g., any 
added, omitted, or revised paragraphs, based on which national policy 
requirements apply to programs and recipients for which the general 
terms and conditions are used).



  Subpart G_Programmatic Requirements Portion of the General Terms and 
                               Conditions



Sec.  1120.700  Scope of programmatic requirements.

    A requirement is most appropriately included in the programmatic 
requirements portion of the general terms and conditions if it:
    (a) Is not in one of the subject matter areas covered by the 
administrative requirements in Subdivision B of the general terms and 
conditions, as described in Sec.  1120.500.
    (b) Does not meet the criteria in Sec.  1120.600 for a national 
policy requirement.
    (c) Broadly applies to awards using the general terms and 
conditions. Requirements that apply to relatively few of those awards 
are more appropriately included in the award-specific terms and 
conditions of the individual awards to which they apply.
    (d) Is expected to be in effect for the foreseeable future, rather 
than for a limited period of time. For example, a requirement in an 
annual appropriations act that applies specifically to funding made 
available by that act is better addressed through the award-specific 
terms and conditions of awards or modifications to which it applies.



Sec.  1120.705  Location of programmatic requirements in the standard
award format.

    As shown in the table in Sec.  1120.4(b), the standard award format 
includes programmatic requirements as Subdivision D of the general terms 
and conditions.



Sec.  1120.710  Examples of programmatic requirements.

    Examples of provisions appropriately included as programmatic 
requirements in Subdivision D of the general terms and conditions 
include:
    (a) Requirements for recipients to acknowledge the DoD Component's 
support in publications of results of the projects or programs performed 
under awards.
    (b) Requirements for recipients to promptly alert the DoD Component 
if they develop any information in the course of performing the projects 
or programs under their awards that, in their judgment, might adversely 
affect national security if disclosed.
    (c) Reservation of the Government's right to use non-Federal 
personnel in any aspect of post-award administration of awards, with 
appropriate nondisclosure requirements placed on

[[Page 406]]

those personnel to protect sensitive information about recipients or the 
projects or programs supported by their awards.

                          PART 1121 [RESERVED]



PART 1122_NATIONAL POLICY REQUIREMENTS: GENERAL AWARD TERMS AND 
CONDITIONS--Table of Contents



Sec.

                            Subpart A_General

1122.1 Purpose of this part.
1122.2 Definition of ``national policy requirement.''
1122.3 Definitions of other terms as they are used in this part.

                     Subpart B_Terms and Conditions

1122.100 Purpose of this subpart.
1122.105 Where to find the terms and conditions.
1122.110 Organization of each article of national policy requirements.
1122.115 Cross-cutting national policy requirements.
1122.120 Other national policy requirements.
Appendix A Terms and condition for NP Article I, ``Nondiscrimination 
          National Policy Requirements.''
Appendix B Terms and condition for NP Article II, ``Environmental 
          National Policy Requirements.''
Appendix C Terms and conditions for NP Article III, ``National Policy 
          Requirements Concerning Live Organisms.''
Appendix D Terms and conditions for NP Article IV, ``Other National 
          Policy Requirements.''

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51225, Aug. 19, 2020, unless otherwise noted.



                            Subpart A_General



Sec.  1122.1  Purpose of this part.

    (a) This part specifies a standard format and standard wording of 
general terms and conditions for Subdivision B of the general terms and 
conditions of DoD grants and cooperative agreements, which concerns 
national policy requirements.
    (b) It thereby implements:
    (1) Office of Management and Budget (OMB) guidance in 2 CFR 
200.210(b)(ii) and 200.300, as those paragraphs of 2 CFR part 200 relate 
to national policy requirements for general terms and conditions of DoD 
grants and cooperative agreements to institutions of higher education 
and other nonprofit organizations, States, local governments, and Indian 
tribes.
    (2) National policy requirements, to the extent they apply, for 
general terms and conditions of DoD awards to for-profit firms, foreign 
organizations, and foreign public entities.



Sec.  1122.2  Definition of ``national policy requirement.''

    For the purposes of this chapter, a national policy requirement is a 
requirement:
    (a) That is prescribed by a statute, Executive order, policy 
guidance issued by the Executive Office of the President, or regulation 
that specifically refers to grants, cooperative agreements, or financial 
assistance in general;
    (b) With which a recipient of a grant or cooperative agreement must 
comply during the period of performance; and
    (c) That is outside subject matter areas covered by administrative 
requirements in subchapters D or E of this chapter.



Sec.  1122.3  Definition of other terms as they are used in this part.

    Because the meaning of some terms used in this part derive from 
their definitions in the statutes, Executive orders, or other sources of 
national policy requirements that this part implements, the meanings of 
those terms may vary from their meanings in other parts of the DoD Grant 
and Agreement Regulations. For example, some statutes define ``State'' 
in ways that differ from each other and from the definition provided in 
2 CFR part B. In each case, the definition in the source of the 
pertinent national policy requirement takes precedence over the 
definition in 2 CFR part B for the purposes of complying with that 
requirement.



                     Subpart B_Terms and Conditions



Sec.  1122.100  Purpose of this subpart.

    This subpart provides:
    (a) Direction to DoD Components on how to construct the four 
articles of

[[Page 407]]

national policy requirements for inclusion in the general terms and 
conditions of grants and cooperative agreements.
    (b) Standard wording for national policy requirements that are more 
commonly applicable to DoD Components' grants and cooperative 
agreements.



Sec.  1122.105  Where to find the terms and conditions.

    (a) Appendices A through D of this part provide standard wording of 
terms and conditions for the four articles of national policy 
requirements. The articles address the rights and responsibilities of 
the Government and the recipient related to those national policy 
requirements.
    (b) The following table shows which national policy terms and 
conditions may be found in each appendix to this part:

------------------------------------------------------------------------
                                  You will find terms
                                    and conditions         That would
                                specifying recipients'    appear in an
           In . . .                   rights and         award within NP
                                   responsibilities       Article . . .
                                   related to . . .
------------------------------------------------------------------------
Appendix A....................  Non-discrimination      I.
                                 national policy
                                 requirements.
Appendix B....................  Environmental national  II.
                                 policy requirements.
Appendix C....................  National policy         III.
                                 requirements
                                 concerning live
                                 organisms.
Appendix D....................  Other national policy   IV.
                                 requirements.
------------------------------------------------------------------------



Sec.  1122.110  Organization of each article of national policy requirements.

    Each of NP Articles I through IV includes two sections.
    (a) Section A of each article includes national policy requirements 
that are cross-cutting in that their applicability extends to many or 
all DoD awards. Appendices A through D to this part provide standard 
wording for each of those requirements.
    (b) Section B of each article is the location in the award for 
program-specific national policy requirements. Section B is reserved in 
the standard wording of the articles provided in appendices A through D 
to this part.



Sec.  1122.115  Cross-cutting national policy requirements.

    (a) General requirement to include applicable cross-cutting 
requirements. A DoD Component's general terms and conditions must 
include the standard wording provided in appendices A through D to this 
part for each national policy requirement addressed in Section A of NP 
Articles I, II, III, and IV, respectively, that may apply either to:
    (1) A recipient of an award using those general terms and 
conditions; or
    (2) A subrecipient of a subaward under an award using those general 
terms and conditions.
    (b) Authority to reserve or omit inapplicable paragraphs. A DoD 
Component may reserve or omit any paragraph appendices A through D to 
this part provide for Section A of NP Articles I, II, III, and IV of its 
general terms and conditions if it determines that the national policy 
requirement addressed in that paragraph will not apply to any awards 
using those terms and conditions nor to any subawards under them.
    (c) Authority to use alternate wording. (1) A DoD Component may use 
different wording for a national policy requirement than is provided in 
appendices A through D to this part if it is authorized or required to 
do so by a statute or a regulation published in the Code of Federal 
Regulations after opportunity for public comment.
    (2) A DoD Component in that case:
    (i) Must include the wording required by the statute or regulation 
in Section B of the appropriate article. This will help a recipient 
recognize the wording as a variation of the usual DoD wording for the 
requirement.
    (ii) May either reserve the paragraph of Section A of the article in 
which that national policy requirement otherwise would appear or insert 
in that paragraph wording to refer the recipient to the paragraph in 
Section B of the article in which the requirement does appear.

[[Page 408]]



Sec.  1122.120  Other national policy requirements.

    If a DoD Component determines that awards using its general terms 
and conditions, or subawards under them, are subject to a national 
policy requirement that is not addressed in the standard wording 
appendices A through D to this part provide for cross-cutting 
requirements, the DoD Component must include the requirement in its 
general terms and conditions. It should add the requirement in Section B 
of NP Article I, II, III, or IV, as most appropriate to the subject 
matter of the requirement.



  Sec. Appendix A to Part 1122--Terms and Conditions for NP Article I, 
           ``Nondiscrimination National Policy Requirements''

    A DoD Component must use the following wording for NP Article I of 
its general terms and conditions in accordance with the provisions of 
Subpart B of this part.

NP Article I. Nondiscrimination national policy requirements. (December 
                                  2014)

    Section A. Cross-cutting nondiscrimination requirements. By signing 
this award or accepting funds under this award, you assure that you will 
comply with applicable provisions of the national policies prohibiting 
discrimination:
    1. On the basis of race, color, or national origin, in Title VI of 
the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), as implemented 
by Department of Defense (DoD) regulations at 32 CFR part 195.
    2. On the basis of gender, blindness, or visual impairment, in Title 
IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.), as 
implemented by DoD regulations at 32 CFR part 196.
    3. On the basis of age, in the Age Discrimination Act of 1975 (42 
U.S.C. 6101 et seq.), as implemented by Department of Health and Human 
Services regulations at 45 CFR part 90.
    4. On the basis of disability, in the Rehabilitation Act of 1973 (29 
U.S.C. 794), as implemented by Department of Justice regulations at 28 
CFR part 41 and DoD regulations at 32 CFR part 56.
    5. On the basis of disability in the Architectural Barriers Act of 
1968 (42 U.S.C. 4151 et seq.) related to physically handicapped persons' 
ready access to, and use of, buildings and facilities for which Federal 
funds are used in design, construction, or alteration.
    Section B. [Reserved]



 Sec. Appendix B to Part 1122--Terms and Conditions for NP Article II, 
             ``Environmental National Policy Requirements''

    A DoD Component must use the following wording for NP Article II of 
its general terms and conditions in accordance with the provisions of 
Subpart B of this part.

  NP Article II. Environmental national policy requirements. (December 
                                  2014)

    Section A. Cross-cutting environmental requirements. You must:
    1. You must comply with all applicable Federal environmental laws 
and regulations. The laws and regulations identified in this section are 
not intended to be a complete list.
    2. Comply with applicable provisions of the Clean Air Act (42 U.S.C. 
7401, et seq.) and Clean Water Act (33 U.S.C. 1251, et seq.).
    3. Comply with applicable provisions of the Lead-Based Paint 
Poisoning Prevention Act (42 U.S.C. 4821-4846), as implemented by the 
Department of Housing and Urban Development at 24 CFR part 35. The 
requirements concern lead-based paint in buildings owned by the Federal 
Government or housing receiving Federal assistance.
    4. Immediately identify to us, as the Federal awarding agency, any 
potential impact that you find this award may have on:
    a. The quality of the ``human environment'', as defined in 40 CFR 
1508.14, including wetlands; and provide any help we may need to comply 
with the National Environmental Policy Act (NEPA, at 42 U.S.C. 4321 et 
seq.), the regulations at 40 CFR 1500-1508, and E.O. 12114, if 
applicable; and assist us to prepare Environmental Impact Statements or 
other environmental documentation. In such cases, you may take no action 
that will have an environmental impact (e.g., physical disturbance of a 
site such as breaking of ground) or limit the choice of reasonable 
alternatives to the proposed action until we provide written 
notification of Federal compliance with NEPA or E.O. 12114.
    b. Flood-prone areas and provide any help we may need to comply with 
the National Flood Insurance Act of 1968, as amended by the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4001 et seq.), which require 
flood insurance, when available, for federally assisted construction or 
acquisition in flood-prone areas.
    c. A land or water use or natural resource of a coastal zone that is 
part of a federally approved State coastal zone management plan and 
provide any help we may need to comply with the Coastal Zone Management 
Act of 1972 (16 U.S.C. 1451, et seq.) including preparation of a Federal 
agency Coastal Consistency Determination.

[[Page 409]]

    d. Coastal barriers along the Atlantic and Gulf coasts and Great 
Lakes' shores and provide help we may need to comply with the Coastal 
Barrier Resources Act (16 U.S.C. 3501 et seq.), concerning preservation 
of barrier resources.
    e. Any existing or proposed component of the National Wild and 
Scenic Rivers system and provide any help we may need to comply with the 
Wild and Scenic Rivers Act of 1968 (16 U.S.C. 1271 et seq.).
    f. Underground sources of drinking water in areas that have an 
aquifer that is the sole or principal drinking water source and in 
wellhead protection areas, and provide any help we may need to comply 
with the Safe Drinking Water Act (42 U.S.C. 300f et seq.).
    5. You must comply fully with the Endangered Species Act of 1973, as 
amended (ESA, at 16 U.S.C. 1531 et seq.), and implementing regulations 
of the Departments of the Interior (50 CFR parts 10-24) and Commerce (50 
CFR parts 217-227). You also must provide any help we may need in 
complying with the consultation requirements of ESA section 7 (16 U.S.C. 
1536) applicable to Federal agencies or any regulatory authorization we 
may need based on the award of this grant. This is not in lieu of 
responsibilities you have to comply with provisions of the Act that 
apply directly to you as a U.S. entity, independent of receiving this 
award.
    6. You must fully comply with the Marine Mammal Protection Act of 
1972, as amended (MMPA, at 16 U.S.C. 1361 et seq.) and provide any 
assistance we may need in obtaining any required MMPA permit based on an 
award of this grant.
    Section B. [Reserved]



 Sec. Appendix C to Part 1122--Terms and Conditions for NP Article III, 
       ``National Policy Requirements Concerning Live Organisms''

    A DoD Component must use the following wording for NP Article III of 
its general terms and conditions in accordance with the provisions of 
Subpart B of this part.

NP Article III. National policy requirements concerning live organisms. 
                             (December 2014)

    Section A. Cross-cutting requirements concerning live organisms.
    1. Human subjects.
    a. You must protect the rights and welfare of individuals who 
participate as human subjects in research under this award and comply 
with the requirements at 32 CFR part 219, DoD Instruction (DoDI) 
3216.02, 10 U.S.C. 980, and when applicable, Food and Drug 
Administration (FDA) regulations.
    b. You must not begin performance of research involving human 
subjects, also known as human subjects research (HSR), that is covered 
under 32 CFR part 219, or that meets exemption criteria under 32 CFR 
219.101(b), until you receive a formal notification of approval from a 
DoD Human Research Protection Official (HRPO). Approval to perform HSR 
under this award is received after the HRPO has performed a review of 
your documentation of planned HSR activities and has officially 
furnished a concurrence with your determination as presented in the 
documentation.
    c. In order for the HRPO to accomplish this concurrence review, you 
must provide sufficient documentation to enable his or her assessment as 
follows:
    i. If the HSR meets an exemption criterion under 32 CFR 219.101(b), 
the documentation must include a citation of the exemption category 
under 32 CFR 219.101(b) and a rationale statement.
    ii. If your activity is determined as ``non-exempt research 
involving human subjects'', the documentation must include:
    (A) Assurance of Compliance (i.e., Department of Health and Human 
Services Office for Human Research Protections (OHRP) Federalwide 
Assurance (FWA)) appropriate for the scope of work or program plan; and
    (B) Institutional Review Board (IRB) approval, as well as all 
documentation reviewed by the IRB to make their determination.
    d. The HRPO retains final judgment on what activities constitute 
HSR, whether an exempt category applies, whether the risk determination 
is appropriate, and whether the planned HSR activities comply with the 
requirements in paragraph 1.a of this section.
    e. You must notify the HRPO immediately of any suspensions or 
terminations of the Assurance of Compliance.
    f. DoD staff, consultants, and advisory groups may independently 
review and inspect your research and research procedures involving human 
subjects and, based on such findings, DoD may prohibit research that 
presents unacceptable hazards or otherwise fails to comply with DoD 
requirements.
    g. Definitions for terms used in paragraph 1 of this article are 
found in DoDI 3216.02.
    2. Animals.
    a. Prior to initiating any animal work under the award, you must:
    i. Register your research, development, test, and evaluation or 
training facility with the Secretary of Agriculture in accordance with 7 
U.S.C. 2136 and 9 CFR 2.30, unless otherwise exempt from this 
requirement by meeting the conditions in 7 U.S.C. 2136 and 9 CFR parts 
1-4 for the duration of the activity.
    ii. Have your proposed animal use approved in accordance with 
Department of Defense Instruction (DoDI) 3216.01, Use of Animals in DoD 
Programs by a DoD Component Headquarters Oversight Office.

[[Page 410]]

    iii. Furnish evidence of such registration and approval to the 
grants officer.
    b. You must make the animals on which the research is being 
conducted, and all premises, facilities, vehicles, equipment, and 
records that support animal care and use available during business hours 
and at other times mutually agreeable to you, the United States 
Department of Agriculture Office of Animal and Plant Health Inspection 
Service (USDA/APHIS) representative, personnel representing the DoD 
component oversight offices, as well as the grants officer, to ascertain 
that you are compliant with 7 U.S.C. 2131 et seq., 9 CFR parts 1-4, and 
DoDI 3216.01.
    c. Your care and use of animals must conform with the pertinent laws 
of the United States, regulations of the Department of Agriculture, and 
regulations, policies, and procedures of the Department of Defense (see 
7 U.S.C. 2131 et seq., 9 CFR parts 1-4, and DoDI 3216.01).
    d. You must acquire animals in accordance with DoDI 3216.01.
    3. Use of Remedies.
    Failure to comply with the applicable requirements in paragraphs 1-2 
of this section may result in the DoD Component's use of remedies, e.g., 
wholly or partially terminating or suspending the award, temporarily 
withholding payment under the award pending correction of the 
deficiency, or disallowing all or part of the cost of the activity or 
action (including the federal share and any required cost sharing or 
matching) that is not in compliance. See OAR Article III.
    Section B. [Reserved]



 Sec. Appendix D to Part 1122--Terms and Conditions for NP Article IV, 
                 ``Other National Policy Requirements''

    A DoD Component must use the following wording for NP Article IV of 
its general terms and conditions in accordance with the provisions of 
Subpart B of this part.

   NP Article IV. Other National Policy Requirements. (December 2014)

    Section A. Cross-cutting requirements.
    1. Debarment and suspension. You must comply with requirements 
regarding debarment and suspension in Subpart C of 2 CFR part 180, as 
adopted by DoD at 2 CFR part 1125. This includes requirements concerning 
your principals under this award, as well as requirements concerning 
your procurement transactions and subawards that are implemented in PROC 
Articles I through III and SUB Article II.
    2. Drug-free workplace. You must comply with drug-free workplace 
requirements in Subpart B of 2 CFR part 26, which is the DoD 
implementation of 41 U.S.C. chapter 81, ``Drug-Free Workplace.''
    3. Lobbying.
    a. You must comply with the restrictions on lobbying in 31 U.S.C. 
1352, as implemented by DoD at 32 CFR part 28, and submit all 
disclosures required by that statute and regulation.
    b. You must comply with the prohibition in 18 U.S.C. 1913 on the use 
of Federal funds, absent express Congressional authorization, to pay 
directly or indirectly for any service, advertisement or other written 
matter, telephone communication, or other device intended to influence 
at any time a Member of Congress or official of any government 
concerning any legislation, law, policy, appropriation, or ratification.
    c. If you are a nonprofit organization described in section 
501(c)(4) of title 26, United States Code (the Internal Revenue Code of 
1968), you may not engage in lobbying activities as defined in the 
Lobbying Disclosure Act of 1995 (2 U.S.C., chapter 26). If we determine 
that you have engaged in lobbying activities, we will cease all payments 
to you under this and other awards and terminate the awards unilaterally 
for material failure to comply with the award terms and conditions.
    4. Officials not to benefit. You must comply with the requirement 
that no member of Congress shall be admitted to any share or part of 
this award, or to any benefit arising from it, in accordance with 41 
U.S.C. 6306.
    5. Hatch Act. If applicable, you must comply with the provisions of 
the Hatch Act (5 U.S.C. 1501-1508) concerning political activities of 
certain State and local government employees, as implemented by the 
Office of Personnel Management at 5 CFR part 151, which limits political 
activity of employees or officers of State or local governments whose 
employment is connected to an activity financed in whole or part with 
Federal funds.
    6. Native American graves protection and repatriation. If you 
control or possess Native American remains and associated funerary 
objects, you must comply with the requirements of 43 CFR part 10, the 
Department of the Interior implementation of the Native American Graves 
Protection and Repatriation Act of 1990 (25 U.S.C., chapter 32).
    7. Fly America Act. You must comply with the International Air 
Transportation Fair Competitive Practices Act of 1974 (49 U.S.C. 40118), 
commonly referred to as the ``Fly America Act,'' and implementing 
regulations at 41 CFR 301-10.131 through 301-10.143. The law and 
regulations require that U.S. Government financed international air 
travel of passengers and transportation of personal effects or property 
must use a U.S. Flag air carrier or be performed under a cost sharing 
arrangement with a U.S. carrier, if such service is available.
    8. Use of United States-flag vessels. You must comply with the 
following requirements of

[[Page 411]]

the Department of Transportation at 46 CFR 381.7, in regulations 
implementing the Cargo Preference Act of 1954:
    a. Pursuant to Public Law 83-664 (46 U.S.C. 55305), at least 50 
percent of any equipment, materials or commodities procured, contracted 
for or otherwise obtained with funds under this award, and which may be 
transported by ocean vessel, must be transported on privately owned 
United States-flag commercial vessels, if available.
    b. Within 20 days following the date of loading for shipments 
originating within the United States or within 30 working days following 
the date of loading for shipments originating outside the United States, 
a legible copy of a rated, ``on-board'' commercial ocean bill-of-lading 
in English for each shipment of cargo described in paragraph 8.a of this 
section must be furnished to both our award administrator (through you 
in the case of your contractor's bill-of-lading) and to the Division of 
National Cargo, Office of Market Development, Maritime Administration, 
Washington, DC 20590.
    9. Research misconduct. You must comply with requirements concerning 
research misconduct in Enclosure 4 to DoD Instruction 3210.7, ``Research 
Integrity and Misconduct.'' The Instruction implements the 
Governmentwide research misconduct policy that the Office of Science and 
Technology Policy published in the Federal Register (65 FR 76260, 
December 6, 2000, available through the U.S. Government Printing Office 
website: https://www.federalregister.gov/documents/2000/12/06/00-30852/
executive-office-of-the-president-federal-policy-on-research-misconduct-
preamble-for-research).
    10. Requirements for an Institution of Higher Education Concerning 
Military Recruiters and Reserve Officers Training Corps (ROTC).
    a. As a condition for receiving funds available to the DoD under 
this award, you agree that you are 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:
    i. The Secretary of a Military Department from maintaining, 
establishing, or operating a unit of the Senior Reserve Officers 
Training Corps (ROTC)--in accordance with 10 U.S.C. 654 and other 
applicable Federal laws--at that institution (or any subelement of that 
institution);
    ii. 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.
    iii. 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
    iv. 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.
    b. If you are determined, using the procedures in 32 CFR part 216, 
to be such an institution of higher education during the period of 
performance of this award, we:
    i. Will cease all payments to you of DoD funds under this award and 
all other DoD grants and cooperative agreements; and
    ii. May suspend or terminate those awards unilaterally for material 
failure to comply with the award terms and conditions.
    11. Historic preservation. You must identify to us any:
    a. Property listed or eligible for listing on the National Register 
of Historic Places that will be affected by this award, and provide any 
help we may need, with respect to this award, to comply with Section 106 
of the National Historic Preservation Act of 1966 (54 U.S.C. 306108), as 
implemented by the Advisory Council on Historic Preservation regulations 
at 36 CFR part 800 and Executive Order 11593, ``Identification and 
Protection of Historic Properties,'' [3 CFR, 1971-1975 Comp., p. 559]. 
Impacts to historical properties are included in the definition of 
``human environment'' that require impact assessment under NEPA (See NP 
Article II, Section A).
    b. Potential under this award for irreparable loss or destruction of 
significant scientific, prehistorical, historical, or archeological 
data, and provide any help we may need, with respect to this award, to 
comply with the Archaeological and Historic Preservation Act of 1974 (54 
U.S.C. chapter 3125).
    12. Relocation and real property acquisition. You must comply with 
applicable provisions of 49 CFR part 24, which implements the Uniform 
Relocation Assistance and Real Property Acquisition Policies Act of 1970 
(42 U.S.C. 4601, et seq.) and provides for fair and equitable treatment 
of persons displaced by federally assisted programs or persons whose 
property is acquired as a result of such programs.
    13. Confidentiality of patient records. You must keep confidential 
any records that you maintain of the identity, diagnosis, prognosis, or 
treatment of any patient in connection with any program or activity 
relating to substance abuse education, prevention, training, treatment, 
or rehabilitation that is assisted directly or indirectly under this 
award, in accordance with 42 U.S.C. 290dd-2.
    14. Pro-Children Act.

[[Page 412]]

    You must comply with applicable restrictions in the Pro-Children Act 
of 1994 (Title 20, Chapter 68, subchapter X, Part B of the U.S. Code) on 
smoking in any indoor facility:
    a. Constructed, operated, or maintained under this award and used 
for routine or regular provision of kindergarten, elementary, or 
secondary education or library services to children under the age of 18.
    b. Owned, leased, or contracted for and used under this award for 
the routine provision of federally funded health care, day care, or 
early childhood development (Head Start) services to children under the 
age of 18.
    15. Constitution Day. You must comply with Public Law 108-447, Div. 
J, Title I, Sec. 111 (36 U.S.C. 106 note), which requires each 
educational institution receiving Federal funds in a Federal fiscal year 
to hold an educational program on the United States Constitution on 
September 17th during that year for the students served by the 
educational institution.
    16. Trafficking in persons. You must comply with requirements 
concerning trafficking in persons specified in the award term at 2 CFR 
175.15(b), as applicable.
    17. Whistleblower protections. You must comply with 10 U.S.C. 2409, 
including the:
    a. Prohibition on reprisals against employees disclosing certain 
types of information to specified persons or bodies; and
    b. Requirement to notify your employees in writing, in the 
predominant native language of the workforce, of their rights and 
protections under that statute.
    Section B. [Reserved]

                       PARTS 1123_1124 [RESERVED]



PART 1125_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
1125.10 What does this part do?
1125.20 Does this part implement the OMB guidance in 2 CFR part 180 for 
          all DoD nonprocurement transactions?
1125.30 Does this part apply to me?
1125.40 What policies and procedures must I follow?

                            Subpart A_General

1125.137 Who in the Department of Defense may grant an exception to let 
          an excluded person participate in a covered transaction?

                     Subpart B_Covered Transactions

1125.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

1125.332 What method must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

   Subpart D_Responsibilities of DoD Officials Regarding Transactions

1125.425 When do I check to see if a person is excluded or disqualified?
1125.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-H [Reserved]

                          Subpart I_Definitions

1125.930 Debarring official (DoD supplement to Governmentwide definition 
          at 2 CFR 180.930).
1125.937 DoD Component.
1125.1010 Suspending official (DoD supplement to Governmentwide 
          definition at 2 CFR 180.1010).

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235; 5 U.S.C. 
301 and 10 U.S.C. 113.

    Source: 72 FR 34984, June 26, 2007. Redesignated at 85 FR 51161, 
Aug. 19, 2020.



Sec.  1125.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Department of Defense (DoD) policies and procedures for 
nonprocurement debarment and suspension. It thereby gives regulatory 
effect for the Department of Defense to the OMB guidance as supplemented 
by this part. This part satisfies the requirements in section 3 of 
Executive Order 12549, ``Debarment and Suspension'' (3 CFR 1986 Comp., 
p. 189), Executive Order 12689, ``Debarment and Suspension'' (3 CFR 1989 
Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Public Law 103-
355, 108 Stat. 3327).



Sec.  1125.20  Does this part implement the OMB guidance in
2 CFR part 180 for all DoD nonprocurement transactions?

    This part implements the OMB guidelines in 2 CFR part 180 for most 
DoD

[[Page 413]]

nonprocurement transactions. However, it does not implement the 
guidelines as they apply to prototype projects under the authority of 
Section 845 of the National Defense Authorization Act for Fiscal Year 
1994 (Pub. L. 103-160), as amended. The Director of Defense Procurement 
and Acquisition Policy maintains a DoD issuance separate from this part 
that addresses section 845 transactions.



Sec.  1125.30  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970, as supplemented by subpart B of this 
part), other than a section 845 transaction described in Sec.  1125.20;
    (b) Respondent in a DoD Component's nonprocurement suspension or 
debarment action;
    (c) DoD Component's debarment or suspension official; or
    (d) DoD Component's grants officer, agreements officer, or other 
official authorized to enter into a nonprocurement transaction that is a 
covered transaction.



Sec.  1125.40  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in subparts A through I of 2 
CFR part 180, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 180, this part supplements 
eight sections of the guidance, as shown in the following table. For 
each of those sections, you must follow the policies and procedures in 
the OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 180.135............  Sec.   1125.137  Who in DoD may grant an
                                                 exception for an
                                                 excluded person to
                                                 participate in a
                                                 covered transaction.
(2) 2 CFR 180.220............  Sec.   1125.220  Which lower-tier
                                                 contracts under a
                                                 nonprocurement
                                                 transaction are covered
                                                 transactions.
(3) 2 CFR 180.330............  Sec.   1125.332  What method a
                                                 participant must use to
                                                 communicate
                                                 requirements to a lower-
                                                 tier participant.
(4) 2 CFR 180.425............  Sec.   1125.425  When a DoD awarding
                                                 official must check to
                                                 see if a person is
                                                 excluded or
                                                 disqualified.
(5) 2 CFR 180.435............  Sec.   1125.437  What method a DoD
                                                 official must use to
                                                 communicate
                                                 requirements to a
                                                 participant.
(6) 2 CFR 180.930............  Sec.   1125.930  Which DoD officials are
                                                 debarring officials.
(7) 2 CFR 180.1010...........  Sec.             Which DoD officials are
                                1125.1010.       suspending officials.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in subparts A through I of 2 CFR 180 
that is not listed in paragraph (b) of this section, DoD policies and 
procedures are the same as those in the OMB guidance.



                            Subpart A_General



Sec.  1125.137  Who in the Department of Defense may grant an exception
to let an excluded person participate in a covered transaction?

    Within the Department of Defense, the Secretary of Defense, 
Secretary of a Military Department, Head of a Defense Agency, Head of 
the Office of Economic Adjustment, and Head of the Special Operations 
Command have the authority to grant an exception to let an excluded 
person participate in a covered transaction, as provided in the OMB 
guidance at 2 CFR 180.135.



                     Subpart B_Covered Transactions



Sec.  1125.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do

[[Page 414]]

so (also see optional lower tier coverage in the figure in the appendix 
to 2 CFR part 180), the Department of Defense does not extend coverage 
of nonprocurement suspension and debarment requirements beyond first-
tier procurement contracts under a covered nonprocurement transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  1125.332  What method must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant in a covered transaction must include a term or 
condition in any lower-tier covered transaction into which you enter, to 
require the participant of that transaction to--
    (a) Comply with subpart C of the OMB guidance in 2 CFR part 180; and
    (b) Include a similar term or condition in any covered transaction 
into which it enters at the next lower tier.



   Subpart D_Responsibilities of DoD Officials Regarding Transactions



Sec.  1125.425  When do I check to see if a person is excluded or
disqualified?

    In addition to the four instances identified in the OMB guidance at 
2 CFR 180.425, you as a DoD Component official must check to see if a 
person is excluded or disqualified before you obligate additional 
funding (e.g., through an incremental funding action) for a pre-existing 
grant or cooperative agreement with an institution of higher education, 
as provided in 32 CFR 22.520(e)(5).



Sec.  1125.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    You as a DoD Component official must include a term or condition in 
each covered transaction into which you enter, to communicate to the 
participant the requirements to--
    (a) Comply with subpart C of 2 CFR part 180, as supplemented by 
subpart C of this part; and
    (b) Include a similar term or condition in any lower-tier covered 
transactions into which the participant enters.

Subparts E-H [Reserved]



                          Subpart I_Definitions



Sec.  1125.930  Debarring official (DoD supplement to Governmentwide
definition at 2 CFR 180.930).

    DoD Components' debarring officials for nonprocurement transactions 
are the same officials identified in 48 CFR part 209, subpart 209.4, as 
debarring officials for procurement contracts.



Sec.  1125.937  DoD Component.

    In this part, DoD Component means the Office of the Secretary of 
Defense, a Military Department, a Defense Agency, a DoD Field Activity, 
or any other organizational entity of the Department of Defense that is 
authorized to award or administer grants, cooperative agreements, or 
other nonprocurement transactions.



Sec.  1125.1010  Suspending official (DoD supplement to Governmentwide
definition at 2 CFR 180.1010).

    DoD Components' suspending officials for nonprocurement transactions 
are the same officials identified in 48 CFR part 209, subpart 209.4, as 
suspending officials for procurement contracts.

[[Page 415]]



 SUBCHAPTER D_ADMINISTRATIVE REQUIREMENTS TERMS AND CONDITIONS FOR COST-
  TYPE GRANTS AND COOPERATIVE AGREEMENTS TO NONPROFIT AND GOVERNMENTAL 
                                ENTITIES





PART 1126_SUBCHAPTER D OVERVIEW--Table of Contents



Sec.
1126.1 Purposes of this subchapter.
1126.2 Applicability of this subchapter.
1126.3 Exceptions from requirements in this subchapter.
1126.4 Relationship to other portions of the DoD grant and agreement 
          regulations.
1126.5 Organization of this subchapter.
1126.6 Organization of the other parts of this subchapter.

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51171, Aug. 19, 2020, unless otherwise noted.



Sec.  1126.1  Purposes of this subchapter.

    This subchapter of the DoD Grant and Agreement Regulations:
    (a) Addresses general terms and conditions governing administrative 
requirements for use by DoD Components when awarding cost-type grants 
and cooperative agreements to institutions of higher education, 
nonprofit organizations, States, local governments, and Indian tribes. 
It does so by providing:
    (1) A standard organization of the administrative requirements into 
articles of general terms and conditions, each of which is in a specific 
subject area.
    (2) Standard wording for those articles; and
    (3) Associated prescriptions for DoD Component's use of the standard 
wording to construct their general terms and conditions, which allow for 
adding, omitting, or varying in other ways from the standard wording in 
certain situations.
    (b) Thereby implements OMB guidance in 2 CFR part 200 as it relates 
to general terms and conditions of grants and cooperative agreements to 
institutions of higher education, nonprofit organizations, States, local 
governments, and Indian tribes.



Sec.  1126.2  Applicability of this subchapter.

    (a) Entities. This subchapter:
    (1) Applies to DoD Components that award cost-type grants and 
cooperative agreements to institutions of higher education, nonprofit 
organizations, States, local governments, and Indian tribes.
    (2) Does not directly impose requirements on a recipient of a DoD 
Component's award but does do so indirectly, through the DoD Component's 
compliance with this subchapter when it constructs its general award 
terms and conditions. The terms and conditions delineate the rights and 
responsibilities of the recipient and the Federal Government under the 
award.
    (b) Awards. This subchapter applies to DoD Components' cost-type 
grants and cooperative agreements to types of entities identified in 
paragraph (a)(1) of this section, other than Technology Investment 
Agreements that are addressed in 32 CFR part 37.



Sec.  1126.3  Exceptions from requirements in this subchapter.

    (a) Exceptions that are not permitted. A DoD Component may not grant 
any exception to the requirements in this subchapter if the exception 
is:
    (1) Prohibited by statute, executive order, or regulation;
    (2) Inconsistent with the OMB implementation of the Single Audit Act 
in Subpart F of 2 CFR part 200.
    (b) Other exceptions. Other exceptions are permitted from 
requirements in this subchapter for institutions of higher education, 
nonprofit organizations, States, local governments, and Indian tribes as 
follows:
    (1) Statutory or regulatory exceptions. A DoD Component's general 
terms and conditions may incorporate a requirement that is inconsistent 
with the requirements in this subchapter if that requirement is 
specifically authorized or required by a statute or regulation adopted 
in the Code of Federal Regulations after opportunity for public comment.

[[Page 416]]

    (2) Individual exceptions. The Head of the DoD Component or his or 
her designee may approve an individual exception affecting only one 
award in accordance with procedures stated in 32 CFR 21.340.
    (3) Small awards. A DoD Component's terms and conditions for small 
awards may apply less restrictive requirements than those specified in 
this subchapter (a small award is an award for which the total value of 
obligated funding through the life of the award is not expected to 
exceed the simplified acquisition threshold).
    (4) Other class exceptions. The Assistant Secretary of Defense for 
Research and Engineering or his or her designee may approve any class 
exception affecting multiple awards other than small awards, with OMB 
concurrence if the class exception is for a requirement that is 
inconsistent with OMB guidance in 2 CFR part 200. Procedures for DoD 
Components' requests for class exceptions are stated in 32 CFR 21.340.



Sec.  1126.4  Relationship to other portions of the DoD grant and
agreement regulations.

    The administrative requirements specified in this subchapter 
complement:
    (a) Provisions of 32 CFR part 34 that address administrative 
requirements for DoD Components' grants and cooperative agreements to 
for-profit entities; and
    (b) Requirements in 32 CFR part 37 for technology investment 
agreements.



Sec.  1126.5  Organization of this subchapter.

    This subchapter is organized into six parts in addition to this 
overview part. Each part provides standard wording and prescriptions for 
articles of general terms and conditions that address administrative 
requirements in a particular subject area. Table 1 shows the subject 
area and articles corresponding to each part:

                        Table 1 to Sec.   1126.5
------------------------------------------------------------------------
                             Of this subchapter, you will find terms and
                               conditions with associated prescriptions
          In . . .           for the following articles related to . . .
 
------------------------------------------------------------------------
Part 1128..................  Recipient financial and program management
                              (designated as ``FMS'' when referring to
                              articles prescribed by this part):
                                --FMS Article I--Financial management
                                 system standards.
                                --FMS Article II--Payments.
                                --FMS Article III--Allowable costs,
                                 period of availability of funds, and
                                 fee or profit.
                                --FMS Article IV--Revision of budget and
                                 program plans.
                                --FMS Article V--Non-Federal audits.
                                --FMS Article VI--Cost sharing or
                                 matching.
                                --FMS Article VII--Program income.
Part 1130..................  Property administration (designated as
                              ``PROP'' when referring to articles
                              prescribed by this part):
                                --PROP Article I--Title to property.
                                --PROP Article II--Property management
                                 system.
                                --PROP Article III--Use and disposition
                                 of real property.
                                --PROP Article IV--Use and disposition
                                 of equipment and supplies.
                                --PROP Article V--Use and disposition of
                                 federally owned property.
                                --PROP Article VI--Intangible property.
Part 1132..................  Recipient procurement procedures
                              (designated as ``PROC'' when referring to
                              articles prescribed by this part):
                                --PROC Article I--Procurement standards
                                 for States.
                                --PROC Article II--Procurement standards
                                 for institutions of higher education,
                                 nonprofit organizations, local
                                 governments, and Indian tribes.
                                --PROC Article III--Contract provisions
                                 for recipient procurements.
Part 1134..................  Financial, programmatic, and property
                              reporting (designated as ``REP'' when
                              referring to articles prescribed by this
                              part):
                                --REP Article I--Performance management,
                                 monitoring, and reporting.
                                --REP Article II--Financial reporting.
                                --REP Article III--Reporting on
                                 property.
                                --REP Article IV--Reporting on subawards
                                 and executive compensation.
                                --REP Article V--Other reporting.
Part 1136..................  Other administrative requirements
                              (designated as ``OAR'' when referring to
                              articles prescribed by this part):
                                --OAR Article I--Submitting and
                                 maintaining recipient information.
                                --OAR Article II--Records retention and
                                 access.
                                --OAR Article III--Remedies and
                                 termination.
                                --OAR Article IV--Claims, disputes, and
                                 appeals.
                                --OAR Article V--Collection of amounts
                                 due.
                                --OAR Article VI--Closeout.

[[Page 417]]

 
                                --OAR Article VII--Post-closeout
                                 adjustments and continuing
                                 responsibilities.
Part 1138..................  Requirements related to subawards
                              (designated as ``SUB'' when referring to
                              articles prescribed by this part):
                                --SUB Article I--Distinguishing
                                 subawards and procurements.
                                --SUB Article II--Pre-award and time of
                                 award responsibilities.
                                --SUB Article III--Informational content
                                 of subawards.
                                --SUB Article IV--Financial and program
                                 management requirements for subawards.
                                --SUB Article V--Property requirements
                                 for subawards.
                                --SUB Article VI--Procurement procedures
                                 to include in subawards.
                                --SUB Article VII--Financial,
                                 programmatic, and property reporting
                                 requirements for subawards.
                                --SUB Article VIII--Other administrative
                                 requirements for subawards.
                                --SUB Article IX--National Policy
                                 Requirements for Subawards.
                                --SUB Article X--Subrecipient monitoring
                                 and other post-award administration.
                                --SUB Article XI--Requirements
                                 concerning subrecipients' lower-tier
                                 subawards.
                                --SUB Article XII--Fixed-amount
                                 subawards.
------------------------------------------------------------------------



Sec.  1126.6  Organization of the other parts of this subchapter.

    (a) Each of parts 1128 through 1138 of this subchapter is organized 
into subparts and appendices.
    (1) Each appendix provides the standard wording of general terms and 
conditions for one of the articles of general terms and conditions that 
the part addresses.
    (2) For each appendix addressing a particular article, the part has 
an associated subpart that provides the prescription for DoD Components' 
use of the standard wording for that article.
    (b) For example, Table 1 to Sec.  1126.5 indicates that 2 CFR part 
1128 provides the standard wording of general terms and conditions for 
FMS Articles I through VII and the prescriptions for DoD Components' use 
of that standard wording.
    (1) FMS Article I on financial management system standards is the 
first of the articles that 2 CFR part 1128 covers. Appendix A to 2 CFR 
part 1128 provides the standard wording of general terms and conditions 
for FMS Article I. The associated subpart of 2 CFR part 1128, subpart A, 
provides the prescription for DoD Components' use of the standard 
wording of that article.
    (2) Appendices B through G of 2 CFR part 1128 provide the standard 
wording of general terms and conditions for FMS Articles II through VII, 
respectively. The associated subparts, Subparts B through G, provide the 
corresponding prescriptions for DoD Components.



PART 1128_RECIPIENT FINANCIAL AND PROGRAM MANAGEMENT: GENERAL AWARD
TERMS AND CONDITIONS--Table of Contents



Sec.
1128.1 Purpose of this part.
1128.2 Applicability of this part.
1128.3 Exceptions from requirements of this part.
1128.4 Organization of this part.

     Subpart A_Financial Management System Standards (FMS Article I)

1128.100 Purpose of FMS Article I.
1128.105 Content of FMS Article I.

                   Subpart B_Payments (FMS Article II)

1128.200 Purpose of FMS Article II.
1128.205 Content of FMS Article II.
1128.210 Payment requirements for States.
1128.215 Payment requirements for institutions of higher education, 
          nonprofit organizations, local governments, and Indian tribes.
1128.220 Electronic funds transfer and other payment procedural 
          instructions or information.

 Subpart C_Allowable Costs, Period of Availability of Funds, and Fee or 
                        Profit (FMS Article III)

1128.300 Purpose of FMS Article III.
1128.305 Content of FMS Article III.
1128.310 Cost principles.
1128.315 Clarification concerning allowability of publication costs.
1128.320 Period of availability of funds.
1128.325 Fee or profit.

[[Page 418]]

     Subpart D_Revision of Budget and Program Plans (FMS Article IV)

1128.400 Purpose of FMS Article IV.
1128.405 Content of FMS Article IV.
1128.410 Approved budget.
1128.415 Prior approvals for non-construction activities.
1128.420 Prior approvals for construction activities.
1128.425 Additional prior approval for awards that support both non-
          construction and construction activities.
1128.430 Procedures for prior approvals.

              Subpart E_Non-Federal audits (FMS Article V)

1128.500 Purpose of FMS Article V.
1128.505 Content of FMS Article V.

           Subpart F_Cost Sharing or Matching (FMS Article VI)

1128.600 Purpose of FMS Article VI.
1128.605 Content of FMS Article VI.
1128.610 General requirement for cost sharing or matching.
1128.615 General criteria for determining allowability as cost sharing 
          or matching.
1128.620 Allowability of unrecovered indirect costs as cost sharing or 
          matching.
1128.625 Allowability of program income as cost sharing or matching.
1128.630 Valuation of services or property contributed or donated by 
          recipients or subrecipients.
1128.635 Valuation of third-party in-kind contributions.

               Subpart G_Program Income (FMS Article VII)

1128.700 Purpose of FMS Article VII.
1128.705 Content of FMS Article VII.
1128.710 What program income includes.
1128.715 Recipient obligations for license fees and royalties.
1128.720 Program income use.
1128.725 Program income after the period of performance.

Appendix A to Part 1128--Terms and conditions for FMS Article I, 
          ``Financial management system standards''
Appendix B to Part 1128--Terms and conditions for FMS Article II, 
          ``Payments''
Appendix C to Part 1128--Terms and conditions for FMS Article III, 
          ``Allowable costs, period of availability of funds, and fee or 
          profit''
Appendix D to Part 1128--Terms and conditions for FMS Article IV, 
          ``Revision of budget and program plans''
Appendix E to Part 1128--Terms and conditions for FMS Article V, ``Non-
          Federal audits''
Appendix F to Part 1128--Terms and conditions for FMS Article VI, ``Cost 
          sharing or matching''
Appendix G to Part 1128--Terms and conditions for FMS Article VII, 
          ``Program income''

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51171, Aug. 19, 2020, unless otherwise noted.



Sec.  1128.1  Purpose of this part.

    (a) This part specifies standard wording of general terms and 
conditions concerning financial and program management, including 
recipients' financial management systems, payments, cost sharing or 
matching, program income, budget and program revisions, audits, 
allowable costs, and periods of availability of funds.
    (b) It thereby implements OMB guidance in the following portions of 
2 CFR part 200, as they apply to general terms and conditions of grants 
and cooperative agreements:
    (1) Sections 200.80, 200.209, and 200.302 through 200.309;
    (2) Sections 200.301 and 200.328, as they relate to associations 
between financial data and performance accomplishments and reporting; 
and
    (3) Subparts E and F.



Sec.  1128.2  Applicability of this part.

    The types of awards and entities to which this part and other parts 
in this subchapter apply are described in the subchapter overview at 2 
CFR 1126.2.



Sec.  1128.3  Exceptions from requirements of this part.

    Exceptions are permitted from the administrative requirements in 
this part only as described at 2 CFR 1126.3.



Sec.  1128.4  Organization of this part.

    (a) The content of this part is organized into subparts and 
associated appendices.
    (1) Each subpart provides direction to DoD Components on how to 
construct one article of general terms and conditions for grants and 
cooperative agreements.
    (2) For each subpart, there is a corresponding appendix with 
standard wording for terms and conditions of the article addressed by 
the subpart. Terms

[[Page 419]]

and conditions address rights and responsibilities of the Federal 
Government and recipients.
    (b) A DoD Component must use the wording provided in each appendix 
in accordance with the direction in the corresponding subpart. That 
direction may permit DoD Components to vary from the standard wording in 
some situations.
    (c) Table 1 shows which article of general terms and conditions may 
be found in each of appendices A through G to this part (with the 
associated direction to DoD Components in Subparts A through G, 
respectively):

                        Table 1 to Paragraph (c)
------------------------------------------------------------------------
                             You will find terms and
                              conditions specifying
                              recipients' rights and   That would appear
          In . . .               responsibilities     in an award within
                                 related to . . .      FMS Article . . .
 
------------------------------------------------------------------------
Appendix A.................  Financial management     I.
                              system standards.
Appendix B.................  Payments...............  II.
Appendix C.................  Allowable costs, period  III.
                              of availability of
                              funds, and fee or
                              profit.
Appendix D.................  Revision of budget and   IV.
                              program plans.
Appendix E.................  Non-Federal audits.....  V.
Appendix F.................  Cost sharing or          VI.
                              matching.
Appendix G.................  Program income.........  VII.
------------------------------------------------------------------------



     Subpart A_Financial Management System Standards (FMS Article I)



Sec.  1128.100  Purpose of FMS Article I.

    FMS Article I specifies standards for recipients' financial 
management systems. It thereby implements OMB guidance in:
    (a) 2 CFR 200.302, 200.303, and 200.328; and
    (b) 2 CFR 200.301 and 200.328, as they relate to associations 
between financial data and performance accomplishments and reporting.



Sec.  1128.105  Content of FMS Article I.

    (a) Requirement. A DoD Component's general terms and conditions must 
address requirements for recipients' financial management systems.
    (b) Award terms and conditions--(1) General. Except as provided in 
paragraph (b)(2) of this section, a DoD Component's general terms and 
conditions must include the wording appendix A to this part provides for 
FMS Article I.
    (2) Exceptions. A DoD Component's general terms and conditions may:
    (i) Reserve Section A of FMS Article I if the DoD Component 
determines that it is not possible that any States will receive:
    (A) DoD Component awards using those general terms and conditions; 
or
    (B) Subawards from recipients of DoD Component awards using those 
general terms and conditions.
    (ii) Reserve paragraph B.6 of FMS Article I if the DoD Component 
determines that it will not require recipients of awards using those 
general terms and conditions to relate financial data to performance 
accomplishments (e.g., through unit costs). Because the nature of 
research makes the use of unit costs and other relationships between 
financial data and performance accomplishments generally inappropriate, 
DoD Components should reserve paragraph B.6 in general terms and 
conditions for awards supporting research.



                   Subpart B_Payments (FMS Article II)



Sec.  1128.200  Purpose of FMS Article II.

    FMS Article II contains requirements related to payments under an 
award. It thereby implements OMB guidance in 2 CFR 200.305.



Sec.  1128.205  Content of FMS Article II.

    (a) Requirement. A DoD Component's general terms and conditions must 
address payment method; payment timing and amounts, which relate to cash 
management; frequency of payment requests; and matters related to 
recipients' depositories, including interest earned on advance payments.

[[Page 420]]

    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must include the wording appendix B to this part provides for 
FMS Article II with appropriate additions, deletions, and substitutions 
as described in Sec. Sec.  1128.210 through 1128.220.



Sec.  1128.210  Payment requirements for States.

    (a) Policy. Payments to States are subject to requirements in 
Department of the Treasury regulations at 31 CFR part 205 that implement 
the Cash Management Improvement Act. Those regulations are in two 
subparts with distinct requirements that apply to different programs:
    (1) Subpart A of 31 CFR part 205 contains requirements for payments 
to States under ``major programs,'' as defined in that part. The 
Department of the Treasury negotiates Treasury-State agreements for 
major programs. Those agreements specify the appropriate timing and 
amounts of payments. They further specify a State's interest liability 
if it receives an advance payment too many days before it disburses the 
funds for program purposes, as well as the Federal Government's interest 
liability if it reimburses the State too many days after the State 
disburses the funds. Most DoD awards to States are not under major 
programs, so Subpart A applies relatively infrequently.
    (2) Subpart B of 31 CFR part 205 applies to all other DoD grants and 
cooperative agreements to States--i.e., awards that are not under major 
programs.
    (b) Award terms and conditions--(1) General. Because few DoD awards 
to States are under major programs, appendix B to this part includes 
wording for Section A of FMS Article II that specifies the requirements 
of Subpart B of 31 CFR part 205. A DoD Component's general terms and 
conditions must include this wording for Section A of FMS Article II if 
no award using those terms and conditions will be made to a State under 
a program designated as a major program in the applicable Treasury-State 
agreement.
    (2) Exception for awards under major programs. If a DoD Component is 
establishing general terms and conditions that will be used for awards 
to States, only some of which are subject to requirements for major 
programs in Subpart A of 31 CFR part 205, then the DoD Component should:
    (i) Use appendix B's wording for Section A of FMS Article II in its 
general terms and conditions; and
    (ii) In each award subject to Subpart A of 31 CFR part 205, include 
award-specific terms and conditions that make payments to the recipient 
subject to the requirements in Subpart A of 31 CFR part 205 and the 
applicable Treasury-State agreement, thereby overriding the wording of 
Section A of FMS Article II.



Sec.  1128.215  Payment requirements for institutions of higher
education, nonprofit organizations, local governments, and Indian
tribes.

    (a) Policy. OMB guidance in 2 CFR 200.305 addresses the use of three 
payment methods for grants and cooperative agreements--advance payments, 
reimbursement, and working capital advances. Two of the methods pertain 
to a DoD Component's general terms and conditions, as described in 
paragraphs (a)(1) and (2) of this section.
    (1) Advance payments. With the possible exception of construction 
awards, as provided in paragraph (a)(2) of this section, a DoD 
Component's general terms and conditions must authorize each recipient 
to request payments in advance as long as the recipient maintains, or 
demonstrates the willingness to maintain, both:
    (i) Written procedures that minimize the time elapsing between its 
receipt of funds from the Federal Government and its disbursement of the 
funds for project or program purposes; and
    (ii) Financial management systems that meet the standards for fund 
control and accountability specified in the wording of FMS Article I 
(see Subpart A and appendix A to this part).
    (2) Reimbursement. A DoD Component's general terms and conditions 
may specify the reimbursement method if the awards using those terms and 
conditions will support construction projects financed in whole or in 
part by the Federal Government.
    (b) Award terms and conditions--(1) General. Appendix B provides 
wording

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for Section B of FMS Article II that a DoD Component:
    (i) Must use in general terms and conditions for non-construction 
awards to authorize recipients to request advance payments; and
    (ii) May use in general terms and conditions for construction awards 
if it elects to authorize recipients of those awards to request advance 
payments.
    (2) Alternative award terms and conditions. A DoD Component may 
develop an alternative to appendix B's wording for Section B of FMS 
Article II to use in general terms and conditions for construction 
awards, if it elects to specify reimbursement as the payment method for 
those awards. The alternative:
    (i) Would replace appendix B's wording for paragraph B.1 with 
wording to specify the reimbursement method of payment;
    (ii) Must include appendix B's wording for paragraphs B.2.b and c, 
B.4, and B.5, which may be renumbered as appropriate, because those 
paragraphs apply to reimbursements as well as advance payments;
    (iii) Should omit appendix B's wording for paragraphs B.2.a, B.3, 
and B.6 because those paragraphs apply specifically to advance payments; 
and
    (iv) Must inform recipients that the DoD payment office generally 
makes payment within 30 calendar days after receipt of the request for 
reimbursement by the award administration office, unless the request is 
reasonably believed to be improper.



Sec.  1128.220  Electronic funds transfer and other payment procedural
instructions or information.

    (a) Policy. A DoD Component's general terms and conditions must 
specify that payments will be made by electronic funds transfer (EFT) 
unless a recipient is excepted in accordance with Department of the 
Treasury regulations at 31 CFR part 208 from the Governmentwide 
requirement to use EFT.
    (b) Award terms and conditions--(1) Electronic funds transfer. 
Appendix B provides wording for Section C of FMS Article II that a DoD 
Component must use to specify payment by EFT, when awards are not 
excepted from the Governmentwide requirement.
    (2) Other payment procedures or instructions. A DoD Component may 
insert one or more paragraphs in its general terms and conditions in 
lieu of the reserved paragraph C.2 in appendix B, to provide procedural 
instructions or information regarding payments that is common to awards 
using those terms and conditions. For example, it may insert wording to 
give detailed instructions on where and how recipients are to submit 
payment requests. All forms, formats, and data elements for payment 
requests must be OMB-approved information collections.



 Subpart C_Allowable Costs, Period of Availability of Funds, and Fee or 
                        Profit (FMS Article III)



Sec.  1128.300  Purpose of FMS Article III.

    FMS Article III of the general terms and conditions specifies what 
costs are allowable as charges to awards and when they are allowable. It 
also specifies restrictions on payment of fee or profit. It thereby 
implements OMB guidance in Sec. Sec.  200.209 and 200.309 and Subpart E 
of 2 CFR part 200. It also partially implements 2 CFR 200.201(b)(1) and 
200.323(c), as those sections apply to the cost principles to be used in 
relation to subawards and contracts, respectively.



Sec.  1128.305  Content of FMS Article III.

    (a) Requirement. A DoD Component's general terms and conditions must 
address allowability of costs and permissibility of fee or profit.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must include the wording appendix C to this part provides for 
FMS Article III with appropriate reservations as described in Sec. Sec.  
1128.310 through 1128.325.



Sec.  1128.310  Cost principles.

    (a) Policy. The set of Governmentwide cost principles applicable to 
a particular entity type governs the allowability of costs that may be:
    (1) Charged to each cost-type:
    (i) DoD grant or cooperative agreement to a recipient of that entity 
type;

[[Page 422]]

    (ii) Subaward to a subrecipient of that entity type at any tier 
below a DoD grant or cooperative agreement; and
    (iii) Procurement transaction with a contractor of that entity type 
awarded by a recipient of a DoD grant or cooperative agreement or a 
subrecipient that received a subaward at any tier below that grant or 
cooperative agreement.
    (2) Considered in establishing the amount of any:
    (i) Fixed-amount subaward, at any tier under a grant or cooperative 
agreement, to a subrecipient of that entity type; or
    (ii) Fixed-price procurement transaction with a contractor of that 
entity type that is awarded by either a recipient of a DoD grant or 
cooperative agreement or a subrecipient that received a subaward at any 
tier below that grant or cooperative agreement.
    (b) Award terms and conditions--(1) General. Because almost all DoD 
grants and cooperative agreements are cost-type awards, appendix C 
includes wording for Section A of FMS Article III that specifies use of 
the applicable Governmentwide cost principles in the determination of 
the allowability of costs.
    (2) Exception. A DoD Component may reserve any paragraph of appendix 
C's wording for Section A of FMS Article III in its general terms and 
conditions if the Component is certain that no entities of the type to 
which the paragraph applies could be recipients of awards using those 
general terms and conditions or recipients of subawards or procurement 
transactions at any tier under those awards.



Sec.  1128.315  Clarification concerning allowability of publication costs.

    (a) Requirement. A DoD Component's general terms and conditions must 
clarify that a recipient must charge publication costs consistently as 
either direct or indirect costs in order for those costs to be allowable 
charges to DoD grants and cooperative agreements.
    (b) Award terms and conditions--(1) General. To clarify the 
allowability of publication costs, a DoD Component's general terms and 
conditions must include the wording appendix C to this part provides for 
Section B of FMS Article III.
    (2) Exception. A DoD Component may instead reserve Section B of FMS 
Article III in its general terms and conditions if the DoD Component 
determines that there will be no publication costs under any of the 
awards using those general terms and conditions.



Sec.  1128.320  Period of availability of funds.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify the period during which Federal funds are available for 
obligation by recipients for project or program purposes.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must include the wording appendix C to this part provides for 
Section C of FMS Article III to specify the period of availability of 
funds.



Sec.  1128.325  Fee or profit.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify that recipients may neither receive fee or profit nor pay fee or 
profit to subrecipients.
    (b) Award terms and conditions. A DoD Component must use the wording 
appendix C to this part provides for Section D of FMS Article III to 
specify the limitation on payment of fee or profit.



     Subpart D_Revision of Budget and Program Plans (FMS Article IV)



Sec.  1128.400  Purpose of FMS Article IV.

    FMS Article IV of the general terms and conditions specifies 
requirements related to changes in recipients' budget and program plans. 
It thereby implements OMB guidance in Sec.  200.308 of 2 CFR part 200 
and partially implements Sec.  200.209 and Subpart E of that part.



Sec.  1128.405  Content of FMS Article IV.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify the changes in budget and program plans for which a recipient is 
required to request DoD Component prior

[[Page 423]]

approval and the procedures for submitting those requests.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must include as FMS Article IV the Sec.  wording appendix D 
to this part provides, with any revisions to the wording that are 
authorized by Sec. Sec.  1128.410 through 1128.430.



Sec.  1128.410  Approved budget.

    (a) OMB guidance. As described in 2 CFR 200.308(a), the approved 
budget for a grant or cooperative agreement may include both the Federal 
and non-Federal shares of funding under the award or only the Federal 
share.
    (b) DoD implementation. For DoD grants and cooperative agreements, 
the approved budget includes the Federal share and any cost sharing or 
matching that the recipient is required to provide under the award.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions therefore must include the wording appendix D to this part 
provides for Section A of FMS Article IV.



Sec.  1128.415  Prior approvals for non-construction activities.

    (a) OMB guidance. OMB guidance in 2 CFR 200.308(c) through (e) 
addresses prior approval requirements for revisions of a recipient's 
budget and program plans under a non-construction grant or cooperative 
agreement, which includes, for the purposes of this section, non-
construction activities under an award that supports both construction 
and non-construction.
    (b) DoD implementation of the guidance. The following paragraphs (c) 
through (g) of this section provide details of the DoD implementation of 
the guidance in 2 CFR 200.308(c) through (e) and paragraph (h) specifies 
the corresponding award terms and conditions. A DoD Component's general 
terms and conditions for non-construction awards may require additional 
prior approvals for budget and program revisions (i.e., prior approvals 
other than those authorized by this subpart) only in accordance with the 
exceptions provisions of 2 CFR 1126.3.
    (c) Scope or objective, cost sharing or matching, and additional 
Federal funds. A DoD Component's general terms and conditions for non-
construction awards must require that a recipient obtain DoD Component 
prior approval:
    (1) For a change in scope or objective of the project or program, as 
described in 2 CFR 200.308(c)(1)(i).
    (2) For any change in the cost sharing or matching included in the 
approved budget for which FMS Article VI requires prior approval, as 
described in OMB guidance at 2 CFR 200.308(c)(1)(vii).
    (3) If the need arises for additional Federal funds to complete the 
project or program, as described in 2 CFR 200.308(c)(1)(viii).
    (d) Personnel changes, disengagements, or reductions in time. A DoD 
Component must include the following prior approval requirements in 
general terms and conditions of research awards and may include them in 
general terms and conditions of other non-construction awards:
    (1) A change in a key person, as described in 2 CFR 
200.308(c)(1)(ii).
    (2) A principal investigator's or project director's disengagement 
from, or reduction in time devoted to, the project or program, as 
described in 2 CFR 200.308(c)(1)(iii).
    (e) Costs requiring prior approval under the cost principles. With 
respect to waivers of prior approvals required by the cost principles, 
as described in 2 CFR 200.308(c)(1)(iv):
    (1) Any waiver of a cost principles requirement for prior approval 
by a recipient entity's cognizant agency for indirect costs is 
appropriately addressed in award-specific terms and conditions, rather 
than general terms and conditions, because the general terms and 
conditions must be appropriate for use in awards to multiple recipient 
entities.
    (2) A DoD Component may waive requirements in the cost principles 
for recipients to request prior approval before charging certain costs 
as direct costs to awards. However, the DoD Component should carefully 
consider each prior approval requirement individually and decide:
    (i) Which, if any, to waive; and
    (ii) Whether to make the waiver of the prior approval requirement 
contingent on specified conditions (e.g., a DoD Component might waive 
the prior

[[Page 424]]

approval required for direct charging of special purpose equipment 
purchases under an award but elect to waive it only up to a certain 
dollar value).
    (f) Transfers of funds and subawards. A DoD Component's general 
terms and conditions for non-construction awards may include prior 
approval requirements for:
    (1) Transfers of funds for participant support costs, as described 
in 2 CFR 200.308(c)(1)(v).
    (2) Subawarding of work under an award, as described in 2 CFR 
200.308(c)(1)(vi).
    (3) Transfers of funds among direct cost categories, as described in 
2 CFR 200.308(e), but the wording in the general terms and conditions 
must make clear that the prior approval requirement applies only to 
awards using those terms and conditions if the Federal share of the 
total value is in excess of the simplified acquisition threshold. As a 
matter of DoD policy, requiring prior approvals for transfers among 
direct cost categories generally is not appropriate for the general 
terms and conditions of grants and cooperative agreements that support 
research.
    (g) Pre-award costs, carry forward of unobligated balances, and no-
cost extensions. (1) A DoD Component's general terms and conditions may 
authorize recipients to incur project costs up to 90 calendar days prior 
to the beginning date of the period of performance, at their own risk, 
as described in 2 CFR 200.308(d)(1). OMB guidance in 2 CFR 200.308(d)(4) 
makes that authorization the default policy for research awards. 
Therefore, a DoD Component must use this policy in general terms and 
conditions for research awards unless exceptional circumstances provide 
the basis for overriding that policy.
    (2) If a DoD Component's general terms and conditions are used for 
awards that have multiple periods of performance, the DoD Component 
should authorize recipients to carry forward unobligated balances to 
subsequent periods of performance, as described in 2 CFR 200.308(d)(3), 
unless there are compelling reasons not to do so.
    (3) A DoD Component's general terms and conditions may authorize 
recipients to initiate one-time extensions in the periods of performance 
of their awards by up to 12 months, subject to the conditions described 
in 2 CFR 200.308(d)(2), but only if the DoD Component judges that 
authorizing no-cost extensions for awards using the general terms and 
conditions will not cause the DoD Component to fail to comply with DoD 
funding policies (e.g., the incremental program budgeting and execution 
policy for research funding) contained in Volume 2A of the DoD Financial 
Management Regulation, DoD 7000.14-R.
    (h) Award terms and conditions. Appendix D to this part provides 
wording for inclusion in Section B of a DoD Component's general terms 
and conditions in accordance with paragraphs (c) through (g) of this 
section. Specifically:
    (1) In accordance with paragraph (c) of this section, a DoD 
Component's general terms and conditions for non-construction awards 
must include the wording that appendix D provides for paragraphs B.1.a 
and B.1.i of FMS Article IV and, if there will be cost sharing or 
matching required under any awards using the general terms and 
conditions, paragraph B.1.g.
    (2) In accordance with paragraph (d) of this section, a DoD 
Component's general terms and conditions for research awards must 
include the wording that appendix D provides for paragraphs B.1.b and 
B.1.c of FMS Article IV. A DoD Component also may include paragraphs 
B.1.b and B.1.c in general terms and conditions for other non-
construction awards.
    (3) In accordance with paragraph (e) of this section, a DoD 
Component's general terms and conditions for non-construction awards 
must include the wording that appendix D provides for paragraph B.1.d of 
FMS Article IV unless the DoD Component decides to waive any 
requirements in the applicable cost principles for recipients to obtain 
prior approval before including certain types of costs as direct charges 
to awards. If a DoD Component elects to waive any of those prior 
approval requirements, it must add wording to paragraph B.1.d to 
identify the specific types of costs for which recipients need

[[Page 425]]

not obtain DoD Component prior approval (thereby leaving in place the 
other prior approval requirements in the cost principles).
    (4) In accordance with paragraphs (f) and (g) of this section, a DoD 
Component's general terms and conditions for non-construction awards may 
include the wording that appendix D provides for paragraphs B.1.e, 
B.1.f, and B.1.h (except as noted for research awards in paragraph 
(f)(3) of this section) and Section C of FMS Article IV. A DoD Component 
may modify the wording as specified in paragraphs (f) and (g) of this 
section (e.g., to limit the authorization for pre-award costs in non-
construction awards other than research to a period of less than 90 
calendar days prior to the beginning date of the period of performance).
    (5) If no awards using a DoD Component's general terms and 
conditions will support non-construction activities, the DoD Component 
may reserve section B.1 of the wording that appendix D provides for FMS 
Article IV.



Sec.  1128.420  Prior approvals for construction activities.

    (a) OMB guidance. OMB guidance in 2 CFR 200.308(g)(1) through (4) 
addresses prior approval requirements for revisions of a recipient's 
budget and program plans under a construction grant or cooperative 
agreement or construction activities under an award that supports both 
construction and non-construction activities.
    (b) DoD implementation of the guidance. DoD implements the guidance 
in 2 CFR 200.308(g)(1) through (4) through terms and conditions of 
awards for construction. A DoD Component's general terms and conditions 
for construction awards may require additional prior approvals for 
budget and program revisions (i.e., prior approvals other than those 
authorized by this subpart) only in accordance with the exceptions 
provisions of 2 CFR 1126.3.
    (c) Award terms and conditions. In a DoD Component's general terms 
and conditions for construction awards or awards supporting construction 
activities, the DoD Component:
    (1) Must include the wording that appendix D to this part provides 
for paragraph B.2 of FMS Article IV.
    (2) May reserve or remove the wording appendix D to this part 
provides for paragraph B.1 and Section C of FMS Article IV unless some 
awards using the general terms and conditions will also support non-
construction activities (if the DoD Component elects to remove Section 
C, it should redesignate Section D in the article as Section C).



Sec.  1128.425  Additional prior approval for awards that support
both non-construction and construction activities.

    (a) OMB guidance. Guidance on an additional prior approval 
requirement for grants or cooperative agreements that support both 
construction and non-construction activities is contained in 2 CFR 
200.308(g)(5).
    (b) DoD implementation of the guidance. DoD implements the guidance 
in 2 CFR 200.308(g)(5) through terms and conditions for awards that 
support both non-construction and construction activities.
    (c) Award terms and conditions. If a DoD Component establishes 
general terms and conditions for awards that support both non-
construction and construction activities, the DoD Component may add the 
prior approval requirement for funding or budget transfers between 
construction and non-construction activities that is described in OMB 
guidance in 2 CFR 200.308(g)(5). The wording that appendix D to this 
part provides for Section B of FMS Article IV includes a reserved 
paragraph B.3 in which the DoD Component may add appropriate wording to 
include that prior approval requirement.



Sec.  1128.430  Procedures for prior approvals.

    (a) OMB guidance. Guidance on procedures related to recipient 
requests for prior approval is contained in 2 CFR 200.308(h) and (i).
    (b) DoD implementation of the guidance. DoD implements the guidance 
in 2 CFR 200.308(h) and (i) for prior approval requests through award 
terms and conditions.
    (c) Award terms and conditions. A DoD Component must:
    (1) Include the wording appendix D to this part provides for 
paragraph D.1 of

[[Page 426]]

FMS Article IV of its general terms and conditions.
    (2) Insert appropriate wording in lieu of the reserved paragraph D.2 
that appendix D to this part includes in FMS Article IV to specify:
    (i) The format the recipient must use when it requests approval for 
budget revisions. As described in 2 CFR 200.308(h), the award term may 
allow the recipient to submit a letter of request or otherwise must 
specify that the recipient use the same format it used for budget 
information in its application or proposal.
    (ii) Any other procedural instructions related to requests for prior 
approvals for budget or program revisions (e.g., to whom requests must 
be submitted) that are common to the awards using the general terms and 
conditions. For procedural instructions that will vary from one award to 
another, it is appropriate to include wording that points to the award-
specific terms and conditions as the source of the information.



              Subpart E_Non-Federal Audits (FMS Article V)



Sec.  1128.500  Purpose of FMS Article V.

    FMS Article V of the general terms and conditions specifies 
requirements related to audits required under the Single Audit Act, as 
amended (31 U.S.C., chapter 75). The article thereby implements for 
grants and cooperative agreements the OMB guidance in Subpart F of 2 CFR 
part 200.



Sec.  1128.505  Content of FMS Article V.

    (a) Requirement. A DoD Component's general terms and conditions must 
address audit requirements.
    (b) Award terms and conditions--(1) General. A DoD Component's 
general terms and conditions must include the wording appendix E to this 
part provides for FMS Article V.
    (2) Exception. A DoD Component may reserve Section B of the wording 
in appendix E if there will be no subawards to for-profit entities under 
any award using those terms and conditions.



           Subpart F	Cost Sharing or Matching (FMS Article VI)



Sec.  1128.600  Purpose of FMS Article VI.

    FMS Article VI sets forth requirements concerning recipients' cost 
sharing or matching under awards. It thereby implements OMB guidance in:
    (a) 2 CFR 200.306 and 200.308(c)(1)(vii); and
    (b) 2 CFR 200.434, in conjunction with FMS Article III in appendix C 
to this part.



Sec.  1128.605  Content of FMS Article VI.

    (a) Requirement. A DoD Component's general terms and conditions for 
awards under which there may be required cost sharing or matching must 
specify the criteria for determining allowability, methods for 
valuation, and requirements for documentation of cost sharing or 
matching.
    (b) Award terms and conditions--(1) General. A DoD Component's 
general terms and conditions must include as FMS Article VI the wording 
appendix F to this part provides, with any revisions to the wording that 
are authorized by Sec. Sec.  1128.610 through 1128.635.
    (2) Exception. A DoD Component may reserve FMS Article VI of its 
general terms and conditions if it determines that there will be no cost 
sharing or matching required under any of the awards using those terms 
and conditions.



Sec.  1128.610  General requirement for cost sharing or matching.

    (a) Requirement. (1) FMS Article VI of the general terms and 
conditions must tell a recipient that:
    (i) It may find the amount or percentage of cost sharing or matching 
required under its award in the award cover pages.
    (ii) The cost sharing or matching amount or percentage identified in 
the award includes all required (but not voluntary uncommitted) 
contributions to the project or program by the recipient and its 
subrecipients, including any that involve third-party contributions or 
donations to the recipient and subrecipients.
    (iii) It must obtain the DoD Component's prior approval for any 
change in

[[Page 427]]

the required amount or percentage of cost share or match.
    (2) At a DoD Component's option, FMS Article VI also may require a 
recipient to obtain the DoD Component's prior approval if it wishes to 
substitute alternative cost sharing or matching contributions in lieu of 
specific contributions included in the approved budget (e.g., to use a 
third-party in-kind contribution not included in the approved budget).
    (b) Award terms and conditions. To implement paragraph (a) of this 
section, a DoD Component's general terms and conditions must include the 
wording appendix F to this part provides as Section A of FMS Article VI. 
A DoD Component may insert wording in lieu of the reserved paragraph 
A.2.b if it elects to require recipients to obtain prior approval before 
substituting alternative cost sharing or matching contributions, as 
described in paragraph (a)(2) of this section.



Sec.  1128.615  General criteria for determining allowability as cost
sharing or matching.

    (a) OMB guidance. The OMB guidance in 2 CFR 200.306(b) lists the 
basic criteria for the allowability of cost sharing or matching under 
grants and cooperative agreements.
    (b) Award terms and conditions--(1) General. A DoD Component's 
general terms and conditions must include the wording appendix F to this 
part provides as Section B of FMS Article VI to specify the allowability 
of cash or third-party in-kind contributions as cost sharing or 
matching.
    (2) Exception. A DoD Component may reserve paragraph B.4 of Section 
B of FMS Article VI in its general terms and conditions, or replace it 
with appropriate alternative wording, if the DoD Component has statutory 
authority to accept costs reimbursed by other Federal awards as cost 
sharing or matching under the awards using its general terms and 
conditions.



Sec.  1128.620  Allowability of unrecovered indirect costs as cost
sharing or matching.

    (a) OMB guidance. The OMB guidance in 2 CFR 200.306(c) provides that 
unrecovered indirect costs may only be included as part of cost sharing 
and matching with the prior approval of the Federal awarding agency.
    (b) DoD implementation. DoD Components must allow any recipient that 
either has an approved negotiated indirect cost rate or is using the de 
minimis rate described in 2 CFR 200.414(f) to count unrecovered indirect 
costs toward any required cost sharing or matching under awards. The 
basis for this policy is that recipients' indirect costs that are 
allowable and allocable to DoD projects and programs are legitimate 
costs of carrying out those projects and programs.
    (c) Award terms and conditions. To implement the policy in paragraph 
(b) of this section, a DoD Component's general terms and conditions must 
include the wording appendix F to this part provides as Section C of FMS 
Article VI unless a statute requires otherwise.



Sec.  1128.625  Allowability of program income as cost sharing or
matching.

    (a) OMB guidance. OMB guidance in 2 CFR 200.307(e)(3) specifies 
that, with the prior approval of the Federal awarding agency, recipients 
may use program income to meet cost sharing or matching requirements of 
their awards.
    (b) Award terms and conditions--(1) General. A DoD Component's 
general terms and conditions must include the wording appendix F to this 
part provides as Section D of FMS Article VI if, in FMS Article VII of 
those terms and conditions, the DoD Component specifies that recipients 
dispose of program income using either:
    (i) The cost sharing or matching alternative described in paragraph 
(b)(1)(iii) of Sec.  1128.720; or
    (ii) A combination alternative, as described in paragraph (b)(1)(iv) 
of Sec.  1128.720, that includes use of at least some program income as 
cost sharing or matching.
    (2) Exception. A DoD Component may reserve Section D of FMS Article 
VI if FMS Article VII of those terms and conditions does not provide 
that recipients will use any program income as cost sharing or matching.

[[Page 428]]



Sec.  1128.630  Valuation of services or property contributed or
donated by recipients or subrecipients.

    (a) OMB guidance. OMB guidance in 2 CFR 200.306(d) specifies:
    (1) That values for recipients' and subrecipients' contributions of 
services or property toward cost sharing or matching must be established 
in accordance with the cost principles in Subpart E of 2 CFR part 200; 
and
    (2) Types of projects or programs under which recipients' or 
subrecipients' donations of buildings or land are allowable as cost 
sharing or matching, with the prior approval of the Federal awarding 
agency, and how the donations are to be valued in those cases.
    (b) DoD implementation. DoD implements the guidance in 2 CFR 
200.306(d) through award terms and conditions, with the following 
clarifications:
    (1) Cost principles to be used for valuation. (i) Values for 
recipients' and subrecipients' contributions of services or property 
toward cost sharing or matching must be established in accordance with 
the cost principles applicable to the entity making the contribution.
    (ii) Consistent with the cost principles, what generally should be 
charged to awards for real property and equipment is depreciation rather 
than allowing a recipient's or subrecipient's donation of the property 
(i.e., counting the full value of the property toward cost sharing or 
matching). However, depreciation included in a recipient's or 
subrecipient's indirect costs is not appropriate for counting as cost 
sharing or matching under an individual award.
    (2) Donations of property to projects or programs under awards. (i) 
In addition to donations of buildings or land described in 2 CFR 
200.306(d), recipients and subrecipients may, with the prior approval of 
the DoD Component, donate other capital assets described in the cost 
principles in 2 CFR 200.439(b)(1) through (3). The basis for clarifying 
that recipients may donate other capital assets to projects or programs 
under awards is that, with the DoD Component's approval:
    (A) Capital expenditures to acquire those types of capital assets 
are allowable as direct charges to awards; and
    (B) The costs therefore satisfy the allowability criterion in 2 CFR 
200.306(b)(4) and can qualify as cost sharing or matching if they meet 
the other criteria listed in 2 CFR 200.306(b).
    (ii) However, when there are alternative ways for recipients to meet 
requirements for cost sharing or matching, DoD Components should not 
approve donations of capital assets to projects or programs under 
awards. Inclusion of the full value of a donated asset as project costs 
in the approved budget of an award is analogous to inclusion of the 
acquisition cost for an asset that is purchased under the award. Through 
the donation, the Federal Government acquires an interest in the donated 
asset that must be resolved at time of disposition of the asset, which 
is best avoided if possible.
    (iii) Whenever a DoD Component permits a recipient to donate a 
capital asset to a project or program under an award, the DoD Component 
should inform the cognizant Federal agency that negotiates the indirect 
cost rate for that recipient. Doing so enables the cognizant agency to 
take the donation into account when it establishes the recipient's 
indirect cost rate, given that the recipient may not include 
depreciation for the donated asset as indirect costs that enter into the 
computation of that rate.
    (c) Award terms and conditions--(1) General. A DoD Component's 
general terms and conditions must use the wording appendix F to this 
part provides as Section E of FMS Article VI.
    (2) Exception. A DoD Component's general terms and conditions may 
reserve paragraph E.2 of the wording appendix F to this part provides if 
the DoD Component does not allow recipients to donate buildings, land, 
or other capital assets to projects or programs under awards using those 
terms and conditions.



Sec.  1128.635  Valuation of third-party in-kind contributions.

    (a) OMB guidance. OMB guidance in 2 CFR 200.306(e) through (j) and 2 
CFR 200.434(b) through (g) specifies how to value and document various 
types of third-party in-kind contributions for cost sharing or matching 
purposes.

[[Page 429]]

    (b) Award terms and conditions--(1) General. To implement the OMB 
guidance described in paragraph (a) of this section as it applies to 
valuation and documentation of third-party in-kind contributions, a DoD 
Component's general terms and conditions must use the wording Section VI 
of appendix F to this part provides as Section F of FMS Article VI.
    (2) Exception. A DoD Component's general terms and conditions may 
reserve any paragraph of the wording appendix F to this part provides 
for Section F of FMS Article VI if the DoD Component determines that 
there will be no possibility of third-party in-kind contributions under 
awards using those terms and conditions.



               Subpart G	Program Income (FMS Article VII)



Sec.  1128.700  Purpose of FMS Article VII.

    FMS Article VII of the general terms and conditions specifies 
requirements for program income that recipients earn. The article 
thereby implements OMB guidance in 2 CFR 200.80 and 200.307.



Sec.  1128.705  Content of FMS Article VII.

    (a) Requirement. A DoD Component's general terms and conditions must 
address the kinds of income included as program income, the way or ways 
in which a recipient may use it, the duration of the recipient's 
accountability for it, and related matters.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must include as FMS Article VII the wording appendix G to 
this part provides, unless, as authorized by Sec. Sec.  1128.710 through 
1128.725, there are revisions to the wording of Sections A and E of the 
article or Section D is reserved.



Sec.  1128.710  What program income includes.

    (a) OMB guidance. Under the definition of ``program income'' at 2 
CFR 200.80 and related OMB guidance at 2 CFR 200.307, an agency's 
regulations or terms and conditions of grants and cooperative agreements 
may include as program income:
    (1) Rebates, credits, discounts, and interest earned on any of them; 
and
    (2) Taxes, special assessments, levies, fines and other similar 
revenue raised by a governmental recipient.
    (b) DoD implementation. Unless a statute or program regulation 
adopted in the Code of Federal Regulations after opportunity for public 
comment specifies otherwise, each DoD Component must exclude the types 
of income listed in paragraphs (a)(1) and (2) of this section from 
program income for which recipients are accountable to the Federal 
Government.
    (c) Award terms and conditions -- (1) General. Except as provided in 
paragraph (c)(2) of this section, a DoD Component must use the wording 
provided in appendix G to this part as Section A of FMS Article VII in 
its general terms and conditions. Doing so excludes the types of income 
listed in paragraphs (a)(1) and (2) of this section from program income 
for which recipients are accountable to the Federal Government.
    (2) Exceptions. If a DoD Component has a statutory or regulatory 
basis for including either or both types of income described in 
paragraphs (a)(1) and (2) of this section, it may do so by appropriately 
revising the wording appendix G provides for Section A of FMS Article 
VII. For example, to include as program income:
    (i) Rebates, credits, discounts, and interest earned on them, a DoD 
Component would reserve paragraph A.3.c and insert the wording of that 
paragraph as a new paragraph at the end of section A.2, thereby adding 
them to the list of items included as program income subject to FMS 
Article VII.
    (ii) Taxes, special assessments, levies, fines and other similar 
revenue raised by a governmental recipient, a DoD Component would 
reserve paragraph A.3.d and insert that wording as a new paragraph at 
the end of section A.2, thereby adding them to the list of items 
included as program income subject to FMS Article VII.



Sec.  1128.715  Recipient obligations for license fees and royalties.

    (a) Policy. Unless a statute or program regulation adopted in the 
Code of Federal Regulations after opportunity

[[Page 430]]

for public comment provides otherwise, a DoD Component's general terms 
and conditions may not specify that recipients have obligations to the 
Federal Government with respect to program income from license fees and 
royalties for patents or patent applications, copyrights, trademarks, or 
inventions produced under DoD awards.
    (b) Award terms and conditions--(1) General. Except as provided in 
paragraph (b)(2) of this section, a DoD Component's general terms and 
conditions must implement the policy in paragraph (a) of this section by 
including the wording provided in appendix G to this part as Section D 
of FMS Article VII.
    (2) Exception. If a DoD Component has a statutory or regulatory 
basis for establishing recipient obligations for the license fees and 
royalties described in paragraph (a) of this section, it may reserve 
Section D of FMS Article VII in its general terms and conditions.



Sec.  1128.720  Program income use.

    (a) OMB guidance. OMB guidance in 2 CFR 200.307(e) identifies 
alternative ways that a Federal agency might specify that recipients use 
program income they earn.
    (b) DoD implementation. A DoD Component's general terms and 
conditions must specify how recipients are to use program income under 
awards using those terms and conditions.
    (1) The terms and conditions may specify one of the following ways 
for recipients to use program income:
    (i) Addition. A recipient under this alternative adds program income 
to the total amount of the approved budget, which consists of the 
Federal share of funding and any required matching or cost sharing.
    (ii) Deduction. A recipient using this alternative subtracts program 
income from total allowable costs to determine net allowable costs for 
purposes of determining the Federal share of funding and any required 
cost sharing or matching.
    (iii) Cost sharing or matching. Under this alternative, a recipient 
counts program income toward its required cost sharing or matching.
    (iv) Combination. The fourth alternative is a combination of any of 
the three alternatives described in paragraphs (b)(1)(i) through (iii) 
of this section. For example, an agency might specify one alternative to 
be used for program income up to a dollar limit and a second alternative 
for any program income beyond that amount.
    (2) For research awards, absent compelling reasons to do otherwise 
for a specific set of general terms and conditions, a DoD Component must 
specify the addition alternative described in paragraph (b)(1)(i) of 
this section.
    (3) For general terms and conditions of other awards, a Component 
may specify any of the alternatives described in paragraph (a) of this 
section. However, the cost sharing or matching alternative is best used 
as part of a combination alternative, as described in paragraph 
(b)(1)(iv) of this section, unless the DoD Component knows at the time 
awards are made how much program income recipients will earn in relation 
to the amounts of their required cost sharing or matching.
    (c) Award terms and conditions. (1) Default--addition alternative. 
In accordance with the DoD implementation in paragraph (b) of this 
section, a DoD Component must use the wording provided in appendix G to 
this part as Section E of FMS Article VII in:
    (i) Research awards; and
    (ii) Other awards for which it elects to specify the addition 
alternative for use of program income.
    (2) Deduction alternative. A DoD Component electing to specify the 
deduction alternative for use of program income must modify the wording 
appendix G to this part provides for Section E by:
    (i) Substituting the following wording for the wording of paragraph 
E.1: ``1. You must use any program income that you earn during the 
period of performance under this award as a deduction from the total 
approved budget of this award. The program income must be used for the 
purposes and in accordance with the terms and conditions of the award.''
    (ii) Including an additional paragraph E.4, such as the following, 
to inform recipients how the award will change if program income is 
deducted: ``If you report program income on the Federal

[[Page 431]]

Financial Report (SF-425), we will recalculate the Federal share of the 
budget and the non-Federal share if there is one. We also will modify 
the award to reflect the recalculated share or shares and the amount of 
program income you must spend on the project, which is the difference 
between the originally approved and recalculated budget amounts.''
    (3) Cost-sharing or matching alternative. A DoD Component electing 
to specify the cost-sharing or matching alternative for use of program 
income must replace the wording appendix G to this part provides for 
Section E with the following wording: ``You must use any program income 
that you earn during the period of performance under this award to meet 
any cost-sharing or matching requirement under this award. The program 
income must be used for the purposes and in accordance with the terms 
and conditions of the award.''
    (4) A combination of alternatives. A DoD Component electing to 
specify some combination of addition, deduction, and cost-sharing or 
matching alternatives must use wording in Section E of FMS Article VII 
that specifies requirements for each alternative in the combination that 
is consistent with the requirements specified for that alternative in 
paragraphs (c)(1), (2), or (3) of this section.



Sec.  1128.725  Program income after the period of performance.

    (a) OMB guidance. OMB guidance in 2 CFR 200.307(f) provides that an 
agency may specify in agency regulations, grant or cooperative agreement 
terms and conditions, or agreements negotiated with recipients during 
the closeout process that a recipient is accountable to the Federal 
Government for program income earned after the end of the period of 
performance.
    (b) DoD implementation. A DoD Component should rarely, if ever, 
establish a requirement for a recipient to be accountable to the Federal 
Government for program income earned after the end of the period of 
performance.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must include as Section F of FMS Article VII the wording for 
that section that is provided in appendix G to this part. That wording 
specifies that recipients are not accountable to the Federal Government 
for program income earned after the end of the performance period. If an 
exception is warranted for an individual award, the exception is 
properly addressed at the time of award in the award-specific terms and 
conditions.



 Sec. Appendix A to Part 1128--Terms and Conditions for FMS Article I, 
                ``Financial Management System Standards''

    Unless any part of this appendix is reserved, as provided in Sec.  
1128.105, a DoD Component's general terms and conditions must include 
the following wording for FMS Article I.

  FMS Article I. Financial Management System Standards. (DECEMBER 2014)

    Section A. System standard for States. As a State, you must expend 
and account for funds under this award in accordance with:
    1. Applicable State laws; and
    2. To the extent they comply with the requirements of Section B of 
this Article, your procedures for expending and accounting for your own 
State funds.
    Section B. System standards for all recipients. Your financial 
management system must provide for:
    1. Inclusion, in your accounts, of the following information about 
each DoD grant or cooperative agreement that you receive:
    a. That you received the award from DoD;
    b. The number and title listed in the Catalog of Federal Domestic 
Assistance for the DoD program under which the award was made;
    c. The DoD award number; and
    d. The year (your fiscal year) in which you received the award.
    2. Accurate, current, and complete disclosure of the financial 
results of the award needed to comply with financial and programmatic 
reporting requirements that are specified in REP Articles I and II of 
these general terms and conditions, as supplemented by any award-
specific terms and conditions of this award concerning reporting 
requirements. If you are asked at any time under this award to report 
financial information on an accrual basis, you:
    a. Need not establish an accrual accounting system if you maintain 
your records on a different basis; and
    b. May develop the accrual data based on an analysis of the data you 
have on hand.
    3. Records that identify adequately the sources of funds for all 
activities funded by DoD awards, including any required cost

[[Page 432]]

sharing or matching, and the application of those funds. This includes 
funding authorizations; your obligations and expenditures of the funds; 
unobligated balances; property and other assets under the award; program 
income; and interest.
    4. Effective control over, and accountability for, all funds, 
property, and other assets under this award. You must adequately 
safeguard all assets and ensure they are used solely for authorized 
purposes (see Section C of this article for additional requirements 
concerning internal controls).
    5. Comparison of expenditures under this award for project or 
program purposes with amounts in the approved budget for those purposes.
    6. The ability to relate financial data to performance 
accomplishments under this award if you are required to do so by the 
programmatic reporting requirements in REP Article I of these general 
terms and conditions, as supplemented by any award-specific terms and 
conditions of this award concerning reporting requirements.
    7. Written procedures:
    a. To implement requirements specified in FMS Article II, 
``Payments;''
    b. For determining the allowability of costs, which for this award 
are determined in accordance with FMS Article III, ``Allowable costs, 
period of availability of funds, and fee or profit,'' of these general 
terms and conditions, as supplemented by any award-specific terms and 
conditions of this award that relate to allowability of costs.
    Section C. Internal controls. Your system of internal controls must 
conform to OMB guidance in 2 CFR 200.303. With respect to paragraph (e) 
of 2 CFR 200.303, your internal control system must include measures to 
safeguard any information that Federal statute, Executive order, or 
regulation requires to be protected (e.g., personally identifiable or 
export controlled information), whether generated under the award or 
provided to you and identified as being subject to protection.



 Sec. Appendix B to Part 1128--Terms and Conditions for FMS Article II, 
                              ``Payments''

    Unless a DoD Component adds, deletes, or modifies wording, as 
permitted by Sec. Sec.  1128.210 through 1128.220, a DoD Component's 
general terms and conditions must include the following wording for FMS 
Article II.

                FMS Article II. Payments. (DECEMBER 2014)

    Section A. Awards to States. If the award-specific terms and 
conditions of this award do not identify it as an award subject to 
Subpart A of 31 CFR part 205 (Department of the Treasury regulations 
implementing the Cash Management Improvement Act), then this award is 
subject to Subpart B of that part. Consistent with Subpart B of 31 CFR 
part 205:
    1. Payment method, timing, and amounts. You must:
    a. Minimize the time between your receipt of a payment under this 
award and your disbursement of those funds for program purposes.
    b. Limit the amount of each advance payment request to the minimum 
amount you need to meet your actual, immediate cash requirements for 
carrying out the program or project.
    c. Submit each advance payment request approximately 10 days before 
you anticipate disbursing the requested amount for program purposes, so 
that your receipt of the funds will be as close in time as is 
administratively feasible to your actual cash outlay for direct project 
costs and the proportionate share of any allowable indirect costs.
    2. Interest. Unlike awards subject to Subpart A of 31 CFR part 205, 
neither you nor we will incur any interest liability due to a difference 
in timing between your receipt of payments under this award and your 
disbursement of those funds for project or program purposes.
    Section B. Awards to institutions of higher education, nonprofit 
organizations, local governments, and Indian tribes.
    1. Payment method. Unless the award-specific terms and conditions of 
this award provide otherwise, you are authorized to request advance 
payments under this award. That authorization is contingent on your 
continuing to maintain, or demonstrating the willingness to maintain, 
written procedures that minimize the time elapsing between your receipt 
of each payment and your disbursement of the funds for program purposes. 
Note that you are not required to request advance payments and may 
instead, at your option, request reimbursements of funds after you 
disburse them for project or program purposes.
    2. Amounts requested. You must:
    a. Limit the amount of any advance payment request to the minimum 
amount needed to meet your actual, immediate cash requirements for 
carrying out the purpose of the approved program or project, including 
direct project costs and a proportionate share of any allowable indirect 
costs.
    b. Exclude from any payment request amounts you are withholding from 
payments to contractors to assure satisfactory completion of the work. 
You may request those amounts when you make the payments to the 
contractors or to escrow accounts established to ensure satisfactory 
completion of the work.
    c. Exclude from any payment request amounts from any of the 
following sources

[[Page 433]]

that are available to you for program purposes under this award: program 
income, including repayments to a revolving fund; rebates; refunds; 
contract settlements; audit recoveries; and interest earned on any of 
those funds. You must disburse those funds for program purposes before 
requesting additional funds from us.
    3. Timing of requests. For any advance payment you request, you 
should submit the request approximately 10 days before you anticipate 
disbursing the requested amount for project or program purposes. With 
time for agency processing of the request, that should result in payment 
as close as is administratively feasible to your actual disbursements 
for project or program purposes.
    4. Frequency of requests. You may request payments as often as you 
wish unless you have been granted a waiver from requirements to receive 
payments by electronic funds transfer (EFT). If you have been granted a 
waiver from EFT requirements, the award-specific terms and conditions of 
this award specify the frequency with which you may submit payment 
requests.
    5. Withholding of payments. We will withhold payments for allowable 
costs under the award at any time during the period of performance only 
if one or more of the following applies:
    a. We suspend either payments or the award, or disallow otherwise 
allowable costs, as a remedy under OAR Article III due to your material 
failure to comply with Federal statutes, regulations, or the terms and 
conditions of this award. If we suspend payments and not the award, we 
will release withheld payments upon your subsequent compliance. If we 
suspend the award, then amounts of payments are subject to adjustment in 
accordance with the terms and conditions of OAR Article III.
    b. You are delinquent in a debt to the United States as defined in 
OMB Circular A-129, ``Policies for Federal Credit Programs and Non-Tax 
Receivables,'' in which case we may, after reasonable notice, inform you 
that we will not make any further payments for costs you incurred after 
a specified date until you correct the conditions or liquidate the 
indebtedness to the Federal Government.
    c. The award-specific terms and conditions of this award include 
additional requirements that provide for withholding of payments based 
on conditions identified during our pre-award risk evaluation, in which 
case you should have been notified about the nature of those conditions 
and the actions needed to remove the additional requirements.
    6. Depository requirements.
    a. There are no eligibility requirements for depositories you use 
for funds you receive under this award.
    b. You are not required to deposit funds you receive under this 
award in a depository account separate from accounts in which you 
deposit other funds. However, FMS Article I requires that you be able to 
account for the receipt, obligation, and expenditure of all funds under 
this award.
    c. You must deposit any advance payments of funds you receive under 
this award in insured accounts whenever possible and, unless any of the 
following apply, you must deposit them in interest-bearing accounts:
    i. You receive a total of less than $120,000 per year under Federal 
grants and cooperative agreements.
    ii. You would not expect the best reasonably available interest-
bearing account to earn interest in excess of $500 per year on your cash 
balances of advance payments under Federal grants and cooperative 
agreements.
    iii. The best reasonably available interest-bearing account would 
require you to maintain an average or minimum balance higher than it 
would be feasible for you to do within your expected Federal and non-
Federal cash balances.
    iv. A foreign government or banking system precludes your use of 
interest-bearing accounts.
    d. You may retain for administrative expenses up to $500 per year of 
interest that you earn in the aggregate on advance payments you receive 
under this award and other Federal grants and cooperative agreements. 
You must remit annually the rest of the interest to the Department of 
Health and Human Services, Payment Management System, using the 
procedures set forth in OMB guidance in 2 CFR 200.305(b)(9).
    Section C. Electronic funds transfer and other payment procedural 
instructions or information.
    1. Electronic funds transfer. Unless the award-specific terms and 
conditions of this award provide otherwise, you will receive payments 
under this award by electronic funds transfer.
    2. [Reserved].



Sec. Appendix C to Part 1128--Terms and Conditions for FMS Article III, 
 ``Allowable Costs, Period of Availability of Funds, and Fee or Profit''

    Unless a DoD Component reserves sections or paragraphs of this 
article, as permitted by Sec. Sec.  1128.310 through 1128.325, a DoD 
Component's general terms and conditions must include the following 
wording for FMS Article III.

 FMS Article III. Allowable Costs, Period of Availability of Funds, and 
                      Fee or Profit (December 2014)

    Section A. Allowable costs. This section, with the clarification 
provided in Section B, specifies which Federal cost principles must

[[Page 434]]

be used in determining the allowability of costs charged to this award, 
a subrecipient's costs charged to any cost-type subaward that you make 
under this award, and a contractor's costs charged to any cost-type 
procurement transaction into which you enter under this award. These 
cost principles also govern the allowable costs that you or a 
subrecipient of a subaward at any tier below this award may consider 
when establishing the amount of any fixed-amount subaward or fixed-price 
procurement transaction at the next lower tier. The set of cost 
principles to be used in each case depends on the type of entity 
incurring the cost under the award, subaward, or contract.
    1. General case. If you, your subrecipient, or your contractor is:
    a. An institution of higher education, the allowability of costs 
must be determined in accordance with provisions of Subpart E of OMB 
guidance in 2 CFR part 200 other than 2 CFR 200.400(g), supplemented by 
appendix III to that part.
    b. A hospital, the allowability of costs must be determined in 
accordance with provisions of appendix IX to 2 CFR part 200, which 
currently specifies the cost principles in appendix IX to 45 CFR part 75 
as the applicable cost principles.
    c. A nonprofit organization other than a hospital or institution of 
higher education, the allowability of costs must be determined in 
accordance with provisions of Subpart E of OMB guidance in 2 CFR part 
200 other than 2 CFR 200.400(g), supplemented by appendices IV and VIII 
to that part. In accordance with guidance in 2 CFR 200.401(c), a 
nonprofit organization listed in appendix VIII to 2 CFR part 200 is 
subject to the cost principles for for-profit entities specified in 
paragraph 1.e of this section.
    d. A State, local government, or Indian tribe, the allowability of 
costs must be determined in accordance with applicable provisions of 
Subpart E of OMB guidance in 2 CFR part 200 other than 2 CFR 200.400(g), 
supplemented by appendices V through VII to that part.
    e. A for-profit entity (other than a hospital) or a nonprofit 
organization listed in appendix VIII to 2 CFR part 200:
    i. The allowability of costs must be determined in accordance with:
    (A) The cost principles for commercial organizations in the Federal 
Acquisition Regulation (FAR) at Subpart 31.2 of 48 CFR part 31, as 
supplemented by provisions of the Defense Federal Acquisition Regulation 
Supplement (DFARS) at Subpart 231.2 of 48 CFR part 231; and
    (B) For a for-profit entity, the additional provisions on 
allowability of audit costs, in 32 CFR 34.16(f).
    ii. The indirect cost rate to use in that determination is:
    (A) The for-profit entity's federally negotiated indirect cost rate 
if it has one.
    (B) Subject to negotiation between you and the for-profit entity if 
it does not have a federally negotiated indirect cost rate. The rate 
that you negotiate may provide for reimbursement only of costs that are 
allowable in accordance with the cost principles specified in paragraph 
A.1.e.i of this article.
    2. Exception. You may use your own cost principles in determining 
the allowability of a contractor's costs charged to a cost-type 
procurement transaction under this award--or in pricing for a fixed-
price contract based on estimated costs--as long as your cost principles 
comply with the Federal cost principles that paragraph A.1 of this 
section identifies as applicable to the contractor.
    Section B. Clarifications concerning charges for professional 
journal publications. For an entity that Section A of this article makes 
subject to the cost principles in Subpart E of 2 CFR part 200:
    1. Costs of publishing in professional journals are allowable under 
2 CFR 200.461(b) only if they are consistently applied across the 
organization. An organization may not charge costs of journal 
publications as direct costs to this award if it charges any of the same 
type of costs for other journal publications as indirect costs.
    2. ``Costs of publication or sharing of research results'' in 2 CFR 
200.461(b)(3) are the ``charges for professional journal publications'' 
described in 2 CFR 200.461(b) and subject to the conditions of 2 CFR 
200.461(b)(1) and (2).
    Section C. Period of availability of funds. You may charge to this 
award only:
    1. Allowable costs incurred during the period of performance 
specified in this award, including any subsequent amendments to it;
    2. Any pre-award costs that you are authorized (by either the terms 
and conditions of FMS Article IV or the DoD awarding official) to incur 
prior to the start of the period of performance, at your own risk, for 
purposes of the project or program under this award; and
    3. Costs of publishing in professional journals incurred after the 
period of performance, as permitted under 2 CFR 200.461(b)(3), if:
    a. We receive the request for payment for such costs no later than 
the date on which REP Article II requires you to submit the final 
financial report to us (or, if we grant your request for an extension of 
the due date, that later date on which the report is due); and
    b. Your reported expenditures on the final financial report include 
the amount you disbursed for those costs.
    Section D. Fee or profit.
    1. You may not receive any fee or profit under this award.
    2. You may not use funds available to you under this award to pay 
fee or profit to an

[[Page 435]]

entity of any type to which you make a subaward.
    3. You may pay fee or profit to an entity with which you enter into 
a procurement transaction to purchase goods or general support services 
for your use in carrying out the project or program under the award.



 Sec. Appendix D to Part 1128--Terms and Conditions for FMS Article IV, 
                ``Revision of Budget and Program Plans''

    Unless a DoD Component reserves a section or paragraph or adds or 
modifies wording, as permitted by Sec. Sec.  1128.410 through 1128.430, 
a DoD Component's general terms and conditions must include the 
following wording for FMS Article IV.

  FMS Article IV. Revision of Budget and Program Plans (DECEMBER 2014)

    Section A. Approved budget. The approved budget of this award:
    1. Is the most recent version of the budget that you submitted, and 
we approved (either at the time of the initial award or a more recent 
amendment), to summarize planned expenditures for project or program 
purposes.
    2. Includes all Federal funding that we make available to you under 
this award to use for project or program purposes and any cost sharing 
or matching that you are required to provide under this award for those 
same purposes.
    Section B. Revisions requiring prior approval.
    1. Non-construction activities. You must request prior approval from 
us for any of the following program or budget revisions in non-
construction activities:
    a. A change in the scope or objective of the project or program 
under this award, even if there is no associated budget revision that 
requires our prior approval.
    b. A change in a key person identified in the award cover pages.
    c. The approved principal investigator's or project director's 
disengagement from the project for more than three months, or a 25 
percent reduction in his or her time devoted to the project.
    d. The inclusion of direct costs that require prior approval in 
accordance with the applicable cost principles, as identified in FMS 
Article III.
    e. The transfer to other categories of expense of funds included in 
the approved budget for participant support costs, as defined at 2 CFR 
200.75.
    f. A subaward to another entity under which it will perform a 
portion of the substantive project or program under the award, if it was 
not included in the approved budget. This does not apply to your 
contracts for acquisition of supplies, equipment, or general support 
services you need to carry out the project or program.
    g. Any change in the cost sharing or matching you provide under the 
award, as included in the approved budget, for which FMS Article VI 
requires prior approval.
    h. A transfer of funds among direct cost categories or programs, 
functions, and activities, if the Federal share of the total value for 
your award exceeds the simplified acquisition threshold and the 
cumulative amount of the transfers exceeds or is expected to exceed 10 
percent of the approved budget.
    i. The need arises for additional Federal funds to complete the 
project or program.
    2. Construction activities. You must request prior approval from us 
for any of the following program or budget revisions in construction 
activities:
    a. A change in the scope or objective of the project or program 
under this award, even if there is no associated budget revision that 
requires our prior approval.
    b. The need arises for additional Federal funds to complete the 
project or program.
    c. The inclusion of direct costs that require prior approval in 
accordance with the applicable cost principles, as identified in FMS 
Article III.
    3. Funding transfers between construction and non-construction 
activities. [Reserved.]
    Section C. Pre-award costs, carry forward of unobligated balances, 
and one-time no-cost extensions. You are authorized, without requesting 
prior approval from us, to:
    1. Charge to this award after you receive it pre-award costs that 
you incurred, at your own risk, up to 90 calendar days before the start 
date of the period of performance, as long as they are costs that would 
be allowable charges to the project or program under the terms and 
conditions of FMS Article III if they were incurred during the period of 
performance.
    2. Carry forward an unobligated balance to a subsequent period of 
performance under this award.
    3. Initiate a one-time extension of the period of performance by up 
to 12 months, as long as:
    a. You notify us in writing with the supporting reasons and revised 
end date of the period of performance at least 10 calendar days before 
the current end date.
    b. The extension does not require any additional Federal funding.
    c. The extension does not involve any change in the scope or 
objectives of the project or program.
    Section D. Procedures.
    1. We will review each request you submit for prior approval for a 
budget or program change and, within 30 calendar days of our receipt of 
your request, we will respond to you in writing to either:

[[Page 436]]

    a. Notify you whether your request is approved; or
    b. Inform you that we still are considering the request, in which 
case we will let you know when you may expect our decision.
    2. [Reserved].



 Sec. Appendix E to Part 1128--Terms and Conditions for FMS Article V, 
                         ``Non-Federal Audits''

    Unless a DoD Component reserves Section B, as permitted by Sec.  
1128.605, a DoD Component's general terms and conditions must use the 
following wording for FMS Article V.

            FMS Article V. Non-Federal Audits (DECEMBER 2014)

    Section A. Requirements for entities subject to the Single Audit 
Act. You and each subrecipient under this award that is an institution 
of higher education, nonprofit organization, State, local government, or 
Indian tribe must comply with the audit requirements specified in 
Subpart F of 2 CFR part 200, which is the OMB implementation of the 
Single Audit Act, as amended (31 U.S.C. chapter 75).
    Section B. Requirements for for-profit entities. Any for-profit 
entity that receives a subaward from you under this award is subject to 
the audit requirements specified in 32 CFR 34.16. Your subaward terms 
and conditions will require the subrecipient to provide the reports to 
you if it is willing to do so, so that you can resolve audit findings 
that pertain specifically to your subaward (e.g., disallowance of 
costs). If the for-profit entity is unwilling to agree to provide the 
auditor's report to you, contact the grants officer for this award to 
discuss an alternative approach for carrying out audit oversight of the 
subaward. If the grants officer does not provide an alternative approach 
within 30 days of receiving your request, you may determine an approach 
to ensure the for-profit subrecipient's compliance with the subaward 
terms and conditions, as described in OMB guidance at 2 CFR 200.501(h).



 Sec. Appendix F to Part 1128--Terms and Conditions for FMS Article VI, 
                      ``Cost Sharing or Matching''

    Unless a DoD Component reserves FMS Article VI in its entirety, 
reserves one or more paragraphs within sections of the article, or 
includes added or alternate wording, as permitted by Sec. Sec.  1128.610 
through 1128.635, a DoD Component's general terms and conditions must 
use the following wording for FMS Article VI.

        FMS Article VI. Cost Sharing or Matching (DECEMBER 2014)

    Section A. Required cost sharing or matching.
    1. If any cost sharing or matching is required under this award, the 
total amount or percentage required is shown in the award cover pages 
and included in the approved budget. That cost sharing or matching 
includes all:
    a. Cash contributions to the project or program either made by or 
through (if made by a third party) you and any subrecipients.
    b. Third-party in-kind contributions to the project or program.
    2. You must obtain our prior approval if you wish to:
    a. Change the amount or percentage of cost sharing or matching 
required under this award.
    b. [Reserved].
    Section B. Allowability as cost sharing or matching. Each cash or 
third party in-kind contribution toward any cost sharing or matching 
required under this award, whether put forward by you or a subrecipient 
under a subaward that you make, is allowable as cost sharing or matching 
if:
    1. You (or the subrecipient, if it is a subrecipient contribution) 
maintain records from which one may verify that the contribution was 
made to the project or program and, if it is a third-party in-kind 
contribution, its value.
    2. The contribution is not counted as cost sharing or matching for 
any other Federal award.
    3. The contribution is:
    a. Allowable under the cost principles applicable to you (or the 
subrecipient, if it is a subrecipient contribution) under FMS Article 
III of these terms and conditions; and
    b. Allocable to the project or program and reasonable.
    4. The Government does not pay for the contribution through another 
Federal award, unless that award is under a program that has a Federal 
statute authorizing application of that program's Federal funds to other 
Federal programs' cost sharing or matching requirements.
    5. The value of the contribution is not reimbursed by the Federal 
share of this award as either a direct or indirect cost.
    6. The contribution conforms to the other terms and conditions of 
this award, including the award-specific terms and conditions.
    Section C. Allowability of unrecovered indirect costs as cost 
sharing or matching. You may use your own or a subrecipient's 
unrecovered indirect costs as cost sharing or matching under this award. 
Unrecovered indirect costs means the difference between the amount of 
indirect costs charged to the award and the amount that you and any 
subrecipients could have charged in accordance with your respective 
approved indirect cost rates, whether those rates are negotiated or de 
minimis (as described in 2 CFR 200.414(f)).
    Section D. Allowability of program income as cost sharing or 
matching. If FMS Article VII

[[Page 437]]

of these general terms and conditions or the award-specific terms and 
conditions of this award specify that you are to use some or all of the 
program income you earn to meet cost-sharing or matching requirements 
under the award, then program income is allowable as cost sharing or 
matching to the extent specified in those award terms and conditions.
    Section E. Valuation of services or property that you or 
subrecipients contribute or donate. You must establish values for 
services or property contributed or donated toward cost sharing or 
matching by you or subrecipients in accordance with the provisions of 
this section. These contributions or donations are distinct from third-
party in-kind contributions to you or subrecipients, which are addressed 
in Section F of this article.
    1. Usual valuation of services or property that you or subrecipients 
contribute or donate. Values established for contributions of services 
or property by you or a subrecipient must be the amounts allowable in 
accordance with the cost principles applicable to the entity making the 
contribution (i.e., you or the subrecipient), as identified in FMS 
Article III. For property, that generally is depreciation.
    2. Needed approvals for, and valuation of, property that you or 
subrecipients donate.
    a. Types of property that may be donated.
    i. Buildings or land. If the purposes of this award include 
construction, facilities acquisition, or long-term use of real property, 
you may donate buildings or land to the project if you obtain our prior 
approval. Donation of property to the project, as described in PROP 
Article I, means counting the value of the property toward cost sharing 
or matching, rather than charging depreciation.
    ii. Other capital assets. If you obtain our prior approval, you may 
donate to the project other capital assets identified in 2 CFR 
200.439(b)(1) through (3).
    b. Usual valuation of donated property. Unless you obtain our 
approval as described in paragraph E.2.c of this article, the value for 
the donated property must be the lesser of:
    i. The value of the remaining life of the property recorded in your 
accounting records at the time of donation, or
    ii. The current fair market value.
    c. Approval needed for alternative valuation of property. If you 
obtained our approval in the approved budget, you may count as cost 
sharing or matching the current fair market value of the donated 
property even if it exceeds the value of the remaining life of the 
property recorded in your accounting records at the time of donation.
    d. Federal interest in donated property. Donating buildings, land, 
or other property to the project, rather than charging depreciation, 
results in a Federal interest in the property in accordance with PROP 
Article I of these terms and conditions.
    Section F. Valuation of third-party in-kind contributions.
    1. General. If a third party furnishes goods or services to you or 
subrecipients that are to be counted toward cost sharing or matching 
under this award, the entity to which the third party furnishes the 
goods or services (i.e., you or a subrecipient) must document the fair 
market value of those in-kind contributions and, to the extent feasible, 
support those values using the same methods the entity uses internally.
    2. Valuation of third-party services. You must establish values for 
third-party volunteer services and services of third parties' employees 
furnished to you or subrecipients as follows:
    a. Volunteer services. Volunteer services furnished by third-party 
professional and technical personnel, consultants, and other skilled and 
unskilled labor must be valued in accordance with 2 CFR 200.306(e).
    b. Services of third parties' employees. When a third-party 
organization furnishes the services of its employees to you or a 
subrecipient, values for the contributions must be established in 
accordance with 2 CFR 200.306(f).
    c. Additional requirement for donations to nonprofit organizations. 
For volunteer services or services of third parties' employees furnished 
to a nonprofit organization:
    i. OMB guidance in 2 CFR 200.434(e) also applies and may require the 
nonprofit organization to allocate a proportionate share of its 
applicable indirect costs to the donated services.
    ii. The indirect costs that the nonprofit organization allocates to 
the donated services in that case must be considered project costs and 
may be either reimbursed under the award or counted toward required cost 
sharing or matching, but not both.
    3. Valuation of third-party property. You must establish values for 
third-party property furnished to you or subrecipients as follows:
    a. Supplies donated by third parties. When a third-party 
organization donates supplies (e.g., office, laboratory, workshop, or 
classroom supplies), the value that may be counted toward cost sharing 
or matching may not exceed the fair market value of the supplies at the 
time of donation.
    b. Equipment, buildings, or land donated by third parties.
    i. The value of third-party donations of equipment, buildings, or 
land that may be counted toward cost sharing or matching when the third 
party transferred title to you or a subrecipient depends on the purpose 
of the award in accordance with the following:
    (A) If one of the purposes of the award is to assist you or the 
subrecipient in the acquisition of equipment, buildings, or land, you 
may count the aggregate fair market value

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of the donated property toward cost sharing or matching.
    (B) If the award's purposes instead include only the support of 
activities that require the use of equipment, buildings, or land, you 
may only charge depreciation unless you obtain our prior approval to 
count as cost sharing or matching the fair market value of equipment or 
other capital assets and fair rental charges for land.
    ii. The values of the donated property must be determined in 
accordance with the usual accounting policies of the entity to which the 
third party transferred title to the property, with the qualifications 
specified in 2 CFR 200.306(i)(1) and (2) for donated land and buildings 
and donated equipment, respectively.
    c. Use of space donated by third parties. If a third party makes 
space available for use by you or a subrecipient, the value that you may 
count toward cost sharing or matching may not exceed the fair rental 
value of comparable space as established by an independent appraisal, as 
described in 2 CFR 200.306(i)(3).
    d. Equipment loaned by third parties. If a third party loans 
equipment for use by you or a subrecipient, the value that you may count 
toward cost sharing or matching may not exceed its fair rental value.



Sec. Appendix G to Part 1128--Terms and Conditions for FMS Article VII, 
                           ``Program Income''

    Unless a DoD Component revises the wording of Section A or E or 
reserves Section D, as permitted by Sec. Sec.  1128.710 through 
1128.725, a DoD Component's general terms and conditions must use the 
following wording for FMS Article VII.

             FMS Article VII. Program Income (December 2014)

    Section A. Definition. The term ``program income'' as used in this 
award:
    1. Is gross income that:
    a. You earn that is directly generated by a supported activity or 
earned as a result of this award; or
    b. A subrecipient earns as a result of a subaward you make under 
this award.
    2. Includes, but is not limited to, income earned under this award 
from:
    a. Fees for services performed;
    b. The use or rental of real or personal property acquired under any 
Federal award and currently administered under this award;
    c. The sale of commodities or items fabricated under this award;
    d. License fees and royalties on patents and copyrights; and
    e. Payments of principal and interest on loans made with Federal 
award funds.
    3. Does not include for purposes of this award any:
    a. Interest earned on advance payments, disposition of which is 
addressed in FMS Article II;
    b. Proceeds from the sale of real property, equipment or supplies, 
which is addressed in PROP Articles III and IV;
    c. Rebates, credits, discounts, and interest earned on any of them; 
and
    d. Governmental revenues, including any taxes, special assessments, 
levies, fines and similar revenues you raise.
    Section B. Encouragement to earn program income. You are encouraged 
to earn program income under this award when doing so does not interfere 
with the program or project the award supports.
    Section C. Costs of generating program income. You may deduct costs 
incidental to the generation of program income from the amount that you 
use in accordance with Section E of this Article, as long as those costs 
are not charged to this award (which includes their being counted toward 
any cost sharing or matching you are required to provide).
    Section D. License fees and royalties. You have no obligations to 
the Federal Government with respect to program income earned under this 
award from license fees and royalties for patents or patent 
applications, copyrights, trademarks, or inventions developed or 
produced under the award.
    Section E. Use of program income.
    1. You must use any program income that you earn during the period 
of performance under this award to increase the amount of the award (the 
sum of the Federal share and any cost sharing or matching you are 
required to provide), thereby increasing the amount budgeted for the 
project. The program income must be used for the purposes and under the 
terms and conditions of the award.
    2. Your use of the additional funding is subject to the terms and 
conditions of this award, including:
    a. FMS Article II concerning your use of balances of program income 
before you request additional funds from us; and
    b. FMS Article III concerning allowability of costs for which the 
funds may be used.
    3. You must report on each Federal Financial Report (SF-425) that 
you submit in accordance with REP Article II the program income that you 
earn and any that you use during the reporting period covered by that 
SF-425.
    Section F. Duration of accountability for program income. The 
requirements concerning disposition of program income in Section E of 
this Article apply only to program income you earn during the period of 
performance. There are no requirements under this award applicable to 
program income you earn after the end of the period of performance.

[[Page 439]]



PART 1130_PROPERTY ADMINISTRATION: GENERAL AWARD TERMS AND
CONDITIONS--Table of Contents



Sec.
1130.1 Purpose of this part.
1130.2 Applicability of this part.
1130.3 Exceptions from requirements of this part.
1130.4 Organization of this part.

              Subpart A_Title to Property (PROP Article I)

1130.100 Purpose of PROP Article I.
1130.105 Title to property acquired under awards.
1130.110 Property trust relationship.
1130.115 Title to federally owned property.
1130.120 Federal interest in donated property.
1130.125 Federal interest in property improved under awards.

         Subpart B_Property Management System (PROP Article II)

1130.200 Purpose of PROP Article II.
1130.205 Insurance coverage for real property and equipment.
1130.210 Other property management system standards for States.
1130.215 Other property management system standards for institutions of 
          higher education, nonprofit organizations, local governments, 
          and Indian tribes.

    Subpart C_Use and Disposition of Real Property (PROP Article III)

1130.300 Purpose of PROP Article III.
1130.305 Use of real property.
1130.310 Disposition of real property.

 Subpart D_Use and Disposition of Equipment and Supplies (PROP Article 
                                   IV)

1130.400 Purpose of PROP Article IV.
1130.405 Property subject to PROP Article IV.
1130.410 Requirements for a State's use and disposition of equipment.
1130.415 Use of equipment by an institution of higher education, 
          nonprofit organization, local government, or Indian tribe.
1130.420 Disposition of equipment by an institution of higher education, 
          nonprofit organization, local government, or Indian tribe.
1130.425 Use and disposition of supplies.

Subpart E_Use and Disposition of Federally Owned Property (PROP Article 
                                   V)

1130.500 Purpose of PROP Article V.
1130.505 Content of PROP Article V.

             Subpart F_Intangible Property (PROP Article VI)

1130.600 Purpose of PROP Article VI.
1130.605 Copyrights asserted in works developed or otherwise acquired 
          under awards.
1130.610 Inventions developed under awards.
1130.615 Data produced under awards.
1130.620 Intangible property acquired, but not developed or produced, 
          under awards.

Appendix A to Part 1130--Terms and conditions for PROP Article I, 
          ``Title to property''
Appendix B to Part 1130--Terms and conditions for PROP Article II, 
          ``Property management system''
Appendix C to Part 1130--Terms and conditions for PROP Article III, 
          ``Use and disposition of real property''
Appendix D to Part 1130--Terms and conditions for PROP Article IV, ``Use 
          and disposition of equipment and supplies''
Appendix E to Part 1130--Terms and conditions for PROP Article V, ``Use 
          and disposition of federally owned property''
Appendix F to Part 1130--Terms and conditions for PROP Article VI, 
          ``Intangible property''

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51171, Aug. 19, 2020, unless otherwise noted.



Sec.  1130.1  Purpose of this part.

    (a) This part specifies standard wording of general terms and 
conditions concerning equipment, supplies, and real, intangible, and 
federally owned property.
    (b) It thereby implements OMB guidance in 2 CFR 200.310 through 
200.316, as that guidance applies to general terms and conditions of 
grants and cooperative agreements.



Sec.  1130.2  Applicability of this part.

    The types of awards and entities to which this part and other parts 
in this subchapter apply are described in the subchapter overview at 2 
CFR 1126.2.



Sec.  1130.3  Exceptions from requirements of this part.

    Exceptions are permitted from the administrative requirements in 
this part only as described at 2 CFR 1126.3.



Sec.  1130.4  Organization of this part.

    (a) The content of this part is organized into subparts and 
associated appendices.

[[Page 440]]

    (1) Each subpart provides direction to DoD Components on how to 
construct one article of general terms and conditions for grants and 
cooperative agreements.
    (2) For each subpart, there is a corresponding appendix with 
standard wording for terms and conditions of the article addressed by 
the subpart. Terms and conditions address rights and responsibilities of 
the Federal Government and recipients.
    (b) A DoD Component must use the wording provided in each appendix 
in accordance with the direction in the corresponding subpart. That 
direction may permit DoD Components to vary from the standard wording in 
some situations.
    (c) Table 1 shows which article of general terms and conditions may 
be found in each of appendices A through F to this part (with the 
associated direction to DoD Components in Subparts A through F, 
respectively):

                        Table 1 to Paragraph (c)
------------------------------------------------------------------------
                             You will find terms and
                              conditions specifying
                              recipients' rights and   That would appear
          In . . .               responsibilities     in an award within
                                 related to . . .     PROP Article . . .
 
------------------------------------------------------------------------
Appendix A.................  Title to property......  I.
Appendix B.................  Property management      II.
                              system.
Appendix C.................  Use and disposition of   III.
                              real property.
Appendix D.................  Use and disposition of   IV.
                              equipment and supplies.
Appendix E.................  Use and disposition of   V.
                              federally owned
                              property.
Appendix F.................  Intangible property....  VI.
------------------------------------------------------------------------



              Subpart A_Title to Property (PROP Article I)



Sec.  1130.100  Purpose of PROP Article I.

    PROP Article I specifies in whom and under what conditions title to 
property vests under the award. It thereby implements OMB guidance for 
grants and cooperative agreements:
    (a) Pertaining to vesting of title to property, in 2 CFR 200.311(a), 
200.312(a), 200.313(a), 200.314(a), and 200.315(a).
    (b) Pertaining to the property trust relationship in 2 CFR 200.316.



Sec.  1130.105  Title to property acquired under awards.

    (a) General policy. Title to tangible property that a recipient 
acquires under an award (whether by purchase, construction or 
fabrication, development, or otherwise), and title to intangible 
property that a recipient acquires other than by developing or producing 
it under an award, generally vests in the recipient subject to the 
conditions in PROP Articles II-IV and Section D of PROP Article VI, 
which protect the Federal interest in the property.
    (b) Exceptions to the general policy when there is statutory 
authority--(1) Exempt property in general. If a DoD Component has 
statutory authority to do so, it may vest title in recipients to 
property acquired under awards either unconditionally or subject to 
fewer conditions than those in PROP Articles II-IV and VI. This subpart 
refers to acquired property for which a DoD Component has such statutory 
authority--and elects to use it--as ``exempt property.''
    (2) Research awards. (i) Under 31 U.S.C. 6306, a DoD Component may 
vest title to tangible personal property (i.e., equipment and supplies) 
in a nonprofit institution of higher education or nonprofit organization 
whose primary purpose is conducting scientific research--without further 
obligation to the Federal Government or subject to conditions the DoD 
Component deems appropriate--if the property is bought with amounts 
provided under a grant or cooperative agreement for basic or applied 
research.
    (ii) As a matter of policy, to enhance the university infrastructure 
for future performance of defense research and research-related 
education and training, DoD Components must make maximum use of the 
authority of 31 U.S.C. 6306 to vest title to equipment in nonprofit 
institutions of higher education subject to only the following three 
conditions:
    (A) The recipient uses the equipment for the authorized purposes of 
the

[[Page 441]]

project or program until the property is no longer needed for those 
purposes.
    (B) The recipient manages the equipment as provided in PROP Article 
II of the general terms and conditions (see Subpart B of this part). 
This includes maintaining property records that include the percentage 
of Federal participation in the costs of the project or program under 
which the recipient acquired the exempt property, so that the recipient 
may deduct the Federal share if it wishes to use the property in future 
contributions for cost sharing or matching purposes on Federal awards.
    (C) The DoD Component reserves the right to transfer title to the 
equipment to another recipient entity if the Principal Investigator 
relocates his or her research program to that entity.
    (c) Award terms and conditions--(1) General. Unless a DoD Component 
has a statute authorizing it to identify acquired property as exempt 
property, as described in paragraph (b) of this section, it must use the 
wording appendix A to this part provides for Section A of PROP Article 
I.
    (2) Exceptions. (i) If a DoD Component has statutory authority such 
as described in paragraph (b) of this section, and elects to use that 
authority for awards subject to its general terms and conditions, it 
must insert wording in paragraph A.2 of PROP Article I to:
    (A) Identify the type or types of property it is exempting from the 
standard requirements for title vesting, use, and disposition contained 
in PROP Articles II through IV and VI and reporting requirements 
contained in REP Article III of the general terms and conditions.
    (B) If it is exempting the property from some, but not all, of the 
standard requirements, identify the requirements to which the exempt 
property will be subject.
    (ii) Paragraph A.2 of PROP Article I in general terms and conditions 
used for research awards to institutions of higher education and 
nonprofit organizations whose primary purpose is conducting scientific 
research generally should provide for vesting of title to acquired 
equipment and supplies in those types of entities when they are 
conducting basic or applied research subject only to the three 
conditions described in paragraph (b)(2)(ii) of this section.



Sec.  1130.110  Property trust relationship.

    (a) OMB guidance. OMB guidance in 2 CFR 200.316 describes the 
property trust relationship. It states that:
    (1) Recipients must hold real property, equipment, and intangible 
property acquired or improved under grants or cooperative agreements in 
trust for the beneficiaries of the projects or programs under which the 
property was acquired or improved; and
    (2) A Federal agency may require a recipient to record liens or 
other appropriate notices of record to indicate that personal or real 
property was acquired or improved under a grant or cooperative 
agreement, making the property's use and disposition subject to the 
award terms and conditions.
    (b) DoD implementation. A DoD Component's general terms and 
conditions must specify that recipients hold title to real property, 
equipment, and intangible property acquired or improved under DoD grants 
and cooperative agreements in trust for the beneficiaries of the 
projects or programs carried out under those awards.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions:
    (1) Must include the wording appendix A to this part provides for 
paragraph B.1 of PROP Article I, except that a DoD Component may instead 
reserve Section B if there will be no acquisition or improvement of real 
property, equipment, or intangible property under awards using those 
general terms and conditions or subawards under those awards.
    (2) May add wording to the reserved paragraph B.2 of the wording of 
Section B of PROP Article I to require recipients to record liens or 
other notices of record, as described in paragraph (a) of this section.



Sec.  1130.115  Title to federally owned property.

    (a) Requirement. A DoD Component's general terms and conditions must 
inform recipients that title to federally

[[Page 442]]

owned property remains with the Federal Government and include the 
wording appendix A to this part provides for Section C of PROP Article 
I.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must either:
    (1) Include the wording appendix A to this part provides for Section 
C of PROP Article I to indicate that title to federally owned property 
remains with the Federal Government; or
    (2) Reserve Section C if it provides no federally owned property 
under its awards.



Sec.  1130.120  Federal interest in donated property.

    (a) Requirement. A DoD Component's general terms and conditions must 
inform recipients that the Federal Government acquires an interest in 
any real property or equipment for which the value of the remaining life 
of the property in the recipient's accounting records or the fair market 
value of the property is counted toward required cost sharing or 
matching, rather than charging depreciation.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions therefore must either:
    (1) Include the wording appendix A to this part provides for Section 
D of PROP Article I to specify the Federal interest in donated real 
property or equipment; or
    (2) Reserve Section D of PROP Article I if the DoD Component does 
not permit recipients to count the fair market value of real property or 
equipment toward cost sharing or matching.



Sec.  1130.125  Federal interest in property improved under awards.

    (a) Requirement. A DoD Component's general terms and conditions must 
address the Federal interest in improvements to real property or 
equipment that results if a recipient directly charges the costs of the 
improvements to an award.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions therefore must either:
    (1) Include the wording appendix A to this part provides for Section 
E of PROP Article I to specify the Federal interest in improved real 
property or equipment; or
    (2) Reserve Section E of PROP Article I if there will be no 
improvements to real property or equipment under awards using those 
general terms and conditions or subawards under those awards.



         Subpart B_Property Management System (PROP Article II)



Sec.  1130.200  Purpose of PROP Article II.

    (a) PROP Article II prescribes standards for:
    (1) Insurance coverage for real property and equipment acquired or 
improved under awards;
    (2) The system that a recipient uses to manage both equipment that 
is acquired or improved in whole or in part under awards and federally 
owned property.
    (b) It thereby implements OMB guidance in 2 CFR 200.310 and 
200.313(d)(1) through (4), and partially implements 2 CFR 200.313(b).



Sec.  1130.205  Insurance coverage for real property and equipment.

    (a) OMB guidance. OMB guidance in 2 CFR 200.310 includes a 
requirement for recipients' insurance coverage for real property and 
equipment acquired or improved under grants and cooperative agreements 
and states that federally owned property need not be insured unless 
required by Federal award terms and conditions.
    (b) DoD implementation. A DoD Component's general terms and 
conditions must require recipients to provide insurance coverage for 
real property and equipment acquired or improved under awards. However, 
unless a statute or program regulation adopted in the Code of Federal 
Regulations after opportunity for public comment specifies otherwise, 
DoD awards will not require recipients to insure federally owned 
property.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions therefore must either:
    (1) Include the wording appendix B to this part provides for Section 
A of PROP Article II; or
    (2) Reserve Section A of PROP Article II if there will be no real 
property

[[Page 443]]

or equipment acquired or improved under awards using those terms and 
conditions or subawards under those awards.



Sec.  1130.210  Other property management system standards for States.

    (a) Requirement. A DoD Component's general terms and conditions must 
address the standards for States' property management systems.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions therefore must either:
    (1) Include the wording appendix B to this part provides for Section 
B of PROP Article II; or
    (2) Reserve Section B of PROP Article II if no State will acquire or 
improve equipment, in whole or in part, or be accountable for federally 
owned property under awards using those general terms and conditions or 
subawards under those awards.



Sec.  1130.215  Other property management system standards for
institutions of higher education, nonprofit organizations, local
governments, and Indian tribes.

    (a) Requirement. A DoD Component's general terms and conditions must 
address the standards for property management systems of institutions of 
higher education, nonprofit organizations, local governments, and Indian 
tribes.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions therefore must either:
    (1) Include the wording appendix B to this part provides for Section 
C of PROP Article II; or
    (2) Reserve Section C of PROP Article II if no institution of higher 
education, nonprofit organization, local government, or Indian tribe 
will acquire or improve equipment, in whole or in part, or be 
accountable for federally owned property under awards using those 
general terms and conditions or subawards under those awards.



    Subpart C_Use and Disposition of Real Property (PROP Article III)



Sec.  1130.300  Purpose of PROP Article III.

    PROP Article III specifies requirements for recipients' use and 
disposition of real property acquired or improved under an award. It 
thereby implements OMB guidance in 2 CFR 200.311(b) and (c).



Sec.  1130.305  Use of real property.

    (a) OMB guidance. OMB guidance in 2 CFR 200.311(b) states that, 
except as otherwise provided by Federal statute or the Federal awarding 
agency, a recipient must use real property acquired or improved under a 
grant or cooperative agreement for the originally authorized purpose as 
long as needed for that purpose, during which time the recipient must 
not dispose of the property or encumber its title or other interests.
    (b) DoD implementation. Unless a statute or program regulation 
adopted in the Code of Federal Regulations after opportunity for public 
comment specifies otherwise, DoD awards must permit recipients to do the 
following:
    (1) While real property acquired or improved under an award still is 
needed for the authorized purpose, also use it for other projects or 
programs that either are supported by DoD Components or other Federal 
agencies or not federally supported, as long as that use does not 
interfere with the property's use for the authorized purpose.
    (2) After the real property no longer is needed for the authorized 
purpose, with the written approval of the award administration office, 
use the property on other federally supported projects or programs that 
have purposes consistent with those authorized for support by the DoD 
Component that made the award under which the property was acquired or 
improved.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must either:
    (1) Include the wording appendix C to this part provides for Section 
A of PROP Article III; or
    (2) If a statute or program regulation in the Code of Federal 
Regulations specifies different requirements for recipients' use of real 
property, substitute alternative wording for Section A to specify those 
requirements.



Sec.  1130.310  Disposition of real property.

    (a) OMB guidance. OMB guidance in 2 CFR 200.311(c):

[[Page 444]]

    (1) Addresses the recipient's responsibility to request disposition 
instructions for real property when the recipient no longer needs it for 
the originally authorized purpose; and
    (2) Identifies three alternative disposition methods those 
instructions may specify.
    (b) DoD implementation. DoD implements the guidance in 2 CFR 
200.311(c) through award terms and conditions that govern disposition of 
real property acquired or improved under awards.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must include the wording appendix C to this part provides for 
Section B of PROP Article III to specify requirements concerning 
disposition of real property acquired or improved under awards.



 Subpart D_Use and Disposition of Equipment and Supplies (PROP Article 
                                   IV)



Sec.  1130.400  Purpose of PROP Article IV.

    PROP Article IV specifies requirements for recipients' use and 
disposition of equipment and supplies in which there is a Federal 
interest. It thereby implements OMB guidance in:
    (a) 2 CFR 200.313(a) through (c), 200.313(d)(5), and 200.313(e) as 
that guidance applies to requirements for use and disposition of 
equipment; and
    (b) 2 CFR 200.314, as that guidance applies to requirements for use 
and disposition of supplies.



Sec.  1130.405  Property subject to PROP Article IV.

    (a) Requirement. A DoD Component's general terms and conditions must 
identify the types of non-exempt property to which requirements for use 
and disposition of equipment and supplies apply.
    (b) Award terms and conditions. To implement the requirement in 
paragraph (a) of this section, a DoD Component's general terms and 
conditions must use the wording appendix D to this part provides for 
Section A of PROP Article IV. That wording identifies the categories of 
equipment and supplies in which there is a Federal interest.



Sec.  1130.410  Requirements for a State's use and disposition
of equipment.

    (a) OMB guidance. OMB guidance in:
    (1) 2 CFR 200.313(a) sets forth basic conditions for use of 
equipment acquired under a grant or cooperative agreement that apply 
when title to the equipment is vested in a recipient conditionally, 
because the awarding agency either does not have statutory authority to 
vest title in the equipment unconditionally or elects not to do so.
    (2) 2 CFR 200.313(b) provides that a State must use, manage, and 
dispose of equipment in accordance with State laws and procedures.
    (b) DoD implementation. DoD implements 2 CFR 200.313(a) and (b) 
through award terms and conditions that govern States' use and 
disposition of equipment.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix D to this part provides for 
Section B of PROP Article IV to specify the requirements for a State's 
use and disposition of equipment in which there is a Federal interest.



Sec.  1130.415  Use of equipment by an institution of higher education,
nonprofit organization, local government, or Indian tribe.

    (a) OMB guidance. OMB guidance in:
    (1) 2 CFR 200.313(a) sets forth basic conditions for use of 
equipment acquired under a grant or cooperative agreement that apply 
when title to the equipment is vested in a recipient conditionally, 
because the awarding agency either does not have statutory authority to 
vest title in the equipment unconditionally or elects not to do so.
    (2) 2 CFR 200.313(c) provides the parameters for use of equipment by 
an institution of higher education, nonprofit organization, local 
government, or Indian tribe.
    (3) 2 CFR 200.313(d)(5) calls for use of sales procedures to ensure 
highest possible return when selling equipment.
    (b) DoD implementation. For equipment in which there is a Federal 
interest under awards to institutions of higher education, nonprofit 
organizations, local governments, or Indian tribes, DoD implements 
through award

[[Page 445]]

terms and conditions the following portions of 2 CFR part 200 as they 
apply to use of equipment prior to the time of its disposition:
    (1) 2 CFR 200.313(a) and (c); and
    (2) 2 CFR 200.313(d)(5), as it applies to equipment sales prior to 
the time of disposition, to offset the acquisition cost of replacement 
equipment.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix D to this part provides for 
Section C of PROP Article IV to specify the requirements for use of 
equipment described in paragraph (b) of this section.



Sec.  1130.420  Disposition of equipment by an institution of higher
education, nonprofit organization, local government, or Indian tribe.

    (a) OMB guidance. OMB guidance in 2 CFR 200.313(e) addresses 
disposition of original or replacement equipment acquired under a grant 
or cooperative agreement by an institution of higher education, 
nonprofit organization, local government, or Indian tribe.
    (b) DoD implementation. DoD implements 2 CFR 200.313(e) through 
award terms and conditions that govern disposition of original or 
replacement equipment acquired under an award by an institution of 
higher education, nonprofit organization, local government, or Indian 
tribe when there is a Federal interest in the equipment.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix D to this part provides for 
Section D of PROP Article IV to specify the requirements for disposition 
of equipment described in paragraph (b) of this section.



Sec.  1130.425  Use and disposition of supplies.

    (a) OMB guidance. OMB guidance in 2 CFR 200.314 sets forth 
requirements for use and disposition of supplies acquired under a grant 
or cooperative agreement.
    (b) DoD implementation. DoD implements 2 CFR 200.314 through award 
terms and conditions that govern use and disposition of supplies 
acquired under awards either by purchase or by donation as cost sharing 
or matching.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix D to this part provides for 
Section E of PROP Article IV to specify the requirements for use and 
disposition of acquired supplies.



Subpart E_Use and Disposition of Federally Owned Property (PROP Article 
                                   V)



Sec.  1130.500  Purpose of PROP Article V.

    PROP Article V specifies requirements for recipients' use and 
disposition of federally owned property. It implements the portion of 
OMB guidance in 2 CFR 200.312(a) that applies to disposition of 
federally owned property.



Sec.  1130.505  Content of PROP Article V.

    A DoD Component's general terms and conditions must either:
    (a) Include the wording appendix E to this part provides for PROP 
Article V to specify requirements for use and disposition of federally 
owned property; or
    (b) Reserve PROP Article V if there is no possibility of recipients 
or subrecipients being accountable for federally owned property under 
awards using those terms and conditions.



             Subpart F_Intangible Property (PROP Article VI)



Sec.  1130.600  Purpose of PROP Article VI.

    PROP Article VI sets forth the rights and responsibilities of 
recipients and the Federal Government with respect to intangible 
property. It thereby implements OMB guidance in 2 CFR 200.315.



Sec.  1130.605  Copyrights asserted in works developed or otherwise
acquired under awards.

    (a) OMB guidance. OMB guidance in 2 CFR 200.315(b) addresses 
recipients' and the Federal Government's rights related to works that 
recipients may copyright under grants and cooperative agreements.
    (b) DoD implementation. DoD implements 2 CFR 200.315(b) through 
award terms and conditions that specify recipient and DoD rights with 
respect to copyrightable works.

[[Page 446]]

    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix F to this part provides for 
Section A of PROP Article VI to affirm the recipient's right to assert 
copyright in works it develops or otherwise acquires under an award, as 
well as DoD's right to use the works for Federal purposes.



Sec.  1130.610  Inventions developed under awards.

    (a) OMB guidance. OMB guidance in 2 CFR 200.315(c) states that 
recipients of grants and cooperative agreements are subject to 
applicable regulations concerning patents and inventions, including 
Department of Commerce regulations at 37 CFR part 401.
    (b) DoD implementation. In implementing 2 CFR 200.315(c) for awards 
for the performance of experimental, developmental, or research work, 
DoD:
    (1) Extends to other entities the patent rights provisions of 
chapter 18 of Title 35 of the U.S. Code and 37 CFR part 401 that 
directly apply to small business firms and nonprofit organizations. This 
broadened applicability is in accordance with the February 18, 1983, 
Presidential memorandum on Government patent policy, referred to in 
Executive Order 12591, ``Facilitating Access to Science and 
Technology.''
    (2) Establishes a requirement for recipients to provide final 
reports listing all subject inventions under their awards or stating 
there were none, a requirement that 37 CFR 401.5(f)(1) provides as an 
agency option.
    (3) Incorporates the prohibition in 35 U.S.C. 212 on asserting 
Federal Government rights in inventions made by recipients of 
scholarships, fellowships, training grants, or other awards made 
primarily for educational purposes.
    (c) Award terms and conditions. (1) Awards for research, 
developmental, or experimental work. A DoD Component's general terms and 
conditions for awards for the performance of experimental, 
developmental, or research work funded in whole or in part by the 
Federal Government must include the wording appendix F to this part 
provides for Section B of PROP Article VI, with one permitted exception. 
The exception is that a DoD Component may reserve or substitute 
alternative wording for paragraph B.2.b of Section B of PROP Article VI, 
as appropriate, if it elects to:
    (i) Omit the requirement for final invention reports;
    (ii) Substitute ``120 calendar days'' for ``90 calendar days'' to 
provide an additional 30 days for recipient's submissions of final 
reports after the end date of the period of performance; or
    (iii) Include a requirement for recipients to submit information 
about each patent application they submit for a subject invention, 
interim listings of all subject inventions, or both, which the 
Department of Commerce regulations at 37 CFR 401.5(f)(2) and (3) permit 
agencies to require.
    (2) Awards for primarily educational purposes. A DoD Component's 
general terms and conditions for awards to support scholarships or 
fellowships, training grants, or other awards for primarily educational 
purposes must replace the wording appendix F to this part provides for 
Section B of PROP Article VI with an alternative award provision stating 
that the Federal Government will have no rights to inventions made by 
recipients.
    (3) Awards for other purposes. A DoD Component developing general 
terms and conditions for awards other than those described in paragraphs 
(c)(1) and (2) of this section should:
    (i) Consult its intellectual property counsel if it anticipates that 
recipients may develop patentable inventions under its awards, to 
identify any applicable statutes or regulations and determine an 
appropriate substitute for the wording appendix F to this part provides 
for Section B of PROP Article VI; or
    (ii) Reserve Section B of PROP Article VI if it does not expect 
development of any patentable inventions under those awards.



Sec.  1130.615  Data produced under awards.

    (a) OMB guidance. OMB guidance in 2 CFR 200.315(d) and (e) addresses 
rights in data under grants and cooperative agreements.
    (b) DoD implementation. DoD implements 2 CFR 200.315(d) and (e) 
through award terms and conditions.

[[Page 447]]

    (c) Award terms and conditions--(1) General. A DoD Component's 
general terms and conditions must include the wording appendix F to this 
part provides for Section C of PROP Article VI.
    (2) Exception. A DoD Component may reserve paragraph C.2 of Section 
C of PROP Article VI in its general terms and conditions if:
    (i) Those terms and conditions will not be used for research awards; 
and
    (ii) The DoD Component determines that no research data as defined 
in 2 CFR 200.315 will be generated under the awards using those terms 
and conditions.



Sec.  1130.620  Intangible property acquired, but not developed or
produced, under awards.

    (a) OMB guidance. OMB guidance in 2 CFR 200.315(a) addresses use and 
disposition of intangible property that is acquired under grants and 
cooperative agreements (in addition to vesting of title, which is 
implemented in Sec.  1130.105 and appendix A to this part).
    (b) DoD implementation. DoD implements 2 CFR 200.315(a) through 
award terms and conditions that govern use and disposition of intangible 
property that is acquired, but not developed or produced, under awards.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must include the wording appendix F to this part provides for 
Section D of PROP Article VI.



 Sec. Appendix A to Part 1130--Terms and Conditions for PROP Article I, 
                          ``Title to Property''

    Unless a DoD Component inserts or adds wording or reserves sections 
of the article, as provided in Sec. Sec.  1130.105 through 1130.125, a 
DoD Component's general terms and conditions must use the following 
wording for PROP Article I.

           PROP Article I. Title to Property. (December 2014)

    Section A. Title to property acquired under this award.
    1. General. Other than any property identified in paragraph A.2 of 
this section as exempt property:
    a. Title to real property, equipment, and supplies that you acquire 
(whether by purchase, construction or fabrication, development, or 
otherwise) and charge as direct project costs under this award vests in 
you, the recipient. Title to intangible property that you acquire (other 
than by developing or producing it) under this award also vests in you.
    b. That title is a conditional title, subject to the terms and 
conditions in PROP Articles II-IV, Section D of PROP Article VI, and REP 
Article III of this award.
    c. There is a Federal interest in the property, other than 
intangible property that you develop or produce under the award. For 
real property, equipment, and intangible property, we retain this 
Federal interest until final disposition of the property under PROP 
Article III (for real property), PROP Article IV (for equipment and 
supplies), or Section D of PROP Article VI (for intangible property that 
is acquired, other than by developing or producing it), a period that in 
some cases may extend beyond closeout of this award.
    2. Exempt property. [Reserved].
    Section B. Property trust relationship.
    1. Basic requirement. Other than intangible property that you 
develop or produce under the award, you hold any real property, 
equipment, or intangible property that you acquire or improve under this 
award in trust for the beneficiaries of the project or program that you 
are carrying out under the award.
    2. Notices of record. [Reserved].
    Section C. Federally owned property. Title to any federally owned 
property that we provide to you under this award (or for which 
accountability is transferred to this award from another Federal award) 
remains with the Federal Government.
    Section D. Federal interest in donated real property or equipment. 
If real property or equipment is acquired under this award through your 
donation of the property to the project or program (i.e., counting the 
value of the remaining life of the property recorded in your accounting 
records or the fair market value as permitted under FMS Article VI of 
this award as part of your share of project costs to meet any cost 
sharing or matching requirements, rather than charging depreciation):
    1. The Federal Government acquires through that donation an interest 
in the real property or equipment, the value of which at any given time 
is the product of:
    a. The Federal share of the project costs under this award; and
    b. The current fair market value of the property at that time.
    2. The real property or equipment is subject to Section B of this 
article and the terms and conditions of PROP Articles II-IV and REP 
Article III that are applicable to property acquired under the award.
    3. The Federal interest in the real property or equipment must be 
addressed at the time of property disposition.

[[Page 448]]

    Section E. Federal interest in property improved under the award.
    1. The Federal Government has an interest in improvements (as 
distinct from ordinary repairs and maintenance) you make to an item of 
real property or equipment if you charge the costs of the improvements 
as direct costs to this award.
    2. We thereby acquire an interest in the property if the Government 
did not previously have one. If the Government already had an interest 
in the property, the value of that Federal interest in the property 
increases by the amount of the Federal interest in the improvements.
    3. The property is subject to Section B of this article and the 
terms and conditions of PROP Articles II-IV and REP Article III that are 
applicable to real property or equipment acquired under the award.
    4. The Federal interest must be addressed at the time of property 
disposition.



Sec. Appendix B to Part 1130--Terms and Conditions for PROP Article II, 
                     ``Property Management System''

    Unless a DoD Component reserves sections of the article, as provided 
in Sec. Sec.  1130.205 through 1130.215, a DoD Component's general terms 
and conditions must use the following wording for PROP Article II.

      PROP Article II. Property Management System. (December 2014)

    Section A. Insurance coverage for real property and equipment. You 
must, at a minimum, provide the equivalent insurance coverage for real 
property and equipment acquired or improved under this award as you 
provide for real property and equipment that you own.
    Section B. Other property management system standards for a State.
    1. Equipment. Your property management system for equipment acquired 
or improved in whole or in part under this award must be in accordance 
with your State laws and procedures.
    2. Federally owned property. You may use your own property 
management system for any federally owned property for which you are 
accountable, as long as it meets the following minimum standards:
    a. Records. Your records must include for each item of federally 
owned property:
    i. A description of the item.
    ii. The location of the item.
    iii. The serial or other identification number.
    iv. Which Federal agency holds title.
    v. The date you received the item.
    vi. Any data on the ultimate disposition of the item, such as the 
date of disposal.
    vii. The Federal award identification number of the award under 
which you are accountable for the item.
    b. Inventory. You must take a physical inventory of federally owned 
property annually.
    c. Control system. You must:
    i. Maintain an internal property control system with adequate 
safeguards to prevent loss, damage, or theft of federally owned 
property.
    ii. Investigate any loss, damage, or theft of federally owned 
property and promptly notify the award administration office.
    d. Maintenance. You must maintain the property in good condition.
    Section C. Other property management system standards for an 
institution of higher education, nonprofit organization, local 
government, or Indian tribe. Your procedures for managing equipment 
(including replacement equipment) acquired or improved in whole or in 
part under this award and any federally owned property for which you are 
accountable under this award must, as a minimum, meet the requirements 
in this section.
    1. Records. You must maintain records that include for each item of 
equipment or federally owned property:
    a. A description of the item.
    b. The serial or other identification number.
    c. Who holds title (e.g., you or the Federal Government and, if the 
latter, which Federal agency).
    d. The source of funding for the equipment, including the Federal 
award identification number, or the source of the federally owned 
property, including the award number of the award under which you are 
accountable for the property.
    e. The acquisition date and cost of the equipment (or improvement to 
the equipment) or the date you received the federally owned property.
    f. The location, use, and condition of the equipment or federally 
owned property.
    g. Information from which one can calculate the amount of the 
Federal interest in the acquisition or improvement of the item (this 
amount is zero after you compensate us for the Federal interest in the 
item or improvement).
    h. Any data on the ultimate disposition of the item including the 
date of disposal and sale price.
    2. Labelling. You must ensure that property owned by the Federal 
Government is labeled to identify it as federally owned property.
    3. Inventory.
    a. You must take a physical inventory of equipment in which there is 
a Federal interest and reconcile the results with your records at least 
once every 2 years.
    b. You must take an annual inventory of any federally owned property 
for which you are accountable under this award.
    4. Control system. You must:
    a. Maintain an internal property control system with adequate 
safeguards to prevent

[[Page 449]]

loss, damage, or theft of equipment and federally owned property.
    b. Investigate any loss, damage, or theft and notify the award 
administration office if it involved equipment in which there is a 
Federal interest under the award or federally owned property.
    5. Maintenance. You must maintain equipment acquired or improved in 
whole or in part under the award and federally owned property in good 
condition.



Sec. Appendix C to Part 1130--Terms and Conditions for PROP Article III, 
                ``Use and Disposition of Real Property''

    Unless a DoD Component substitutes wording in Section A, as provided 
in Sec.  1130.305, a DoD Component's general terms and conditions must 
use the following wording for PROP Article III.

 PROP Article III. Use and Disposition of Real Property. (December 2014)

    Section A. Use of real property.
    1. You must use real property acquired or improved under this award 
for the originally authorized purpose as long as needed for that 
purpose. During that time, you may not:
    a. Dispose of the property except, with the approval of the award 
administration office, to acquire replacement property under this award, 
in which case you must use the proceeds from the disposition as an 
offset to the cost of the replacement property; or
    b. Encumber the title or other interests in the property without the 
approval of the award administration office identified in this award.
    2. During the time that the real property is used for the originally 
authorized purpose, you may make the property available for use on other 
projects or programs, but only if that use will not interfere with the 
property's use as needed for its originally authorized purpose.
    a. First preference must be given to other projects or programs 
supported by DoD Components and second preference to those supported by 
other Federal agencies.
    b. Third preference is for other projects or programs not currently 
supported by the Federal Government. You should charge user fees for use 
of the property in those cases, if it is at all practicable.
    3. When the real property is no longer needed for the originally 
authorized purpose, with the written approval of the award 
administration office, you may delay final disposition of the property 
to use it on other federally sponsored projects or programs. A condition 
for the award administration office's approval is that the other 
projects or programs have purposes consistent with those authorized for 
support by the DoD Component that made the award under which the 
property was acquired or improved.
    Section B. Disposition of real property. When you no longer need 
real property for the originally authorized purpose, you must obtain 
disposition instructions from the award administration office, except as 
provided in paragraph A.3 of this article. Those instructions will 
provide for one of the following three alternatives, which are that you:
    1. Retain title after compensating us for the Federal interest in 
the property, which is to be computed as specified in the definition of 
``Federal interest.''
    2. Sell the property and compensate us for the Federal interest in 
the property, as described in 2 CFR 200.311(c)(2).
    3. Transfer title to us or a third party we designate, as described 
in 2 CFR 200.311(c)(3).



Sec. Appendix D to Part 1130--Terms and Conditions for PROP Article IV, 
            ``Use and Disposition of Equipment and Supplies''

    As specified in Sec. Sec.  1130.405 through 1130.425, a DoD 
Component's general terms and conditions must use the following wording 
for PROP Article IV.

    PROP Article IV. Use and Disposition of Equipment and Supplies. 
                             (December 2014)

    Section A. Property subject to this article. This article specifies 
requirements for use and disposition of equipment and supplies. If a 
provision of PROP Article I identifies any type of equipment or supplies 
as exempt property, requirements of this Article apply to that exempt 
property only to the extent specified in that provision of PROP Article 
I or an award-specific term or condition. The types of non-exempt 
property to which this article applies are:
    1. Supplies that you acquire either by purchase or by donation as 
cost sharing or matching under this award; and
    2. Equipment for which title is vested conditionally in you. That 
includes equipment with a conditional title resulting from your having, 
either under this award or under a previous award from which you 
transferred accountability for the equipment to this award:
    a. Directly charged as project costs, in whole or in part, the 
acquisition (by purchase, construction or fabrication, or development) 
of equipment;
    b. Donated the equipment to the project or program by counting the 
value of the remaining life of the property recorded in your accounting 
records or the fair market value toward any cost sharing or matching 
requirements under the award, rather than charging depreciation (see 
PROP Article I, Section D); or

[[Page 450]]

    c. Directly charged as project costs improvements to the equipment 
that meet the criteria given in paragraph E.1 of PROP Article I.
    Section B. Requirements for a State's use and disposition of 
equipment. You:
    1. Must use the equipment for the authorized purposes of the project 
or program during the period of performance, or until the property is no 
longer needed for those purposes.
    2. May not encumber the property without the prior written approval 
of the award administration office.
    3. Must use and dispose of the equipment in accordance with your 
State laws and procedures.
    Section C. Use of equipment by an institution of higher education, 
nonprofit organization, local government, or Indian tribe. You:
    1. Must use the equipment for the authorized purposes of the project 
or program under this award until the equipment is no longer needed for 
those purposes, whether or not the project or program continues to be 
supported by this award.
    2. May not encumber the equipment without the prior written approval 
of the award administration office.
    3. During the time that the equipment is used for the project or 
program under this award:
    a. You must make the equipment available for use on other projects 
or programs but only if that use will not interfere with the equipment's 
use as needed for the project or program supported by this award.
    i. First preference must be given to other projects or programs 
supported or previously supported by DoD Components
    ii. Second preference to projects or programs supported or 
previously supported by other Federal agencies.
    iii. Third preference is for other projects or programs not 
supported by the Federal Government. You should charge user fees for use 
of the equipment in those cases, if it is at all practicable.
    b. You may use the equipment, if you need to acquire replacement 
equipment, as a trade-in or sell it (using sales procedures designed to 
ensure the highest possible return) and use the proceeds from the sale 
to offset the cost of the replacement equipment.
    4. When the equipment is no longer needed for the project or program 
under this award, you may defer final disposition of the equipment and 
continue to use it on other federally sponsored projects or programs. 
You must give first priority to other projects or programs supported by 
DoD Components.
    5. Notwithstanding the encouragement in FMS Article VII to earn 
program income, you may not use equipment in which there currently is a 
Federal interest--whether you acquired it under this award or are 
otherwise accountable for it under this award--to provide services for a 
fee that is less than private companies charge for equivalent services.
    Section D. Disposition of equipment by an institution of higher 
education, nonprofit organization, local government, or Indian tribe. 
You must request disposition instructions from the award administration 
office when either original or replacement equipment acquired under this 
award with a current fair market value that exceeds $5,000 is no longer 
needed for the original project or program or for other federally 
sponsored activities as described in paragraph C.4 of this article. For 
each item of equipment with a current fair market value of $5,000 or 
less, you may retain, sell, or otherwise dispose of the item with no 
further obligation to the Federal Government.
    1. We may issue disposition instructions that:
    a. Allow you to retain or sell any item of equipment after 
compensating us for the Federal interest in the property, which is to be 
computed as specified in the definition of ``Federal interest;'' or
    b. Require you to transfer title to the equipment to a Federal 
agency or a third party, in which case you are entitled to compensation 
from us for the non-Federal interest in the equipment, plus any 
reasonable shipping or interim storage costs incurred.
    2. If we fail to provide disposition instructions for any item of 
equipment within 120 calendar days of receiving your request, you may 
retain or sell the equipment, but you must compensate us for the amount 
of the Federal interest in the equipment.
    3. If you sell the equipment:
    a. You must use sales procedures designed to ensure the highest 
possible return; and
    b. You may deduct and retain for selling and handling expenses 
either $500 or ten percent of the proceeds, whichever is less.
    Section E. Use and disposition of supplies acquired under this 
award.
    1. Use. As long as we retain a Federal interest in supplies acquired 
under this award either by purchase or by donation as cost sharing or 
matching, you may not use the supplies to provide services to other 
organizations for a fee that is less than private companies charge for 
equivalent services, notwithstanding the encouragement in FMS Article 
VII to earn program income.
    2. Disposition. If you have a residual inventory of unused supplies 
with aggregate value exceeding $5,000 at the end of the period of 
performance under this award, and the supplies are not needed for any 
other Federal award, you must retain the supplies or sell them but must 
in either case compensate us for the amount of the Federal interest in 
the supplies. You may deduct and retain for selling and handling 
expenses either $500 or ten percent of the proceeds, whichever is less.

[[Page 451]]



 Sec. Appendix E to Part 1130--Terms and Conditions for PROP Article V, 
           ``Use and Disposition of Federally Owned Property''

    Unless a DoD Component reserves the article, as specified in Sec.  
1130.505, a DoD Component's general terms and conditions must use the 
following wording for PROP Article V.

    PROP Article V. Use and Disposition of Federally Owned Property. 
                             (December 2014)

    Section A. Use. During the time that federally owned property for 
which you are accountable under this award is used for the project or 
program supported by the award, you:
    1. Also may make the property available for use on other federally 
supported projects or programs, but only if that use will not interfere 
with the property's use for the project or program supported by this 
award. You must give first priority to other projects or programs 
supported by DoD Components.
    2. May use the property for purposes other than federally supported 
projects or programs only with the prior approval of the awarding office 
or, if you request approval after the award is made, the award 
administration office.
    Section B. Disposition. You must request disposition instructions 
from the award administration office for any federally owned property 
under this award, including any property for which a subrecipient is 
accountable under a subaward you make under this award, either:
    1. At any time during the period of performance if the property is 
no longer needed for the project or program supported by this award; or
    2. At the end of the period of performance.



Sec. Appendix F to Part 1130--Terms and Conditions for PROP Article VI, 
                         ``Intangible Property''

    Except for Section B, whose language must be tailored or reserved 
based on the type of award as specified in Sec.  1130.610, and Section D 
if reserved as provided in Sec.  1130.615, a DoD Component's general 
terms and conditions must use the following wording for PROP Article VI.

          PROP Article VI. Intangible Property. (December 2014)

    Section A. Assertion of copyright.
    1. You may assert copyright in any work that is eligible for 
copyright protection if you acquire ownership of it under this award, 
either by developing it or otherwise.
    2. With respect to any work, you developed or otherwise acquired 
under this award, DoD reserves a royalty-free, nonexclusive and 
irrevocable license to:
    a. Reproduce, publish, or otherwise use the work for Federal 
Government purposes; and
    b. Authorize others to reproduce, publish, or otherwise use the work 
for Federal Government purposes.
    Section B. Inventions developed under the award.
    1. Applicability of Governmentwide clause for research awards. You 
must comply with the Governmentwide patent rights award clause published 
at 37 CFR 401.14, with the modifications described in paragraph B.2 of 
this section. DoD adopts that Governmentwide clause for the following 
entities, thereby broadening the applicability beyond types of entities 
included in the definition of ``contractor'' in 37 CFR part 401:
    a. Any governmental or nonprofit entity (the types of entities 
subject to these general terms and conditions) receiving a DoD award for 
the performance of experimental, research, or developmental work;
    b. Any governmental, nonprofit, or for-profit entity receiving a 
subaward to perform experimental, research, or developmental work under 
an award described in paragraph B.1.a of this section.
    2. Modifications to the wording of the Governmentwide clause. DoD 
adopts the Governmentwide clause at 37 CFR 401.14, as described in 
paragraph B.1 of this section, with the following modifications:
    a. Terminology. Throughout the Governmentwide clause:
    i. Insert the terms ``recipient'' and ``subrecipient (or contractor 
to the recipient or to a subrecipient)'' to replace the terms 
``contractor'' and ``subcontractor,'' respectively.
    ii. Insert the terms ``award'' and ``subaward (or contract under 
either the award or a subaward)'' to replace the terms ``contract'' and 
``subcontract,'' respectively.
    b. Final report. Add a new subparagraph (f)(5) to read, ``The 
recipient must submit a final report listing all subject inventions made 
under the award or stating that there were none. The final report is due 
90 calendar days after the end date of the period of performance unless 
you request, and we grant, an extension of the due date.''
    c. Broadening applicability to all entities. Delete paragraphs 
(g)(2) and (3) of the Governmentwide clause, redesignate paragraph 
(g)(1) as paragraph (g) and delete the phrase ``to be performed by a 
small business firm or domestic nonprofit organization'' from paragraph 
(g) as redesignated.
    Section C. Data produced under the award.
    1. Data in general. The Federal Government has the right to:
    a. Obtain, reproduce, publish, or otherwise use the data produced 
under this award; and
    b. Authorize others to receive, reproduce, publish, or otherwise use 
the data produced

[[Page 452]]

under this award for Federal Government purposes.
    2. Research data requested under the Freedom of Information Act 
(FOIA).
    a. If we receive a request under the FOIA for ``research data'' that 
are related to ``published research findings'' produced under this award 
and that were ``used by the Federal Government in developing an agency 
action that has the force and effect of law,'' you must provide the data 
to us within a reasonable time after we request it from you, so that the 
data can be made available to the public through procedures established 
under the FOIA.
    b. For purposes of the requirement in paragraph C.2.a of this 
section, 2 CFR 200.315(e) provides definitions of the phrases 
``published research findings,'' ``used by the Federal Government in 
developing an agency action that has the force and effect of law,'' and 
``research data.''
    Section D. Use and disposition of intangible property acquired, but 
not developed or produced, under the award.
    1. Applicability. This section applies to a patent, patent 
application, copyright, or other intangible property acquired, but not 
developed or produced, under this award.
    2. Use. You:
    a. Must use the intangible property for the authorized purpose under 
this award until the intangible property is no longer needed for that 
purpose, whether or not that purpose is still being supported by this 
award.
    b. May not encumber the intangible property without the prior 
written approval of the award administration office.
    3. Disposition. When the intangible property is no longer needed for 
the originally authorized purpose, you must contact the award 
administration office to arrange for disposition in accordance with the 
procedures specified for disposition of equipment in either section B or 
D of PROP Article IV, as applicable.



PART 1132_RECIPIENT PROCUREMENT PROCEDURES: GENERAL AWARD TERMS AND
CONDITIONS--Table of Contents



Sec.
1132.1 Purpose of this part.
1132.2 Applicability of this part.
1132.3 Exceptions from requirements of this part.
1132.4 Organization of this part.

       Subpart A_Procurement Standards for States (PROC Article I)

1132.100 Purpose of PROC Article I.
1132.105 Content of PROC Article I.

 Subpart B_Procurement Standards for Institutions of Higher Education, 
  Nonprofit Organizations, Local Governments, and Indian Tribes (PROC 
                               Article II)

1132.200 Purpose of PROC Article II.
1132.205 Procurement procedures.
1132.210 Procurement of recovered materials.
1132.215 Review of recipient procurement documents.
1132.220 Bonding requirements.

 Subpart C_Contract Provisions for Recipient Procurements (PROC Article 
                                  III)

1132.300 Purpose of PROC Article III.
1132.305 Administrative requirements.
1132.310 National policy requirements.

Appendix A to Part 1132--Terms and conditions for PROC Article I, 
          ``Procurement standards for States''
Appendix B to Part 1132--Terms and conditions for PROC Article II, 
          ``Procurement standards for institutions of higher education, 
          nonprofit organizations, local governments, and Indian 
          tribes''
Appendix C to Part 1132--Terms and conditions for PROC Article III, 
          ``Contract provisions for recipient procurements''

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51171, Aug. 19, 2020, unless otherwise noted.



Sec.  1132.1  Purpose of this part.

    (a) This part specifies standard wording of general terms and 
conditions concerning recipients' purchases of property (supplies, 
equipment, and real property) and services.
    (b) It thereby implements OMB guidance in 2 CFR 200.317 through 
200.326, and appendix II to 2 CFR part 200, as those portions of 2 CFR 
part 200 apply to general terms and conditions of grants and cooperative 
agreements. It also partially implements 2 CFR 200.205(d), 200.213, and 
200.517.



Sec.  1132.2  Applicability of this part.

    The types of awards and entities to which this part and other parts 
in this subchapter apply are described in the subchapter overview at 2 
CFR 1126.2.

[[Page 453]]



Sec.  1132.3  Exceptions from requirements of this part.

    Exceptions are permitted from the administrative requirements in 
this part only as follows:
    (a) As described in 2 CFR 1126.3, and
    (b) Based on any language in 2 CFR 200.110(a) regarding the 
applicability of the procurement standards in 2 CFR part 200.



Sec.  1132.4  Organization of this part.

    (a) The content of this part is organized into subparts and 
associated appendices.
    (1) Each subpart provides direction to DoD Components on how to 
construct one article of general terms and conditions for grants and 
cooperative agreements.
    (2) For each subpart, there is a corresponding appendix with 
standard wording for terms and conditions of the article addressed by 
the subpart. Terms and conditions address rights and responsibilities of 
the Federal Government and recipients.
    (b) A DoD Component must use the wording provided in each appendix 
in accordance with the direction in the corresponding subpart. That 
direction may permit DoD Components to vary from the standard wording in 
some situations.
    (c) Table 1 shows which article of general terms and conditions may 
be found in each of appendices A through C to this part (with the 
associated direction to DoD Components in Subparts A through C, 
respectively):

                        Table 1 to paragraph (c)
------------------------------------------------------------------------
                                  You will find terms
                                    and conditions         That would
                                specifying recipients'    appear in an
           In . . .                   rights and          award within
                                   responsibilities     PROC Article . .
                                   related to . . .             .
------------------------------------------------------------------------
Appendix A....................  Procurement standards   I.
                                 for States.
Appendix B....................  Procurement standards   II.
                                 for institutions of
                                 higher education,
                                 nonprofit
                                 organizations, local
                                 governments, and
                                 Indian tribes.
Appendix C....................  Contract provisions     III.
                                 for recipient
                                 procurements.
------------------------------------------------------------------------



       Subpart A	Procurement Standards for States (PROC Article I)



Sec.  1132.100  Purpose of PROC Article I.

    PROC Article I of the general terms and conditions specifies 
requirements for a State's procurement of property and services under 
grants or cooperative agreements. It thereby implements OMB guidance in 
2 CFR 200.317 and partially implements the guidance in 2 CFR 200.205(d) 
and 200.213.



Sec.  1132.105  Content of PROC Article I.

    (a) Requirement. A DoD Component's general terms and conditions must 
address requirements for States' procurement systems.
    (b) Award terms and conditions--(1) General. Except as provided in 
paragraph (b)(2) of this section, a DoD Component's general terms and 
conditions must use the wording appendix A to this part provides for 
PROC Article I.
    (2) Exception. A DoD Component's general terms and conditions may 
instead reserve PROC Article I if the DoD Component determines that it 
is not possible that any States will receive:
    (i) DoD Component awards using those general terms and conditions; 
or
    (ii) Subawards from recipients of DoD Component awards using those 
general terms and conditions.



 Subpart B_Procurement Standards for Institutions of Higher Education, 
  Nonprofit Organizations, Local Governments, and Indian Tribes (PROC 
                               Article II)



Sec.  1132.200  Purpose of PROC Article II.

    PROC Article II of the general terms and conditions specifies 
procurement procedures for a recipient of a grant or cooperative 
agreement other than a State or for-profit entity. It thereby:
    (a) Implements OMB guidance in 2 CFR 200.318 through 200.323, 
200.324(a) and (b), and 200.325;

[[Page 454]]

    (b) Partially implements 2 CFR 200.205(d) and 200.213; and
    (c) Implements, in conjunction with PROC Article III, 2 CFR 200.326.



Sec.  1132.205  Procurement procedures.

    (a) Requirement. A DoD Component's general terms and conditions must 
address requirements for procurement systems of institutions of higher 
education, nonprofit organizations, local governments, and Indian 
tribes.
    (b) Award terms and conditions. In order to implement the 
requirement described in paragraph (a) of this section, a DoD 
Component's general terms and conditions must use the wording that 
appendix B provides for Sections A through F of PROC Article II.



Sec.  1132.210  Procurement of recovered materials.

    (a) Requirement. A DoD Component's general terms and conditions must 
address requirements for procurement of recovered materials if State 
agencies or agencies of a political subdivision of a State may receive 
awards using those terms and conditions or be subrecipients under those 
awards.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must either:
    (1) Use the wording that appendix B provides for Section G of PROC 
Article II, to specify requirements for a local government or other 
political subdivision of a State to comply with Resource Conservation 
and Recovery Act requirements; or
    (2) Reserve Section G if the DoD Component determines that it is not 
possible that a political subdivision of a State will receive either:
    (i) An award using those terms and conditions; or
    (ii) A subaward under an award using those terms and conditions.



Sec.  1132.215  Review of recipient procurement documents.

    (a) Requirements. A DoD Component's general terms and conditions 
must:
    (1) Include a requirement for recipients to make technical 
specifications for proposed procurements available upon the DoD 
Component's request, as described in 2 CFR 200.324(a).
    (2) Reserve the DoD Component's right to review a recipient's pre-
procurement documents when any of the conditions described in 2 CFR 
200.324(b)(1) through (5) apply and the recipient is not exempted from 
the requirement in accordance with 2 CFR 200.324(c).
    (b) Award terms and conditions. To implement the requirements 
described in paragraph (a) of this section, a DoD Component's general 
terms and conditions must use the wording that appendix B to this part 
provides for Section H of PROC Article II.



Sec.  1132.220  Bonding requirements.

    (a) Requirements. A DoD Component's general terms and conditions 
must require each recipient to meet minimum bonding requirements if it 
awards any construction or facility improvement contract with a value in 
excess of the simplified acquisition threshold. A recipient would 
instead use its own bonding requirements if the DoD Component determined 
that the recipient's bonding policy and requirements are adequate to 
protect Federal interests.
    (b) Award terms and conditions--(1) General. To implement the 
requirements in paragraph (a) of this section, a DoD Component's general 
terms and conditions must use the wording that appendix B to this part 
provides for Section I of PROC Article II. The DoD Component may include 
a provision in the award-specific terms and conditions to override 
Section I of PROC Article II in each award to a recipient for which it 
made the determination about the recipient's bonding policy and 
requirements, as described in paragraph (a) of this section.
    (2) Exceptions. A DoD Component's general terms and conditions may 
reserve Section I if the DoD Component determines that there will be no 
construction or facility improvement contracts with values in excess of 
the simplified acquisition threshold under awards using its general 
terms and conditions.

[[Page 455]]



 Subpart C_Contract Provisions for Recipient Procurements (PROC Article 
                                  III)



Sec.  1132.300  Purpose of PROC Article III.

    PROC Article III of the general terms and conditions specifies 
provisions that recipients must include in contracts under their awards, 
as applicable. It thereby:
    (a) Implements, in conjunction with PROC Articles I and II, OMB 
guidance concerning recipients' contract provisions under grants and 
cooperative agreements in 2 CFR 200.317 and 200.326;
    (b) Partially implements the OMB guidance in 2 CFR 200.205(d) and 
200.213 concerning suspension and debarment requirements; and
    (c) Partially implements the OMB guidance in 2 CFR 200.517 
concerning retention and access of auditors' records.



Sec.  1132.305  Administrative requirements.

    (a) Requirement. A DoD Component's general terms and conditions must 
require recipients to include in their contracts standard administrative 
requirements related to remedies, termination, allowable costs, rights 
in copyrights and data, records access and retention, and reporting.
    (b) Award terms and conditions. To implement the requirement 
described in paragraph (a) of this section, a DoD Component's general 
terms and conditions must use the wording that appendix C to this part 
provides for Section A of PROC Article III.



Sec.  1132.310  National policy requirements.

    (a) Requirement. A DoD Component's general terms and conditions must 
require recipients to include provisions in their contracts that require 
the contractors to comply with applicable national policy requirements.
    (b) Award terms and conditions--(1) General. To implement the 
requirement in paragraph (a) of this section, a DoD Component's general 
terms and conditions must use the wording that appendix C to this part 
provides for Section B of PROC Article III.
    (2) Exceptions. (i) The Wage Rate Requirements (Construction) 
statute (40 U.S.C. 3141-44, 3146, and 3147) does not apply to a program 
carried out through grants or cooperative agreements unless another 
statute makes it apply to that program. A DoD Component's general terms 
and conditions therefore may not include the provision that appendix C 
to this part includes as paragraph B.2 of PROC Article III unless 
another statute makes the Wage Rate Requirements statute apply to the 
program using those general terms and conditions.
    (ii) If a DoD Component determines that any of the other national 
policy requirements in Section B will not apply to any of the awards 
subject to its general terms and conditions, the DoD Component may 
reserve the paragraphs of Section B addressing those requirements. 
Should a future need arise to include the requirements in a given award, 
the DoD Component may include them as award-specific terms and 
conditions.



 Sec. Appendix A to Part 1132--Terms and Conditions for PROC Article I, 
                  ``Procurement Standards for States''

    Unless a DoD Component reserves the article, as specified in Sec.  
1132.105, a DoD Component's general terms and conditions must use the 
following wording for PROC Article I.

    PROC Article I. Procurement Standards for States. (December 2014)

    Section A. Use of State procurement system. Subject only to the 
conditions in Sections B through D of this article, you must use the 
same policies and procedures to procure supplies, equipment, real 
property, and services under this award that you use when you procure 
those items for State purposes using non-Federal funds.
    Section B. Procurement of recovered materials. You must comply with 
the Resource Conservation and Recovery Act requirements described in OMB 
guidance in 2 CFR 200.322.
    Section C. Debarment and suspension. You must comply with 
restrictions on awarding procurement transactions to excluded or 
disqualified parties and other requirements specified by OMB guidelines 
on nonprocurement debarment and suspension at 2 CFR part 180, as 
implemented by DoD at 2 CFR part 1125.

[[Page 456]]

    Section D. Contract provisions. You must include provisions in your 
procurement transactions under this award to require the contractors' 
compliance with the requirements specified in PROC Article III, as 
applicable.



Sec. Appendix B to Part 1132--Terms and Conditions for PROC Article II, 
``Procurement Standards for Institutions of Higher Education, Nonprofit 
          Organizations, Local Governments, and Indian Tribes''

    With the exception of Sections G and I, which may be reserved as 
specified in Sec. Sec.  1132.210 and 1132.220, a DoD Component's general 
terms and conditions must use the following wording for PROC Article II.

   PROC Article II. Procurement Standards for Institutions of Higher 
   Education, Nonprofit Organizations, Local Governments, and Indian 
                         Tribes. (December 2014)

    Section A. General procurement standards.
    1. For procurement under this award, you must comply with the 
following paragraphs of OMB guidance in 2 CFR 200.318:
    a. 200.318(a) concerning documented procurement procedures;
    b. 200.318(b) concerning oversight of contractors;
    c. 200.318(c) concerning standards of conduct and conflicts of 
interest;
    d. 2 CFR 200.318(d) concerning purchases of unnecessary or 
duplicative items;
    e. 200.318(e) concerning intergovernmental or inter-entity 
agreements;
    f. 200.318(g) concerning value engineering;
    g. 200.318(i) concerning procurement records;
    h. 200.318(j) concerning time and material type contracts; and
    i. 200.318(k) concerning settlement of issues arising out of 
procurements.
    2. You must do business only with responsible contractors who are 
able to perform, as described in OMB guidance in 2 CFR 200.318(h). 
Related to that, you must comply with restrictions on awarding 
procurement transactions to excluded or disqualified parties and other 
requirements specified by OMB guidelines on nonprocurement debarment and 
suspension at 2 CFR part 180, as implemented by DoD at 2 CFR part 1125.
    Section B. Competition. You must award procurement transactions 
under this DoD award in accordance with the competition requirements 
described in OMB guidance in 2 CFR 200.319.
    Section C. Procurement methods. You must award procurement 
transactions under this award using methods described in OMB guidance in 
2 CFR 200.320.
    Section D. Contracting with small and minority businesses, women's 
business enterprises, and labor surplus area firms. You must take the 
affirmative steps described in OMB guidance in 2 CFR 200.321 when 
awarding procurement transactions under this award.
    Section E. Contract cost and price. When awarding a contract under 
this award, you must follow the procedures related to costs and price 
that are described in OMB guidance in 2 CFR 200.323, using the 
applicable cost principles specified in FMS Article III.
    Section F. Contract provisions. You must include provisions in your 
procurement transactions under this award to require the contractors' 
compliance with the requirements of PROC Article III, as applicable.
    Section G. Procurement of recovered materials. If you are a 
political subdivision of a State, you must comply with the Resource 
Conservation and Recovery Act requirements described in OMB guidance in 
2 CFR 200.322.
    Section H. Review of procurement documents. Upon our request, you 
must make available:
    1. Technical specifications on proposed procurements, as described 
in 2 CFR 200.324(a).
    2. Pre-procurement documents for our review, as described in 2 CFR 
200.324(b) unless you are exempt from that requirement under 2 CFR 
200.324(c).
    Section I. Bonding requirements. If you award a construction or 
facility improvement contract under this award with a value in excess of 
the simplified acquisition threshold, you must comply with at least the 
minimum requirements for bidders' bid guarantees and contractors' 
performance and payment bonds described in 2 CFR 200.325(a) through (c), 
unless a provision in the award-specific terms and conditions of this 
award excepts you from the requirement based on our determination that 
your bonding policy and requirements are adequate to protect Federal 
interests.



Sec. Appendix C to Part 1132--Terms and Conditions for PROC Article III, 
           ``Contract Provisions for Recipient Procurements''

    Unless a DoD Component reserves one or more paragraphs of Section B, 
as specified in Sec.  1132.310, a DoD Component's general terms and 
conditions must use the following wording for PROC Article III.

   PROC Article III. Contract Provisions for Recipient Procurements. 
                             (December 2014)

    Section A. Contract provisions for administrative requirements.
    1. Remedies. In any contract under this award for an amount in 
excess of the simplified acquisition threshold, you must provide for 
administrative, contractual, or legal

[[Page 457]]

remedies, including any appropriate sanctions and penalties, when the 
contractor violates or breaches the contract terms.
    2. Termination. In any contract for an amount in excess of $10,000, 
you must specify conditions under which you may terminate the contract 
for cause or convenience; the procedures for termination; and the basis 
to be used for settlement.
    3. Allowable costs under cost-type contracts. In any cost-type 
contract with an entity, you must include a clause to permit the entity 
to charge to the contract only costs that are allowable under the cost 
principles that FMS Article III identifies as applicable to that type of 
entity, as supplemented by any award-specific terms and conditions 
related to allowability of costs that are included in this award. Your 
contract clause may permit the contractor to use its own cost principles 
in determining the allowability of its costs charged to the contract, as 
long as its cost principles comply with those Federal cost principles 
supplemented by any award-specific terms and conditions of this award.
    4. Rights in copyright and data. You must include in each contract 
under this award a provision requiring that the contractor:
    a. Grant the Federal Government a royalty-free, nonexclusive and 
irrevocable right to:
    i. Reproduce, publish, or otherwise use for Federal purposes any 
work that is subject to copyright and that the contractor develops, or 
acquires ownership of, under this award;
    ii. Authorize others to reproduce, publish, or otherwise use such 
work for Federal purposes; and
    b. Grant the Federal Government the right to:
    i. Obtain, reproduce, publish, or otherwise use data produced under 
this award;
    ii. Authorize others to receive, reproduce, publish, or otherwise 
use such data for Federal purposes; and
    c. Include the Federal Government rights described in subparagraphs 
4.a. and 4.b. of this section in any subcontracts.
    5. Access to records.
    a. In any negotiated, cost-type or time and materials contract for 
an amount in excess of the simplified acquisition threshold, you must 
provide for access to any of the contractor's books, documents, papers, 
and records that are directly pertinent to that contract to enable and 
support audits, examinations, excerpts, and transcriptions. The contract 
provision must provide access to those records for all of the following 
and their duly authorized representatives:
    i. You;
    ii. Us as the Federal awarding agency, including our Inspector 
General; and
    iii. The Comptroller General of the United States.
    b. In any audit services contract for performance of an audit 
required by the Single Audit Act, as implemented by OMB in Subpart F of 
2 CFR part 200, you must provide for the access to audit documentation 
described in 2 CFR 200.517(b).
    6. Records retention.
    a. In any negotiated, cost-type or time and materials contract for 
an amount in excess of the simplified acquisition threshold, you must 
provide for retention of all records that are directly pertinent to that 
contract for 3 years after you make final payment and all pending 
matters are closed.
    b. In any audit services contract for performance of an audit 
required by the Single Audit Act, as implemented by OMB in Subpart F of 
2 CFR part 200, you must provide for the retention of audit 
documentation described in 2 CFR 200.517(a).
    7. Reporting. In any contract awarded under this award, you must 
include any provision for the contractor's reporting to you that may be 
needed in order for you to meet your requirements under this award to 
report to us.
    Section B. Contract provisions for national policy requirements.
    1. Equal employment opportunity. You must include the clause 
provided in 41 CFR 60-1.4(b) in any ``federally assisted construction 
contract'' (as defined in 41 CFR 60-1.3) under this award, unless 
provisions of 41 CFR part 60-1 exempt the contract from the requirement.
    2. Wage Rate Requirements (Construction), formerly the Davis-Bacon 
Act. With respect to each construction contract for more than $2,000 to 
be awarded using funding provided under this award, you must:
    a. Place in the solicitation under which the contract will be 
awarded a copy of the current prevailing wage determination issued by 
the Department of Labor;
    b. Condition the decision to award the contract upon the 
contractor's acceptance of that prevailing wage determination;
    c. Include in the contract the clauses specified at 29 CFR 5.5(a) in 
Department of Labor regulations at 29 CFR part 5, ``Labor Standards 
Provisions Applicable to Contracts Governing Federally Financed and 
Assisted Construction,'' to require the contractor's compliance with the 
Wage Rate Requirements (Construction), as amended (40 U.S.C. 3141-44, 
3146, and 3147); and
    d. Report all suspected or reported violations to the award 
administration office identified in this award.
    3. Copeland Act prohibition on kickbacks. In each contract under 
this award that is subject to the Wage Rate requirements in paragraph 2 
of these provisions, you must:
    a. Include a provision requiring the contractor to comply with the 
anti-kickback provisions of the Copeland Act (18 U.S.C. 874 and 40 
U.S.C. 3145), as supplemented by Department of Labor regulations at 29 
CFR part 3, ``Contractors and Subcontractors on

[[Page 458]]

Public Building or Public Work Financed in Whole or in Part by Loans or 
Grants from the United States.''
    b. Report all suspected or reported violations to the award 
administration office identified in the award notice cover sheet of this 
award.
    4. Contract Work Hours and Safety Standards Act for work involving 
mechanics or laborers. In each contract for an amount greater than 
$100,000 that involves the employment of mechanics or laborers and is 
not a type of contract excepted under 40 U.S.C. 3701, you must include 
the clauses specified in Department of Labor (DoL) regulations at 29 CFR 
5.5(b) to require use of wage standards that comply with the Contract 
Work Hours and Safety Standards Act (40 CFR, Subtitle II, Part A, 
Chapter 37), as implemented by DoL at 29 CFR part 5, ``Labor Standards 
Provisions Applicable to Contracts Governing Federally Financed and 
Assisted Construction.''
    5. Patents and inventions. If you procure the services of a 
nonprofit organization, small business firm, or other entity for the 
performance of experimental, developmental or research work, you must 
include in the contract the clause prescribed in Section B of PROP 
Article VI to establish contractual requirements regarding subject 
inventions resulting from the contract and provide for Federal 
Government rights in those inventions.
    6. Clean air and water requirements. You must:
    a. In each contract for an amount greater than $150,000 under this 
award, include a clause requiring the contractor to comply with 
applicable provisions of the Clean Air Act (42 U.S.C. 7401-7671q), 
Federal Water Pollution Control Act (33 U.S.C. 1251-1387), and 
standards, orders, or regulations issued under those acts; and
    b. Report any violations of the Acts, standards, orders, or 
regulations to both the award administration office identified in this 
award and the appropriate regional office of the Environmental 
Protection Agency.
    7. Nonprocurement suspension and debarment. Unless you have an 
alternate method for requiring the contractor's compliance, you must 
include a clause in each contract for an amount equal to or greater than 
$25,000 for other than federally required audit services and in each 
contract for federally required audit services regardless of dollar 
value to require the contractor to comply with OMB guidance on 
nonprocurement suspension and debarment in 2 CFR part 180, as 
implemented by DoD regulations at 2 CFR part 1125.
    8. Byrd Amendment anti-lobbying requirements. In each contract for 
an amount exceeding $100,000, you must include a clause requiring the 
contractor to submit to you the certification and any disclosure forms 
regarding lobbying that are required under 31 U.S.C. 3152, as 
implemented by the DoD at 32 CFR part 28.
    9. Purchase of recovered materials by States or political 
subdivisions of States. In each contract under which the contractor may 
purchase items designated in Environmental Protection Agency (EPA) 
regulations in 40 CFR part 247, subpart B, you must include a clause 
requiring the contractor to comply with applicable requirements in those 
EPA regulations, which implement Section 6002 of the Resource 
Conservation and Recovery Act of 1976, as amended (42 U.S.C. 6962).
    10. Fly America requirements. In each contract under which funds 
provided under this award might be used for international air travel for 
the transportation of people or property, you must include a clause 
requiring the contractor to:
    a. Comply with the International Air Transportation Fair Competitive 
Practices Act of 1974 (49 U.S.C. 40118, also known as the ``Fly 
America'' Act), as implemented at 41 CFR 301-10.131 through 301-10.143. 
The statute and regulations provide that U.S. Government-financed 
international air travel of passengers and transportation of personal 
effects or property must use a U.S. Flag air carrier or be performed 
under a cost-sharing arrangement with a U.S. carrier, if such service is 
available; and
    b. Include the requirements of the Fly America Act in all 
subcontracts that might involve international air transportation.
    11. Cargo preference for United States flag vessels. In each 
contract under which equipment, material, or commodities may be shipped 
by oceangoing vessels, you must include the clause specified in 
Department of Transportation regulations at 46 CFR 381.7(b) to require 
that at least 50 percent of equipment, materials or commodities 
purchased or otherwise obtained with Federal funds under this award, and 
transported by ocean vessel, be transported on privately owned U.S.-flag 
commercial vessels, if available.



PART 1134_FINANCIAL, PROGRAMMATIC, AND PROPERTY REPORTING: GENERAL
AWARD TERMS AND CONDITIONS--Table of Contents



Sec.
1134.1 Purpose of this part.
1134.2 Applicability of this part.
1134.3 Exceptions from requirements in this part.
1134.4 Organization of this part.

Subpart A_Performance Management, Monitoring, and Reporting (REP Article 
                                   I)

1134.100 Purpose of REP Article I.
1134.105 Performance reporting for construction awards.

[[Page 459]]

1134.110 Performance reporting for non-construction awards.
1134.115 Content and forms, formats, or data elements for interim and 
          final performance reporting under non-construction awards.
1134.120 Frequency, reporting periods, and due dates for interim 
          performance reporting under non-construction awards.
1134.125 Due dates and reporting periods for final performance reports 
          under non-construction awards.
1134.130 Requesting extensions of due dates for performance reports.
1134.135 Reporting significant developments.
1134.140 Performance reporting procedures.
1134.145 Site visits.

             Subpart B_Financial Reporting (REP Article II)

1134.200 Purpose of REP Article II.
1134.205 Reporting forms, formats, or data elements.
1134.210 Content of REP Article II.

            Subpart C_Reporting on Property (REP Article III)

1134.300 Purposes of REP Article III.
1134.305 Real property: reports, notifications, requests, and 
          accounting.
1134.310 Equipment and supplies: reports, notifications, requests, and 
          accounting.
1134.315 Federally owned property: inventory, notifications, and 
          requests.
1134.320 Intangible property: disclosures, reports, and requests.

Subpart D_Reporting on Subawards and Executive Compensation (REP Article 
                                   IV)

1134.400 Purpose of REP Article IV.
1134.405 Content of REP Article IV.

                Subpart E_Other Reporting (REP Article V)

1134.500 Purpose of REP Article V
1134.505 Content of REP Article V.

Appendix A to Part 1134--Terms and conditions for REP Article I, 
          ``Performance management, monitoring, and reporting''
Appendix B to Part 1134--Terms and conditions for REP Article II, 
          ``Financial reporting''
Appendix C to Part 1134--Terms and conditions for REP Article III, 
          ``Reporting on property''
Appendix D to Part 1134--Terms and conditions for REP Article IV, 
          ``Reporting on subawards and executive compensation''
Appendix E to Part 1134--Terms and conditions for REP Article V, ``Other 
          reporting''

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51171, Aug. 19, 2020, unless otherwise noted.



Sec.  1134.1  Purpose of this part.

    (a) This part specifies standard wording of general terms and 
conditions concerning recipients' reporting requirements.
    (b) It thereby implements OMB guidance on reporting in 2 CFR part 
170 and the following portions of 2 CFR part 200, as they relate to 
general terms and conditions of grants and cooperative agreements:
    (1) 2 CFR 200.301 and 200.327 through 200.329; and
    (2) 2 CFR 200.300(b) as it relates to subaward reporting, 200.312(a) 
as it relates to inventories of federally owned property, and 200.343(a) 
as it relates to financial and performance reporting.



Sec.  1134.2  Applicability of this part.

    The types of awards and entities to which this part and other parts 
in this subchapter apply are described in the subchapter overview at 2 
CFR 1126.2.



Sec.  1134.3  Exceptions from requirements of this part.

    Exceptions are permitted from the administrative requirements in 
this part only as described at 2 CFR 1126.3.



Sec.  1134.4  Organization of this part.

    (a) The content of this part is organized into subparts and 
associated appendices.
    (1) Each subpart provides direction to DoD Components on how to 
construct one article of general terms and conditions for grants and 
cooperative agreements.
    (2) For each subpart, there is a corresponding appendix with 
standard wording for terms and conditions of the article addressed by 
the subpart. Terms and conditions address rights and responsibilities of 
the Federal Government and recipients.
    (b) A DoD Component must use the wording provided in each appendix 
in accordance with the direction in the corresponding subpart. That 
direction may permit DoD Components to vary from the standard wording in 
some situations.

[[Page 460]]

    (c) Table 1 shows which article of general terms and conditions may 
be found in each of appendices A through D to this part (with the 
associated direction to DoD Components in Subparts A through D, 
respectively):

                        Table 1 to Paragraph (c)
------------------------------------------------------------------------
                             You will find terms and
                              conditions specifying
                              recipients' rights and   That would appear
          In . . .               responsibilities     in an award within
                                 related to . . .      REP Article . . .
 
------------------------------------------------------------------------
Appendix A.................  Performance management,  I.
                              monitoring, and
                              reporting.
Appendix B.................  Financial reporting....  II.
Appendix C.................  Reporting on property..  III.
Appendix D.................  Reporting on subawards   IV.
                              and executive
                              compensation.
Appendix E.................  Other reporting........  V.
------------------------------------------------------------------------



Subpart A_Performance Management, Monitoring, and Reporting (REP Article 
                                   I)



Sec.  1134.100  Purpose of REP Article I.

    REP Article I of the general terms and conditions specifies 
requirements related to recipient reporting on program performance. It 
thereby implements OMB guidance for grants and cooperative agreements 
in:
    (a) 2 CFR 200.328; and
    (b) Portions of 2 CFR 200.301 and 200.343(a) that relate to 
performance reporting.



Sec.  1134.105  Performance reporting for construction awards.

    (a) OMB guidance. OMB guidance in 2 CFR 200.328(c) notes that 
agencies rely heavily on onsite technical inspections and certified 
percentage of completion data to monitor progress under construction 
grants and cooperative agreements and states that agencies may require 
additional performance reports only when considered necessary.
    (b) DoD implementation. DoD Components may require performance 
reports under construction awards only when necessary and, to reduce 
recipient burdens, should coordinate the performance reporting with 
financial reporting to the maximum extent practicable.
    (c) Award terms and conditions. (1) If a DoD Component has general 
terms and conditions specifically for construction awards and does not 
need performance reports for those awards, it:
    (i) Should reserve Sections A through D of REP Article I in those 
terms and conditions;
    (ii) Must follow the specifications in Sec. Sec.  1134.135 and 
1134.145 to include the wording appendix A to this part provides for 
Sections E and G of REP Article I in those terms and conditions, in 
order to require recipients to promptly report significant developments 
and reserve the DoD Component's right to make site visits.
    (iii) Must follow the specifications in Sec.  1134.140 to insert 
wording in Section F of REP Article I in those terms and conditions, to 
tell recipients where and how to submit any reports of significant 
developments.
    (2) If a DoD Component has general terms and conditions specifically 
for construction awards and determines that it needs performance reports 
for those awards:
    (i) It may tailor the template and content that appendix A to this 
part provides for Sections A through D of REP Article I in those terms 
and conditions, as needed to specify the reporting requirements or, as 
appropriate, instead integrate those requirements into REP Article II on 
financial reporting. The form, format, or data elements that the DoD 
Component specifies for any of those performance reports must comply 
with requirements of the Paperwork Reduction Act of 1995, as implemented 
by OMB at 5 CFR part 1320, to use OMB-approved information collections 
if more than 9 recipients will be subject to the reporting requirement.
    (ii) It must follow the specifications in Sec. Sec.  1134.135 
through 1134.145 concerning Sections E through G of REP Article I in 
those terms and conditions, as described in paragraphs (c)(1)(ii) and 
(iii) of this section.

[[Page 461]]



Sec.  1134.110  Performance reporting for non-construction awards.

    (a) OMB guidance. OMB guidance in 2 CFR 200.328(f) states that an 
agency may waive any performance report that it does not need.
    (b) DoD implementation--(1) Interim reports. DoD Components should 
waive requirements for interim performance reports under non-
construction awards, including research awards, only when program 
managers have an alternative source for the information that the reports 
provide in support of the need for technical program oversight during 
the period of performance.
    (2) Final reports--(i) Research. DoD Components may not waive 
requirements for final performance reports under research awards, even 
when program managers have other sources of the information they 
contain. A primary purpose of a final report under a research award is 
to document the overall project or program well enough to serve as a 
long-term reference from which others may understand the purpose, scope, 
approach, results or outcomes, and conclusions or recommendations of the 
research.
    (ii) Non-construction awards other than research. DoD Components 
should consider the long-term value of final performance reports for 
documenting program outcomes, as well as any near-term value, before 
waiving requirements for final reports under other non-construction 
awards.
    (c) Award terms and conditions. Appendix A to this part provides a 
template for REP Article I of the general terms and conditions of 
research awards or other non-construction awards under which performance 
reports are required. A DoD Component must either use the wording that 
appendix A provides or insert wording into the template, in accordance 
with Sec. Sec.  1134.115 through 1134.145, to:
    (1) Specify the content and form, format, or data elements 
recipients must use for interim and final performance reporting (see 
Sec.  1134.115);
    (2) Specify the reporting frequency, reporting periods, and due 
dates for interim performance reports (see Sec.  1134.120);
    (3) Specify the due dates and reporting periods for final 
performance reports (see Sec.  1134.125);
    (4) Specify that recipients may request extensions of due dates for 
performance reports (see Sec.  1134.130);
    (5) Require recipients to report significant developments (see Sec.  
1134.135);
    (6) Specify reporting procedures (see Sec.  1134.140); and
    (7) Reserve the DoD Component's right to make site visits (see Sec.  
1134.145).



Sec.  1134.115  Content and forms, formats, or data elements for 
interim and final performance reporting under non-construction awards.

    (a) OMB guidance. OMB guidance in:
    (1) 2 CFR 200.301 and 200.328(b)(2) state that Federal awarding 
agencies must require recipients to use standard OMB-approved 
information collections for reporting performance information.
    (2) 2 CFR 200.328(b)(2)(i) through (iii) list types of information 
that performance reports under non-construction grants and cooperative 
agreements will contain, as appropriate, unless other collections are 
approved by OMB.
    (b) DoD implementation. (1) The content of the information 
collections that a DoD Component's general terms and conditions specify 
for non-construction awards must include the elements listed in 2 CFR 
200.328(b)(2)(i) through (iii) that are appropriate to the projects or 
programs subject to those general terms and conditions.
    (2) Forms, formats, and data elements that a DoD Component's general 
terms and conditions specify for performance reporting under non-
construction awards must comply with requirements of the Paperwork 
Reduction Act of 1995 to use OMB-approved information collections, as 
implemented by OMB at 5 CFR part 1320.
    (3) To the maximum extent practicable, a DoD Component's general 
terms and conditions for non-construction awards must specify that 
recipients use Governmentwide standard forms, formats, and data elements 
that also are used by other Federal agencies for similar programs, 
recipients, and types of awards (e.g., the Research Performance Progress 
Report format or any successor to it that OMB clears for interim 
performance progress reports

[[Page 462]]

under research awards to institutions of higher education and nonprofit 
organizations).
    (c) Award terms and conditions. To implement the provisions of 
paragraphs (a) and (b) of this section, a DoD Component must insert 
wording in lieu of the reserved Section A of REP Article I of its 
general terms and conditions for non-construction awards to specify the 
form, format, or data elements that recipients must use for interim and 
final performance reports. Section A of REP Article I may specify a 
different requirement for final performance reports than interim 
reports.



Sec.  1134.120  Frequency, reporting periods, and due dates for interim
performance reporting under non-construction awards.

    (a) OMB guidance. OMB guidance in 2 CFR 200.328(b)(1) addresses 
performance reporting frequency under grants and cooperative agreements 
and due dates.
    (1) Reporting frequency. The OMB guidance states that interim 
performance reports should be no less frequent than annually, nor more 
frequent than quarterly except in unusual circumstances (e.g., when more 
frequent reporting is necessary for effective program monitoring).
    (2) Due dates. The OMB guidance states that due dates for interim 
performance reports must be:
    (i) 30 calendar days after the end of the reporting period if 
interim reports are required quarterly or semiannually; and
    (ii) 90 calendar days after the end of the reporting period if 
interim reports are required annually, unless the agency elects to 
require the annual reports before the anniversary dates of multiyear 
awards.
    (b) DoD implementation. DoD implements the OMB guidance in 2 CFR 
200.328(b)(1) concerning frequency and due dates of interim performance 
reports through award terms and conditions, with the following 
clarifications and added specifications concerning reporting periods:
    (1) Reporting frequency. DoD Components rarely, if ever, should 
require recipients to submit interim performance reports more often than 
annually for basic research awards. Before requiring interim performance 
reports more frequently than annually for other research awards, DoD 
Components should carefully consider whether the benefits of more 
frequent reporting are sufficient to offset the potential for slowing 
the rate of research progress, due to diversion of researchers' time 
from research performance to report preparation.
    (2) Reporting periods. For research awards, a DoD Component should 
not require any recipient to submit interim performance reports on a 
cumulative basis--i.e., the second and any subsequent performance report 
should address only the most recent reporting period and not also 
address previous reporting periods covered by earlier interim 
performance reports.
    (3) Due dates. If a DoD Component requires an interim report more 
frequently than quarterly due to unusual circumstances, as described in 
2 CFR 200.328(a)(1) and paragraph (a)(1) of this section, the DoD 
Component must specify that the due date for the report is 30 days after 
the end of the reporting period. For all other interim reports, DoD 
Components must specify due dates in accordance with paragraph (a)(2) of 
this section.
    (c) Award terms and conditions. A DoD Component must insert wording 
in lieu of the reserved Section B of REP Article I of its general terms 
and conditions for non-construction awards to specify:
    (1) The frequency with which recipients must submit interim 
performance reports;
    (2) The reporting period each interim performance report must cover; 
and
    (3) The due date for each interim performance report, stated as the 
number of calendar days after the end of the reporting period.



Sec.  1134.125  Due dates and reporting periods for final performance
reports under non-construction awards.

    (a) OMB guidance. OMB guidance in 2 CFR 200.328(b)(1) states that 
each final performance report will be due 90 calendar days after the end 
date of the period of performance. It also states that an agency may 
extend the due date if a recipient submits a justified request.

[[Page 463]]

    (b) DoD implementation--(1) Due dates. Consistent with 2 CFR 
200.328(b)(1):
    (i) General. A DoD Component's general terms and conditions must 
specify that the due date for each recipient's submission of its final 
performance report is:
    (A) 90 calendar days after the end of the period of performance for 
non-construction awards other than research.
    (B) 120 calendar days after the end of the period of performance for 
research awards.
    (ii) Exception. A DoD Component may pre-approve a 30-day extension 
to the due date in its general terms and conditions for non-construction 
awards other than research by specifying that each recipient's final 
performance report is due 120 calendar days after the end of the period 
of performance. Doing so would be especially helpful to recipients that 
have subawards and need time to assimilate subrecipient inputs into the 
final report for the project or program as a whole.
    (2) Reporting periods--(i) Non-construction awards other than 
research. A DoD Component's general terms and conditions for non-
construction awards other than research may require each recipient to 
submit a final report that is cumulative and covers the entire period of 
performance, as that may more effectively document the project or 
program for future reference.
    (ii) Research. Final reports for research awards must be cumulative 
(i.e., each final report must cover the entire period of performance 
under the award and not just the period since the previous interim 
performance report) because a primary purpose of a final report for a 
research award is to document the overall project or program, as 
described in Sec.  1134.110(b)(2).
    (c) Award terms and conditions. To implement the provisions of 
paragraphs (a) and (b) of this section, a DoD Component in its general 
terms and conditions for non-construction awards:
    (1) Must either:
    (i) Specify that the due date for final performance reports is 
either 90 or 120 calendar days after the end of the period of 
performance, as indicated in paragraph (b)(1)(i), by including the 
wording that appendix A to this part provides for paragraph C.1 of REP 
Article I and modifying the bracketed language in that wording by 
removing the brackets and showing only the number of days (i.e., 90 or 
120 calendar days) appropriate for the type of awards; or
    (ii) Pre-approve a 30-day extension to the 90 calendar day due date, 
as described in paragraph (b)(1)(ii) of this section for non-
construction awards other than research, by including the wording that 
appendix A to this part provides for paragraph C.1 of REP Article I and 
modifying the bracketed language in that wording by removing the 
brackets and showing only ``120 calendar days'' in lieu of ``90 calendar 
days.''
    (2) Must insert wording in lieu of the reserved paragraph C.2 of REP 
Article I, to specify the reporting period for final reports (e.g., that 
research awards require cumulative final reports).



Sec.  1134.130  Requesting extensions of due dates for performance
reports.

    (a) OMB guidance. OMB guidance in 2 CFR 200.328(b)(1) states that, 
if a recipient submits a justified request for an extension in the due 
date for any interim or final performance report under a grant or 
cooperative agreement, an agency may extend the due date.
    (b) DoD implementation. A DoD Component's general terms and 
conditions for non-construction awards must specify that a recipient may 
request an extension of the due date for interim or final performance 
reports. DoD Components should grant requests that provide adequate 
justification. For a DoD Component that pre-approves a 30-day extension 
of due dates for final performance reports in its general terms and 
conditions, as described in Sec.  1134.125(b)(1)(ii) and (c)(1)(ii), any 
award-specific extensions would be beyond the pre-approved 30-day 
extension.
    (c) Award terms and conditions. To implement the provisions of 
paragraphs (a) and (b) of this section, a DoD Component's general terms 
and conditions for non-construction awards must include the wording that 
appendix A to this part provides for Section D of REP Article I on 
extensions of performance reporting due dates.

[[Page 464]]



Sec.  1134.135  Reporting significant developments.

    (a) OMB guidance. OMB guidance in 2 CFR 200.328(d) states that a 
recipient must promptly notify the awarding agency about significant 
developments under grants and cooperative agreements.
    (b) DoD implementation. A DoD Component's general terms and 
conditions must require recipients to report significant developments, 
as described in 2 CFR 200.328(d).
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must include the wording that appendix A to this part 
provides for Section E of REP Article I on reporting of significant 
developments.



Sec.  1134.140  Performance reporting procedures.

    (a) Requirement. A DoD Component's general terms and conditions must 
inform recipients about performance reporting procedures.
    (b) Award terms and conditions. To implement the requirement of 
paragraph (a) of this section, a DoD Component in its general terms and 
conditions must insert wording in Section F of REP Article I (which is 
reserved in the template for REP Article I that appendix A to this part 
provides), to specify:
    (1) The office or offices to which a recipient must submit its 
interim and final performance reports, any requests in due dates for 
those reports, and any reports of significant developments; and
    (2) How the recipient is to submit those reports and requests (e.g., 
email or other electronic submission method).
    (3) For research awards, component must assure that the recipient 
final report complies with the distribution and marking requirements of 
DoD Manual 3200.14, Volume 1. This includes the requirement that all 
significant scientific or technological findings, recommendations, and 
results derived from DoD endeavors--which shall include the final 
performance report at a minimum--are recorded and provided to Defense 
Technical Information Center (DTIC). Follow guidance in (b)(1) to inform 
recipients as the submission and distribution requirements (i.e. 
Component may choose to receive the report and submit to DTIC themselves 
or provide instructions to recipient on submission to DTIC).
    (4) Access to Research Results
    (i) For purposes of this term and condition, the following 
definition applies:
    Final Peer-Reviewed Manuscript: The final version of a peer-reviewed 
article for a professional journal publication disclosing the results of 
scientific research which is authored or co-authored by the recipient or 
funded, in whole or in part, with funds from a DoD award, that includes 
all modifications from the publishing peer review process, and all 
graphics and supplemental material associated with the article.
    (ii) The recipient shall ensure that any Final Peer-Reviewed 
Manuscript is submitted to the Defense Technical Information Center 
(DTIC) repository, currently at www.dtic.mil. Ensure that the Final 
Peer-Reviewed Manuscript is submitted when it is accepted for 
publication, and when the final title and date of publication are known.



Sec.  1134.145  Site visits.

    (a) OMB guidance. OMB guidance in 2 CFR 200.328(e) states that a 
Federal awarding agency may make site visits as warranted by program 
needs.
    (b) DoD implementation. A DoD Component's general terms and 
conditions must state that the Federal Government reserves the right to 
make site visits as warranted.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must include the wording that appendix A to this part 
provides for Section G of REP Article I concerning site visits.



             Subpart B_Financial Reporting (REP Article II)



Sec.  1134.200  Purpose of REP Article II.

    REP Article II of the general terms and conditions specifies 
requirements related to financial reporting. It thereby implements OMB 
guidance in 2 CFR 200.327 and the portions of 2 CFR 200.301 and 
200.343(a) that are specific to financial reporting under grants and 
cooperative agreements.

[[Page 465]]



Sec.  1134.205  Reporting forms, formats, or data elements.

    (a) OMB guidance. OMB guidance in 2 CFR 200.327 states that Federal 
awarding agencies may require recipients to use only the standard OMB-
approved Governmentwide data elements for collection of financial 
information, unless OMB approves other forms, formats, or data elements 
for financial information collection.
    (b) DoD implementation. DoD Components must collect financial 
information from recipients using OMB-approved forms, formats, or data 
elements.
    (1) Unless current approvals expire, approved financial information 
collections include the Federal Financial Report (SF-425) and Request 
for Advance or Reimbursement (SF-270). In the future, they would include 
any additional information collections that OMB approves.
    (2) For all but the recipient's final financial report, a DoD 
Component may rely on financial information the recipient provides on 
the SF-270 or other OMB-approved payment request form, format, or data 
elements if that financial information is sufficient to meet the DoD 
Component's needs. For the final report, the DoD Component must require 
the recipient to use the SF-425 or other OMB-approved financial 
information collection.
    (3) A DoD Component must obtain approval for any variations from 
OMB-approved forms or formats, including use of additional or substitute 
data elements or modification of the associated instructions for 
recipient entities submitting the information.



Sec.  1134.210  Content of REP Article II.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify what financial information recipients are required to report and 
how often, when, where, and how they must report.
    (b) Award terms and conditions--(1) General. Appendix B to this part 
provides a template into which a DoD Component must insert wording to 
specify the form, format, or data elements recipients must use for 
financial reporting; the frequency, reporting periods, and due dates for 
their financial reports (stated as the number of days after the end of 
the reporting period); and where and how they must submit the 
information.
    (2) Required reporting form, format, or data elements for interim 
and final financial reports. In Section A of REP Article II, which is 
reserved in appendix B to this part, a DoD Component must insert wording 
to specify the OMB-approved form, format, or data elements that 
recipients must use for financial reporting and the website where they 
can be found. The section may provide a different requirement for final 
financial reports than interim reports during the period of performance 
if the DoD Component needs less information on interim reports than is 
needed on the final report.
    (3) Interim financial reports: Frequency, reporting periods, and due 
dates. In Section B of REP Article II, which is reserved in appendix B 
to this part, a DoD Component must insert wording to specify the 
frequency with which recipients must submit interim financial reports, 
as well as the reporting period each report must cover and when it is 
due. However, this section of the article may waive interim reporting 
requirements if the DoD Component relies on information already provided 
with payment requests (e.g., on the SF-270).
    (i) Consistent with OMB guidance in 2 CFR 200.327, the reporting 
frequency may be no less often than annually and no more frequently than 
quarterly except in unusual circumstances (e.g., a need for more 
frequent reporting for monitoring program performance, in which case 
financial reporting should be coordinated with performance reporting).
    (ii) The reporting frequency, reporting periods, and due dates must 
conform with any guidance on those aspects of financial reporting in the 
OMB-approved instructions accompanying the form, format, or data 
elements used.
    (iii) When a DoD Component's general terms and conditions provide 
for advance payments based on predetermined schedules--which is very 
rarely if ever appropriate for research awards--the terms and conditions 
must provide for quarterly reporting. This

[[Page 466]]

will enable post-award administrators to closely monitor recipients' 
balances of cash on hand for compliance with Governmentwide cash 
management standards.
    (4) Final financial report. Appendix B to this part provides wording 
for Section C of REP Article II to implement OMB guidance in 2 CFR 
200.343(a) as it applies to final financial reports. Given that 2 CFR 
part 200 provides 90 days for subrecipients to liquidate subaward 
obligations and submit their final financial reports to recipients, the 
wording in appendix B gives recipients 120 days to submit final 
financial reports to DoD post-award administration offices. That 
provides a reasonable amount of time for recipients to incorporate any 
information they need from final subaward reports. A DoD Component may 
alter the wording or supplement it if the DoD Component has a basis to 
do so in a statute or a regulation published in the Code of Federal 
Regulations.
    (5) Extensions of due dates. A DoD Component's general terms and 
conditions must include the wording for Section D of REP Article II that 
appendix B to this part provides to authorize recipients to request 
extensions of due dates for interim or final financial reports.
    (6) Where and how to submit financial reports. In Section E of REP 
Article II, which is reserved in appendix B to this part, a DoD 
Component must insert wording to specify the DoD official or office to 
whom a recipient must submit its interim and final financial reports and 
the method it must use to do so (e.g., email or other electronic 
submission method).



            Subpart C_Reporting on Property (REP Article III)



Sec.  1134.300  Purposes of REP Article III.

    REP Article III of the general terms and conditions provides a 
consolidated source that sets out required reports, notifications, 
requests, and accountings related to federally owned property and 
property that is acquired or improved under awards. The article is:
    (a) The original source of requirements for recipients to:
    (1) Submit periodic status reports and notifications of critical 
changes for real property (in paragraphs A.1 and A.2 of the article), 
which thereby implements OMB guidance in 2 CFR 200.329;
    (2) Submit an annual inventory of federally owned property (in 
paragraph C.1 of the article), which thereby partially implements OMB 
guidance in 2 CFR 200.312(a);
    (3) Provide information on request about copyrighted works and data 
produced under awards (in paragraph D.2 of the article).
    (b) A secondary source provided for the convenience of recipients 
and DoD post-award administrators that lists and refers to the original 
sources of requirements for recipients to:
    (1) Request disposition instructions and account at closeout for 
real property (in paragraphs A.3 and A.4 of the article), the original 
sources of which are in PROP Article III and OAR Article VI;
    (2) Provide notifications of loss, damage, or theft and requests for 
disposition instructions for equipment (in paragraphs B.2 and B.3 of the 
article), the original sources of which are in PROP Articles II and IV, 
respectively;
    (3) Account at closeout for equipment and supplies (in paragraph B.4 
of the article), the original sources of which are in OAR Article VI and 
PROP Article IV;
    (4) Provide notifications of loss, damage, or theft and requests for 
disposition instructions for federally owned property (in paragraphs C.2 
and C.3 of the article), the original sources of which are in PROP 
Articles II and V, respectively;
    (5) Disclose and report on inventions developed under awards (in 
paragraph D.1), the original source of which is in PROP Article VI; and
    (6) Request disposition instructions for intangible property 
acquired, but not developed or produced, under awards (in paragraph D.3 
of the article), the original source of which is in PROP Article VI.



Sec.  1134.305  Real property: reports, notifications, requests,
and accounting.

    (a) Requirement. A DoD Component's general terms and conditions must

[[Page 467]]

specify the real property reporting requirements described in Sec.  
1134.300(a)(1) and provide references to the related requirements 
described in Sec.  1134.300(b)(1).
    (b) Award terms and conditions. To implement the requirement 
described in paragraph (a) of this section, the wording of Section A of 
REP Article III of a DoD Component's general terms and conditions must 
comply with either paragraph (b)(1) or (b)(2) of this section.
    (1) General. Unless a DoD Component determines that there will be no 
acquisition or improvement of real property under awards using its 
general terms and conditions, those general terms and conditions must 
include the wording appendix C to this part provides for Section A of 
REP Article III, to which the DoD Component:
    (i) Must add wording in lieu of the reserved paragraph A.1.a to 
specify how often a recipient must submit periodic status reports and 
how long it is required to do so (which should be the duration of the 
Federal interest in the real property). The wording of paragraph A.1.a 
must be consistent with OMB guidance in 2 CFR 200.329, which provides 
different options for reporting frequency depending on the duration of 
the Federal interest in the real property.
    (ii) Must add wording in lieu of the reserved paragraph A.1.b to 
specify the due date for each periodic status report in terms of the 
number of calendar days after the end of the period covered by the 
report (e.g., a report on the status of the property as of September 30 
might be due 30 calendar days after that date).
    (iii) May provide wording in lieu of the reserved paragraph A.1.c if 
there are other instructions--e.g., a form, format, or information 
elements that a recipient must use (which must be cleared by OMB under 
the Paperwork Reduction Act, as implemented by OMB at 5 CFR part 1320) 
or a particular office to which reports must be submitted, especially if 
reporting will continue beyond closeout of the award under which the 
real property was acquired or improved.
    (2) Exception. A DoD Component may reserve Section A of REP Article 
III if it determines that there will be no acquisition or improvement of 
real property under awards using its general terms and conditions.



Sec.  1134.310  Equipment and supplies: reports, notifications, 
requests, and accounting.

    (a) Requirement. REP Article III of a DoD Component's general terms 
and conditions must clarify that there is no requirement for routine 
periodic reporting about equipment acquired under an award and provide 
the references described in Sec.  1134.300(b)(2) and (3) to requirements 
in other articles for notifications, requests, and accounting related to 
equipment and supplies.
    (b) Award terms and conditions. To implement the requirement 
described in paragraph (a) of this section, a DoD Component's general 
terms and conditions must use the wording appendix C to this part 
provides for Section B of REP Article III.



Sec.  1134.315  Federally owned property: inventory, notifications,
and requests.

    (a) Requirement. REP Article III of a DoD Component's general terms 
and conditions must specify the reporting requirement described in Sec.  
1134.300(a)(2) and provide the references described in Sec.  
1134.300(b)(4) to requirements in other articles for notifications and 
requests related to federally owned property.
    (b) Policy. (1) Except as provided by statute or in regulations 
adopted in the Code of Federal Regulations after opportunity for public 
comment, a DoD Component may not specify:
    (i) Due dates for the annual inventories of federally owned 
property; or
    (ii) Forms, formats, or specific data elements for the inventories, 
notifications, or requests for disposition instructions. Any form, 
format, or data elements that a DoD Component specifies must be cleared 
by OMB under the Paperwork Reduction Act, as implemented by OMB at 5 CFR 
part 1320.
    (2) Not specifying due dates, forms, formats, or data elements 
provides flexibility for recipients and DoD post-award administrators to 
handle these

[[Page 468]]

requirements in ways that reduce burdens and costs. For example, a 
recipient may arrange with a post-award administration office to submit 
one consolidated inventory annually for federally owned property under 
all of the awards it receives that are administered by that office, 
using a format its property management system already generates.
    (c) Award terms and conditions--(1) General. To implement the 
requirement described in paragraph (a) of this section, a DoD 
Component's general terms and conditions must use the wording appendix C 
to this part provides for Section C of REP Article III. The DoD 
Component may add wording on due dates or on forms, formats, or data 
elements only as provided in paragraph (b) of this section.
    (2) Exception. A DoD Component may reserve Section C of REP Article 
III if it determines that no recipients of awards using its general 
terms and conditions, or subrecipients of subawards under those awards, 
will be accountable for federally owned property under those awards or 
subawards.



Sec.  1134.320  Intangible property: disclosures, reports, and requests.

    (a) Requirement. REP Article III of a DoD Component's general terms 
and conditions must specify the requirement described in Sec.  
1134.300(a)(3) and provide the references described in Sec.  
1134.300(b)(5) and (6) to requirements in other articles for 
disclosures, reports, and requests related to intangible property.
    (b) Award terms and conditions--(1) General. To implement the 
requirement described in paragraph (a) of this section, a DoD 
Component's general terms and conditions must use the wording appendix C 
to this part provides for Section D of REP Article III.
    (2) Exceptions. A DoD Component may reserve:
    (i) Section D of REP Article III if it determines that no recipients 
of awards using its general terms and conditions, or subrecipients of 
subawards under those awards, will have any intangible property for 
which they will be accountable to the Federal Government; or
    (ii) Any of paragraphs D.1 through D.3, if it determines that no 
recipients of awards using its general terms and conditions, or 
subrecipients of subawards under those awards, will be accountable to 
the Federal Government for the particular types of intangible property 
addressed by those paragraphs.



Subpart D_Reporting on Subawards and Executive Compensation (REP Article 
                                   IV)



Sec.  1134.400  Purpose of REP Article IV.

    REP Article IV of the general terms and conditions specifies 
requirements for recipients to report information about subawards and 
executive compensation.



Sec.  1134.405  Content of REP Article IV.

    (a) Source of the reporting requirements. The requirements for 
recipients to report information about subawards and executive 
compensation originate in the Federal Funding Accountability and 
Transparency Act of 2006, as amended (31 U.S.C. 6101 note). OMB guidance 
at 2 CFR part 170 implements those statutory requirements and appendix A 
to that part provides standard Governmentwide wording of an award 
provision.
    (b) Award terms and conditions. To implement the reporting 
requirements described in paragraph (a) of this section, a DoD 
Component's general terms and conditions must use the wording appendix E 
to this part provides as REP Article IV.



                Subpart E_Other Reporting (REP Article V)



Sec.  1134.500  Purpose of REP Article V.

    REP Article V of the general terms and conditions specifies 
requirements for recipients to provide any type of report not addressed 
in REP Articles I-IV.



Sec.  1134.505  Content of REP Article V.

    (a) Source of reporting requirement. Any requirement in a DoD 
Component's general terms and conditions for recipients to provide a 
type of report

[[Page 469]]

not addressed in REP Articles I-IV must:
    (1) Have a basis in a statute or regulation adopted in the Federal 
Register after an opportunity for public comment; and
    (2) Use a form/format that has been approved by OMB under the PRA, 
as implemented by OMB in 5 CFR part 1320.
    (b) Award terms and conditions. (1) To implement any reporting 
requirement described in paragraph (a) of this section, a DoD 
Component's general terms and conditions must include the following 
content in REP Article V, consistent with the PRA approval. Otherwise, 
REP Article V must be reserved.
    (a) The name of the report and where a recipient can obtain it;
    (b) For an interim report, the frequency with which it must be 
submitted and due date(s);
    (c) For a final report, whether the report is due 90 days or, if the 
DoD Component has pre-approved a 30-day extension, 120 days after the 
end of the period of performance; and
    (d) To what DoD office/official the report(s) must be submitted.
    (2) If there is more than one such report, the DoD Component must 
show the information for each in separate sections of the article.



 Sec. Appendix A to Part 1134--Terms and Conditions for REP Article I, 
          ``Performance Management, Monitoring, and Reporting''

    For the general terms and conditions of construction awards, unless 
a DoD Component reserves any sections or inserts or modifies wording, as 
specified in Sec.  1134.105 for Sections A through D of the article, a 
DoD Component's general terms and conditions must use the following 
wording for REP Article I.
    For the general terms and conditions of non-construction awards 
(Sec. Sec.  1134.115 through 1134.145), a DoD Component must use the 
following wording for REP Article I and, as specified in Sec. Sec.  
1134.115 through 1134.125 and Sec.  1134.140, insert or modify wording, 
depending on whether the terms and conditions are for research and/or 
other non-construction awards.

   REP Article I. Performance Management, Monitoring, and Reporting. 
                             (DECEMBER 2014)

    Section A. Required reporting form, format, or data elements for 
interim and final performance reports. [Reserved.]
    Section B. Frequency, reporting periods, and due dates for interim 
performance reports. [Reserved.]
    Section C. Due date and reporting period for final performance 
report.
    1. Due date. You must submit the final performance report under this 
award no later than [90 calendar days for non-construction awards other 
than research or 120 calendar days for research awards] after the end 
date of the period of performance unless we approve an extension of that 
due date as described in Section D of this article.
    2. Reporting period. [Reserved.]
    Section D. Extensions of due dates. You may request extensions of 
the due dates that Sections B and C of this Article specify for interim 
and final reports, respectively. You must provide the reasons for your 
request and we will approve extensions that are adequately justified.
    Section E. Reporting significant developments. You must report the 
following information to us as soon as you become aware of it:
    1. Problems, delays, or adverse conditions that will materially 
impair your ability to meet the objectives of this award. This 
disclosure must include a statement of the action taken, or 
contemplated, and any assistance needed to resolve the situation.
    2. Favorable developments which will enable you to meet schedules 
and objectives sooner or at less cost than anticipated or produce more 
or different beneficial results than originally planned.
    Section F. Performance reporting procedures. [Reserved.]
    Section G. Site visits. We reserve the right to make site visits as 
warranted to monitor program performance under this award.



 Sec. Appendix B to Part 1134--Terms and Conditions for REP Article II, 
                         ``Financial Reporting''

    A DoD Component must in its general terms and conditions complete 
the template provided in this appendix for Sections A, B, and E of REP 
Article II by inserting or modifying wording, as specified in Sec.  
1134.210, and use the following wording for Sections C (unless alternate 
wording is permitted by Sec.  1134.210) and D of the article.

          REP Article II. Financial Reporting. (DECEMBER 2014)

    Section A. Required reporting form, format, or data elements for 
interim and final financial reports. [Reserved.]

[[Page 470]]

    Section B. Interim financial reports: Frequency, reporting periods, 
and due dates. [Reserved.]
    Section C. Final financial report. You must submit the final 
financial report under this award no later than 120 calendar days after 
the end date of the period of performance.
    Section D. Extensions of due dates. You may request extensions of 
the due dates that Sections B and C of this Article specify for interim 
and final reports, respectively. You must provide the reasons for your 
request, and we will approve extensions that are adequately justified.
    Section E. Where and how to submit financial reports. [Reserved.]



Sec. Appendix C to Part 1134--Terms and Conditions for REP Article III, 
                        ``Reporting on Property''

    Unless a DoD Component reserves REP Article III in its entirety as 
specified in Sec.  1134.305, or reserves Sections C or D (or any 
paragraph in those sections) as specified in Sec. Sec.  1134.315 and 
1134.320, a DoD Component's general terms and conditions must include a 
completed Section A (as specified in Sec.  1134.305) and use the 
following wording for the remainder of REP Article III.

         REP Article III. Reporting on Property (DECEMBER 2014)

    Section A. Real property. Paragraphs A.1 through A.4 apply to real 
property for which you are accountable under this award, for as long as 
there is a Federal interest in the property (whether that interest is 
due to you or a subrecipient having acquired or improved the property 
under this award, or a transfer of the accountability for the property 
to this award from another award).
    1. Periodic status reports. You must submit periodic status reports, 
as follows:
    a. Frequency and duration of reporting requirement. [Reserved.]
    b. Due dates. [Reserved.]
    c. Other submission instructions. [Reserved.]
    2. Notifications of critical changes. You must notify the award 
administration office of any critical change in the status of real 
property as soon as feasible after you become aware of it. A critical 
change is any event with a significant adverse impact on the condition 
or value of the property, such as damage due to fire; flood, hurricane, 
or other severe weather; earthquake; or accident.
    3. Requests for disposition instructions. You must comply with 
applicable requirements in PROP Article III to request disposition 
instructions, either during the period of performance or at closeout.
    4. Closeout accounting. You must account to the award administration 
office for real property at the time of closeout of the award, as 
required by Section D of OAR Article VI.
    Section B. Equipment and supplies. Paragraphs B.1 through B.4 apply 
to equipment or supplies for which you are accountable under this award 
and in which there is a Federal interest (whether that interest is due 
to you or a subrecipient having acquired or improved the property under 
this award, or a transfer of the accountability for the property to this 
award from another award).
    1. Periodic status report. There is no requirement for periodic 
reporting during the period of performance.
    2. Notifications of loss, damage, or theft. You must comply with 
applicable requirements in PROP Article II governing your property 
management system to promptly notify the award administration office of 
any loss, damage, or theft of equipment.
    3. Requests for disposition instructions. You must comply with 
applicable requirements in PROP Article IV to request disposition 
instructions for equipment, either during the period of performance or 
at closeout.
    4. Closeout accounting.
    a. Equipment. You must account to the award administration office 
for equipment at the time of closeout of this award, as required by 
Section D of OAR Article VI.
    b. Supplies. If you have a residual inventory of unused supplies 
that meets the criteria specified in paragraph E.2 of PROP Article IV, 
you must as part of your closeout accounting arrange with the award 
administration office for the compensation that paragraph specifies for 
the Federal interest in the supplies.
    Section C. Federally owned property. Paragraphs C.1 through C.3 
apply to federally owned property for which you are accountable under 
this award.
    1. Annual inventory. You must submit annually to the award 
administration office an inventory of federally owned property.
    2. Notifications of loss, damage, or theft. As provided in PROP 
Article II governing your property management system, you must promptly 
notify the award administration office of any loss, damage, or theft of 
federally owned property.
    3. Requests for disposition instructions. You must comply with 
requirements in Section B of PROP Article V to request disposition 
instructions, either during the period of performance or at closeout.
    4. Closeout accounting. Your requests for disposition instructions 
for federally owned property, as described in paragraph C.3 of this 
section, satisfy the need to account for federally owned property at 
closeout (see Section D of OAR Article VI).
    Section D. Intangible property. Paragraphs D.1 through D.3 apply to 
intangible property for which you are accountable under this award.

[[Page 471]]

    1. Inventions developed under the award. You must submit all reports 
on subject inventions developed under this award that are required by 
the modified Governmentwide patent rights award provision specified in 
Section B of PROP Article VI, which include a disclosure of each subject 
invention and a final report listing all such subject inventions.
    2. Copyrights and data. You are not required to submit periodic 
reports about data produced under the award or about works for which you 
acquired ownership under this award, either by development or otherwise, 
and in which copyright was asserted. However, because of the DoD/Federal 
Government's rights in the works and data that Sections A and C of PROP 
Article VI specify, you must provide information about the works and 
data if we request it.
    3. Intangible property acquired, but not developed or produced, 
under the award. You must comply with requirements in Section D of PROP 
Article VI to request disposition instructions for intangible property 
acquired, but not developed or produced, under the award.



 Sec. Appendix D to Part 1134--Terms and Conditions for REP Article IV, 
          ``Reporting on Subawards and Executive Compensation''

    As specified in Sec.  1134.405, a DoD Component's general terms and 
conditions must use the following wording for REP Article IV.

   REP Article IV. Reporting on Subawards and Executive Compensation 
                             (DECEMBER 2014)

    You must report information about subawards and executive 
compensation as specified in the award provision in appendix A to 2 CFR 
part 170, ``Reporting subaward and executive compensation information,'' 
modified as follows:
    1. To accommodate any future designation of a different 
Governmentwide website for reporting subaward information, the website 
``http://www.fsrs.gov'' cited in paragraphs a.2.i. and a.3 of the award 
provision is replaced by the phrase ``http://www.fsrs.gov or successor 
OMB-designated website for reporting subaward information'';
    2. To accommodate any future designation of a different 
Governmentwide website for reporting executive compensation information, 
the website ``http://www.sam.gov'' cited in paragraph b.2.i. of the 
award provision is replaced by the phrase ``https://www.sam.gov or 
successor OMB-designated website for reporting information on total 
compensation''; and
    3. The reference to ``Sec. _.210 of the attachment to OMB Circular 
A-133, `Audits of States, Local Governments, and Non-Profit 
Organizations' '' in paragraph e.3.ii of the award provision is replaced 
by ``2 CFR 200.330, as implemented in SUB Article I of this award''.



 Sec. Appendix E to Part 1134--Terms and Conditions for REP Article V, 
                           ``Other Reporting''

    In accordance with Sec.  1134.505 of this part, a DoD Component's 
general terms and conditions must either reserve REP Article V or 
provide the information required by that section for each applicable 
report.

            REP Article V. Other Reporting. (Date) [Reserved]



PART 1136_OTHER ADMINISTRATIVE REQUIREMENTS: GENERAL AWARD TERMS AND
CONDITIONS--Table of Contents



Sec.
1136.1 Purpose of this part.
1136.2 Applicability of this part.
1136.3 Exceptions from requirements of this part.
1136.4 Organization of this part.

Subpart A_Submitting and Maintaining Recipient Information (OAR Article 
                                   I)

1136.100 Purpose of OAR Article I.
1136.105 Content of OAR Article I.

         Subpart B_Records Retention and Access (OAR Article II)

1136.200 Purpose of OAR Article II.
1136.205 Records retention period.
1136.210 Extensions of retention period due to litigation, claim, or 
          audit.
1136.215 Records for program income earned after the end of the 
          performance period.
1136.220 Records for joint or long-term use.
1136.225 Methods for collecting, transmitting, and storing information.
1136.230 Access to records.

          Subpart C_Remedies and Termination (OAR Article III)

1136.300 Purpose of OAR Article III.
1136.305 Content of OAR Article III.

        Subpart D_Claims, Disputes, and Appeals (OAR Article IV)

1136.400 Purpose of OAR Article IV.
1136.405 Content of OAR Article IV.

[[Page 472]]

           Subpart E_Collection of Amounts Due (OAR Article V)

1136.500 Purpose of OAR Article V.
1136.505 Content of OAR Article V.

                   Subpart F_Closeout (OAR Article VI)

1136.600 Purpose of OAR Article VI.
1136.605 Content of OAR Article VI.

Subpart G_Post-Closeout Adjustments and Continuing Responsibilities (OAR 
                              Article VII)

1136.700 Purpose of OAR Article VII.
1136.705 Content of OAR Article VII.

Appendix A to Part 1136--Terms and conditions for OAR Article I, 
          ``Submitting and maintaining recipient information''
Appendix B to Part 1136--Terms and conditions for OAR Article II, 
          ``Records retention and access''
Appendix C to Part 1136--Terms and conditions for OAR Article III, 
          ``Remedies and termination''
Appendix D to Part 1136--Terms and conditions for OAR Article IV, 
          ``Claims, disputes, and appeals''
Appendix E to Part 1136--Terms and conditions for OAR Article V, 
          ``Collection of amounts due''
Appendix F to Part 1136--Terms and conditions for OAR Article VI, 
          ``Closeout''
Appendix G to Part 1136--Terms and conditions for OAR Article VII, 
          ``Post-closeout adjustments and continuing responsibilities''

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51171, Aug. 19, 2020, unless otherwise noted.



Sec.  1136.1  Purpose of this part.

    (a) This part specifies standard wording of general terms and 
conditions concerning submission and maintenance of recipient 
information; records retention and access; remedies for noncompliance 
and termination; claims, disputes, and appeals; collection of amounts 
due; closeout; and after-the-award requirements.
    (b) It thereby implements OMB guidance for grants and cooperative 
agreements in multiple portions of 2 CFR part 200, as those portions 
apply to general terms and conditions. Specifically, this part 
implements:
    (1) 2 CFR 200.113 and 200.210(b)(1)(iii);
    (2) 2 CFR 200.300(b) as it refers to requirements in 2 CFR part 25; 
and
    (3) 2 CFR 200.333 through 200.345.



Sec.  1136.2  Applicability of this part.

    The types of awards and entities to which this part and other parts 
in this subchapter apply are described in the subchapter overview at 2 
CFR 1126.2.



Sec.  1136.3  Exceptions from requirements of this part.

    Exceptions are permitted from the administrative requirements in 
this part only as described at 2 CFR 1126.3.



Sec.  1136.4  Organization of this part.

    (a) The content of this part is organized into subparts and 
associated appendices.
    (1) Each subpart provides direction to DoD Components on how to 
construct one article of general terms and conditions for grants and 
cooperative agreements.
    (2) For each subpart, there is a corresponding appendix with 
standard wording for terms and conditions of the article addressed by 
the subpart. Terms and conditions address rights and responsibilities of 
the Federal Government and recipients.
    (b) A DoD Component must use the wording provided in each appendix 
in accordance with the direction in the corresponding subpart. That 
direction may permit DoD Components to vary from the standard wording in 
some situations.
    (c) Table 1 shows which article of general terms and conditions may 
be found in each of appendices A through G to this part (with the 
associated direction to DoD Components in Subparts A through G, 
respectively):

                        Table 1 to Paragraph (c)
------------------------------------------------------------------------
                             You will find terms and
                              conditions specifying
                              recipients' rights and   That would appear
          In . . .               responsibilities     in an award within
                                 related to . . .      OAR Article . . .
 
------------------------------------------------------------------------
Appendix A.................  Submitting and           I.
                              maintaining recipient
                              information.
Appendix B.................  Records retention and    II.
                              access.
Appendix C.................  Remedies and             III.
                              termination.
Appendix D.................  Claims, disputes, and    IV.
                              appeals.
Appendix E.................  Collection of amounts    V.
                              due.

[[Page 473]]

 
Appendix F.................  Closeout...............  VI.
Appendix G.................  Post-closeout            VII.
                              adjustments and
                              continuing
                              responsibilities.
------------------------------------------------------------------------



Subpart A_Submitting and Maintaining Recipient Information (OAR Article 
                                   I)



Sec.  1136.100  Purpose of OAR Article I.

    OAR Article I sets forth requirements for recipients to maintain 
current information about themselves in the data system the Federal 
Government specifies as the repository for standard information about 
its business partners, currently the System for Award Management. The 
article thereby implements OMB guidance in:
    (a) 2 CFR 200.113 and 200.210(b)(1)(iii);
    (b) 2 CFR part 25; and
    (c) The portion of 2 CFR 200.300(b) that cites 2 CFR part 25 and the 
System for Award Management).



Sec.  1136.105  Content of OAR Article I.

    To implement the requirement described in Sec.  1136.100, a DoD 
Component's general terms and conditions must use the standard wording 
appendix A to this part provides as OAR Article I. A DoD Component may 
reserve Section B of the article in its general terms and conditions if 
it is certain that there will be no award using those general terms and 
conditions for which the Federal share of the award's total value will 
exceed $500,000.



         Subpart B_Records Retention and Access (OAR Article II)



Sec.  1136.200  Purpose of OAR Article II.

    OAR Article II addresses rights and responsibilities concerning 
retention of records related to awards; access to recipients' records; 
and collection, transmission, and storage of information. The article 
thereby implements OMB guidance in 2 CFR 200.333 through 200.337.



Sec.  1136.205  Records retention period.

    (a) OMB guidance. OMB guidance in:
    (1) The lead-in paragraph of 2 CFR 200.333 sets a standard retention 
period that is generally applicable to recipient records pertinent to 
grants and cooperative agreements.
    (2) 2 CFR 200.333(c) and (f) provide different standard retention 
periods specifically for records that are related either to real 
property and equipment acquired with Federal funds or indirect cost rate 
proposals and cost allocation plans.
    (b) DoD implementation. A DoD Component's general terms and 
conditions must specify the standard retention periods described in 
paragraph (a) of this section.
    (c) Award terms and conditions--(1) General. A DoD Component's 
general terms and conditions must use the wording appendix B to this 
part provides for Section A of OAR Article II.
    (2) Exception. A DoD Component's general terms and conditions may 
substitute alternative wording for paragraph A.3 of OAR Article II if 
the awards using those terms and conditions will be renewed quarterly or 
annually. The alternative wording for awards that will be renewed 
quarterly or annually would replace the words ``final financial report'' 
in paragraph A.3 with ``quarterly financial report'' or ``annual 
financial report,'' respectively.



Sec.  1136.210  Extensions of retention period due to litigation,
claim, or audit.

    (a) OMB guidance. OMB guidance in:
    (1) 2 CFR 200.333(a) provides for an extended retention period for 
records involved in a litigation, claim, or audit that begins before the 
end of the standard 3-year retention period.
    (2) 2 CFR 200.333(b) provides that a recipient also is required to 
extend the retention period when a Federal awarding, cognizant, or 
oversight agency notifies it in writing to do so.

[[Page 474]]

    (b) DoD implementation. (1) A DoD Component's general terms and 
conditions must provide for extended retention periods for records 
involved in a litigation, claim, or audit that begins before the end of 
the standard 3-year retention period, as described in 2 CFR 200.333(a).
    (2)(i) Other than the exception described in paragraph (b)(2)(ii) of 
this section, DoD Components may not require recipients to extend the 
records retention period as described in 2 CFR 200.333(b).
    (ii) A DoD Component's general terms and conditions must extend the 
``retention period,'' as that term is used in 2 CFR 200.344(a), to 
include the entire period during which recipients retain their records, 
even if that period extends beyond the standard 3-year retention period 
described in Sec.  1136.205. That extension will enable disallowance of 
costs and recovery of funds based on an audit or other review of records 
a recipient elected to retain beyond the standard retention period, even 
if the audit or review began after the end of that retention period. 
Without that extension, the ability to disallow costs and recover funds 
would be limited by 2 CFR 200.344(a), which states that an agency must 
make any disallowance determination about a recipient's costs and notify 
the recipient within the record retention period.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix B to this part provides for 
Section B of OAR Article II.



Sec.  1136.215  Records for program income earned after the end of
the performance period.

    (a) OMB guidance. OMB guidance in 2 CFR 200.333(e) provides the 
retention period for records related to program income earned under a 
grant or cooperative agreement after the end of the period of 
performance, if an agency establishes requirements governing the 
disposition of program income earned after that time.
    (b) DoD implementation. A DoD Component's general terms and 
conditions should not establish retention requirements for records 
related to program income earned after the end of the period of 
performance. Retention requirements for those records in general terms 
and conditions would be inconsistent with the statement in 2 CFR 
1128.725 that a DoD Component should rarely, if ever, establish a 
requirement for a recipient to be accountable for program income earned 
after the end of the period of performance. Section 1128.725 provides 
for use of general terms and conditions wording in FMS Article VII that 
establishes no such requirement. Section 1128.725 further states that 
exceptions for individual awards are properly addressed at the time of 
award in the award-specific terms and conditions.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix B to this part provides for 
Section C of OAR Article II. If a DoD Component includes a requirement 
in the award-specific terms and conditions for the recipient to be 
accountable for program income earned after the end of the period of 
performance, it also may include a requirement in the award-specific 
terms and conditions for the recipient's retention of the associated 
records.



Sec.  1136.220  Records for joint or long-term use.

    (a) OMB guidance. OMB guidance in:
    (1) 2 CFR 200.334 states that a Federal awarding agency must request 
that a recipient transfer records to its custody if the agency 
determines that the records have value that warrants long-term 
retention. It also provides that the agency may instead arrange for the 
recipient to retain records that are continuously needed for joint use.
    (2) 2 CFR 200.333(d) exempts records transferred to a Federal agency 
from the standard records retention requirement.
    (b) DoD implementation. A DoD Component's general terms and 
conditions must inform recipients that they may be asked to transfer 
records, maintain them for joint use, or retain them for a longer 
period.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix B to this part provides for 
Section D of OAR Article II.

[[Page 475]]



Sec.  1136.225  Methods for collecting, transmitting, and storing
information.

    (a) OMB guidance. OMB guidance in 2 CFR 200.335 addresses the use of 
electronic and paper formats in the collection, transmission, and 
storage of information related to awards.
    (b) DoD implementation. A DoD Component's general terms and 
conditions must include provisions consistent with the guidance in 2 CFR 
200.335 for recipients' use of electronic and paper formats to collect, 
transmit, and store information.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix B to this part provides for 
Section E of OAR Article II.



Sec.  1136.230  Access to records.

    (a) OMB guidance. OMB guidance in 2 CFR 200.336 and 200.337 
addresses Federal Government and public access to recipient records 
related to grants and cooperative agreements.
    (b) DoD implementation. A DoD Component's general terms and 
conditions must provide for Federal Government access to records 
consistent with 2 CFR 200.336 and address public access to records to 
implement the guidance in 2 CFR 200.337.
    (c) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix B to this part provides for 
Section F of OAR Article II.



          Subpart C_Remedies and Termination (OAR Article III)



Sec.  1136.300  Purpose of OAR Article III.

    OAR Article III addresses remedies for noncompliance, including 
suspension and termination of awards. It thereby implements OMB guidance 
in 2 CFR 200.338 through 200.340 and 200.342.



Sec.  1136.305  Content of OAR Article III.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify remedies available for addressing noncompliance with award terms 
and conditions, policies and procedures related to termination of 
awards, and effects of suspension and termination on allowability of 
costs.
    (b) Award terms and conditions. To implement the requirement in 
paragraph (a) of this section, a DoD Component's general terms and 
conditions must use the wording appendix C to this part provides for OAR 
Article III.



        Subpart D_Claims, Disputes, and Appeals (OAR Article IV)



Sec.  1136.400  Purpose of OAR Article IV.

    OAR Article IV addresses claims, disputes, and appeals under awards. 
It thereby provides the award terms and conditions required by the 
DoDGARs at 32 CFR 22.815 and also implements OMB guidance in 2 CFR 
200.341.



Sec.  1136.405  Content of OAR Article IV.

    (a) Requirement. The DoDGARs at 32 CFR 22.815 require DoD 
Components' general terms and conditions to incorporate the procedures 
set forth in that section for processing claims and disputes and 
deciding appeals of grants officer's decisions.
    (b) Award terms and conditions--(1) General. To implement the 
requirement in paragraph (a) of this section, a DoD Component's general 
terms and conditions must use the wording appendix D to this part 
provides for OAR Article IV, with wording inserted in lieu of the 
reserved paragraph A.2 to identify the Component's cognizant Grant 
Appeal Authority and provide his or her mailing or email address.
    (2) Exception. A DoD Component may add one or more sections to the 
wording appendix D to this part provides for OAR Article IV to state a 
requirement that recipients must provide opportunities to subrecipients 
for hearings, appeals, or other administrative proceedings with respect 
to claims, disputes, remedies for noncompliance, or other matters if:
    (i) That requirement is in a statute or regulation adopted in the 
Code of Federal Regulations after opportunity for public comment; and
    (ii) The statutory or regulatory requirement applies to awards using 
the DoD Component's general terms and conditions.

[[Page 476]]



           Subpart E_Collection of Amounts Due (OAR Article V)



Sec.  1136.500  Purpose of OAR Article V.

    OAR Article V addresses procedures for establishing, appealing, and 
collecting debts under DoD awards. It thereby:
    (a) Provides requirements for recipients paralleling those for DoD 
Components in the DoDGARs at 32 CFR 22.820;
    (b) Augments requirements of OAR Article IV in any case in which a 
claim leads to a determination that a recipient owes an amount to DoD; 
and
    (c) Implements OMB guidance in 2 CFR 200.345.



Sec.  1136.505  Content of OAR Article V.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify how grants officers' decisions establish debts under awards, 
when debts become delinquent, how and when recipients may appeal, and 
how debts not paid in a timely manner are referred for debt collection.
    (b) Award terms and conditions. To implement the requirement in 
paragraph (a) of this section, a DoD Component's general terms and 
conditions must use the wording appendix E to this part provides for OAR 
Article V.



                   Subpart F_Closeout (OAR Article VI)



Sec.  1136.600  Purpose of OAR Article VI.

    OAR Article VI addresses recipients' responsibilities for closeout 
of awards and subawards under them. The article thereby implements OMB 
guidance in 2 CFR 200.343.



Sec.  1136.605  Content of OAR Article VI.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify requirements related to closeout of awards and subawards, 
including recipients' liquidations of obligations, refunds of 
unobligated balances, and submission of final reports.
    (b) Award terms and conditions--(1) General. To implement the 
requirement in paragraph (a) of this section, a DoD Component's general 
terms and conditions must use the wording appendix F to this part 
provides for OAR Article VI.
    (2) Exception related to due dates for final reports other than 
performance, financial, and invention reports. Consistent with OMB 
guidance in 2 CFR 200.343(a), a DoD Component may grant extensions to 
due dates for final reports.
    (i) To pre-approve a 30-day extension for final reports other than 
performance, financial, and invention reports, a DoD Component may 
substitute ``120 calendar days'' for ``90 calendar days'' in the wording 
appendix F to this part provides for paragraph C.4 of OAR Article VI. 
These pre-approved 30-day extensions in the general terms and conditions 
are for all awards using those terms and conditions; they therefore are 
separate and distinct from any additional extensions a recipient may 
later request for an individual award.
    (ii) The parallel authorities for pre-approved extensions of due 
dates for final performance and invention reports are elsewhere. DoDGARs 
provisions in:
    (A) 2 CFR 1134.125 authorize a DoD Component to pre-approve a 30-day 
extension for due dates of performance reports by an appropriate 
substitution of wording in REP Article I of the general terms and 
conditions.
    (B) 2 CFR 1130.610 authorize a DoD Component to pre-approve a 30-day 
extension for due dates of final reports listing subject inventions 
under awards by an appropriate substitution of wording in PROP Article 
VI of the general terms and conditions.
    (C) 2 CFR 1134.505 authorize a DoD Component to pre-approve a 30-day 
extension for due dates of other types of final reports by inclusion of 
appropriate wording in REP Article V of the general terms and 
conditions.



Subpart G_Post-Closeout Adjustments and Continuing Responsibilities (OAR 
                              Article VII)



Sec.  1136.700  Purpose of OAR Article VII.

    OAR Article VII addresses post-closeout funding adjustments and 
recipients' continuing responsibilities after award closeout. It thereby 
implements OMB guidance in 2 CFR 200.344.

[[Page 477]]



Sec.  1136.705  Content of OAR Article VII.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify the rights and responsibilities of the Federal Government and 
recipients with respect to funding adjustments and recipients' 
continuing responsibilities after award closeout.
    (b) Award terms and conditions. To implement the requirement in 
paragraph (a) of this section, a DoD Component's general terms and 
conditions must use the wording appendix G to this part provides for OAR 
Article VII.



 Sec. Appendix A to Part 1136--Terms and Conditions for OAR Article I, 
          ``Submitting and Maintaining Recipient Information''

    Unless a DoD Component reserves Section B, as specified in Sec.  
1136.105, a DoD Component's general terms and conditions must use the 
following wording for OAR Article I.

    OAR Article I. Submitting and Maintaining Recipient Information. 
                             (DECEMBER 2014)

    Section A. System for Award Management.
    1. Unless you are exempted from this requirement in accordance with 
OMB guidance in 2 CFR 25.110, you must maintain the currency of 
information about yourself in the system the Federal Government 
specifies as the repository for information about its business partners 
(currently the System for Award Management (SAM)).
    2. You must maintain the information in that system until you submit 
the final financial report required under this award or receive the 
final payment, whichever is later.
    3. You must review and update the information at least annually 
after your initial registration in the system (unless you are subject to 
the requirements in Section B) and more frequently if required by 
changes in your information.
    Section B. Reporting of Performance and Integrity Information.
    1. General reporting requirement. If the total value of your 
currently active grants, cooperative agreements, and procurement 
contracts from all Federal agencies exceeds $10,000,000 for any period 
of time during the period of performance of this award, then during that 
period of time you must maintain in SAM the currency of information 
required by paragraph B.2 of this section. Note that:
    a. This reporting is required under section 872 of Public Law 110-
417, as amended (41 U.S.C. 2313).
    b. As required by section 3010 of Public Law 111-212, all 
performance and integrity information posted in the designated 
information system on or after April 15, 2011, except past performance 
reviews required for Federal procurement contracts, will be publicly 
available.
    c. Recipient information is submitted to the OMB-designated 
integrity and performance system through the SAM, as described in 
paragraph B.3 of this section. The currently designated integrity and 
performance information system is the Federal Awardee Performance and 
Integrity Information System (FAPIIS).
    2. Proceedings about which you must report. Submit the information 
that the designated information system requires about each proceeding 
that:
    a. Is in connection with the award or performance of a grant, 
cooperative agreement, or procurement contract from the Federal 
Government;
    b. Reached its final disposition during the most recent 5-year 
period; and
    c. Is one of the following:
    i. A criminal proceeding that resulted in a conviction, as defined 
in paragraph B.5. of this section;
    ii. A civil proceeding that resulted in a finding of fault and 
liability and payment of a monetary fine, penalty, reimbursement, 
restitution, or damages of $5,000 or more;
    iii. An administrative proceeding, as defined in paragraph B.5. of 
this section, that resulted in a finding of fault and liability and your 
payment of either monetary fine or penalty of $5,000 or more or a 
reimbursement, restitution, or damages in excess of $100,000; or
    iv. Any other criminal, civil, or administrative proceeding if:
    (A) It could have led to an outcome described in paragraph B.2.c.i, 
ii, or iii of this section;
    (B) It had a different disposition arrived at by consent or 
compromise with an acknowledgment of fault on your part; and
    (C) The requirement in this section to disclose information about 
the proceeding does not conflict with applicable laws and regulations.
    3. Reporting procedures. Submit the information required in 
paragraph B.2 of this section to the Entity Management functional area 
of the SAM.
    a. Current procedures are to submit the information as part of the 
maintenance of your information in the SAM that Section A of this 
article requires.
    b. You do not need to submit the information again under this award 
if you already reported current information to the SAM under another 
Federal grant, cooperative agreement, or procurement contract.
    4. Reporting frequency. During any period of time when you are 
subject to the requirement in paragraph B.1 of this section, you must 
report to SAM at least semiannually

[[Page 478]]

following your initial report of any information required in paragraph 
B.2 of this section, either to provide new information not reported 
previously or affirm that there is no new information to report.
    5. Definitions. For purposes of this section:
    a. Administrative proceeding means a non-judicial process that is 
adjudicatory in nature in order to make a determination of fault or 
liability (e.g., Securities and Exchange Commission Administrative 
proceedings, Civilian Board of Contract Appeals proceedings, and Armed 
Services Board of Contract Appeals proceedings). This includes 
proceedings at the Federal and State level but only in connection with 
performance of a Federal contract, grant, or cooperative agreement. It 
does not include audits, site visits, corrective plans, or inspection of 
deliverables.
    b. Conviction means a judgment or conviction of a criminal offense 
by any court of competent jurisdiction, whether entered upon a verdict 
or a plea, and includes a conviction entered upon a plea of nolo 
contendere.
    c. Total value of currently active grants, cooperative agreements, 
and procurement contracts includes:
    i. Only the Federal share of the funding under any Federal agency 
award with a recipient cost share or match; and
    ii. The value of all expected funding increments and options, even 
if not yet exercised, under each Federal agency award.
    Section C. Disclosure of evidence of integrity-related issues.
    1. Disclosure requirement. At any time during the period of 
performance of this award, if you have evidence that a covered person 
committed a covered action (see paragraphs C.2 and C.3 of this section) 
that may affect this award, you must disclose the evidence in writing to 
the Office of the Inspector General, DoD, with a copy to the grants 
officer identified in the award cover pages.
    2. Covered person. As the term is used in this section, ``covered 
person'' means a principal, employee, or agent of either you or a 
subrecipient under this award, where:
    a. ``Principal'' means:
    i. An officer, director, owner, partner, principal investigator, or 
other person with management or supervisory responsibilities that relate 
to this award; or
    ii. A consultant or other person, whether or not employed by you or 
a subrecipient or paid with funds under this award, who:
    (A) Is in a position to handle funds under this award;
    (B) Is in a position to influence or control the use of those funds; 
or
    (C) Occupies a technical or professional position capable of 
substantially influencing the development or outcome of an activity 
required to perform the project or program under this award.
    b. ``Agent'' means any individual who acts on behalf of, or who is 
authorized to commit you or the subrecipient, whether or not employed by 
you or the subrecipient.
    3. Covered action. As the term is used in this section, ``covered 
action'' means a violation of Federal criminal law in Title 18 of the 
United States Code involving fraud, bribery, or a gratuity violation.
    4. Safeguarding of the information.
    a. To the extent permitted by law and regulation, we will:
    i. Safeguard and treat information you disclose to us as 
confidential if you mark the information as ``confidential'' or 
``proprietary.''
    ii. Not release the information to the public in response to a 
Freedom of Information Act (5 U.S.C. 552) request without notifying you 
in advance.
    b. We may transfer documents you provide to us to any other 
department or agency within the Executive Branch of the Federal 
Government if the information relates to matters within that 
organization's jurisdiction.



 Sec. Appendix B to Part 1136--Terms and Conditions for OAR Article II, 
                    ``Records Retention and Access''

    Unless a DoD Component substitutes alternate wording in paragraph 
A.3, a DoD Component's general terms and conditions must use the 
following wording for OAR Article II, as specified in Sec. Sec.  
1136.205 through 1136.230.

      OAR Article II. Records Retention and Access. (DECEMBER 2014)

    Section A. Records retention period. Except as provided in Sections 
B through D of this article:
    1. You must keep records related to any real property and equipment 
acquired, in whole or in part, using Federal funds under the award for 3 
years after final disposition of the property. For any item of exempt 
property with a current fair market value greater than $5,000, and for 
which final disposition was not a condition of the title vesting, you 
must keep whatever records you need for as long as necessary to ensure 
that you can deduct the Federal share if you later use the property in 
contributions for cost sharing or matching purposes under any Federal 
award.
    2. You must keep records related to rate proposals for indirect or 
facilities and administrative costs, cost allocation plans, and 
supporting records such as indirect cost rate computations and any 
similar accounting computations of the rate at which a particular group 
of costs is chargeable (such as computer usage chargeback or composite 
fringe benefit rates) as follows:
    a. If you are required to submit a proposal, plan, or other 
computations to your Federal

[[Page 479]]

cognizant agency for indirect costs, as the basis for negotiation of a 
rate, you must keep the submissions and all supporting records for 3 
years from the date on which you were required to make the submissions.
    b. If you are not required to submit a proposal, plan, or other 
computation as the basis for negotiation, you must keep the proposal, 
plan, other computation, and supporting records for 3 years from the end 
of the fiscal year or other accounting period covered by the proposal, 
plan, or other computation.
    3. You must keep other financial records, supporting documents, 
statistical records, and other records pertinent to this award for a 
period of 3 years from the date you submit your final financial report 
under the award.
    Section B. Extensions of retention period due to litigation, claim, 
or audit.
    1. If any litigation, claim, or audit begins before the end of the 
3-year retention period specified in Section A of this article and the 
final action related to the litigation, claim, or audit is not taken 
before the end of that 3-year period, you must retain all records 
related to this award that may be involved in the litigation, claim, or 
audit until all findings involving the records have been resolved and 
final action taken.
    2. We may disallow costs and recover funds under this award based on 
an audit or other review of records you elected to retain beyond the 
retention period required by this article, even if the audit or review 
begins after the end of the 3-year retention period specified in Section 
A of this article. Thus, the ``retention period,'' as that term is used 
in OMB guidance in 2 CFR 200.344(a)(1), is extended, as described in 2 
CFR 200.333(b), to include the entire period during which we and our 
authorized representatives continue to have access to those records 
under paragraph F.2 of this article.
    Section C. Records for program income earned after the end of the 
performance period. In accordance with Section F of FMS Article VII, 
there are no requirements under this award applicable to program income 
you earn after the end of the period of performance and therefore no 
associated records retention requirements.
    Section D. Records for joint or long-term use.
    1. Joint use. To avoid duplicate recordkeeping for records that you 
and we both need to use on a continuous basis, we may ask you to make 
special arrangements with us, by mutual agreement, to make records 
available for joint and continuous use.
    2. Long-term use. If we determine that some records will be needed 
longer than the 3-year period specified in Section A of this article, we 
may request that you either:
    a. Retain the records for a longer period of time; or
    b. Transfer the records to our custody for long-term retention.
    3. Retention requirements for transferred records. For any records 
transferred to our custody, you are not subject to the records retention 
requirements in Section A of this article.
    Section E. Methods for collecting, transmitting, and storing 
information.
    1. You should, whenever practicable, collect, transmit, and store 
information related to this award in open and machine-readable formats 
rather than in closed formats or on paper. However, if you request it, 
we will:
    a. Provide award related-information to you on paper; and
    b. Accept award related-information from you on paper. In that case, 
we will not require more than an original and two copies.
    2. When your original records are in an electronic form that cannot 
be altered, you do not need to create and retain paper copies of those 
records.
    3. When your original records are on paper, you may substitute 
electronic versions produced through duplication or using other forms of 
electronic media, provided that:
    a. You conduct periodic quality control reviews of the records;
    b. You provide reasonable safeguards against alteration of the 
records; and
    c. The records remain readable.
    Section F. Access to records.
    1. Scope of Federal Government access rights.
    a. We as the awarding agency, the Federal Government Inspectors 
General, the Comptroller General of the United States, and any of our 
authorized representatives have the right of access to any documents, 
papers, or other records you have that are pertinent to this award, in 
order to make audits, examinations, excerpts, and transcripts.
    b. This right also includes timely and reasonable access to your 
personnel for the purposes of interview and discussion related to the 
records.
    c. As described in OMB guidance at 2 CFR 200.336(b), the access to 
records described in this section will include access to the true name 
of a victim of a crime only under extraordinary and rare circumstances.
    i. You are required to provide that access only in response to a 
court order or subpoena pursuant to a bona fide confidential 
investigation, or in response to a request duly authorized by the head 
of the DoD Component or his or her designee; and
    ii. You must take appropriate steps to protect this sensitive 
information.
    2. Duration of Federal Government access rights. We have the access 
rights described in paragraph F.1 of this section as long as you retain 
the records.
    3. Public access.
    a. You must comply with requirements to protect information that 
Federal statute, Executive order, or regulation requires to be protected 
(e.g., personally identifiable or export controlled information), to 
include both

[[Page 480]]

information generated under this award and information provided to you 
and identified as being subject to protection. Other than those 
limitations on dissemination of information, we place no restrictions on 
you that limit public access to your records pertinent to this award.
    b. We do not place any requirements on you to permit public access 
to your records separate from any Federal, State, local, or tribal 
statute that may require you to do so.
    c. The Freedom of Information Act (FOIA, 5 U.S.C. 552) does not 
apply to records in your possession but records you provide to us 
generally will be subject to FOIA, with the applicable exemptions.



Sec. Appendix C to Part 1136--Terms and Conditions for OAR Article III, 
                      ``Remedies and Termination''

    As required by Sec.  1136.305, a DoD Component's general terms and 
conditions must use the following wording for OAR Article III.

       OAR Article III. Remedies and Termination. (DECEMBER 2014)

    Section A. Non-compliance with award terms and conditions. If you 
fail to comply with a term or condition of this award or an applicable 
Federal statute or regulation, we may amend this award to impose award-
specific conditions, as described in OMB guidance in 2 CFR 200.207. If 
imposing award-specific conditions, we will notify you before modifying 
the award and, once you have corrected the non-compliance, promptly 
remove the award-specific conditions. If we determine that the 
imposition of award-specific conditions is insufficient to correct the 
non-compliance or the non-compliance remains uncorrected despite the use 
of award-specific conditions, we may consider taking one or more of the 
remedies specified in Section B of this article.
    Section B. Remedies for noncompliance.
    1. If you fail to comply with a term or condition of this award or 
an applicable Federal statute or regulation, we may take one or more of 
the following actions that we deem appropriate to the circumstances:
    a. Temporarily withhold cash payments pending:
    i. Your correction of the deficiency; or
    ii. Our taking more severe enforcement action.
    b. Disallow (that is, deny both use of funds and any applicable 
cost-sharing or matching credit for) all or part of the cost of the 
activity or action not in compliance;
    c. Suspend or, in accordance with paragraph C.1.a.i of this article, 
terminate this award, in whole or in part (suspension of an award is a 
separate and distinct action from suspension of a person under 2 CFR 
parts 180 and 1125, as noted in paragraph B.3 of this article);
    d. Withhold further awards to you for the project or program that is 
not in compliance;
    e. Take any other action legally available to us under the 
circumstances.
    2. You may raise an objection to our taking any remedy we take under 
paragraph B.1 of this section and will be given an opportunity to 
provide information and documentation challenging the action. The 
procedures are those specified in OAR Article IV for claims and 
disputes.
    3. Our use of any remedy under paragraph B.1 of this section, 
including suspension or termination of the award, does not preclude our 
referring the noncompliance to a suspension and debarment official and 
asking that official to consider initiating a suspension or debarment 
action under 2 CFR part 1125, the DoD implementation of OMB guidance at 
2 CFR part 180.
    Section C. Termination.
    1. This award may be terminated in whole or in part as follows:
    a. Unilaterally by the Federal Government. We will provide a notice 
of termination if we unilaterally terminate this award in whole or in 
part, which we may do for either of the following reasons:
    i. Your material failure to comply with the award terms and 
conditions. If we terminate the award for that reason, we will report 
the termination to the OMB-designated integrity and performance system 
(currently FAPIIS). In accordance with 41 U.S.C. 2313, each Federal 
awarding official must review and consider the information in the OMB-
designated integrity and performance system with regard to any proposal 
or offer before awarding a grant or contract.
    ii. The program office does not have funding for an upcoming 
increment if this award is incrementally funded. In that case, the 
Federal Government's financial obligation does not exceed the amount 
currently obligated under the award.
    b. By mutual agreement. With your consent, we may terminate this 
award, in whole or in part, for any reason. In that case, you and we 
must agree to:
    i. The termination conditions, including the effective date; and
    ii. In the case of a partial termination, the portion to be 
terminated.
    c. Unilaterally by the recipient. You may unilaterally terminate 
this award, in whole or in part, by sending us written notification that 
states:
    i. The reasons for the termination;
    ii. The effective date; and
    iii. In the case of partial termination, the portion to be 
terminated. In that case, however, we may terminate the award in its 
entirety if we determine that the remaining portion of the award will 
not accomplish the purposes for which we made the award.

[[Page 481]]

    2. If this award is terminated in its entirety before the end of the 
performance period, you must complete the closeout actions for which you 
are responsible under OAR Article VI. The due date for each action is to 
be measured relative to the date of termination.
    3. If this award is only partially terminated before the end of the 
performance period, with a reduced or modified portion of the award 
continuing through the end of the performance period, then closeout 
actions will occur at the end of the performance period as specified in 
OAR Article VI.
    4. You will continue to have all of the post-closeout 
responsibilities that OAR Article VII specifies for you if this award is 
wholly or partially terminated before the end of the performance period.
    Section D. Effects of suspension or termination of the award on 
allowability of costs. If we suspend or terminate this award prior to 
the end of the period of performance, costs resulting from obligations 
that you incurred:
    1. Before the effective date of the suspension or termination are 
allowable if:
    a. You properly incurred those obligations;
    b. You did not incur the obligations in anticipation of the 
suspension or termination;
    c. In the case of termination, the costs resulted from obligations 
that were noncancellable after the termination; and
    d. The costs would have been allowable if we had not suspended or 
terminated the award and it had expired normally at the end of the 
period of performance.
    2. During the suspension or after the termination are not allowable 
unless we expressly authorize them, either in the notice of suspension 
or termination or subsequently.



 Sec. Appendix D to Part 1136--Terms and Conditions for OAR Article IV, 
                    ``Claims, Disputes, and Appeals''

    As specified in Sec.  1136.405, a DoD Component's general terms and 
conditions must use the following wording for OAR Article IV, with the 
required insertion in paragraph A.2 of the article, along with any 
additional wording permitted by that section.

     OAR Article IV. Claims, Disputes, and Appeals. (DECEMBER 2014)

    Section A. Definitions.
    1. Claim. The definition of the term ``claim,'' as it is used in 
this article, is in the definitions section of the preamble to these 
general terms and conditions.
    2. Grant Appeal Authority. [Reserved.]
    Section B. Submission of claims.
    1. Your claims. To submit a claim arising out of this award, you 
must submit it in writing to the grants officer for decision, specify 
the nature and basis for the relief you are requesting, and include all 
data that supports your claim.
    2. Federal Government claims. You will receive a written grants 
officer's decision if a DoD claim arises out of this award.
    Section C. Alternative dispute resolution.
    1. We encourage resolution of all issues related to this award by 
mutual agreement between you and the grants officer.
    2. If you and the grants officer are unable to resolve an issue 
through unassisted negotiations, we encourage use of Alternative Dispute 
Resolution (ADR) procedures to try to do so. ADR procedures are any 
voluntary means, such as mini-trials or mediation, used to resolve 
issues in controversy. ADR procedures may be used prior to submission of 
a claim or at any other time prior to the Grant Appeal Authority's 
decision on any appeal you submit.
    Section D. Grants officer decisions for claims you submit.
    1. Within 60 calendar days of receiving your claim, the grants 
officer will either:
    a. Transmit a written decision that:
    i. Identifies data on which the decision is based; and
    ii. Identifies and provides the mailing address for the Grant Appeal 
Authority to whom you would submit an appeal of the decision if you 
elect to do so; or
    b. If more time is required to render a written decision, notify you 
of a specific date when he or she will render the decision and inform 
you of the reason for delaying it.
    2. The grants officer's decision will be final unless you decide to 
appeal, in which case we encourage use of ADR procedures as noted in 
Section C of this article.
    Section E. Formal administrative appeals.
    1. Right to appeal. You have the right to appeal a grants officer's 
decision to the Grant Appeal Authority identified in Section A of this 
article.
    2. Notice of appeal. You may appeal a grants officer's decision 
within 90 calendar days of receiving the decision by submitting a 
written notice of appeal to the Grant Appeal Authority and grants 
officer. If you elect to use ADR procedures, you are allowed an 
additional 60 calendar days to submit the written notice of appeal.
    3. Appeal file. Within 30 calendar days of the grants officer's 
receipt of your notice of appeal, you should receive the appeal file 
with copies of all documents relevant to the appeal. You may supplement 
the file with other documents you deem relevant and with a memorandum in 
support of your position for the Grant Appeal Authority's consideration. 
The Grant Appeal Authority may request additional information from you.
    4. Decision. Unless the Grant Appeal Authority decides to conduct 
fact-finding procedures or an oral hearing on the appeal, the appeal 
will be decided solely on the basis of

[[Page 482]]

the written record. Any fact-finding or hearing will be conducted using 
procedures that the Grant Appeal Authority deems appropriate.
    Section F. Representation. You may be represented by counsel or any 
other designated representative in any claim, appeal, or ADR proceeding, 
as long as the representative is not otherwise prohibited by law or 
regulation from appearing before the DoD Component concerned.
    Section G. Effect of Grant Appeal Authority's decision. The Grant 
Appeal Authority's decision is the final administrative decision of DoD 
and cannot be further appealed within DoD.
    Section H. Non-exclusivity of remedies. Nothing in this article is 
intended to limit your right to any remedy under the law.



 Sec. Appendix E to Part 1136--Terms and Conditions for OAR Article V, 
                      ``Collection of Amounts Due''

    As required by Sec.  1136.505, a DoD Component's general terms and 
conditions must use the following wording for OAR Article V.

        OAR Article V. Collection of Amounts Due. (DECEMBER 2014)

    Section A. Establishing a debt.
    1. Any amount paid to you in excess of the amount to which you are 
determined to be entitled under the terms and conditions of this award 
constitutes a debt to the Federal Government.
    2. A grants officer will attempt to resolve any claim of your 
indebtedness arising out of this award by mutual agreement.
    3. If the grants officer fails to resolve the claim in that manner, 
you will receive a written notice of the grants officer's decision 
formally determining the debt, as described in paragraph B.2 of OAR 
Article IV. The notice will describe the debt, including the amount, 
name and address of the official who determined the debt, and a copy of 
that official's determination.
    Section B. Debt delinquency and appeals.
    1. Within 30 calendar days of the grants officer's decision, you 
must either pay the amount owed to the address provided in the written 
notice or inform the grants officer that you intend to appeal the 
decision. Appeal procedures are described in OAR Article IV.
    2. If you elect not to appeal, any amounts not paid within 30 
calendar days of the grants officer's decision will be a delinquent 
debt.
    3. If you elect to appeal the grants officer's decision, you will 
have 90 calendar days after receipt of the grants officer's decision to 
file your appeal unless Alternative Dispute Resolution (ADR) procedures 
are used, as described in section C of OAR Article IV, in which case you 
will have 150 calendar days.
    Section C. Demand letter, interest, and debt collection.
    1. If within 30 calendar days of the grants officer's decision, you 
neither pay the amount due nor provide notice of your intent to appeal 
the grants officer's decision, the grants officer will send you a demand 
letter identifying a payment office that will be responsible for any 
further debt collection activity.
    2. If you do not pay by the due date specified in the written demand 
letter, the Federal Government may collect part or all of the debt by:
    a. Making an administrative offset against your requests for 
reimbursements under Federal awards;
    b. Withholding advance payments otherwise due to you; and
    c. Any other action permitted by Federal statute.
    3. The debt will bear interest, and may include penalties and other 
administrative costs, in accordance with applicable provisions of the 
DoD Financial Management Regulation (DoD 7000.14-R), which implements 
the Federal Claims Collection Standards. The date from which interest is 
computed is not extended by litigation or the filing of any form of 
appeal.



 Sec. Appendix F to Part 1136--Terms and Conditions for OAR Article VI, 
                              ``Closeout''

    As required by Sec.  1136.605, a DoD Component's general terms and 
conditions must use the following wording for OAR Article VI but may 
make a substitution in paragraph C.4 of the article as provided in that 
section.

                OAR Article VI. Closeout. (DECEMBER 2014)

    Section A. Liquidation of obligations. Unless the award 
administration office authorizes an extension of the due date, you must 
liquidate all obligations that you incurred under this award not later 
than 120 calendar days after the end date of the period of performance.
    Section B. Refunds of unobligated balances. You must promptly refund 
to the award administration office any balances of unobligated cash that 
we have advanced or paid to you and not authorized you to use on other 
projects or programs.
    Section C. Final reports. You must submit the:
    1. Final performance report under this award no later than the date 
specified in Section C of REP Article I, subject to any extensions 
granted under Section D of that article;
    2. Final financial report under this award no later than the date 
specified in Section C of REP Article II, subject to any extensions 
granted under Section D of that article;

[[Page 483]]

    3. Final report listing subject inventions made under the award no 
later than the date specified in Section B of PROP Article VI; and
    4. Other final reports that are required under this award no later 
than 90 calendar days after the end date of the period of performance, 
unless you request an extension of the due date and the award 
administration office approves the request.
    Section D. Accounting for property. You must account for any real 
property, equipment, supplies, and intangible property that you and any 
subrecipients acquired or improved under the award, in accordance with 
PROP Articles I through IV and VI. Your requests for disposition 
instructions for any federally owned property, as required by PROP 
Article V, meet the need described in OMB guidance at 2 CFR 200.343(f) 
to account for that property at closeout.



Sec. Appendix G to Part 1136--Terms and Conditions for OAR Article VII, 
      ``Post-Closeout Adjustments and Continuing Responsibilities''

    As required by Sec.  1136.705, a DoD Component's general terms and 
conditions must use the following wording for OAR Article VII.

       OAR Article VII. Post-Closeout Adjustments and Continuing 
                    responsibilities. (DECEMBER 2014)

    Section A. Adjustments. The closeout of this award does not affect:
    1. Our right to disallow costs and recover funds on the basis of a 
later audit or other review, as long as we make the determination that 
the costs are disallowed and notify you about that determination within 
the extended records retention period specified in paragraph B.2 of OAR 
Article II of these terms and conditions.
    2. Your obligation to return any funds due to the Federal Government 
as a result of later refunds, corrections, or other transactions (to 
include any adjustments in final indirect cost rates).
    Section B. Continuing responsibilities. After closeout of this 
award, you must continue to comply with terms and conditions of this 
award that have applicability beyond closeout, including requirements 
concerning:
    1. Audits, as specified in FMS Article V that cover periods of time 
during which you expended funds under this award.
    2. Management, use, and disposition of any real property or 
equipment acquired or improved under this award in which we continue to 
have a Federal interest after closeout, as specified in PROP Articles I 
through IV.
    3. Retention of, and access to, records related to this award, as 
specified in OAR Article II.



PART 1138_REQUIREMENTS RELATED TO SUBAWARDS: GENERAL AWARD TERMS AND
CONDITIONS--Table of Contents



Sec.
1138.1 Purpose of this part.
1138.2 Applicability of this part.
1138.3 Exceptions from requirements of this part.
1138.4 Organization of this part.
1138.5 Authority to omit or reserve portions of SUB Articles I through 
          XII.

   Subpart A	Distinguishing Subawards and Procurements (SUB Article I)

1138.100 Purpose of SUB Article I.
1138.105 Content of SUB Article I.

 Subpart B	Pre-Award and Time of Award Responsibilities (SUB Article II)

1138.200 Purpose of SUB Article II.
1138.205 Content of SUB Article II.

     Subpart C	Informational Content of Subawards (SUB Article III)

1138.300 Purpose of SUB Article III.
1138.305 Content of SUB Article III.

 Subpart D	Financial and Program Management Requirements for Subawards 
                            (SUB Article IV)

1138.400 Purpose of SUB Article IV.
1138.405 Content of SUB Article IV.

      Subpart E	Property Requirements for Subawards (SUB Article V)

1138.500 Purposes of SUB Article V in relation to other articles.
1138.505 Title to property under subawards.
1138.510 Property management system requirements for subawards.
1138.515 Use and disposition of real property, equipment, supplies, and 
          federally owned property under subawards.
1138.520 Intangible property under subawards.

 Subpart F	Procurement Procedures to Include in Subawards (SUB Article 
                                   VI)

1138.600 Purpose of SUB Article VI.

[[Page 484]]

1138.605 Content of SUB Article VI.

 Subpart G	Financial, Programmatic, and Property Reporting Requirements 
                     for Subawards (SUB Article VII)

1138.700 Purposes of SUB Article VII in relation to other articles.
1138.705 Performance reporting requirements for subawards.
1138.710 Financial reporting requirements for subawards.
1138.715 Reporting on property under subawards.
1138.720 Other reporting under subawards.

 Subpart H	Other Administrative Requirements for Subawards (SUB Article 
                                  VIII)

1138.800 Purpose of SUB Article VIII.
1138.805 Content of SUB Article VIII.

  Subpart I	National Policy Requirements for Subawards (SUB Article IX)

1138.900 Purpose of SUB Article IX.
1138.905 Content of SUB Article IX.

 Subpart J	Subrecipient Monitoring and Other Post-Award Administration 
                             (SUB Article X)

1138.1000 Purpose of SUB Article X.
1138.1005 Content of SUB Article X.

 Subpart K	Requirements Concerning Subrecipients' Lower-Tier Subawards 
                            (SUB Article XI)

1138.1100 Purpose of SUB Article XI.
1138.1105 Content of SUB Article XI.

           Subpart L	Fixed-Amount Subawards (SUB Article XII)

1138.1200 Purpose of SUB Article XII.
1138.1205 Content of SUB Article XII.

Appendix A to Part 1138--Terms and conditions for SUB Article I, 
          ``Distinguishing subawards and procurements''
Appendix B to Part 1138--Terms and conditions for SUB Article II, ``Pre-
          award and time of award responsibilities''
Appendix C to Part 1138--Terms and conditions for SUB Article III, 
          ``Informational content of subawards''
Appendix D to Part 1138--Terms and conditions for SUB Article IV, 
          ``Financial and program management requirements for 
          subawards''
Appendix E to Part 1138--Terms and conditions for SUB Article V, 
          ``Property requirements for subawards''
Appendix F to Part 1138--Terms and conditions for SUB Article VI, 
          ``Procurement procedures to include in subawards''
Appendix G to Part 1138--Terms and conditions for SUB Article VII, 
          ``Financial, programmatic, and property reporting requirements 
          for subawards''
Appendix H to Part 1138--Terms and conditions for SUB Article VIII, 
          ``Other administrative requirements for subawards''
Appendix I to Part 1138--Terms and conditions for SUB Article IX, 
          ``National policy requirements for subawards''
Appendix J to Part 1138--Terms and conditions for SUB Article X, 
          ``Subrecipient monitoring and other post-award 
          administration''
Appendix K to Part 1138--Terms and conditions for SUB Article XI, 
          ``Requirements concerning subrecipients' lower-tier 
          subawards''
Appendix L to Part 1138--Terms and conditions for SUB Article XII, 
          ``Fixed-amount subawards''

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

    Source: 85 FR 51171, Aug. 19, 2020, unless otherwise noted.



Sec.  1138.1  Purpose of this part.

    (a) This part specifies standard wording of general terms and 
conditions concerning recipients' award and administration of subawards 
under DoD grants and cooperative agreements.
    (b) It thereby implements OMB guidance in Subparts A through F of 2 
CFR part 200 and 2 CFR parts 25, 170, and 180, as they apply to 
subawards.



Sec.  1138.2  Applicability of this part.

    The types of awards and entities to which this part and other parts 
in this subchapter apply are described in the subchapter overview at 2 
CFR 1126.2.



Sec.  1138.3  Exceptions from requirements of this part.

    Exceptions are permitted from the administrative requirements in 
this part only as described at 2 CFR 1126.3.



Sec.  1138.4  Organization of this part.

    (a) The content of this part is organized into subparts and 
associated appendices.
    (1) Each subpart provides direction to DoD Components on how to 
construct one article of general terms and conditions for grants and 
cooperative agreements.
    (2) For each subpart, there is a corresponding appendix with 
standard wording for terms and conditions of the

[[Page 485]]

article addressed by the subpart. Terms and conditions address rights 
and responsibilities of the Federal Government and recipients.
    (b) A DoD Component must use the wording provided in each appendix 
in accordance with the direction in the corresponding subpart and the 
authorization in Sec.  1138.5, which permit a DoD Component to vary from 
the standard wording in some situations.
    (c) Table 1 shows which article of general terms and conditions may 
be found in each of appendices A through L to this part (with the 
associated direction to DoD Components in Subparts A through L, 
respectively, as supplemented by the authorization in Sec.  1138.5):

                        Table 1 to Paragraph (c)
------------------------------------------------------------------------
                             You will find terms and
                              conditions specifying
                              recipients' rights and   That would appear
          In . . .               responsibilities     in an award within
                                 related to . . .      SUB Article . . .
 
------------------------------------------------------------------------
Appendix A.................  Distinguishing           I.
                              subawards and
                              procurements.
Appendix B.................  Pre-award and time of    II.
                              award responsibilities.
Appendix C.................  Informational content    III.
                              of subawards.
Appendix D.................  Financial and program    IV.
                              management
                              requirements for
                              subawards.
Appendix E.................  Property requirements    V.
                              for subawards.
Appendix F.................  Procurement procedures   VI.
                              to include in
                              subawards.
Appendix G.................  Financial,               VII.
                              programmatic, and
                              property reporting
                              requirements for
                              subawards.
Appendix H.................  Other administrative     VIII.
                              requirements for
                              subawards.
Appendix I.................  National policy          IX.
                              requirements for
                              subawards.
Appendix J.................  Subrecipient monitoring  X.
                              and other post-award
                              administration.
Appendix K.................  Requirements concerning  XI.
                              subrecipients' lower-
                              tier subawards.
Appendix L.................  Fixed-amount subawards.  XII.
------------------------------------------------------------------------



Sec.  1138.5  Authority to omit or reserve portions of SUB 
Articles I through XII.

    A DoD Component's general terms and conditions may:
    (a) Omit SUB Articles II through XII that are the subject of this 
part if the DoD Component does not allow recipients to make subawards 
under awards using those terms and conditions. The DoD Component also 
may amend SUB Article I in that case, to state the prohibition on making 
subawards and limit the recipient's responsibility to ensuring that any 
transaction it awards at the next tier is a procurement transaction.
    (b) Reserve portions of SUB Articles I through XII that do not apply 
to the DoD Component's awards using those terms and conditions. For 
example, the DoD Component may reserve paragraphs in SUB Articles IV 
through IX specifying administrative requirements that flow down solely 
to subawards to States if it determines that there is no possibility of 
a subaward to a State under any of the awards using its general terms 
and conditions. Similarly, it may reserve SUB Article XII if it does not 
permit any fixed-amount subawards under its awards.



   Subpart A	Distinguishing Subawards and Procurements
   (SUB Article I)



Sec.  1138.100  Purpose of SUB Article I.

    SUB Article I specifies requirements for a recipient to determine 
whether each transaction it makes at the next tier below a DoD grant or 
cooperative agreement is a subaward or a procurement transaction. It 
thereby implements OMB guidance in 2 CFR 200.201(a) and 200.330.



Sec.  1138.105  Content of SUB Article I.

    (a) Requirement. A DoD Component's general terms and conditions 
must:
    (1) Require the recipient to determine the nature of transactions it 
makes under its award; and
    (2) Inform the recipient about the effect of that determination on 
the procedures for awarding the transaction and the transaction's terms 
and conditions.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix A to this part provides for SUB 
Article I.

[[Page 486]]



 Subpart B	Pre-Award and Time of Award Responsibilities 
 (SUB Article II)



Sec.  1138.200  Purpose of SUB Article II.

    SUB Article II specifies requirements concerning subrecipients' 
unique entity identifiers and pre-award risk assessments. It also 
references requirements in REP Article IV to report on subawards and 
subrecipients' executive compensation. It thereby partially implements 
OMB guidance in:
    (a) 2 CFR parts 25 and 170;
    (b) 2 CFR 200.207; 200.300(b), as it applies to subaward reporting; 
and 200.331(b); and
    (c) Subpart C of 2 CFR part 180, as implemented by DoD at 2 CFR part 
1125.



Sec.  1138.205  Content of SUB Article II.

    (a) Requirement. A DoD Component's general terms and conditions must 
require the recipient to:
    (1) Obtain an entity's unique entity identifier before making a 
subaward to the entity;
    (2) Notify potential subrecipients in advance about that 
requirement; and
    (3) Conduct a pre-award risk assessment of an entity before making a 
subaward to the entity and adjust subaward terms and conditions if 
warranted by the results of the assessment.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix B to this part provides for SUB 
Article II.



     Subpart C	Informational Content of Subawards (SUB Article III)



Sec.  1138.300  Purpose of SUB Article III.

    SUB Article III specifies information that recipients must include 
in subawards they make under DoD grants and cooperative agreements. It 
thereby implements OMB guidance in 2 CFR 200.331(a)(1).



Sec.  1138.305  Content of SUB Article III.

    (a) Requirement. A DoD Component's general terms and conditions must 
require recipients to include certain information items in each subaward 
they make.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix C to this part provides for SUB 
Article III.



 Subpart D	Financial and Program Management Requirements for
 Subawards (SUB Article IV)



Sec.  1138.400  Purpose of SUB Article IV.

    SUB Article IV specifies the financial and program management 
requirements that recipients must include in subawards they make under 
DoD grants and cooperative agreements. It thereby implements OMB 
guidance in the following portions of 2 CFR part 200, as they apply to 
subawards:
    (a) Sections 200.209 and 200.302 through 200.309; and (b) Subparts E 
and F.



Sec.  1138.405  Content of SUB Article IV.

    (a) Requirement. A DoD Component's general terms and conditions must 
require recipients to include pertinent requirements concerning 
financial and program management in each subaward they make.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix D to this part provides for SUB 
Article IV.



      Subpart E	Property Requirements for Subawards (SUB Article V)



Sec.  1138.500  Purposes of SUB Article V in relation to other articles.

    (a) Purposes. SUB Article V specifies requirements concerning 
equipment, supplies, and real, intangible, and federally owned property 
that recipients must include in subawards they make under DoD grants and 
cooperative agreements. It thereby:
    (1) Specifies which of the requirements in PROP Articles I through 
VI of the award flow down to subawards; and
    (2) Implements OMB guidance in 2 CFR 200.310 through 200.316, as 
those sections apply to subawards.

[[Page 487]]

    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix E to this part provides as 
Section A of SUB Article V to inform recipients about the relationship 
between requirements for the recipient in PROP Articles I through VI and 
requirements for subawards in SUB Article V.



Sec.  1138.505  Title to property under subawards.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify requirements related to title to property under subawards.
    (b) Award terms and conditions--(1) General. A DoD Component's 
general terms and conditions must use the wording appendix E to this 
part provides as Section B of SUB Article V to specify the requirements 
concerning title to property that recipients must include in their 
subawards.
    (2) Exception. If a DoD Component has the necessary statutory 
authority to do so and includes provisions in paragraph A.2 of PROP 
Article I to identify any property acquired under the award as exempt 
property, as described in 2 CFR 1130.105, the DoD Component may at its 
option insert wording in paragraph B.1.b of SUB Article V to allow 
recipients to pass through those provisions to subrecipients.
    (i) It is critical, however, that the DoD Component ensures that the 
wording of paragraph B.1.b is consistent with the statutory authority.
    (ii) For example, if the statutory authority is 31 U.S.C. 6306--as 
described in 2 CFR 1130.105(b)(2)(i)--the wording of paragraph B.1.b of 
SUB Article V may permit a recipient to flow down the substance of the 
exempt property provision in paragraph A.2 of PROP Article I only to a 
subrecipient that is a nonprofit institution of higher education or 
nonprofit organization whose primary purpose is conducting scientific 
research.



Sec.  1138.510  Property management system requirements for subawards.

    (a) Requirement. A DoD Component's general terms and conditions must 
address the standards for property management systems that apply to 
subawards.
    (b) Award terms and conditions. To specify the property management 
system standards that recipients must include in their subawards, a DoD 
Component's general terms and conditions must use the wording appendix E 
to this part provides as Section C of SUB Article V.



Sec.  1138.515  Use and disposition of real property, equipment, 
supplies, and federally owned property under subawards.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify the requirements concerning use and disposition of real 
property, equipment, supplies, and federally owned property that 
recipients must include in subawards.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix E to this part provides for 
Sections D through F of SUB Article V.



Sec.  1138.520  Intangible property under subawards.

    (a) Requirement. A DoD Component's general terms and conditions must 
address the provisions concerning intangible property that recipients 
must include in subawards.
    (b) Award terms and conditions--(1) General. To specify the 
intangible property provisions that recipients must include in their 
subawards, a DoD Component's general terms and conditions must use the 
wording appendix E to this part provides as Section G of SUB Article V.
    (2) Exception. A DoD Component's general terms and conditions may 
delete the reference to ``Section B of PROP Article VI'' in the wording 
appendix E to this part provides for paragraph G.2 of SUB Article V and 
provide alternative wording if:
    (i) Those general terms and conditions will be used in awards for 
purposes other than research or education, as described in 2 CFR 
1130.610(c)(3); and
    (ii) The DoD Component wants to specify that nonprofit and 
governmental recipients include either:
    (A) No provisions concerning inventions in subawards to for-profit 
entities; or

[[Page 488]]

    (B) Provisions in subawards to for-profit entities that differ from 
those the DoD Component's general terms and conditions specify for 
nonprofit and governmental recipients.



 Subpart F	Procurement Procedures to Include in Subawards
 (SUB Article VI)



Sec.  1138.600  Purpose of SUB Article VI.

    SUB Article VI of the general terms and conditions specifies 
procurement provisions recipients must include in their subaward terms 
and conditions. It thereby:
    (a) Specifies which of the requirements in PROC Articles I through 
III of the award flow down to subawards; and
    (b) Implements OMB guidance in 2 CFR 200.317 through 200.326 and 
appendix II to 2 CFR part 200, as those portions of 2 CFR part 200 apply 
to subawards; and
    (c) Partially implements OMB guidance in 2 CFR 200.205(d), 200.213, 
and 200.517, as those sections of 2 CFR part 200 apply to subawards.



Sec.  1138.605  Content of SUB Article VI.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify that recipients' subawards include requirements for 
subrecipients' procurement procedures.
    (b) Award terms and conditions. To specify the requirements for 
procurement procedures that a recipient must include in its subawards, a 
DoD Component's general terms and conditions must use the wording 
appendix F to this part provides for SUB Article VI.



 Subpart G_Financial, Programmatic, and Property Reporting Requirements 
                     for Subawards (SUB Article VII)



Sec.  1138.700  Purposes of SUB Article VII in relation to other articles.

    (a) Purposes. SUB Article VII of the general terms and conditions 
specifies provisions concerning reporting that recipients must include 
in their subaward terms and conditions, as applicable. It thereby 
implements OMB guidance in the following sections of 2 CFR part 200, as 
they apply to subawards:
    (1) 2 CFR 200.301 and 200.327 through 200.329; and
    (2) 2 CFR 200.315(c), as it relates to invention reporting; and
    (3) 2 CFR 200.343(a), as it relates to financial and performance 
reporting.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix G to this part provides as 
Section A of SUB Article VII to inform recipients about the relationship 
between requirements for the recipient in REP Articles I through III and 
requirements for subawards in SUB Article VII.



Sec.  1138.705  Performance reporting requirements for subawards.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify performance reporting requirements for subawards.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix G to this part provides as 
Section B of SUB Article VII to specify the performance reporting 
requirements that recipients must include in their subawards.



Sec.  1138.710  Financial reporting requirements for subawards.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify financial reporting requirements for subawards.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix G to this part provides for 
Section C of SUB Article VII to specify the financial reporting 
requirements that recipients must include in their subawards.



Sec.  1138.715  Reporting on property under subawards.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify the requirements for reporting on property that recipients must 
include in their subawards.
    (b) Award terms and conditions. To implement the requirement 
described in paragraph (a) of this section, a DoD

[[Page 489]]

Component's general terms and conditions must use the wording appendix G 
to this part provides as Section D of SUB Article VII.



Sec.  1138.720  Other reporting under subawards.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify any requirements for other reporting that recipients must 
include in their subawards.
    (b) Award terms and conditions. To implement the requirement 
described in paragraph (a) of this section, a DoD Component's general 
terms and conditions must:
    (1) Include in Section E of SUB Article VII any reporting 
requirement included in REP Article V that may flow down to 
subrecipients, and
    (2) Indicate whether the recipient must require the subrecipient to 
provide any specific information or can comply by ensuring that the 
recipient meets its responsibilities to DoD.



 Subpart H_Other Administrative Requirements for Subawards (SUB Article 
                                  VIII)



Sec.  1138.800  Purpose of SUB Article VIII.

    SUB Article VIII of the general terms and conditions:
    (a) Specifies provisions that a recipient must include in its 
subaward terms and conditions concerning submission and maintenance of 
subrecipient information; records retention and access; remedies and 
termination; disputes, hearings, and appeals; collection of amounts due; 
closeout; and post-closeout adjustments and continuing responsibilities.
    (b) It thereby implements OMB guidance in 2 CFR 200.113 and 200.333 
through 200.345, as those sections apply to subawards.



Sec.  1138.805  Content of SUB Article VIII.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify the administrative requirements that a recipient must include in 
its subaward terms and conditions in areas covered by OAR Articles I 
through VII of the recipient's prime award.
    (b) Award terms and conditions--(1) General. To implement the 
requirement in paragraph (a) of this section, a DoD Component's general 
terms and conditions must use the wording appendix H to this part 
provides for SUB Article VIII.
    (2) Exception. A DoD Component's general terms and conditions may 
add one or more sections to the wording that appendix H to this part 
provides for SUB Article VIII if the DoD Component added requirements to 
OAR Article IV of its general terms and conditions, in accordance with 
paragraph 2 CFR 1136.405(b)(2), because a statute or regulation requires 
recipients to provide opportunities to subrecipients for hearings, 
appeals, or other administrative proceedings with respect to claims, 
disputes, remedies for noncompliance, or other matters. The additional 
wording in SUB Article VIII would address the flow down to subrecipients 
of the added requirements in OAR Article IV.



  Subpart I_National Policy Requirements for Subawards (SUB Article IX)



Sec.  1138.900  Purpose of SUB Article IX.

    SUB Article IX addresses national policy requirements that 
recipients must include in their subaward terms and conditions. It 
thereby partially implements OMB guidance in 2 CFR 200.331(a)(2).



Sec.  1138.905  Content of SUB Article IX.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify which of the national policy requirements in NP Articles I 
through IV of the award flow down to subawards.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions:
    (1) Must use the wording appendix B to this part provides for SUB 
Article IX if the DoD Component did not add, delete, or otherwise modify 
any of the wording that appendices A through D of 2 CFR part 1122 
provided for NP Articles I through IV of the award (as permitted in 
accordance with DoDGARs provisions at 2 CFR 1122.115 and 1122.120).

[[Page 490]]

    (2) May make corresponding alterations to the wording appendix I to 
this part provides for SUB Article IX if the DoD Component did modify 
the wording of NP Articles I through IV, in order to conform the 
national policy requirements in SUB Article IX to the requirements in 
those modified articles.



 Subpart J_Subrecipient Monitoring and Other Post-Award Administration 
                             (SUB Article X)



Sec.  1138.1000  Purpose of SUB Article X.

    SUB Article X specifies the requirements for recipients' monitoring 
of subrecipients and related post-award administration of subawards they 
make under DoD grants and cooperative agreements. It thereby implements 
OMB guidance in 2 CFR 200.331(d) through (h) and 2 CFR 200.340(a).



Sec.  1138.1005  Content of SUB Article X.

    (a) Requirement. A DoD Component's general terms and conditions must 
specify requirements for recipients' monitoring of subrecipients and 
related post-award administration of subawards.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix J to this part provides for SUB 
Article X of its general terms and conditions.



 Subpart K_Requirements Concerning Subrecipients' Lower-Tier Subawards 
                            (SUB Article XI)



Sec.  1138.1100  Purpose of SUB Article XI.

    SUB Article XI specifies requirements that a recipient must include 
in any subaward under which it judges that the subrecipient may make 
lower-tier subawards. It thereby implements OMB guidance in 2 CFR 
200.331(a) through (c) and other portions of 2 CFR part 200 as they 
apply to lower-tier subawards.



Sec.  1138.1105  Content of SUB Article XI.

    (a) Requirement. A DoD Component's general terms and conditions must 
address requirements that recipients must include in subawards to 
entities that may make lower-tier subawards.
    (b) Award terms and conditions. A DoD Component's general terms and 
conditions must use the wording appendix K to this part provides for SUB 
Article XI.



           Subpart L_Fixed-Amount Subawards (SUB Article XII)



Sec.  1138.1200  Purpose of SUB Article XII.

    SUB Article XII specifies policy and procedures concerning 
recipients' use of fixed-amount subawards under DoD grants and 
cooperative agreements. It thereby implements OMB guidance in 2 CFR 
200.201(b) and 200.332 and other portions of 2 CFR part 200 as they 
apply to fixed-amount subawards.



Sec.  1138.1205  Content of SUB Article XII.

    (a) Requirement. A DoD Component's general terms and conditions must 
address how a recipient may use a fixed-amount type of subaward, when it 
requires the Component's prior approval to do so, and what requirements 
the recipient must include in those subawards.
    (b) Award terms and conditions -- (1) General. A DoD Component's 
general terms and conditions must use the wording appendix L to this 
part provides for SUB Article XII.
    (2) Exceptions.
    (i) In addition to the authorities provided in Sec.  1138.5 to omit 
or reserve all or portions of the wording appendix L to this part 
provides for SUB Article XII, a DoD Component's general terms and 
conditions may add wording to Section B of the article to authorize 
recipients to use fixed-amount subawards without obtaining the 
Component's prior approval in other situations for which it would be 
appropriate to do so, given the nature of the program or programs that 
use its general terms and conditions.
    (ii) However, a DoD Component's general terms and conditions should 
never authorize recipients' use of fixed-amount subawards for basic or 
applied research, for the reason given in paragraph B.2.a.ii of the 
wording appendix L provides for SUB Article XII. It is

[[Page 491]]

unrealistic to have a subrecipient commit in advance to accomplishing 
specific, well-defined, and observable research outcomes. Doing so 
subjects the subrecipient to undue risk of not being reimbursed for 
research costs it incurred if it fails to fully accomplish the outcomes.



 Sec. Appendix A to Part 1138--Terms and Conditions for SUB Article I, 
              ``Distinguishing Subawards and Procurements''

    Unless modified as provided in Sec.  1138.5, a DoD Component's 
general terms and conditions must use the following wording for SUB 
Article I.

  SUB Article I. Distinguishing Subawards and Procurements. (DECEMBER 
                                  2014)

    Section A. Required recipient determination. For each transaction 
into which you enter with another entity at the next tier below this 
award, you must determine whether the transaction is a subaward or a 
procurement.
    Section B. Considerations in making the determination.
    1. The primary purpose of the transaction between you and the other 
entity is the key factor you must use to determine whether the 
transaction is a subaward or a procurement.
    a. The transaction is a subaward and the other entity therefore a 
subrecipient if the transaction's primary purpose is for you to 
transfer--for performance by the other entity--a portion of the 
substantive program for which we are providing financial assistance to 
you through this award. You will continue to be accountable to us for 
performance of the project or program under the award, including 
portions performed by any subrecipients.
    b. The transaction is a procurement and the other entity therefore 
your contractor if the transaction's primary purpose is for you to 
purchase goods or services that you need to perform the substantive 
program supported by this award. The distinction from a subaward is the 
contractor is not performing a portion of the substantive program as a 
result of the transaction.
    2. What you call the transaction is not a factor in distinguishing a 
subaward from a procurement. If the transaction meets the criterion in 
paragraph B.1.a of this article, it is a subaward for purposes of the 
requirements of this award even if you call and consider the transaction 
a ``contract.''
    Section C. Effect of the determination on the next-tier transaction.
    1. Process for awarding the transaction. One important consequence 
of your determining whether a next-tier transaction is a subaward or a 
procurement is that there are different requirements governing the pre-
award and time of award processes that you use to award the transaction.
    a. SUB Article II of this award specifies pre-award and time of 
award responsibilities for subawards.
    b. PROC Articles I and II of this award govern pre-award and time of 
award processes for awarding procurement transactions.
    2. Transaction terms and conditions. A second important consequence 
of your determining whether a next-tier transaction is a subaward or a 
procurement is that the terms and conditions you include in a subaward 
differ from those you include in a procurement transaction.
    a. Section C of SUB Article II of this award addresses requirements 
you must include in subaward terms and conditions. Those requirements 
generally are either identical or directly related to requirements in 
the general terms and conditions of this award. They include national 
policy requirements as well as administrative requirements in areas such 
as financial and programmatic management, property administration, 
procurement, and reporting.
    b. PROC Article III of this award lists requirements you must 
include in a procurement transaction when applicable to the procurement.



 Sec. Appendix B to Part 1138--Terms and Conditions for SUB Article II, 
            ``Pre-Award and Time of Award Responsibilities''

    Unless modified as provided in Sec.  1138.5, a DoD Component's 
general terms and conditions must use the following wording for SUB 
Article II.

SUB Article II. Pre-Award and Time of Award Responsibilities. (DECEMBER 
                                  2014)

    Section A. Requirements for unique entity identifiers.
    1. Definition of ``entity.'' For purposes of the unique entity 
identifier requirements in paragraphs A.2 and 3 of this section, 
``entity'' has the meaning given in paragraph C.3 of appendix A to OMB 
guidance in 2 CFR part 25.
    2. Pre-notification of potential subrecipients. You must notify 
potential subrecipients that no entity may receive a subaward from you 
under this award unless it has provided its unique entity identifier to 
you.
    3. Restriction on making subawards.
    a. General. You may not make a subaward to an entity unless the 
entity has provided its unique entity identifier to you.
    b. Exception. You may make a subaward to an entity that has not 
provided its unique entity identifier to you in rare cases in which you 
requested, and we approved, an

[[Page 492]]

exemption from the requirement for the entity to provide a unique entity 
identifier, based on the criteria in OMB guidance in 2 CFR part 
25.110(d).
    Section B. Pre-award risk assessment.
    1. Before making a subaward to an entity, you must perform a risk 
assessment of the prospective subrecipient, as described in 2 CFR 
200.331(b). OMB guidance in 2 CFR 200.205(c) provides examples of 
factors you may consider in evaluating risk.
    2. As part of the risk assessment under paragraph B.1 of this 
article, you must:
    a. Verify that neither the prospective subrecipient nor its 
principals under the subaward are excluded or disqualified from 
participating in the transaction, in accordance with requirements in 
Subpart C of OMB guidance in 2 CFR part 180, as implemented by DoD at 2 
CFR part 1125; and
    b. If warranted by risks you identify, determine whether to impose 
award-specific terms and conditions in the subaward to mitigate the 
risks.
    i. These award-specific terms and conditions may be in addition to, 
or differ from, the terms and conditions that SUB Articles IV through IX 
of this award require you to include in subawards.
    ii. They may include items such as those listed in OMB guidance in 2 
CFR 200.207(b)(1) through (6).
    iii. Your procedures for imposing and removing the additional or 
different requirements must comply with the procedural guidance in 2 CFR 
200.207(c) and (d).
    Section C. Subaward content.
    1. Cost-type subawards.
    a. SUB Article III of this award specifies informational content 
that you must include in each cost-type subaward.
    b. SUB Articles IV through VIII specify administrative requirements 
that you must include:
    i. As applicable, in each cost-type subaward to:
    (A) A domestic U.S. entity (i.e., an entity other than a foreign 
public entity or a foreign organization); or
    (B) An organizational unit of a foreign organization if that unit 
has a place of business in the United States; and
    ii. To the maximum extent practicable in each cost-type subaward to 
either a foreign public entity or an organizational unit of a foreign 
organization that does not have a place of business in the United States 
(regardless of whether another organizational unit of that foreign 
organization has one). However, absent our prior approval, you may not 
allow that foreign entity or organization to acquire real property or 
equipment under a subaward.
    c. SUB Article IX of this award specifies national policy 
requirements that you must include, as applicable, in each cost-type 
subaward.
    2. Fixed-amount type subawards.
    a. Sections A through F of SUB Article III of this award specify 
informational content that you must include in each fixed-amount 
subaward.
    b. SUB Article IX of this award specifies national policy 
requirements that you must include, as applicable, in each fixed-amount 
subaward.
    c. Section D of SUB Article XII of this award specifies 
administrative requirements that you must include, as applicable, in any 
fixed-amount subaward to:
    i. A domestic U.S. entity (i.e., an entity other than a foreign 
public entity or a foreign organization); or
    ii. An organizational unit of a foreign organization if that unit 
has a place of business in the United States; and
    iii. To the maximum extent practicable to either a foreign public 
entity or an organizational unit of a foreign organization that does not 
have a place of business in the United States (regardless of whether 
another organizational unit of that foreign organization has one). 
However, absent our prior approval, you may not allow that foreign 
entity or organization to acquire real property or equipment under a 
subaward.
    3. Additional subaward terms and conditions. You may include other 
requirements in your subawards that you need in order to meet your 
responsibilities under this award for performance of the project or 
program (including portions performed by subrecipients) and compliance 
with applicable administrative and national policy requirements.
    Section D. Subaward and executive compensation reporting. You must 
report subaward obligating actions and information on subrecipients' 
executive compensation as required by REP Article IV of this award.



Sec. Appendix C to Part 1138--Terms and Conditions for SUB Article III, 
                 ``Informational Content of Subawards''

    Unless modified as provided in Sec.  1138.5, a DoD Component's 
general terms and conditions must use the following wording for SUB 
Article III.

  SUB Article III. Informational Content of Subawards. (DECEMBER 2014)

    Section A. Informational content in general. You must include in 
each subaward (and each subsequent amendment to a subaward that alters 
the amount of the subaward) the information specified in OMB guidance in 
2 CFR 200.331(a)(1), ``Federal Award Identification,'' with the 
clarifications provided in Sections B through G of this article.
    Section B. Federal award identification number and award date. The 
``Federal Award Identification Number'' and ``Federal Award

[[Page 493]]

Date'' described in 2 CFR 200.331(a)(1)(iii) and (iv), respectively, are 
the award number and award date for this award to you. You must provide 
the information in a way that makes it clear that the subaward is under 
this DoD award.
    Section C. Amount of Federal funds obligated.
    1. The ``Amount of Federal Funds Obligated by this action by the 
pass-through entity to the subrecipient'' that is described in 2 CFR 
200.331(a)(1)(vi) is either:
    a. The amount of your obligation to the subrecipient, if the terms 
and conditions of this award do not require you to provide any cost 
sharing or matching for the project or program the award supports; or
    b. The amount of the Federal share of your subaward obligation if 
this award does require cost sharing or matching, which in that case is 
the product of:
    i. The Federal share of total project costs under this DoD award to 
you, as a percentage of those total project costs; and
    ii. The total amount of project costs obligated for the subaward 
action.
    2. Note that the total project costs of the award and subaward, as 
used in paragraphs C.1.b.i and ii of this section, include any cost 
sharing or matching that you or the subrecipient provides if you are 
counting it toward the cost sharing or matching required under this 
award.
    Section D. Total amount obligated to the subrecipient. The ``Total 
Amount of Federal Funds Obligated to the Subrecipient by the pass-
through entity including the current obligation,'' as described in 2 CFR 
200.331(a)(1)(vii), is the cumulative amount to date of the amounts 
described in Section C of this article.
    Section E. Total Amount of the Federal Award. The ``Total Amount of 
the Federal Award committed to the subrecipient by the pass-through 
entity,'' as described in 2 CFR 200.331(a)(1)(viii), is the total amount 
through the end of the subaward that you and the subrecipient mutually 
agreed upon, to include: Funding obligated to date, any future 
anticipated funding increments, and any options you may exercise in the 
future.
    Section F. Federal awarding agency, pass-through entity, and 
awarding official. The ``Name of Federal awarding agency'' and ``pass-
through entity,'' as those terms are used in 2 CFR 200.331(a)(1)(x) are 
the DoD and the business name associated with your registration in SAM. 
In that same paragraph of 2 CFR part 200, the ``awarding official'' is 
the individual in your organization who made the subaward.
    Section G. Indirect cost rate. With respect to the requirement in 2 
CFR 200.331(a)(1)(xiii) for the subaward to include the ``Indirect cost 
rate for the Federal award:''
    1. This requirement applies to cost-type subawards only.
    2. The rate the subaward must include is the subrecipient's rate, 
whether it is a rate set by negotiation with a Federal agency or you or 
is the de minimis rate described in 2 CFR 200.414(f).
    3. You are required to include the indirect cost rate only if the 
subrecipient is willing to share that information with you and assents 
that information about its rate is not proprietary. If a subrecipient is 
not willing to share information about its indirect cost rate with you, 
consult the grants officer for this award to explore alternative ways to 
assess the reasonableness of costs of the subaward.



 Sec. Appendix D to Part 1138--Terms and Conditions for SUB Article IV, 
     ``Financial and Program Management Requirements for Subawards''

    Unless modified as provided in Sec.  1138.5, a DoD Component's 
general terms and conditions must use the following wording for SUB 
Article IV.

   SUB Article IV. Financial and Program Management Requirements for 
                       Subawards. (DECEMBER 2014)

    Section A. Purposes of this article in relation to other articles.
    1. This article specifies administrative requirements concerning 
financial and program management that you must include in the terms and 
conditions of each cost-type subaward that you make under this award to 
a domestic entity.
    2. It thereby addresses the flow down to subrecipients of 
requirements with which you must comply under FMS Articles I through VII 
of this award.
    3. SUB Article XII of this award addresses which of these 
administrative requirements you must include in any fixed-amount 
subaward that you make, if you are authorized to make fixed-amount 
subawards under this award.
    Section B. Financial management system standards. You must include 
in any subaward you make under this award the requirements of:
    1. Sections A through C of FMS Article I of this award if the 
subrecipient is a State;
    2. Sections B and C of FMS Article I if the subrecipient is an 
institution of higher education, nonprofit organization, local 
government, or Indian tribe; or
    3. 32 CFR 34.11 if the subrecipient is a for-profit entity.
    Section C. Payments.
    1. Subawards to States. You must include the provisions of Section A 
of FMS Article II of this award in each subaward you make to a State;

[[Page 494]]

    2. Subawards to institutions of higher education, nonprofit 
organizations, local governments, and Indian tribes. The following 
paragraphs specify requirements you must include in subawards to 
institutions of higher education, nonprofit organizations, local 
governments, and Indian tribes.
    a. Payment method.
    i. If you are authorized to request advance payments under this 
award, you must authorize a subrecipient to request advance payments 
unless:
    (A) The subrecipient does not maintain, or demonstrate the 
willingness to maintain, written procedures that minimize the time 
elapsing between its receipt of each payment and its disbursement of the 
funds for project or program purposes;
    (B) You impose a requirement for the subrecipient to be paid by 
reimbursement as a result of your risk evaluation of the subrecipient 
under SUB Article II of this award.
    (C) The subaward is for construction.
    ii. If you do not authorize advance payments for one of the reasons 
given in paragraph C.2.a.i of this article, you must specify either 
reimbursement or working capital advances as the payment method in 
accordance with OMB guidance in 2 CFR 200.305(b)(3) and (4).
    b. Payment timing and amount.
    i. Advances. You must limit advance payments to the minimum amounts 
needed and time the payments to be in accordance with the subrecipient's 
actual, immediate cash requirements in carrying out the project or 
program under the subaward. The timing and amount of your advance 
payments to the subrecipient must be as close as is administratively 
feasible to the subrecipient's actual disbursements for direct project 
costs and the proportionate share of any allowable indirect costs. Your 
subawards also must include the requirements of paragraphs B.2.b and c 
of FMS Article II to specify costs subrecipients must exclude from 
amounts of their advance payment requests.
    ii. Reimbursements or working capital advances. You must follow OMB 
guidance in 2 CFR 200.305(b)(3) and (4) concerning timing and amount of 
reimbursements or working capital advances.
    c. Frequency of requests. You must allow the subrecipient to request 
advance payments or reimbursements, including those associated with the 
working capital advance payment method, as often as it wishes if you pay 
using electronic funds transfers and at least monthly otherwise.
    d. Other requirements.
    i. In any subaward that was subject to our consent, you must include 
the requirements of paragraph B.5 of FMS Article II of this award 
concerning withholding of payments.
    ii. You must include the provisions of paragraph B.6 of FMS Article 
II concerning depositories in each subaward that authorizes the 
subrecipient to request advance payments.
    3. Subawards to for-profit entities. The provision concerning 
payments in each subaward you make to a for-profit entity must conform 
to the requirements in 32 CFR 34.12.
    Section D. Allowable costs, period of availability of funds, and fee 
and profit.
    1. You must include in each cost-type subaward a requirement that 
the allowability of costs under the subaward (and any lower-tier 
subawards or procurement transactions into which the subrecipient 
enters) must be determined in accordance with the applicable cost 
principles identified in Section A of FMS Article III of this award, as 
well as the clarification in Section B of that article if it applies to 
those cost principles.
    2. You must specify in each subaward the period of availability of 
funds for any project or program purpose so that the period neither 
begins before nor ends after the period during which you may use funds 
available to you under this award for that same project or program 
purpose.
    3. You must include in each subaward the provisions concerning fee 
or profit that are in Section D of FMS Article III of this award.
    Section E. Revision of budget and program plans. You must include in 
each subaward provisions requiring the subrecipient to request your 
approval for any change in the subaward budget or program that would 
cause a budget or program change under this award for which Section B of 
FMS Article IV requires you to first obtain our prior approval. You may 
not approve any budget or program revision that is inconsistent with the 
purpose or terms and conditions of this award.
    Section F. Non-Federal audits. You must include a provision in each 
subaward that you make under this award to require the subrecipient 
entity to comply with the audit requirements applicable to that entity, 
as specified in either Section A or Section B of FMS Article V.
    Section G. Cost sharing or matching requirements. If you make a 
subaward under which the subrecipient may provide contributions or 
donations of cash or third-party in-kind contributions to be counted 
toward any cost sharing or matching that is required under this award, 
you must include provisions in that subaward to specify:
    1. The criteria governing the allowability as cost sharing or 
matching of the types of cash or third-party in-kind contributions that 
the subrecipient may contribute or donate. Those criteria are specified 
in:
    a. Sections B through D of FMS Article VI of this award if the 
subaward is to a State, institution of higher education, nonprofit 
organization, local government, or Indian tribe.

[[Page 495]]

    b. The provisions of 32 CFR 34.13(a) if the subaward is to a for-
profit entity.
    2. The methods for determining and documenting the values of those 
contributions or donations to be counted as cost sharing or matching. 
Those methods are specified in:
    a. Sections E and F of FMS Article VI of this award if the subaward 
is to a State, institution of higher education, nonprofit organization, 
local government, or Indian tribe.
    b. The provisions of 32 CFR 34.13(b) if the subaward is to a for-
profit entity.
    Section H. Program income. You must include requirements concerning 
program income in subawards, as follows:
    1. In each subaward to a State, institution of higher education, 
nonprofit organization, local government, or Indian tribe:
    a. You must require the subrecipient to account to you when it earns 
any program income under the subaward or uses it, so that you can 
prepare reports you are required to submit to us. If the award-specific 
terms and conditions of this award require you to account for program 
income earned after the period of performance, you must include a 
corresponding requirement in your subawards.
    b. You must include the provisions of Sections A through D of FMS 
Article VII of this award.
    c. You may specify the deduction, addition, or cost-sharing or 
matching alternative--described in 2 CFR 1128.720(b)--or a combination 
of those alternatives, for the subrecipient's use of any program income 
it earns. However, you still must comply with the alternative specified 
in Section E of FMS Article VII and any applicable award-specific terms 
and conditions for the total amount of program income earned, which 
includes amounts earned by you and your subrecipients. For example, if 
we require you to use the deduction alternative, you may authorize a 
subrecipient to use the addition alternative if you reduce the funding 
allocated for portions of the project or program that you or other 
subrecipients perform to make the required reduction in the total award 
amount.
    2. In each subaward to a for-profit entity, you must include the 
provisions of 32 CFR 34.14, with the appropriate method specified for 
disposition of program income.



 Sec. Appendix E to Part 1138--Terms and Conditions for SUB Article V, 
                 ``Property Requirements for Subawards''

    Unless modified as provided in Sec.  1138.5 or either or both of the 
exceptions in Sec.  1138.505 and Sec.  1138.520 are applied, a DoD 
Component's general terms and conditions must use the following wording 
for SUB Article V (as specified in Sec. Sec.  1138.500 through 
1138.520).

   SUB Article V. Property Requirements for Subawards. (DECEMBER 2014)

    Section A. Purposes of this article in relation to other articles.
    1. This article specifies administrative requirements concerning 
property that you must include in the terms and conditions of each cost-
type subaward that you make under this award.
    2. It thereby addresses the flow down to subrecipients of 
requirements with which you must comply under PROP Articles I through VI 
of this award.
    3. SUB Article XII of this award addresses which of these 
administrative requirements you must include in any fixed-amount 
subaward that you make, if you are authorized to make fixed-amount 
subawards under this award.
    Section B. Title to property.
    1. Subawards to institutions of higher education, nonprofit 
organizations, States, local governments, or Indian tribes.
    a. General. You must include terms and conditions in each subaward 
to flow down to the subrecipient the provisions of:
    i. Paragraph A.1 of PROP Article I concerning vesting of title to 
property acquired under the subaward unless paragraph B.1.b of this 
section provides otherwise.
    ii. Sections B through E of PROP Article I that are applicable to 
types of property that the subrecipient may acquire, improve, donate, or 
for which it may otherwise be accountable under the subaward.
    b. Exceptions. [Reserved.]
    2. Subawards to for-profit entities.
    a. Real property and equipment. You must obtain the prior approval 
of the grants officer before permitting any for-profit subrecipient to 
acquire or improve real property or equipment under the award.
    i. If the grants officer does not grant the approval, you must 
include a subaward provision that prohibits the for-profit entity from 
acquiring or improving real property or equipment under the subaward.
    ii. If the approval is granted, you must include a subaward 
provision specifying that title vesting and Federal interest are 
governed by provisions of 32 CFR 34.21(b) and (c).
    b. Supplies. You must include a subaward provision specifying that 
vesting of title to supplies is governed by provisions of 32 CFR 
34.24(a), subject to the use and disposition requirements of 32 CFR 
34.24(b).
    c. Federally owned property. You must include a provision in any 
subaward to a for-profit entity under which the entity may be 
accountable for federally owned property, to state that title to such 
property will remain vested in the Federal Government.
    Section C. Property management system. If you make a subaward under 
which the subrecipient either may acquire or improve

[[Page 496]]

equipment, or may be accountable for federally owned property, you must 
include in the subaward:
    1. If the subrecipient is a State, applicable provisions of:
    a. Section A of PROP Article II concerning insurance for real 
property and equipment.
    b. Section B of PROP Article II concerning other property management 
system standards.
    2. If the subrecipient is an institution of higher education, 
nonprofit organization, local government, or Indian tribe, applicable 
provisions of:
    a. Section A of PROP Article II concerning insurance for real 
property and equipment.
    b. Section C of PROP Article II concerning other property management 
system standards.
    3. If the subrecipient is a for-profit entity, applicable provisions 
of 32 CFR 34.22(a) and 34.23 and:
    a. The for-profit entity may be accountable under the subaward for 
federally owned property; or
    b. You obtained the grants officer's prior approval for the for-
profit entity's acquisition of equipment under the subaward.
    Section D. Use and disposition of real property. If the subrecipient 
of a subaward you make under this award may acquire or improve real 
property, then you must include in the subaward:
    1. Use. The requirements concerning use of real property:
    a. In Section A of PROP Article III if the subaward is to an 
institution of higher education, nonprofit organization, State, local 
government, or Indian tribe, unless the award-specific terms and 
conditions of this award provide otherwise; and
    b. In 32 CFR 34.21(d) if the subaward is to a for-profit entity and 
you obtained the grants officer's prior approval for the entity's 
acquisition of real property under the subaward.
    2. Disposition. Provisions to require the subrecipient to request 
disposition instructions through you when the property is no longer 
needed for its originally authorized purpose, so that you can meet your 
responsibilities to us under Section B of PROP Article III to address 
the Federal interest in the property.
    Section E. Use and disposition of equipment and supplies. If you 
make a subaward under which the subrecipient may acquire or improve 
equipment, or acquire supplies, you must include in the subaward, as 
applicable:
    1. If the subaward is to a State:
    a. The requirements in Sections B and E of PROP Article IV 
concerning use and disposition of equipment and supplies; and
    b. Provisions such as those in Section A of PROP Article IV that 
make clear the applicability of those requirements.
    2. If the subaward is to an institution of higher education, 
nonprofit organization, local government, or Indian tribe:
    a. The requirements in Sections C and E of PROP Article IV 
concerning use of equipment and use and disposition of supplies;
    b. Provisions such as those in Section A of PROP Article IV that 
make clear the applicability of those requirements; and
    c. Provisions to require the subrecipient to request disposition 
instructions from you when equipment is no longer needed for its 
originally authorized purpose, so that you can meet your 
responsibilities to us under Section D of PROP Article IV to address the 
Federal interest in the equipment.
    3. If the subaward is to a for-profit entity:
    a. The requirements concerning use and disposition of supplies in 32 
CFR 34.24(b);
    b. And you obtained the grants officer's prior approval for the for-
profit entity's acquisition of equipment under the subaward:
    i. The requirements concerning use of equipment in 32 CFR 34.21(d); 
and
    ii. Provisions such as those in Section A of PROP Article IV that 
make clear the applicability of those requirements; and
    iii. Provisions to require the subrecipient to request disposition 
instructions from you when equipment is no longer needed for its 
originally authorized purpose, so that you can meet your 
responsibilities to us under Section B or D of PROP Article IV to 
address the Federal interest in the equipment.
    Section F. Use and disposition of federally owned property. If you 
make a subaward under which the subrecipient may be accountable for 
federally owned property, you must include subaward provisions 
specifying that the subrecipient:
    1. May use the property for purposes specified in paragraph A.1 of 
PROP Article V;
    2. Must submit requests through you for the award administration 
office's approval to use the property for other purposes, as described 
in paragraph A.2 of PROP Article V;
    3. Must request the award administration office's disposition 
instructions through you when the property is no longer needed for 
subaward purposes or the subaward ends.
    Section G. Intangible property. You must include in a subaward 
provisions specifying the requirements of:
    1. Sections A through D of PROP Article VI if the subaward is to an 
institution of higher education, nonprofit organization, State, local 
government, or Indian tribe.
    2. Section A of PROP Article VI as it applies to works developed 
under the subaward, Section B of PROP Article VI, and paragraph C.1 of 
Section C of PROP Article VI, if the subaward is to a for-profit entity.

[[Page 497]]



 Sec. Appendix F to Part 1138--Terms and Conditions for SUB Article VI, 
           ``Procurement Procedures to Include in Subawards''

    Unless modified as provided in Sec.  1138.5, a DoD Component's 
general terms and conditions must use the following wording for SUB 
Article VI.

    SUB Article VI. Procurement Procedures To Include in Subawards. 
                             (DECEMBER 2014)

    Section A. Purposes of this article in relation to other articles.
    1. This article specifies administrative requirements concerning 
procurement procedures that you must include in the terms and conditions 
of each cost-type subaward that you make under this award.
    2. It thereby addresses the flow down to subrecipients of 
requirements with which you must comply under PROC Articles I through 
III of this award.
    3. SUB Article XII of this award addresses which of these 
administrative requirements you must include in any fixed-amount 
subaward that you make, if you are authorized to make fixed-amount 
subawards under this award.
    Section B. Subaward to a State. In any subaward that you make to a 
State, you must include the requirements of PROC Article I and 
applicable sections of PROC Article III of this award.
    Section C. Subaward to an institution of higher education, nonprofit 
organization, local government, or Indian tribe. In any subaward that 
you make to an institution of higher education, nonprofit organization, 
local government, or Indian tribe:
    1. You must include the requirements of Sections A through G of PROC 
Article II and applicable sections of PROC Article III of this award.
    2. You must include the requirement for the subrecipient to make 
available to you, upon request:
    a. Technical specifications of proposed procurements, under the 
conditions described in OMB guidance at 2 CFR 200.324(a); and
    b. Other procurement documents for pre-procurement review, under the 
conditions described in OMB guidance at 2 CFR 200.324(b).
    3. If it is possible that, under a subaward you make, the 
subrecipient may award a construction or facility improvement contract 
with a value in excess of the simplified acquisition threshold, you must 
include provisions in the subaward to require the subrecipient to comply 
with at least the minimum requirements for bidders' bid guarantees and 
contractors' performance and payment bonds described in 2 CFR 200.325(a) 
through (c), unless you determine that the subrecipient's bonding policy 
and requirements are adequate to protect Federal interests.
    Section D. Subaward to a for-profit entity. In any subaward you make 
to a for-profit entity, you must include the requirements in 32 CFR 
34.31.



Sec. Appendix G to Part 1138--Terms and Conditions for SUB Article VII, 
   ``Financial, Programmatic, and Property Reporting Requirements for 
                               Subawards''

    Unless modified as provided in Sec.  1138.5, a DoD Component's 
general terms and conditions must use the following wording for SUB 
Article VII (as specified in Sec. Sec.  1138.700 through 1138.715).

    SUB Article VII. Financial, Programmatic, and Property Reporting 
               Requirements for Subawards. (DECEMBER 2014)

    Section A. Purposes of this article in relation to other articles.
    1. This article specifies administrative requirements concerning 
reporting that you must include in the terms and conditions of each 
cost-type subaward that you make under this award.
    2. It thereby addresses the flow down to subrecipients of 
requirements with which you must comply under REP Articles I through III 
of this award.
    3. SUB Article XII of this award addresses which of these 
administrative requirements you must include in any fixed-amount 
subaward that you make, if you are authorized to make fixed-amount 
subawards under this award.
    Section B. Performance reporting.
    1. You must include terms and conditions in each subaward to require 
the subrecipient to provide any performance information you need, by the 
time you need it, to comply with the performance reporting requirements 
in REP Article I and other terms and conditions of this award.
    2. You may specify a form, format, or data elements for use by the 
subrecipient to provide the information to you (you need not require the 
subrecipient to use the same form, format, or data elements that REP 
Article I specifies for your reporting to us).
    Section C. Financial reporting.
    1. You must include terms and conditions in each subaward to require 
the subrecipient to provide any financial information you need, by the 
time you need it, to comply with the financial reporting requirements in 
REP Article II and other terms and conditions of this award.
    2. You may specify a form, format, or data elements for use by the 
subrecipient to provide the information to you (you need not require the 
subrecipient to use the same form,

[[Page 498]]

format, or data elements that REP Article II specifies for your 
reporting to us).
    Section D. Reporting on property.
    1. Each subaward you make under this award must include provisions 
concerning property reporting as described in paragraph D.2 of this 
section if the subrecipient may, under the subaward:
    a. Acquire or improve real property or equipment;
    b. Acquire supplies or intangible property; or
    c. Be accountable for federally owned property.
    2. The subaward provisions must require the subrecipient to give you 
the information you need about the property in order to meet your 
responsibilities to us under Sections A through D of REP Article III and 
PROP Articles II through VI.
    Section E. Other reporting [Reserved].



Sec. Appendix H to Part 1138--Terms and Conditions for SUB Article VIII, 
           ``Other Administrative Requirements for Subawards''

    Unless modified as provided in Sec.  1138.5, a DoD Component's 
general terms and conditions must use the following wording for SUB 
Article VIII, as specified in Sec.  1138.805, but may add a section(s), 
as appropriate.

   SUB Article VIII. Other Administrative Requirements for Subawards. 
                             (DECEMBER 2014)

    Section A. Purposes of this article in relation to other articles.
    1. This article specifies other administrative requirements that you 
either must or should include in the terms and conditions of each cost-
type subaward that you make under this award.
    2. It thereby addresses the flow down to subrecipients of 
requirements with which you must comply under OAR Articles I through VII 
of this award.
    3. SUB Article XII of this award addresses which of these 
administrative requirements you must include in any fixed-amount 
subaward that you make, if you are authorized to make fixed-amount 
subawards under this award.
    Section B. Submission and maintenance of subrecipient information. 
You must include the substance of the provision in Section C of OAR 
Article I in any subaward you make under this award. The provision must 
require the subrecipient's disclosure of any evidence directly to the 
Inspector General, DoD.
    Section C. Records retention and access. In each subaward you make 
under this award:
    1. If the subaward is to an institution of higher education, 
nonprofit organization, State, local government, or Indian tribe:
    a. You must include the requirements of Section A of OAR Article II 
with the additional condition that, for any subrecipient under this 
award that does not have a federally approved rate for indirect or 
facilities and administrative costs and that does not use the de minimis 
rate described in 2 CFR 200.414(f), you must:
    i. Require the subrecipient to keep records that support its 
indirect or facilities and administrative costs charged to the subaward 
for 3 years from the end of the fiscal year (or other accounting period) 
to which the costs apply; and
    ii. Keep any plan or computation the subrecipient submits to you to 
serve as a basis for your determining the reasonableness and 
allowability of indirect or facilities and administrative costs of the 
subaward, for 3 years from the end of the fiscal year (or other 
accounting period) to which the proposal, plan, or computation applies.
    b. You must include the requirements of Sections B, C, and F of OAR 
Article II.
    c. You must include provisions that enable you to comply with the 
requirements of Section D of OAR Article II concerning records for joint 
or long-term use.
    d. You must include provisions that establish the same rights and 
responsibilities for the subrecipient under the subaward that Section E 
of OAR Article II establishes for you under this award.
    e. You may not impose any other record retention or access 
requirements on the subrecipient.
    2. If the subaward is to a for-profit entity, you must include the 
records retention and access provisions of 32 CFR 34.42.
    Section D. Remedies and termination. The terms and conditions of 
each subaward you make under this award should specify your rights and 
responsibilities and those of the subrecipient if you take a remedial 
action to address a subrecipient's noncompliance with an applicable 
Federal statute or regulation or the terms and conditions of your 
subaward. Each subaward's terms and conditions should:
    1. Identify remedial actions you may take to address the 
subrecipient's noncompliance. Available remedies are described in:
    a. OMB guidance in 2 CFR 200.338 for a subaward to an institution of 
higher education, nonprofit organization, State, local government, or 
Indian tribe; and
    b. 32 CFR 34.52 for a subaward to a for-profit entity.
    2. With respect to termination specifically:
    a. Identify conditions under which you, the subrecipient, or both 
(by mutual agreement) may terminate the subaward, in whole or in part, 
as described in:
    i. OMB guidance in 2 CFR 200.339(a) for a subaward to an institution 
of higher education, nonprofit organization, State, local government, or 
Indian tribe; and
    ii. 32 CFR 34.51 for a subaward to a for-profit entity.

[[Page 499]]

    b. Inform the subrecipient that you will provide it with a notice of 
termination if you unilaterally terminate the award.
    c. Specify that you and the subrecipient remain responsible for 
applicable requirements addressed in Sections G and H of this article 
concerning closeout, post-closeout adjustments, and continuing 
responsibilities.
    3. With respect to either suspension or termination of the subaward, 
inform the subrecipient about the criteria that you will use to either 
allow or disallow subaward costs, which are in:
    a. Section D of OAR Article III for a subaward to an institution of 
higher education, nonprofit organization, State, local government, or 
Indian tribe; and
    b. 32 CFR 34.52(c) for a subaward to a for-profit entity.
    Section E. Disputes, hearings, and appeals. Each subaward's terms 
and conditions should specify any rights the subrecipient has to a 
hearing, appeal, or other administrative proceeding if it disputes a 
decision you render in administering its subaward. You must comply with 
any statute or regulation that affords the subrecipient an opportunity 
for a hearing, appeal, or other administrative proceeding and is 
applicable to the dispute.
    Section F. Collection of amounts due. Although your subaward terms 
and conditions do not need to include any of the requirements of OAR 
Article V because those requirements do not flow down to subrecipients, 
you should consider including provisions to specify what you would need 
from the subrecipient if you owed a debt to the Federal Government under 
this award that is related to its subaward.
    Section G. Closeout.
    1. In each subaward that you make to an institution of higher 
education, nonprofit organization, State, local government, or Indian 
tribe, you must include provisions to require the subrecipient to:
    a. Liquidate all obligations that it incurred under the subaward not 
later than 90 calendar days after the end date of the period of 
performance of either the subaward or this award, whichever is earlier, 
unless you grant an extension.
    b. Promptly refund to you any balances of unobligated cash that you 
advanced or paid to the subrecipient, unless you received authorization 
from the DoD award administration office for the subrecipient's use of 
those funds on other projects or programs.
    c. Submit to you:
    i. Any information you need from the subrecipient to meet your 
responsibilities to us for an accounting of property, under Section D of 
OAR Article VI; and
    ii. Not later than 90 calendar days after the end date of the period 
of performance of this award, unless you grant the subrecipient an 
extension, any information you need to meet your responsibilities to us 
for final reports, under Section C of OAR Article VI.
    2. In each subaward that you make to a for-profit entity, you must 
include the terms and conditions that you deem necessary for you to be 
able to comply with the requirements in OAR Article VI.
    Section H. Post-closeout adjustments and continuing 
responsibilities.
    You must include provisions in each subaward to require the 
subrecipient to provide what you need in order to comply with the 
requirements of OAR Article VII.



 Sec. Appendix I to Part 1138--Terms and Conditions for SUB Article IX, 
             ``National Policy Requirements for Subawards''

    Unless modified as provided in Sec.  1138.5, a DoD Component's 
general terms and conditions must use the following wording for SUB 
Article IX, as specified in Sec.  1138.905, or may modify the wording of 
the article, consistent with the Component's treatment of NP Articles I 
through IV in those terms and conditions.

 SUB Article IX. National Policy Requirements for Subawards. (DECEMBER 
                                  2014)

    Section A. General.
    1. You must include provisions in the terms and conditions of each 
subaward you make, whether cost-type or fixed-amount type, to require 
the subrecipient entity's compliance with each of the national policy 
requirements in Sections B through E of this article that you determine 
is applicable, given the type of entity receiving the subaward and 
activities it will be carrying out under the subaward.
    2. If an entity to which you are about to make a subaward will not 
accept an award provision requiring its compliance with a national 
policy requirement that you determine to be applicable, you must alert 
the award administration office immediately. You may not omit an 
applicable national policy requirement in order to make the subaward.
    3. If at any time during the performance of a subaward, you learn 
that--or receive a credible allegation that--the subrecipient is not 
complying with an applicable national policy requirement, you must alert 
the award administration office immediately.
    Section B. Nondiscrimination national policy requirements. You must 
include provisions in each subaward to require the subrecipient's 
compliance with the nondiscrimination national policy requirements 
specified in paragraphs A.1 through A.5 of NP Article I, as applicable.
    Section C. Environmental national policy requirements. You must 
include provisions in each subaward to require that:

[[Page 500]]

    1. The subrecipient comply with all applicable Federal environmental 
laws and regulations, including those specified in paragraphs A.2, A.3, 
A.5, and A.6 of NP Article II, as applicable.
    2. Provide any information you need, when you need it, in order to 
comply with the requirement to immediately notify us of potential 
environmental impacts specified in paragraphs A.4, A.5, and A.6 of NP 
Article II, as applicable, due to activities under the award (which 
includes subaward activities).
    Section D. National policy requirements concerning live organisms. 
You must include provisions in each subaward to require the 
subrecipient's compliance with the national policy requirements 
concerning human subjects and animals that are specified in paragraphs 
A.1 and A.2 of NP Article III, as applicable.
    Section E. Other national policy requirements. You must include 
provisions in each subaward to require the subrecipient's compliance 
with the national policy requirements in the following portions of NP 
Article IV of this award, as applicable:
    1. Paragraph A.1.
    2. Paragraphs A.3.a and b.
    3. Paragraphs A.4 through A.17.



 Sec. Appendix J to Part 1138--Terms and Conditions for SUB Article X, 
     ``Subrecipient Monitoring and Other Post-Award Administration''

    Unless modified as provided in Sec.  1138.5, a DoD Component's 
general terms and conditions must use the following wording for SUB 
Article X.

      SUB Article X. Subrecipient Monitoring and Other Post-Award 
                     Administration. (DECEMBER 2014)

    Section A. General requirement for subrecipient monitoring. You must 
do the post-award monitoring of the subrecipient's activities under each 
subaward that is needed in order for you to ensure that:
    1. The subrecipient carries out the portion of the substantive 
project or program under this award.
    2. The subrecipient is using funds under the subaward (including any 
cost sharing or matching the subrecipient provides that is counted as 
project costs in the approved budget of this award) for authorized 
purposes.
    3. The subrecipient's performance under the subaward is in 
compliance with applicable Federal statutes and regulations, and the 
terms and conditions of your subaward.
    Section B. Subrecipient monitoring actions.
    1. Required monitoring actions under cost-type subawards. You must, 
as part of your post-award monitoring of each subrecipient:
    a. Review the financial and programmatic information that your 
subaward terms and conditions require the subrecipient to provide, in 
accordance with Sections B and C of SUB Article VII of this award.
    b. Follow up and ensure that the subrecipient takes timely and 
appropriate action to remedy deficiencies detected through any means, 
including audits and on-site reviews.
    c. With respect to audits of subrecipients that are required under 
FMS Article V of this award:
    i. Verify that the subrecipient is audited in accordance with those 
requirements, as applicable (note that Section F of SUB Article IV 
requires you to include those audit requirements for the subrecipient in 
the subaward's terms and conditions).
    ii. Resolve and issue a management decision for audit findings that 
pertain to your subaward. Doing so is a requirement under either Section 
A or B of FMS Article V of this award (Section B requires that 
explicitly and Section A does so by implementing OMB guidance in 2 CFR 
200.521, as well as other portions of Subpart F of that part).
    iii. Consider whether you need to adjust your own records related to 
this award based on results of audits, on-site reviews or other 
monitoring of the subrecipient and, as applicable, notify the award 
administration office.
    2. Other monitoring actions. OMB guidance in 2 CFR 200.331(e)(1) 
through (3) describes other actions that may be useful as part of your 
subrecipient monitoring program, depending on the outcomes of the pre-
award risk assessment you conducted in accordance with Section B of SUB 
Article II.
    Section C. Remedies and subaward suspension or termination. With 
respect to any subaward under this award, you must:
    1. Consider whether you need to take any remedial action if you 
determine that the subrecipient is noncompliant with an applicable 
Federal statute or regulation or the terms and conditions of your 
subaward, as described in Section D of SUB Article VIII.
    2. Provide a notice of termination to the subrecipient if you 
terminate its subaward unilaterally for any reason prior to the end of 
the period of performance.
    3. In the case of suspension or termination of a subaward prior to 
the end of the period of performance, allow or disallow subaward costs 
in accordance with Section D of OAR Article III.
    Section D. Subaward closeout.
    1. You will close out each subaward when you either:
    a. Determine that the subrecipient has completed its programmatic 
performance under the subaward and all applicable administrative 
actions; or

[[Page 501]]

    b. Terminate the subaward, if you do so prior to the end of the 
subaward's period of performance.
    2. With respect to the closeout of each subaward:
    a. You must pay the subrecipient promptly for allowable and 
reimbursable costs.
    b. Consistent with the terms and conditions of the subaward, you 
must make a settlement for any upward or downward adjustments to the 
Federal share of costs after you receive the information you need from 
the subrecipient to close out the subaward.
    c. You should complete the closeout of the subaward no later than 
one year after you receive and accept the final reports and other 
information from the subrecipient that you need to close out the 
subaward.



 Sec. Appendix K to Part 1138--Terms and Conditions for SUB Article XI, 
     ``Requirements Concerning Subrecipients' Lower-Tier Subawards''

    Unless modified as provided in Sec.  1138.5, a DoD Component's 
general terms and conditions must use the following wording for SUB 
Article XI.

   SUB Article XI. Requirements Concerning Subrecipients' Lower-Tier 
                       Subawards. (DECEMBER 2014)

    Section A. Purpose. This article specifies requirements you must 
include in any cost-type subaward under which you determine that the 
subrecipient of your subaward may make lower-tier cost-type subawards to 
other entities. Paragraph G.1 of SUB Article XII specifies requirements 
related to fixed-amount type subawards at lower tiers.
    Section B. Requirements for lower-tier subawards. Your cost-type 
subaward terms and conditions must require your subrecipient, with 
respect to each lower-tier cost-type subaward that it makes, to:
    1. Ensure that the lower-tier transaction is a subaward, rather than 
a procurement, by making the determination that SUB Article I of this 
award requires you to make for your subawards.
    2. Conduct the pre-award risk assessment of its intended 
subrecipient that Section B of SUB Article II of this award requires you 
to make for your subawards.
    3. Include in any cost-type subaward it makes at the next tier:
    a. The informational content that SUB Article III specifies;
    b. The administrative requirements that SUB Articles IV through VIII 
of this award specify;
    c. The national policy requirements that SUB Article IX of this 
award specifies, as applicable; and
    d. The requirements of this article if the next-tier subrecipient 
may make even lower-tier cost-type subawards to other entities.
    4. Carry out the subrecipient monitoring and other post-award 
administration responsibilities specified in SUB Article X of this 
award.



Sec. Appendix L to Part 1138--Terms and Conditions for SUB Article XII, 
                       ``Fixed-Amount Subawards''

    Unless modified as provided in Sec.  1138.5 or 1138.1205, a DoD 
Component's general terms and conditions must use the following wording 
for SUB Article XII.

        SUB Article XII. Fixed-Amount Subawards. (DECEMBER 2014)

    Section A. Limitations on use.
    1. You may not use a fixed-amount subaward:
    a. If the total value over the life of the subaward will exceed the 
simplified acquisition threshold.
    b. Unless the project or program scope is specific, with definite 
outcomes, and you are able to establish a reasonable estimate of the 
actual costs of accomplishing those outcomes.
    c. If you will predetermine a set amount or percentage of cost 
sharing or matching that the subrecipient must provide under the 
subaward.
    d. If the subrecipient will acquire any real property or equipment 
under the subaward.
    2. For fixed-amount subawards not prohibited by paragraph 1 of this 
section and except as provided in Section B of this article, you must 
obtain our prior approval before making a fixed-amount type of subaward.
    a. If Section B of FMS Article IV requires you to obtain our prior 
approval before you make any subaward, and you do not identify the 
subaward as a fixed-amount subaward when you obtain that approval, then 
you must subsequently request separate approval before awarding it as a 
fixed-amount type of subaward.
    b. If a subaward is identified as a fixed-amount type of subaward in 
the budget you submit for our approval, then our approval of the budget 
is the required prior approval.
    Section B. Fixed-amount subawards that do not require prior 
approval. You are not required to obtain our prior approval before using 
a fixed-amount type of subaward if:
    1. The subaward is to either:
    a. A foreign public entity; or
    b. An organizational unit of a foreign organization, if that unit 
does not have a place of business in the United States, regardless of 
whether another organizational unit of that foreign organization has 
one.
    2. You determine that the portion of the project or program under 
this award which the subrecipient will be carrying out under

[[Page 502]]

the subaward has one or more specific outcomes with the following 
characteristics:
    a. You can define the outcomes well enough to specify them at the 
time you make the subaward. Note that:
    i. Outcomes are distinct from inputs needed to achieve the outcomes, 
such as amounts or percentages of time that subrecipient employees or 
other participants will spend on the project or program.
    ii. The inherently unpredictable nature of basic or applied research 
makes it rarely, if ever, possible to define specific research outcomes 
in advance, which makes fixed-amount subawards inappropriate for 
research. Note that technical performance reports serve to document 
research outcomes but are not themselves outcomes, notwithstanding the 
definition of ``performance goals'' in OMB guidance at 2 CFR 200.76.
    b. The accomplishment of each outcome will be observable and 
verifiable by you when it occurs, so that you will not need to rely 
solely on the subrecipient's assurance of that accomplishment.
    c. The subrecipient associates its estimated costs with outcomes in 
the proposal it submits to you, and you are confident that the costs of 
accomplishment of the outcomes will equal or exceed the subaward amount. 
This requires either that you have a high degree of confidence:
    i. In your estimate of the costs associated with accomplishing the 
well-defined and observable outcomes, based on the prospective 
subrecipient's proposal (and using the applicable cost principles in FMS 
Article III as a guide); or
    ii. That those costs will be within a finite range, rather than a 
specific amount, so that you may provide an amount of funding under the 
subaward that does not exceed the lower end of the range, with the 
provision that the subrecipient agrees to provide any balance above that 
amount that ultimately is needed to accomplish the outcomes. Your 
subaward then would include a term or condition to reflect the 
subrecipient's agreement to provide that balance (which would be in an 
amount to be post-determined, when the outcomes are accomplished). Note 
that this is distinct from a situation in which you predetermine a set 
amount or percentage of cost sharing or matching that the subrecipient 
must provide under its subaward, a situation in which paragraph A.1.c of 
this article prohibits use of a fixed-amount subaward.
    3. a. The subaward is based on a fixed rate per unit of outcome (or 
``unit cost'') and you have both the confidence:
    i. That is described in paragraph B.2.c of this article in the 
estimated costs associated with each unit of outcome; and
    ii. In the subrecipient's guarantee that it can accomplish at least 
the number of units of outcome on which your total subaward amount will 
be based (i.e., the product of the unit cost and the number of units of 
outcome the subrecipient guarantees to accomplish).
    b. Note, however, that not every fixed rate subaward is also a 
fixed-amount subaward. If you have confidence in the unit cost but not 
also in the subrecipient's ability to guarantee the number of units of 
outcome that it will accomplish, then you should set a not-to-exceed 
award amount based on the number of units desired and reduce the 
subaward amount at the end if the subrecipient accomplishes fewer than 
that number. Examples of activities for which it may be appropriate to 
award this type of fixed rate subaward that is not a fixed-amount 
subaward include:
    i. A clinical trial for which the unit cost is the cost of treating 
each participant. The not-to-exceed amount would be based on the number 
of participants the subrecipient planned to recruit and the final award 
on the number who actually participated, documentation for which would 
be subject to audit.
    ii. Labor costs for performance of a portion of the project or 
program under this award by a for-profit entity that treats its indirect 
cost rate as proprietary information. The unit cost in that case may be 
``loaded'' labor rates for the entity's employees that include indirect 
costs. The final award amount would depend on the number of labor hours 
the entity's employees expended under the subaward, documentation for 
which may be audited without exposing proprietary details associated 
with the actual costs.
    Section C. Informational content of fixed-amount subawards. You must 
include in each fixed-amount subaward the informational content, other 
than the indirect cost rate, that is described in SUB Article III of 
this award.
    Section D. Terms and conditions addressing administrative 
requirements.
    1. General. This section:
    a. Specifies the minimum set of terms and conditions (in lieu of the 
more extensive set specified in SUB Articles IV through X for cost-type 
subawards) addressing administrative requirements that you must include 
in each fixed-amount subaward:
    i. To an entity other than a foreign organization, as applicable; 
and
    ii. To the maximum extent practicable, to a foreign organization.
    b. Does not preclude the inclusion of other requirements that you 
need in order to meet your responsibilities under this award for 
performance of the project or program and compliance with applicable 
administrative and national policy requirements.
    2. Financial and program management requirements.
    a. Financial management system standards. For a subaward to other 
than a for-profit entity, your subaward must require the subrecipient to 
include the information specified in paragraph B.1 of FMS Article I in 
its

[[Page 503]]

financial management system, for the purposes of the non-Federal audits 
required by paragraph 2.d of this section.
    b. Payments. Your payments must be based on accomplishment of the 
outcomes and associated costs that you used to establish the award 
amount, rather than on subrecipient expenditures for project or program 
purposes. Milestone payments before the end of the subaward's period of 
performance may be appropriate if there are outcomes that the 
subrecipient will accomplish at different times during that period.
    c. Revision of budget and program plans. If our prior approval was 
required under paragraph A.2 of this article for use of a fixed-amount 
type of subaward, then you must:
    i. Request our prior approval for any change in scope or objective 
of the subaward; and
    ii. Include a requirement in the subaward for the subrecipient to 
request that approval through you.
    d. Non-Federal audits. You must include the requirement for non-
Federal audits described in Section F of SUB Article IV. The audits are 
intended to focus on compliance with the performance requirements in the 
subaward terms and conditions and not to review actual costs as they 
would for a cost-type subaward.
    3. Property requirements.
    a. Federally owned property. If the subrecipient will be accountable 
for federally owned property, you must include the property management 
system, use, and disposition requirements described in Sections C and F 
of SUB Article V that are applicable to federally owned property.
    b. Intangible property. You must include the applicable intangible 
property requirements described in Section G of SUB Article V.
    4. Reporting requirements. You must include requirements for 
reporting that you need in order to meet your responsibilities under 
this award for reporting to us.
    5. Other administrative requirements.
    a. Integrity-related information. You must include the substance of 
the provision in Section C of OAR Article I in any subaward you make 
under this award. The provision must require the subrecipient's 
disclosure of any evidence directly to the Inspector General, DoD.
    b. Records retention and access.
    i. You must include the requirements for records retention and 
access in paragraph A.3 and Sections B and F of OAR Article II, as 
applicable, if the subaward is to an institution of higher education, 
nonprofit organization, State, local government, or Indian tribe. You 
may not impose any other records retention or access requirements on the 
subrecipient.
    ii. You must include the corresponding requirements of 32 CFR 34.42 
if the subaward is to a for-profit entity.
    c. Remedies and termination. You must include:
    i. The requirements concerning remedies and termination that are 
described in paragraphs D.1 and 2 of SUB Article VIII;
    ii. Provisions addressing any hearing and appeal rights the 
subrecipient has, as described in Section E of SUB Article VIII; and
    iii. Terms and conditions addressing adjustment of the amount of the 
subaward if it is terminated before the subrecipient accomplishes all of 
the specified outcomes.
    d. Continuing responsibilities. You must include requirements 
concerning continuing responsibilities for audits and records retention 
and access that are described in paragraphs B.1 and 3 of OAR Article 
VII.
    e. Collection of amounts due. You should consider including 
requirements concerning collection of amounts due, as described in 
Section F of SUB Article VIII.
    Section E. National policy requirements for fixed-amount subawards. 
You must include in the terms and conditions of each fixed-amount 
subaward the national policy requirements that SUB Article IX of this 
award specifies, as applicable.
    Section F. Subrecipient monitoring and other post-award 
administration. You must carry out the subrecipient monitoring and post-
award administration actions specified in SUB Article X, as applicable.
    Section G. Fixed-amount subawards at lower tiers.
    1. Authority.
    a. If Section B of this article authorizes you to use a fixed-amount 
type of subaward without our prior approval in some situations, a cost-
type subaward that you make may authorize the subrecipient to use fixed-
amount subawards at the next lower tier in those same situations without 
our prior approval.
    b. If you wish to allow a subrecipient of a cost-type subaward to 
use fixed-amount subawards at the next tier in other situations (i.e., 
situations in which this article requires you to obtain our prior 
approval before using a fixed-amount type of subaward), your subaward 
terms and conditions must require the subrecipient to submit a request 
through you to obtain our prior approval for use of that type of 
subaward.
    2. Subaward requirements. If your subrecipient is authorized to use 
lower-tier fixed-amount subawards, as described in paragraphs 1.a and b 
of this section, your subaward's terms and conditions must:
    a. Require the subrecipient, before it makes any lower-tier fixed-
amount subaward, to:
    i. Ensure that the lower-tier transaction is a subaward, rather than 
a procurement, by making the determination that SUB Article I of this 
award requires you to make for your subawards.

[[Page 504]]

    ii. Conduct the pre-award risk assessment of its intended 
subrecipient that Section B of SUB Article II of this award requires you 
to make for your subawards.
    b. Include the requirements specified in Sections A through F of 
this article.

                          PART 1140 [RESERVED]



                         SUBCHAPTER E [RESERVED]



                       PARTS 1141	1155 [RESERVED]



                         SUBCHAPTER F [RESERVED]



                       PARTS 1156	1170 [RESERVED]



                         SUBCHAPTER G [RESERVED]



                       PARTS 1171	1199 [RESERVED]

[[Page 505]]



                CHAPTER XII--DEPARTMENT OF TRANSPORTATION




  --------------------------------------------------------------------
Part                                                                Page
1200            Nonprocurement suspension and debarment.....         507
1201            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         508
1202-1299

[Reserved]

[[Page 507]]



PART 1200_NONPROCUREMENT SUSPENSION AND DEBARMENT--Table of Contents



Sec.
1200.10 What does this part do?
1200.20 Does this part apply to me?
1200.30 What policies and procedures must I follow?

                            Subpart A_General

1200.137 Who in the Department of Transportation may grant an exception 
          to let an excluded person participate in a covered 
          transaction?

                     Subpart B_Covered Transactions

1200.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

1200.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

1200.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-J [Reserved]

    Authority: 49 U.S.C. 322; Sec. 2455, Public Law 103-355, 108 Stat. 
3327 (31 U.S.C. 6101 note); E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O. 
12689 (3 CFR, 1989 Comp., p. 235).

    Source: 73 FR 24140, May 2, 2008, unless otherwise noted.



Sec.  1200.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Department of Transportation policies and procedures for 
nonprocurement suspension and debarment. It thereby gives regulatory 
effect for the Department of Transportation to the OMB guidance as 
supplemented by this part. This part satisfies the requirements in 
section 3 of Executive Order 12549, ``Supension and Debarment'' (3 CFR 
1986 Comp., p. 189), Executive Order 12689, ``Suspension and Debarment'' 
(3 CFR 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Public 
Law 103-355, 108 Stat. 3327).



Sec.  1200.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970;
    (b) Respondent in a Department of Transportation suspension or 
debarment action;
    (c) Department of Transportation debarment or suspension official;
    (d) Department of Transportation grants officer, agreements officer, 
or other official authorized to enter into any type of nonprocurement 
transaction that is a covered transaction.



Sec.  1200.30  What policies and procedures must I follow?

    The Department of Transportation policies and procedures that you 
must follow are the policies and procedures specified in each applicable 
section of the OMB guidance in subparts A through I of 2 CFR part 180, 
as that section is supplemented by the section in this part with the 
same section number. The contracts that are covered transactions, for 
example, are specified by section 220 of the OMB guidance (i.e., 2 CFR 
180.220), as supplemented by section 220 in this part (i.e., Sec.  
1200.220). For any section of OMB guidance in subparts A through I of 2 
CFR 180 that has no corresponding section in this part, Department of 
Transportation policies and procedures are those in the OMB guidance.



                            Subpart A_General



Sec.  1200.137  Who in the Department of Transportation may grant
an exception to let an excluded person participate in a covered
transaction?

    Within the Department of Transportation, Office of the Secretary, 
the Secretary or an official designated by the

[[Page 508]]

Secretary may grant an exception permitting an excluded person to 
participate in a particular covered transaction. Within an Operating 
Administration of the Department of Transportation, the head of the 
operating administration may grant an exception permitting an excluded 
person to participate in a particular covered transaction. The head of 
an operating administration may delegate this function and authorize 
successive delegations.



                     Subpart B_Covered Transactions



Sec.  1200.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.220(b) of the 
OMB guidance, this part applies to any contract, regardless of tier, 
that is awarded by a contractor, subcontractor, supplier, consultant, or 
its agent or representative in any transaction, if the contract is to be 
funded or provided by the Department of Transportation under a covered 
nonprocurement transaction and the amount of the contract is expected to 
equal or exceed $25,000. This extends the coverage of the Department of 
Transportation nonprocurement suspension and debarment requirements to 
all lower tiers of subcontracts under covered nonprocurement 
transactions, as permitted under the OMB guidance at 2 CFR 180.220(c) 
(see optional lower-tier coverage in the figure in the appendix to 2 CFR 
part 180).



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  1200.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  1200.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180 and requires the participant to include a similar term or 
condition in lower-tier covered transactions.

Subparts E-J [Reserved]



PART 1201_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND 
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



Sec.
1201.1 What does this part do?
1201.2 Definitions.
1201.80 Program income.
1201.102 Exceptions.
1201.106 DOT Component implementation.
1201.107 DOT Headquarters responsibilities.
1201.108 Inquiries.
1201.109 Review date.
1201.112 Conflict of interest.
1201.206 Standard application requirements.
1201.313 Equipment.
1201.317 Procurements by States.
1201.319 Competition.
1201.327 Financial reporting.

    Authority: 49 U.S.C. 322(a); 2 CFR 200.106.

    Source: 79 FR 76049, Dec. 19, 2014, unless otherwise noted.



Sec.  1201.1  What does this part do?

    Except as otherwise provided in this part, the Department of 
Transportation adopts the Office of Management and Budget Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements for 
Federal Awards (2 CFR part 200). This part supersedes and repeals the 
requirements of the Department of Transportation Common Rules (49 CFR 
part 18--Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments and 49

[[Page 509]]

CFR part 19--Uniform Administrative Requirements--Uniform Administrative 
Requirements for Grants and Agreements with Institutions of Higher 
Education, Hospitals, and other Non-Profit Organizations), except that 
grants and cooperative agreements executed prior to December 26, 2014 
shall continue to be subject to 49 CFR parts 18 and 19 as in effect on 
the date of such grants or agreements. New parts with terminology 
specific to the Department of Transportation follow.



Sec.  1201.2  Definitions.

    Throughout this part, the term ``DOT Component'' refers to any 
Division, Office, or Mode (e.g., the Federal Aviation Administration 
(FAA), Federal Highway Administration (FHWA), Federal Motor Carrier 
Safety Administration (FMCSA), Federal Railroad Administration (FRA), 
Federal Transit Administration (FTA), Maritime Administration (MARAD), 
National Highway Traffic Safety Administration (NHTSA), Office of 
Inspector General (OIG), Office of the Secretary of Transportation 
(OST), Pipeline and Hazardous Materials Safety Administration (PHMSA), 
St. Lawrence Seaway Development Corporation (SLSDC), and the Surface 
Transportation Board (STB)) within the Department of Transportation 
awarding Federal financial assistance. In addition, the term ``DOT 
Headquarters'' refers to the Secretary of Transportation or any office 
designated by the Secretary to fulfill headquarters' functions within 
any office under the Secretary's immediate supervision.



Sec.  1201.80  Program income.

    Notwithstanding 2 CFR 200.80, program income means gross income 
earned by the non-Federal entity that is directly generated by a 
supported activity or earned as a result of the Federal award during the 
period of performance. (See 2 CFR 200.77 Period of performance.) Program 
income includes but is not limited to income from fees for services 
performed, the use or rental or real or personal property acquired under 
Federal awards, the sale of commodities or items fabricated under a 
Federal award, license fees and royalties on patents and copyrights, and 
principal and interest on loans made with Federal award funds. Interest 
earned on advances of Federal funds is not program income. Except as 
otherwise provided in Federal statutes, regulations, or the terms and 
conditions of the Federal award, program income does not include 
rebates, credits, discounts, taxes, special assessments, levies, and 
fines raised by a grantee and subgrantee, and interest earned on any of 
them.



Sec.  1201.102  Exceptions.

    DOT Headquarters may grant exceptions to Part 1201 on a case-by-case 
basis. Such exceptions will be granted only as determined by the 
Secretary of Transportation.



Sec.  1201.106  DOT Component implementation.

    The specific requirements and responsibilities for grant-making DOT 
Components are set forth in this part. DOT Components must implement the 
language in this part unless different provisions are required by 
Federal statute or are approved by DOT Headquarters. DOT Components 
making Federal awards to non-Federal entities must implement the 
language in the Subpart C--Pre-Federal Award Requirements and Contents 
of Federal Awards of this Part through Subpart F--Audit Requirements of 
this Part in codified regulations unless different provisions are 
required by Federal statute or are approved by DOT Headquarters.



Sec.  1201.107  DOT Headquarters responsibilities.

    DOT Headquarters will review DOT Component implementation of this 
part, and will provide interpretations of policy requirements and 
assistance to ensure effective and efficient implementation. Any 
exceptions will be subject to approval by DOT Headquarters. Exceptions 
will only be made in particular cases where adequate justification is 
presented.



Sec.  1201.108  Inquiries.

    Inquiries regarding Part 1201 should be addressed to the DOT 
Component making the award, cognizant agency

[[Page 510]]

for indirect costs, cognizant or oversight agency for audit, or pass-
through entities as appropriate. DOT Components will, in turn, direct 
the inquiry to the Office of Chief Financial Officer, Department of 
Transportation.



Sec.  1201.109  Review date.

    DOT Headquarters will review this part at least every five years 
after December 26, 2014.



Sec.  1201.112  Conflict of interest.

    The DOT Component making a financial assistance award must establish 
conflict of interest policies for Federal awards, including policies 
from DOT Headquarters. The non-Federal entity must disclose in writing 
any potential conflict of interest to the DOT Component or pass-through 
entity in accordance with applicable Federal awarding agency policy.



Sec.  1201.206  Standard application requirements.

    The requirements of 2 CFR 200.206 do not apply to formula grant 
programs, which do not require applicants to apply for funds on a 
project basis.



Sec.  1201.313  Equipment.

    Notwithstanding 2 CFR 200.313, subrecipients of States shall follow 
such policies and procedures allowed by the State with respect to the 
use, management and disposal of equipment acquired under a Federal 
award.



Sec.  1201.317  Procurements by States.

    Notwithstanding 2 CFR 200.317, subrecipients of States shall follow 
such policies and procedures allowed by the State when procuring 
property and services under a Federal award.



Sec.  1201.327  Financial reporting.

    Notwithstanding 2 CFR 200.327, recipients of FHWA and NHTSA 
financial assistance may use FHWA, NHTSA or State financial reports.

                       PARTS 1202	1299 [RESERVED]

[[Page 511]]



                  CHAPTER XIII--DEPARTMENT OF COMMERCE




  --------------------------------------------------------------------
Part                                                                Page
1300-1325

 [Reserved]

1326            Nonprocurement debarment and suspension.....         513
1327            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         515
1328

 [Reserved]

1329            Requirements for drug-free workplace 
                    (financial assistance)..................         515
1330-1399

 [Reserved]

[[Page 513]]

                       PARTS 1300	1325 [RESERVED]



PART 1326_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
1326.10 What does this part do?
1326.20 Does this part apply to me?
1326.30 What policies and procedures must I follow?

                            Subpart A_General

1326.137 Who in the Department of Commerce may grant an exception to let 
          an excluded person participate in a covered transaction?

                     Subpart B_Covered Transactions

1326.215 Which nonprocurement transactions, in addition to those listed 
          in 2 CFR 180.215, are not covered transactions?
1326.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

1326.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

1326.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-H [Reserved]

                          Subpart I_Definitions

1326.970 Nonprocurement transaction (Department of Commerce supplement 
          to government-wide definition at 2 CFR 180.970).

Subpart J [Reserved]

    Authority: 5 U.S.C. 301; Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; 
E.O. 12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 
235.

    Source: 71 FR 76574, Dec. 21, 2006, unless otherwise noted.



Sec.  1326.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Department of Commerce policies and procedures for nonprocurement 
debarment and suspension. It thereby gives regulatory effect to the OMB 
guidance as supplemented by this part. This part satisfies the 
requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189), Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235) and 31 U.S.C. 
6101 note (Section 2455, Public Law 103-355, 108 Stat. 3327).



Sec.  1326.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970, as supplemented by subpart B and Sec.  
1326.970 of this part).
    (b) Respondent in a Department of Commerce suspension or debarment 
action.
    (c) Department of Commerce debarment or suspension official;
    (d) Department of Commerce grants officer, agreements officer, or 
other official authorized to enter into any type of nonprocurement 
transaction that is a covered transaction;



Sec.  1326.30  What policies and procedures must I follow?

    The Department of Commerce policies and procedures that you must 
follow are the policies and procedures specified in each applicable 
section of the OMB guidance in subparts A through I of 2 CFR part 180, 
as that section is supplemented by the section in this part with the 
same section number. The contracts that are covered transactions, for 
example, are specified by section 220 of the OMB guidance (i.e., 2 CFR 
180.220) as supplemented by section 220 in this part (i.e., Sec.  
1326.220). For any section of OMB guidance in subparts A through I of 2 
CFR 180 that has no corresponding section in this part, Department of 
Commerce policies

[[Page 514]]

and procedures are those in the OMB guidance.



                            Subpart A_General



Sec.  1326.137  Who in the Department of Commerce may grant an 
exception to let an excluded person participate in a covered
transaction?

    Within the Department of Commerce, the Secretary of Commerce or 
designee has the authority to grant an exception to let an excluded 
person participate in a covered transaction, as provided in the OMB 
guidance at 2 CFR 180.135.



                     Subpart B_Covered Transactions



Sec.  1326.215  Which nonprocurement transactions, in addition to
those listed in 2 CFR 180.215, are not covered transactions?

    (a) For purposes of the Department of Commerce, a transaction that 
the Department needs to respond to a national or agency-recognized 
emergency or disaster includes the Fisherman's Contingency Fund.
    (b) For purposes of the Department of Commerce, an incidental 
benefit that results from ordinary governmental operations includes:
    (1) Export Promotion, Trade Information and Counseling, and Trade 
policy.
    (2) Geodetic Surveys and Services (Specialized Services).
    (3) Fishery Products Inspection Certification.
    (4) Standard Reference Materials.
    (5) Calibration, Measurement, and Testing.
    (6) Critically Evaluated Data (Standard Reference Data).
    (7) Phoenix Data System.
    (8) The sale or provision of products, information, and services to 
the general public.
    (c) For purposes of the Department of Commerce, any other 
transaction if the application of an exclusion to the transaction is 
prohibited by law includes:
    (1) The Administration of the Anti-dumping and Countervailing Duty 
Statutes.
    (2) The export Trading Company Act Certification of Review Program.
    (3) Trade Adjustment Assistance Program Certification.
    (4) Foreign Trade Zones Act of 1934, as amended.
    (5) Statutory Import Program.



Sec.  1326.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.220(b) of the 
OMB guidance, this part applies to a subcontract that is awarded by a 
participant in a procurement transaction covered under 2 CFR 180.220(a), 
if the amount of the subcontract exceeds or is expected to exceed 
$25,000. This extends the coverage of the Department of Commerce 
nonprocurement suspension and debarment requirements to one additional 
tier of contracts under covered nonprocurement transactions, as 
permitted under the OMB guidance at 2 CFR 180.220(c) (see optional lower 
tier coverage in the figure in the appendix to 2 CFR part 180).



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  1326.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR Part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  1326.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

[[Page 515]]

Subparts E-H [Reserved]



                          Subpart I_Definitions



Sec.  1326.970  Nonprocurement transaction (Department of Commerce 
supplement to government-wide definition at 2 CFR 180.970).

    For purposes of the Department of Commerce, nonprocurement 
transaction includes the following:
    (a) Joint project Agreements under 15 U.S.C. 1525.
    (b) Cooperative research and development agreements.
    (c) Joint statistical agreements.
    (d) Patent licenses under 35 U.S.C. 207.
    (e) NTIS joint ventures, 15 U.S.C. 3704b.

Subpart J [Reserved]



PART 1327_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND 
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 5 U.S.C. 301; 38 U.S.C. 501; 2 CFR part 200.

    Source: 79 FR 76050, Dec. 19, 2014, unless otherwise noted.



Sec.  1327.101  Adoption of 2 CFR Part 200.

    Under the authority listed above, the Department of Commerce adopts 
the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. 
Thus, this part gives regulatory effect to the OMB guidance and 
supplements the guidance as needed for the Department.

                          PART 1328 [RESERVED]



PART 1329_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
1329.10 What does this part do?
1329.20 Does this part apply to me?
1329.30 What policies and procedures must I follow?

Subpart A--Purpose and Coverage [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

1329.225 Whom in the Department of Commerce does a recipient other than 
          an individual notify about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

1329.300 Whom in the Department of Commerce does a recipient who is an 
          individual notify about a criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

1329.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of This Part and Consequences

1329.500 Who in the Department of Commerce determines that a recipient 
          other than an individual violated the requirements of this 
          part?
1329.505 Who in the Department of Commerce determines that a recipient 
          who is an individual violated the requirements of this part?

Subpart F--Definitions [Reserved]

    Authority: 5 U.S.C. 301; 41 U.S.C. 701-707.

    Source: 81 FR 3700, Jan. 22, 2016, unless otherwise noted.



Sec.  1329.10  What does this part do?

    This part requires that the award and administration of Department 
of Commerce grants and cooperative agreements comply with Office of 
Management and Budget (OMB) guidance implementing the portion of the 
Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as amended, 
hereafter referred to as ``the Act'') that applies to grants. It 
thereby--
    (a) Gives regulatory effect to the OMB guidance (subparts A through 
F of 2 CFR part 182) for the Department of Commerce's grants and 
cooperative agreements; and
    (b) Establishes Department of Commerce policies and procedures for 
compliance with the Act that are the same

[[Page 516]]

as those of other Federal agencies, in conformance with the requirement 
in 41 U.S.C. 705 for Governmentwide implementing regulations.



Sec.  1329.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of a Department of Commerce grant or cooperative 
agreement; or
    (b) Department of Commerce awarding official.



Sec.  1329.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table. For each 
of those sections, you must follow the policies and procedures in the 
OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   1329.225  Whom in the Department
                                                 of Commerce a recipient
                                                 other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   1329.300  Whom in the Department
                                                 of Commerce a recipient
                                                 who is an individual
                                                 must notify if he or
                                                 she is convicted of a
                                                 criminal drug offense
                                                 resulting from a
                                                 violation occurring
                                                 during the conduct of
                                                 any award activity.
(3) 2 CFR 182.500............  Sec.   1329.500  Who in the Department of
                                                 Commerce is authorized
                                                 to determine that a
                                                 recipient other than an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(4) 2 CFR 182.505............  Sec.   1329.505  Who in the Department of
                                                 Commerce is authorized
                                                 to determine that a
                                                 recipient who is an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, Department of 
Commerce policies and procedures are the same as those in the OMB 
guidance.

Subpart A--Purpose and Coverage [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  1329.225  Whom in the Department of Commerce does a recipient
other than an individual notify about a criminal drug conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify each Department of Commerce office 
from which it currently has an award.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  1329.300  Whom in the Department of Commerce does a recipient
who is an individual notify about a criminal drug conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify each Department of Commerce office from which 
it currently has an award.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  1329.400  What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award: Drug-free workplace. You as 
the recipient must

[[Page 517]]

comply with drug-free workplace requirements in Subpart B (or Subpart C, 
if the recipient is an individual) of 2 CFR part 1329, which adopts the 
Govemmentwide implementation (2 CFR part 182) of sec. 5152-5158 of the 
Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 
41 U.S.C. 701-707).



           Subpart E_Violations of This Part and Consequences



Sec.  1329.500  Who in the Department of Commerce determines that a
recipient other than an individual violated the requirements of this
part?

    The Secretary of Commerce or designee determines that a recipient 
other than an individual violated the requirements of this part.



Sec.  1329.505  Who in the Department of Commerce determines that a 
recipient who is an individual violated the requirements of this part?

    The Secretary of Commerce or designee determines that a recipient 
who is an individual violated the requirements of this part.

Subpart F--Definitions [Reserved]

                       PARTS 1330	1399 [RESERVED]

[[Page 519]]



                 CHAPTER XIV--DEPARTMENT OF THE INTERIOR




  --------------------------------------------------------------------
Part                                                                Page
1400            Nonprocurement debarment and suspension.....         521
1401            Requirements for drug-free workplace 
                    (financial assistance)..................         527
1402            Financial assistance interior regulation, 
                    supplementing the uniform administrative 
                    requirements, cost principles, and audit 
                    requirements for Federal awards.........         533
1403-1499

 [Reserved]

[[Page 521]]



PART 1400_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
1400.10 What does this part do?
1400.20 When does this part apply to me?
1400.30 What policies and procedures must I follow?

                            Subpart A_General

1400.137 Who in the Department of the Interior may grant an exception to 
          let an excluded person participate in a covered transaction?

                     Subpart B_Covered Transactions

1400.215 Which nonprocurement transactions, in addition to those listed 
          in 2 CFR 180.215, are not covered transactions?
1400.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

1400.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

1400.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

            Subpart E_System for Award Management Exclusions

1400.526 Who at DOI places exclusions information into SAM?

   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions

1400.600 How does a DOI debarment or suspension action begin?
1400.635 May DOI settle a debarment or suspension action?

                          Subpart G_Suspension

1400.751 What does the Suspending and Debarring Official consider in 
          making a decision on whether to continue a suspension 
          following notice issuance?
1400.752 When does a contested suspension action include a fact-finding 
          proceeding?
1400.753 How is the fact-finding proceeding conducted?
1400.756 May a respondent request administrative review of the 
          Suspending and Debarring Official's decision?

                           Subpart H_Debarment

1400.861 What procedures does the Suspending and Debarring Official 
          follow to make a decision on whether to impose debarment 
          following notice issuance?
1400.862 When does a contested debarment action include a fact-finding 
          proceeding?
1400.863 How is the fact-finding proceeding conducted?
1400.876 May a respondent request administrative reconsideration of a 
          decision?
1400.881 May a respondent seek award eligibility reinstatement at any 
          time before the end of the period of debarment?

                          Subpart I_Definitions

1400.930 Debarring official (Department of the Interior supplement to 
          the definition at 2 CFR 180.930).
1400.970 Nonprocurement transaction (Department of the Interior 
          supplement to the definition at 2 CFR 180.970).
1400.1010 Suspending official (Department of the Interior supplement to 
          the definition at 2 CFR 180.930).
1400.1011 The DOI Debarment Program Director.
1400.1012 The OIG Administrative Remedies Division (ARD).
1400.1013 The administrative record.
1400.1014 Respondent.

Subpart J [Reserved]

    Authority: Section 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 
6101 note); 5 U.S.C. 301; E.O. 12549 (3 CFR, 1986 Comp., p. 189); and 
E.O. 12689 (3 CFR, 1989 Comp., p. 235).

    Source: 72 FR 33384, June 18, 2007, unless otherwise noted.



Sec.  1400.10  What does this part do?

    This part provides procedures for the Department of the Interior 
nonprocurement suspension and debarment actions.

[81 FR 65855, Sept. 26, 2016]



Sec.  1400.20  When does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of

[[Page 522]]

``nonprocurement transaction'' at 2 CFR 180.970, as supplemented by 
subpart B and Sec.  1400.970);
    (b) Respondent in a Department of the Interior suspension or 
debarment action;
    (c) Department of the Interior debarment or suspension official, 
i.e., the Director, Office of Acquisition and Property Management; or
    (d) Department of the Interior grants officer, agreements officer, 
or other official authorized to enter into any type of nonprocurement 
transaction that is a covered transaction.



Sec.  1400.30  What policies and procedures must I follow?

    (a) The Department of the Interior policies and procedures that you 
must follow are specified in:
    (1) Each applicable section of the OMB guidance in subparts A 
through I of 2 CFR part 180; and
    (2) The supplement to each section of the OMB guidance that is found 
in this part under the same section number. (The contracts that are 
covered transactions, for example, are specified by section 220 of the 
OMB guidance (i.e., 2 CFR 180.220) as supplemented by section 220 in 
this part (i.e., Sec. 1400.220)).
    (b) For any section of OMB guidance in subparts A through I of 2 CFR 
part 180 that has no corresponding section in this part, Department of 
the Interior policies and procedures are those in the OMB guidance.



                            Subpart A_General



Sec.  1400.137  Who in the Department of the Interior may grant an
exception to let an excluded person participate in a covered
transaction?

    Within the Department of the Interior, the Director, Office of 
Acquisition and Property Management has the authority to grant an 
exception to let an excluded person participate in a covered 
transaction, as provided in the OMB guidance at 2 CFR 180.135.



                     Subpart B_Covered Transactions



Sec.  1400.215  Which nonprocurement transactions, in addition to 
those listed in 2 CFR 180.215, are not covered transactions?

    (a) Transactions entered into pursuant to Public Law 93-638, 88 
Stat. 2203.
    (b) Under natural resource management programs, permits, licenses, 
exchanges, and other acquisitions of real property, rights-of-way, and 
easements.
    (c) Transactions concerning mineral patent claims entered into 
pursuant to 30 U.S.C. 22 et seq.; and
    (d) Water service contracts and repayments entered into pursuant to 
43 U.S.C. 485.



Sec.  1400.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see optional lower tier coverage in the figure in 
the appendix to 2 CFR part 180), the Department of the Interior does not 
extend coverage of nonprocurement suspension and debarment requirements 
beyond first-tier procurement contracts under a covered nonprocurement 
transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  1400.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  1400.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435

[[Page 523]]

of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.



            Subpart E_System for Award Management Exclusions

    Source: 81 FR 65855, Sept. 26, 2016, unless otherwise noted.



Sec.  1400.526  Who at DOI Places Exclusions Information into SAM?

    The Office of Acquisition and Property Management (PAM) Debarment 
Program personnel enter information about persons suspended or debarred 
by DOI into the GSA Web-based System for Award Management (SAM) within 3 
working days of the effective date of the action.



   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions

    Source: 81 FR 65855, Sept. 26, 2016, unless otherwise noted.



Sec.  1400.600  How does a DOI suspension or debarment action begin?

    (a) Federal officials, DOI award officials, employees, or other 
sources will forward information indicating the potential existence of a 
cause for suspension or debarment, as listed in 2 CFR 180.700 and 
180.800, to:
    (1) The DOI Office of Inspector General Administrative Remedies 
Division (OIG ARD); or
    (2) The Suspending and Debarring Official.
    (b) If forwarded to the OIG ARD, that office will conduct a review 
to determine if a recommendation for administrative action is warranted. 
If warranted, the OIG ARD will prepare and submit to the Suspending and 
Debarring Official an Action Referral Memorandum (ARM) with supporting 
documentation for the administrative record.
    (c) OIG ARD will also identify potential matters for case 
development and conduct a review to determine if a recommendation for 
administrative action is warranted. If warranted, the OIG ARD will 
prepare and submit to the Suspending and Debarring Official an ARM with 
supporting documentation for the administrative record.
    (d) The Suspending and Debarring Official will review the ARM to 
determine the adequacy of evidence to support and initiate:
    (1) A suspension by taking the actions listed in 2 CFR 180.615 and 
180.715; or
    (2) A debarment by taking the actions listed in 2 CFR 180.615 and 2 
CFR 180.805; and
    (3) Notification of the respondent on how the respondent may contest 
the action.



Sec.  1400.635  May DOI settle a debarment or suspension action?

    Under 2 CFR 180.635, the Suspending and Debarring Official may 
resolve a suspension or debarment action through an administrative 
agreement if it is in the best interest of the Government at any stage 
of proceedings, where the respondent agrees to appropriate terms. The 
specific effect of administrative agreements that incorporate terms 
regarding award eligibility will vary with the terms of the agreements. 
Where the Suspending and Debarring Official enters into an 
administrative agreement, PAM will notify the award officials by:
    (a) Entering any appropriate information regarding an exclusion or 
the termination of an exclusion into the SAM; and
    (b) Entering the agreement into the Federal Awardee Performance 
Integrity Information System (FAPIIS) or its successor system.



                          Subpart G_Suspension

    Source: 81 FR 65855, Sept. 26, 2016, unless otherwise noted.

[[Page 524]]



Sec.  1400.751  What does the Suspending and Debarring Official
consider in making a decision on whether to continue a suspension 
following notice issuance?

    (a) In the event a respondent does not contest the suspension in 
writing within the time period provided at 2 CFR 180.715 through 
180.725, the suspension will remain in place without further 
proceedings.
    (b) Where a suspension is contested, the Suspending and Debarring 
Official follows the provisions at 2 CFR 180.730 through 180.755 in 
reaching a decision on whether to continue or terminate the suspension.
    (c) The contested suspension proceeding will include an oral 
Presentation of Matters in Opposition (PMIO), where one is requested by 
a respondent. The PMIO is conducted in an informal business meeting 
format and electronically recorded for inclusion in the administrative 
record.
    (d) Where fact-finding occurs as part of the suspension proceeding, 
after receiving the findings of fact and the hearing record from the 
fact-finding official, the Suspending and Debarring Official completes 
suspension proceedings, including a PMIO if one has been requested and 
did not occur before the fact-finding proceeding. Following completion 
of suspension proceedings, the Suspending and Debarring Official issues 
a written decision under the provisions of 2 CFR 180.750 and 180.755.



Sec.  1400.752  When does a contested suspension action include a 
fact-finding proceeding?

    (a) Fact-finding to resolve genuine disputes over facts material to 
the suspension occurs where the conditions listed in 2 CFR 180.735(b) 
are satisfied.
    (b) The fact-finding official for DOI suspension proceedings is the 
DOI Debarment Program Director, unless the Suspending and Debarring 
Official designates another DOI official to serve as the fact-finding 
official.



Sec.  1400.753  How is the fact-finding proceeding conducted?

    (a) The fact-finding proceeding is conducted in accordance with 
PAM's suspension and debarment program fact-finding procedures, a copy 
of which is provided to the respondent.
    (b) The fact-finding proceeding is undertaken in accordance with 2 
CFR 180.745.
    (1) The reporters' fees and other direct costs associated with the 
fact-finding proceeding are borne by the bureau(s) or office(s) 
initiating the suspension action, except in the case of actions 
initiated by the OIG ARD.
    (2) For actions initiated by the OIG ARD, the costs are borne by 
bureau(s) and/or office(s) out of which the matter arose.
    (3) A transcribed record transcript of the fact-finding proceedings 
is available to the respondent as provided at 2 CFR 180.745(b).
    (c) The fact-finding official provides findings of fact and the 
hearing record to the Suspending and Debarring Official. The fact-
finding official files the original copy of the transcribed record of 
the fact-finding proceedings transcript with the administrative record.



Sec.  1400.756  May a respondent request administrative review of the
Suspending and Debarring Official's decision?

    A respondent may seek administrative reconsideration of the 
Suspending and Debarring Official's decision by following the procedures 
in this section.
    (a) Within 30 days of receiving the decision, the respondent may ask 
the Suspending and Debarring Official to reconsider the decision for 
clear and material errors of fact or law that would change the outcome 
of the matter. The respondent bears the burden of demonstrating the 
existence of the asserted clear and material errors of fact or law.
    (b) A respondent's request for reconsideration must be submitted in 
writing to the Suspending and Debarring Official and include:
    (1) The specific findings of fact and conclusions of law believed to 
be in error; and
    (2) The reasons or legal basis for the respondent's position.
    (c) The Suspending and Debarring Official may, in the exercise of 
discretion, stay the suspension pending reconsideration. The Suspending 
and Debarring Official will:

[[Page 525]]

    (1) Notify the respondent in writing of the decision on whether to 
reconsider the decision; and
    (2) If reconsideration occurs, notify the respondent in writing of 
the results of the reconsideration.



                           Subpart H_Debarment

    Source: 81 FR 65855, Sept. 26, 2016, unless otherwise noted.



Sec.  1400.861  What procedures does the Suspending and Debarring 
Official follow to make a decision on whether to impose debarment
following notice issuance?

    (a) In the event a respondent does not contest the proposed 
debarment in writing within the time period provided at 2 CFR 180.815 
through 180.825, the debarment as proposed in the notice will be imposed 
without further proceedings.
    (b) Where a proposed debarment is contested, the Suspending and 
Debarring Official will follow the provisions at 2 CFR 180.830 through 
180.870 in reaching a decision on whether to impose a period of 
debarment.
    (c) The administrative record will include an oral PMIO, in those 
actions where the respondent requests one. The PMIO is conducted in an 
informal business meeting format and electronically recorded for the 
record.
    (d) Where fact-finding occurs as part of the proposed debarment 
proceeding, after receiving the findings of fact and the hearing record 
from the fact-finding official, the Suspending and Debarring Official 
completes debarment proceedings, including a PMIO if one has been 
requested and did not occur before the fact-finding proceeding. 
Following completion of proposed debarment proceedings, the Suspending 
and Debarring Official issues a written decision under the provisions of 
2 CFR 180.870.



Sec.  1400.862  When does a contested proposed debarment action include
a fact-finding proceeding?

    Fact-finding to resolve genuine disputes over facts material to the 
proposed debarment occurs where the conditions at 2 CFR 180.830(b) are 
satisfied.



Sec.  1400.863  How is the fact-finding proceeding conducted?

    (a) The fact-finding proceeding is conducted in accordance with 
PAM's suspension and debarment program fact-finding procedures, a copy 
of which is provided to the respondent.
    (b) The fact-finding official for DOI debarment proceedings is the 
DOI Debarment Program Director, unless the Suspending and Debarring 
Official designates another DOI official to serve as the fact-finding 
official.
    (c) The fact-finding proceeding is undertaken in accordance with 2 
CFR 180.840.
    (1) The reporters' fees and other direct costs associated with the 
fact-finding proceeding are borne by the bureau(s) or office(s) 
initiating the debarment action, except in the case of actions initiated 
by the OIG.
    (2) For actions initiated by the OIG, the costs are borne by the 
bureau(s) and/or office(s) out of which the matter arose.
    (3) A transcribed record of the fact-finding proceedings is 
available to the respondent as provided at 2 CFR 180.840(b).
    (d) The fact-finding official provides written findings of fact and 
the hearing record to the Suspending and Debarring Official. The fact-
finding official files the original copy of the transcribed record of 
the fact-finding proceedings with the administrative record.



Sec.  1400.876  May a respondent request administrative reconsideration
of a decision?

    A respondent may request the Suspending and Debarring Official to 
review a decision under this part as follows:
    (a) Within 30 days of receiving the decision, the respondent may ask 
the Suspending and Debarring Official to reconsider the decision based 
on clear and material error(s) of fact or conclusion(s) of law that 
would change the outcome of the matter. The respondent bears the burden 
of demonstrating the existence of the asserted clear and material 
error(s) of fact or conclusion(s) of law.
    (b) The respondent's request for reconsideration must be submitted 
in

[[Page 526]]

writing to the Suspending and Debarring Official and include:
    (1) The specific finding(s) of fact and conclusion(s) of law the 
respondent believes are in error; and
    (2) The reasons or legal bases for the respondent's position.
    (c) The Suspending and Debarring Official may in the exercise of 
discretion stay the debarment pending reconsideration. The Suspending 
and Debarring Official will review the request for reconsideration and:
    (1) Notify the respondent in writing whether the Suspending and 
Debarring Official will reconsider the decision; and
    (2) If reconsideration occurs, notify the respondent in writing of 
the results of the reconsideration.



Sec.  1400.881  May a respondent seek award eligibility reinstatement
at any time before the end of the period of debarment?

    In addition to a petition for reconsideration based on a clear error 
of material fact or law, a respondent may, at any time following 
imposition of debarment, request the Suspending and Debarring Official 
to reduce or terminate the period of debarment based upon the factors 
under the provisions of 2 CFR 180.880.



                          Subpart I_Definitions



Sec.  1400.930  Debarring official (Department of the Interior 
supplement to the definition at 2 CFR 180.930).

    The Debarring Official for the Department of the Interior is the 
Director, Office of Acquisition and Property Management.



Sec.  1400.970  Nonprocurement transaction (Department of the Interior
supplement to the definition at 2 CFR 180.970).

    In addition to those listed in 2 CFR 180.970, the Department of the 
Interior includes the following as nonprocurement transactions:
    (a) Federal acquisition of a leasehold interest or any other 
interest in real property;
    (b) Concession contracts;
    (c) Disposition of Federal real and personal property and natural 
resources; and
    (d) Any other nonprocurement transactions between the Department and 
a person.



Sec.  1400.1010  Suspending official (Department of the Interior
supplement to the definition at 2 CFR 180.930).

    The Suspending Official for the Department of the Interior is the 
Director, Office of Acquisition and Property Management.



Sec.  1400.1011  The DOI Debarment Program Director.

    The Debarment Program Director is the individual in PAM who advises 
the Suspending and Debarring Official on DOI suspension and debarment 
practices and procedures, manages the suspension and debarment process, 
and acts as the DOI suspension and debarment program fact-finding 
official.

[81 FR 65857, Sept. 26, 2016]



Sec.  1400.1012  The OIG Administrative Remedies Division (ARD).

    The OIG ARD prepares and forwards suspension and/or debarment action 
referral memoranda to the Suspending and Debarring Official and may 
provide additional assistance, in the course of action proceedings.

[81 FR 65857, Sept. 26, 2016]



Sec.  1400.1013  The administrative record.

    The administrative record for DOI suspension and debarment actions 
consists of the initiating action referral memorandum and its attached 
documents; the action notice; contested action scheduling 
correspondence; written information, arguments and supporting documents 
submitted by a respondent in opposition to the action notice; written 
information, arguments and supporting documents submitted by the OIG ARD 
in response to information provided by a respondent; the electronic 
recording of the PMIO, where a PMIO is held as part of the proceeding; 
where fact-finding is conducted, the transcribed record of the fact-
finding proceedings, and findings of fact; and the final written 
determination by the Suspending and Debarring Official on the action; 
or, alternatively, the administrative agreement

[[Page 527]]

endorsed by the respondent and the Suspending and Debarring Official 
that resolves an action.

[81 FR 65857, Sept. 26, 2016]



Sec.  1400.1014  Respondent.

    Respondent means a person who is the subject of a DOI suspension or 
proposed debarment action.

[81 FR 65857, Sept. 26, 2016]

Subpart J [Reserved]



PART 1401_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



                     Subpart A_Purpose and Coverage

Sec.
1401.100 What does this part do?
1401.105 Does this part apply to me?
1401.110 What policies and procedures must I follow?
1401.115 Are any of my Federal assistance awards exempt from this part?
1401.120 Does this part affect the Federal contracts that I receive?

                          Subpart B_Definitions

1401.205 Award.
1401.210 Controlled substance.
1401.215 Conviction.
1401.220 Cooperative agreement.
1401.225 Criminal drug statute.
1401.230 Debarment.
1401.235 Drug-free workplace.
1401.240 Employee.
1401.245 Federal agency or agency.
1401.250 Grant.
1401.255 Individual.
1401.260 Recipient.
1401.265 State.
1401.270 Suspension.

      Subpart C_Requirements for Recipients Other Than Individuals

1401.300 What must I do to comply with this part?
1401.305 What must I include in my drug-free workplace statement?
1401.310 To whom must I distribute my drug-free workplace statement?
1401.315 What must I include in my drug-free awareness program?
1401.320 By when must I publish my drug-free workplace statement and 
          establish my drug-free awareness program?
1401.325 What actions must I take concerning employees who are convicted 
          of drug violations in the workplace?
1401.330 How and when must I identify workplaces?
1401.335 Whom in the DOI does a recipient other than an individual 
          notify about a criminal drug conviction?

        Subpart D_Requirements for Recipients Who Are Individuals

1401.400 What must I do to comply with this part if I am an individual 
          recipient?
1401.401 Whom in the DOI does a recipient who is an individual notify 
          about a criminal drug conviction?

   Subpart E_Responsibilities of Department of the Interior Awarding 
                                Officials

1401.500 What are my responsibilities as a DOI awarding official?

           Subpart F_Violations of this Part and Consequences

1401.600 How are violations of this part determined for recipients other 
          than individuals?
1401.605 How are violations of this part determined for recipients who 
          are individuals?
1401.610 What actions will the Federal Government take against a 
          recipient determined to have violated this part?
1401.615 Are there any exceptions to those actions?

    Authority: 5 U.S.C. 301; 31 U.S.C. 6101 note, 7501; 41 U.S.C. 252a; 
41 U.S.C. 701-707.

    Source: 75 FR 71008, Nov. 22, 2010, unless otherwise noted.



                     Subpart A_Purpose and Coverage



Sec.  1401.100  What does this part do?

    This part requires that the award and administration of the DOI 
grants and cooperative agreements comply with Office of Management and 
Budget (OMB) guidance implementing the portion of the Drug-Free 
Workplace Act of 1988, 41 U.S.C. 701-707, as amended (hereinafter, ``the 
Act'') that applies to grants. It thereby--
    (a) Gives regulatory effect to the OMB guidance (Subparts A through 
F of 2 CFR Part 182) for DOI's grants and cooperative agreements; and
    (b) Establishes DOI policies and procedures for compliance with the 
Act that are the same as those of other Federal agencies, in conformance 
with the requirement in 41 U.S.C. 705 for

[[Page 528]]

government-wide implementing regulations.



Sec.  1401.105  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in Subparts A through F of 2 CFR part 182 apply if you are--
    (a) A recipient of an assistance award from the Department of the 
Interior; or
    (b) The Department of the Interior awarding official.
    The following table (will be incorporated into 2 CFR part 182) shows 
the subparts that apply to you:

------------------------------------------------------------------------
                If you are                          See subparts
------------------------------------------------------------------------
(1) A recipient who is not an individual.  A, C and F.
(2) A recipient who is an individual.....  A, D and F.
(3) A Department of the Interior awarding  A, E and F.
 official.
------------------------------------------------------------------------



Sec.  1401.110  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) In implementing OMB guidance in 2 CFR part 182, this part 
supplements four sections of the guidance, as shown in the following 
table. For each of those sections, you must follow the policies and 
procedures set forth in the OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   1401.335  Whom in the DOI a
                                                 recipient other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   1401.401  Whom in the DOI a
                                                 recipient who is an
                                                 individual must notify
                                                 if he or she is
                                                 convicted of a criminal
                                                 drug offense resulting
                                                 from a violation
                                                 occurring during the
                                                 conduct of any award
                                                 activity.
(3) 2 CFR 182.500............  Sec.   1401.600  Who in the DOI is
                                                 authorized to determine
                                                 that a recipient other
                                                 than an individual is
                                                 in violation of the
                                                 requirements of 2 CFR
                                                 Part 182, as
                                                 implemented by this
                                                 part.
(4) 2 CFR 182.505............  Sec.   1401.605  Who in the DOI is
                                                 authorized to determine
                                                 that a recipient who is
                                                 an individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 Part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in Subparts A through F of 2 CFR Part 
182 that is not listed in paragraph (b) of this section, DOI policies 
and procedures are the same as those in the OMB guidance.



Sec.  1401.115  Are any of my Federal assistance awards exempt from 
this part?

    This part does not apply to any award if the Director, Office of 
Acquisition and Property Management (PAM), 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.



Sec.  1401.120  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.  1401.610(c). However, this part does not directly 
apply 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 48 CFR part 23, subpart 
23.5.



                          Subpart B_Definitions



Sec.  1401.205  Award.

    Award means an award of financial assistance by DOI 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

[[Page 529]]

grant is exempted from coverage under the Departmental rules at 43 CFR 
part 12, subpart C, ``Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments.''
    (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.
    (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.  1401.210  Controlled substance.

    Controlled substance means any controlled substance identified in 
schedules I through V of the Controlled Substances Act, 21 U.S.C. 812, 
and as further defined by regulations at 21 CFR 1308.11 through 1308.15.



Sec.  1401.215  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.  1401.220  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 section 1401.250), 
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.  1401.225  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.  1401.230  Debarment.

    Debarment means an action taken by a Federal agency to prohibit a 
recipient from participating in Federal Government procurement contracts 
and covered non-procurement 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 2 CFR part 180.



Sec.  1401.235  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.  1401.240  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 sub-recipients or subcontractors in covered workplaces).



Sec.  1401.245  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.

[[Page 530]]



Sec.  1401.250  Grant.

    Grant means an award of financial assistance that, consistent with 
31 U.S.C. 6304, is used to enter into a relationship whereby--
    (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.  1401.255  Individual.

    Individual means a natural person.



Sec.  1401.260  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.  1401.265  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.  1401.270  Suspension.

    Suspension means an action taken by a Federal agency that 
immediately prohibits a recipient from participating in Federal 
Government procurement contracts and covered non-procurement 
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 2 CFR part 180. Suspension of a recipient is a distinct 
and separate action from suspension of an award or suspension of 
payments under an award.



      Subpart C_Requirements for Recipients Other Than Individuals



Sec.  1401.300  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; and
    (2) Take actions concerning employees who are convicted of violating 
drug statutes in the workplace.
    (b) Second, you must identify all known workplaces under your 
Federal awards.



Sec.  1401.305  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.  1401.310  To whom must I distribute my drug-free workplace statement?

    You must require that a copy of the statement described in Sec.  
1401.305 be given to each employee who will be engaged in the 
performance of any Federal award.

[[Page 531]]



Sec.  1401.315  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.  1401.320  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.  1401.305 and an ongoing awareness 
program as described in Sec.  1401.315, 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  must have the policy statement
 is less than 30 days.                    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  must have the policy statement
 is 30 days or more.                      and program in place within 30
                                          days after award.
(c) You believe there are extraordinary  may ask the Department of the
 circumstances that will require more     Interior awarding official to
 than 30 days for you to publish the      give you more time to do so.
 policy statement and establish the       The amount of additional time,
 awareness program.                       if any, to be given is at the
                                          discretion of the awarding
                                          official.
------------------------------------------------------------------------



Sec.  1401.325  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.  1401.305(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.  1401.330  How and when must I identify workplaces?

    (a) You must identify all known workplaces under each DOI award. A 
failure to do so is a violation of your drug-free workplace 
requirements. You may identify the workplaces--
    (1) To the DOI 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 DOI 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

[[Page 532]]

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 DOI 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 DOI awarding official.



Sec.  1401.335  Whom in the DOI does a recipient other than an 
individual notify about a criminal drug conviction?

    The DOI is not designating a central location for the receipt of 
these reports. Therefore you shall provide this report to every grant 
officer, or other designee within a bureau or office of the Department 
on whose grant activity the convicted employee was working.



        Subpart D_Requirements for Recipients Who Are Individuals



Sec.  1401.400  What must I do to comply with this part if I am an
individual recipient?

    As a condition of receiving a DOI 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 Department of the Interior awarding official or other 
designee for each award that you currently have, unless Sec.  1401.401 
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 
identification number(s) of each affected award.



Sec.  1401.401  Whom in the DOI does a recipient who is an individual
notify about a criminal drug conviction?

    The DOI is not designating a central location for the receipt of 
these reports. Therefore you shall provide this report to every grant 
officer, or other designee within a bureau or office of the Department 
on whose grant activity the convicted employee was working.



 Subpart E_Responsibilities of Department of Interior Awarding Officials



Sec.  1401.500  What are my responsibilities as a DOI awarding official?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award:

    Drug-free workplace. You, as the recipient, must comply with drug-
free workplace requirements in subpart B (or subpart C, if the recipient 
is an individual) of part 1401, which adopts the government-wide 
implementation of 2 CFR part 182; sections 5152-5158 of the Drug-Free 
Workplace Act of 1988, Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 
701-707.



           Subpart F_Violations of this Part and Consequences



Sec.  1401.600  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 Director, PAM 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.

[[Page 533]]



Sec.  1401.605  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 Director, PAM 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.  1401.610  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.  1401.600 or Sec.  1401.605, DOI 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 2 CFR part 180, 
for a period not to exceed five years.



Sec.  1401.615  Are there any exceptions to those actions?

    The Secretary of the Interior 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 the Interior determines that such a waiver would be in 
the public interest. This exception authority cannot be delegated to any 
other official.



 PART 1402_FINANCIAL ASSISTANCE INTERIOR REGULATION, SUPPLEMENTING 
 THE UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT 
 REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



                          Subpart A_Definitions

Sec.
1402.1 Definitions.
1402.2 Employment.
1402.3 Financial Assistance Officer.
1402.4 Foreign entity.
1402.5 Non-Federal entity.
1402.6 Real property.

                      Subpart B_General Provisions

1402.100 Purpose.
1402.101 To whom does this part apply?
1402.102 Are there any exceptions to this part?
1402.103 What other policies or procedures must non-Federal entities 
          follow?
1402.104-1402.111 [Reserved]
1402.112 What are the conflict of interest policies?
1402.113 What are the mandatory disclosure requirements?
1402.114-1402.203 [Reserved]

 Subpart C_Pre-Federal Award Requirements and Contents of Federal Awards

1402.204 What are the merit review requirements for competitive awards?
1402.205 [Reserved]
1402.206 What are the FAIR requirements for domestic for-profit 
          entities?
1402.207 What specific conditions apply?
1402.208-1402.299 [Reserved]

                Subpart D_Post Federal Award Requirements

1402.300 What are the statutory and national policy requirements?
1402.301-1402.314 [Reserved]
1402.315 What are the requirements for the availability of data?
1402.316-1402.328 [Reserved]
1402.329 What are the requirements for land acquired under an award?
1402.330-1402.413 [Reserved]
1402.414 What are the negotiated indirect cost rate deviation policies?
1402.415-1402.999 [Reserved]

    Authority: 5 U.S.C. 301 and 2 CFR part 200.

    Source: 84 FR 45635, Aug. 30, 2019, unless otherwise noted.



                          Subpart A_Definitions



Sec.  1402.1  Definitions.

    The definitions in this subpart are for terms used in this part. For 
terms used in this part that are not defined, the definitions in 2 CFR 
part 200 apply. Different definitions may be found in Federal statutes 
or regulations that apply more specifically to particular programs or 
activities.



Sec.  1402.2  Employment.

    Employment includes any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee, whether to be undertaken at the same time

[[Page 534]]

as, or subsequent to Federal employment. It includes but is not limited 
to personal services as an officer, director, employee, agent, attorney, 
consultant, contractor, general partner, or trustee of the other 
organization.



Sec.  1402.3  Financial Assistance Officer.

    Financial Assistance Officer means a person with the authority to 
enter into, administer, and/or terminate financial assistance awards 
(including grants and cooperative agreements); and make related 
determinations and findings.



Sec.  1402.4  Foreign entity.

    Foreign entity means both ``foreign public entity'' and ``foreign 
organization,'' as defined in 2 CFR 200.46 and 200.47.



Sec.  1402.5  Non-Federal entity.

    Non-Federal entity means a State, local government, Indian tribe, 
institution of higher education (IHE), for-profit entity, or nonprofit 
organization that carries out a Federal award as a recipient or 
subrecipient.



Sec.  1402.6  Real property.

    Real property has the same meaning as set forth in 2 CFR 200.85, 
except that the definition in this section also applies to legal 
ownership interests in land such as easements.



                      Subpart B_General Provisions



Sec.  1402.100  Purpose.

    (a) The Uniform Administrative Requirements, Cost Principles, and 
Audit Requirements for Federal Awards set forth in 2 CFR part 200 apply 
to the Department of the Interior. This part adopts, as the Department 
of the Interior (DOI) policies and procedures, the Office of Management 
and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, 
and Audit Requirements set forth in 2 CFR part 200. The Uniform Guidance 
applies in full except as stated in this part.
    (b) This part establishes DOI financial assistance regulations that 
implement or supplement the OMB's Uniform Guidance. It is designed to 
ensure that financial assistance is administered in full compliance with 
applicable law, regulation, policy, and best practices to ensure the 
American people get the most value from the funds DOI awards on 
financial assistance. For supplemental guidance, DOI has adopted section 
numbering that corresponds to related OMB guidance in 2 CFR part 200.
    (c) This part extends 2 CFR part 200, subparts A through E, policies 
and procedures to foreign public entities and foreign organizations as 
allowed by 2 CFR 200.101, except as indicated throughout this part.



Sec.  1402.101  To whom does this part apply?

    (a) This part applies to all DOI grant-making activities and to any 
non-Federal entity that applies for, receives, operates, or expends 
funds from a DOI Federal award after October 29, 2019, unless otherwise 
authorized by Federal statute.
    (b) This part applies to foreign entity applicants and recipients, 
except where the DOI office or bureau determines that the application of 
this part would be inconsistent with the international obligations of 
the United States or the statutes or regulations of a foreign government 
(see Sec.  1402.102).
    (1) Foreign entities are subject to the definitions and requirements 
in 2 CFR part 200, subparts A through E, and as supplemented by this 
part. In addition to the general requirements in 2 CFR part 200, foreign 
entities must follow the special considerations and requirements for 
different classes of recipients in subparts A through E as follows, 
unless otherwise instructed in this part:
    (i) Foreign public entities are to follow those for States, with the 
exception of the State payment procedures in 2 CFR 200.305(a). Foreign 
public entities must follow the payment procedures for non-Federal 
entities other than States;
    (ii) Foreign nonprofit organizations are to follow those for 
nonprofits; and
    (iii) Foreign higher education institutions are to follow those for 
Institutions of Higher Education (IHEs).
    (2) [Reserved]

[[Page 535]]



Sec.  1402.102  Are there any exceptions to this part?

    (a) Awards made in accordance with the Indian Self-Determination and 
Education Assistance Act (Pub. L. 93-638, 88 Stat. 2204), as amended, 
are governed by 25 CFR parts 900 and 1000, and by 2 CFR part 200, 
subparts E and F.
    (b) Exceptions for individual foreign entities to the requirements 
in this part may be authorized by the Director, Office of Grants 
Management. Such exceptions must be made in accordance with written 
bureau or office policy and procedures.
    (1) Foreign entities must request any exception to a requirement 
established in this part in writing. Such requests must be submitted to 
the funding bureau or office by an authorized official of the foreign 
entity, and must provide sufficient pertinent background information, 
including:
    (i) Identification of the requirement under this part that is 
inconsistent with an in-country statute or regulation to which the 
foreign entity is subject;
    (ii) A complete description of the in-country statute or regulation, 
including a description of how it prohibits or otherwise limits the 
foreign entity's ability to comply with the identified requirement under 
this part; and
    (iii) Identification of the entity's name, DOI award(s) affected, 
and point of contact for the request.
    (2) The Director, Office of Grants Management may approve exceptions 
for individual foreign entities to the requirements of this part only 
when it has been determined that the requirement to be waived is 
inconsistent with either the international obligations of the United 
States or the statutes or regulations of a foreign government. Bureaus 
and offices will communicate exception request decisions to the 
requesting entity in writing.
    (3) Submissions by public international organization submissions of 
any assurances, certifications or representations required for and 
related to a Federal award do not constitute a waiver of immunities 
provided under the International Organizations Immunities Act (22 U.S.C. 
288-288f).
    (4) Foreign entities are not subject to the following requirements 
in 2 CFR part 200:
    (i) Foreign entities may be subject to other applicable 
international or in-country alternatives to generally accepted 
accounting principles (GAAP), such as the International Financial 
Reporting Standards (IFRS). See 2 CFR 200.403, Factors affecting 
allowability of costs;
    (ii) 2 CFR 200.321, Contracting with small and minority businesses, 
women's business enterprises, and labor surplus area firms; and
    (iii) Section 6002 of the Solid Waste Disposal Act. See 2 CFR 
200.322, Procurement of recovered materials.



Sec.  1402.103  What other policies or procedures must non-Federal
entities follow?

    Non-Federal entities must follow bureau or office policies and 
procedures as communicated in notices of funding opportunity (NOFOs) and 
award terms and conditions. In the event such policies or procedures 
conflict with 2 CFR part 200 or this part, 2 CFR part 200 or this part 
will supersede, unless otherwise authorized by Federal statute.



Sec. Sec.  1402.104-1402.111  [Reserved]



Sec.  1402.112  What are the conflict of interest policies?

    This section shall apply to all non-Federal entities. NOFOs and 
financial assistance awards must include the full text of the conflict 
of interest provisions in paragraphs (a) through (e) of this section.
    (a) Applicability. (1) This section intends to ensure that non-
Federal entities and their employees take appropriate steps to avoid 
conflicts of interest in their responsibilities under or with respect to 
Federal financial assistance agreements.
    (2) In the procurement of supplies, equipment, construction, and 
services by recipients and by subrecipients, the conflict of interest 
provisions in 2 CFR 200.318 apply.
    (b) Notification. (1) Non-Federal entities, including applicants for 
financial assistance awards, must disclose in writing any conflict of 
interest to the DOI awarding agency or pass-through

[[Page 536]]

entity in accordance with 2 CFR 200.112.
    (2) Recipients must establish internal controls that include, at a 
minimum, procedures to identify, disclose, and mitigate or eliminate 
identified conflicts of interest. The recipient is responsible for 
notifying the Financial Assistance Officer in writing of any conflicts 
of interest that may arise during the life of the award, including those 
that have been reported by subrecipients.
    (c) Restrictions on lobbying. Non-Federal entities are strictly 
prohibited from using funds under a grant or cooperative agreement for 
lobbying activities and must provide the required certifications and 
disclosures pursuant to 43 CFR part 18 and 31 U.S.C. 1352.
    (d) Review procedures. The Financial Assistance Officer will examine 
each conflict of interest disclosure on the basis of its particular 
facts and the nature of the proposed grant or cooperative agreement, and 
will determine whether a significant potential conflict exists and, if 
it does, develop an appropriate means for resolving it.
    (e) Enforcement. Failure to resolve conflicts of interest in a 
manner that satisfies the government may be cause for termination of the 
award. Failure to make required disclosures may result in any of the 
remedies described in 2 CFR 200.338, Remedies for noncompliance, 
including suspension or debarment (see also 2 CFR part 180).



Sec.  1402.113  What are the mandatory disclosure requirements?

    In addition to the disclosures required under 2 CFR 200.112 and 
200.113, non-Federal entities, including applicants for all Federal 
awards, must disclose in writing any potential or actual conflict of 
interest to the DOI awarding agency or pass-through entity. Non-Federal 
entities and applicants must also disclose any outstanding unresolved 
matters with the Government Accountability Office or an Office of 
Inspector General when submitting a proposal and through the life of the 
award as needed. Unresolved items are those items that do not have an 
approved (by the awarding agency) corrective action plan in place and 
remain open.



Sec. Sec.  1402.114-1402.203  [Reserved]



 Subpart C_Pre-Federal Award Requirements and Contents of Federal
 Awards



Sec.  1402.204  What are the merit review requirements for
competitive awards?

    The requirements in this section apply to competitive grants and 
cooperative agreements unless otherwise authorized by Federal statute. 
Merit review procedures must be described or incorporated by reference 
in NOFOs (see 2 CFR part 200, appendix I, and 2 CFR 200.203). Pre-award 
considerations for both discretionary competitive and noncompetitive 
awards shall take into account the alignment of the award's purpose, 
goals, and measurement with the current DOI Government Performance and 
Results Act Strategic Plan including, the mission statement, vision, 
values, goals, objectives, strategies, and performance metrics therein, 
unless otherwise prohibited by statute.
    (a) Competition in grant and cooperative agreement awards. 
Competition is expected in awarding discretionary funds, unless 
otherwise directed by Congress. When grants and cooperative agreements 
are awarded competitively, DOI requires that the competitive process be 
fair and impartial, that all applicants be evaluated only on the 
criteria stated in the announcement, and that no applicant receive an 
unfair competitive advantage. All competitive funding announcements, and 
all modifications/amendments to those announcements, must be posted on 
Grants.gov (www.grants.gov).
    (b) Independent objective evaluation of financial assistance 
applications and proposals. Bureaus and offices must conduct reviews of 
applications submitted in response to the announcement and for selecting 
applicants for award following established merit review procedures. 
Bureaus and offices must conduct comprehensive, impartial, and objective 
review of applications based on the criteria contained in the 
announcement by individuals who have no conflicts of interest with 
respect to the

[[Page 537]]

competing proposal/applications or applicants. Bureaus and offices must 
ensure reviewers are qualified, applications are scored on the basis of 
announced criteria, consideration is given to the level of applicant 
risk and past performance, applications are ranked, and funding 
determinations are made.
    (c) Evaluation and Selection Plan for notice of funding 
opportunities. Bureaus and offices must develop an Evaluation and 
Selection Plan in concert with the notice of funding opportunity to 
ensure consistency, and to outline and document the selection process. 
The Evaluation and Selection Plan should be finalized prior to the 
release of the notice of funding opportunity. An Evaluation and 
Selection Plan is comprised of five basic elements:
    (1) Merit review factors and sub-factors;
    (2) A rating system (e.g., adjectival, color coding, numerical, or 
ordinal);
    (3) Evaluation standards or descriptions that explain the basis for 
assignment of the various rating system grades/scores;
    (4) Program policy factors; and
    (5) The basis for selection.
    (d) Basic review standards. Bureaus and offices must initially 
screen applications/proposals to ensure that they meet the standards in 
paragraphs (e) through (g) of this section before they are subjected to 
a detailed evaluation utilizing a merit review process specified in 
paragraph (h) of this section. The review system should include three 
phases: Initial Screening, Threshold Screening, and a Merit Review 
Evaluation Screening. Bureaus and offices may remove an application from 
funding consideration if it does not pass the basic eligibility 
screening per paragraphs (e) through (g) of this section.
    (e) Completeness. Bureaus and offices may return applications/
proposals that are incomplete or otherwise fail to meet the requirements 
of the Grants.gov announcement to the applicant to be corrected, 
modified, or supplemented, or may reject the application/proposal 
outright. Until the application/proposal meets the substantive 
requirements of the announcement and this part, it shall not be given 
detailed evaluation. Bureaus and offices may use discretion to determine 
the length of time for applicants to resolve application deficiencies.
    (f) Timeliness. Bureaus and offices must consider the timeliness of 
the application submission. Applications that are submitted beyond the 
announced deadline date must be removed from the review process.
    (g) Threshold Screening. Bureaus and offices are responsible for 
screening applications and proposals for the adequacy of the budget and 
compliance with statutory and other requirements. The SF-424 and budget 
information (SF-424A, SF-424C, or OMB-approved alternate budget data 
collection) must be reviewed according to Department of the Interior 
policy.
    (h) Merit Review Evaluation Screening. This is the final review 
stage where the technical merit of the application/proposal is reviewed. 
In the absence of a program rule or statutory requirement, program 
officials shall develop criteria that include all aspects of technical 
merit. Bureaus and offices shall develop criteria that are conceptually 
independent of each other, but all-encompassing when taken together. 
While criteria will vary, the basic criteria shall focus reviewers' 
attention on the project's underlying merit (i.e., significance, 
approach, and feasibility). The criteria shall focus not only on the 
technical details of the proposed project but also on the broader 
importance or potential impact of the project. The criteria shall be 
easily understood.
    (i) Risk assessments. Bureaus and offices must also consider risk 
thresholds during application/proposal review process. Elements to be 
considered may include organization; single audit submissions, past 
performance; availability of necessary resources, equipment, or 
facilities; financial strength and management capabilities; and 
procurement procedures; or procedures for selecting and monitoring 
subrecipients or sub-vendors, if applicable. For all non-Federal 
entities that receive an award, the Financial Assistance Officer must 
document the risk analysis.
    (j) Requirements for proposal evaluators. Upon receipt of a 
Memorandum of Appointment, each proposal evaluator and advisor must sign 
and return a Conflict of Interest Certificate to the

[[Page 538]]

Financial Assistance Officer. If an actual or potential conflict of 
interest exists, the appointee may not evaluate or provide advice on a 
potential applicant's proposal until the conflict has been resolved or 
mitigated. Further, each proposal evaluator or advisor must agree to 
comply with any notice or limitation placed on the application. Upon 
completion of the review, the proposal evaluator or advisor shall return 
or destroy all copies of the application and accompanying proposals (or 
abstracts) to DOI; and unless authorized by the Financial Assistance 
Officer or agency designee, the reviewer shall not contact the non-
Federal entity concerning any aspect of the application.



Sec.  1402.205  [Reserved]



Sec.  1402.206  What are the FAIR requirements for domestic 
for-profit entities?

    (a) Requirements for domestic for-profit entities. (1) Section 
1402.207(a) contains standard award terms and conditions that always 
apply to for-profit entities and Sec.  1402.207(b) contains terms that 
apply to sub-awards or contracts with for-profit entities over the 
simplified acquisition threshold. Bureaus and offices must incorporate 
into awards to domestic for-profit organizations the award terms and 
conditions that always apply, either directly or by reference.
    (2) Bureaus and offices may apply the administrative guidelines in 
subparts A through D of 2 CFR part 200, the cost principles at 48 CFR 
part 31, subpart 31.2, and the procedures for negotiating indirect costs 
(detailed in Sec.  1402.414) to domestic for-profit entities.
    (3) Depending on the nature of a particular program, offices and 
bureaus may additionally develop program-specific administrative 
guidelines for domestic for-profits based on the requirements in 2 CFR 
part 200, subparts A through D, but may not apply more restrictive 
requirements than the requirements in 2 CFR part 200, subparts A through 
D, unless approved by OMB through a request to the Director, Office of 
Grants Management.
    (b) Requirements for award terms and conditions. Bureau and office 
award terms and conditions must be managed in accordance with the 
requirements in 2 CFR 200.210, Information contained in a Federal award.



Sec.  1402.207  What specific conditions apply?

    (a) The following financial assistance award terms and conditions 
always apply to domestic for-profit entities:
    (1) 2 CFR part 25, Universal Identifier and System for Award 
Management.
    (2) 2 CFR part 170, Reporting Subawards and Executive Compensation 
Information.
    (3) 2 CFR part 175, Award Term for Trafficking in Persons.
    (4) 2 CFR part 1400, government-wide debarment and suspension (non-
procurement).
    (5) 2 CFR part 1401, Requirements for Drug-Free Workplace (Financial 
Assistance).
    (6) 43 CFR part 18, New Restrictions on Lobbying. Submission of an 
application also represents the applicant's certification of the 
statements in 43 CFR part 18, appendix A, Certification Regarding 
Lobbying.
    (7) 41 U.S.C. 4712, Whistleblower Protection for Contractor and 
Grantee Employees. The requirement in this paragraph (a)(7) applies to 
all awards issued after July 1, 2013.
    (8) 41 U.S.C. 6306, Prohibition on Members of Congress Making 
Contracts with the Federal Government. No member of or delegate to the 
United States Congress or Resident Commissioner shall be admitted to any 
share or part of this award, or to any benefit that may arise therefrom; 
this paragraph (a)(8) shall not be construed to extend to an award made 
to a corporation for the public's general benefit.
    (9) Executive Order 13513, Federal Leadership on Reducing Text 
Messaging while Driving. Recipients are encouraged to adopt and enforce 
policies that ban text messaging while driving, including conducting 
initiatives of the type described in section 3(a) of the Executive 
Order.
    (b) The following financial assistance award terms and conditions 
always apply to non-profit and domestic for-profit entities. The 
recipient shall insert the following clause in all subawards and 
contracts related to the

[[Page 539]]

prime award that are over the simplified acquisition threshold, as 
defined in the Federal Acquisition Regulation:

    All awards and related subawards and contracts over the Simplified 
Acquisition Threshold, and all employees working on applicable awards 
and related subawards and contracts, are subject to the whistleblower 
rights and remedies in accordance with the pilot program on award 
recipient employee whistleblower protections established at 41 U.S.C. 
4712 by section 828 of the National Defense Authorization Act for Fiscal 
Year 2013 (Pub. L. 112-239).
    Recipients, their subrecipients and contractors that are awarded 
contracts over the Simplified Acquisition Threshold related to an 
applicable award, shall inform their employees, in writing, in the 
predominant language of the workforce, of the employee whistleblower 
rights and protections under 41 U.S.C. 4712.

    (c) The following award terms and conditions apply to for-profit 
recipients as specified in 2 CFR 200.101:
    (1) Administrative requirements: 2 CFR part 200, subparts A through 
D.
    (2) Cost principles: 48 CFR part 31, subpart 31.2, Contracts with 
Commercial Organizations.
    (3) Indirect cost rate negotiations. For information on indirect 
cost rate negotiations, contact the Interior Business Center (IBC) 
Indirect Cost Services Division by telephone at (916) 566-7111 or by 
email at [email protected]. Visit the IBC Indirect Cost Services Division 
website at http://www.doi.gov/ibc/services/Indirect_ Cost_ Services/
index.cfm for more information.



Sec. Sec.  1402.208-1402.399  [Reserved]



                Subpart D_Post Federal Award Requirements



Sec.  1402.300  What are the statutory and national policy requirements?

    (a) DOI bureaus and offices will communicate to the non-Federal 
entity all relevant public policy requirements, including those in 
general appropriations provisions, and incorporate them either directly 
or by reference in the terms and conditions of the Federal award.
    (b) The non-Federal entity is responsible for complying with all 
requirements of the Federal award. For all Federal awards, this includes 
the provisions of Federal Funding Accountability and Transparency Act 
(FFATA), which includes requirements on executive compensation, and also 
requirements implementing the FFATA for the non-Federal entity at 2 CFR 
part 25, financial assistance use of universal identifier and system for 
award management, and 2 CFR part 170, Reporting Subaward and Executive 
Compensation Information. See also statutory requirements for 
whistleblower protections at 10 U.S.C. 2409, 41 U.S.C. 4712, and 10 
U.S.C. 2324, 41 U.S.C. 4304 and 4310.
    (c) Recipients conducting work outside the United States are 
responsible for coordinating with appropriate United States and foreign 
government authorities as necessary to make sure all required licenses, 
permits, or approvals are obtained before undertaking project 
activities. DOI does not assume responsibility for recipient compliance 
with the laws, regulations, policies, or procedures of the foreign 
country in which the work is conducted.
    (d) As required in 54 U.S.C. 307101, World Heritage Convention, 
prior to the approval of any undertaking outside the United States that 
may directly and adversely affect a property that is on the World 
Heritage List or on the applicable country's equivalent of the National 
Register of Historic Places, the DOI bureau or office having direct or 
indirect jurisdiction over the undertaking shall take into account the 
effect of the undertaking on the property for purposes of avoiding or 
mitigating any adverse effect.
    (e) Foreign entities are responsible for complying with all 
requirements of the Federal award. For awards to foreign entities, this 
includes:
    (1) 2 CFR part 25, Universal Identifier and System for Award 
Management, unless the entity meets one or more qualifying conditions 
and is exempted by the awarding bureau or office as provided for in 2 
CFR part 25;
    (2) 2 CFR part 170, Reporting Subaward and Executive Compensation 
Information;
    (3) 2 CFR part 175, Award Term for Trafficking in Persons. This term 
is required in awards to foreign private entities. The term is also 
required in

[[Page 540]]

awards to foreign public entities, if funding could be provided under 
the award to a foreign private entity as a subrecipient;
    (4) 2 CFR part 1400, Nonprocurement Debarment and Suspension. Awards 
to foreign organizations are covered transactions under the DOI 
nonprocurement debarment and suspension program. Awards to foreign 
public entities are not covered transactions;
    (5) 43 CFR part 18, New Restrictions on Lobbying. Foreign entities 
shall file the 43 CFR part 18, appendix A, certification, and a 
disclosure form, if required, with each application for Federal 
assistance. See also 31 U.S.C. 1352, Limitation on use of appropriated 
funds to influence certain Federal contracting and financial 
transactions; and
    (6) Public Law 113-235 (128 Stat. 2391, Dec. 16, 2014). Federal 
award recipients are prohibited from requiring employees or contractors 
seeking to report fraud, waste, or abuse to sign internal 
confidentiality agreements or statements prohibiting or otherwise 
restricting such employees or contractors from lawfully reporting such 
waste, fraud, or abuse to a designated investigative or law enforcement 
representative of a Federal department or agency authorized to receive 
such information.



Sec. Sec.  1402.301-1402.314  [Reserved]



Sec.  1402.315  What are the requirements for availability of data?

    (a) All data, methodology, factual inputs, models, analyses, 
technical information, reports, conclusions, valuation products or other 
scientific assessments in any medium or form, including textual, 
numerical, graphic, cartographic, narrative, or audiovisual, resulting 
from a financial assistance agreement is available for use by the 
Department of the Interior, including being available in a manner that 
is sufficient for independent verification.
    (b) The Federal Government has the right to:
    (1) Obtain, reproduce, publish, or otherwise use the data, 
methodology, factual inputs, models, analyses, technical information, 
reports, conclusions, or other scientific assessments, produced under a 
Federal award; and
    (2) Authorize others to receive, reproduce, publish, or otherwise 
use such data, methodology, factual inputs, models, analyses, technical 
information, reports, conclusions, or other scientific assessments, for 
Federal purposes, including to allow for meaningful third-party 
evaluation.
    (c) Bureaus and offices of the Department of the Interior must 
include the language in paragraphs (a) and (b) of this section in full 
text in all NOFOs and financial assistance agreements.



Sec. Sec.  1402.316-1402.328  [Reserved]



Sec.  1402.329  What are the requirements for land acquired under
an award?

    (a) Approval prior to land purchases. Bureaus and offices must 
ensure compliance with the prior written approval requirements for land 
acquisition in 2 CFR 200.439. Whenever a recipient is seeking DOI's 
approval to use award funds to purchase an interest in real property, 
the OMB-approved governmentwide data elements for collection of real 
property reporting information, as of October 29, 2019, SF-429-B, 
Request to Acquire, Improve, or Furnish, or approved alternate 
standardized data collection, must be submitted to the bureau or office. 
The Financial Assistance Officer is responsible for ensuring that this 
requirement is met. All aspects of the purchase must be in compliance 
with applicable laws and regulations relating to purchases of land or 
interests in land.
    (b) Appraisal requirements for land purchases. (1) Unless a waiver 
valuation applies in accordance with 49 CFR 24.102(c), land or interests 
in land that will be acquired under the award must be appraised in 
accordance with the Uniform Appraisal Standards for Federal Land 
Acquisitions, (UASFLA or the ``Yellow Book''), developed and promulgated 
by the Interagency Land Acquisition Conference, 1155 15th Street NW, 
Suite 1111, Washington, DC 20005, by a real property appraiser licensed 
or certified by the State or States in which the property is located. 
The appraisal report shall be reviewed by a qualified review appraiser 
that meets qualifications established by the DOI

[[Page 541]]

Appraisal and Valuation Services Office (AVSO), which is responsible for 
appraisal and valuation services and policy across the Department. 
Bureaus and offices shall ensure that funds are not disbursed for 
purchases of land or interests in land without an appraisal accompanied 
by a written appraisal review report that complies with standards 
approved by AVSO. Where appraisals are required to support federally 
assisted land acquisitions, AVSO has oversight responsibilities for 
these appraisals, including those purchased through financial assistance 
actions in the various grant programs within the Department. AVSO will 
coordinate with grant programs to conduct periodic internal control 
review of appraisal and appraisal review reports prepared in conjunction 
with grant applications for land acquisition.
    (2) The Director of the Federal Register approves the material 
referenced in this section for incorporation by reference into this 
section in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. You may 
inspect a copy at the Appraisal and Valuation Services Office within the 
Department of the Interior located at 1849 C St. NW, Washington, DC 
20240, (202) 208-3466, or at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, email [email protected] or go to www.archives.gov/
federal-register/cfr/ibr-locations.html.
    (i) Interagency Land Acquisition Conference, 1155 15th Street NW, 
Suite 1111, Washington, DC 20005.
    (A) Uniform Appraisal Standards for Federal Land Acquisitions, Sixth 
Edition, 2016.
    (B) You may obtain a print copy or interactive electronic version 
from The Appraisal Foundation at https://www.appraisal foundation.org/
iMIS/item Detail ?iProduct Code=351& Category= PUB or a read-only 
version from the U.S. Department of Justice at https://www.justice.gov/
file/408306/download.
    (ii) [Reserved]
    (c) Foreign land acquisition. Land to be acquired under an award 
that is located outside the United States must be appraised by an 
independent real property appraiser licensed or certified in the country 
in which the property is located in accordance with any in-country 
appraisal standards, if they exist, or with International Valuation 
Standards, when such appraisals are available and financially feasible. 
Otherwise, the non-Federal entity must use the most widely accepted 
business practice for property valuation in the country where the 
property is located and provide to the awarding DOI bureau or office a 
detailed explanation of the methodology used to determine value.
    (d) Requirements for recipient reporting on real property purchases. 
(1) For all financial assistance actions where real property is acquired 
under the Federal award, the recipient must submit reports on the status 
of the real property. Bureaus and offices must ensure recipients receive 
written notification of those reporting requirements, including 
reporting frequency/schedule, report content requirements, and 
submission instructions, at the time of award.
    (2) If the interest in the land will be held for less than 15 years, 
reports must be submitted annually. If the interest in the land will be 
held for 15 years or more, then the recipient must submit the first 
report within one year of the period of performance end date of the 
award and then, at a minimum, every five years thereafter.
    (3) The reports must be submitted to the Financial Assistance 
Officer within the period of performance of the award. After the end of 
the period of performance, reports must be submitted to a designated 
individual. Each bureau must have a process in place to designate 
specific individuals to receive, and review and accept the report.
    (4) Recipients must use the OMB-approved governmentwide data 
elements for collection of real property reporting information, as of 
October 29, 2019, the Real Property Status Report Standard Form (SF) 
429-A, General Reporting, to report status of land or interests in land 
under Federal financial assistance awards. Bureaus or offices may 
request to use an equivalent reporting format. The Director, Office of 
Grants Management must approve alternate equivalent formats.

[[Page 542]]

    (5) Reports must include, at a minimum, sufficient information to 
demonstrate that all conditions imposed on the land use are being met, 
and a signed certification to that fact by the recipient of the 
financial assistance award.
    (6) The Financial Assistance Officer must indicate the reporting 
schedule, including due dates, in the award document. The schedule must 
conform with the frequency required in paragraph (d)(2) of this section. 
For awards issued prior to October 29, 2019, the recipient must contact 
the program to establish due dates for reports going forward. If there 
is already a reporting schedule in place, then the recipient and the 
program shall ensure that the schedule is updated to conform with this 
part prior to the due date of the next scheduled report.



Sec. Sec.  1402.330-1402.413  [Reserved]



Sec.  1402.414  What are the negotiated indirect cost rate deviation
policies?

    (a) This section establishes DOI policies, procedures, and decision 
making criteria for using an indirect cost rate that differs from the 
non-Federal entity's negotiated rate or approved rate for DOI awards. 
These are established in accordance with 2 CFR 200.414(c)(3) or (f).
    (b) DOI accepts indirect cost rates that have been reduced or 
removed voluntarily by the proposed recipient of the award, on an award-
specific basis.
    (c) For all deviations to the Federal negotiated indirect cost rate, 
including statutory, regulatory, programmatic, and voluntary, the basis 
of direct costs against which the indirect cost rate is applied must be:
    (1) The same base identified in the recipient's negotiated indirect 
cost rate agreement, if the recipient has a federally negotiated 
indirect cost rate agreement; or
    (2) The Modified Total Direct Cost (MTDC) base, in cases where the 
recipient does not have a federally negotiated indirect cost rate 
agreement or, with prior approval of the awarding bureau or office, when 
the recipient's federally negotiated indirect cost rate agreement base 
is only a subset of the MTDC (such as salaries and wages) and the use of 
the MTDC still results in an overall reduction in the total indirect 
cost recovered. MTDC is the base defined by 2 CFR 200.68, Modified Total 
Direct Cost (MTDC).
    (d) In cases where the recipient does not have a federally 
negotiated indirect cost rate agreement, DOI will not use a modified 
rate based upon total direct cost or other base not identified in the 
federally negotiated indirect cost rate agreement or defined within 2 
CFR 200.68.
    (1) Indirect cost rate deviation required by statute or regulation. 
In accordance with 2 CFR 200.414(c)(1), a Federal agency must use a rate 
other than the Federal negotiated rate where required by Federal statute 
or regulation. For such instances within DOI, the official award file 
must document the specific statute or regulation that required the 
deviation.
    (2) Indirect cost rate reductions used as cost-share. Instances 
where the recipient elects to use a rate lower than the federally 
negotiated indirect cost rate, and uses the balance of the unrecovered 
indirect costs to meet a cost-share or matching requirement required by 
the program and/or statute, are not considered a deviation from 2 CFR 
200.414(c), as the federally negotiated indirect cost rate is being 
applied under the agreement in order to meet the terms and conditions of 
the award.
    (3) Programmatic indirect cost rate deviation approval process. 
Bureaus and offices with DOI approved deviations in place prior to 
October 29, 2019 are not required to resubmit those for reconsideration 
following the procedures in this paragraph (d)(3). The following 
requirements apply for review, approval, and posting of programmatic 
indirect cost rate waivers:
    (i) Program qualifications. Programs that have instituted a program-
wide requirement and governance process for deviations from federally 
negotiated indirect cost rates may qualify for a programmatic deviation 
approval.
    (ii) Deviation requests. Deviation requests must be submitted by the 
responsible senior program manager to the DOI Office of Grants 
Management. The request for deviation approval

[[Page 543]]

must include a description of the program, and the governance process 
for negotiating and/or communicating to recipients the indirect cost 
rate requirements under the program. The program must make its 
governance documentation, rate deviations, and other program information 
publicly available.
    (iii) Approvals. Programmatic deviations must be approved, in 
writing, by the Director, Office of Grants Management. Approved 
deviations will be made publicly available.
    (4) Voluntary indirect cost rate reduction. On any single award, an 
applicant and/or proposed recipient may elect to reduce or eliminate the 
indirect cost rate applied to costs under that award. The election must 
be voluntary and cannot be required by the awarding official, NOFO, 
program, or other non-statutory or non-regulatory requirements. For 
these award-specific and voluntary reductions, DOI can accept the lower 
rate provided the notice of award clearly documents the recipient's 
voluntary election. Once DOI has accepted the lower rate, that rate will 
apply for the duration of the award.
    (5) Unrecovered indirect costs. In accordance with 2 CFR 200.405, 
indirect costs not recovered due to deviations to the federally 
negotiated rate are not allowable for recovery via any other means.



Sec. Sec.  1402.415-1402.499  [Reserved]

                       PARTS 1403	1499 [RESERVED]

[[Page 545]]



               CHAPTER XV--ENVIRONMENTAL PROTECTION AGENCY




  --------------------------------------------------------------------
Part                                                                Page
1500            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         547
1501-1531

 [Reserved]

1532            Nonprocurement debarment and suspension.....         553
1536            Requirements for drug-free workplace 
                    (financial assistance)..................         561
1537-1599

 [Reserved]

[[Page 547]]



PART 1500_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



                   Subpart A_Acronyms and Definitions

1500.1 Definitions.

                      Subpart B_General Provisions

Sec.
1500.2 Adoption of 2 CFR part 200.
1500.3 Applicability.
1500.4 Exceptions.
1500.5 Supersession.

Subpart C_Pre-Federal Award Requirements and Contents of Federal Awards.

1500.6 Fixed Amount Awards.

               Subpart D_Post Federal Award Requirements.

             Standards for Financial and Program Management

1500.7 Retention requirements for records.
1500.8 Program income.
1500.9 Revision of budget and program plans.

                          Procurement Standards

1500.10 General procurement standards.
1500.11 Use of the same architect or engineer during construction.

           Performance and Financial Monitoring and Reporting

1500.12 Quality Assurance.

                           Subpart E_Disputes.

1500.13 Purpose and scope of this subpart.
1500.14 Definitions.
1500.15 Submission of Dispute.
1500.16 Notice of receipt of Dispute to Affected Entity.
1500.17 Determination of Dispute.

    Authority: 5 U.S.C. 301, 7 U.S.C. 136 et seq., 15 U.S.C. 2601 et 
seq., 20 U.S.C. 4011 et seq., 33 U.S.C. 1251 et seq., and 1401 et seq., 
42 U.S.C. 241, 242b, 243, 246, 300f et seq., 1857 et seq., 6901 et seq., 
7401 et seq., and 9601 et seq.; 2 CFR part 200.

    Source: 79 FR 76050, Dec. 19, 2014, unless otherwise noted.



                   Subpart A_Acronyms and Definitions

    Source: 85 FR 61573, Sept. 30, 2020, unless otherwise noted.



Sec.  1500.1  Definitions.

    (a) Participant support costs. The Environmental Protection Agency 
(EPA) has supplemented 2 CFR 200.1, Participant support costs, to 
provide that allowable participant support costs under EPA assistance 
agreements include:
    (1) Rebates or other subsidies provided to program participants for 
purchases and installations of commercially available, standard (``off 
the shelf'') pollution control equipment or low emission vehicles under 
the Diesel Emission Reduction Act program or programs authorized by EPA 
appropriation acts and permitted by terms specified in EPA assistance 
agreements or guidance, when the program participant rather than the 
recipient owns the equipment.
    (2) Subsidies, rebates, and other payments provided to program 
beneficiaries to encourage participation in statutorily authorized 
programs to encourage environmental stewardship and enable the public to 
participate in EPA funded research, pollution abatement, and other 
projects or programs to the extent permitted by statutes and terms 
specified in EPA assistance agreements or guidance.
    (b) [Reserved]



                      Subpart B_General Provisions



Sec.  1500.2  Adoption of 2 CFR Part 200.

    Under the authority listed above the Environmental Protection Agency 
adopts the Office of Management and Budget (OMB) guidance Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements for 
Federal Awards to Non-Federal Entities (subparts A through F of 2 CFR 
part 200), as supplemented by this part, as the Environmental Protection 
Agency (EPA) policies and procedures for financial assistance 
administration. This part satisfies the requirements of 2

[[Page 548]]

CFR 200.110(a) and gives regulatory effect to the OMB guidance as 
supplemented by this part. EPA also has programmatic regulations located 
in 40 CFR Chapter 1 Subchapter B.

[79 FR 76050, Dec. 19, 2014. Redesignated at 85 FR 61573, Sept. 30, 
2020]



Sec.  1500.3  Applicability.

    (a) Uniform administrative requirements and cost principles 
(subparts A through E of 2 CFR part 200 as supplemented by this part) 
apply to foreign public entities or foreign organizations, except where 
EPA determines that the application of this part would be inconsistent 
with the international obligations of the United States or the statutes 
or regulations of a foreign government.
    (b) Requirements for subrecipient monitoring and management at 2 CFR 
200.331 through 200.333 do not apply to loan, loan guarantees, interest 
subsidies and principal forgiveness, purchases of insurance or local 
government debt or similar transactions with borrowers by recipients of 
Clean Water State Revolving Fund (CWSRF) capitalization grants and 
Drinking Water State Revolving Fund (DWSRF) capitalization grants. 
Requirements for reporting subaward and executive compensation in 2 CFR 
part 170 and internal controls described at 2 CFR 200.303 continue to 
apply to CWSRF and DWSRF grant recipients and borrowers.

[85 FR 61573, Sept. 30, 2020]



Sec.  1500.4  Exceptions.

    Consistent with 2 CFR 200.102(b):
    (a) In the EPA, the Director, Office of Grants and Debarment or 
designee, is authorized to grant exceptions on a case-by-case basis for 
non-Federal entities.
    (b) The EPA Director or designee is also authorized to approve 
exceptions, on a class or an individual case basis, to EPA program 
specific assistance regulations other than those which implement 
statutory and executive order requirements.

[79 FR 76050, Dec. 19, 2014. Redesignated at 85 FR 61573, Sept. 30, 
2020]



Sec.  1500.5  Supersession.

    Effective December 26, 2014, this part supersedes the following 
regulations under Title 40 of the Code of Federal Regulations:
    (a) 40 CFR part 30, ``Uniform Administrative Requirements for Grants 
and Agreements with Institutions of Higher Education, Hospitals, and 
other Non-profit Organizations.''
    (b) 40 CFR part 31, ``Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments.''

[79 FR 76050, Dec. 19, 2014. Redesignated at 85 FR 61573, Sept. 30, 
2020]



 Subpart C_Pre-Federal Award Requirements and Contents of Federal Awards



Sec.  1500.6  Fixed Amount Awards.

    In the EPA, programs awarding fixed amount awards will do so in 
accordance with guidance issued from the Office of Grants and Debarment. 
(See 2 CFR 200.201(b)).

[79 FR 76050, Dec. 19, 2014. Redesignated at 85 FR 61573, Sept. 30, 
2020]



               Subpart D_Post Federal Award Requirements.

             Standards for Financial and Program Management



Sec.  1500.7  Retention requirements for records.

    (a) In the EPA, some programs require longer retention requirements 
for records by statute.
    (b) When there is a difference between the retention requirements 
for records of the Uniform Administrative Requirements, Cost Principles, 
and Audit Requirements for Federal Awards (2 CFR 200.333) and the 
applicable statute, the non-federal entity will follow to the retention 
requirements for records in the statute.

[79 FR 76050, Dec. 19, 2014. Redesignated at 85 FR 61573, Sept. 30, 
2020]



Sec.  1500.8  Program income.

    (a) Governmental revenues. Permit fees are governmental revenue and 
not program income. (See 2 CFR 200.307(c)).

[[Page 549]]

    (b) Use of program income. The default use of program income for EPA 
awards is addition even if the amount of program income the non-Federal 
entity generates exceeds the anticipated amount at time of the award of 
the assistance agreement. Unless the terms of the agreement provide 
otherwise, recipients may deduct costs incidental to the generation of 
program income from gross income to determine program income, provided 
these costs have not been charged to any Federal award. (See 2 CFR 
200.307(b)). The program income shall be used for the purposes and under 
the conditions of the assistance agreement. (See 2 CFR 200.307(e)(2)).
    (c) Brownfields Revolving Loan. To continue the mission of the 
Brownfields Revolving Loan fund, recipients may use EPA grant funding 
prior to using program income funds generated by the revolving loan 
fund. Recipients may also keep program income at the end of the 
assistance agreement as long as they use these funds to continue to 
operate the revolving loan fund or some other brownfield purpose as 
outlined in their respective closeout agreements.
    (d) Other revolving loan programs. Recipients of EPA funding for 
other revolving loan fund programs may use EPA grant funding prior to 
using program income funds generated by the revolving loan fund. 
Recipients may also keep program income at the end of the assistance 
agreement as long as they use these funds to continue to operate the 
revolving loan fund or some other authorized purpose as outlined in 
their closeout agreement. This paragraph (d) does not apply to EPA's 
Clean Water State Revolving Fund and Drinking Water State Revolving Fund 
programs which are subject to their own regulations.

[85 FR 61574, Sept. 30, 2020]



Sec.  1500.9  Revision of budget and program plans.

    Pre-award Costs. EPA award recipients may incur allowable project 
costs 90 calendar days before the Federal awarding agency makes the 
Federal award. Expenses more than 90 calendar days pre-award require 
prior approval of EPA. All costs incurred before EPA makes the award are 
at the recipient's risk. EPA is under no obligation to reimburse such 
costs if for any reason the recipient does not receive a Federal award 
or if the Federal award is less than anticipated and inadequate to cover 
such costs.

[79 FR 76050, Dec. 19, 2014. Redesignated at 85 FR 61573, Sept. 30, 
2020]

                          Procurement Standards



Sec.  1500.10  General procurement standards.

    (a) EPA will limit its participation in the salary rate (excluding 
overhead) paid to individual consultants retained by recipients, and 
their contractors or subcontractors to the maximum daily rate for level 
4 of the Executive Schedule unless a greater amount is authorized by 
law. (These non-Federal entities may, however, pay consultants more than 
this amount with non-EPA funds.) The limitation in this paragraph (a) 
applies to consultation services of designated individuals with 
specialized skills who are paid at a daily or hourly rate. This rate 
does not include transportation and subsistence costs for travel 
performed; recipients will pay these in accordance with their normal 
travel reimbursement practices.
    (b) All contracts between recipients and subrecipients and 
individual consultants are subject to the procurement standards in 
subpart D of 2 CFR part 200. Contracts or subcontracts with multi-
employee firms for consulting services are not affected by the 
limitation in paragraph (a) of this section provided the contractor or 
subcontractor rather than the recipient or subrecipient selects, directs 
and controls individual employees providing consulting services.
    (c) Borrowers under EPA revolving loan fund capitalization grant 
programs are not subject to paragraphs (a) and (b) of this section.

[85 FR 61574, Sept. 30, 2020]



Sec.  1500.11  Use of the same architect or engineer during construction.

    (a) If the recipient is satisfied with the qualifications and 
performance of the architect or engineer who provided any or all of the 
facilities planning or

[[Page 550]]

design services for a waste-water treatment works project and wishes to 
retain that firm or individual during construction of the project, it 
may do so without further public notice and evaluation of 
qualifications, provided:
    (1) The recipient received a facilities planning (Step 1) or design 
grant (Step 2), and selected the architect or engineer in accordance 
with EPA's procurement regulations in effect when EPA awarded the grant; 
or
    (2) The award official approves noncompetitive procurement under 2 
CFR 200.320(f) for reasons other than simply using the same individual 
or firm that provided facilities planning or design services for the 
project; or
    (3) The recipient attests that:
    (i) The initial request for proposals clearly stated the possibility 
that the firm or individual selected could be awarded a subaward for 
services during construction; and
    (ii) The firm or individual was selected for facilities planning or 
design services in accordance with procedures specified in this section.
    (iii) No employee, officer or agent of the recipient, any member of 
their immediate families, or their partners have financial or other 
interest in the firm selected for award; and
    (iv) None of the recipient's officers, employees or agents solicited 
or accepted gratuities, favors or anything of monetary value from 
contractors or other parties to subawards.
    (b) However, if the recipient uses the procedures in paragraph (a) 
of this section to retain an architect or engineer, any Step 3 subawards 
between the architect or engineer and the grantee must meet all of the 
other procurement provisions in 2 CFR 200.317 through 200.326.

[79 FR 76050, Dec. 19, 2014. Redesignated at 85 FR 61573, Sept. 30, 
2020]

           Performance and Financial Monitoring and Reporting



Sec.  1500.12  Quality Assurance.

    (a) Quality assurance applies to all assistance agreements that 
involve environmentally related data operations, including environmental 
data collection, production or use.
    (b) Recipients shall develop a written quality assurance system 
commensurate with the degree of confidence needed for the 
environmentally related data operations.
    (c) If the recipient complies with EPA's quality policy, the system 
will be presumed to be in compliance with the quality assurance system 
requirement. The recipient may also comply with the quality assurance 
system requirement by complying with American National Standard ASQ/ANSI 
E4:2014: Quality management systems for environmental information and 
technology programs.
    (d) The recipient shall submit the written quality assurance system 
for EPA review. Upon EPA's written approval, the recipient shall 
implement the EPA-approved quality assurance system.
    (e) EPA Quality Policy is available at: http://www.epa.gov/quality.
    (f) The standards required in this section are incorporated by 
reference into this section with the approval of the Director of the 
Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51.
    The material is available for inspection at the Environmental 
Protection Agency's Headquarters Library, Room 3340, EPA West Building, 
1301 Constitution Avenue NW., Washington, DC 20004, (202) 566-0556. A 
copy is also available for inspection at the National Archives and 
Records Administration (NARA). For information on the availability of 
this material at NARA, call 202-741-6030, or go to: http://
www.archives.gov/federal_ register/code_ of_ federal_ regulations/ibr_ 
locations.html.
    (1) American Society for Quality, 600 North Plankinton Avenue, 
Milwaukee, WI 53201, 1-800-248-1946, http://asq.org.
    (i) American National Standard ASQ/ANSI E4:2014: Quality management 
systems for environmental information and technology programs--
Requirements with guidance for use, approved February 4, 2014.
    (ii) Reserved.
    (2) Reserved.

[79 FR 76050, Dec. 19, 2014, as amended at 80 FR 61088, Oct. 9, 2015. 
Redesignated at 85 FR 61573, Sept. 30, 2020]

[[Page 551]]



                           Subpart E_Disputes



Sec.  1500.13  Purpose and scope of this subpart.

    (a) This section provides the process for the resolution of pre-
award and post-award assistance agreement disputes as described in Sec.  
1500.14, except for:
    (1) Assistance agreement competition-related disputes which are 
covered by EPA's Grant Competition Dispute Resolution Procedures; and,
    (2) Any appeal process relating to an award official's determination 
that an entity is not qualified for award that may be developed pursuant 
to guidance implementing Section 872 of the Duncan Hunter National 
Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417, as 
amended).
    (b) Pre-award and post-award disagreements between affected entities 
and EPA related to an assistance agreement should be resolved at the 
lowest level possible. If an agreement cannot be reached, absent any 
other applicable statutory or regulatory dispute provisions, affected 
entities must follow the dispute procedures outlined in this subpart.
    (c) Determinations affecting assistance agreements made under 
certain Agency decision-making processes are not subject to review under 
the procedures in this subpart or the Agency's procedures for resolving 
assistance agreement competition-related disputes. These determinations 
include, but are not limited to:
    (1) Decisions on requests for exceptions under Sec.  1500.4;
    (2) Bid protest decisions under 2 CFR 200.318(k);
    (3) National Environmental Policy Act decisions under 40 CFR part 6;
    (4) Policy decisions of the EPA Internal Audit Dispute Resolution 
Process (formerly known as Audit Resolution Board);
    (5) Suspension and Debarment Decisions under 2 CFR parts 180 and 
1532;
    (6) Decisions to decline to fund non-competitive applications or not 
to award incremental or supplemental funding based on the availability 
of funds or agency priorities;
    (7) Decisions on requests for reconsideration of specific award 
conditions under 2 CFR 200.208;
    (8) Decisions to deny requests for no-cost extensions under 2 CFR 
200.308(e)(2), 40 CFR 35.114(b), and 40 CFR 35.514(b); and
    (9) Denials of requests for EPA approval of procurement through 
noncompetitive proposals under 2 CFR 200.320(c)(4).

[79 FR 76050, Dec. 19, 2014. Redesignated at 85 FR 61573, Sept. 30, 
2020]



Sec.  1500.14  Definitions.

    As used in this subpart:
    (a) Action Official (AO) is the EPA official who authors the Agency 
Decision to the Affected Entity regarding a pre-award or post-award 
matter.
    (b) Affected Entity is an entity that applies for and/or receives 
Federal financial assistance from EPA including but not limited to: 
State and local governments, Indian Tribes, Intertribal Consortia, 
Institutions of Higher Education, Hospitals, and other Non-profit 
Organizations, and Individuals.
    (c) Agency Decision is the agency's initial pre-award or post-award 
assistance agreement determination that may be disputed in accordance 
with this subpart. The Agency Decision is sent by the Action Official 
(AO) to the Affected Entity electronically and informs them of their 
dispute rights and identifies the Dispute Decision Official (DDO). An 
Agency Decision based on audit findings serves as EPA's Management 
decision as defined in 2 CFR part 200.1.
    (d) Dispute is a disagreement by an Affected Entity with a specific 
Agency Decision submitted to the DDO in accordance with this subpart.
    (e) Dispute Decision Official (DDO) is the designated agency 
official responsible for issuing a decision resolving a Dispute.
    (1) The DDO for a Headquarters Dispute is the Director of the Grants 
and Interagency Agreement Management Division in the Office of Grants 
and Debarment or designee. To provide for a fair and impartial review, 
the AO for the challenged Agency Decision may not serve as the 
Headquarters DDO.

[[Page 552]]

    (2) The DDO for a Regional Assistance Agreement Dispute is the 
Regional Administrator or the official designated by the Regional 
Administrator to issue the written decision resolving the Dispute. To 
provide for a fair and impartial review, the AO for the challenged 
Agency Decision may not serve as the Regional DDO.
    (f) Review Official is the EPA official responsible for issuing a 
decision resolving an Affected Entity's request for review of a DDO's 
Appeal decision.
    (1) For a Headquarters DDO Appeal decision, the Review Official is 
the Director of the Office of Grants and Debarment or designee.
    (2) For a Regional DDO Appeal decision, the Review Official is the 
Regional Administrator or designee.

[79 FR 76050, Dec. 19, 2014. Redesignated at 85 FR 61573, Sept. 30, 
2020]



Sec.  1500.15  Submission of Dispute.

    An Affected Entity or its authorized representative may dispute an 
Agency Decision by electronically submitting a Dispute to the DDO 
identified in the Agency Decision. In order for the DDO to consider the 
Dispute, it must satisfy the following requirements:
    (a) Timeliness. The DDO must receive the Dispute no later than 30 
calendar days from the date the Agency Decision is electronically sent 
to the Affected Entity. The DDO will dismiss any Dispute received after 
the 30-day period unless the DDO grants an extension of time to submit 
the Dispute. The Affected Entity must submit a written request for 
extension to the DDO before the expiration of the 30-day period. The DDO 
may grant a one-time extension of up to 30 calendar days when justified 
by the situation, which may include the unusual complexity of the 
Dispute or because of exigent circumstances.
    (b) Method of submission. The Affected Entity must submit the 
Dispute electronically via email to the DDO, with a copy to the AO, 
using the email addresses specified in the Agency Decision within the 
30-day period stated in paragraph (a) of this section.
    (c) Contents of Dispute. The Dispute submitted to the DDO must 
include:
    (1) A copy of the disputed Agency Decision;
    (2) A detailed statement of the specific legal and factual grounds 
for the Dispute, including copies of any supporting documents;
    (3) The specific remedy or relief the Affected Entity seeks under 
the Dispute; and
    (4) The name and contact information, including email address, of 
the Affected Entity's designated point of contact for the Dispute.

[85 FR 61575, Sept. 30, 2020]



Sec.  1500.16  Notice of receipt of Dispute to Affected Entity.

    Within 15 calendar days of receiving the Dispute, the DDO will 
provide the Affected Entity a written notice, sent electronically, 
acknowledging receipt of the Dispute.
    (a) Timely Disputes. If the Dispute was timely submitted, the notice 
of acknowledgement may identify any additional information or 
documentation that is required for a thorough consideration of the 
Dispute. The notice should provide no more than 30 calendar days for the 
Affected Entity to provide the requested information. If it is not 
feasible to identify such information or documentation in the notice the 
DDO may request it at a later point in time prior to issuance of the 
Dispute decision.
    (b) Untimely Disputes. If the DDO did not receive the Dispute within 
the required 30-day period, or any extension of it, the DDO will notify 
the Affected Entity that the Dispute is being dismissed as untimely and 
the Agency Decision of the AO becomes final. The dismissal of an 
untimely Dispute constitutes the final agency action. In appropriate 
circumstances, the DDO may, as a matter of discretion, consider an 
untimely Dispute if doing so would be in the interests of fairness and 
equity.

[85 FR 61575, Sept. 30, 2020]



Sec.  1500.17  Determination of Dispute.

    (a) In determining the merits of the Dispute, the DDO will consider 
the record related to the Agency Decision, any documentation that the 
Affected Entity submits with its Dispute, any additional documentation 
submitted by the Affected Entity in response to the DDO's request under 
Sec.  1500.16(a),

[[Page 553]]

and any other information the DDO determines is relevant to the Dispute 
provided the DDO gives notice of that information to the Affected 
Entity. The Affected Entity may not on its own initiative submit any 
additional documents except in the support of a request for 
reconsideration under paragraph (c) of this section.
    (b) The DDO will issue the Dispute decision within 180 calendar days 
from the date the Dispute is received by the DDO unless a longer period 
is necessary based on the complexity of the legal, technical, and 
factual issues presented. The DDO will notify the Affected Entity if the 
expected decision will not be issued within the 180-day period and if 
feasible will indicate when the decision is expected to be issued. The 
DDO will issue the Dispute decision electronically and advise the 
Affected Entity of procedures for requesting reconsideration. The DDO's 
decision will constitute the final agency action unless the Affected 
Entity electronically petitions the DDO for reconsideration within 15 
calendar days of issuance of the DDO Decision. The Affected Entity must 
include a detailed statement of the factual and legal grounds warranting 
reversal or modification of the DDO decision. In addition, the Affected 
Entity may submit additional documents that were not previously provided 
to the DDO.
    (c) If a petition for reconsideration is submitted, the DDO's will 
advise the Affected Entity within 15 calendar days of receipt of the 
petition whether the DDO Decision will be reconsidered. The DDO will 
issue this determination electronically. DDO's will only grant a 
reconsideration petition if the Affected Entity provides relevant and 
material evidence that was not available to the Affected Entity at the 
time the Dispute was submitted or to correct a clear and prejudicial 
error of fact or law. Denial of a petition for reconsideration 
constitutes final agency action and the DDO will advise the Affected 
Entity of the reasons for denying the reconsideration in writing.
    (d) If the DDO grants a reconsideration petition, the DDO will issue 
a revised DDO Decision within 30 calendar days of acceptance of the 
reconsideration petition unless a longer period is necessary based on 
the complexity of the legal, technical, and factual issues presented. 
The DDO will issue the revised DDO Decision electronically. The revised 
DDO Decision and any new material considered by the DDO in making the 
revised DDO Decision will become part of the record of the Dispute. The 
revised DDO Decision will constitute final agency action.
    (e) The DDO may consider untimely filed reconsideration petitions 
only if necessary, to correct a DDO Decision that is manifestly unfair 
and inequitable in light of relevant and material evidence that the 
Affected Entity could not have discovered during the 30-day period for 
petitioning for reconsideration. This evidence must be submitted within 
six months of the date of the DDO Decision. The DDO will advise the 
Affected Entity within 30 days of receipt of an untimely filed 
reconsideration petition whether the DDO will accept the petition. 
Denial of an untimely filed reconsideration petition constitutes final 
agency action.

[85 FR 61575, Sept. 30, 2020]

                       PARTS 1501	1531 [RESERVED]



PART 1532_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
1532.10 What does this part do?
1532.20 Does this part apply to me?
1532.30 What policies and procedures must I follow?

                            Subpart A_General

1532.137 Who in the EPA may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

1532.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

1532.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

[[Page 554]]

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

1532.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-F [Reserved]

                          Subpart G_Suspension

1532.765 How may I appeal my EPA suspension?

                           Subpart H_Debarment

1532.890 How may I appeal my EPA debarment?

                          Subpart I_Definitions

1532.995 Principal (EPA supplement to government-wide definition at 2 
          CFR 180.995).

 Subpart J_Statutory Disqualification and Reinstatement Under the Clean 
                       Air Act and Clean Water Act

1532.1100 What does this subpart do?
1532.1105 Does this subpart apply to me?
1532.1110 How will a CAA or CWA conviction affect my eligibility to 
          participate in Federal contracts, subcontracts, assistance, 
          loans and other benefits?
1532.1115 Can the EPA extend a CAA or CWA disqualification to other 
          facilities?
1532.1120 What is the purpose of CAA or CWA disqualification?
1532.1125 How do award officials and others know if I am disqualified?
1532.1130 How does disqualification under the CAA or CWA differ from a 
          Federal discretionary suspension or debarment action?
1532.1135 Does CAA or CWA disqualification mean that I must remain 
          ineligible?
1532.1140 Can an exception be made to allow me to receive an award even 
          though I may be disqualified?
1532.1200 How will I know if I am disqualified under the CAA or CWA?
1532.1205 What procedures must I follow to have my procurement and 
          nonprocurement eligibility reinstated under the CAA or CWA?
1532.1210 Will anyone else provide information to the EPA debarring 
          official concerning my reinstatement request?
1532.1215 What happens if I disagree with the information provided by 
          others to the EPA debarring official on my reinstatement 
          request?
1532.1220 What will the EPA debarring official consider in making a 
          decision on my reinstatement request?
1532.1225 When will the EPA debarring official make a decision on my 
          reinstatement request?
1532.1230 How will the EPA debarring official notify me of the 
          reinstatement decision?
1532.1300 Can I resolve my eligibility status under terms of an 
          administrative agreement without having to submit a formal 
          reinstatement request?
1532.1305 What are the consequences if I mislead the EPA in seeking 
          reinstatement or fail to comply with my administrative 
          agreement?
1532.1400 How may I appeal a decision denying my request for 
          reinstatement?
1532.1500 If I am reinstated, when will my name be removed from the 
          EPLS?
1532.1600 What definitions apply specifically to actions under this 
          subpart?

    Authority: 33 U.S.C. 1251 et seq.; 42 U.S.C. 7401 et seq.; Sec. 
2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E.O. 11738 
(3 CFR, 1973 Comp., p. 799); E.O. 12549 (3 CFR, 1986 Comp., p. 189); 
E.O. 12689 (3 CFR, 1989 Comp., p. 235).

    Source: 72 FR 2422, Jan. 19, 2007, unless otherwise noted.



Sec.  1532.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Environmental Protection Agency (EPA) policies and procedures for 
nonprocurement debarment and suspension. It thereby gives regulatory 
effect for the EPA to the OMB guidance as supplemented by this part. 
This part satisfies the requirements in section 3 of Executive Order 
12549, ``Debarment and Suspension'' (3 CFR 1986 Comp., p. 189), 
Executive Order 12689, ``Debarment and Suspension'' (3 CFR 1989 Comp., 
p. 235) and 31 U.S.C. 6101 note (Section 2455, Pub. L. 103-355, 108 
Stat. 3327).



Sec.  1532.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970;

[[Page 555]]

    (b) Respondent in an EPA suspension or debarment action;
    (c) EPA debarment or suspension official; or
    (d) EPA grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  1532.30  What policies and procedures must I follow?

    The EPA policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180, as that section is 
supplemented by the section in this part with the same section number. 
The contracts that are covered transactions, for example, are specified 
by section 220 of the OMB guidance (i.e., 2 CFR 180.220) as supplemented 
by section 220 in this part (i.e., Sec.  1532.220). For any section of 
OMB guidance in subparts A through I of 2 CFR 180 that has no 
corresponding section in this part, EPA policies and procedures are 
those in the OMB guidance.



                            Subpart A_General



Sec.  1532.137  Who in the EPA may grant an exception to let an 
excluded person participate in a covered transaction?

    The EPA Debarring Official has the authority to grant an exception 
to let an excluded person participate in a covered transaction, as 
provided in the OMB guidance at 2 CFR 180.135. If the EPA Debarring 
Official grants an exception, the exception must be in writing and state 
the reason(s) for deviating from the governmentwide policy in Executive 
Order 12549.



                     Subpart B_Covered Transactions



Sec.  1532.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.220(b) of the 
OMB guidance, this part applies to any contract, regardless of tier, 
that is awarded by a contractor, subcontractor, supplier, consultant, or 
its agent or representative in any transaction, if the contract is to be 
funded or provided by the EPA under a covered nonprocurement transaction 
and the amount of the contract is expected to equal or exceed $25,000. 
This extends the coverage of the EPA nonprocurement suspension and 
debarment requirements to all lower tiers of subcontracts under covered 
nonprocurement transactions, as permitted under the OMB guidance at 2 
CFR 180.220(c) (see optional lower tier coverage in the figure in the 
appendix to 2 CFR part 180).



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  1532.332  What methods must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  1532.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-F [Reserved]



                          Subpart G_Suspension



Sec.  1532.765  How may I appeal my EPA suspension?

    (a) If the EPA suspending official issues a decision under 2 CFR 
180.755 to continue your suspension after you

[[Page 556]]

present information in opposition to that suspension under 2 CFR 
180.720, you can ask for review of the suspending official's decision in 
two ways:
    (1) You may ask the suspending official to reconsider the decision 
for material errors of fact or law that you believe will change the 
outcome of the matter; and/or
    (2) You may request the Director, Office of Grants and Debarment 
(OGD Director), to review the suspending official's decision to continue 
your suspension within 30 days of your receipt of the suspending 
official's decision under 2 CFR 180.755 or paragraph (a)(1) of this 
section. However, the OGD Director can reverse the suspending official's 
decision only where the OGD Director finds that the decision is based on 
a clear error of material fact or law, or where the OGD Director finds 
that the suspending official's decision was arbitrary, capricious, or an 
abuse of discretion.
    (b) A request for review under this section must be in writing; 
state the specific findings you believe to be in error; and include the 
reasons or legal bases for your position.
    (c) A review under paragraph (a)(2) of this section is solely within 
the discretion of the OGD Director who may also stay the suspension 
pending review of the suspending official's decision.
    (d) The EPA suspending official and the OGD Director must notify you 
of their decisions under this section, in writing, using the notice 
procedures at 2 CFR 180.615 and 180.975.



                           Subpart H_Debarment



Sec.  1532.890  How may I appeal my EPA debarment?

    (a) If the EPA debarring official issues a decision under 2 CFR 
180.870 to debar you after you present information in opposition to a 
proposed debarment under 2 CFR 180.815, you can ask for review of the 
debarring official's decision in two ways:
    (1) You may ask the debarring official to reconsider the decision 
for material errors of fact or law that you believe will change the 
outcome of the matter; and/or
    (2) You may request the Director, Office of Grants and Debarment 
(OGD Director), to review the debarring official's decision to debar you 
within 30 days of your receipt of the debarring official's decision 
under 2 CFR 180.870 or paragraph (a)(1) of this section. However, the 
OGD Director can reverse the debarring official's decision only where 
the OGD Director finds that the decision is based on a clear error of 
material fact or law, or where the OGD Director finds that the debarring 
official's decision was arbitrary, capricious, or an abuse of 
discretion.
    (b) A request for review under this section must be in writing; 
state the specific findings you believe to be in error; and include the 
reasons or legal bases for your position.
    (c) A review under paragraph (a)(2) of this section is solely within 
the discretion of the OGD Director who may also stay the debarment 
pending review of the debarring official's decision.
    (d) The EPA debarring official and the OGD Director must notify you 
of their decisions under this section, in writing, using the notice 
procedures at 2 CFR 180.615 and 180.975.



                          Subpart I_Definitions



Sec.  1532.995  Principal (EPA supplement to government-wide 
definition at 2 CFR 180.995).

    In addition to those listed in 2 CFR 180.995, other examples of 
individuals who are principals in EPA covered transactions include:
    (a) Principal investigators;
    (b) Technical or management consultants;
    (c) Individuals performing chemical or scientific analysis or 
oversight;
    (d) Professional service providers such as doctors, lawyers, 
accountants, engineers, etc.;
    (e) Individuals responsible for the inspection, sale, removal, 
transportation, storage or disposal of solid or hazardous waste or 
materials;
    (f) Individuals whose duties require special licenses;
    (g) Individuals that certify, authenticate or authorize billings; 
and
    (h) Individuals that serve in positions of public trust.

[[Page 557]]



 Subpart J_Statutory Disqualification and Reinstatement Under the 
 Clean Air Act and Clean Water Act



Sec.  1532.1100  What does this subpart do?

    This subpart explains how the EPA administers section 306 of the 
Clean Air Act (CAA) (42 U.S.C. 7606) and section 508 of the Clean Water 
Act (CWA) (33 U.S.C. 1368), which disqualify persons convicted for 
certain offenses under those statutes (see Sec.  1532.1105), from 
eligibility to receive certain contracts, subcontracts, assistance, 
loans and other benefits (see coverage under the Federal Acquisition 
Regulation (FAR), 48 CFR part 9, subpart 9.4 and subparts A through I of 
2 CFR part 180). It also explains: the procedures for seeking 
reinstatement of a person's eligibility under the CAA or CWA; the 
criteria and standards that apply to EPA's decision-making process; and 
requirements of award officials and others involved in Federal 
procurement and nonprocurement activities in carrying out their 
responsibilities under the CAA and CWA.



Sec.  1532.1105  Does this subpart apply to me?

    (a) Portions of this subpart apply to you if you are convicted, or 
likely to be convicted, of any offense under section 7413(c) of the CAA 
or section 1319(c) of the CWA.
    (b) Portions of this subpart apply to you if you are the EPA 
debarring official, a Federal procurement or nonprocurement award 
official, a participant in a Federal procurement or nonprocurement 
program that is precluded from entering into a covered transaction with 
a person disqualified under the CAA or CWA, or if you are a Federal 
department or agency anticipating issuing an exception to a person 
otherwise disqualified under the CAA or CWA.



Sec.  1532.1110  How will a CAA or CWA conviction affect my eligibility
to participate in Federal contracts, subcontracts, assistance, loans
and other benefits?

    If you are convicted of any offense described in Sec.  1532.1105, 
you are automatically disqualified from eligibility to receive any 
contract, subcontract, assistance, sub-assistance, loan or other 
nonprocurement benefit or transaction that is prohibited by a Federal 
department or agency under the Governmentwide debarment and suspension 
system (i.e. covered transactions under subpart A through I of 2 CFR 
part 180, or prohibited awards under 48 CFR part 9, subpart 9.4), if 
you:
    (a) Will perform any part of the transaction or award at the 
facility giving rise to your conviction (called the violating facility); 
and
    (b) You own, lease or supervise the violating facility.



Sec.  1532.1115  Can the EPA extend a CAA or CWA disqualification
to other facilities?

    The CAA specifically authorizes the EPA to extend a CAA 
disqualification to other facilities that are owned or operated by the 
convicted person. The EPA also has authority under subparts A through I 
of 2 CFR part 180, or under 48 CFR part 9, subpart 9.4, to take 
discretionary suspension and debarment actions on the basis of 
misconduct leading to a CAA or CWA conviction, or for activities that 
the EPA debarring official believes were designed to improperly 
circumvent a CAA or CWA disqualification.



Sec.  1532.1120  What is the purpose of CAA or CWA disqualification?

    As provided for in Executive Order 11738 (3 CFR, 1973 Comp., p. 
799), the purpose of CAA and CWA disqualification is to enforce the 
Federal Government's policy of undertaking Federal procurement and 
nonprocurement activities in a manner that improves and enhances 
environmental quality by promoting effective enforcement of the CAA or 
CWA.



Sec.  1532.1125  How do award officials and others know if I am
disqualified?

    If you are convicted under these statutes, the EPA enters your name 
and address and that of the violating facility into the Excluded Parties 
List System (EPLS) as soon as possible after the EPA learns of your 
conviction. In addition, the EPA enters other information describing the 
nature of your

[[Page 558]]

disqualification. Federal award officials and others who administer 
Federal programs consult the EPLS before entering into or approving 
procurement and nonprocurement transactions. Anyone may access the EPLS 
through the internet, currently at http://www.epls.gov.



Sec.  1532.1130  How does disqualification under the CAA or CWA
differ from a Federal discretionary suspension or debarment action?

    (a) CAA and CWA disqualifications are exclusions mandated by 
statute. In contrast, suspensions and debarments imposed under subparts 
A through I of 2 CFR part 180 or under 48 CFR part 9, subpart 9.4, are 
exclusions imposed at the discretion of Federal suspending or debarring 
officials. This means that if you are convicted of violating the CAA or 
CWA provisions described under Sec.  1532.1105, ordinarily your name and 
that of the violating facility is placed into the EPLS before you 
receive a confirmation notice of the listing, or have the opportunity to 
discuss the disqualification with, or seek reinstatement from, the EPA.
    (b) CAA or CWA disqualification applies to both the person convicted 
of the offense, and to the violating facility during performance of an 
award or covered transaction under the Federal procurement and 
nonprocurement suspension and debarment system. It is the EPA's policy 
to carry out CAA and CWA disqualifications in a manner which integrates 
the disqualifications into the Governmentwide suspension and debarment 
system. Whenever the EPA determines that the risk presented to Federal 
procurement and nonprocurement activities on the basis of the misconduct 
which gives rise to a person's CAA or CWA conviction exceeds the 
coverage afforded by mandatory disqualification, the EPA may use its 
discretionary authority to suspend or debar a person under subparts A 
through I of 2 CFR part 180, or under 48 CFR part 9, subpart 9.4.



Sec.  1532.1135  Does CAA or CWA disqualification mean that I must
remain ineligible?

    You must remain ineligible until the EPA debarring official 
certifies that the condition giving rise to your conviction has been 
corrected. If you desire to have your disqualification terminated, you 
must submit a written request for reinstatement to the EPA debarring 
official and support your request with persuasive documentation. For 
information about the process for reinstatement see Sec. Sec.  1532.1205 
and 1532.1300.



Sec.  1532.1140  Can an exception be made to allow me to receive an
award even though I may be disqualified?

    (a) After consulting with the EPA debarring official, the head of 
any Federal department or agency (or designee) may exempt any particular 
award or a class of awards with that department or agency from CAA or 
CWA disqualification. In the event an exemption is granted, the 
exemption must:
    (1) Be in writing; and
    (2) State why the exemption is in the paramount interests of the 
United States.
    (b) In the event an exemption is granted, the exempting department 
or agency must send a copy of the exemption decision to the EPA 
debarring official for inclusion in the official record.



Sec.  1532.1200  How will I know if I am disqualified under the
CAA or CWA?

    There may be several ways that you learn about your 
disqualification. You are legally on notice by the statutes that a 
criminal conviction the CAA or CWA automatically disqualifies you. As a 
practical matter, you may learn about your disqualification from your 
defense counsel, a Federal contract or award official, or from someone 
else who sees your name in the EPLS. As a courtesy, the EPA will attempt 
to notify you and the owner, lessor or supervisor of the violating 
facility that your names have been entered into the EPLS. The EPA will 
inform you of the procedures for seeking reinstatement and give you the 
name of a person you can contact to discuss your reinstatement request.

[[Page 559]]



Sec.  1532.1205  What procedures must I follow to have my procurement
and nonprocurement eligibility reinstated under the CAA or CWA?

    (a) You must submit a written request for reinstatement to the EPA 
debarring official stating what you believe the conditions were that led 
to your conviction, and how those conditions have been corrected, 
relieved or addressed. Your request must include documentation 
sufficient to support all material assertions you make. The debarring 
official must determine that all the technical and non-technical causes, 
conditions and consequences of your actions have been sufficiently 
addressed so that the Government can confidently conduct future business 
activities with you, and that your future operations will be conducted 
in compliance with the CAA and CWA.
    (b) You may begin the reinstatement process by having informal 
discussions with the EPA representative named in your notification of 
listing. Having informal dialogue with that person will make you aware 
of the EPA concerns that must be addressed. The EPA representative is 
not required to negotiate conditions for your reinstatement. However, 
beginning the reinstatement process with informal dialogue increases the 
chance of achieving a favorable outcome, and avoids unnecessary delay 
that may result from an incomplete or inadequate reinstatement request. 
It may also allow you to resolve your disqualification by reaching an 
agreement with the EPA debarring official under informal procedures. 
Using your informal option first does not prevent you from submitting a 
formal reinstatement request with the debarring official at any time.



Sec.  1532.1210  Will anyone else provide information to the EPA
debarring official concerning my reinstatement request?

    If you request reinstatement under Sec.  1532.1205, the EPA 
debarring official may obtain review and comment on your request by 
anyone who may have information about, or an official interest in, the 
matter. For example, the debarring official may consult with the EPA 
Regional offices, the Department of Justice or other Federal agencies, 
or state, tribal or local governments. The EPA debarring official will 
make sure that you have an opportunity to address important allegations 
or information contained in the administrative record before making a 
final decision on your request for reinstatement.



Sec.  1532.1215  What happens if I disagree with the information
provided by others to the EPA debarring official on my reinstatement
request?

    (a) If your reinstatement request is based on factual information 
(as opposed to a legal matter or discretionary conclusion) that is 
different from the information provided by others or otherwise contained 
in the administrative record, the debarring official will decide whether 
those facts are genuinely in dispute, and material to making a decision. 
If so, a fact-finding proceeding will be conducted in accordance with 2 
CFR 180.830 through 180.840, and the debarring official will consider 
the findings when making a decision on your reinstatement request.
    (b) If the basis for your disagreement with the information 
contained in the administrative record relates to a legal issue or 
discretionary conclusion, or is not a genuine dispute over a material 
fact, you will not have a fact-finding proceeding. However, the 
debarring official will allow you ample opportunity to support your 
position for the record and present matters in opposition to your 
continued disqualification. A summary of any information you provide 
orally, if not already recorded, should also be submitted to the 
debarring official in writing to assure that it is preserved for the 
debarring official's consideration and the administrative record.



Sec.  1532.1220  What will the EPA debarring official consider in
making a decision on my reinstatement request?

    (a) The EPA debarring official will consider all information and 
arguments contained in the administrative record in support of, or in 
opposition to, your request for reinstatement, including any findings of 
material fact.
    (b) The debarring official will also consider any mitigating or 
aggravating factors that may relate to your conviction or the 
circumstances surrounding

[[Page 560]]

it, including any of those factors that appear in 2 CFR 180.860 that may 
apply to your situation.
    (c) Finally, if disqualification applies to a business entity, the 
debarring official will consider any corporate or business attitude, 
policies, practices and procedures that contributed to the events 
leading to conviction, or that may have been implemented since the date 
of the misconduct or conviction. You can obtain any current policy 
directives issued by the EPA that apply to CAA or CWA disqualification 
or reinstatement by contacting the Office of the EPA Debarring Official, 
U.S. EPA, Office of Grants and Debarment (3901R), 1200 Pennsylvania 
Avenue, NW., Washington, DC 20460.



Sec.  1532.1225  When will the EPA debarring official make a decision
on my reinstatement request?

    (a) The EPA debarring official will make a decision regarding your 
reinstatement request under Sec.  1532.1205(a), when the administrative 
record is complete, and he or she can determine whether the condition 
giving rise to the CAA or CWA conviction has been corrected-usually 
within 45 days of closing the administrative record.
    (b) A reinstatement request is not officially before the debarring 
official while you are having informal discussions under Sec.  
1532.1205(b).



Sec.  1532.1230  How will the EPA debarring official notify me of
the reinstatement decision?

    The EPA debarring official will notify you of the reinstatement 
decision in writing, using the same methods for communicating debarment 
or suspension action notices under 2 CFR 180.615.



Sec.  1532.1300  Can I resolve my eligibility status under terms of
an administrative agreement without having to submit a formal
reinstatement request?

    (a) The EPA debarring official may, at any time, resolve your CAA or 
CWA eligibility status under the terms of an administrative agreement. 
Ordinarily, the debarring official will not make an offer to you for 
reinstatement until after the administrative record for decision is 
complete, or contains enough information to enable him or her to make an 
informed decision in the matter.
    (b) Any resolution of your eligibility status under the CAA or CWA 
resulting from an administrative agreement must include a certification 
that the condition giving rise to the conviction has been corrected.
    (c) The EPA debarring official may enter into an administrative 
agreement to resolve CAA or CWA disqualification issues as part of a 
comprehensive criminal plea, civil or administrative agreement when it 
is in the best interest of the United States to do so.



Sec.  1532.1305  What are the consequences if I mislead the EPA in
seeking reinstatement or fail to comply with my administrative
agreement?

    (a) Any certification of correction issued by the EPA debarring 
official whether the certification results from a reinstatement decision 
under Sec. Sec.  1532.1205(a) and 1532.1230, or from an administrative 
agreement under Sec. Sec.  1532.1205(b) and 1532.1300, is conditioned 
upon the accuracy of the information, representations or assurances made 
during development of the administrative record.
    (b) If the EPA debarring official finds that he or she has certified 
correction of the condition giving rise to a CAA or CWA conviction or 
violation on the basis of a false, misleading, incomplete or inaccurate 
information; or if a person fails to comply with material condition of 
an administrative agreement, the EPA debarring official may take 
suspension or debarment action against the person(s) responsible for the 
misinformation or noncompliance with the agreement as appropriate. If 
anyone provides false, inaccurate, incomplete or misleading information 
to EPA in an attempt to obtain reinstatement, the EPA debarring official 
will refer the matter to the EPA Office of Inspector General for 
potential criminal or civil action.



Sec.  1532.1400  How may I appeal a decision denying my request for
reinstatement?

    (a) If the EPA debarring official denies your request for 
reinstatement under the CAA or CWA, you can ask for review of the 
debarring official's decision in two ways:

[[Page 561]]

    (1) You may ask the debarring official to reconsider the decision 
for material errors of fact or law that you believe will change the 
outcome of the matter; and/ or
    (2) You may request the Director, Office of Grants and Debarment 
(OGD Director), to review the debarring official's denial within 30 days 
of your receipt of the debarring official's decision under Sec.  
1532.1230 or paragraph (a)(1) of this section. However, the OGD Director 
can reverse the debarring official's decision denying reinstatement only 
where the OGD Director finds that there is a clear error of material 
fact or law, or where the OGD Director finds that the debarring 
official's decision was arbitrary, capricious, or an abuse of 
discretion.
    (b) A request for review under this section must be in writing and 
state the specific findings you believe to be in error and include the 
reasons or legal bases for your position.
    (c) A review under this section is solely within the discretion of 
the OGD Director.
    (d) The OGD Director must notify you of his or her decision under 
this section, in writing, using the notice procedures at 2 CFR 180.615 
and 180.975.



Sec.  1532.1500  If I am reinstated, when will my name be removed
from the EPLS?

    If your eligibility for procurement and nonprocurement participation 
is restored under the CAA or CWA, whether by decision, appeal, or by 
administrative agreement, the EPA will remove your name and that of the 
violating facility from the EPLS, generally within 5 working days of 
your reinstatement.



Sec.  1532.1600  What definitions apply specifically to actions 
under this subpart?

    In addition to definitions under subpart A through I of 2 CFR part 
180 that apply to this part as a whole, the following two definitions 
apply specifically to CAA and CWA disqualifications under this subpart:
    (a) Person means an individual, corporation, partnership, 
association, state, municipality, commission, or political subdivision 
of a state, or any interstate body.
    (b) Violating facility means any building, plant, installation, 
structure, mine, vessel, floating craft, location or site of operations 
that gives rise to a CAA or CWA conviction, and is a location at which 
or from which a Federal contract, subcontract, loan, assistance award or 
other covered transactions may be performed. If a site of operations 
giving rise to a CAA or CWA conviction contains or includes more than 
one building, plant, installation, structure, mine, vessel, floating 
craft, or other operational element, the entire location or site of 
operation is regarded as the violating facility unless otherwise limited 
by the EPA.



PART 1536_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL 
ASSISTANCE)--Table of Contents



Sec.
1536.10 What does this part do?
1536.20 Does this part apply to me?
1536.30 What policies and procedures must I follow?

Subpart A--Purpose and Coverage [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

1536.225 Whom in the Environmental Protection Agency does a recipient 
          other than an individual notify about a criminal drug 
          conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

1536.300 Whom in the Environmental Protection Agency does a recipient 
          who is an individual notify about a criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

1536.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of This Part and Consequences

1536.500 Who in the Environmental Protection Agency determines that a 
          recipient

[[Page 562]]

          other than an individual violated the requirements of this 
          part?
1536.505 Who in the Environmental Protection Agency determines that a 
          recipient who is an individual violated the requirements of 
          this part?

    Authority: 41 U.S.C. 701-707.

    Source: 75 FR 80288, Dec. 22, 2010, unless otherwise noted.



Sec.  1536.10  What does this part do?

    This part requires that the award and administration of 
Environmental Protection Agency grants and cooperative agreements comply 
with Office of Management and Budget (OMB) guidance implementing the 
portion of the Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as 
amended, hereafter referred to as ``the Act'') that applies to grants. 
It thereby--
    (a) Gives regulatory effect to the OMB guidance (Subparts A through 
F of 2 CFR part 182) for the Environmental Protection Agency's grants 
and cooperative agreements; and
    (b) Establishes Environmental Protection Agency policies and 
procedures for compliance with the Act that are the same as those of 
other Federal agencies, in conformance with the requirement in 41 U.S.C. 
705 for Governmentwide implementing regulations.



Sec.  1536.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in Subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of a Environmental Protection Agency grant or 
cooperative agreement; or
    (b) Environmental Protection Agency awarding official.



Sec.  1536.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table. For each 
of those sections, you must follow the policies and procedures in the 
OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   1536.225  Whom in the
                                                 Environmental
                                                 Protection Agency a
                                                 recipient other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   1536.300  Whom in the
                                                 Environmental
                                                 Protection Agency a
                                                 recipient who is an
                                                 individual must notify
                                                 if he or she is
                                                 convicted of a criminal
                                                 drug offense resulting
                                                 from a violation
                                                 occurring during the
                                                 conduct of any award
                                                 activity.
(3) 2 CFR 182.500............  Sec.   1536.500  Who in the Environmental
                                                 Protection Agency is
                                                 authorized to determine
                                                 that a recipient other
                                                 than an individual is
                                                 in violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(4) 2 CFR 182.505............  Sec.   1536.505  Who in the Environmental
                                                 Protection Agency is
                                                 authorized to determine
                                                 that a recipient who is
                                                 an individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in Subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, Environmental 
Protection Agency policies and procedures are the same as those in the 
OMB guidance.

Subpart A--Purpose and Coverage [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  1536.225  Whom in the Environmental Protection Agency does a
recipient other than an individual notify about a criminal drug 
conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify the EPA

[[Page 563]]

award official from each Environmental Protection Agency office from 
which it currently has an award.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  1536.300  Whom in the Environmental Protection Agency does a 
recipient who is an individual notify about a criminal drug conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify the EPA award official from each Environmental 
Protection Agency office from which it currently has an award.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  1536.400  What method do I use as an agency awarding official
to obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award:

    Drug-free workplace. You as the recipient must comply with drug-free 
workplace requirements in Subpart B (or Subpart C, if the recipient is 
an individual) of 2 CFR Subtitle B, Chapter XV, Part 1536, which adopts 
the Governmentwide implementation (2 CFR part 182) of sec. 5152-5158 of 
the Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle 
D; 41 U.S.C. 701-707).



           Subpart E_Violations of This Part and Consequences



Sec.  1536.500  Who in the Environmental Protection Agency determines
that a recipient other than an individual violated the requirements of
this part?

    The EPA Administrator or designee is the official authorized to make 
the determination under 2 CFR 182.500.



Sec.  1536.505  Who in the Environmental Protection Agency determines
that a recipient who is an individual violated the requirements of
this part?

    The EPA Administrator or designee is the official authorized to make 
the determination under 2 CFR 182.505.

                       PARTS 1537	1599 [RESERVED]

[[Page 565]]



      CHAPTER XVIII--NATIONAL AERONAUTICS AND SPACE ADMINISTRATION




  --------------------------------------------------------------------
Part                                                                Page
1800            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         567
1801-1879

 [Reserved]

1880            Nonprocurement debarment and suspension.....         572
1881

 [Reserved]

1882            Requirements for drug-free workplace 
                    (financial assistance)..................         574
1883-1899

 [Reserved]

[[Page 567]]



PART 1800_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



Sec.
1800.1 Authority.
1800.2 Purpose.
1800.3 Applicability.
1800.4 Amendment.
1800.5 Publication.
1800.6 [Reserved]

                   Subpart A_Acronyms and Definitions

1800.10 Acronyms.
1800.11 Definitions.

 Subpart B_Pre-Federal Award Requirements and Contents of Federal Awards

1800.208 Certifications and representations.
1800.209 Pre-award costs.
1800.210 Information contained in a Federal award.

                Subpart C_Post Federal Award Requirements

             Standards for Financial and Program Management

1800.305 Payment.
1800.306 Cost sharing or matching.

                           Property Standards

1800.312 Federally owned and exempt property.
1800.315 Intangible property.

                       Remedies for Noncompliance

1800.339 Termination.
1800.400 Policy guide.

    Authority: 51 U.S.C. 20113 (e), Pub. L. 97-258, 96 Stat. 1003 (31 
U.S.C. 6301 et seq.), and 2 CFR part 200.

    Source: 80 FR 54701, Sept. 11, 2015, unless otherwise noted.



Sec.  1800.1  Authority.

    The National Aeronautics and Space Administration (NASA) awards 
grants and cooperative agreements under the authority of 51 U.S.C. 20113 
(e), the National Aeronautics and Space Act. This part 1800 is issued 
under the authority of 51 U.S.C. 20113 (e), Pub. L. 97-258, 96 Stat. 
1003 (31 U.S.C. 6301 et seq.), and 2 CFR part 200.



Sec.  1800.2  Purpose.

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through F of 2 CFR part 200, as supplemented by this part, 
as the NASA policies and procedures for uniform administrative 
requirements, cost principles, and audit requirements for Federal 
awards. It thereby gives regulatory effect for NASA to the OMB guidance 
as supplemented by this part.



Sec.  1800.3  Applicability.

    (a) This part establishes policies and procedures for grants and 
cooperative agreements awarded by NASA to non-Federal entities, 
commercial firms (when cost sharing is not required), and foreign 
organizations as allowed by 2 CFR 200.101 Applicability. The policies 
and procedures that you must follow are those appearing in subparts A 
through F of 2 CFR part 200 and as supplemented by 2 CFR part 1800. For 
supplemental guidance, NASA has adopted section numbers that correspond 
to those in the OMB guidance in 2 CFR part 200.
    (b) Throughout this part, the term ``award'' refers to both 
``grant'' and ``cooperative agreement'' unless otherwise indicated.
    (c) When commercial firms are required to provide cost sharing 
pursuant to 2 CFR 200.306, Cost Sharing, the regulations at 14 CFR part 
1274 apply.
    (d)(1) In general, research with foreign organizations will not be 
conducted through grants or cooperative agreements, but instead will be 
accomplished on a no-exchange-of-funds basis. In these cases, NASA 
enters into agreements undertaking projects of international scientific 
collaboration. NASA policy on performing research with foreign 
organizations on a no-exchange-of-funds basis is set forth at NASA FAR 
Supplement (NFS) 1835.016-70. In rare instances, NASA may enter into an 
international agreement under which funds will be transferred to a 
foreign recipient.
    (2) Grants or cooperative agreements awarded to foreign 
organizations are made on an exceptional basis only. Awards require the 
prior approval of the Headquarters Office of International and 
Interagency Relations

[[Page 568]]

and the Headquarters Office of the General Counsel. Requests to issue 
awards to foreign organizations are to be coordinated through the Office 
of the Chief Financial Officer, Policy Division.

[80 FR 54701, Sept. 11, 2015, as amended at 84 FR 20240, May 9, 2019]

    Effective Date Note: At 85 FR 71816, Nov. 12, 2020, Sec.  1800.3 was 
revised, effective Jan. 11, 2021. For the convenience of the user, the 
revised text is set forth as follows:



Sec.  1800.3  Applicability.

    (a) This part establishes policies and procedures for grants and 
cooperative agreements awarded by NASA to non-Federal entities, for-
profit organization, foreign organizations, and foreign public entities 
as allowed by 2 CFR 200.101. For supplemental guidance, NASA has adopted 
section numbers that correspond to those in the OMB guidance in 2 CFR 
part 200.
    (1) Non-Federal entities must follow the policies and procedures 
appearing in subparts A through F of 2 CFR part 200 and as supplemented 
by this part.
    (2) Foreign organizations and foreign public entities must follow 
the policies and procedures appearing in subparts A through E of 2 CFR 
part 200 and as supplemented by this part.
    (3) U.S. and foreign for-profit organizations must follow the 
policies and procedures appearing in subparts A through D of 2 CFR part 
200 and as supplemented by this part. The Federal Acquisition Regulation 
(FAR) at 48 CFR parts 30 and 31 take precedence over the cost principles 
in subpart E of 2 CFR part 200 for Federal awards to U.S. and foreign 
for-profit organizations.
    (b) Throughout this part, the term ``award'' refers to both 
``grant'' and ``cooperative agreement'' unless otherwise indicated.
    (c)(1) In general, research with foreign organizations will not be 
conducted through grants or cooperative agreements, but instead will be 
accomplished on a no-exchange-of-funds basis. In these cases, NASA 
enters into agreements undertaking projects of international scientific 
collaboration. NASA's policy on performing research with foreign 
organizations on a no-exchange-of-funds basis is set forth at NASA FAR 
Supplement (NFS) at 48 CFR 1835.016-70 and 1835.016-72. In rare 
instances, NASA may enter into an international agreement under which 
funds will be transferred to a foreign recipient.
    (2) Grants or cooperative agreements awarded to foreign 
organizations are made on an exceptional basis only. Awards require the 
prior approval of the Headquarters Office of International and 
Interagency Relations and the Headquarters Office of the General 
Counsel. Requests to issue awards to foreign organizations are to be 
coordinated through the Office of the Chief Financial Officer, Policy 
Division.



Sec.  1800.4  Amendment.

    This part will be amended by publication of changes in the Federal 
Register. Changes will be issued as final rules.



Sec.  1800.5  Publication.

    The official site for accessing the NASA Grant and Cooperative 
Agreement Regulation, including notices, internal guidance, 
certifications, Grants and Cooperative Agreements Manual (GCAM) and 
other source information is on the internet at https://prod.nais. 
nasa.gov/pub/pub_ library/srba.

[80 FR 54701, Sept. 11, 2015, as amended at 84 FR 20240, May 9, 2019]

    Effective Date Note: At 85 FR 71816, Nov. 12, 2020, Sec.  1800.5 was 
revised, effective Jan. 11, 2021. For the convenience of the user, the 
revised text is set forth as follows:



Sec.  1800.5  Publication.

    The official site for accessing the NASA grant and cooperative 
agreement policies, including notices, internal guidance, 
certifications, the NASA Grant and Cooperative Agreement Manual (GCAM), 
and other source information is on the internet at: https://prod.nais. 
nasa.gov/pub/pub_ library/srba/index.html.



Sec.  1800.6  [Reserved]



                   Subpart A_Acronyms and Definitions



Sec.  1800.10  Acronyms.

    The following acronyms are a supplement to the acronyms set forth at 
2 CFR 200.0

ACH Automated Clearing House
AO Announcement of Opportunity
CAN Cooperative Agreement Notice
CFR Code of Federal Regulations
CNSI Classified National Security Information
EPA Environmental Protection Agency
GCAM Grants and Cooperative Agreements Manual
HBCU Historically Black Colleges and Universities
LEP Limited English Proficiency
MI Minority Institutions
MYA Multiple Year Award

[[Page 569]]

NASA National Aeronautics and Space Administration
NFS NASA FAR Supplement
NPR NASA Procedural Requirements
NRA NASA Research Announcement
NSSC NASA Shared Services Center
OMB Office of Management and Budget
ONR Office of Naval Research
RPPR Research Performance Progress Report
STIP NASA Scientific and Technical Information Program

[80 FR 54701, Sept. 11, 2015, as amended at 84 FR 20240, May 9, 2019]

    Effective Date Note: At 85 FR 71816, Nov. 12, 2020, Sec.  1800.10 
was revised, effective Jan. 11, 2021. For the convenience of the user, 
the revised text is set forth as follows:



Sec.  1800.10  Acronyms.

    The following acronyms supplement the acronyms set forth at 2 CFR 
200.0:

ACH Automated Clearing House
AO Announcement of Opportunity
CAN Cooperative Agreement Notice
CFR Code of Federal Regulations
CNSI Classified National Security Information
EPA Environmental Protection Agency
GCAM Grant and Cooperative Agreement Manual
HBCU Historically Black Colleges and Universities
LEP Limited English Proficiency
MSI Minority-serving Institutions
MYA Multiple Year Award
NASA National Aeronautics and Space Administration
NFS NASA FAR Supplement
NPR NASA Procedural Requirements
NRA NASA Research Announcement
NSPIRES NASA Solicitation and Proposal Integrated Review and Evaluation 
System
NSSC NASA Shared Services Center
OMB Office of Management and Budget
ONR Office of Naval Research
RPPR Research Performance Progress Report
STIP NASA Scientific and Technical Information Program



Sec.  1800.11  Definitions.

    (a) The following definitions are a supplement to the subpart A 
definitions set forth at 2 CFR 200.2 through 200.99.
    Administrative Grant Officer means a Federal employee delegated 
responsibility for award administration; e.g., a NASA Grant Officer who 
has retained award administration responsibilities, or an Office of 
Naval Research (ONR) Grant Officer delegated award administration by a 
NASA Grant Officer.
    Commercial firm means any corporation, trust or other organization 
which is organized primarily for profit.
    Effective date means the date work can begin. This date is the 
beginning of the period of performance and can be earlier or later than 
the date of signature on a basic award. Expenditures made prior to the 
effective date are incurred at the recipient's risk.
    Grant Officer means a Federal employee responsible for the signing 
of the grant award documents.
    Historically Black Colleges and Universities (HBCUs) means 
institutions determined by the Secretary of Education to meet the 
requirements of 34 CFR 608.2 and listed therein.
    Minority Institutions (MIs) means an institution of higher education 
whose enrollment of a single minority or a combination of minorities 
(minority meaning American Indian, Alaskan Native, Black (not of 
Hispanic origin), Hispanic (including persons of Mexican, Puerto Rican, 
Cuban, and Central or South American origin), Pacific Islander or other 
ethnic group under-represented in science and engineering.) exceeds 50 
percent of the total enrollment, as defined by section 365(3) of the 
Higher Education Act (HEA) (20 U.S.C. 1067k(3)).
    NASA Technical Officer means the NASA official responsible for the 
programmatic, scientific, and/or technical aspects of assigned 
applications and awards.
    Original signature means an authorized signature as follows. If the 
system (such as NSPIRS) used to submit required documents allows for 
electronic signatures, then the submission of the documents, by the 
authorized representative of the organization serves as the required 
original signature. If, however, a paper copy submission is required, 
all documents submitted shall be appropriately signed in ink with an 
actual signature by the authorized representative of the organization.
    Prescription is defined as the written instructions, to the Grants 
Officer, for the application of terms and conditions.
    Research misconduct is defined in 14 CFR 1275.101. NASA policies and 
procedures regarding Research misconduct

[[Page 570]]

are set out in 14 CFR part 1275, ``Investigation of Research 
Misconduct.''
    Summary of research means a document summarizing the results of the 
entire project, which includes bibliographies, abstracts, and lists of 
other media in which the research was discussed. Terms and conditions 
replace the provisions cited in the former Grant Handbook. They may be 
modified as noted in each section.

[80 FR 54701, Sept. 11, 2015, as amended at 84 FR 20240, May 9, 2019]

    Effective Date Note: At 85 FR 71816, Nov. 12, 2020, Sec.  1800.11 
was revised, effective Jan. 11, 2021. For the convenience of the user, 
the revised text is set forth as follows:



Sec.  1800.11  Definitions.

    The following definitions are a supplement to the definitions set 
forth at 2 CFR 200.1.
    Administrative Grant Officer means a Federal employee delegated 
responsibility for award administration; e.g., a NASA Grant Officer who 
has retained award administration responsibilities, or an Office of 
Naval Research (ONR) Grant Officer delegated award administration by a 
NASA Grant Officer.
    Effective date means the date work can begin under an awarded 
instrument. This date is the beginning of the period of performance and 
can be earlier or later than the date of signature on a basic award. 
Expenditures made prior to the effective date are incurred at the 
recipient's risk unless prior written permission has been given by the 
Grant Officer.
    For-profit organization means any corporation, trust, or other 
organization that is organized primarily for profit.
    Grant Officer means a Federal employee responsible for the signing 
of the Federal award documents.
    Historically Black Colleges and Universities (HBCUs) means 
institutions determined by the Secretary of Education to meet the 
requirements of 34 CFR 608.2 and listed therein.
    Minority-serving Institutions (MSIs) means an institution of higher 
education whose enrollment of a single minority or a combination of 
minorities (minority meaning American Indian, Alaskan Native, Black (not 
of Hispanic origin), Hispanic (including persons of Mexican, Puerto 
Rican, Cuban, and Central or South American origin), Pacific Islander or 
other ethnic group underrepresented in science and engineering) exceeds 
50 percent of the total enrollment, as defined by the Higher Education 
Act (HEA) (20 U.S.C. 1067k(3)).
    NASA Technical Officer means the NASA official responsible for the 
programmatic, scientific, and/or technical aspects of assigned 
applications and awards.
    Original signature means an authorized signature as described in 
this definition. If the system (such as NSPIRES) used to submit required 
documents allows for electronic signatures, then the submission of the 
documents, by the authorized representative of the organization serves 
as the required original signature. If, however, a paper copy submission 
is required, all documents submitted shall be appropriately signed in 
ink with an actual signature by the authorized representative of the 
organization.
    Prescription is defined as the written instructions, to the Grants 
Officer, for the application of terms and conditions.
    Research misconduct is defined in 14 CFR 1275.101. NASA policies and 
procedures regarding research misconduct are set forth in 14 CFR part 
1275.
    Summary of research means a document summarizing the results of the 
entire project, which includes bibliographies, abstracts, and lists of 
other media in which the research was discussed.



 Subpart B_Pre-Federal Award Requirements and Contents of Federal Awards



Sec.  1800.208  Certifications and representations.

    The certifications and representations for NASA may be found in 
Exhibit C of the GCAM. https://prod.nais. nasa.gov/pub/pub_ library/
srba.

[84 FR 20240, May 9, 2019]

    Effective Date Note: At 85 FR 71817, Nov. 12, 2020, Sec.  1800.208 
was redesignated as Sec.  1800.209, effective Jan. 11, 2021. The newly 
redesignated Sec.  1800.209 was subsequently revised at 85 FR 71817, 
Nov. 12, 2020. For the convenience of the user, the revised text is set 
forth as follows:



Sec.  1800.209  Certifications and representations.

    The certifications and representations for NASA may be found in 
Appendix C of the GCAM, at: https://prod.nais. nasa.gov/pub/pub_ 
library/srba/index.html.



Sec.  1800.209  Pre-award costs.

    NASA waives the approval requirement for pre-award costs of 90 days 
or less.

    Effective Date Note: At 85 FR 71817, Nov. 12, 2020, Sec.  1800.209 
was redesignated as Sec.  1800.210, effective Jan. 11, 2021.

[[Page 571]]



Sec.  1800.210  Information contained in a Federal award.

    NASA waives the requirement for the inclusion of indirect cost rates 
on any notice of Federal award for commercial firms with no cost sharing 
requirement. The terms and conditions for NASA may be found in Exhibit D 
of the GCAM. https://prod.nais. nasa.gov/pub/pub_ library/srba.

[84 FR 20240, May 9, 2019]

    Effective Date Note: At 85 FR 71817, Nov. 12, 2020, Sec.  1800.210 
was redesignated as Sec.  1800.211, effective Jan. 11, 2021. This newly 
redesignated Sec.  1800.211 was subsequently revised, effective Jan. 11, 
2021. For the convenience of the user, the text is set forth as follows:



Sec.  1800.211  Information contained in a Federal award.

    NASA waives the requirement for the inclusion of indirect cost rates 
on any notice of Federal award for for-profit organizations. The terms 
and conditions for NASA may be found in Appendix D of the GCAM at: 
https://prod.nais. nasa.gov/pub/pub_ library/srba/index.html.



                Subpart C_Post Federal Award Requirements

             Standards for Financial and Program Management



Sec.  1800.305  Payment.

    Payments under awards with commercial firms will be made based on 
incurred costs. Standard Form 425 is not required. Commercial firms 
shall not submit invoices more frequently than quarterly. Payments to be 
made on a more frequent basis require the written approval of the Grant 
Officer.

    Effective Date Note: At 85 FR 71817, Nov. 12, 2020, Sec.  1800.305 
was revised, effective Jan. 11, 2021. For the convenience of the user, 
the revised text is set forth as follows:



Sec.  1800.305  Federal payment.

    Payments under awards with for-profit organizations will be made 
based on incurred costs. Standard Form 425 is not required. For-profit 
organizations shall not submit invoices more frequently than quarterly. 
Payments to be made on a more frequent basis require the written 
approval of the Grant Officer.



Sec.  1800.306  Cost sharing or matching.

    In some cases NASA research projects require cost sharing/match. 
Where cost sharing/match is required, recipients must secure and 
document matching funds, to receive the Federal award.

    Effective Date Note: At 85 FR 71817, Nov. 12, 2020, Sec.  1800.306 
was revised, effective Jan. 11, 2021. For the convenience of the user, 
the revised text is set forth as follows:



Sec.  1800.306  Cost sharing or matching.

    In some cases, NASA research projects require cost sharing or 
matching. Where cost sharing or matching is required, recipients must 
secure and document matching funds to receive the Federal award.

                           Property Standards



Sec.  1800.312  Federally owned and exempt property.

    Under the authority of the Childs Act, 31 U.S.C. 6301 to 6308, NASA 
has determined to vest title to property acquired with Federal funds in 
the recipient without further obligation to NASA, including reporting 
requirements.

    Effective Date Note: At 85 FR 71817, Nov. 12, 2020, Sec.  1800.312 
was revised, effective Jan. 11, 2021. For the convenience of the user, 
the revised text is set forth as follows:



Sec.  1800.312  Federally-owned and exempt property.

    Under the authority of the Chiles Act, 31 U.S.C. 6301 to 6308, NASA 
has decided to vest title to tangible personal property acquired with 
Federal funds in nonprofit institutions of higher education and 
nonprofit organizations whose primary purpose is conducting scientific 
research without further obligation to NASA, including reporting 
requirements. Award recipients that are not nonprofit institutions of 
higher education or nonprofit organizations whose primary purpose is 
conducting scientific research shall adhere to regulations at 2 CFR 
200.312 through 200.316.



Sec.  1800.315  Intangible property.

    Due to the substantial involvement on the part of NASA under a 
cooperative agreement, intellectual property may be produced by Federal 
employees and NASA contractors tasked to perform NASA assigned 
activities. Title to intellectual property created under the cooperative 
agreement by NASA or its contractors will initially vest with the

[[Page 572]]

creating party or parties. Certain rights may be exchanged with the 
recipient.

                       Remedies for Noncompliance



Sec.  1800.339  Termination.

    NASA reserves the ability to terminate a Federal award in accordance 
with Sec.  200.338 through Sec.  200.342 and as set forth in section D21 
of the GCAM.

[84 FR 20240, May 9, 2019]

    Effective Date Note: At 85 FR 71817, Nov. 12, 2020, Sec.  1800.339 
was revised, effective Jan. 11, 2021. For the convenience of the user, 
the revised text is set forth as follows:



Sec.  1800.339  Remedies for noncompliance.

    NASA reserves the ability to impose additional conditions in 
response to award recipient noncompliance and terminate a Federal award 
in accordance with 2 CFR 200.339 through 200.343 and as set forth in the 
GCAM.



Sec.  1800.400  Policy guide.

    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 assistance 
instrument, in all cases where fee or profit is to be paid to the 
recipient of the instrument or the instrument is to be used to carry out 
a program where fee or profit is necessary to achieving program 
objectives. Grants and Cooperative Agreements shall not provide for the 
payment of fee or profit to the recipient.

    Effective Date Note: At 85 FR 71817, Nov. 12, 2020, Sec.  1800.400 
was revised, effective Jan. 11, 2021. For the convenience of the user, 
the revised text is set forth as follows:



Sec.  1800.400  Policy guide.

    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 Federal financial assistance to a 
recipient to carry out a public purpose. Therefore, the Grants Officer 
shall use a procurement contract, rather than a grant or cooperative 
agreement, in all cases where fee or profit is to be paid to the 
recipient of the instrument or the instrument is to be used to carry out 
a program where fee or profit is necessary to achieving program 
objectives. Grants and cooperative agreements shall not provide for the 
payment of any fee or profit to the recipient.

                       PARTS 1801	1879 [RESERVED]



PART 1880_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
1880.10 What does this part do?
1880.20 Does this part apply to me?
1880.30 What policies and procedures must I follow?

                            Subpart A_General

1880.137 Who in NASA may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

1880.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

1880.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

1880.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-J [Reserved]

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235; 42 
U.S.C. 2473(c)(1).

    Source: 72 FR 19783, Apr. 20, 2007, unless otherwise noted.



Sec.  1880.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the NASA policies and procedures for nonprocurement debarment and 
suspension. It thereby gives regulatory effect

[[Page 573]]

for NASA to the OMB guidance as supplemented by this part. This part 
satisfies the requirements in section 3 of Executive Order 12549, 
``Debarment and Suspension'' (3 CFR 1986 Comp., p. 189), Executive Order 
12689, ``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235) and 31 
U.S.C. 6101 note (Section 2455, Public Law 103-355, 108 Stat. 3327).



Sec.  1880.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in a NASA suspension or debarment action;
    (c) NASA debarment or suspension official; or
    (d) NASA grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  1880.30  What policies and procedures must I follow?

    The NASA policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180, as that section is 
supplemented by the section in this part with the same section number. 
The contracts that are covered transactions, for example, are specified 
by section 220 of the OMB guidance (i.e., 2 CFR 180.220) as supplemented 
by section 220 in this part (i.e., Sec.  1880.220). For any section of 
OMB guidance in subparts A through I of 2 CFR 180 that has no 
corresponding section in this part, NASA policies and procedures are 
those in the OMB guidance.



                            Subpart A_General



Sec.  1880.137  Who in NASA may grant an exception to let an excluded
person participate in a covered transaction?

    The Chief Acquisition Officer has the authority to grant an 
exception to let an excluded person participate in a covered 
transaction, as provided in the OMB guidance at 2 CFR 180.135.



                     Subpart B_Covered Transactions



Sec.  1880.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    NASA extends coverage of nonprocurement suspension and debarment 
requirements beyond first-tier procurement contracts under a covered 
nonprocurement action, to all lower tier subcontracts, at all dollar 
values, consistent with OMB guidance at 2 CFR 180.220(c) and the figure 
in the appendix at 2 CFR part 180. NASA does not permit subcontracting 
to suspended or debarred entities at any tier, at any dollar amount.

[78 FR 13211, Feb. 27, 2013]



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  1880.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  1880.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include

[[Page 574]]

a term or condition in the transaction that requires the participant's 
compliance with subpart C of 2 CFR part 180, as supplemented by subpart 
C of this part, and requires the participant to include a similar term 
or condition in lower-tier covered transactions.

Subparts E-J [Reserved]

                          PART 1881 [RESERVED]



PART 1882_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL 
ASSISTANCE)--Table of Contents



Sec.
1882.5 What does this part do?

                     Subpart A_Purpose and Coverage

1882.120 Are any of my Federal assistance awards exempt from this part?

Subparts B-D [Reserved]

           Subpart E_Violations of This Part and Consequences

1882.500 How are violations of this part determined for recipients other 
          than individuals?
1882.505 How are violations of this part determined for recipients who 
          are individuals?
1882.515 Are there any exceptions to those actions?

Subpart F [Reserved]

    Authority: 41 U.S.C. 701 et seq.; 51 U.S.C. 20113(e).

    Source: 79 FR 56487, Sept. 22, 2014, unless otherwise noted.



Sec.  1882.5  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through F of 2 CFR part 182, as supplemented by this part, 
as the NASA policies and procedures for implementing the portion of the 
Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as amended, 
hereafter referred to as ``the Act'') that applies to grants and 
cooperative agreements. It thereby gives regulatory effect for NASA to 
the OMB guidance. Further, it supplements the OMB guidance with NASA-
specific regulation.

[79 FR 56487, Sept. 22, 2014. Redesignated at 79 FR 62797, Oct. 21, 
2014]



                     Subpart A_Purpose and Coverage



Sec.  1882.120  Are any of my Federal assistance awards exempt 
from this part?

    This part does not apply to any award for which the Assistant 
Administrator for Procurement 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.

Subparts B-D [Reserved]



           Subpart E_Violations of This Part and Consequences



Sec.  1882.500  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 Assistant Administrator for Procurement 
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.  1882.505  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 Assistant Administrator for Procurement 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.

[[Page 575]]



Sec.  1882.515  Are there any exceptions to those actions?

    The Assistant Administrator for Procurement (AA) may waive with 
respect to a particular award, in writing, a suspension of payments 
under an award or a suspension or termination of an award. The Chief 
Acquisition Officer (CAO) may approve an award to a suspended or 
debarred entity if the CAO determines that such a waiver would be in the 
public interest. These exception authorities cannot be delegated to any 
other official.

Subpart F [Reserved]

                       PARTS 1883	1899 [RESERVED]

[[Page 577]]



         CHAPTER XX--UNITED STATES NUCLEAR REGULATORY COMMISSION




  --------------------------------------------------------------------
Part                                                                Page
2000            Nonprocurement debarment and suspension.....         579
2001-2099

 [Reserved]

[[Page 579]]



PART 2000_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



                            Subpart A_General

Sec.
2000.10 What does this part do?
2000.20 Does this part apply to me?
2000.30 What policies and procedures must I follow?
2000.135 Who in the Nuclear Regulatory Commission may grant an exception 
          to let an excluded person participate in a covered 
          transaction?

                     Subpart B_Covered Transactions

2000.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

2000.330 What method must be used to pass requirements down to 
          participants at lower tiers?

Subparts D-H [Reserved]

                          Subpart I_Definitions

2000.930 Debarring official.
2000.1010 Suspending official.

    Authority: 5 U.S.C. 301; Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 
(31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR, 1986 Comp., p. 
189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p. 235.

    Source: 75 FR 27924, May 19, 2010, unless otherwise noted.



                            Subpart A_General



Sec.  2000.10  What does this part do?

    This part promulgates a regulation adopting the Office of Management 
and Budget (OMB) guidance in subparts A through I of 2 CFR part 180, 
establishing the United States Nuclear Regulatory Commission (NRC) 
policies and procedures for nonprocurement debarment and suspension. NRC 
thereby gives regulatory effect to the OMB guidance. It also supplements 
the OMB guidance by identifying NRC implementing officials and 
identifying how to pass these requirements through to other entities.



Sec.  2000.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to:
    (a) Participant or principal in a ``covered transaction'';
    (b) Respondent in an NRC nonprocurement suspension or debarment 
action;
    (c) NRC debarment or suspension official; or
    (d) NRC grants officer, agreements officer, or other official 
authorized to enter into a covered nonprocurement transaction.



Sec.  2000.30  What policies and procedures must I follow?

    (a) The NRC policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in Subparts A through I of 2 CFR part 180, and those in this 
part. The NRC has closely tracked OMB's numbering scheme. For example, 
the contracts under a nonprocurement transaction that are covered 
transactions that are in section 220 of the OMB guidance (i.e., 2 CFR 
180.220) are found in Sec.  2000.220.
    (b) For any section of OMB guidance in subparts A through I of 2 CFR 
part 180 that has no corresponding section in this part, NRC 
requirements are those in the OMB guidance at 2 CFR part 180.



Sec.  2000.135  Who in the Nuclear Regulatory Commission may grant
an exception to let an excluded person participate in a covered
transaction?

    The Director, Office of Administration or another official 
designated by the Director, has the authority to grant a written 
exception to let an excluded person participate in a covered 
transaction, as provided in guidance at 2 CFR 180.135. The Director or 
other official designated by the Director shall explain the reason(s) 
for deviating from the governmentwide policy.



                     Subpart B_Covered Transactions



Sec.  2000.220  What contracts and subcontracts, in addition to 
those listed in 2 CFR 180.220, are covered transactions?

    The NRC nonprocurement suspension and debarment requirements apply

[[Page 580]]

only to first-tier procurement contracts under a covered nonprocurement 
transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  2000.330  What method must be used to pass requirements down to
participants at lower tiers?

    A participant in a covered transaction must include a term or 
condition in any lower-tier covered transaction to require the 
participant of that transaction to--
    (a) Comply with subpart C of the OMB guidance in 2 CFR part 180; and
    (b) Include a similar term or condition in any covered transaction 
into which it enters at the next lower tier.

Subparts D-H [Reserved]



                          Subpart I_Definitions



Sec.  2000.930  Debarring official.

    The Debarring Official for the United States Nuclear Regulatory 
Commission is the Director, Office of Administration.



Sec.  2000.1010  Suspending official.

    The suspending official for the United States Nuclear Regulatory 
Commission is the Director, Office of Administration.

                       PARTS 2001	2099 [RESERVED]

[[Page 581]]



      CHAPTER XXII--CORPORATION FOR NATIONAL AND COMMUNITY SERVICE




  --------------------------------------------------------------------
Part                                                                Page
2200            Nonprocurement debarment and suspension.....         583
2205            Implementation of and exemptions to 2 CFR...         584
2245            Requirements for drug-free workplace 
                    (financial assistance)..................         584
2246-2299

 [Reserved]

[[Page 583]]



PART 2200_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
2200.10 What does this part do?
2200.20 Does this part apply to me?
2200.30 What policies and procedures must I follow?
2200.137 Who in the Corporation for National and Community Service may 
          grant an exception to let an excluded person participate in a 
          covered transaction?
2200.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?
2200.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?
2200.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235; 22 
U.S.C. 2503(b).

    Source: 72 FR 28826, May 23, 2007, unless otherwise noted.



Sec.  2200.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Corporation for National and Community Service policies and 
procedures for nonprocurement debarment and suspension. It thereby gives 
regulatory effect for the Corporation for National and Community Service 
to the OMB guidance as supplemented by this part. This part satisfies 
the requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189), Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235) and 31 U.S.C. 
6101 note (Section 2455, Pub. L. 103-355, 108 Stat. 3327).



Sec.  2200.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction.'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970.
    (b) Respondent in a Corporation for National and Community Service 
suspension or debarment action;
    (c) Corporation for National and Community Service debarment or 
suspension official; or
    (d) Corporation for National and Community Service grants officer, 
agreements officer, or other official authorized to enter into any type 
of nonprocurement transaction that is a covered transaction.



Sec.  2200.30  What policies and procedures must I follow?

    The Corporation for National and Community Service policies and 
procedures that you must follow are the policies and procedures 
specified in each applicable section of the OMB guidance in subparts A 
through I of 2 CFR part 180, as that section is supplemented by the 
section in this part with the same section number. The contracts that 
are covered transactions, for example, are specified by section 220 of 
the OMB guidance (i.e., 2 CFR 180.220) as supplemented by section 220 in 
this part (i.e., Sec. 2200.220). For any section of OMB guidance in 
subparts A through I of 2 CFR part 180 that has no corresponding section 
in this part, Corporation for National and Community Service policies 
and procedures are those in the OMB guidance.



Sec.  2200.137  Who in the Corporation for National and Community
Service may grant an exception to let an excluded person participate
in a covered transaction?

    The Chief Executive Officer (or another official designated by the 
Chief Executive Officer) has the authority to grant an exception to let 
an excluded person participate in a covered transaction, as provided in 
the OMB guidance at 2 CFR 180.135.



Sec.  2200.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see optional lower tier coverage in the figure in 
the appendix to 2 CFR part 180), Corporation for National

[[Page 584]]

and Community Service does not extend coverage of nonprocurement 
suspension and debarment requirements beyond first-tier procurement 
contracts under a covered nonprocurement transaction.



Sec.  2200.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with Subpart C 
of the OMB guidance in 2 CFR part 180.



Sec.  2200.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you as an agency official must include a 
term or condition in the transaction that requires the participant's 
compliance with subpart C of 2 CFR part 180, and requires the 
participant to include a similar term or condition in lower-tier covered 
transactions.



PART 2205_IMPLEMENTATION OF AND EXEMPTIONS TO 2 CFR--Table of Contents



Sec.
2205.100 Adoption of 2 CFR part 200.
2205.201 Use of grant agreements (including fixed amount awards), 
          cooperative agreements, and contracts.
2205.306 Cost sharing or matching.
2205.332 Fixed amount subawards.
2205.414 Indirect (F&A) costs.

    Authority: 42 U.S.C. 12571(d), 12571(e)(2)(B), 12581(l), 12581a(a), 
12616(c)(2), 12651c(c), 12651d(h), 12651g(b), 12653(a), 12653(h), 
12653o(a), and 12657(a); 2 CFR part 200; 45 CFR 2521.95, and 2540.110.

    Source: 79 FR 76076, Dec. 19, 2014, unless otherwise noted.



Sec.  2205.100  Adoption of 2 CFR Part 200.

    Under the authority listed above, the Corporation for National and 
Community Service adopts the Office of Management and Budget's (OMB) 
Guidance in 2 CFR part 200, except as specified in this part. Thus, this 
part gives regulatory effect to the OMB guidance and supplements the 
guidance for recipients of awards from the Corporation.



Sec.  2205.201  Use of grant agreements (including fixed amount awards),
cooperative agreements, and contracts.

    (a) The Corporation will determine the appropriate instrument in 
accordance with its authorities under the national service laws, and in 
accordance with the Federal Grant and Cooperative Agreement Act (31 
U.S.C. 6301-6308), as appropriate.
    (b) The Corporation and pass through entities may also provide fixed 
amount awards in the manner and in the amounts permitted under the 
national service laws.



Sec.  2205.306  Cost sharing or matching.

    (a) Shared costs or matching funds must meet the criteria of 2 CFR 
200.306(b), with the exception of 2 CFR 200.306(b)(5). Federal funds 
from other agencies may be used as match or cost sharing as authorized 
by 42 U.S.C. 12571(e) under the national service laws.



Sec.  2205.332  Fixed amount subawards.

    Fixed amount subawards may be made in the manner and in amounts 
determined under the national service laws, as authorized by the 
Corporation, without respect to the Simplified Acquisition Threshold.



Sec.  2205.414  Indirect (F&A) costs.

    Administrative costs for programs funded under subtitles B and C of 
the National and Community Service Act of 1990, as amended, shall be 
subject to 45 CFR 2521.95 and 2540.110.



PART 2245_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
2245.10 What does this part do?
2245.20 Does this part apply to me?
2245.30 What policies and procedures must I follow?

Subpart A--Purpose and Coverage [Reserved]

[[Page 585]]

      Subpart B_Requirements for Recipients Other Than Individuals

2245.225 Whom in the Corporation does a recipient other than an 
          individual notify about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

2245.300 Whom in the Corporation does a recipient who is an individual 
          notify about a criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

2245.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of this Part and Consequences

2245.500 Who in the Corporation determines that a recipient other than 
          an individual violated the requirements of this part?
2245.505 Who in the Corporation determines that a recipient who is an 
          individual violated the requirements of this part?

Subpart F [Reserved]

    Authority: 41 U.S.C. 701-707; 42 U.S.C. 12644.

    Source: 75 FR 22206, Apr. 28, 2010, unless otherwise noted.



Sec.  2245.10  What does this part do?

    This part requires that the award and administration of the 
Corporation's grants and cooperative agreements comply with Office of 
Management and Budget (OMB) guidance implementing the portion of the 
Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as amended, 
hereafter referred to as ``the Act'') that applies to grants. It 
thereby--
    (a) Gives regulatory effect to the OMB guidance (Subparts A through 
F of 2 CFR part 182) for the Corporation's grants and cooperative 
agreements; and
    (b) Establishes the Corporation's policies and procedures for 
compliance with the Act that are the same as those of other Federal 
agencies, in conformance with the requirement in 41 U.S.C. 705 for 
Government-wide implementing regulations.



Sec.  2245.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in Subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of a Corporation grant or cooperative agreement; or
    (b) A Corporation awarding official.



Sec.  2245.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table. For each 
of those sections, you must follow the policies and procedures in the 
OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   2245.225  Whom in the Corporation
                                                 a recipient other than
                                                 an individual must
                                                 notify if an employee
                                                 is convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   2245.300  Whom in the Corporation
                                                 a recipient who is an
                                                 individual must notify
                                                 if he or she is
                                                 convicted of a criminal
                                                 drug offense resulting
                                                 from a violation
                                                 occurring during the
                                                 conduct of any award
                                                 activity.
(3) 2 CFR 182.500............  Sec.   2245.500  Who in the Corporation
                                                 is authorized to
                                                 determine that a
                                                 recipient other than an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(4) 2 CFR 182.505............  Sec.   2245.505  Who in the Corporation
                                                 is authorized to
                                                 determine that a
                                                 recipient who is an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------


[[Page 586]]

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in Subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, the 
Corporation's policies and procedures are the same as those in the OMB 
guidance.

Subpart A--Purpose and Coverage [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  2245.225  Whom in the Corporation does a recipient other than
an individual notify about a criminal drug conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify the Corporation's awarding official 
or other designee.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  2245.300  Whom in the Corporation does a recipient who is an
individual notify about a criminal drug conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify the Corporation's awarding official or other 
designee.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  2245.400  What method do I use as an agency awarding official
to obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must obtain each 
recipient's agreement, as a condition of the award, to comply with the 
requirements in subpart B (or subpart C, if the recipient is an 
individual) of 2245, which adopts the Government-wide implementation (2 
CFR part 182) of sec. 5152-5158 of the Drug-Free Workplace Act of 1988 
(Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 701-707).



           Subpart E_Violations of this Part and Consequences



Sec.  2245.500  Who in the Corporation determines that a recipient
other than an individual violated the requirements of this part?

    The Corporation's Chief Executive Officer or designee is authorized 
to make the determination under 2 CFR 182.500.



Sec.  2245.505  Who in the Corporation determines that a recipient
who is an individual violated the requirements of this part?

    The Corporation's Chief Executive Officer or designee is authorized 
to make the determination under 2 CFR 182.500.

Subpart F [Reserved]

                       PARTS 2246	2299 [RESERVED]

[[Page 587]]



              CHAPTER XXIII--SOCIAL SECURITY ADMINISTRATION




  --------------------------------------------------------------------
Part                                                                Page
2300            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         589
2301-2335

 [Reserved]

2336            Nonprocurement debarment and suspension.....         589
2339            Requirements for drug-free workplace 
                    (financial assistance)..................         590
2340-2399

 [Reserved]

[[Page 589]]



PART 2300_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND 
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 5 U.S.C. 301; 2 CFR part 200, and as noted in specific 
sections.

    Source: 79 FR 76078, Dec. 19, 2014, unless otherwise noted.



Sec.  2300.10  Applicable regulations.

    The Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards set forth in 2 CFR part 200 shall apply 
to the Social Security Administration.



Sec. Sec.  2300.11-2300.2335  [Reserved]

                       PARTS 2301	2335 [RESERVED]



PART 2336_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
2336.10 What does this part do?
2336.20 Does this part apply to me?
2336.30 What policies and procedures must I follow?

                            Subpart A_General

2336.137 Who in the SSA may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

2336.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

2336.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

2336.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-J [Reserved]

    Authority: 42 U.S.C. 902(a)(5); Sec. 2455, Pub. L. 103-355, 108 
Stat. 3327; E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O. 12689 (3 CFR, 
1989 Comp., p. 235).

    Source: 72 FR 46140, Aug. 17, 2007, unless otherwise noted.



Sec.  2336.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the SSA policies and procedures for nonprocurement debarment and 
suspension. This part satisfies the requirements in section 3 of 
Executive Order 12549, ``Debarment and Suspension'' (3 CFR 1986 Comp., 
p. 189), Executive Order 12689, ``Debarment and Suspension'' (3 CFR 1989 
Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Pub. L. 103-355, 
108 Stat. 3327).



Sec.  2336.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in an SSA suspension or debarment action;
    (c) SSA debarment or suspension official; or
    (d) SSA grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  2336.30  What policies and procedures must I follow?

    The SSA policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180, as supplemented by 
the section in this part with the same section number. The contracts 
that are covered transactions, for example, are specified by section 220 
of the OMB guidance (i.e., 2 CFR 180.220), as supplemented by section 
220 in this part (i.e., Sec.  2336.220). For

[[Page 590]]

any section of OMB guidance in subparts A through I of 2 CFR 180 that 
has no corresponding section in this part, SSA policies and procedures 
are those in the OMB guidance.



                            Subpart A_General



Sec.  2336.137  Who in the SSA may grant an exception to let an
excluded person participate in a covered transaction?

    (a) Within the Social Security Administration, the Commissioner or 
the designated agency debarment official may grant an exception 
permitting an excluded person to participate in a particular covered 
transaction. If the Commissioner or the designated agency debarment 
official grants an exception, the exception must be in writing and state 
the reason(s) for deviating from the OMB guidance at 2 CFR 180.135.
    (b) An exception granted by one agency for an excluded person does 
not extend to the covered transactions of another agency.



                     Subpart B_Covered Transactions



Sec.  2336.220  What contracts and subcontracts, in addition to 
those listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see option lower tier coverage in the figure in 
the appendix to 2 CFR part 180), SSA does not extend coverage of 
nonprocurement suspension and debarment requirements beyond first-tier 
procurement contracts under a covered nonprocurement transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  2336.332  What methods must I use to pass requirements down 
to participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  2336.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-J [Reserved]



PART 2339_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
2339.10 What does this part do?
2339.20 Does this part apply to me?
2339.30 What policies and procedures must I follow?

Subpart A [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

2339.225 Who in the Social Security Administration does a recipient 
          other than an individual notify about a criminal drug 
          conviction?

Subpart C [Reserved]

         Subpart D_Responsibilities of Agency Awarding Officials

2339.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of this Part and Consequences

2339.500 Who in the Social Security Administration determines that a 
          recipient other than an individual violated the requirements 
          of this part?

Subpart F [Reserved]

    Authority: 41 U.S.C. 701-707.

[[Page 591]]


    Source: 75 FR 31274, June 3, 2010, unless otherwise noted.



Sec.  2339.10  What does this part do?

    This part requires that the award and administration of Social 
Security Administration (SSA) grants and cooperative agreements comply 
with Office of Management and Budget (OMB) guidance implementing the 
portion of the Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as 
amended, hereafter referred to as ``the Act'') that applies to grants. 
It thereby--
    (a) Gives regulatory effect to the OMB guidance (subparts A through 
F of 2 CFR part 182) for SSA's grants and cooperative agreements; and
    (b) Establishes SSA's policies and procedures for compliance with 
the Act that are the same as those of other Federal agencies, in 
conformance with the requirement in 41 U.S.C. 705 for Government-wide 
implementing regulations.



Sec.  2339.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are--
    (a) A recipient of an SSA grant or cooperative agreement; or
    (b) An SSA awarding official.



Sec.  2339.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table.

------------------------------------------------------------------------
                               Section in this
 Section of OMB guidance in 2     part where    What the supplementation
             CFR               supplemented, 2          clarifies
                                     CFR
------------------------------------------------------------------------
(1) 182.225(a)...............  Sec.   2339.225  Who in SSA a recipient
                                                 other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 182.300(b)...............  Sec.   2339.300  Who in SSA a recipient
                                                 who is an individual
                                                 must notify if he or
                                                 she is convicted of a
                                                 criminal drug offense
                                                 resulting from a
                                                 violation occurring
                                                 during the conduct of
                                                 any award activity.
(3) 182.500..................  Sec.   2339.500  Who in SSA is authorized
                                                 to determine that a
                                                 recipient other than an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(4) 182.505..................  Sec.   2339.505  Who in SSA is authorized
                                                 to determine that a
                                                 recipient who is an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
Our policies and procedures are the same as those in the OMB guidance 
for any section not included in the table in paragraph (b) of this 
section.

Subpart A [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  2339.225  Who in the Social Security Administration does a
recipient other than an individual notify about a criminal drug
conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify the Commissioner of Social Security 
or designee.

Subpart C [Reserved]



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  2339.400  What method do I use as an agency awarding official
to obtain a recipient's agreement to comply with the OMB guidance?

    You must include the following term or condition in the award:
    Drug-free workplace. You, as the recipient, must comply with drug-
free workplace requirements in Subpart B,

[[Page 592]]

which adopts the Government-wide implementation (2 CFR part 182) of sec. 
5152-5158 of the Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title 
V, Subtitle D; 41 U.S.C. 701-707).



           Subpart E_Violations of this Part and Consequences



Sec.  2339.500  Who in the Social Security Administration determines
that a recipient other than an individual violated the requirements
of this part?

    The Commissioner of Social Security or designee will make the 
determination.

Subpart F [Reserved]

                       PARTS 2340	2399 [RESERVED]

[[Page 593]]



        CHAPTER XXIV--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




  --------------------------------------------------------------------
Part                                                                Page
2400            Uniform administrative requirements, cost 
                    principles and audit requirements for 
                    Federal awards..........................         595
2401-2423

 [Reserved]

2424            Nonprocurement debarment and suspension.....         595
2429            Requirements for drug-free workplace 
                    (financial assistance)..................         602
2430-2499

 [Reserved]

[[Page 595]]



PART 2400_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 42 U.S.C. 3535(d); 2 CFR part 200.

    Source: 79 FR 76078, Dec. 19, 2014, unless otherwise noted.



Sec.  2400.101  Applicable regulations.

    Unless excepted under 24 CFR chapters I through IX, the Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements for 
Federal Awards, set forth in 2 CFR part 200, shall apply to Federal 
Awards made by the Department of Housing and Urban Development to non-
Federal entities.

                       PARTS 2401	2423 [RESERVED]



PART 2424_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
2424.10 What does this part do?
2424.20 Does this part apply to me?
2424.30 What policies and procedures must I follow?

                            Subpart A_General

2424.137 Who in HUD may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

2424.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

2424.300 What must I do before I enter into a covered transaction with 
          another person at the next lower tier (HUD supplement to 
          governmentwide definition at 2 CFR 180.300)?
2424.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

2424.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-F [Reserved]

                          Subpart G_Suspension

2424.747 Who conducts fact finding for HUD suspensions?

                           Subpart H_Debarment

2424.842 Who conducts fact finding for HUD debarments?

                          Subpart I_Definitions

2424.952 Hearing officer.
2424.970 Nonprocurement transaction (HUD supplement to governmentwide 
          definition at 2 CFR 180.970).
2424.995 Principal (HUD supplement to governmentwide definition at 2 CFR 
          180.995).
2424.1017 Ultimate beneficiary.

                Subpart J_Limited Denial of Participation

2424.1100 What is a limited denial of participation?
2424.1105 Who may issue a limited denial of participation?
2424.1110 When may a HUD official issue a limited denial of 
          participation?
2424.1115 When does a limited denial of participation take effect?
2424.1120 How long may a limited denial of participation last?
2424.1125 How does a limited denial of participation start?
2424.1130 How may I contest my limited denial of participation?
2424.1135 Do Federal agencies coordinate limited denial of participation 
          actions?
2424.1140 What is the scope of a limited denial of participation?
2424.1145 May HUD impute the conduct of one person to another in a 
          limited denial of participation?
2424.1150 What is the effect of a suspension or debarment on a limited 
          denial of participation?
2424.1155 What is the effect of a limited denial of participation on a 
          suspension or a debarment?
2424.1160 May a limited denial of participation be terminated before the 
          term of the limited denial of participation expires?
2424.1165 How is a limited denial of participation reported?

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235.

    Source: 72 FR 73487, Dec. 27, 2007, unless otherwise noted.

[[Page 596]]



Sec.  2424.10  What does this part do?

    In this part, HUD adopts, as HUD policies, procedures, and 
requirements for nonprocurement debarment and suspension, the OMB 
guidance in subparts A through I of 2 CFR part 180, as supplemented by 
this part. This adoption thereby gives regulatory effect for HUD to the 
OMB guidance, as supplemented by this part. This part satisfies the 
requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189), Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235) and 31 U.S.C. 
6101 note (Section 2455, Pub. L. 103-355, 108 Stat. 3327).



Sec.  2424.20  Does this part apply to me?

    This part and, through this part, pertinent portions of subparts A 
through I of 2 CFR part 180 (see table at 2 CFR 180.100(b)), apply to 
you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970, as supplemented by Sec.  2424.970 of 
this part);
    (b) Respondent in a HUD suspension or debarment action;
    (c) HUD debarment or suspension official; or
    (d) HUD grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  2424.30  What policies and procedures must I follow?

    The HUD policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180, as that section is 
supplemented by the section in this part with the same section number. 
The contracts that are covered transactions, for example, are specified 
by section 220 of the OMB guidance (i.e., 2 CFR 180.220), as 
supplemented by section 220 in this part (i.e., Sec.  2424.220). For any 
section of OMB guidance in subparts A through I of 2 CFR 180 that has no 
corresponding section in this part, HUD policies and procedures are 
those in the OMB guidance.



                            Subpart A_General



Sec.  2424.137  Who in HUD may grant an exception to let an excluded
person participate in a covered transaction?

    The Secretary or designee may grant an exception permitting an 
excluded person to participate in a particular covered transaction. If 
the Secretary or a designee grants an exception, the exception must be 
in writing and state the reason(s) for deviating from the governmentwide 
policy in Executive Order 12549.



                     Subpart B_Covered Transactions



Sec.  2424.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.220(b) of the 
OMB guidance, this part applies to any contract, regardless of tier, 
that is awarded by a contractor, subcontractor, supplier, consultant, or 
its agent or representative in any transaction, if the contract is to be 
funded or provided by HUD under a covered nonprocurement transaction and 
the amount of the contract is expected to equal or exceed $25,000. This 
extends the coverage of the HUD nonprocurement suspension and debarment 
requirements to all lower tiers of subcontracts under covered 
nonprocurement transactions, as permitted under the OMB guidance at 2 
CFR 180.220(c) (see optional lower-tier coverage in the figure in the 
appendix to 2 CFR part 180).



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  2424.300  What must I do before I enter into a covered
transaction with another person at the next lower tier (HUD supplement
to governmentwide definition at 2 CFR 180.300)?

    (a) You, as a participant, are responsible for determining whether 
you are entering into a covered transaction with an excluded or 
disqualified person. You may decide the method by which you do so.

[[Page 597]]

    (1) You may, but are not required to, check the Excluded Parties 
List System (EPLS).
    (2) You may, but are not required to, collect a certification from 
that person.
    (b) In the case of an employment contract, HUD does not require 
employers to check the EPLS prior to making salary payments pursuant to 
that contract.



Sec.  2424.332  What methods must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?

    To communicate the requirements to lower-tier participants, you must 
include a term or condition in the transaction requiring compliance with 
subpart C of the OMB guidance in 2 CFR part 180, as supplemented by this 
subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  2424.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant to: comply with subpart C of 2 
CFR part 180, as supplemented by subpart C of this part, and include a 
similar term or condition in lower-tier covered transactions.

Subparts E-F [Reserved]



                          Subpart G_Suspension



Sec.  2424.747  Who conducts fact finding for HUD suspensions?

    In all HUD suspensions, the official who shall conduct additional 
proceedings where disputed material facts are challenged shall be a 
hearing officer.



                           Subpart H_Debarment



Sec.  2424.842  Who conducts fact finding for HUD debarments?

    In all HUD debarments, the official who shall conduct additional 
proceedings where disputed material facts are challenged shall be a 
hearing officer.



                          Subpart I_Definitions



Sec.  2424.952  Hearing officer.

    Hearing Officer means an Administrative Law Judge or Office of 
Appeals Judge authorized by HUD's Secretary or by the Secretary's 
designee to conduct proceedings under this part.



Sec.  2424.970  Nonprocurement transaction (HUD supplement to
governmentwide definition at 2 CFR 180.970).

    In the case of employment contracts that are covered transactions, 
each salary payment under the contract is a separate covered 
transaction.



Sec.  2424.995  Principal (HUD supplement to governmentwide definition
at 2 CFR 180.995).

    A person who has a critical influence on, or substantive control 
over, a covered transaction, whether or not employed by the participant. 
Persons who have a critical influence on, or substantive control over, a 
covered transaction may include, but are not limited to:
    (a) Loan officers;
    (b) Staff appraisers and inspectors;
    (c) Underwriters;
    (d) Bonding companies;
    (e) Borrowers under programs financed by HUD or with loans 
guaranteed, insured, or subsidized through HUD programs;
    (f) Purchasers of properties with HUD-insured or Secretary-held 
mortgages;
    (g) Recipients under HUD assistance agreements;
    (h) Ultimate beneficiaries of HUD programs;
    (i) Fee appraisers and inspectors;
    (j) Real estate agents and brokers;
    (k) Management and marketing agents;

[[Page 598]]

    (l) Accountants, consultants, investment bankers, architects, 
engineers, and attorneys who are in a business relationship with 
participants in connection with a covered transaction under a HUD 
program;
    (m) Contractors involved in the construction or rehabilitation of 
properties financed by HUD, with HUD-insured loans or acquired 
properties, including properties held by HUD as mortgagee-in-possession;
    (n) Closing agents;
    (o) Turnkey developers of projects financed by or with financing 
insured by HUD;
    (p) Title companies;
    (q) Escrow agents;
    (r) Project owners;
    (s) Administrators of hospitals, nursing homes, and projects for the 
elderly financed or insured by HUD; and
    (t) Developers, sellers, or owners of property financed with loans 
insured under Title I or Title II of the National Housing Act.



Sec.  2424.1017  Ultimate beneficiary.

    Ultimate beneficiaries of HUD programs include, but are not limited 
to, subsidized tenants and subsidized mortgagors, such as those assisted 
under Section 8 Housing Assistance Payment contracts, by Section 236 
Rental Assistance, or by Rent Supplement payments.



                Subpart J_Limited Denial of Participation



Sec.  2424.1100  What is a limited denial of participation?

    A limited denial of participation excludes a specific person from 
participating in a specific program, or programs, within a HUD field 
office's geographic jurisdiction, for a specific period of time. A 
limited denial of participation is normally issued by a HUD field 
office, but may be issued by a Headquarters office. The decision to 
impose a limited denial of participation is discretionary and based on 
the best interests of the federal government.



Sec.  2424.1105  Who may issue a limited denial of participation?

    The Secretary designates HUD officials who are authorized to impose 
a limited denial of participation, affecting any participant and/or 
their affiliates, except mortgagees approved by the Federal Housing 
Administration (FHA).



Sec.  2424.1110  When may a HUD official issue a limited denial of
participation?

    (a) An authorized HUD official may issue a limited denial of 
participation against a person, based upon adequate evidence of any of 
the following causes:
    (1) Approval of an applicant for insurance would constitute an 
unsatisfactory risk;
    (2) There are irregularities in a person's past performance in a HUD 
program;
    (3) The person has failed to maintain the prerequisites of 
eligibility to participate in a HUD program;
    (4) The person has failed to honor contractual obligations or to 
proceed in accordance with contract specifications or HUD regulations;
    (5) The person has failed to satisfy, upon completion, the 
requirements of an assistance agreement or contract;
    (6) The person has deficiencies in ongoing construction projects;
    (7) The person has falsely certified in connection with any HUD 
program, whether or not the certification was made directly to HUD;
    (8) The person has committed any act or omission that would be cause 
for debarment under 2 CFR 180.800;
    (9) The person has violated any law, regulation, or procedure 
relating to the application for financial assistance, insurance, or 
guarantee, or to the performance of obligations incurred pursuant to a 
grant of financial assistance or pursuant to a conditional or final 
commitment to insure or guarantee;
    (10) The person has made or procured to be made any false statement 
for the purpose of influencing in any way an action of the Department; 
or
    (11) Imposition of a limited denial of participation by any other 
HUD office.
    (b) Filing of a criminal Indictment or Information shall constitute 
adequate

[[Page 599]]

evidence for the purpose of limited denial of participation actions. The 
Indictment or Information need not be based on offenses against HUD.
    (c) Imposition of a limited denial of participation by any other HUD 
office shall constitute adequate evidence for a concurrent limited 
denial of participation. Where such a concurrent limited denial of 
participation is imposed, participation may be restricted on the same 
basis without the need for an additional conference or further hearing.
    (d) An affiliate or organizational element may be included in a 
limited denial of participation solely on the basis of its affiliation, 
and regardless of its knowledge of or participation in the acts 
providing cause for the sanction. The burden of proving that a 
particular affiliate or organizational element is currently responsible 
and not controlled by the primary sanctioned party (or by an entity that 
itself is controlled by the primary sanctioned party) is on the 
affiliate or organizational element.



Sec.  2424.1115  When does a limited denial of participation
take effect?

    A limited denial of participation is effective immediately upon 
issuance of the notice.



Sec.  2424.1120  How long may a limited denial of participation last?

    A limited denial of participation may remain in effect up to 12 
months.



Sec.  2424.1125  How does a limited denial of participation start?

    A limited denial of participation is made effective by providing the 
person, and any specifically named affiliate, with notice:
    (a) That the limited denial of participation is being imposed;
    (b) Of the cause(s) under Sec.  2424.1110 for the sanction;
    (c) Of the potential effect of the sanction, including the length of 
the sanction and the HUD program(s) and geographic area affected by the 
sanction;
    (d) Of the right to request, in writing, within 30 days of receipt 
of the notice, a conference under Sec.  2424.1130; and
    (e) Of the right to contest the limited denial of participation 
under Sec.  2424.1130.



Sec.  2424.1130  How may I contest my limited denial of participation?

    (a) Within 30 days after receiving a notice of limited denial of 
participation, you may request a conference with the official who issued 
such notice. The conference shall be held within 15 days after the 
Department's receipt of the request for a conference, unless you waive 
this time limit. The official or designee who imposed the sanction shall 
preside. At the conference, you may appear with a representative and may 
present all relevant information and materials to the official or 
designee. Within 20 days after the conference, or within 20 days after 
any agreed-upon extension of time for submission of additional 
materials, the official or designee shall, in writing, advise you of the 
decision to terminate, modify, or affirm the limited denial of 
participation. If all or a portion of the remaining period of exclusion 
is affirmed, the notice of affirmation shall advise you of the 
opportunity to contest the notice and to request a hearing before a 
Departmental Hearing Officer. You have 30 days after receipt of the 
notice of affirmation to request this hearing. If the official or 
designee does not issue a decision within the 20-day period, you may 
contest the sanction before a Departmental Hearing Officer. Again, you 
have 30 days from the expiration of the 20-day period to request this 
hearing. If you request a hearing before the Departmental Hearing 
Officer, you must submit your request to the Debarment Docket Clerk, 
Department of Housing and Urban Development, 451 Seventh Street, SW., B-
133 Portals 200, Washington DC 20410-0500.
    (b) You may skip the conference with the official and you may 
request a hearing before a Departmental Hearing Officer. This must also 
be done within 30 days after receiving a notice of limited denial of 
participation. If you opt to have a hearing before a Departmental 
Hearing Officer, you must submit your request to the Debarment Docket 
Clerk, Department of Housing and Urban Development, 451 Seventh Street, 
SW., B-133 Portals 200, Washington DC 20410-0500. The hearing before the 
Departmental Hearing Officer

[[Page 600]]

is more formal than the conference before the sanctioning official 
described above. The Departmental Hearing Officer will conduct the 
hearing in accordance with 24 CFR part 26, subpart A. The Departmental 
Hearing Officer will issue findings of fact and make a recommended 
decision. The sanctioning official will then make a final decision, as 
promptly as possible, after the Departmental Hearing Officer's 
recommended decision is issued. The sanctioning official may reject the 
recommended decision or any findings of fact, only after specifically 
determining that the decision or any of the facts are arbitrary, 
capricious, or clearly erroneous.
    (c) In deciding whether to terminate, modify, or affirm a limited 
denial of participation, the Departmental official or designee may 
consider the factors listed at 2 CFR 180.860. The Departmental Hearing 
Officer may also consider the factors listed at 2 CFR 180.860 in making 
any recommended decision.



Sec.  2424.1135  Do Federal agencies coordinate limited denial of
participation actions?

    Federal agencies do not coordinate limited denial of participation 
actions. As stated in Sec.  2424.1100, a limited denial of participation 
is a HUD-specific action and applies only to HUD activities.



Sec.  2424.1140  What is the scope of a limited denial of participation?

    The scope of a limited denial of participation is as follows:
    (a) A limited denial of participation generally extends only to 
participation in the program under which the cause arose. A limited 
denial of participation may, at the discretion of the authorized 
official, extend to other programs, initiatives, or functions within the 
jurisdiction of an Assistant Secretary. The authorized official, 
however, may determine that where the sanction is based on an indictment 
or conviction, the sanction shall apply to all programs throughout HUD.
    (b) For purposes of this subpart, participation includes receipt of 
any benefit or financial assistance through grants or contractual 
arrangements; benefits or assistance in the form of loan guarantees or 
insurance; and awards of procurement contracts.
    (c) The sanction may be imposed for a period not to exceed 12 
months, and shall be effective within the geographic jurisdiction of the 
office imposing it, unless the sanction is imposed by an Assistant 
Secretary or Deputy Assistant Secretary, in which case the sanction may 
be imposed on either a nationwide or a more restricted basis.



Sec.  2424.1145  May HUD impute the conduct of one person to another
in a limited denial of participation?

    For purposes of determining a limited denial of participation, HUD 
may impute conduct as follows:
    (a) Conduct imputed from an individual to an organization. HUD may 
impute the fraudulent, criminal, or other improper conduct of any 
officer, director, shareholder, partner, employee, or other individual 
associated with an organization, to that organization when the improper 
conduct occurred in connection with the individual's performance of 
duties for or on behalf of that organization, or with the organization's 
knowledge, approval, or acquiescence. The organization's acceptance of 
the benefits derived from the conduct is evidence of knowledge, 
approval, or acquiescence.
    (b) Conduct imputed from an organization to an individual or between 
individuals. HUD may impute the fraudulent, criminal, or other improper 
conduct of any organization to an individual, or from one individual to 
another individual, if the individual to whom the improper conduct is 
imputed participated in, had knowledge of, or had reason to know of the 
improper conduct.
    (c) Conduct imputed from one organization to another organization. 
HUD may impute the fraudulent, criminal, or other improper conduct of 
one organization to another organization when the improper conduct 
occurred in connection with a partnership, joint venture, joint 
application, association, or similar arrangement, or when the 
organization to whom the improper conduct is imputed has the power to 
direct, manage, control, or influence the activities of the organization 
responsible for the improper conduct. Acceptance

[[Page 601]]

of the benefits derived from the conduct is evidence of knowledge, 
approval, or acquiescence.



Sec.  2424.1150  What is the effect of a suspension or debarment on
a limited denial of participation?

    If you have submitted a request for a hearing pursuant to Sec.  
2424.1130 of this subpart, and you also receive, pursuant to subpart G 
or H of this part, a notice of proposed debarment or suspension that is 
based on the same transaction(s) or the same conduct as the limited 
denial of participation, as determined by the debarring or suspending 
official, the following rules shall apply:
    (a) During the 30-day period after you receive a notice of proposed 
debarment or suspension, during which you may elect to contest the 
debarment under 2 CFR 180.815, or the suspension pursuant to 2 CFR 
180.720, all proceedings in the limited denial of participation, 
including discovery, are automatically stayed.
    (b) If you do not contest the proposed debarment pursuant to 2 CFR 
180.815, or the suspension pursuant to 2 CFR 180.720, the final 
imposition of the debarment or suspension shall also constitute a final 
decision with respect to the limited denial of participation, to the 
extent that the debarment or suspension is based on the same 
transaction(s) or conduct as the limited denial of participation.
    (c) If you contest the proposed debarment pursuant to 2 CFR 180.815, 
or the suspension pursuant to 2 CFR 180.720, then:
    (1) Those parts of the limited denial of participation and the 
debarment or suspension based on the same transaction(s) or conduct, as 
determined by the debarring or suspending official, shall be immediately 
consolidated before the debarring or suspending official;
    (2) Proceedings under the consolidated portions of the limited 
denial of participation shall be stayed before the hearing officer until 
the suspending or debarring official makes a determination as to whether 
the consolidated matters should be referred to a hearing officer. Such a 
determination must be made within 90 days of the date of the issuance of 
the suspension or proposed debarment, unless the suspending/debarring 
official extends the period for good cause.
    (i) If the suspending or debarring official determines that there is 
a genuine dispute as to material facts regarding the consolidated 
matter, the entire consolidated matter will be referred to the hearing 
officer hearing the limited denial of participation, for additional 
proceedings pursuant to 2 CFR 180.750 or 180.845.
    (ii) If the suspending or debarring official determines that there 
is no dispute as to material facts regarding the consolidated matter, 
jurisdiction of the hearing officer under 2 CFR part 2424, subpart J, to 
hear those parts of the limited denial of participation based on the 
same transaction[s] or conduct as the debarment or suspension, as 
determined by the debarring or suspending official, will be transferred 
to the debarring or suspending official, and the hearing officer 
responsible for hearing the limited denial of participation shall 
transfer the administrative record to the debarring or suspending 
official.
    (3) The suspending or debarring official shall hear the entire 
consolidated case under the procedures governing suspensions and 
debarments, and shall issue a final decision as to both the limited 
denial of participation and the suspension or debarment.



Sec.  2424.1155  What is the effect of a limited denial of participation
on a suspension or a debarment?

    The imposition of a limited denial of participation does not affect 
the right of the Department to suspend or debar any person under this 
part.



Sec.  2424.1160  May a limited denial of participation be terminated 
before the term of the limited denial of participation expires?

    If the cause for the limited denial of participation is resolved 
before the expiration of the 12-month period, the official who imposed 
the sanction may terminate it.



Sec.  2424.1165  How is a limited denial of participation reported?

    When a limited denial of participation has been made final, or the 
period

[[Page 602]]

for requesting a conference pursuant to Sec.  2424.1130 has expired 
without receipt of such a request, the official imposing the limited 
denial of participation shall notify the Director of the Compliance 
Division in the Departmental Enforcement Center of the scope of the 
limited denial of participation.



PART 2429_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
2429.10 What does this part do?
2429.20 Does this part apply to me?
2429.30 What policies and procedures must I follow?

Subpart A [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

2429.225 Whom in HUD does a recipient other than an individual notify 
          about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

2429.300 Whom in HUD does a recipient who is an individual notify about 
          a criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

2429.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of This Part and Consequences

2429.500 Who in HUD determines that a recipient other than an individual 
          violated the requirements of this part?
2429.505 Who in HUD determines that a recipient who is an individual 
          violated the requirements of this part?

Subpart F [Reserved]

    Authority: 41 U.S.C. 701-707; 42 U.S.C. 3535(d).

    Source: 76 FR 45166, July 28, 2011, unless otherwise noted.



Sec.  2429.10  What does this part do?

    This part requires that the award and administration of HUD grants 
and cooperative agreements comply with Office of Management and Budget 
(OMB) guidance implementing the portion of the Drug-Free Workplace Act 
of 1988 (41 U.S.C. 701-707) (referred to as the Act in this part) that 
applies to grants. This part:
    (a) Gives regulatory effect to the OMB guidance (Subparts A through 
F of 2 CFR part 182) for HUD grants and cooperative agreements; and
    (b) Establishes HUD policies and procedures for compliance with the 
Act that are the same as those of other Federal agencies, in conformance 
with the requirement in 41 U.S.C. 705 for governmentwide implementing 
regulations.



Sec.  2429.20  Does this part apply to me?

    This part, and through this part, pertinent portions of the OMB 
guidance in subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a:
    (a) Recipient of a HUD grant or cooperative agreement; or
    (b) HUD awarding official.



Sec.  2429.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table. For each 
of those sections, you must follow the policies and procedures of the 
OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   2429.225  Whom in HUD must a
                                                 recipient other than an
                                                 individual notify if an
                                                 employee is convicted
                                                 for a violation of a
                                                 criminal drug statute
                                                 in the workplace?

[[Page 603]]

 
(2) 2 CFR 182.300(b).........  Sec.   2429.300  Whom in HUD must a
                                                 recipient who is an
                                                 individual notify if he
                                                 or she is convicted of
                                                 a criminal drug offense
                                                 resulting from a
                                                 violation occurring
                                                 during the conduct of
                                                 any award activity?
(3) 2 CFR 182.500............  Sec.   2429.500  Who in HUD is authorized
                                                 to determine that a
                                                 recipient other than an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part?
(4) 2 CFR 182.505............  Sec.   2429.505  Who in HUD is authorized
                                                 to determine that a
                                                 recipient who is an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part?
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in Subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, HUD policies 
and procedures are the same as those in the OMB guidance.

Subpart A [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  2429.225  Whom in HUD does a recipient other than an individual
notify about a criminal conviction?

    A recipient other than an individual who is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify each HUD office with which it 
currently has an award.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  2429.300  Whom in HUD does a recipient who is an individual
notify about a criminal conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify each HUD office with which he or she currently 
has an award.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  2429.400  What method do I use as an agency awarding official
to obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award:
    Drug-free workplace. You as the recipient must comply with drug-free 
workplace requirements in Subpart B (or Subpart C, if the recipient is 
an individual) of part 2429, which adopts the governmentwide 
implementation (2 CFR part 182) of sections 5152-5158 of the Drug-Free 
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 
701-707).



           Subpart E_Violations of This Part and Consequences



Sec.  2429.500  Who in HUD determines that a recipient other than an
individual violated the requirements of this part?

    The Secretary or designee is the official authorized to make the 
determination under 2 CFR 182.500.



Sec.  2429.505  Who in HUD determines that a recipient who is an
individual violated the requirements of this part?

    The Secretary or designee is the official authorized to make the 
determination under 2 CFR 182.505.

Subpart F [Reserved]

                       PARTS 2430	2499 [RESERVED]

[[Page 605]]



                CHAPTER XXV--NATIONAL SCIENCE FOUNDATION




  --------------------------------------------------------------------
Part                                                                Page
2500            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         607
2501-2519

 [Reserved]

2520            Nonprocurement debarment and suspension.....         607
2521-2599

 [Reserved]

[[Page 607]]



PART 2500_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 42 U.S.C. 1861, et seq.; 2 CFR part 200.

    Source: 79 FR 76079, Dec. 19, 2014, unless otherwise noted.



Sec.  2500.100  Adoption of 2 CFR Part 200.

    Under the Authority cited above, NSF has formally adopted 2 CFR part 
200, Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards (``the Uniform Guidance''). The 
Foundation's implementation document, the NSF Proposal & Award Policies 
& Procedures Guide, may be found at: http://www.nsf.gov/publications/
pub_ summ.jsp ?ods_ key=papp.
    NSF's implementation includes the following deviation from the 
Uniform Guidance:
    Award Cash Management System--NSF is continuing collection of award 
financial information through the implementation of the Award Cash 
Management Service (ACM$) and the Program Income Worksheet. ACM$ 
replaced the NSF Federal Financial Report (FFR) and the NSF FastLane 
Cash Request process with a single web based user interface. ACM$ is 
used to collect award level detail financial information at the time of 
each payment request submitted by the awardee institution. The Program 
Income Worksheet is used to collect program income financial information 
from awardee institutions on an annual basis. ACM$ and the Program 
Income Worksheet utilize approved government-wide data elements from the 
FFR for the collection of financial information as provided for in the 
Uniform Guidance paragraph 505(c) and prescribed in 2 CFR 200.327. The 
requirement for Federal agencies to use the FFR data elements for cash 
management and financial reporting was publically announced in Federal 
Register on August 13, 2008.

                       PARTS 2501	2519 [RESERVED]



PART 2520_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
2520.10 What does this part do?
2520.20 Does this part apply to me?
2520.30 What policies and procedures must I follow?

                            Subpart A_General

2520.137 Who in NSF may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

2520.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

2520.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

2520.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-I [Reserved]

    Authority: 42 U.S.C. 1870(a); Sec. 2455, Pub. L. 103-355, 108 Stat. 
3327; E.O. 12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 
Comp., p. 235.

    Source: 72 FR 4944, Feb. 2, 2007, unless otherwise noted.



Sec.  2520.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the NSF policies and procedures for nonprocurement debarment and 
suspension. It thereby gives regulatory effect for NSF to the OMB 
guidance as supplemented by this part. This part satisfies the 
requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189), Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235) and 31 U.S.C. 
6101 note (Section 2455, Public Law 103-355, 108 Stat. 3327).

[[Page 608]]



Sec.  2520.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
Subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970).
    (b) Respondent in an NSF suspension or debarment action.
    (c) NSF debarment or suspension official.
    (d) NSF grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  2520.30  What policies and procedures must I follow?

    The NSF policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180, as that section is 
supplemented by the section in this part with the same section number. 
The contracts that are covered transactions, for example, are specified 
by section 220 of the OMB guidance (i.e., 2 CFR 180.220) as supplemented 
by section 220 in this part (i.e., Sec.  2520.220). For any section of 
OMB guidance in subparts A through I of 2 CFR 180 that has no 
corresponding section in this part, NSF policies and procedures are 
those in the OMB guidance.



                            Subpart A_General



Sec.  2520.137  Who in NSF may grant an exception to let an excluded
person participate in a covered transaction?

    The NSF Director and the Deputy Director have the authority to grant 
an exception to let an excluded person participate in a covered 
transaction.



                     Subpart B_Covered Transactions



Sec.  2520.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see optional lower tier coverage in the figure in 
the appendix to 2 CFR part 180), NSF does not extend coverage of 
nonprocurement suspension and debarment requirements beyond first-tier 
procurement contracts under a covered nonprocurement transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  2520.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  2520.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-I [Reserved]

                       PARTS 2521	2599 [RESERVED]

[[Page 609]]



       CHAPTER XXVI--NATIONAL ARCHIVES AND RECORDS ADMINISTRATION




  --------------------------------------------------------------------
Part                                                                Page
2600            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         611
2601-2699

 [Reserved]

[[Page 611]]



PART 2600_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



Sec.
2600.100 Adoption of 2 CFR part 200.
2600.101 Indirect costs exception to 2 CFR 200.414.
2600.102 Additional NARA grant administration policies.

    Authority: 5 U.S.C. 301; 44 U.S.C. 2104(a); 44 U.S.C. 2501-2506; 75 
FR 66317 (Oct. 28, 2010); 2 CFR 200.

    Source: 79 FR 76079, Dec. 19, 2014, unless otherwise noted.



Sec.  2600.100  Adoption of 2 CFR Part 200.

    Under the authority listed above, the National Archives and Records 
Administration (NARA), through its National Historical Publications and 
Records Commission (NHPRC), adopts the Office of Management and Budget 
(OMB) Guidance in 2 CFR part 200, except regarding indirect costs (see 
Sec.  2600.101). Thus, this part gives regulatory effect to the OMB 
guidance and supplements the guidance as needed for NARA and NHPRC.



Sec.  2600.101  Indirect costs exception to 2 CFR 200.414.

    As approved by the Archivist of the United States, the National 
Archives does not permit grant recipients to use allocated funds from 
NARA or NHPRC for indirect costs. Grant recipients may use cost sharing 
to cover indirect costs instead. NARA's policies on indirect costs are 
located at http://www.archives.gov/nhprc, and are included in grant 
opportunity announcements.

(Authority: 44 U.S.C. 2103-04, 2 CFR part 200)



Sec.  2600.102  Additional NARA grant administration policies.

    Grant recipients must also follow NARA grant administration policies 
and procedures set out in 36 CFR parts 1202, 1206, 1208, 1211, and 1212.

                       PARTS 2601	2699 [RESERVED]

[[Page 613]]



              CHAPTER XXVII--SMALL BUSINESS ADMINISTRATION




  --------------------------------------------------------------------
Part                                                                Page
2700            Nonprocurement debarment and suspension.....         615
2701            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         618
2702-2799

 [Reserved]

[[Page 615]]



PART 2700_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
2700.10 What does this part do?
2700.20 Does this part apply to me?
2700.30 What policies and procedures must I follow?

                            Subpart A_General

2700.137 Who in the Small Business Administration may grant an exception 
          to let an excluded person participate in a covered 
          transaction?

                     Subpart B_Covered Transactions

2700.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

2700.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

2700.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-F [Reserved]

                          Subpart G_Suspension

2700.765 How may I appeal my suspension?

                           Subpart H_Debarment

2700.890 How may I appeal my debarment?

                          Subpart I_Definitions

2700.930 Debarring official (SBA supplement to government-wide 
          definition at 2 CFR 180.930).
2700.995 Principal (SBA supplement to government-wide definition at 2 
          CFR 180.995).
2700.1010 Suspending official (SBA supplement to government-wide 
          definition at 2 CFR 180.1010).

Subpart J [Reserved]

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 
6101 note); E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O. 12689 (3 CFR, 
1989, 1986 Comp., p. 235); 15 U.S.C. 634(b)(6).

    Source: 72 FR 39728, July 20, 2007, unless otherwise noted.



Sec.  2700.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the SBA policies and procedures for nonprocurement debarment and 
suspension. It thereby gives regulatory effect for SBA to the OMB 
guidance as supplemented by this part. This part satisfies the 
requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189); Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235); and section 
2455 of the Federal Acquisition Streamlining Act of 1994, Pub. L. 103-
355 (31 U.S.C. 6101 note).



Sec.  2700.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in an SBA suspension or debarment action;
    (c) SBA debarment or suspension official; or
    (d) SBA grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  2700.30  What policies and procedures must I follow?

    The SBA policies and procedures you must follow are the policies and 
procedures specified in each applicable section of the OMB guidance in 
subparts A through I of 2 CFR part 180, as that section is supplemented 
by the section in this part with the same section number. The contracts 
that are covered transactions, for example, are specified by section 220 
of the OMB guidance (i.e., 2 CFR 180.220) as supplemented by section 220 
of this part (i.e., Sec.  2700.220). For any section of OMB guidance in 
subparts A through I of 2 CFR 180 that

[[Page 616]]

has no corresponding section in this part, SBA policies and procedures 
are those in the OMB guidance.



                            Subpart A_General



Sec.  2700.137  Who in the Small Business Administration may grant 
an exception to let an excluded person participate in a covered
transaction?

    The Director of the Office of Credit Risk Management may grant an 
exception permitting an excluded person to participate in a particular 
covered transaction under SBA's financial assistance programs. For all 
other Agency programs, the Associate General Counsel for Procurement Law 
may grant such an exception.

[72 FR 39728, July 20, 2007, as amended at 73 FR 43348, July 25, 2008]



                     Subpart B_Covered Transactions



Sec.  2700.220  What contracts and subcontracts, in addition to those 
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.22(b) of the 
OMB guidance, this part applies to any contract, regardless of tier, 
that is awarded by a contractor, subcontractor, supplier, consultant, or 
its agent or representative in any transaction, if the contract is to be 
funded or provided by the SBA under a covered nonprocurement transaction 
and the amount of the contract is expected to equal or exceed $25,000. 
This extends the coverage of the SBA nonprocurement suspension and 
debarment requirements to all lower tiers of subcontracts under covered 
nonprocurement transactions, as permitted under the OMB guidance at 2 
CFR 180.200(c) (see optional lower tier coverage in the figure in the 
appendix to 2 CFR part 180)



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  2700.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You, as a participant, must include a term or condition in lower-
tier transactions requiring lower-tier participants to comply with 
subpart C of the OMB guidance in 2 CFR part 180, as supplemented by this 
part.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  2700.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-F [Reserved]



                          Subpart G_Suspension



Sec.  2700.765  How may I appeal my suspension?

    (a) If the SBA suspending official issues a decision under Sec.  
180.755 to continue your suspension after you present information in 
opposition to that suspension under Sec.  180.720, you may ask for 
review of the suspending official's decision in two ways:
    (1) You may ask the suspending official to reconsider the decision 
for material errors of fact or law that you believe will change the 
outcome of the matter; or
    (2) You may request that the SBA Office of Hearings and Appeals 
(OHA) review the suspending official's decision to continue your 
suspension within 30 days of your receipt of the suspending official's 
decision under Sec.  180.755 or paragraph (a)(1) of this section. 
However, OHA may reverse the suspending official's decision only where 
OHA finds that the decision is based on a clear error of material fact 
or law, or where OHA finds that the suspending official's decision was 
arbitrary, capricious, or an abuse of discretion. You may appeal the 
suspending official's decision without requesting reconsideration, or 
you may appeal the decision

[[Page 617]]

of the suspending official on reconsideration. The procedures governing 
OHA appeals are set forth in 13 CFR part 134.
    (b) A request for review under this section must be in writing; 
state the specific findings you believe to be in error; and include the 
reasons or legal bases for your position.
    (c) OHA, in its discretion, may stay the suspension pending review 
of the suspending official's decision.
    (d) The SBA suspending official and OHA must notify you of their 
decision under this section, in writing, using the notice procedures set 
forth at Sec. Sec.  180.615 and 180.975.



                           Subpart H_Debarment



Sec.  2700.890  How may I appeal my debarment?

    (a) If the SBA debarring official issues a decision under Sec.  
180.870 to debar you after you present information in opposition to a 
proposed debarment under Sec.  180.815, you may ask for review of the 
debarring official's decision in two ways:
    (1) You may ask the debarring official to reconsider the decision 
for material errors of fact or law that you believe will change the 
outcome of the matter; or
    (2) You may request that the SBA Office of Hearings and Appeals 
(OHA) review the debarring official's decision to debar you within 30 
days of your receipt of the debarring official's decision under Sec.  
180.870 or paragraph (a)(1) of this section. However, OHA may reverse 
the debarring official's decision only where OHA finds that the decision 
is based on a clear error of material fact or law, or where OHA finds 
that the debarring official's decision was arbitrary, capricious, or an 
abuse of discretion. You may appeal the debarring official's decision 
without requesting reconsideration, or you may appeal the decision of 
the debarring official on reconsideration. The procedures governing OHA 
appeals are set forth in 13 CFR part 134.
    (b) A request for review under this section must be in writing; 
state the specific findings you believe to be in error; and include the 
reasons or legal bases for your position.
    (c) OHA, in its discretion, may stay the debarment pending review of 
the debarring official's decision.
    (d) The SBA debarring official and OHA must notify you of their 
decision under this section, in writing, using the notice procedures set 
forth at Sec. Sec.  180.615 and 180.975.



                          Subpart I_Definitions



Sec.  2700.930  Debarring official (SBA supplement to government-wide
definition at 2 CFR 180.930).

    For SBA, the debarring official for financial assistance programs is 
the Director of the Office of Credit Risk Management; for all other 
programs, the debarring official is the Associate General Counsel for 
Procurement Law.

[72 FR 39728, July 20, 2007, as amended at 73 FR 43348, July 25, 2008]



Sec.  2700.995  Principal (SBA supplement to government-wide definition
at 2 CFR 180.995).

    Principal means--
    (a) Other examples of individuals who are principals in SBA covered 
transactions include:
    (1) Principal investigators.
    (2) Securities brokers and dealers under the section 7(a) Loan, 
Certified Development Company (CDC) and Small Business Investment 
Company (SBIC) programs.
    (3) Applicant representatives under the section 7(a) Loan, CDC, 
SBIC, Small Business Development Center (SBDC), and section 7(j) 
programs.
    (4) Providers of professional services under the section 7(a) Loan, 
CDC, SBIC, SBDC, and section 7(j) programs.
    (5) Individuals that certify, authenticate or authorize billings.
    (b) [Reserved]



Sec.  2700.1010  Suspending official (SBA supplement to government-wide
definition at 2 CFR 180.1010).

    For SBA, the suspending official for financial assistance programs 
is the Director of the Office of Credit Risk Management; for all other 
programs, the suspending official is the Associate General Counsel for 
Procurement Law.

[72 FR 39728, July 20, 2007, as amended at 73 FR 43348, July 25, 2008]

[[Page 618]]

Subpart J [Reserved]



PART 2701_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



Sec.
2701.1 Adoption of 2 CFR part 200.
2701.74 Pass-through entity.
2701.92 Subaward.
2701.93 Subrecipient.
2701.112 Conflict of Interest.
2701.414 Indirect (F&A) Costs.
2701.503 Relation to other audit requirements.
2701.513 Responsibilities.
2701.600 Other regulatory guidance.

    Authority: 15 U.S.C. 634(b)(6), 2 CFR part 200.

    Source: 79 FR 76080, Dec. 19, 2014, unless otherwise noted.



Sec.  2701.1  Adoption of 2 CFR Part 200.

    (a) Under the authority listed above, the U.S. Small Business 
Administration adopts the Office of Management and Budget (OMB) Guidance 
in 2 CFR part 200, except for 2 CFR 200.74, 200.92, and 200.93. Thus, 
this part gives regulatory effect to the OMB guidance and supplements 
the guidance as needed for the Administration.



Sec.  2701.74  Pass-through entity.

    SBA will only make awards to pass-through entities where expressly 
authorized by statute.



Sec.  2701.92  Subaward.

    SBA will only permit pass-through entities to make awards to 
subrecipients where expressly authorized by statute.



Sec.  2701.93  Subrecipient.

    SBA will only permit non-Federal entities to receive subawards where 
expressly authorized by statute.



Sec.  2701.112  Conflict of Interest.

    The following conflict of interest policies apply to all SBA awards 
of financial assistance:
    (a) Where an employee or contractor of a non-Federal entity 
providing assistance under an SBA award also provides services in 
exchange for pay in her or his private capacity, that employee or 
contractor may not accept as a client for her or his private services 
any individual or firm she or he assists under an SBA award.
    (b) No non-Federal entity providing assistance under an SBA award 
(nor any subrecipient, employee, or contractor of such an entity) may 
give preferential treatment to any client referred to it by an 
organization with which it has a financial, business, or other 
relationship.
    (c) Except where otherwise provided for by law, no non-Federal 
entity may seek or accept an equity stake in any firm it assists under 
the auspices of an SBA award. Additionally, no principal, officer, 
employee, or contractor of such an entity (nor any of their Close or 
Secondary Relatives as those terms are defined by 13 CFR 108.50) may 
seek or accept an equity stake or paid position in any firm the entity 
assists under an SBA award.



Sec.  2701.414  Indirect (F&A) Costs.

    (a) When determining whether a deviation from a negotiated indirect 
cost rate is justified, SBA will consider the following factors:
    (1) The degree to which a non-Federal entity has been able to defray 
its overhead expenses via those indirect costs it has recovered under 
other, concurrent SBA awards;
    (2) The amount of funding that must be devoted to conducting program 
activities in order for a project to result in meaningful outcomes; and
    (3) The amount of project funds that will remain available for 
conducting program activities after a negotiated rate is applied.
    (b) After conducting the analysis required in paragraph (a) above, 
the head of each SBA grant program office will determine in writing 
whether there is sufficient justification to deviate from a negotiated 
indirect cost rate.
    (c) Where SBA determines that deviation from a negotiated rate is 
justified, it will provide a copy of that determination to OMB and will 
inform potential applicants of the deviation in the corresponding 
funding announcement.

[[Page 619]]



Sec.  2701.503  Relation to other audit requirements.

    Non-Federal entities that are not subject to the requirements of the 
Single Audit Act and that are performing projects under SBA awards will 
be required to submit copies of their audited financial statements for 
their most recently completed fiscal year. Costs associated with the 
auditing of a non-Federal entity's financial statements may be included 
in its negotiations for an indirect cost rate agreement in accordance 
with 2 CFR 200.425.



Sec.  2701.513  Responsibilities.

    For SBA, the Single Audit Senior Accountable Official is the Deputy 
Chief Operating Officer. The Single Audit Liaison is the Director, 
Office of Grants Management.

[81 FR 1115, Jan. 11, 2016]



Sec.  2701.600  Other regulatory guidance.

    (a) In addition to the general regulations set forth above and those 
contained in 2 CFR part 200, the program-specific regulations governing 
the operation of SBA's individual grant programs may be found in title 
13 of the Code of Federal Regulations beginning at the sections noted 
below:
    (1) New Markets Venture Capital program--13 CFR 108.2000.
    (2) Program for Investment in Microentrepreneurs (PRIME)--13 CFR 
119.1.
    (3) Microloan program--13 CFR 120.700.
    (4) 7(j) Management and Technical Assistance program--13 CFR 
124.701.
    (5) Small Business Development Center program--13 CFR 130.100.
    (b) [Reserved]

                       PARTS 2702	2799 [RESERVED]

[[Page 621]]



                  CHAPTER XXVIII--DEPARTMENT OF JUSTICE




  --------------------------------------------------------------------
Part                                                                Page
2800            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards by the Department of 
                    Justice.................................         623
2801-2866

 [Reserved]

2867            Nonprocurement debarment and suspension.....         623
2868-2899

 [Reserved]

[[Page 623]]



PART 2800_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS BY THE DEPARTMENT OF JUSTICE-
-Table of Contents



Sec.
2800.101 Adoption of 2 CFR part 200.
2800.313 Equipment.
2800.314 Supplies.

    Authority: 5 U.S.C. 301; 28 U.S.C. 509; 28 U.S.C. 530C(a)(4); 42 
U.S.C. 3789; 2 CFR part 200.

    Source: 79 FR 76081, Dec. 19, 2014, unless otherwise noted.



Sec.  2800.101  Adoption of 2 CFR part 200.

    Under the authority listed above, the Department of Justice adopts 
the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, 
except as otherwise may be provided by this Part. Unless expressly 
provided otherwise, any reference in this part to any provision of law 
not in this part shall be understood to constitute a general reference 
and thus to include any subsequent changes to the provision.

[81 FR 61982, Sept. 8, 2016]



Sec.  2800.313  Equipment.

    Title I of the Omnibus Crime Control and Safe Streets Act of 1968, 
Public Law 90-351, section 808 (42 U.S.C. 3789), creates a special rule 
for disposition and use of equipment and supplies purchased by funds 
made available under that Title, which rule, where applicable, 
supersedes any conflicting provisions of 2 CFR 200.313. Section 808 
currently provides that such equipment and supplies shall vest in the 
criminal justice agency or nonprofit organization that purchased the 
property if such agency or nonprofit certifies to the appropriate State 
office (as indicated in the statute) that it will use the property for 
criminal justice purposes, and further provides that, if such 
certification is not made, title to the property shall vest in the State 
office, which shall seek to have the property used for criminal justice 
purposes elsewhere in the State prior to using it or disposing of it in 
any other manner.



Sec.  2800.314  Supplies.

    Title I of the Omnibus Crime Control and Safe Streets Act of 1968, 
Public Law 90-351, section 808 (42 U.S.C. 3789) creates a special rule 
for disposition and use of equipment and supplies purchased by funds 
made available under that Title, which rule, where applicable, 
supersedes any conflicting provisions of Sec.  200.314. Section 808 
currently provides that such equipment and supplies shall vest in the 
criminal justice agency or nonprofit organization that purchased the 
property if such agency or nonprofit certifies to the appropriate State 
office (as indicated in the statute) that it will use the property for 
criminal justice purposes, and further provides that, if such 
certification is not made, title to the property shall vest in the State 
office, which shall seek to have the property used for criminal justice 
purposes elsewhere in the State prior to using it or disposing of it in 
any other manner.

                       PARTS 2801	2866 [RESERVED]



PART 2867_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
2867.10 What does this part do?
2867.20 To whom does this part apply?
2867.30 What policies and procedures must be followed?

                            Subpart A_General

2867.137 Who in the Department of Justice may grant an exception to let 
          an excluded person participate in a covered transaction?

                     Subpart B_Covered Transactions

2867.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

2867.332 What method must a participant use to pass requirements down to 
          participants at lower tiers with whom the participant intends 
          to do business?

[[Page 624]]

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

2867.437 What method must be used to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-J [Reserved]

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235; 5 U.S.C. 
301; 28 U.S.C. 509, 510, 515-519.

    Source: 72 FR 11286, Mar. 13, 2007, unless otherwise noted.



Sec.  2867.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Department of Justice policies and procedures for nonprocurement 
debarment and suspension. It thereby gives regulatory effect for the 
Department of Justice to the OMB guidance as supplemented by this part. 
This part satisfies the requirements in section 3 of Executive Order 
12549, ``Debarment and Suspension'' (3 CFR 1986 Comp., p. 189), 
Executive Order 12689, ``Debarment and Suspension'' (3 CFR 1989 Comp., 
p. 235) and 31 U.S.C. 6101 note (Section 2455, Pub. L. 103-355, 108 
Stat. 3327).



Sec.  2867.20  To whom does this part apply?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to any--
    (a) Participant or principal in a ``covered transaction'' (sees 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970 (as supplemented by subpart B of this 
part));
    (b) Respondent in a Department of Justice suspension or debarment 
action;
    (c) Department of Justice debarment or suspension official;
    (d) Department of Justice grants officer, agreements officer, or 
other official authorized to enter into any type of nonprocurement 
transaction that is a covered transaction.



Sec.  2867.30  What policies and procedures must be followed?

    The Department of Justice policies and procedures that must be 
followed are the policies and procedures specified in each applicable 
section of the OMB guidance in subparts A through I of 2 CFR part 180, 
as that section is supplemented by the section in this part with the 
same section number. The contracts that are covered transactions, for 
example, are specified by section 220 of the OMB guidance (i.e., 2 CFR 
180.220) as supplemented by section 220 in this part (i.e., Sec.  
2867.220). For any section of OMB guidance in subparts A through I of 2 
CFR 180 that has no corresponding section in this part, Department of 
Justice policies and procedures are those in the OMB guidance.



                            Subpart A_General



Sec.  2867.137  Who in the Department of Justice may grant an exception
to let an excluded person participate in a covered transaction?

    Within the Department of Justice, the Attorney General or designee 
has the authority to grant an exception to let an excluded person 
participate in a covered transaction, as provided in the OMB guidance at 
2 CFR 180.135.



                     Subpart B_Covered Transactions



Sec.  2867.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see optional lower tier coverage in the figure in 
the appendix to 2 CFR part 180), the Department of Justice does not 
extend coverage of nonprocurement suspension and debarment requirements 
beyond first-tier procurement contracts under a covered nonprocurement 
transaction.

[[Page 625]]



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  2867.332  What method must a participant use to pass requirements
down to participants at lower tiers with whom the participant intends 
to do business?

    A participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  2867.437  What method must be used to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, the communication must include a term or 
condition in the transaction that requires the participant's compliance 
with subpart C of 2 CFR part 180, as supplemented by subpart C of this 
part, and requires the participant to include a similar term or 
condition in lower-tier covered transactions.

Subparts E-J [Reserved]

                       PARTS 2868	2899 [RESERVED]

[[Page 627]]



                    CHAPTER XXIX--DEPARTMENT OF LABOR




  --------------------------------------------------------------------
Part                                                                Page
2900            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         629
2901-2997

 [Reserved]

2998            Nonprocurement debarment and suspension.....         633
2999

 [Reserved]

[[Page 629]]



PART 2900_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



                   Subpart A_Acronyms and Definitions

Sec.
2900.1 Budget.
2900.2 Non-Federal entity.
2900.3 Questioned cost.

                      Subpart B_General Provisions

2900.4 Adoption of 2 CFR part 200.

 Subpart C_Pre-Federal Award Requirements and Contents of Federal Awards

2900.5 Federal awarding agency review of merit of proposals.

                Subpart D_Post Federal Award Requirements

2900.6 Advance Payment.
2900.7 Payment.
2900.8 Cost sharing or matching.
2900.9 Revision of budget and program plans.
2900.10 Prior approval requests.
2900.11 Revision of budget and program plans including extension of the 
          period of performance.
2900.12 Revision of budget and program plans approval from Grant 
          Officers.
2900.13 Intangible property.
2900.14 Financial reporting.
2900.15 Closeout.

                        Subpart E_Cost Principles

2900.16 Prior written approval (prior approval).
2900.17 Adjustment of negotiated IDC rates.
2900.18 Contingency provisions.
2900.19 Student activity costs.

                      Subpart F_Audit Requirements

2900.20 Federal Agency Audit Responsibilities.
2900.21 Management decision.
2900.22 Audit Requirements, Appeal Process for Department of Labor 
          Recipients.

    Authority: 5 U.S.C. 301; 2 CFR 200.

    Source: 79 FR 76081, Dec. 19, 2014, unless otherwise noted.



                   Subpart A_Acronyms and Definitions



Sec.  2900.1  Budget.

    In the DOL, approval of the budget as awarded does not constitute 
prior approval of those items requiring prior approval, including those 
items the Federal Awarding agency specifies as requiring prior approval. 
See Sec.  200.407 and Sec.  2900.16 for more information about prior 
approval. (See 2 CFR 200.8)

[80 FR 81440, Dec. 30, 2015]



Sec.  2900.2  Non-Federal entity.

    In the DOL, Non-Federal entity means a state, local government, 
Indian tribe, institution of higher education (IHE), for-profit entity, 
foreign public entity, foreign organization or nonprofit organization 
that carries out a Federal award as a recipient or subrecipient. (See 2 
CFR 200.69)



Sec.  2900.3  Questioned cost.

    In the DOL, in addition to the guidance contained in 2 CFR 200.84, a 
Questioned cost means a cost that is questioned by an auditor, Federal 
Project Officer, Grant Officer, or other authorized Awarding agency 
representative because of an audit or monitoring finding:
    (a) Which resulted from a violation or possible violation of a 
statute, regulation, or the terms and conditions of a Federal award, 
including for funds used to match Federal funds;
    (b) Where the costs, at the time of the audit, are not supported by 
adequate documentation; or
    (c) Where the costs incurred appear unreasonable and do not reflect 
the actions a prudent person would take in the circumstances.

[79 FR 76081, Dec. 19, 2014, as amended at 80 FR 81440, Dec. 30, 2015]



                      Subpart B_General Provisions



Sec.  2900.4  Adoption of 2 CFR Part 200.

    Under the authority listed above, the Department of Labor adopts the 
Office of Management and Budget (OMB) Guidance in the Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements for 
Federal

[[Page 630]]

Awards to Non-Federal Entities (subparts A through F of 2 CFR 200), as 
supplemented by this part, as the Department of Labor policies and 
procedures for financial assistance administration. This part satisfies 
the requirements of 2 CFR 200.110(a) and gives regulatory effect to the 
OMB guidance as supplemented by this part. The DOL also has programmatic 
and administrative regulations located in 20 and 29 CFR.



 Subpart C_Pre-Federal Award Requirements and Contents of Federal Awards



Sec.  2900.5  Federal awarding agency review of merit of proposals.

    In the DOL, audits and monitoring reports containing findings, 
issues of non-compliance or questioned costs are in addition to reports 
and findings from audits performed under Subpart F--Audit Requirements 
of 2 CFR 200 or the reports and findings of any other available audits. 
(See 2 CFR 200.205(c)(4)).

[80 FR 81440, Dec. 30, 2015]



                Subpart D_Post Federal Award Requirements



Sec.  2900.6  Advance Payment.

    In the DOL, except as authorized under 2 CFR 200.207, specific 
conditions, the non-Federal entity must be paid in advance. (See 2 CFR 
200.305(b)(1))



Sec.  2900.7  Payment.

    In addition to the guidance set forth in 2 CFR 200.305(b), for 
Federal awards from the Department of Labor, the non-Federal entity 
should liquidate existing advances before it requests additional 
advances.

[80 FR 81440, Dec. 30, 2015]



Sec.  2900.8  Cost sharing or matching.

    In addition to the guidance set forth in 2 CFR 200.306(b), for 
Federal awards from the Department of Labor, the non-Federal entity 
accounts for funds used for cost sharing or match within their 
accounting systems as the funds are expended.



Sec.  2900.9  Revision of budget and program plans.

    In the DOL, approval of the budget as awarded does not constitute 
prior approval of those items requiring prior approval, including those 
items the Federal awarding agency specifies as requiring prior approval 
(see 2 CFR 200.407 and 2 CFR 200.308(a))



Sec.  2900.10  Prior approval requests.

    In addition to the guidance set forth in 2 CFR 200.308(c), for 
Federal awards from the Department of Labor, the non-Federal entity must 
request prior approval actions at least 30 days prior to the effective 
date of the requested action.



Sec.  2900.11  Revision of budget and program plans including 
extension of the period of performance.

    In addition to the guidance set forth in 2 CFR 200.308(c), for 
Federal awards from the Department of Labor, the non-Federal entity must 
request prior approval for an extension to the period of performance.



Sec.  2900.12  Revision of budget and program plans approval from
Grant Officers.

    In the DOL, unless otherwise noted in the Grant Agreement, prior 
written approval must come from the Grant Officer (See 2 CFR 200.308(d))



Sec.  2900.13  Intangible property.

    In addition to the guidance set forth in 2 CFR 200.315(d), the 
Department of Labor requires intellectual property developed under a 
competitive Federal award process to be licensed under a Creative 
Commons Attribution license. This license allows subsequent users to 
copy, distribute, transmit and adapt the copyrighted work and requires 
such users to attribute the work in the manner specified by the 
recipient.

[80 FR 81440, Dec. 30, 2015]



Sec.  2900.14  Financial reporting.

    In addition to the guidance set forth in 2 CFR 200.327, for Federal 
awards from the Department of Labor, the DOL awarding agency will 
prescribe whether the report will be on a cash or an accrual basis. If 
the DOL awarding

[[Page 631]]

agency requires reporting on an accrual basis and the recipient's 
accounting system is not on the accrual basis, the recipient will not be 
required to convert its accounting system, but must develop and report 
such accrual information through best estimates based on an analysis of 
the documentation on hand.



Sec.  2900.15  Closeout.

    In addition to the guidance set forth in 2 CFR 200.343(b), for 
Federal awards from the Department of Labor, the non-Federal entity must 
liquidate all obligations and/or accrued expenditures incurred under the 
Federal award. For non-Federal entities reporting on an accrual basis 
and operating on an expenditure period, unless otherwise noted in the 
grant agreement, the only liquidation that can occur during closeout is 
the liquidation of accrued expenditures (NOT obligations) for goods and/
or services received during the grant period.

[80 FR 81441, Dec. 30, 2015]



                        Subpart E_Cost Principles



Sec.  2900.16  Prior written approval (prior approval).

    In addition to the guidance set forth in 2 CFR 200.407, for Federal 
awards from the Department of Labor, the non-Federal entity must request 
prior written approval which should include the timeframe or scope of 
the agreement and be submitted not less than 30 days before the 
requested action is to occur. Unless otherwise noted in the grant 
agreement, the Grant Officer is the only official with the authority to 
provide prior written approval (prior approval). Items included in the 
statement of work or budget as awarded does not constitute prior 
approval.

[80 FR 81441, Dec. 30, 2015]



Sec.  2900.17  Adjustment of negotiated IDC rates.

    In the DOL, in addition to the requirements under 2 CFR 
200.411(a)(2), adjustments to indirect cost rates resulting from a 
determination of unallowable costs being included in the rate proposal 
may result in the reissuance of negotiated rate agreement.



Sec.  2900.18  Contingency provisions.

    In addition to the guidance set forth in 2 CFR 200.433(c), for 
Federal awards from the Department of Labor, excepted citations include 
2 CFR 200.333 Retention requirements for records, and 2 CFR 200.334 
Requests for transfers of records.



Sec.  2900.19  Student activity costs.

    In the Department of Labor, the provisions of 2 CFR 200.469 apply 
unless the activities meet a program requirement and have prior written 
approval from the Federal awarding agency.



                      Subpart F_Audit Requirements



Sec.  2900.20  Federal Agency Audit Responsibilities.

    In the DOL, in addition to 2 CFR 200.513, the department employs a 
collaborative resolution process with non-federal entities.
    (a) Department of Labor Cooperative Audit Resolution Process. The 
DOL official(s) responsible for resolution shall promptly evaluate 
findings and recommendations reported by auditors and the corrective 
action plan developed by the recipient to determine proper actions in 
response to audit findings and recommendations. The process of audit 
resolution includes at a minimum an initial determination, an informal 
resolution period, and a final determination.
    (1) Initial determination. After the conclusion of any comment 
period for audits provided the recipient/contractor, the responsible DOL 
official(s) shall make an initial determination on the allowability of 
questioned costs or activities, administrative or systemic findings, and 
the corrective actions outlined by the recipient. Such determination 
shall be based on applicable statutes, regulations, administrative 
directives, or terms and conditions of the grant/contract award 
instrument.
    (2) Informal resolution. The recipient/contractor shall have a 
reasonable period of time (as determined by the DOL official(s) 
responsible for audit resolution) from the date of issuance of the 
initial determination to informally resolve those matters in which the 
recipient/contractor disagrees with the

[[Page 632]]

decisions of the responsible DOL official(s).
    (3) Final determination. After the conclusion of the informal 
resolution period, the responsible DOL official(s) shall issue a final 
determination that:
    (i) As appropriate, indicate that efforts to informally resolve 
matters contained in the initial determination have either been 
successful or unsuccessful;
    (ii) Lists those matters upon which the parties continue to 
disagree;
    (iii) Lists any modifications to the factual findings and 
conclusions set forth in the initial determination;
    (iv) Lists any sanctions and required corrective actions; and
    (v) Sets forth any appeal rights.
    (4) Time limit. Insofar as possible, the requirements of this 
section should be met within 180 days of the date the final approved 
audit report is received by the DOL official(s) responsible for audit 
resolution.

[79 FR 76081, Dec. 19, 2014, as amended at 80 FR 81441, Dec. 30, 2015]



Sec.  2900.21  Management decision.

    In the DOL, ordinarily, a management decision is issued within six 
months of receipt of an audit from the audit liaison of the Office of 
the Inspector General and is extended an additional six months when the 
audit contains a finding involving a subrecipient of the pass-through 
entity being audited. The pass-through entity responsible for issuing a 
management decision must do so within twelve months of acceptance of the 
audit report by the FAC. The auditee must initiate and proceed with 
corrective action as rapidly as possible and should begin corrective 
action no later than upon receipt of the audit report. (See 2 CFR 
200.521(d)).

[80 FR 81441, Dec. 30, 2015]



Sec.  2900.22  Audit Requirements--Appeal Process for Department
of Labor Recipients.

    In the DOL, the DOL grantor agencies shall determine which of the 
two appeal options set forth in paragraphs (a) and (b) of this section 
the recipient may use to appeal the final determination of the grant 
officer. All awards within the same Federal financial assistance program 
shall follow the same appeal procedure.
    (a) Appeal to the head of the grantor agency, or his/her designee, 
for which the audit was conducted.
    (1) Jurisdiction. (i) Request for hearing. Within 21 days of receipt 
of the grant officer's final determination, the recipient may transmit, 
by certified mail, return receipt requested, a request for hearing to 
the head of the grantor agency, or his/her designee, as noted in the 
final determination. A copy must also be sent to the grant officer who 
signed the final determination.
    (ii) Statement of issues. The request for a hearing shall be 
accompanied by a copy of the final determination, if issued, and shall 
specifically state those portions of the final determination upon which 
review is requested. Those portions of the final determination not 
specified for review shall be considered resolved and not subject to 
further review.
    (iii) Failure to request review. When no timely request for a 
hearing is made, the final determination shall constitute final action 
by the Secretary of Labor and shall not be subject to further review.
    (2) Conduct of hearings. The grantor agency shall establish 
procedures for the conduct of hearings by the head of the grantor 
agency, or his/her designee.
    (3) Decision of the head of the grantor agency, or his/her designee. 
The head of the grantor agency, or his/her designee, should render a 
written decision no later than 90 days after the closing of the record. 
This decision constitutes final action of the Secretary.
    (b) Appeal to the DOL Office of Administrative Law Judges. (1) 
Jurisdiction. (i) Request for hearing. Within 21 days of receipt of the 
grant officer's final determination, the recipient may transmit by 
certified mail, return receipt requested, a request for hearing to the 
Chief Administrative Law Judge, United States Department of Labor, 800 K 
Street NW., Suite 400, Washington, DC 20001, with a copy to the grant 
officer who signed the final determination. The Chief Administrative Law 
Judge shall designate an administrative law judge to hear the appeal.

[[Page 633]]

    (ii) Statement of issues. The request for a hearing shall be 
accompanied by a copy of the final determination, if issued, and shall 
specifically state those portions of the final determination upon which 
review is requested. Those portions of the final determination not 
specified for review shall be considered resolved and not subject to 
further review.
    (iii) Failure to request review. When no timely request for a 
hearing is made, the final determination shall constitute final action 
by the Secretary and shall not be subject to further review.
    (2) Conduct of hearings. The DOL Rules of Practice and Procedure for 
Administrative Hearings Before the Office of Administrative Law Judges, 
set forth at 29 CFR part 18, shall govern the conduct of hearings under 
paragraph (b) of this section.
    (3) Decision of the administrative law judge. The administrative law 
judge should render a written decision no later than 90 days after the 
closing of the record.
    (4) Filing exceptions to decision. The decision of the 
administrative law judge shall constitute final action by the Secretary 
of Labor, unless, within 21 days after receipt of the decision of the 
administrative law judge, a party dissatisfied with the decision or any 
part thereof has filed exceptions with the Secretary, specifically 
identifying the procedure or finding of fact, law, or policy with which 
exception is taken. Any exceptions not specifically urged shall be 
deemed to have been waived. Thereafter, the decision of the 
administrative law judge shall become the decision of the Secretary, 
unless the Secretary, within 30 days of such filing, has notified the 
parties that the case has been accepted for review.
    (5) Review by the Secretary of Labor. Any case accepted for review 
by the Secretary shall be decided within 180 days of such acceptance. If 
not so decided, the decision of the administrative law judge shall 
become the final decision of the Secretary.

                       PARTS 2901	2997 [RESERVED]



PART 2998_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
2998.10 What does this part do?
2998.20 Does this part apply to me?
2998.30 What policies and procedures must I follow?

                            Subpart A_General

2998.137 Who in the DOL may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

2998.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

2998.332 What requirements must I pass down to persons at lower tiers 
          with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

2998.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-J [Reserved]

    Authority: 5 U.S.C. 301; E.O. 12549 (3 CFR, 1986 Comp., p.189); E.O. 
12689 (3 CFR, 1989 Comp., p.235); sec 2455 Pub. L. 103-355, 108 Stat. 
3327 (31 U.S.C. 6101 note).

    Source: 81 FR 25586, Apr. 29, 2016, unless otherwise noted.



Sec.  2998.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Department of Labor (DOL) policies and procedures for non-
procurement debarment and suspension. It thereby gives regulatory effect 
for DOL to the OMB guidance as supplemented by this part. This part 
satisfies the requirements in section 3 of Executive Order 12549, 
``Debarment and Suspension'' (3 CFR 1986 Comp., p. 189); Executive Order 
12689, ``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235); and 
section 2455 of the Federal Acquisition

[[Page 634]]

Streamlining Act of 1994, 103 (31 U.S.C. 6101 note).



Sec.  2998.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``non-procurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in a Department of Labor suspension or debarment 
action;
    (c) Department of Labor debarment or suspension official; or
    (d) Department of Labor grants officer, agreements officer, or other 
official authorized to enter into any type of non-procurement 
transaction that is a covered transaction.



Sec.  2998.30  What policies and procedures must I follow?

    (a) The Department of Labor's policies and procedures that you must 
follow are specified in:
    (1) Each applicable section of the OMB guidance in subparts A 
through I of 2 CFR part 180; and
    (2) The supplement to each section of the OMB guidance that is found 
in this part under the same section number. (The contracts that are 
covered transactions, for example, are specified by section 220 of the 
OMB guidance (i.e., 2 CFR 180.220) as supplemented by section 220 in 
this part (i.e., Sec. 2998.220)).
    (b) For any section of OMB guidance in subparts A through I of 2 CFR 
part 180 that has no corresponding section in this part, the Department 
of Labor's policies and procedures are those in the OMB guidance.



                            Subpart A_General



Sec.  2998.137  Who in DOL may grant an exception to let an excluded
person participate in a covered transaction?

    Within the Department of Labor, the Secretary of Labor or designee 
has the authority to grant an exception to let an excluded person 
participate in a covered transaction, as provided in the OMB guidance at 
2 CFR 180.135. If any designated official grants an exception, the 
exception must be in writing and state the reason(s) for deviating from 
the government-wide policy in Executive Order 12549.



                     Subpart B_Covered Transactions



Sec.  2998.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.220(b) of the 
OMB guidance, this part applies to any contract, regardless of tier, 
that is awarded by a contractor, subcontractor, supplier, consultant, or 
its agent or representative in any transaction, if the contract is to be 
funded or provided by the Department of Labor under a covered non-
procurement transaction. This extends the coverage of the Department of 
Labor non-procurement suspension and debarment requirements to all lower 
tiers of subcontracts under covered non-procurement transactions, as 
permitted under the OMB guidance at 2 CFR 180.220(c) (see optional lower 
tier coverage in the figure in the appendix to 2 CFR part 180).



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  2998.332  What requirements must I pass down to persons at lower
tiers with whom I intend to do business?

    You, as a participant, must include a term or condition in lower-
tier transactions requiring lower-tier participants to comply with 
subpart C of the OMB guidance in 2 CFR part 180, as supplemented by this 
subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  2998.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction

[[Page 635]]

that requires the participant's compliance with Subpart C of 2 CFR part 
180, and supplemented by subpart C of this part, and requires the 
participant to include a similar term or condition in lower-tier covered 
transactions.

Subparts E-J [Reserved]

                          PART 2999 [RESERVED]

[[Page 637]]



              CHAPTER XXX--DEPARTMENT OF HOMELAND SECURITY




  --------------------------------------------------------------------
Part                                                                Page
3000            Nonprocurement debarment and suspension.....         639
3001            Requirements for drug-free workplace 
                    (financial assistance)..................         640
3002            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         643
3003-3099

 [Reserved]

[[Page 639]]



PART 3000_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
3000.10 What does this part do?
3000.20 Does this part apply to me?
3000.30 What policies and procedures must I follow?

                            Subpart A_General

3000.137 Who in the Department of Homeland Security may grant an 
          exception to let an excluded person participate in a covered 
          transaction?

                     Subpart B_Covered Transactions

3000.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

3000.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

Subpart D_Responsibilities of Department of Homeland Security Officials 
                         Regarding Transactions

3000.437 What method do I use to communicate to a participant the 
          requirements described in the Office of Management and Budget 
          guidance at 2 CFR 180.435?

Subparts E-I [Reserved]

    Authority: Sec. 2455, Public Law 103-355, 108 Stat. 3327; E.O. 
12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235; 
Public Law 107-296, 116 Stat. 2135.

    Source: 74 FR 34497, July 16, 2009, unless otherwise noted.



Sec.  3000.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in Subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Department of Homeland Security policies and procedures for 
nonprocurement debarment and suspension. It thereby gives regulatory 
effect for the Department of Homeland Security to the OMB guidance as 
supplemented by this part. This part satisfies the requirements in 
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3 CFR 
1986 Comp., p. 189), Executive Order 12689, ``Debarment and Suspension'' 
(3 CFR 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Pub. 
L. 103-355, 108 Stat. 3327).



Sec.  3000.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in Subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
Subpart B of 2 CFR Part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in a Department of Homeland Security suspension or 
debarment action;
    (c) Department of Homeland Security debarment or suspension 
official;
    (d) Department of Homeland Security grants officer, agreements 
officer, or other official authorized to enter into any type of 
nonprocurement transaction that is a covered transaction.



Sec.  3000.30  What policies and procedures must I follow?

    The Department of Homeland Security policies and procedures that you 
must follow are the policies and procedures specified in each applicable 
section of the OMB guidance in Subparts A through I of 2 CFR Part 180, 
as that section is supplemented by the section in this part with the 
same section number. The contracts that are covered transactions, for 
example, are specified by section 220 of the OMB guidance (i.e., 2 CFR 
180.220) as supplemented by section 220 in this part (i.e., Sec.  
3000.220). For any section of OMB guidance in Subparts A through I of 2 
CFR Part 180 that has no corresponding section in this part, Department 
of Homeland Security policies and procedures are those in the OMB 
guidance.



                            Subpart A_General



Sec.  3000.137  Who in the Department of Homeland Security may grant
an exception to let an excluded person participate in a covered 
transaction?

    Within the Department of Homeland Security, the Secretary of 
Homeland Security has delegated the authority

[[Page 640]]

to grant an exception to let an excluded person participate in a covered 
transaction to the Head of the Contracting Activity for each DHS 
component as provided in the OMB guidance at 2 CFR 180.135.



                     Subpart B_Covered Transactions



Sec.  3000.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Department of Homeland Security extends coverage of nonprocurement 
suspension and debarment requirements beyond first-tier procurement 
contracts under a covered nonprocurement transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  3000.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant in a covered transaction must include a term or 
condition in any lower-tier covered transaction into which you enter, to 
require the participant of that transaction to--
    (a) Comply with Subpart C of the OMB guidance in 2 CFR part 180; and
    (b) Include a similar term or condition in any covered transaction 
into which it enters at the next lower tier.



Subpart D_Responsibilities of Department of Homeland Security Officials 
                         Regarding Transactions



Sec.  3000.437  What method do I use to communicate to a participant
the requirements described in the Office of Management and Budget
guidance at 2 CFR 180.435?

    You as a DHS component official must include a term or condition in 
each covered transaction into which you enter, to communicate to the 
participant the requirements to--
    (a) Comply with subpart C of the OMB guidance in 2 CFR part 180; and
    (b) Include a similar term or condition in any lower-tier covered 
transactions into which the participant enters.

Subparts E-I [Reserved]



PART 3001_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)--Table of Contents



Sec.
3001.10 What does this part do?
3001.20 Does this part apply to me?
3001.30 What policies and procedures must I follow?

Subpart A--Purpose and Coverage [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

3001.225 Who in DHS does a recipient other than an individual notify 
          about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

3001.300 Who in DHS does a recipient who is an individual notify about a 
          criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

3001.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of This Part and Consequences

3001.500 Who in DHS determines that a recipient other than an individual 
          violated the requirements of this part?
3001.505 Who in DHS determines that a recipient who is an individual 
          violated the requirements of this part?
3001.510 What actions will the Federal Government take against a 
          recipient determined to have violated this part?

                          Subpart F_Definitions

3001.605 Award.
3001.661 Reimbursable Agreement.

    Authority: 5 U.S.C. 301; 41 U.S.C. 701-707; OMB Guidance for Drug-
Free Workplace Requirements, codified at 2 CFR part 182.

    Source: 76 FR 10207, Feb. 24, 2011, unless otherwise noted.

[[Page 641]]



Sec.  3001.10  What does this part do?

    This part requires that the award and administration of Department 
of Homeland Security (DHS) grants and cooperative agreements comply with 
Office of Management and Budget (OMB) guidance implementing the portion 
of the Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as amended, 
hereafter referred to as ``the Act'') that applies to grants. It 
thereby--
    (a) Gives regulatory effect to the OMB guidance, as supplemented by 
this part (Subparts A through F of 2 CFR part 182) for DHS's grants and 
cooperative agreements; and
    (b) Establishes DHS policies and procedures, as supplemented by this 
part, for compliance with the Act that are the same as those of other 
Federal agencies, in conformance with the requirement in 41 U.S.C. 705 
for Government-wide implementing regulations.



Sec.  3001.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in Subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of a DHS grant or cooperative agreement; or
    (b) DHS awarding official.



Sec.  3001.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. 
This part supplements the OMB guidance in 2 CFR part 182 as shown in the 
following table. For each of those sections, you must follow the 
policies and procedures in the OMB guidance, as supplemented by this 
part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
2 CFR 182.225(a).............  Sec.   3001.225  Who in DHS a recipient
                                                 other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
2 CFR 182.300(b).............  Sec.   3001.300  Who in DHS a recipient
                                                 who is an individual
                                                 must notify if he or
                                                 she is convicted of a
                                                 criminal drug offense
                                                 resulting from a
                                                 violation occurring
                                                 during the conduct of
                                                 any award activity.
2 CFR 182.400................  Sec.   3001.400  What method do I use as
                                                 an agency awarding
                                                 official to obtain a
                                                 recipient's agreement
                                                 to comply with the OMB
                                                 guidance.
2 CFR 182.500................  Sec.   3001.500  Who in DHS is authorized
                                                 to determine that a
                                                 recipient other than an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
2 CFR 182.505................  Sec.   3001.505  Who in DHS is authorized
                                                 to determine that a
                                                 recipient who is an
                                                 individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
2 CFR 182.510................  Sec.   3001.510  What actions the Federal
                                                 Government will take
                                                 against a recipient
                                                 determined to have
                                                 violated 2 CFR part
                                                 182, as implemented by
                                                 this part.
2 CFR 182.605................  Sec.   3001.605  What types of assistance
                                                 are included in the
                                                 definition of
                                                 ``award.''
None.........................  Sec.   3001.661  What types of assistance
                                                 are included in the
                                                 definition of
                                                 ``reimbursable
                                                 agreement.''
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in Subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, DHS policies 
and procedures are the same as those in the OMB guidance.

Subpart A--Purpose and Coverage [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  3001.225  Who in DHS does a recipient other than an individual
notify about a criminal drug conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify the DHS Office of Inspector General 
and each DHS office from which the recipient currently has an award.

[[Page 642]]



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  3001.300  Who in DHS does a recipient who is an individual
notify about a criminal drug conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify the DHS Office of Inspector General and each 
DHS office from which the recipient currently has an award.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  3001.400  What method do I use as an agency awarding official
to obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award:


Drug-free workplace. You as the recipient must comply with drug-free 
workplace requirements in Subpart B (or Subpart C, if the recipient is 
an individual) of 2 CFR part 3001, which adopts the Government-wide 
implementation (2 CFR part 182) of sec. 5152-5158 of the Drug-Free 
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 
701-707).



           Subpart E_Violations of This Part and Consequences



Sec.  3001.500  Who in DHS determines that a recipient other than an
individual violated the requirements of this part?

    The Secretary of Homeland Security, or his or her official designee, 
will make the determination that a recipient other than an individual 
violated the requirements of this part.



Sec.  3001.505  Who in DHS determines that a recipient who is an
individual violated the requirements of this part?

    The Secretary of Homeland Security, or his or her official designee, 
will make the determination that a recipient who is an individual 
violated the requirements of this part.



Sec.  3001.510  What actions will the Federal Government take against
a recipient determined to have violated this part?

    If a recipient is determined to have violated 2 CFR part 182, as 
implemented by this part, the agency will 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 2 CFR part 180 
and 2 CFR part 3000, for a period not to exceed five years.



                          Subpart F_Definitions



Sec.  3001.605  Award.

    Award means an award of financial assistance by a Federal agency 
directly to a recipient.
    (a) The term award includes:
    (1) A Federal grant, cooperative agreement or reimbursable 
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 2 CFR part 182 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.
    (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).
    (8) Other Transactional Authority Award.



Sec.  3001.661  Reimbursable Agreement.

    Reimbursable Agreement means an award in which the recipient is 
reimbursed for expenditures only, and is not eligible for advance 
payments.

[[Page 643]]



PART 3002_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 31 U.S.C. 503, 2 CFR part 200, and as noted in specific 
sections.

    Source: 79 FR 76084, Dec. 19, 2014, unless otherwise noted.



Sec.  3002.10  Adoption of 2 CFR Part 200.

    Under the authority listed above, the Department of Homeland 
Security adopts the Office of Management and Budget (OMB) Guidance in 2 
CFR part 200. Thus, this part gives regulatory effect to the OMB 
guidance and supplements the guidance as needed for the Department.

                       PARTS 3003	3099 [RESERVED]

[[Page 645]]



         CHAPTER XXXI--INSTITUTE OF MUSEUM AND LIBRARY SERVICES




  --------------------------------------------------------------------
Part                                                                Page
3100-3184

 [Reserved]

3185            Nonprocurement debarment and suspension.....         647
3186            Requirements for drug-free workplace 
                    (financial assistance)..................         648
3187            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         650
3188-3199

 [Reserved]

[[Page 647]]

                       PARTS 3100	3184 [RESERVED]



PART 3185_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
3185.10 What does this part do?
3185.20 Does this part apply to me?
3185.30 What policies and procedures must I follow?

                            Subpart A_General

3185.137 Who in IMLS may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

3185.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

3185.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

3185.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-I [Reserved]

    Authority: 20 U.S.C. 9103(f); Sec. 2455, Pub. L. 103-355, 108 Stat. 
3327; E.O. 12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 
Comp., p. 235.

    Source: 73 FR 46529, Aug. 11, 2008, unless otherwise noted.



Sec.  3185.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Institute of Museum and Library Services (IMLS) policies and 
procedures for nonprocurement debarment and suspension. It thereby gives 
regulatory effect for IMLS to the OMB guidance as supplemented by this 
part. This part satisfies the requirements in section 3 of Executive 
Order 12549, ``Debarment and Suspension'' (3 CFR 1986 Comp., p. 189), 
Executive Order 12689, ``Debarment and Suspension'' (3 CFR 1989 Comp., 
p. 235) and 31 U.S.C. 6101 note (Section 2455, Pub. L. 103-355, 108 
Stat. 3327).



Sec.  3185.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970.
    (b) Respondent in an IMLS suspension or debarment action.
    (c) IMLS debarment or suspension official;
    (d) IMLS grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  3185.30  What policies and procedures must I follow?

    The IMLS policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180, as that section is 
supplemented by the section in this part with the same section number. 
The contracts that are covered transactions, for example, are specified 
by section 220 of the OMB guidance (i.e., 2 CFR 180.220) as supplemented 
by section 220 in this part (i.e., Sec.  3185.220). For any section of 
OMB guidance in subparts A through I of 2 CFR 180 that has no 
corresponding section in this part, IMLS policies and procedures are 
those in the OMB guidance.



                            Subpart A_General



Sec.  3185.137  Who in the IMLS may grant an exception to let an 
excluded person participate in a covered transaction?

    The IMLS Director has the authority to grant an exception to let an 
excluded person participate in a covered transaction, as provided in the 
OMB guidance at 2 CFR 180.135.

[[Page 648]]



                     Subpart B_Covered Transactions



Sec.  3185.220  What contracts and subcontracts, in addition to those 
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see optional lower-tier coverage in the figure in 
the appendix to 2 CFR part 180), IMLS does not extend coverage of 
nonprocurement suspension and debarment requirements beyond first-tier 
procurement contracts under a covered nonprocurement transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  3185.332  What methods must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  3185.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-I [Reserved]



PART 3186_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
3186.10 What does this part do?
3186.20 Does this part apply to me?
3186.30 What policies and procedures must I follow?

Subpart A--Purpose and Coverage [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

3186.225 Whom in the IMLS does a recipient other than an individual 
          notify about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

3186.300 Whom in the IMLS does a recipient who is an individual notify 
          about a criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

3186.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of this Part and Consequences

3186.500 Who in the IMLS determines that a recipient other than an 
          individual violated the requirements of this part?
3186.505 Who in the IMLS determines that a recipient who is an 
          individual violated the requirements of this part?

    Authority: 41 U.S.C. 701-707.

    Source: 75 FR 39134, July 8, 2010, unless otherwise noted.



Sec.  3186.10  What does this part do?

    This part requires that the award and administration of IMLS grants 
and cooperative agreements comply with Office of Management and Budget 
(OMB) guidance implementing the portion of the Drug-Free Workplace Act 
of 1988 (41 U.S.C. 701-707, as amended, hereafter referred to as ``the 
Act'') that applies to grants. It thereby--
    (a) Gives regulatory effect to the OMB guidance (Subparts A through 
F of 2 CFR part 182) for the IMLS's grants and cooperative agreements; 
and

[[Page 649]]

    (b) Establishes IMLS policies and procedures for compliance with the 
Act that are the same as those of other Federal agencies, in conformance 
with the requirement in 41 U.S.C. 705 for Governmentwide implementing 
regulations.



Sec.  3186.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in Subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of an IMLS grant or cooperative agreement; or
    (b) IMLS awarding official.



Sec.  3186.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table. For each 
of those sections, you must follow the policies and procedures in the 
OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   3186.225  Whom in the IMLS a
                                                 recipient other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   3186.300  Whom in the IMLS a
                                                 recipient who is an
                                                 individual must notify
                                                 if he or she is
                                                 convicted of a criminal
                                                 drug offense resulting
                                                 from a violation
                                                 occurring during the
                                                 conduct of any award
                                                 activity.
(3) 2 CFR 182.500............  Sec.   3186.500  Who in the IMLS is
                                                 authorized to determine
                                                 that a recipient other
                                                 than an individual is
                                                 in violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(4) 2 CFR 182.505............  Sec.   3186.505  Who in the IMLS is
                                                 authorized to determine
                                                 that a recipient who is
                                                 an individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in Subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, IMLS policies 
and procedures are the same as those in the OMB guidance.

Subpart A--Purpose and Coverage [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  3186.225  Whom in the IMLS does a recipient other than an 
individual notify about a criminal drug conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify each IMLS office from which it 
currently has an award.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  3186.300  Whom in the IMLS does a recipient who is an individual
notify about a criminal drug conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify each IMLS office from which it currently has an 
award.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  3186.400  What method do I use as an agency awarding official
to obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award:

[[Page 650]]

    Drug-free workplace. You as the recipient must comply with drug-free 
workplace requirements in Subpart B (or Subpart C, if the recipient is 
an individual) of 2 CFR part 3186, which adopts the Governmentwide 
implementation (2 CFR part 182) of sec. 5152-5158 of the Drug-Free 
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 
701-707).



           Subpart E_Violations of this Part and Consequences



Sec.  3186.500  Who in the IMLS determines that a recipient other than 
an individual violated the requirements of this part?

    The IMLS Chief Financial Officer is the official authorized to make 
the determination under 2 CFR 182.500.



Sec.  3186.505  Who in the IMLS determines that a recipient who is an
individual violated the requirements of this part?

    The IMLS Chief Financial Officer is the official authorized to make 
the determination under 2 CFR 182.505.



PART 3187_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND 
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



Sec.
3187.1 Adoption of 2 CFR part 200.

              Subpart A_Scope, Definitions, and Eligibility

3187.2 Applicable regulations and scope of this part.
3187.3 Definition of a museum.
3187.4 Other definitions.
3187.5 Museum eligibility and burden of proof--Who may apply.
3187.6 Related institutions.
3187.7 Basic materials which an applicant must submit to be considered 
          for funding.

      Subpart B_General Application, Selection and Award Procedures

                              Applications

3187.8 Deadline date and method for submitting applications.

                     Selection and Award Procedures

3187.9 Rejection of an application.
3187.10 Rejection for technical deficiency--appeal.

             Subpart C_General Conditions Which Must Be Met

                   Compliance with Legal Requirements

3187.11 Compliance with statutes, regulations, approved application and 
          Federal award.

                            Nondiscrimination

3187.12 Federal statutes and regulations on nondiscrimination.

                               Evaluation

3187.13 Federal evaluation--Cooperation by a non-Federal entity.

                             Allowable Costs

3187.14 Subawards
3187.15 Allowable costs.

    Authority: 20 U.S.C. 9101-9176, 9103(h); 20 U.S.C. 80r-5; 2 CFR part 
200.

    Source: 79 FR 76088, Dec. 19, 2014, unless otherwise noted.



Sec.  3187.1  Adoption of 2 CFR Part 200.

    Under the authority listed above, the Institute of Museum and 
Library Services (IMLS) adopts the Office of Management and Budget (OMB) 
Guidance in 2 CFR part 200, with the additions that are provided below. 
Thus, this part gives regulatory effect to the OMB guidance and 
supplements the guidance as needed for IMLS.



              Subpart A_Scope, Definitions, and Eligibility



Sec.  3187.2  Applicable regulations and scope of this part.

    (a) Except as set forth in this 2 CFR part 3187, the Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements for 
Federal Awards set forth in 2 CFR part 200 shall apply to awards from 
funds appropriated to the Institute of Museum and Library Services (the 
``Institute'' or ``IMLS'').
    (b) The IMLS authorizing statutes, including 20 U.S.C. 9101 et seq. 
and 20 U.S.C. 80r-5, (``IMLS Statutes'') are controlling in the event of 
any conflict between the IMLS Statutes and the regulations in 2 CFR part 
200.

[[Page 651]]



Sec.  3187.3  Definition of a museum.

    For the purpose of this part:
    (a) Museum means a public, tribal, or private nonprofit institution 
which is organized on a permanent basis for essentially educational, 
cultural heritage, or aesthetic purposes and which, using a professional 
staff:
    (1) Owns or uses tangible objects, either animate or inanimate;
    (2) Cares for these objects; and
    (3) Exhibits them to the general public on a regular basis.
    (i) An institution that exhibits objects to the general public for 
at least 120 days a year shall be deemed to meet this requirement.
    (ii) An institution that exhibits objects by appointment may meet 
this requirement if it can establish, in light of the facts under all 
the relevant circumstances, that this method of exhibition does not 
unreasonably restrict the accessibility of the institution's exhibits to 
the general public.
    (b) The term ``museum'' in paragraph (a) of this section includes 
museums that have tangible and digital collections. Museums include, but 
are not limited to, the following types of institutions, if they 
otherwise satisfy the provisions of this section:
    (1) Aquariums;
    (2) Arboretums;
    (3) Botanical gardens;
    (4) Art museums;
    (5) Children's museums;
    (6) General museums;
    (7) Historic houses and sites;
    (8) History museums;
    (9) Nature centers;
    (10) Natural history and anthropology museums;
    (11) Planetariums;
    (12) Science and technology centers;
    (13) Specialized museums; and
    (14) Zoological parks.
    (c) For the purposes of this section, an institution uses a 
professional staff if it employs at least one staff member, or the 
fulltime equivalent, whether paid or unpaid primarily engaged in the 
acquisition, care, or exhibition to the public of objects owned or used 
by the institution.
    (d)(1) Except as set forth in paragraph (d)(2) of this section, an 
institution exhibits objects to the general public for the purposes of 
this section if such exhibition is a primary purpose of the institution.
    (2) An institution that does not have as a primary purpose the 
exhibition of objects to the general public but which can demonstrate 
that it exhibits objects to the general public on a regular basis as a 
significant, separate, distinct, and continuing portion of its 
activities, and that it otherwise meets the requirements of this 
section, may be determined to be a museum under this section. In order 
to establish its eligibility, such an institution must provide 
information regarding the following:
    (i) The number of staff members devoted to museum functions as 
described in paragraph (a) of this section.
    (ii) The period of time that such museum functions have been carried 
out by the institution over the course of the institution's history.
    (iii) Appropriate financial information for such functions presented 
separately from the financial information of the institution as a whole.
    (iv) The percentage of the institution's total space devoted to such 
museum functions.
    (v) Such other information as the Director requests.
    (3) The Director uses the information furnished under paragraph 
(d)(2) of this section in making a determination regarding the 
eligibility of such an institution under this section.
    (e) For the purpose of this section, an institution exhibits objects 
to the public if it exhibits the objects through facilities which it 
owns or operates.

[79 FR 76088, Dec. 19, 2014, as amended at 84 FR 27704, June 14, 2019]



Sec.  3187.4  Other definitions.

    The following other definitions apply in this part:
    Act means The Museum and Library Services Act, Pub. L. 104-208 (20 
U.S.C. 9101-9176), as amended.
    Collection includes objects owned, used or loaned by a museum as 
well as those literary, archival and documentary resources specifically 
required for the study and interpretation of these objects.
    Director means the Director of the Institute of Museum and Library 
Services.

[[Page 652]]

    Institute or IMLS means the Institute of Museum and Library Services 
established under Section 203 of the Act.
    Museum services means services provided by a museum, primarily 
exhibiting objects to the general public, and including but not limited 
to preserving and maintaining its collections, and providing educational 
and other programs to the public through the use of its collections and 
other resources.



Sec.  3187.5  Museum eligibility and burden of proof--Who may apply.

    (a) A museum located in any of the 50 States of the United States, 
the District of Columbia, the Commonwealth of Puerto Rico, the United 
States Virgin Islands, Guam, American Samoa, the Commonwealth of the 
Northern Mariana Islands, the Republic of the Marshall Islands, the 
Federated States of Micronesia, and the Republic of Palau may apply for 
a Federal award under the Act.
    (b) A public or private nonprofit agency which is responsible for 
the operation of a museum may, if necessary, apply on behalf of the 
museum.
    (c) A museum operated by a department or agency of the Federal 
Government is not eligible to apply.
    (d) An applicant has the burden of establishing that it is eligible 
for assistance under these regulations.



Sec.  3187.6  Related institutions.

    (a) If two or more institutions are under the common control of one 
agency or institution or are otherwise organizationally related and 
apply for assistance under the Act, the Director determines under all 
the relevant circumstances whether they are separate museums for the 
purpose of establishing eligibility for assistance under these 
regulations. See Sec.  3187.5 (Museum eligibility and burden of proof--
Who may apply).
    (b) IMLS regards the following factors, among others, as showing 
that a related institution is a separate museum:
    (1) The institution has its own governing body;
    (2) The institution has budgetary autonomy; and
    (3) The institution has administrative autonomy.



Sec.  3187.7  Basic materials which an applicant must submit to be
considered for funding.

    (a) Application. To apply for an IMLS Federal award, an applicant 
must submit the designated application form containing all information 
requested.
    (b) IRS letter. An applicant applying as a private, nonprofit 
institution must submit a copy of the letter from the Internal Revenue 
Service indicating the applicant's eligibility for nonprofit status 
under the applicable provision of the Internal Revenue Code of 1954, as 
amended.



      Subpart B_General Application, Selection and Award Procedures

                              Applications



Sec.  3187.8  Deadline date and method for submitting applications.

    (a) The notice of funding opportunity sets the deadline date and 
method(s) for applications to be submitted to the Institute.
    (b) If the application notice permits mailing of an application, an 
applicant must be prepared to show one of the following as proof of 
timely mailing:
    (1) A legibly dated U.S. Postal Service postmark.
    (2) A legible mail receipt with the date of mailing stamped by the 
U.S. Postal Service.
    (3) A dated shipping label, invoice, or receipt from a commercial 
carrier.
    (4) Any other dated proof of mailing acceptable to the Director.
    (c) If the application notice permits mailing of an application, and 
the application is mailed through the U.S. Postal Service, the Director 
does not accept either of the following as proof of mailing:
    (1) A private metered postmark.
    (2) A mail receipt that is not date cancelled by the U.S. Postal 
Service.

                     Selection and Award Procedures



Sec.  3187.9  Rejection of an application.

    (a) The Director rejects an application if:
    (1) The applicant is not eligible;
    (2) The applicant fails to comply with procedural rules that govern 
the submission of the application;

[[Page 653]]

    (3) The application does not contain the information required;
    (4) The application cannot be funded under the authorizing statute 
or implementing regulations.
    (b) If the Director rejects an application under this section, the 
Director informs the applicant and explains why the application was 
rejected.



Sec.  3187.10  Rejection for technical deficiency--appeal.

    An applicant whose application is rejected because of technical 
deficiency may appeal such rejection in writing to the Director within 
10 business days of electronic or postmarked notice of rejection, 
whichever is earlier.



             Subpart C_General Conditions Which Must Be Met

                   Compliance With Legal Requirements






Sec.  3187.11  Compliance with statutes, regulations, approved 
application and Federal award.

    (a) A recipient and subrecipient, as applicable, shall comply with 
the relevant statutes, regulations, and the approved application and 
Federal award, and shall use Federal funds in accordance therewith.
    (b) No act or failure to act by an official, agent, or employee of 
the Institute can affect the authority of the Director to enforce 
regulations.
    (c) In any circumstance for which waiver is provided, the 
determination of the Director shall be final.

                            Nondiscrimination



Sec.  3187.12  Federal statutes and regulations on nondiscrimination.

    (a) Each recipient and subrecipient, as applicable, shall comply 
with the relevant nondiscrimination statutes and public policy 
requirements including, but not limited to, the following:

------------------------------------------------------------------------
                Subject                              Statute
------------------------------------------------------------------------
Discrimination on the basis of race,     Title VI of the Civil Rights
 color or national origin.                Act of 1964 (42 U.S.C. 2000d
                                          through 2000d-4).
Discrimination on the basis of sex.....  Title IX of the Education
                                          Amendments of 1972 (20 U.S.C.
                                          1681-1683).
Discrimination on the basis of           Section 504 of the
 disability.                              Rehabilitation Act of 1973 (29
                                          U.S.C. 794).
Discrimination on the basis of age.....  The Age Discrimination Act of
                                          1975 (42 U.S.C. 6101-6107).
------------------------------------------------------------------------

    (b) Regulations under section 504 of the Rehabilitation Act of 1973. 
The Institute applies the regulations in 45 CFR part 1170, issued by the 
National Endowment for the Humanities and relating to nondiscrimination 
on the basis of handicap in federally assisted programs and activities, 
in determining the compliance with section 504 of the Rehabilitation Act 
of 1973 as it applies to recipients of Federal financial assistance from 
the Institute. These regulations apply to each program or activity that 
receives such assistance. In applying these regulations, references to 
the Endowment or the agency shall be deemed to be references to the 
Institute and references to the Chairman shall be deemed to be 
references to the Director.

[79 FR 76088, Dec. 19, 2014, as amended at 84 FR 22944, May 21, 2019]

                               Evaluation



Sec.  3187.13  Federal evaluation--Cooperation by a non-Federal entity.

    A non-Federal entity shall cooperate in any evaluation by the 
Director of the particular IMLS Federal financial assistance program in 
which the non-Federal entity has participated.

                             Allowable Costs



Sec.  3187.14  Subawards.

    (a) A recipient may not make a subaward unless expressly authorized 
by the Institute. In the event the Institute authorizes a subaward, the 
recipient shall:
    (1) Ensure that the subaward includes any clauses required by 
Federal law as well as any program-related conditions imposed by the 
Institute;

[[Page 654]]

    (2) Ensure that the subrecipient is aware of the applicable legal 
and program requirements; and
    (3) Monitor the activities of the subrecipient as necessary to 
ensure compliance with Federal law and program requirements.
    (b) A recipient may contract for supplies, equipment, and services, 
subject to applicable law, including but not limited to applicable 
Office of Management and Budget (OMB) Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal Awards 
set forth in 2 CFR part 200.



Sec.  3187.15  Allowable costs.

    (a) Determination of costs allowable under a Federal award is made 
in accordance with the government-wide cost principles in the Office of 
Management and Budget (OMB) Uniform Administrative Requirements, Cost 
Principles, and Audit Requirements for Federal Awards set forth in 2 CFR 
part 200.
    (b) No costs shall be allowed for the purchase of any object to be 
included in the collection of a museum, except library, literary, or 
archival material specifically required for a designated activity under 
a Federal award under the Act.

                       PARTS 3188	3199 [RESERVED]

[[Page 655]]



             CHAPTER XXXII--NATIONAL ENDOWMENT FOR THE ARTS




  --------------------------------------------------------------------
Part                                                                Page
3200-3253

 [Reserved]

3254            Nonprocurement debarment and suspension.....         657
3255            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         658
3256            Requirements for drug-free workplace 
                    (financial assistance)..................         658
3257-3299

 [Reserved]

[[Page 657]]

                       PARTS 3200	3253 [RESERVED]



PART 3254_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
3254.10 What does this part do?
3254.20 Does this part apply to me?
3254.30 What policies and procedures must I follow?

                            Subpart A_General

3254.137 Who in the NEA may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

3254.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

3254.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

3254.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-I [Reserved]

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235.

    Source: 72 FR 6141, Feb. 9, 2007, unless otherwise noted.



Sec.  3254.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the National Endowment for the Arts (NEA) policies and procedures for 
nonprocurement debarment and suspension. It thereby gives regulatory 
effect for the NEA to the OMB guidance as supplemented by this part. 
This part satisfies the requirements in section 3 of Executive Order 
12549, ``Debarment and Suspension'' (3 CFR 1986 Comp., p. 189), 
Executive Order 12689, ``Debarment and Suspension'' (3 CFR 1989 Comp., 
p. 235) and 31 U.S.C. 6101 note (Section 2455, Public Law 103-355, 108 
Stat. 3327).



Sec.  3254.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970.
    (b) Respondent in a NEA suspension or debarment action.
    (c) NEA debarment or suspension official;
    (d) NEA grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction;



Sec.  3254.30  What policies and procedures must I follow?

    The NEA policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180, as that section is 
supplemented by the section in this part with the same section number. 
The contracts that are covered transactions, for example, are specified 
by section 220 of the OMB guidance (i.e., 2 CFR 180.220) as supplemented 
by section 220 in this part (i.e., Sec.  3254.220). For any section of 
OMB guidance in subparts A through I of 2 CFR 180 that has no 
corresponding section in this part, NEA policies and procedures are 
those in the OMB guidance.



                            Subpart A_General



Sec.  3254.137  Who in the NEA may grant an exception to let an 
excluded person participate in a covered transaction?

    The NEA Chairman has the authority to grant an exception to let an 
excluded person participate in a covered transaction, as provided in the 
OMB guidance at 2 CFR 180.135.

[[Page 658]]



                     Subpart B_Covered Transactions



Sec.  3254.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see options lower tier coverage in the figure in 
the appendix to 2 CFR part 180), NEA does not extend coverage of 
nonprocurement suspension and debarment requirements beyond first-tier 
procurement contracts under a covered nonprocurement transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  3254.332  What methods must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  3254.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-I [Reserved]



PART 3255_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 5 U.S.C. 301, 20 U.S.C. 954, 2 CFR part 200.

    Source: 79 FR 76090, Dec. 19, 2014, unless otherwise noted.



Sec.  3255.1  Adoption of 2 CFR Part 200.

    Under the authority listed above, the National Endowment for the 
Arts (NEA) adopts the Office of Management and Budget (OMB) Guidance in 
2 CFR part 200. Thus, this part gives regulatory effect to the OMB 
guidance and supplements the guidance as needed for the NEA.



PART 3256_REQUIREMENTS FOR DRUG	FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
3256.100 What does this part do?
3256.105 Does this part apply to me?
3256.110 What policies and procedures must I follow?

Subpart A [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

3256.200 Whom in the NEA does a recipient other than an individual 
          notify about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

3256.300 Whom in the NEA does a recipient who is an individual notify 
          about a criminal drug conviction?

          Subpart D_Responsibilities of NEA Awarding Officials

3256.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of This Part and Consequences

3256.500 Who in the NEA determines that a recipient other than an 
          individual violated the requirements of this part?

[[Page 659]]

3256.505 Who in the NEA determines that a recipient who is an individual 
          violated the requirements of this part?

Subpart F [Reserved]

    Authority: 41 U.S.C. 701 et seq.

    Source: 80 FR 33156, June 11, 2015, unless otherwise noted.



Sec.  3256.100  What does this part do?

    This part requires that the award and administration of NEA grants 
and cooperative agreements comply with Office of Management and Budget 
(OMB) guidance implementing the portion of the Drug-Free Workplace Act 
of 1988 (41 U.S.C. 701-707, as amended, hereafter referred to as ``the 
Act'') that applies to grants. It thereby--
    (a) Gives regulatory effect to the OMB guidance (subparts A through 
F of 2 CFR part 182) for the NEA's grants and cooperative agreements; 
and
    (b) Establishes NEA policies and procedures for compliance with the 
Act that are the same as those of other Federal agencies, in conformance 
with the requirement in 41 U.S.C. 705 for Governmentwide implementing 
regulations.



Sec.  3256.105  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of an NEA grant or cooperative agreement; or
    (b) NEA awarding official.



Sec.  3256.110  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in the applicable sections of the OMB guidance in subparts A through F 
of 2 CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the guidance in 2 CFR part 182, this part supplements four 
sections of that guidance, as shown in the following table. For each of 
those sections, you must follow the policies and procedures in the OMB 
guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   3256.200  Whom in the NEA a
                                                 recipient other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   3256.300  Whom in the NEA a
                                                 recipient who is an
                                                 individual must notify
                                                 if he or she is
                                                 convicted of a criminal
                                                 drug offense resulting
                                                 from a violation
                                                 occurring during the
                                                 conduct of any award
                                                 activity.
(3) 2 CFR 182.500............  Sec.   3256.500  Who in the NEA is
                                                 authorized to determine
                                                 that a recipient other
                                                 than an individual is
                                                 in violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(4) 2 CFR 182.505............  Sec.   3256.505  Who in the NEA is
                                                 authorized to determine
                                                 that a recipient who is
                                                 an individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, the NEA's 
policies and procedures are the same as those in the OMB guidance.

Subpart A [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  3256.200  Whom in the NEA does a recipient other than an 
individual notify about a criminal drug conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify the NEA

[[Page 660]]

awarding official or other designee for each award that it currently 
has.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  3256.300  Whom in the NEA does a recipient who is an individual
notify about a criminal drug conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify the NEA awarding official or other designee for 
each award that he or she currently has.



          Subpart D_Responsibilities of NEA Awarding Officials



Sec.  3256.400  What method do I use as an agency awarding official
to obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award: Drug-free workplace. You as 
the recipient must comply with drug-free workplace requirements in 
subpart B (or subpart C, if the recipient is an individual) of this 
part, which adopts the Governmentwide implementation (2 CFR part 182) of 
sec. 5152-5158 of the Drug-Free Workplace Act of 1988 (Pub. L. 100-690, 
Title V, Subtitle D; 41 U.S.C. 701-707).



           Subpart E_Violations of This Part and Consequences



Sec.  3256.500  Who in the NEA determines that a recipient other than
an individual violated the requirements of this part?

    The Chairman of the National Endowment for the Arts is the official 
authorized to make the determination under 2 CFR 182.500.



Sec.  3256.505  Who in the NEA determines that a recipient who is an
individual violated the requirements of this part?

    The Chairman of the National Endowment for the Arts is the official 
authorized to make the determination under 2 CFR 182.505.

Subpart F [Reserved]

                       PARTS 3257	3299 [RESERVED]

[[Page 661]]



          CHAPTER XXXIII--NATIONAL ENDOWMENT FOR THE HUMANITIES




  --------------------------------------------------------------------
Part                                                                Page
3300-3368

 [Reserved]

3369            Nonprocurement debarment and suspension.....         663
3373            Requirements for drug-free workplace 
                    (financial assistance)..................         664
3374            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         666
3375-3399

 [Reserved]

[[Page 663]]

                       PARTS 3300	3368 [RESERVED]



PART 3369_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
3369.10 What does this part do?
3369.20 Does this part apply to me?
3369.30 What policies and procedures must I follow?

                            Subpart A_General

3369.137 Who in the NEH may grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

3369.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

3369.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

3369.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-I [Reserved]

    Authority: 20 U.S.C. 959(a)(1); Sec. 2455, Pub. L. 103-355, 108 
Stat. 3327; E.O. 12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 
1989 Comp., p. 235.

    Source: 72 FR 9236, Mar. 1, 2007, unless otherwise noted.



Sec.  3369.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the National Endowment for the Humanities (NEH) policies and 
procedures for nonprocurement debarment and suspension. It thereby gives 
regulatory effect for the NEH to the OMB guidance as supplemented by 
this part. This part satisfies the requirements in section 3 of 
Executive Order 12549, ``Debarment and Suspension'' (3 CFR 1986 Comp., 
p. 189), Executive Order 12689, ``Debarment and Suspension'' (3 CFR 1989 
Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Public Law 103-
355, 108 Stat. 3327).



Sec.  3369.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970).
    (b) Respondent in a NEH suspension or debarment action.
    (c) NEH debarment or suspension official;
    (d) NEH grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction;



Sec.  3369.30  What policies and procedures must I follow?

    The NEH policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180, as that section is 
supplemented by the section in this part with the same section number. 
The contracts that are covered transactions, for example, are specified 
by section 220 of the OMB guidance (i.e., 2 CFR 180.220) as supplemented 
by section 220 in this part (i.e., Sec.  3369.220). For any section of 
OMB guidance in subparts A through I of 2 CFR 180 that has no 
corresponding section in this part, NEH policies and procedures are 
those in the OMB guidance.



                            Subpart A_General



Sec.  3369.137  Who in the NEH may grant an exception to let an 
excluded person participate in a covered transaction?

    The NEH Chairman has the authority to grant an exception to let an 
excluded person participate in a covered transaction, as provided in the 
OMB guidance at 2 CFR 180.135.

[[Page 664]]



                     Subpart B_Covered Transactions



Sec.  3369.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see optional lower tier coverage in the figure in 
the appendix to 2 CFR part 180), NEH does not extend coverage of 
nonprocurement suspension and debarment requirements beyond first-tier 
procurement contracts under a covered nonprocurement transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  3369.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180, as supplemented by this subpart.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  3369.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-I [Reserved]



PART 3373_REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL ASSISTANCE)-
-Table of Contents



Sec.
3373.10 What does this part do?
3373.20 Does this part apply to me?
3373.30 What policies and procedures must I follow?

Subpart A--Purpose and Coverage [Reserved]

      Subpart B_Requirements for Recipients Other Than Individuals

3373.225 Whom in the NEH does a recipient other than an individual 
          notify about a criminal drug conviction?

        Subpart C_Requirements for Recipients Who Are Individuals

3373.300 Whom in the NEH does a recipient who is an individual notify 
          about a criminal drug conviction?

         Subpart D_Responsibilities of Agency Awarding Officials

3373.400 What method do I use as an agency awarding official to obtain a 
          recipient's agreement to comply with the OMB guidance?

           Subpart E_Violations of This Part and Consequences

3373.500 Who in the NEH determines that a recipient other than an 
          individual violated the requirements of this part?
3373.505 Who in the NEH determines that a recipient who is an individual 
          violated the requirements of this part?

Subpart F--Definitions [Reserved]

    Authority: 41 U.S.C. 701-707.

    Source: 75 FR 52858, Aug. 30, 2010, unless otherwise noted.



Sec.  3373.10  What does this part do?

    This part requires that the award and administration of NEH grants 
and cooperative agreements comply with Office of Management and Budget 
(OMB) guidance implementing the portion of the Drug-Free Workplace Act 
of 1988 (41 U.S.C. 701-707, as amended, hereafter referred to as ``the 
Act'') that applies to grants. It thereby--
    (a) Gives regulatory effect to the OMB guidance (Subparts A through 
F

[[Page 665]]

of 2 CFR part 182) for the NEH's grants and cooperative agreements; and
    (b) Establishes NEH policies and procedures for compliance with the 
Act that are the same as those of other Federal agencies, in conformance 
with the requirement in 41 U.S.C. 705 for Governmentwide implementing 
regulations.



Sec.  3373.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in Subparts A through F of 2 CFR part 182 (see table at 2 CFR 
182.115(b)) apply to you if you are a--
    (a) Recipient of a NEH grant or cooperative agreement; or
    (b) NEH awarding official.



Sec.  3373.30  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through F of 2 
CFR part 182, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. In 
implementing the OMB guidance in 2 CFR part 182, this part supplements 
four sections of the guidance, as shown in the following table. For each 
of those sections, you must follow the policies and procedures in the 
OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                               Section in this
   Section of OMB guidance        part where    What the supplementation
                                 supplemented           clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a).........  Sec.   3373.225  Whom in the NEH a
                                                 recipient other than an
                                                 individual must notify
                                                 if an employee is
                                                 convicted for a
                                                 violation of a criminal
                                                 drug statute in the
                                                 workplace.
(2) 2 CFR 182.300(b).........  Sec.   3373.300  Whom in the NEH a
                                                 recipient who is an
                                                 individual must notify
                                                 if he or she is
                                                 convicted of a criminal
                                                 drug offense resulting
                                                 from a violation
                                                 occurring during the
                                                 conduct of any award
                                                 activity.
(3) 2 CFR 182.500............  Sec.   3373.500  Who in the NEH is
                                                 authorized to determine
                                                 that a recipient other
                                                 than an individual is
                                                 in violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
(4) 2 CFR 182.505............  Sec.   3373.505  Who in the NEH is
                                                 authorized to determine
                                                 that a recipient who is
                                                 an individual is in
                                                 violation of the
                                                 requirements of 2 CFR
                                                 part 182, as
                                                 implemented by this
                                                 part.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not supplement. 
For any section of OMB guidance in Subparts A through F of 2 CFR part 
182 that is not listed in paragraph (b) of this section, NEH policies 
and procedures are the same as those in the OMB guidance.

Subpart A--Purpose and Coverage [Reserved]



      Subpart B_Requirements for Recipients Other Than Individuals



Sec.  3373.225  Whom in the NEH does a recipient other than an 
individual notify about a criminal drug conviction?

    A recipient other than an individual that is required under 2 CFR 
182.225(a) to notify Federal agencies about an employee's conviction for 
a criminal drug offense must notify the Director, Office of Grant 
Management, NEH.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec.  3373.300  Whom in the NEH does a recipient who is an individual
notify about a criminal drug conviction?

    A recipient who is an individual and is required under 2 CFR 
182.300(b) to notify Federal agencies about a conviction for a criminal 
drug offense must notify the Director, Office of Grant Management, NEH.



         Subpart D_Responsibilities of Agency Awarding Officials



Sec.  3373.400  What method do I use as an agency awarding official
to obtain a recipient's agreement to comply with the OMB guidance?

    To obtain a recipient's agreement to comply with applicable 
requirements in the OMB guidance at 2 CFR part 182, you must include the 
following term or condition in the award:


[[Page 666]]


    Drug-free workplace. You as the recipient must comply with drug-free 
workplace requirements in Subpart B (or Subpart C, if the recipient is 
an individual) of 2 CFR Part 3373, which adopts the Governmentwide 
implementation (2 CFR part 182) of sec. 5152-5158 of the Drug-Free 
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 
701-707).



           Subpart E_Violations of This Part and Consequences



Sec.  3373.500  Who in the NEH determines that a recipient other than
an individual violated the requirements of this part?

    The NEH General Counsel is the agency official authorized to make 
the determination under 2 CFR 182.500.



Sec.  3373.505  Who in the NEH determines that a recipient who is an
individual violated the requirements of this part?

    The NEH General Counsel is the agency official authorized to make 
the determination under 2 CFR 182.505.

Subpart F--Definitions [Reserved]



PART 3374_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 5 U.S.C. 301, 20 U.S.C. 956, 2 CFR part 200.

    Source: 79 FR 76091, Dec. 19, 2014, unless otherwise noted.



Sec.  3374.1  Adoption of 2 CFR Part 200.

    Under the authority listed above, the National Endowment for the 
Humanities (NEH) adopts the Office of Management and Budget (OMB) 
Guidance in 2 CFR part 200. Thus, this part gives regulatory effect to 
the OMB guidance and supplements the guidance as needed for NEH.

                       PARTS 3375	3399 [RESERVED]

[[Page 667]]



                 CHAPTER XXXIV--DEPARTMENT OF EDUCATION




  --------------------------------------------------------------------
Part                                                                Page
3400-3473

 [Reserved]

3474            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         669
3485            Nonprocurement debarment and suspension.....         673
3486-3499

 [Reserved]

[[Page 669]]

                       PARTS 3400	3473 [RESERVED]



PART 3474_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



Sec.
3474.1 Adoption of 2 CFR part 200.
3474.5 How exceptions are made to 2 CFR part 200.
3474.10 Clarification regarding 2 CFR 200.207.
3474.15 Contracting with faith-based organizations and 
          nondiscrimination.
3474.20 Open licensing requirement for competitive grant programs.
3474.21 Severability.

    Authority: 20 U.S.C. 1221e-3, 3474, and 2 CFR part 200, unless 
otherwise noted.

    Effective Date Note: At 85 FR 82125, Dec. 17, 2020, the authority 
citation for part 3474 was revised, effective Jan. 19, 2021. For the 
convenience of the user, the revised text is set forth as follows:
    Authority: 20 U.S.C. 1221e-3, 3474; 42 U.S.C. 2000bb et seq.; and 2 
CFR part 200, unless otherwise noted.

    Source: 79 FR 76091, Dec. 19, 2014, unless otherwise noted.



Sec.  3474.1  Adoption of 2 CFR part 200.

    (a) The Department of Education adopts the Office of Management and 
Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR 200.102(a) and 
2 CFR 200.207(a). Thus, this part gives regulatory effect to the OMB 
guidance and supplements the guidance as needed for the Department.
    (b) The authority for all of the provisions in 2 CFR part 200 as 
adopted in this part is listed as follows.

(Authority: 20 U.S.C. 1221e-3, 3474, and 2 CFR part 200.)



Sec.  3474.5  How exceptions are made to 2 CFR part 200. \1\
---------------------------------------------------------------------------

    \1\ C. Ref. 2 CFR 200.102.
---------------------------------------------------------------------------

    (a) With the exception of Subpart F--Audit Requirements of 2 CFR 
part 200, the Secretary of Education, after consultation with OMB, may 
allow exceptions for classes of Federal awards or non-Federal entities 
subject to the requirements of this part when exceptions are not 
prohibited by statute. However, in the interest of maximum uniformity, 
exceptions from the requirements of this part will be permitted only in 
unusual circumstances.
    (b) Exceptions for classes of Federal awards or non-Federal entities 
will be published on the OMB Web site at www.whitehouse.gov/omb.

(Authority: 20 U.S.C. 1221e-3, 3474, and 2 CFR part 200)



Sec.  3474.10  Clarification regarding 2 CFR 200.207. \2\
---------------------------------------------------------------------------

    \2\ C. Ref. 2 CFR 200.205, 200.207.
---------------------------------------------------------------------------

    The Secretary or a pass-through entity may, in appropriate 
circumstances, designate the specific conditions established under 2 CFR 
200.207 as ``high-risk conditions'' and designate a non-Federal entity 
subject to specific conditions established under Sec.  200.207 as 
``high-risk''.

(Authority: 20 U.S.C. 1221e-3, 3474, and 2 CFR part 200)



Sec.  3474.15  Contracting with faith-based organizations and
nondiscrimination.

    (a) This section establishes responsibilities that grantees and 
subgrantees have in selecting contractors to provide direct Federal 
services under a program of the Department. Paragraphs (c)(1), (d)(1), 
and (f) of this section establish requirements that supplement the 
procurement requirements in 2 CFR 200.313 through 200.326. Every 
contract between a grantee or subgrantee and a faith-based organization 
under a program of direct Federal financial assistance must include 
conditions to implement the requirements in paragraphs (c)(1), (d)(1), 
and (f) of this section.
    (b)(1) A faith-based organization is eligible to contract with 
grantees and subgrantees, including States, on the same basis as any 
other private organization, with respect to contracts for which such 
other organizations are eligible.
    (2) In selecting providers of goods and services, grantees and 
subgrantees, including States, must not discriminate for or against a 
private organization on the basis of the organization's religious 
character or affiliation and must ensure that the award of contracts is 
free

[[Page 670]]

from political interference, or even the appearance of such 
interference, and is done on the basis of merit, not on the basis of 
religion or religious belief, or lack thereof.
    (c)(1) The provisions of 34 CFR 75.532 and 76.532 (Use of funds for 
religion prohibited), 75.712 and 76.712 (Beneficiary protections: 
Written notice), and 75.713 and 76.713 (Beneficiary protections: 
Referral requirements) that apply to a faith-based organization that is 
a grantee or subgrantee also apply to a faith-based organization that 
contracts with a grantee or subgrantee, including a State.
    (2) The requirements referenced under paragraph (c)(1) of this 
section do not apply to a faith-based organization that provides goods 
or services to a beneficiary under a program supported only by indirect 
Federal financial assistance, as defined in 34 CFR 75.52(c)(3) and 
76.52(c)(3).
    (d)(1) A private organization that engages in explicitly religious 
activities, such as religious worship, instruction, or proselytization, 
must offer those activities separately in time or location from any 
programs or services supported by a contract with a grantee or 
subgrantee, including a State, and attendance or participation in any 
such explicitly religious activities by beneficiaries of the programs 
and services supported by the contract must be voluntary.
    (2) The limitations on explicitly religious activities under 
paragraph (d)(1) of this section do not apply to a faith-based 
organization that provides services to a beneficiary under a program 
supported only by indirect Federal financial assistance, as defined in 
34 CFR 75.52(c)(3) and 76.52(c)(3).
    (e)(1) A faith-based organization that contracts with a grantee or 
subgrantee, including a State, may retain its independence, autonomy, 
right of expression, religious character, and authority over its 
governance.
    (2) A faith-based organization may, among other things--
    (i) Retain religious terms in its name;
    (ii) Continue to carry out its mission, including the definition, 
development, practice, and expression of its religious beliefs;
    (iii) Use its facilities to provide services without removing or 
altering religious art, icons, scriptures, or other symbols from these 
facilities;
    (iv) Select its board members and otherwise govern itself on a 
religious basis; and
    (v) Include religious references in its mission statement and other 
chartering or governing documents.
    (f) A private organization that contracts with a grantee or 
subgrantee, including a State, may not discriminate against a 
beneficiary or prospective beneficiary in the provision of program goods 
or services on the basis of religion or religious belief, a refusal to 
hold a religious belief, or refusal to attend or participate in a 
religious practice. However, an organization that participates in a 
program funded by indirect financial assistance need not modify its 
program activities to accommodate a beneficiary who chooses to expend 
the indirect aid on the organization's program.
    (g) A religious organization's exemption from the Federal 
prohibition on employment discrimination on the basis of religion, in 
section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1(a), is 
not forfeited when the organization contracts with a grantee or 
subgrantee.

(Authority: 20 U.S.C. 1221e-3 and 3474; 2 CFR Part 200, E.O. 13559)

[81 FR 19405, Apr. 4, 2016]

    Effective Date Note: At 85 FR 82125, Dec. 17, 2020, Sec.  3474.15 
was revised, effective Jan. 19, 2021. For the convenience of the user, 
the revised text is set forth as follows:



Sec.  3474.15  Contracting with faith-based organizations and 
          nondiscrimination.

    (a) This section establishes responsibilities that grantees and 
subgrantees have in selecting contractors to provide direct Federal 
services under a program of the Department. Grantees and subgrantees 
must ensure compliance by their subgrantees with the provisions of this 
section and any implementing regulations or guidance.
    (b)(1) A faith-based organization is eligible to contract with 
grantees and subgrantees, including States, on the same basis as any 
other private organization, with respect to contracts for which such 
organizations are eligible and considering any permissible 
accommodation.
    (2) In selecting providers of goods and services, grantees and 
subgrantees, including

[[Page 671]]

States, must not discriminate for or against a private organization on 
the basis of the organization's religious character, affiliation, or 
exercise, as defined in 34 CFR 75.52(c)(3) and 76.52(c)(3), and must 
ensure that the award of contracts is free from political interference, 
or even the appearance of such interference, and is done on the basis of 
merit, not on the basis of religion or religious belief, or lack 
thereof. Notices or announcements of award opportunities and notices of 
award or contracts shall include language substantially similar to that 
in appendices A and B, respectively, to 34 CFR part 75.
    (3) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by a grantee or 
subgrantee in administering Federal financial services from the 
Department shall require faith-based organizations to provide assurances 
or notices where they are not required of non-faith-based organizations. 
Any restrictions on the use of grant funds shall apply equally to faith-
based and non-faith-based organizations. All organizations that 
participate in Department programs or services, including organizations 
with religious character or affiliation, must carry out eligible 
activities in accordance with all program requirements, subject to any 
required or appropriate religious accommodation, and other applicable 
requirements governing the conduct of Department-funded activities, 
including those prohibiting the use of direct financial assistance to 
engage in explicitly religious activities.
    (4) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by a grantee or 
subgrantee shall disqualify faith-based organizations from participating 
in Department-funded programs or services because such organizations are 
motivated or influenced by religious faith to provide social services, 
or because of their religious character or affiliation, or on grounds 
that discriminate against organizations on the basis of the 
organizations' religious exercise, as defined in 34 CFR 75.52(c)(3) and 
76.52(c)(3).
    (c)(1) The provisions of 34 CFR 75.532 and 76.532 that apply to a 
faith-based organization that is a grantee or subgrantee also apply to a 
faith-based organization that contracts with a grantee or subgrantee, 
including a State.
    (2) The requirements referenced under paragraph (c)(1) of this 
section do not apply to a faith-based organization that provides goods 
or services to a beneficiary under a program supported only by indirect 
Federal financial assistance, as defined in 34 CFR 75.52(c)(3) and 
76.52(c)(3).
    (d)(1) A private organization that provides direct Federal services 
under a program of the Department and engages in explicitly religious 
activities, such as worship, religious instruction, or proselytization, 
must offer those activities separately in time or location from any 
programs or services funded by the Department through a contract with a 
grantee or subgrantee, including a State. Attendance or participation in 
any such explicitly religious activities by beneficiaries of the 
programs and services supported by the contract must be voluntary.
    (2) The limitations on explicitly religious activities under 
paragraph (d)(1) of this section do not apply to a faith-based 
organization that provides services to a beneficiary under a program 
supported only by indirect Federal financial assistance, as defined in 
34 CFR 75.52(c)(3) and 76.52(c)(3).
    (e)(1) A faith-based organization that contracts with a grantee or 
subgrantee, including a State, will retain its independence, autonomy, 
right of expression, religious character, and authority over its 
governance. A faith-based organization that receives Federal financial 
assistance from the Department does not lose the protections of law.
    Note 1 to paragraph (e)(1): Memorandum for All Executive Departments 
and Agencies, From the Attorney General, ``Federal Law Protections for 
Religious Liberty'' (Oct. 6, 2017) (describing Federal law protections 
for religious liberty).
    (2) A faith-based organization that contracts with a grantee or 
subgrantee, including a State, may, among other things--
    (i) Retain religious terms in its name;
    (ii) Continue to carry out its mission, including the definition, 
development, practice, and expression of its religious beliefs;
    (iii) Use its facilities to provide services without concealing, 
removing, or altering religious art, icons, scriptures, or other symbols 
from these facilities;
    (iv) Select its board members on the basis of their acceptance of or 
adherence to the religious tenets of the organization; and
    (v) Include religious references in its mission statement and other 
chartering or governing documents.
    (f) A private organization that contracts with a grantee or 
subgrantee, including a State, may not discriminate against a 
beneficiary or prospective beneficiary in the provision of program goods 
or services on the basis of religion or religious belief, a refusal to 
hold a religious belief, or refusal to attend or participate in a 
religious practice. However, an organization that participates in a 
program funded by indirect financial assistance need not modify its 
program activities to accommodate a beneficiary who chooses to expend 
the indirect aid on the organization's program and may require 
attendance at all activities that are fundamental to the program.
    (g) A religious organization's exemption from the Federal 
prohibition on employment discrimination on the basis of religion, in 
section 702(a) of the Civil Rights Act of 1964,

[[Page 672]]

42 U.S.C. 2000e-1(a), is not forfeited when the organization contracts 
with a grantee or subgrantee. An organization qualifying for such an 
exemption may select its employees on the basis of their acceptance of 
or adherence to the religious tenets of the organization.
    (h) No grantee or subgrantee receiving funds under any Department 
program or service shall construe these provisions in such a way as to 
advantage or disadvantage faith-based organizations affiliated with 
historic or well-established religions or sects in comparison with other 
religions or sects.



Sec.  3474.20  Open licensing requirement for competitive grant
programs.

    For competitive grants awarded in competitions announced after 
February 21, 2017:
    (a) A grantee or subgrantee must openly license to the public the 
rights set out in paragraph (b)(1) of this section in any grant 
deliverable that is created wholly or in part with Department 
competitive grant funds, and that constitutes a new copyrightable work; 
provided, however, that when the deliverable consists of modifications 
to pre-existing works, the license shall extend only to those 
modifications that can be separately identified and only to the extent 
that open licensing is permitted under the terms of any licenses or 
other legal restrictions on the use of pre-existing works.
    (b)(1) With respect to copyrightable work identified in paragraph 
(a) of this section, the grantee or subgrantee must grant to the public 
a worldwide, non-exclusive, royalty-free, perpetual, and irrevocable 
license to--
    (i) Access, reproduce, publicly perform, publicly display, and 
distribute the copyrightable work;
    (ii) Prepare derivative works and reproduce, publicly perform, 
publicly display and distribute those derivative works; and
    (iii) Otherwise use the copyrightable work, provided that in all 
such instances attribution is given to the copyright holder.
    (2) Grantees and subgrantees may select any open licenses that 
comply with the requirements of this section, including, at the 
grantee's or subgrantee's discretion, a license that limits use to 
noncommercial purposes. The open license also must contain--
    (i) A symbol or device that readily communicates to users the 
permissions granted concerning the use of the copyrightable work;
    (ii) Machine-readable code for digital resources;
    (iii) Readily accessed legal terms; and
    (iv) The statement of attribution and disclaimer specified in 34 CFR 
75.620(b).
    (c) A grantee or subgrantee that is awarded competitive grant funds 
must have a plan to disseminate the openly licensed copyrightable works 
identified in paragraph (a) of this section.
    (d)(1) The requirements of paragraphs (a), (b), and (c) of this 
section do not apply to--
    (i) Grants that provide funding for general operating expenses;
    (ii) Grants that provide support to individuals (e.g., scholarships, 
fellowships);
    (iii) Grant deliverables that are jointly funded by the Department 
and another Federal agency if the other Federal agency does not require 
the open licensing of its grant deliverables for the relevant grant 
program;
    (iv) Copyrightable works created by the grantee or subgrantee that 
are not created with Department grant funds;
    (v) Peer-reviewed scholarly publications that arise from any 
scientific research funded, either fully or partially, from grants 
awarded by the Department;
    (vi) Grantees or subgrantees under the Ready To Learn Television 
Program, as defined in the Elementary and Secondary Education Act of 
1965, as amended, Title II, Subpart 3, Sec. 2431, 20 U.S.C. 6775;
    (vii) A grantee or subgrantee that has received an exception from 
the Secretary under 2 CFR 3474.5 and 2 CFR 200.102 (e.g., where the 
Secretary has determined that the grantee's dissemination plan would 
likely achieve meaningful dissemination equivalent to or greater than 
the dissemination likely to be achieved through compliance with 
paragraph (a) or (b) of this section, or compliance with paragraph (a) 
or (b) of this section would impede the grantee's ability to form the 
required partnerships necessary to carry out the purpose of the grant); 
and

[[Page 673]]

    (viii) Grantees or subgrantees for which compliance with these 
requirements would conflict with, or materially undermine the ability to 
protect or enforce, other intellectual property rights or obligations of 
the grantee or subgrantee, in existence or under development, including 
those provided under 15 U.S.C. 1051, et seq., 18 U.S.C. 1831-1839, and 
35 U.S.C. 200, et seq.
    (2) The requirements of paragraphs (a), (b), and (c) of this section 
do not alter any applicable rights in the grant deliverable available 
under 17 U.S.C. 106A, 203 or 1202, 15 U.S.C. 1051, et seq., or State 
law.
    (e) The license set out in paragraph (b)(1) of this section shall 
not extend to any copyrightable work incorporated in the grant 
deliverable that is owned by a party other than the grantee or 
subgrantee, unless the grantee or subgrantee has acquired the right to 
provide such a license in that work.
    (f) Definition. For purposes of this section,
    (1) A grant deliverable is a final version of a work, including any 
final version of program support materials necessary to the use of the 
deliverable, developed to carry out the purpose of the grant, as 
specified in the grant announcement.
    (2) A derivative work means a derivative work as defined in the 
Copyright Act, 17 U.S.C. 101.

[82 FR 7397, Jan. 19, 2017]



Sec.  3474.21  Severability.

    If any provision of this part or its application to any person, act, 
or practice is held invalid, the remainder of the part or the 
application of its provisions to any person, act, or practice shall not 
be affected thereby.

[85 FR 82126, Dec. 17, 2020]

    Effective Date Note: At 85 FR 82126, Dec. 17, 2020, Sec.  3474.21 
was added, effective Jan. 19, 2021.



PART 3485_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
3485.12 What does this part do?
3485.22 Does this part apply to me?
3485.32 What policies and procedures must I follow?

                            Subpart A_General

3485.137 May the Department grant an exception to let an excluded person 
          participate in a covered transaction?

                     Subpart B_Covered Transactions

3485.220 Are any procurement contracts included as covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

3485.310 What must I do if a Federal agency excludes a person with whom 
          I am already doing business in a covered transaction?
3485.315 May I use the services of an excluded person as a principal 
          under a covered transaction?
3485.330 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

   Subpart D_Responsibilities of the Department's Officials Regarding 
                              Transactions

3485.415 What must I do if a Federal agency excludes the participant or 
          a principal after I enter into a covered transaction?
3485.437 What method do I use to communicate to a participant the 
          requirements described in Sec.  180.435 of this title?

Subpart E [Reserved]

   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions

3485.611 What procedures do we use for a suspension or debarment action 
          involving title IV, HEA transactions?
3485.612 When does an exclusion by another agency affect the ability of 
          the excluded person to participate in a title IV, HEA 
          transaction?

                          Subpart G_Suspension

3485.711 When does a suspension affect title IV, HEA transactions?

                           Subpart H_Debarment

3485.811 When does a debarment affect title IV, HEA transactions?

                          Subpart I_Definitions

3485.937 ED Deciding Official.
3485.952 HEA.
3485.995 Principal.
3485.1016 Title IV, HEA participant.
3485.1017 Title IV, HEA program.
3485.1018 Title IV, HEA transaction.

[[Page 674]]

Subpart J [Reserved]

Appendix A to Part 3485--Covered Transactions

    Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474, unless 
otherwise noted.

    Source: 77 FR 18673, Mar. 28, 2012, unless otherwise noted.



Sec.  3485.12  What does this part do?

    (a)(1) The Department of Education (the ``Department'' or ``ED'') 
adopts subparts A through I of the Office of Management and Budget 
guidance in 2 CFR part 180. Thus, this part gives regulatory effect to 
the OMB guidance and supplements the guidance as needed for the 
Department. This part satisfies the requirements in section 3 of 
Executive Order 12549, ``Debarment and Suspension'' (3 CFR part 1986 
Comp., p. 189), Executive Order 12689, ``Debarment and Suspension'' (3 
CFR part 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Pub. 
L. 103-355, 108 Stat. 3327).
    (2) The table of contents for this part contains only those sections 
in part 3485 that include supplements to the guidance in part 180 and 
new sections needed to implement the guidance for the Department's 
programs. In those sections of the OMB guidance that are supplemented, 
the section in part 3485 includes both the text of the OMB guidance that 
is not affected by the change and any additional paragraphs that need to 
be added to the OMB guidance. For example, Sec.  180.220 of this title 
contains only paragraphs (a) and (b). The text of Sec.  3485.220, which 
supplements Sec.  180.220 to extend lower-tier transactions to certain 
transactions below the primary tier, includes both the text of paragraph 
(a) and (b) of Sec.  180.220 and the text of added paragraph (c).
    (3) In those sections in part 180 that do not have paragraph 
designations and that the Department supplements, the section in this 
part implementing the OMB guidance designates the undesignated paragraph 
from part 180 as paragraph (a) and the first supplemental paragraph as 
paragraph (b). For example, 2 CFR 180.330 includes an undesignated lead 
in paragraph and two subparagraphs designated (a) and (b). In Sec.  
3485.330, the undesignated paragraph in 2 CFR 180.330 is designated 
paragraph (a) and the two subparagraphs are designated paragraphs (1) 
and (2). The added paragraphs are designated paragraph (b) and (c).
    (b) The authority for all the provisions in 2 CFR part 180 as 
adopted in this part is listed as follows.

    Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474, unless 
otherwise noted.)



Sec.  3485.22  Does this part apply to me?

    This part applies to you if you are--
    (a) A participant or principal in a ``covered transaction'' (see 
subpart B of this part and the definition of ``nonprocurement 
transaction'' in Sec.  180.970 of this title).
    (b) A respondent in a suspension or debarment action of the 
Department.
    (c) An ED deciding official; or
    (d) An ED officer authorized to enter into any type of 
nonprocurement transaction that is a covered transaction.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



Sec.  3485.32  What policies and procedures must I follow?

    The Department's policies and procedures that you must follow are 
the policies and procedures specified in this part and in Subparts A 
through I of 2 CFR part 180. The contracts that are covered 
transactions, for example, are specified in Sec.  3485.220. Section 
180.205 of this title does not require supplementation, so it is not 
included in the table of contents for this part and is not separately 
stated in this part.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)

[[Page 675]]



                            Subpart A_General



Sec.  3485.137  May the Department grant an exception to let an
excluded person participate in a covered transaction?

    (a) Yes, the Secretary delegates to the ED Deciding Official the 
authority under this section to grant an exception permitting an 
excluded person to participate in a particular covered transaction.
    (b) If the ED Deciding Official grants an exception, the exception 
must be in writing and state the reason(s) for deviating from the 
Governmentwide policy in Executive Order 12549.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



                     Subpart B_Covered Transactions



Sec.  3485.220  Are any procurement contracts included as covered 
transactions?

    (a) Covered transactions under this part--
    (1) Do not include any procurement contracts awarded directly by a 
Federal agency; but
    (2) Do include some procurement contracts awarded by non-Federal 
participants in nonprocurement covered transactions.
    (b) Specifically, a contract for goods or services is a covered 
transaction if any of the following applies:
    (1) The contract is awarded by a participant in a nonprocurement 
transaction that is covered under Sec.  180.210 of this title, and the 
amount of the contract is expected to equal or exceed $25,000.
    (2) The contract requires the consent of an official of a Federal 
agency. In that case, the contract, regardless of the amount, always is 
a covered transaction, and it does not matter who awarded it. For 
example, it could be a subcontract awarded by a contractor at a tier 
below a nonprocurement transaction, as shown in the Appendix to Part 
3485--Covered Transactions.
    (3) The contract is for Federally-required audit services.
    (4) The contract is to perform services as a third party servicer in 
connection with a title IV, HEA program.
    (c) In addition to the contracts covered under 2 CFR 180.220(b) of 
the OMB guidance, this part applies to any contract, regardless of tier, 
that is awarded by a contractor, subcontractor, supplier, consultant, or 
its agent or representative in any transaction, if the contract is to be 
funded or provided by ED under a covered nonprocurement transaction and 
the amount of the contract is expected to equal or exceed $25,000. This 
extends the coverage of the ED nonprocurement suspension and debarment 
requirements to all lower tiers of subcontracts under covered 
nonprocurement transactions, as permitted under the OMB guidance at 2 
CFR 180.220(c) (see optional lower tier coverage in the figure in 
Appendix A to Part 3485--Covered Transactions).

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  3485.310  What must I do if a Federal agency excludes a person
with whom I am already doing business in a covered transaction?

    (a) You as a participant may continue covered transactions with an 
excluded person if the transactions were in existence when the agency 
excluded the person. However, you are not required to continue the 
transactions, and you may consider termination. You should make a 
decision about whether to terminate and the type of termination action, 
if any, only after a thorough review to ensure that the action is proper 
and appropriate.
    (b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, unless another Federal 
agency responsible for the transaction grants an exception under Sec.  
180.135 of this title or ED grants an exception under Sec.  3485.137.
    (c) If you are a title IV, HEA participant, you may not continue a 
title IV,

[[Page 676]]

HEA transaction with an excluded person after the effective date of the 
exclusion unless permitted by 34 CFR 668.26, 682.702, or 668.94, as 
applicable.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



Sec.  3485.315  May I use the services of an excluded person as a
principal under a covered transaction?

    (a) You as a participant may continue to use the services of an 
excluded person as a principal under a covered transaction if you were 
using the services of that person in the transaction before the person 
was excluded. However, you are not required to continue using that 
person's services as a principal. You should make a decision about 
whether to discontinue that person's services only after a thorough 
review to ensure that the action is proper and appropriate.
    (b) You may not begin to use the services of an excluded person as a 
principal under a covered transaction unless another Federal agency 
responsible for the transaction grants an exception under Sec.  180.135 
of this title or, if ED took the action, an ED deciding official grants 
an exception under Sec.  3485.137.
    (c) If you are a title IV, HEA participant--
    (1) You may not renew or extend the term of any contract or 
agreement for the services of an excluded person as a principal with 
respect to a title IV, HEA transaction; and
    (2) You may not continue to use the services of that excluded person 
as a principal under this kind of an agreement or arrangement more than 
90 days after you learn of the exclusion or after the close of the 
Federal fiscal year in which the exclusion takes effect, whichever is 
later.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



Sec.  3485.330  What methods must I use to pass requirements down
to participants at lower tiers with whom I intend to do business?

    (a) Before entering into a covered transaction with a participant at 
the next lower tier, you must require that participant to--
    (1) Comply with this subpart as a condition of participation in the 
transaction. You must do so using the method specified in paragraph (b) 
of this section; and
    (2) Pass the requirement to comply with this subpart to each person 
with whom the participant enters into a covered transaction at the next 
lower tier.
    (b) To communicate the requirements in this part to a participant, 
you must include a term or condition in the transaction that requires 
the participant's compliance with part 180, subpart C, of this title, as 
adopted at Sec.  3485.12, and requires the participant to include a 
similar term or condition in lower-tier covered transactions.
    (c) The failure of a participant to include a requirement to comply 
with Subpart C of 2 CFR part 180 in the agreement with a lower tier 
participant does not affect the lower tier participant's 
responsibilities under this part.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



   Subpart D_Responsibilities of the Department's Officials Regarding 
                              Transactions



Sec.  3485.415  What must I do if a Federal agency excludes the
participant or a principal after I enter into a covered transaction?

    (a) You as a Federal agency official may continue covered 
transactions with an excluded person, or under which an excluded person 
is a principal, if the transactions were in existence when the person 
was excluded. You are not required to continue the transactions, 
however, and you may consider termination. You should make a decision 
about whether to terminate and the type of termination action, if

[[Page 677]]

any, only after a thorough review to ensure that the action is proper.
    (b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, or under which an 
excluded person is a principal, unless you obtain an exception under 
Sec.  3485.137.
    (c) Title IV, HEA transactions. If you are a title IV, HEA 
participant--
    (1) You may not renew or extend the term of any contract or 
agreement for the services of an excluded person as a principal with 
respect to a title IV, HEA transaction; and
    (2) You may not continue to use the services of that excluded person 
as a principal under this kind of an agreement or arrangement more than 
90 days after you learn of the exclusion or after the close of the 
Federal fiscal year in which the exclusion takes effect, whichever is 
later.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



Sec.  3485.437  What method do I use to communicate to a participant
the requirements described in Sec.  180.435 of this title?

    To communicate the requirements in this part to a participant, you 
must include a term or condition in the transaction that requires the 
participant's compliance with part 180, subpart C, of this title, as 
adopted at Sec.  3485.12 and requires the participant to include a 
similar term or condition in lower-tier covered transactions.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)

Subpart E [Reserved]



   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions



Sec.  3485.611  What procedures do we use for a suspension or debarment
action involving a title IV, HEA transaction?

    (a) If we suspend a title IV, HEA participant under Executive Order 
12549, we use the following procedures to ensure that the suspension 
prevents participation in title IV, HEA transactions:
    (1) The notification procedures in Sec.  180.715 of this title.
    (2) Instead of the procedures in Sec. Sec.  180.720 through 180.760 
of this title, the procedures in 34 CFR part 668, subpart G, or 34 CFR 
part 682, subpart D or G, as applicable.
    (3) In addition to the findings and conclusions required by 34 CFR 
part 668, subpart G, or 34 CFR part 682, subpart D or G, the suspending 
official, and, on appeal, the Secretary determines whether there is 
sufficient cause for suspension as explained in Sec.  180.700 of this 
title.
    (b) If we debar a title IV, HEA participant under E.O. 12549, we use 
the following procedures to ensure that the debarment also precludes 
participation in title IV, HEA transactions:
    (1) The notification procedures in Sec. Sec.  180.805 and 180.870 of 
this title.
    (2) Instead of the procedures in Sec. Sec.  180.810 through 180.885 
of this title, the procedures in 34 CFR part 668, subpart G, or 34 CFR 
part 682, subpart D or G, as applicable.
    (3) On appeal from a decision debarring a title IV, HEA participant, 
we issue a final decision after we receive any written materials from 
the parties.
    (4) In addition to the findings and conclusions required by 34 CFR 
part 668, subpart G, or 34 CFR part 682, subpart D or G, the debarring 
official, and, on appeal, the Secretary determines whether there is 
sufficient cause for debarment as explained in Sec.  180.800 of this 
title.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)

[[Page 678]]



Sec.  3485.612  When does an exclusion by another agency affect
the ability of the excluded person to participate in a title IV,
HEA transaction?

    (a) If a title IV, HEA participant is debarred by another agency 
under E.O. 12549, using procedures described in paragraph (d) of this 
section, that party is not eligible to enter into title IV, HEA 
transactions for the duration of the debarment.
    (b)(1) If a title IV, HEA participant is suspended by another agency 
under E.O. 12549 or under a proposed debarment under the Federal 
Acquisition Regulation (FAR) (48 CFR part 9, subpart 9.4), using 
procedures described in paragraph (d) of this section, that party is not 
eligible to enter into title IV, HEA transactions for the duration of 
the suspension.
    (2)(i) The suspension of title IV, HEA eligibility as a result of 
suspension by another agency lasts for at least 60 days.
    (ii) If the excluded party does not object to the suspension, the 
60-day period begins on the 35th day after that agency issues the notice 
of suspension.
    (iii) If the excluded party objects to the suspension, the 60-day 
period begins on the date of the decision of the suspending official.
    (3) The suspension of title IV, HEA eligibility does not end on the 
60th day if--
    (i) The excluded party agrees to an extension; or
    (ii) Before the 60th day we begin a limitation or termination 
proceeding against the excluded party under 34 CFR part 668, subpart G, 
or part 682, subpart D or G.
    (c)(1) If a title IV, HEA participant is debarred or suspended by 
another Federal agency--
    (i) We notify the participant whether the debarment or suspension 
prohibits participation in title IV, HEA transactions; and
    (ii) If participation is prohibited, we state the effective date and 
duration of the prohibition.
    (2) If a debarment or suspension by another agency prohibits 
participation in title IV, HEA transactions, that prohibition takes 
effect 20 days after we mail notice of our action.
    (3) If the Department or another Federal agency suspends a title IV, 
HEA participant, we determine whether grounds exist for an emergency 
action against the participant under 34 CFR part 668, subpart G, or part 
682, subpart D or G, as applicable.
    (4) We use the procedures in Sec.  3485.611 to exclude a title IV, 
HEA participant excluded by another Federal agency using procedures that 
did not meet the standards in paragraph (d) of this section.
    (d) If a title IV, HEA participant is excluded by another agency, we 
debar, terminate, or suspend the participant--as provided under this 
part, 34 CFR part 668, or 34 CFR part 682, as applicable--if that agency 
followed procedures that gave the excluded party--
    (1) Notice of the proposed action;
    (2) An opportunity to submit and have considered evidence and 
argument to oppose the proposed action;
    (3) An opportunity to present its objection at a hearing--
    (i) At which the agency has the burden of persuasion by a 
preponderance of the evidence that there is cause for the exclusion; and
    (ii) Conducted by an impartial person who does not also exercise 
prosecutorial or investigative responsibilities with respect to the 
exclusion action;
    (4) An opportunity to present witness testimony, unless the hearing 
official finds that there is no genuine dispute about a material fact;
    (5) An opportunity to have agency witnesses with personal knowledge 
of material facts in genuine dispute testify about those facts, if the 
hearing official determines their testimony to be needed, in light of 
other available evidence and witnesses; and
    (6) A written decision stating findings of fact and conclusions of 
law on which the decision is rendered.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)

[[Page 679]]



                          Subpart G_Suspension



Sec.  3485.711  When does a suspension affect title IV, HEA
transactions?

    (a) A suspension under Sec.  3485.611(a) takes effect immediately if 
the Secretary takes an emergency action under 34 CFR part 668, subpart 
G, or 34 CFR part 682, subpart D or G, at the same time the Secretary 
issues the suspension.
    (b)(1) Except as provided under paragraph (a) of this section, a 
suspension under Sec.  3485.611(a) takes effect 20 days after those 
procedures are complete.
    (2) If the respondent appeals the suspension to the Secretary before 
the expiration of the 20 days under paragraph (b)(1) of this section, 
the suspension takes effect when the respondent receives the Secretary's 
decision.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



                           Subpart H_Debarment



Sec.  3485.811  When does a debarment affect title IV, HEA transactions?

    (a) A debarment under Sec.  3485.611(b) takes effect 30 days after 
those procedures are complete.
    (b) If the respondent appeals the debarment to the Secretary before 
the expiration of the 30 days under paragraph (a) of this section, the 
debarment takes effect when the respondent receives the Secretary's 
decision.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



                          Subpart I_Definitions



Sec.  3485.937  ED Deciding Official.

    The ED Deciding Official is an officer of the Department who has 
delegated authority under the procedures of the Department of Education 
to decide whether to affirm a suspension or enter a debarment.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



Sec.  3485.952  HEA.

    HEA means the Higher Education Act of 1965, as amended.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR 
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



Sec.  3485.995  Principal.

    Principal means--
    (a) An officer, director, owner, partner, principal investigator, or 
other person within a participant with management or supervisory 
responsibilities related to a covered transaction; or
    (b) A consultant or other person, whether or not employed by the 
participant or paid with Federal funds, who--
    (1) Is in a position to handle Federal funds;
    (2) Is in a position to influence or control the use of those funds; 
or
    (3) Occupies a technical or professional position capable of 
substantially influencing the development or outcome of an activity 
required to perform the covered transaction.
    (c) For the purposes of Department of Education title IV, HEA 
transactions--
    (1) A third-party servicer, as defined in 34 CFR 668.2 or 682.200; 
or
    (2) Any person who provides services described in 34 CFR 668.2 or 
682.200 to a title IV, HEA participant, whether or not that person is 
retained or paid directly by the title IV, HEA participant.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p.189); E.O. 12689 (3 CFR 1989 
Comp., p.235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 
6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



Sec.  3485.1016  Title IV, HEA participant.

    A title IV, HEA participant is--
    (a) An institution described in 34 CFR 600.4, 600.5, or 600.6 that 
provides postsecondary education; or

[[Page 680]]

    (b) A lender, third-party servicer, or guaranty agency, as those 
terms are defined in 34 CFR 668.2 or 682.200.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p.189); E.O. 12689 (3 CFR 1989 
Comp., p.235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 
6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



Sec.  3485.1017  Title IV, HEA program.

    A title IV, HEA program includes any program listed in 34 CFR 
668.1(c).

(Authority: E.O. 12549 (3 CFR 1986 Comp., p.189); E.O. 12689 (3 CFR 1989 
Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 
6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)



Sec.  3485.1018  Title IV, HEA transaction.

    A title IV, HEA transaction includes--
    (a) A disbursement or delivery of funds provided under a title IV, 
HEA program to a student or borrower;
    (b) A certification by an educational institution of eligibility for 
a loan under a title IV, HEA program;
    (c) Guaranteeing a loan made under a title IV, HEA program; and
    (d) The acquisition or exercise of any servicing responsibility for 
a grant, loan, or work study assistance under a title IV, HEA program.

(Authority: E.O. 12549 (3 CFR 1986 Comp., p.189); E.O. 12689 (3 CFR 1989 
Comp., p.235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 
6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)

Subpart J [Reserved]

[[Page 681]]



           Sec. Appendix A to Part 3485--Covered Transactions
[GRAPHIC] [TIFF OMITTED] TR28MR12.000

                       PARTS 3486	3499 [RESERVED]

[[Page 683]]



          CHAPTER XXXV--EXPORT-IMPORT BANK OF THE UNITED STATES




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                       PARTS 3500	3512 [RESERVED]



PART 3513_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
3513.10 What does this part do?
3513.20 Does this part apply to me?
3513.30 What policies and procedures must I follow?

                            Subpart A_General

3513.137 Who at Ex-Im Bank may grant an exception to let an excluded 
          person participate in a covered transaction?

                     Subpart B_Covered Transactions

3513.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

3513.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

3513.437 What method do I use to communicate to a participate the 
          requirements described in the OMB guidance at 2 CFR 180.435?

Subparts E-J [Reserved]

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235.

    Source: 72 FR 30244, May 31, 2007, unless otherwise noted.



Sec.  3513.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Export Import Bank of the United States (Ex-Im Bank) policies and 
procedures for nonprocurement debarment and suspension. It thereby gives 
regulatory effect for Ex-Im Bank to the OMB guidance as supplemented by 
this part. This part satisfies the requirements in section 3 of 
Executive Order 12549, ``Debarment and Suspension'' (3 CFR 1986 Comp., 
p. 189), Executive Order 12689, ``Debarment and Suspension'' (3 CFR 1989 
Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Pub. L. 103-355, 
108 Stat. 3327).



Sec.  3513.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970, as supplemented by subpart B of this 
part).
    (b) Respondent in an Ex-Im Bank suspension or debarment action.
    (c) Ex-Im Bank debarment or suspension official;
    (d) Ex-Im Bank grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction;



Sec.  3513.30  What policies and procedures must I follow?

    Ex-Im Bank policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180, as that section is 
supplemented by the section in this part with the same section number. 
The contracts that are covered transactions, for example, are specified 
by section 220 of the OMB guidance (i.e., 2 CFR 180.220) as supplemented 
by section 220 in this pat (i.e., Sec.  3513.220). For any section of 
OMB guidance in subparts A through I of 2 CFR 180 that has no 
corresponding section in this part, Ex-Im Bank policies and procedures 
are those in the OMB guidance.



                            Subpart A_General



Sec.  3513.137  Who in Ex-Im Bank may grant an exception to let an
excluded person participate in a covered transaction?

    (a) The Ex-Im Bank agency head or designee may grant an exception 
permitting an excluded person to participate in a particular covered 
transacting. If the Ex-Im Bank agency head or designee grants an 
exception,

[[Page 686]]

the exception must be in writing and state the reason(s) for deviating 
from the government wide policy in Executive Order 12549.
    (b) An exception granted by one agency for an excluded person does 
not extend to the covered transactions of another agency.



                     Subpart B_Covered Transactions



Sec.  3513.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see optional lower tier coverage in the figure in 
the appendix to 2 CFR part 180), Ex-Im Bank does not extend coverage of 
nonprocurement suspension and debarment requirements beyond first-tier 
procurement under a covered nonprocurement transaction.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  3513.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    To communicate the requirements, you must include a term or 
condition in the transaction requiring the participants' compliance with 
subpart C of this part and requiring them to include a similar term or 
condition in lower-tiered covered transactions.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  3513.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in the 
transaction that requires the participant's compliance with subpart C of 
2 CFR part 180, as supplemented by subpart C of this part, and requires 
the participant to include a similar term or condition in lower-tier 
covered transactions.

Subparts E-J [Reserved]

                       PARTS 3514	3599 [RESERVED]

[[Page 687]]



CHAPTER XXXVI--OFFICE OF NATIONAL DRUG CONTROL POLICY, EXECUTIVE OFFICE 
                            OF THE PRESIDENT




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3603            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         689
3604-3699

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[[Page 689]]

                       PARTS 3600	3602 [RESERVED]



PART 3603_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND 
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 21 U.S.C. 1706; 21 U.S.C. 1703(d), 1703(f), 21 U.S.C. 
1701, 21 U.S.C. 1521-1548, 21 U.S.C. 2001-2003, Office of National Drug 
Control Policy Reauthorization Act of 2006, P.L 109-469 (2006), 2 CFR 
part 200.

    Source: 79 FR 76105, Dec. 19, 2014, unless otherwise noted.



Sec.  3603.1  Adoption of 2 CFR Part 200.

    Under the authority listed above, the Executive Office of the 
President, Office of National Drug Control Policy (ONDCP) adopts the 
Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, 
this part gives regulatory effect to the OMB guidance and supplements 
the guidance as needed for ONDCP.

                       PARTS 3604	3699 [RESERVED]

[[Page 691]]



                       CHAPTER XXXVII--PEACE CORPS




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PART 3700_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
3700.10 What does this part do?
3700.20 Does this part apply to me?
3700.30 What policies and procedures must I follow?
3700.137 Who in the Peace Corps may grant an exception to let an 
          excluded person participate in a covered transaction?
3700.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?
3700.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?
3700.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 
CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235; 22 
U.S.C. 2503(b).

    Source: 71 FR 64731, Nov. 22, 2006, unless otherwise noted.



Sec.  3700.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the Peace Corps policies and procedures for nonprocurement debarment 
and suspension. It thereby gives regulatory effect for the Peace Corps 
to the OMB guidance as supplemented by this part. This part satisfies 
the requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189), Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235) and 31 U.S.C. 
6101 note (Section 2455, Pub. L. 103-355, 108 Stat. 3327).



Sec.  3700.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in a Peace Corps suspension or debarment action;
    (c) Peace Corps debarment or suspension official; or
    (d) Peace Corps grants officer, agreements officer, or other 
official authorized to enter into any type of nonprocurement transaction 
that is a covered transaction.



Sec.  3700.30  What policies and procedures must I follow?

    The Peace Corps policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180, as that section is 
supplemented by the section in this part with the same section number. 
The contracts that are covered transactions, for example, are specified 
by section 220 of the OMB guidance (i.e., 2 CFR 180.220) as supplemented 
by section 220 in this part (i.e., Sec.  3700.220). For any section of 
OMB guidance in subparts A through I of 2 CFR 180 that has no 
corresponding section in this part, Peace Corps policies and procedures 
are those in the OMB guidance.



Sec.  3700.137  Who in the Peace Corps may grant an exception to let
an excluded person participate in a covered transaction?

    The Director of the Peace Corps has the authority to grant an 
exception to let an excluded person participate in a covered 
transaction, as provided in the OMB guidance at 2 CFR 180.135.



Sec.  3700.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see optional lower tier coverage in the figure in 
the appendix to 2 CFR part 180), Peace Corps does not extend coverage of 
nonprocurement suspension and debarment requirements beyond first-tier 
procurement contracts under a covered nonprocurement transaction.

[[Page 694]]



Sec.  3700.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    You as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with subpart C 
of the OMB guidance in 2 CFR part 180.



Sec.  3700.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you as an agency official must include a 
term or condition in the transaction that requires the participant's 
compliance with subpart C of 2 CFR part 180, and requires the 
participant to include a similar term or condition in lower-tier covered 
transactions.

                       PARTS 3701	3799 [RESERVED]

[[Page 695]]



              CHAPTER LVIII--ELECTION ASSISTANCE COMMISSION




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[[Page 697]]



PART 5800_NONPROCUREMENT DEBARMENT AND SUSPENSION--Table of Contents



Sec.
5800.10 What does this part do?
5800.20 Does this part apply to me?
5800.30 What policies and procedures must I follow?

                            Subpart A_General

5800.137 Who at the Commission may grant an exception to let an excluded 
          person participate in a covered transaction?

                     Subpart B_Covered Transactions

5800.220 What contracts and subcontracts, in addition to those listed in 
          2 CFR 180.220, are covered transactions?

    Subpart C_Responsibilities of Participants Regarding Transactions

5800.332 What methods must I use to pass requirements down to 
          participants at lower tiers with whom I intend to do business?

    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions

5800.437 What method do I use to communicate to a participant the 
          requirements described in the OMB guidance at 2 CFR 180.435?
5800.765 May I ask the suspending official to reconsider a decision to 
          suspend me?
5800.875 May I ask the debarring official to reconsider a decision to 
          debar me?
5800.880 What factors may influence the debarring official during 
          reconsideration?
5800.890 How may I appeal my debarment?

Subparts E-H [Reserved]

                          Subpart I_Definitions

5800.930 Debarring official.
5800.970 Nonprocurement transaction.
5800.1010 Suspending official.

Subpart J [Reserved]

    Authority: Sec. 2455, Pub. L. 103-355, 108; Stat. 3327 (31 U.S.C. 
6101 note); E.O. 12549; (3 CFR, 1986 Comp., p. 189); E.O. 12689 (3); 
CFR, 1989 Comp., p. 235).

    Source: 75 FR 41692, July 19, 2010, unless otherwise noted.



Sec.  5800.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in Subparts A through I of 2 CFR part 180, as supplemented by this part, 
as the U.S. Election Assistance Commission (``the Commission'' or 
``EAC'') policies and procedures for nonprocurement debarment and 
suspension. It thereby gives regulatory effect for the Commission to the 
OMB guidance as supplemented by this part. This part satisfies the 
requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' and 31 U.S.C. 6101 note.



Sec.  5800.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in a Commission suspension or debarment action;
    (c) Commission debarment or suspension official; or
    (d) Commission grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.



Sec.  5800.30  What policies and procedures must I follow?

    The Commission policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in Subparts A through I of 2 CFR part 180, as that section is 
supplemented by the section in this part with the same section number. 
The contracts that are covered transactions, for example, are specified 
by section 220 of the OMB guidance (i.e., 2 CFR 180.220) as supplemented 
by section 220 in this part (i.e., Sec.  ___.220). For any section of 
OMB guidance in Subparts A through I of 2 CFR 180 that has no 
corresponding section in this part, Commission policies and procedures 
are those in the OMB guidance.

[[Page 698]]



                            Subpart A_General



Sec.  5800.137  Who at the Commission may grant an exception to let
an excluded person participate in a covered transaction?

    The Commission's Contracting Officer has the authority to grant an 
exception to let an excluded person participate in a covered 
transaction, as provided in the OMB guidance at 2 CFR 180.135.



                     Subpart B_Covered Transactions



Sec.  5800.220  What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?

    Pursuant to 2 CFR 180.220(c), the Commission extends coverage of 
nonprocurement suspension and debarment requirements beyond first-tier 
procurement contracts to include any subcontract to be funded by the 
Commission, the value of which is expected to equal to or exceed $25,000 
or 30 percent of the value of first-tier transaction, whichever is 
lesser.



    Subpart C_Responsibilities of Participants Regarding Transactions



Sec.  5800.332  What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?

    If a lower-tier transaction is covered pursuant to Sec.  5800.220, 
you as a participant must include a term or condition in lower-tier 
transactions requiring lower-tier participants to comply with Subpart C 
of the OMB guidance in 2 CFR part 180.



    Subpart D_Responsibilities of Federal Agency Officials Regarding 
                              Transactions



Sec.  5800.437  What method do I use to communicate to a participant
the requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you as an agency official must include a 
term or condition in the transaction that requires the participant's 
compliance with subpart C of 2 CFR part 180, and requires the 
participant to include a similar term or condition in lower-tier covered 
transactions.



Sec.  5800.765  May I ask the suspending official to reconsider a
decision to suspend me?

    Yes. Within 30 days of receiving a final notice of suspension, you 
may make a written request for the suspending official to reconsider 
your suspension.



Sec.  5800.875  May I ask the debarring official to reconsider a 
decision to debar me?

    Yes. Within 30 days of receiving a final notice of debarment, you 
may make a written request for the debarring official to reconsider your 
debarment pursuant to Sec.  5800.880. The disposition of your request 
for reconsideration; or the result of your appeal; shall be considered a 
final agency action.



Sec.  5800.880  What factors may influence the debarring official
during reconsideration?

    The debarring official may reduce or terminate your debarment based 
on:
    (a) Newly discovered material evidence;
    (b) A reversal of the conviction or civil judgment upon which your 
debarment was based;
    (c) A bona fide change in ownership or management;
    (d) Elimination of other causes for which the debarment was imposed; 
or
    (e) Other reasons the debarring official finds appropriate.



Sec.  5800.890  How may I appeal my debarment?

    (a) If the Commission debarring official issues a decision under 2 
CFR 180.870 to debar you after you present information in opposition to 
a proposed debarment under Sec.  180.815, you may ask for review of the 
debarring official's decision in two ways:
    (1) You may ask the debarring official under Sec.  875 to reconsider 
the decision for material errors of fact or law that you believe will 
change the outcome of the matter; or

[[Page 699]]

    (2) You may request a review by the EAC's debarment appeals body 
(DAP), which is composed of the Executive Director, Chief Financial 
Officer, and Chief Operating Officer. The DAP will review your appeal 
and make a determination on whether to sustain or reverse the decision 
of the debarring official. The DAP will then make a recommendation to 
the EAC Commissioners who will vote by circulation on whether to accept 
or reject the recommendation of the DAP. A request to review the 
debarring official's decision to debar you must be made within 30 days 
of your receipt of the debarring official's decision under Sec.  180.870 
or paragraph (a)(1) of this section. However, the DAP may recommend to 
the EAC Commissioners that the debarring official's decision be 
reversed, based on a majority vote of the DAP, only where the DAP finds 
that the decision is based on a clear error of material fact or law, or 
where DAP finds that the debarring official's decision was arbitrary, 
capricious, or an abuse of discretion. You may appeal the debarring 
official's decision without requesting reconsideration, or you may 
appeal the decision of the debarring official on reconsideration.
    (b) A request for review under this section must be in writing; 
prominently state on the envelope or other cover and at the top of the 
first page ``Debarment Appeal;'' state the specific findings you believe 
to be in error; and include the reasons or legal bases for your 
position. The appeal request should be delivered or addressed to the 
U.S. Election Assistance Commission, 1201 New York Avenue, NW., Suite 
300, Washington, DC 20005.
    (c) After the circulation vote of the EAC Commissioners has been 
certified, either the Commission debarring official or the DAP must 
notify you of their decision under this section, in writing, using the 
notice procedures set forth at Sec. Sec.  180.615 and 180.975.
    (d) [Reserved]
    (e) Nothing in this part prohibits the EAC from delegating the 
appeal review process to another Federal agency through a memorandum of 
understanding or interagency agreement.

Subparts E-H [Reserved]



                          Subpart I_Definitions



Sec.  5800.930  Debarring official.

    For the Commission, the debarring official for all nonprocurement 
transactions is the Commission's Contracting Officer. In the case of a 
vacancy in the position of the Contracting Officer, the alternate 
debarring official is the Chief Financial Officer.



Sec.  5800.970  Nonprocurement transaction.

    While the Commission treats all payments made to states under 42 
U.S.C. 15301, 15302 and 15401 as grants, this part does not apply to 
grants made to states and political subdivisions therein.



Sec.  5800.1010  Suspending official.

    For the Commission, the debarring official for all nonprocurement 
transactions is the Commission's Contracting Officer. In the case of a 
vacancy in the position of the Contracting Officer, the alternate 
debarring official is the Chief Financial Officer.

Subpart J [Reserved]

                       PARTS 5801	5899 [RESERVED]

[[Page 701]]



          CHAPTER LIX--GULF COAST ECOSYSTEM RESTORATION COUNCIL




  --------------------------------------------------------------------
Part                                                                Page
5900            Uniform administrative requirements, cost 
                    principles, and audit requirements for 
                    Federal awards..........................         703
5901-5999

 [Reserved]

[[Page 703]]



PART 5900_UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS--Table of Contents



    Authority: 5 U.S.C. 301; 33 U.S.C. 1321(t)(2); 38 U.S.C. 501; 2 CFR 
part 200.

    Source: 79 FR 76106, Dec. 19, 2014, unless otherwise noted.



Sec.  5900.101  Adoption of 2 CFR Part 200.

    Under the authority listed above, the Gulf Coast Ecosystem 
Restoration Council adopts the Office of Management and Budget (OMB) 
Guidance in 2 CFR part 200. Thus, this part gives regulatory effect to 
the OMB guidance and supplements the guidance as needed for the Council.

                       PARTS 5901	5999 [RESERVED]

[[Page 705]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 707]]



                    Table of CFR Titles and Chapters




                     (Revised as of January 1, 2021)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        IV  Miscellaneous Agencies (Parts 400--599)
        VI  National Capital Planning Commission (Parts 600--699)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 2--199)
        II  Office of Management and Budget Guidance (Parts 200--
                299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300--
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
         X  Department of the Treasury (Parts 1000--1099)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1800--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Department of Housing and Urban Development (Parts 
                2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)

[[Page 708]]

     XXVII  Small Business Administration (Parts 2700--2799)
    XXVIII  Department of Justice (Parts 2800--2899)
      XXIX  Department of Labor (Parts 2900--2999)
       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
     XXXIV  Department of Education (Parts 3400--3499)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
     XXXVI  Office of National Drug Control Policy, Executive 
                Office of the President (Parts 3600--3699)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)
       LIX  Gulf Coast Ecosystem Restoration Council (Parts 5900--
                5999)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--199)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
        IV  Office of Personnel Management and Office of the 
                Director of National Intelligence (Parts 1400--
                1499)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600--3699)

[[Page 709]]

    XXVIII  Department of Justice (Parts 3800--3899)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  U.S. International Development Finance Corporation 
                (Parts 4300--4399)
     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
     XXXVI  Department of Homeland Security (Parts 4600--4699)
    XXXVII  Federal Election Commission (Parts 4700--4799)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)

[[Page 710]]

     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)
     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 9000--9099)
   LXXXIII  Special Inspector General for Afghanistan 
                Reconstruction (Parts 9300--9399)
    LXXXIV  Bureau of Consumer Financial Protection (Parts 9400--
                9499)
    LXXXVI  National Credit Union Administration (Parts 9600--
                9699)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)
    XCVIII  Council of the Inspectors General on Integrity and 
                Efficiency (Parts 9800--9899)
      XCIX  Military Compensation and Retirement Modernization 
                Commission (Parts 9900--9999)
         C  National Council on Disability (Parts 10000--10049)
        CI  National Mediation Board (Part 10101)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 1--199)
         X  Privacy and Civil Liberties Oversight Board (Parts 
                1000--1099)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Agricultural Marketing Service (Federal Grain 
                Inspection Service, Fair Trade Practices Program), 
                Department of Agriculture (Parts 800--899)

[[Page 711]]

        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  [Reserved]
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  [Reserved]
       XXV  Office of Advocacy and Outreach, Department of 
                Agriculture (Parts 2500--2599)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  National Institute of Food and Agriculture (Parts 
                3400--3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

[[Page 712]]

         L  Rural Business-Cooperative Service, Rural Housing 
                Service, and Rural Utilities Service, Department 
                of Agriculture (Parts 5001--5099)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Agricultural Marketing Service (Federal Grain 
                Inspection Service, Fair Trade Practices Program), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1300--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  (Parts 500--599) [Reserved]
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  (Parts 900--999) [Reserved]

[[Page 713]]

         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
      XIII  Financial Stability Oversight Council (Parts 1300--
                1399)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research (Parts 1600--1699)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--1199)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)

[[Page 714]]

      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  National Technical Information Service, Department of 
                Commerce (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399) [Reserved]

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  U.S. Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  U.S. Immigration and Customs Enforcement, Department 
                of Homeland Security (Parts 400--599) [Reserved]

[[Page 715]]

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millennium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

[[Page 716]]

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799) [Reserved]
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099) [Reserved]
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

[[Page 717]]

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--899)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900--999)
        VI  Office of the Assistant Secretary, Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--End)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--799)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)

[[Page 718]]

        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Safety and Environmental Enforcement, 
                Department of the Interior (Parts 200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
         V  Bureau of Ocean Energy Management, Department of the 
                Interior (Parts 500--599)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)

[[Page 719]]

      VIII  Office of Investment Security, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)
         X  Financial Crimes Enforcement Network, Department of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Department of Defense, Defense Logistics Agency (Parts 
                1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army, Department 
                of Defense (Parts 200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)

[[Page 720]]

       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Career, Technical, and Adult Education, 
                Department of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599) 
                [Reserved]
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799) 
                [Reserved]
            Subtitle C--Regulations Relating to Education
        XI  (Parts 1100--1199) [Reserved]
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [Reserved]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  U.S. Copyright Office, Library of Congress (Parts 
                200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  National Institute of Standards and Technology, 
                Department of Commerce (Parts 400--599)

[[Page 721]]

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--199)
        II  Armed Forces Retirement Home (Parts 200--299)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)
      VIII  Gulf Coast Ecosystem Restoration Council (Parts 1800--
                1899)

          Title 41--Public Contracts and Property Management

            Subtitle A--Federal Procurement Regulations System 
                [Note]
            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
   62--100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
  103--104  (Parts 103-001--104-099) [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
  129--200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]

[[Page 722]]

            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
   II--III  [Reserved]
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--699)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1099)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 400--999)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)

[[Page 723]]

       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
        IX  Denali Commission (Parts 900--999)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Administration for Children and Families, Department 
                of Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission of Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Parts 2300--2399)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

[[Page 724]]

        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)
         V  The First Responder Network Authority (Parts 500--599)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199) [Reserved]
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399) 
                [Reserved]

[[Page 725]]

        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (Parts 6100--6199)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation (Parts 1400--1499) 
                [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)

[[Page 726]]

        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

[[Page 727]]





           Alphabetical List of Agencies Appearing in the CFR




                     (Revised as of January 1, 2021)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Conference of the United States    1, III
Advisory Council on Historic Preservation         36, VIII
Advocacy and Outreach, Office of                  7, XXV
Afghanistan Reconstruction, Special Inspector     5, LXXXIII
     General for
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              2, VII; 22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, VIII, IX, X, XI; 9, 
                                                  II
Agricultural Research Service                     7, V
Agriculture, Department of                        2, IV; 5, LXXIII
  Advocacy and Outreach, Office of                7, XXV
  Agricultural Marketing Service                  7, I, VIII, IX, X, XI; 9, 
                                                  II
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  National Institute of Food and Agriculture      7, XXXIV
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force, Department of                          32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
   Compliance Board
[[Page 728]]

Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI; 38, II
Army, Department of                               32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase from People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Career, Technical, and Adult Education, Office    34, IV
     of
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chemical Safety and Hazard Investigation Board    40, VI
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X, XIII
Civil Rights, Commission on                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce, Department of                           2, XIII; 44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II; 37, IV
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Technical Information Service          15, XI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Secretary of Commerce, Office of                15, Subtitle A
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Financial Protection Bureau              5, LXXXIV; 12, X
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Council of the Inspectors General on Integrity    5, XCVIII
     and Efficiency
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
     for the District of Columbia
Customs and Border Protection                     19, I
Defense, Department of                            2, XI; 5, XXVI; 32, 
                                                  Subtitle A; 40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III; 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I

[[Page 729]]

  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy, Department of                             32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
Denali Commission                                 45, IX
Disability, National Council on                   5, C; 34, XII
District of Columbia, Court Services and          5, LXX; 28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          2, XXXIV; 5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Career, Technical, and Adult Education, Office  34, IV
       of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
Educational Research and Improvement, Office of   34, VII
Election Assistance Commission                    2, LVIII; 11, II
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Policy, National Commission for        1, IV
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             2, IX; 5, XXIII; 10, II, 
                                                  III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                2, Subtitle A; 5, III, 
                                                  LXXVII; 14, VI; 48, 99
  National Drug Control Policy, Office of         2, XXXVI; 21, III
  National Security Council                       32, XXI; 47, II
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV

[[Page 730]]

Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       5, XXXVII; 11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Agency                    5, LXXX; 12, XII
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Financial Crimes Enforcement Network              31, X
Financial Research Office                         12, XVI
Financial Stability Oversight Council             12, XIII
Fine Arts, Commission of                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F

[[Page 731]]

  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Gulf Coast Ecosystem Restoration Council          2, LIX; 40, VIII
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X, XIII
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 5, XXXVI; 6, I; 8, 
                                                  I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection                   19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Housing and Urban Development, Department of      2, XXIV; 5, LXV; 24, 
                                                  Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Immigration and Customs Enforcement Bureau        19, IV
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Independent Counsel, Offices of                   28, VI
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII

[[Page 732]]

Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII, XV
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior, Department of                           2, XIV
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Ocean Energy Management, Bureau of              30, V
  Reclamation, Bureau of                          43, I
  Safety and Enforcement Bureau, Bureau of        30, II
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Development Finance Corporation,    5, XXXIII; 22, VII
     U.S.
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
Investment Security, Office of                    31, VIII
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice, Department of                            2, XXVIII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Independent Counsel, Offices of                 28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor, Department of                              2, XXIX; 5, XLII
  Benefits Review Board                           20, VII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment Standards Administration             20, VI
  Employment and Training Administration          20, V
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50

[[Page 733]]

  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I, VI
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Libraries and Information Science, National       45, XVII
     Commission on
Library of Congress                               36, VII
  Copyright Royalty Board                         37, III
  U.S. Copyright Office                           37, II
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Military Compensation and Retirement              5, XCIX
     Modernization Commission
Millennium Challenge Corporation                  22, XIII
Mine Safety and Health Administration             30, I
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   2, XXII; 45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV, VI
National Counterintelligence Center               32, XVIII
National Credit Union Administration              5, LXXXVI; 12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           2, XXXVI; 21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Geospatial-Intelligence Agency           32, I
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute of Food and Agriculture        7, XXXIV
National Institute of Standards and Technology    15, II; 37, IV
National Intelligence, Office of Director of      5, IV; 32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          5, CI; 29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       2, XXV; 5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI; 47, II
National Security Council and Office of Science   47, II
   and Technology Policy
[[Page 734]]

National Technical Information Service            15, XI
National Telecommunications and Information       15, XXIII; 47, III, IV, V
     Administration
National Transportation Safety Board              49, VIII
Natural Resource Revenue, Office of               30, XII
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy, Department of                               32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Ocean Energy Management, Bureau of                30, V
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, IV, XXXV; 45, VIII
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Privacy and Civil Liberties Oversight Board       6, X
Procurement and Property Management, Office of    7, XXXII
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Contracts, Department of Labor             41, 50
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Utilities Service                           7, XVII, XVIII, XLII
Safety and Environmental Enforcement, Bureau of   30, II
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI

[[Page 735]]

Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State, Department of                              2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Tennessee Valley Authority                        5, LXIX; 18, XIII
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     2, XII; 5, L
  Commercial Space Transportation                 14, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury, Department of the                       2, X; 5, XXI; 12, XV; 17, 
                                                  IV; 31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection                   19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, Office of                  31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
U.S. Copyright Office                             37, II
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs, Department of                   2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I, VII
World Agricultural Outlook Board                  7, XXXVIII

[[Page 737]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations (CFR) that 
were made by documents published in the Federal Register since January 
1, 2016 are enumerated in the following list. Entries indicate the 
nature of the changes effected. Page numbers refer to Federal Register 
pages. The user should consult the entries for chapters, parts and 
subparts as well as sections for revisions.
For changes to this volume of the CFR prior to this listing, consult the 
annual edition of the monthly List of CFR Sections Affected (LSA). The 
LSA is available at www.govinfo.gov. For changes to this volume of the 
CFR prior to 2001, see the ``List of CFR Sections Affected, 1949-1963, 
1964-1972, 1973-1985, and 1986-2000'' published in 11 separate volumes. 
The ``List of CFR Sections Affected 1986-2000'' is available at 
www.govinfo.gov.

                                  2016

2 CFR
                                                                   81 FR
                                                                    Page
Chapter IV
400 Regulation at 79 FR 75982 confirmed.............................7696
415 Regulation at 79 FR 75982 confirmed.............................7696
416 Regulation at 79 FR 75985 confirmed.............................7696
418 Regulation at 79 FR 75985 confirmed.............................7696
422 Regulation at 79 FR 75992 confirmed.............................7696
Chapter X
Regulation at 79 FR 76047 confirmed.................................4573
1000 Regulation at 79 FR 76047 confirmed............................4573
Chapter XIII
1329 Added..........................................................3700
Chapter XIV
1400 Authority citation revised....................................65855
1400.10 Revised....................................................65855
1400.526 (Subpart E) Added.........................................65855
1400.600--1400.635 (Subpart F) Added...............................65855
1400.751--1400.756 (Subpart G) Added...............................65855
1400.861--1400.881 (Subpart H) Added...............................65855
1400.1011 Added....................................................65857
1400.1012 Added....................................................65857
1400.1013 Added....................................................65857
1400.1014 Added....................................................65857
Chapter XVIII
1800.210 Revised...................................................74659
1800 Appendix B amended............................................74659
Chapter XXVII
2701 Regulation at 79 FR 76080 confirmed............................1115
2701.513 Revised....................................................1115
Chapter XXVIII
2800 Regulation at 79 FR 76081 confirmed...........................61982
2800.101 Revised...................................................61982
Chapter XXIX
2998 Added.........................................................25586
2998 Regulation at 81 FR 25586 eff. date confirmed.................67091
Chapter XXXIV
3474.15 Added......................................................19405

                                  2017

2 CFR
                                                                   82 FR
                                                                    Page
Chapter II
200.110 (a) correctly revised......................................22609
Chapter IX
Chapter IX Policy statement........................................50491

[[Page 738]]

Chapter XXXIV
3474.20 Added.......................................................7397
    Regulation at 82 FR 7397 eff. date delayed to 3-21-17...........8669
    Regulation at 82 FR 7397 eff. date further delayed to 5-22-17 
                                                                   14419

                                  2018

2 CFR
                                                                   83 FR
                                                                    Page
Chapter I
180 Authority citation revised.....................................31038
180.215 (h) added; interim.........................................31038

                                  2019

2 CFR
                                                                   84 FR
                                                                    Page
Subtitle B
Chapter IV
417.500--417.530 (Subpart E) Added.................................52994
417.600--417.660 (Subpart F) Added.................................52994
417.935 Added......................................................52996
417.970 Added......................................................52996
417 Appendix 1 added...............................................52996
Chapter IX
910.130 (b)(1) and (2) amended; (b)(3) added.......................12049
Chapter XIV
1402 Revised.......................................................45635
Chapter XVIII
1800 Technical correction..........................................49191
1800.3 (d)(2) amended..............................................20240
1800.5 Amended.....................................................20240
1800.6 Removed.....................................................20240
1800.10 Amended....................................................20240
1800.11 (a) amended................................................20240
1800.208 Revised...................................................20240
1800.210 Revised...................................................20240
1800.339 Revised...................................................20240
1800 Appendix A and Appendix B removed.............................20240
Chapter XXXI
3187.3 (a) introductory text amended...............................27704
3187.12 (a) table amended..........................................22944

                                  2020

2 CFR
                                                                   85 FR
                                                                    Page
Chapter I
25.100 Introductory text and (a) revised...........................49522
25.105 Revised.....................................................49522
25.110 Revised.....................................................49523
25.115 Removed.....................................................49523
25.200 Revised.....................................................49523
25.205 Revised.....................................................49523
25.210 Revised.....................................................49523
25.215 Revised.....................................................49524
25.220 Revised.....................................................49524
25.300 (Subpart C) Revised.........................................49524
25.400--25.465 (Subpart D) Added...................................49524
25 Appendix A revised..............................................49525
170.100 Revised....................................................49525
170.105 Revised....................................................49525
170.110 Revised....................................................49525
170.115 Removed....................................................49525
170.200 Revised....................................................49525
170.210 Added......................................................49526
170.220 Revised....................................................49526
170.300 Revised....................................................49526
170.301 Added......................................................49526
170.305 Revised....................................................49526
170.307 Added......................................................49526
170.308 Added......................................................49526
170.310 Revised....................................................49526
170.320 (b) paragraph following (j) correctly designated as (k); 
        (k) introductory text and (2) revised......................49526
170.322 Added......................................................49526
170.325 Revised....................................................49526
170 Appendix A revised.............................................49526
183 Added..........................................................49527
Chapter II
200 Notice of guidance availability.........................50757, 86793
200.0 Amended......................................................49529
200.1 Revised......................................................49529
200.100 (a)(1), (c) through (e) revised............................49536
200.101 Revised....................................................49536
200.102 Revised....................................................49538
200.103 Revised....................................................49538
200.104 Introductory text, (g), and (h) revised....................49538
200.105 Revised....................................................49538
200.106 Revised....................................................49538
200.110 Revised....................................................49538
200.113 Revised....................................................49539
200.200--200.216 (Subpart C) Revised...............................49539
200.300--200.346 (Subpart D) Revised...............................49543
200.400 (e) and (g) revised........................................49561
200.401 (a)(3), (4), (b), and (c) revised..........................49562

[[Page 739]]

200.403 (f) and (g) revised; (h) added.............................49562
200.405 (d) revised................................................49562
200.406 (b) revised................................................49562
200.407 (g) and (y) revised........................................49562
200.409 Revised....................................................49562
200.410 Revised....................................................49562
200.413 (a), (b), and (f) revised..................................49562
200.414 (a), (c) introductory text, (3), (4), (d), (f), and (g) 
        revised; (h) added.........................................49563
200.415 (b)(1), (2), (c), and (d) revised..........................49563
200.417 Revised....................................................49564
200.418 (a) revised................................................49564
200.419 (a), (b) introductory text, (1), and (2) revised...........49564
200.420 Revised....................................................49564
200.421 (b)(1) and (e)(2) revised..................................49564
200.422 Revised....................................................49564
200.425 (a)(1), (2), and (c) introductory text revised.............49564
200.426 Revised....................................................49565
200.428 Revised....................................................49565
200.429 Revised....................................................49565
200.430 (a) introductory text, (3), (h) heading, (3), (8)(iv), and 
        (viii)(C) revised..........................................49565
200.431 Revised....................................................49565
200.432 Revised....................................................49567
200.433 (b) and (c) revised........................................49567
200.434 (b), (c), (f), and (g)(2) revised..........................49567
200.436 (c) introductory text, (3), (4), and (e) revised...........49568
200.439 (a), (b)(3), and (7) revised...............................49568
200.441 Revised....................................................49568
200.442 Revised....................................................49568
200.443 (b)(1), (3), and (d) revised...............................49568
200.444 (a) introductory text, (4), and (b) revised................49568
200.447 (a)(4) revised.............................................49568
200.448 (a)(1)(iii) revised........................................49569
200.449 (b)(1) and (c)(4) revised..................................49569
200.450 (a), (c)(2)(v), (vi), and (vii)(A) introductory text 
        revised....................................................49569
200.452 Revised....................................................49569
200.454 (e) revised................................................49569
200.456 Revised....................................................49569
200.457 Revised....................................................49569
200.458 Revised....................................................49569
200.459 (a) revised................................................49569
200.461 (b)(3) revised.............................................49569
200.463 (c) revised................................................49569
200.464 (c) revised................................................49570
200.465 (d) through (f) added......................................49570
200.466 (b) revised................................................49570
200.467 Revised....................................................49570
200.468 (a) and (b)(2) revised.....................................49570
200.471 Redesignated as 200.472; new section added.................49570
200.472 Redesignated as 200.473; section redesignated from 
        200.471; new (c)(2), new (e)(1)(i), and new (f) revised....49570
200.473 Redesignated as 200.474; section redesignated from 200.472
                                                                   49570
200.474 Redesignated as 200.475; section redesignated from 200.473
                                                                   49570
200.475 Redesignated as 200.476; section redesignated from 
        200.474; new (a) and new (c)(2) revised....................49570
200.476 Redesignated from 200.475..................................49570
    New section revised............................................49571
200.501 (b) through (d), (f), and (h) revised......................49571
200.503 (e) revised................................................49571
200.505 Revised....................................................49571
200.506 Revised....................................................49571
200.507 (a), (b)(2), (3)(ii) through (v), (4)(iv), (c)(2), (3), 
        and (d)(8) revised.........................................49571
200.508 (a) through (c) revised....................................49572
200.509 (a) revised................................................49572
200.510 (a), (b) introductory text, (3), (5), and (6) revised......49572
200.511 (a) and (c) revised........................................49572
200.512 (b) introductory text, (1), (c)(1) through (4), and (g) 
        revised....................................................49573
200.513 (a)(1), (2), (3)(ii), (vii), (b) introductory text, (c) 
        introductory text, (3)(i), and (iii) revised...............49573
200.514 (d)(4), (e), and (f) revised...............................49574
200.515 (a), (d)(1)(vi) through (ix), (3), and (e) revised.........49574
200.516 (a)(1), (7), (b)(1), (6), and (c) revised..................49574
200.518 (b)(3), (4), (c)(1) introductory text, (i), (ii), (d)(1), 
        and (f) revised............................................49574
200.519 (d)(1) revised.............................................49575

[[Page 740]]

200.520 Introductory text, (a), (e)(1), and (2) revised............49575
200.521 (b), (c), and (e) revised..................................49575
200 Appendix I amended.............................................49575
200 Appendices II and III amended..................................49577
200 Appendix IV amended............................................49579
200 Appendices V, VI, and VII amended..............................49581
200 Appendices VIII, XI, and XII amended...........................49582
Subtitle B
Chapter III
376.10 Amended.....................................................72906
Chapter IV
415 Authority citation revised.....................................72912
415.1 (a)(1) and (b)(10) revised...................................72912
416 Authority citation revised.....................................72912
416.1 (a) and (b) amended..........................................72912
Chapter IX
910.133 Added; interim.............................................32979
    Regulation at 85 FR 32979 confirmed............................64945
Chapter XI
1100--1109 (Subchapter A) Added....................................51160
1103 Removed.......................................................51160
1108 Added.........................................................51230
1110--1119 (Subchapter B) Added and reserved.......................51161
1120--1125 (Subchapter C) Added....................................51161
1120 Added.........................................................51163
1122 Added.........................................................51225
1125 Transferred to Subchapter C...................................51161
1126--1140 (Subchapter D) Added....................................51161
1126 Added.........................................................51171
1128 Added.........................................................51171
1130 Added.........................................................51171
1132 Added.........................................................51171
1134 Added.........................................................51171
1136 Added.........................................................51171
1138 Added.........................................................51171
1141--1155 (Subchapter E) Added and reserved.......................51161
1156--1170 (Subchapter F) Added and reserved.......................51161
1171--1199 (Subchapter G) Added and reserved.......................51161
Chapter XV
1500 Authority citation revised....................................61573
1500.1 (Subpart A) Added; interim..................................61573
1500.1 Redesignated as 1500.2; interim.............................61573
1500.2 Redesignated as 1500.3; new section redesignated from 
        1500.1; interim............................................61573
1500.3 Redesignated as 1500.4; new section redesignated from 
        1500.2 and revised; interim................................61573
1500.4 Redesignated as 1500.5; new section redesignated from 
        1500.3; interim............................................61573
1500.5 Redesignated as 1500.6; new section redesignated from 
        1500.4; interim............................................61573
1500.6 Redesignated as 1500.7; new section redesignated from 
        1500.5; interim............................................61573
1500.7 Redesignated as 1500.8; new section redesignated from 
        1500.6; interim............................................61573
1500.8 Redesignated as 1500.9; new section redesignated from 
        1500.7; interim............................................61573
    Revised; interim...............................................61574
1500.9 Redesignated as 1500.10; new section redesignated from 
        1500.8; interim............................................61573
1500.10 Redesignated as 1500.11; new section redesignated from 
        1500.9; interim............................................61573
    Revised; interim...............................................61574
1500.11 Redesignated as 1500.12; new section redesignated from 
        1500.10; interim...........................................61573
1500.12 Redesignated as 1500.13; new section redesignated from 
        1500.11; interim...........................................61573
1500.13 Redesignated as 1500.14; new section redesignated from 
        1500.12; interim...........................................61573
    New (a) introductory text, new (1), new (c) introductory text, 
and new (1) revised; new (c)(2), new (4), and new (5) amended; new 
(c)(6) through new (9) added; interim..............................51574
1500.14 Redesignated as 1500.15; new section redesignated from 
        1500.13....................................................61573
    New (c)-(e) revised; interim...................................61574
1500.15 Redesignated as 1500.16; new section redesignated from 
        1500.14; interim...........................................61573
    Revised; interim...............................................61575

[[Page 741]]

1500.16 Redesignated as 1500.17; interim...........................61573
    Revised; interim...............................................61575
1500.17 Removed; new section redesignated from 1500.16; interim....61573
    Revised; interim...............................................61575
1500.18 Removed; interim...........................................61573
1500.19 Removed; interim...........................................61573
Chapter XVIII
1800.3 Revised; eff. 1-11-21.......................................71816
1800.5 Revised; eff. 1-11-21.......................................71816
1800.10 Revised; eff. 1-11-21......................................71816
1800.11 Revised; eff. 1-11-21......................................71816
1800.208 Redesignated as 1800.209; eff. 1-11-21....................71817
1800.209 Redesignated as 1800.210; new section redesignated from 
        1800.208 and revised; eff. 1-11-21.........................71817
1800.210 Redesignated as 1800.211; new section redesignated from 
        1800.209; eff. 1-11-21.....................................71817
1800.211 Redesignated from 1800.210 and revised; eff. 1-11-21......71817
1800.305 Revised; eff. 1-11-21.....................................71817
1800.306 Revised; eff. 1-11-21.....................................71817
1800.312 Revised; eff. 1-11-21.....................................71817
1800.339 Revised; eff. 1-11-21.....................................71817
1800.400 Revised; eff. 1-11-21.....................................71817
Chapter XXXIV
3474 Authority citation revised; eff. 1-19-21......................82125
3474.15 Revised; eff. 1-19-21......................................82125
3474.21 Added; eff. 1-19-21........................................82126


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