[Title 32 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2024 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 32
National Defense
________________________
Parts 1 to 190
Revised as of July 1, 2024
Containing a codification of documents of general
applicability and future effect
As of July 1, 2024
Published by the Office of the Federal Register
National Archives and Records Administration as a
Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 32:
SUBTITLE A--Department of Defense
Chapter I--Office of the Secretary of Defense 5
Finding Aids:
Table of CFR Titles and Chapters........................ 873
Alphabetical List of Agencies Appearing in the CFR...... 893
List of CFR Sections Affected........................... 903
[[Page iv]]
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 32 CFR 2.1 refers to
title 32, part 2, section
1.
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[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
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Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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collection request.
[[Page vi]]
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[[Page vii]]
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Oliver A. Potts,
Director,
Office of the Federal Register
July 1, 2024
[[Page ix]]
THIS TITLE
Title 32--National Defense is composed of six volumes. The parts in
these volumes are arranged in the following order: Parts 1-190, parts
191-399, parts 400-629, parts 630-699, parts 700-799, and part 800 to
end. The contents of these volumes represent all current regulations
codified under this title of the CFR as of July 1, 2024.
The current regulations issued by the Office of the Secretary of
Defense appear in the volumes containing parts 1-190 and parts 191-399;
those issued by the Department of the Army appear in the volumes
containing parts 400-629 and parts 630-699; those issued by the
Department of the Navy appear in the volume containing parts 700-799,
and those issued by the Department of the Air Force, Defense Logistics
Agency, Selective Service System, Office of the Director of National
Intelligence, National Counterintelligence Center, Central Intelligence
Agency, Information Security Oversight Office (National Archives and
Records Administration), National Security Council, Office of Science
and Technology Policy, Office for Micronesian Status Negotiations, and
Office of the Vice President of the United States appear in the volume
containing part 800 to end.
For this volume, Christine Colaninno was Chief Editor. The Code of
Federal Regulations publication program is under the direction of John
Hyrum Martinez, assisted by Stephen J. Frattini.
[[Page 1]]
TITLE 32--NATIONAL DEFENSE
(This book contains parts 1 to 190)
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SUBTITLE A--Department of Defense
Part
chapter i--Office of the Secretary of Defense............... 2
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Subtitle A--Department of Defense
[[Page 5]]
CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE
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SUBCHAPTER A--ACQUISITION
Part Page
1
[Reserved]
2 Pilot program policy........................ 9
3 Transactions other than contracts, grants,
or cooperative agreements for prototype
projects................................ 11
4-8
[Reserved]
SUBCHAPTER B [RESERVED]
SUBCHAPTER C--DOD GRANT AND AGREEMENT REGULATIONS
21 DoD grants and agreements--general matters.. 20
22 DoD grants and agreements--award and
administration.......................... 31
26 Governmentwide requirements for drug-free
workplace (financial assistance)........ 52
28 New restrictions on lobbying................ 57
34 Administrative requirements for grants and
agreements with for-profit organizations 69
37 Technology investment agreements............ 88
SUBCHAPTER D--PERSONNEL, MILITARY AND CIVILIAN
44 Screening the Ready Reserve................. 143
45 Medical malpractice claims by members of the
uniformed services...................... 145
47 Active duty service for civilian or
contractual groups...................... 157
50 Personal commercial solicitation on DoD
installations........................... 162
53 Wearing of the uniform...................... 173
56 Nondiscrimination on the basis of handicap
in programs and activities assisted or
conducted by the Department of Defense.. 173
57 Provision of early intervention and special
education services to eligible DoD
dependents.............................. 193
[[Page 6]]
60 Family advocacy command assistance team
(FACAT)................................. 243
61 Family advocacy program (FAP)............... 246
66 Qualification standards for enlistment,
appointment, and induction.............. 287
67 Educational requirements for appointment of
Reserve component officers to a grade
above first lieutenant or lieutenant
(junior grade).......................... 296
68 Voluntary education programs................ 298
69 School boards for Department of Defense
domestic dependent elementary and
secondary schools....................... 327
70 Discharge Review Board (DRB) procedures and
standards............................... 331
74 Appointment of doctors of osteopathy as
medical officers........................ 364
75 Exceptional family member program (EFMP).... 365
79 Child development programs (CDPs)........... 369
86 Background checks on individuals in DoD
child care services programs............ 402
89 Interstate compact on educational
opportunity for military children....... 412
93 Acceptance of service of process; release of
official information in litigation; and
testimony by NSA personnel as witnesses. 420
94 Naturalization of aliens serving in the
Armed Forces of the United States and of
alien spouses and/or alien adopted
children of military and civilian
personnel ordered overseas.............. 425
97 Release of official information in
litigation and presentation of witness
testimony by DOD personnel (Touhy
regulation)............................. 428
99 Procedures for States and localities to
request indemnification................. 433
103 Sexual assault prevention and response
(SAPR) program.......................... 435
107 Personal services authority for direct
health care providers................... 461
108 Health care eligibility under the
Secretarial Designee Program and related
special authorities..................... 462
111 Transitional compensation for abused
dependents.............................. 467
113 Indebtedness procedures of military
personnel............................... 470
114 Victim and witness assistance............... 486
117 National Industrial Security Program
Operating Manual (NISPOM)............... 503
142 Copyrighted sound and video recordings...... 592
145 Cooperation with the Office of Special
Counsel of the Merit Systems Protection
Board................................... 593
[[Page 7]]
147 Adjudicative guidelines for determining
eligibility for access to classified
information............................. 598
148 National policy and implementation of
reciprocity of facilities............... 611
SUBCHAPTER E--REGULATIONS PERTAINING TO MILITARY JUSTICE
150 Courts of criminal appeals rules of practice
and procedure........................... 615
151 Foreign criminal and civil jurisdiction..... 623
152 Review of the Manual for Courts-Martial..... 626
153 Criminal jurisdiction over civilians
employed by or accompanying the Armed
Forces outside the United States,
certain service members, and former
service members......................... 630
SUBCHAPTER F--SECURITY
155 Defense Industrial Personnel Security
Clearance Program....................... 651
156 Department of Defense Personnel Security
Program (PSP)........................... 658
157 DoD investigative and adjudicative guidance
for issuing the Common Access Card (CAC) 665
158 Operational contract support (OCS) outside
the United States....................... 679
159 Private security contractors (PSCs)
operating in contingency operations,
humanitarian or peace operations, or
other military operations or exercises.. 704
161 Identification (ID) cards for members of the
Uniformed Services, their dependents and
other eligible individuals.............. 710
SUBCHAPTER G--DEFENSE CONTRACTING
168a National Defense Science and Engineering
Graduate Fellowships.................... 788
173 Competitive information certificate and
profit reduction clause................. 789
SUBCHAPTER H--CLOSURES AND REALIGNMENT
174 Revitalizing base closure communities and
addressing impacts of realignment....... 792
175 Indemnification or defense, or providing
notice to the Department of Defense,
relating to a third-party environmental
claim................................... 806
[[Page 8]]
176 Revitalizing base closure communities and
community assistance--community
redevelopment and homeless assistance... 811
179 Munitions Response Site Prioritization
Protocol (MRSPP)........................ 820
SUBCHAPTERS I-K [RESERVED]
SUBCHAPTER L--ENVIRONMENT
187 Environmental effects abroad of major
Department of Defense actions........... 851
188 DoD environmental laboratory accreditation
program (ELAP).......................... 860
189-190
[Reserved]
[[Page 9]]
SUBCHAPTER A_ACQUISITION
PART 1 [RESERVED]
PART 2_PILOT PROGRAM POLICY--Table of Contents
Sec.
2.1 Purpose.
2.2 Statutory relief for participating programs.
2.3 Regulatory relief for participating programs.
2.4 Designation of participating programs.
2.5 Criteria for designation of participating programs.
Authority: 10 U.S.C. 2340 note.
Source: 62 FR 17549, Apr. 10, 1997, unless otherwise noted.
Sec. 2.1 Purpose.
Section 809 of Public Law 101-510, ``National Defense Authorization
Act for Fiscal Year 1991,'' as amended by section 811 of Public Law 102-
484, ``National Defense Authorization Act for Fiscal Year 1993'' and
Public Law 103-160, ``National Defense Authorization Act for Fiscal Year
1994,'' authorizes the Secretary of Defense to conduct the Defense
Acquisition Pilot Program. In accordance with section 809 of Public Law
101-510, the Secretary may designate defense acquisition programs for
participation in the Defense Acquisition Pilot Program.
(a) The purpose of the pilot programs is to determine the potential
for increasing the efficiency and effectiveness of the acquisition
process. Pilot programs shall be conducted in accordance with the
standard commercial, industrial practices. As used in this policy, the
term ``standard commercial, industrial practice'' refers to any
acquisition management practice, process, or procedure that is used by
commercial companies to produce and sell goods and services in the
commercial marketplace. This definition purposely implies a broad range
of potential activities to adopt commercial practices, including
regulatory and statutory streamlining, to eliminate unique Government
requirements and practices such as government-unique contracting
policies and practices, government-unique specifications and standards,
and reliance on cost determination rather than price analysis.
(b) Standard commercial, industrial practices include, but are not
limited to:
(1) Innovative contracting policies and practices;
(2) Performance and commercial specifications and standards;
(3) Innovative budget policies;
(4) Establishing fair and reasonable prices without cost data;
(5) Maintenance of long-term relationships with quality suppliers;
(6) Acquisition of commercial and non-developmental items (including
components); and
(7) Other best commercial practices.
Sec. 2.2 Statutory relief for participating programs.
(a) Within the limitations prescribed, the applicability of any
provision of law or any regulation prescribed to implement a statutory
requirement may be waived for all programs participating in the Defense
Acquisition Pilot Program, or separately for each participating program,
if that waiver or limit is specifically authorized to be waived or
limited in a law authorizing appropriations for a program designated by
statute as a participant in the Defense Acquisition Pilot Program.
(b) Only those laws that prescribe procedures for the procurement of
supplies or services; a preference or requirement for acquisition from
any source or class of sources; any requirement related to contractor
performance; any cost allowability, cost accounting, or auditing
requirements; or any requirement for the management of, testing to be
performed under, evaluation of, or reporting on a defense acquisition
program may be waived.
(c) The requirements in section 809 of Public Law 101-510, as
amended by section 811 of Public Law 102-484, the requirements in any
law enacted on or after the enactment of Public Law 101-510 (except to
the extent that a waiver or limitation is specifically authorized for
such a defense acquisition program by statute), and any provision of law
that ensures the financial integrity of
[[Page 10]]
the conduct of a Federal Government program or that relates to the
authority of the Inspector General of the Department of Defense may not
be considered for waiver.
Sec. 2.3 Regulatory relief for participating programs.
(a) A program participating in the Defense Acquisition Pilot Program
will not be subject to any regulation, policy, directive, or
administrative rule or guideline relating to the acquisition activities
of the Department of Defense other than the Federal Acquisition
Regulation (FAR) \1\, the Defense FAR Supplement (DFARS) \2\, or those
regulatory requirements added by the Under Secretary of Defense for
Acquisition and Technology, the Head of the Component, or the DoD
Component Acquisition Executive.
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\1\ Copies of this Department of Defense publication may be obtained
from the Government Printing Office, Superintendent of Documents,
Washington, DC 20402.
\2\ See footnote 1 to Sec. 2.3(a).
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(b) Provisions of the FAR and/or DFARS that do not implement
statutory requirements may be waived by the Under Secretary of Defense
for Acquisition and Technology using appropriate administrative
procedures. Provisions of the FAR and DFARS that implement statutory
requirements may be waived or limited in accordance with the procedures
for statutory relief previously mentioned.
(c) Regulatory relief includes relief from use of government-unique
specifications and standards. Since a major objective of the Defense
Acquisition Pilot Program is to promote standard, commercial industrial
practices, functional performance and commercial specifications and
standards will be used to the maximum extent practical. Federal or
military specifications and standards may be used only when no practical
alternative exists that meet the user's needs. Defense acquisition
officials (other than the Program Manager or Commodity Manager) may only
require the use of military specifications and standards with advance
approval from the Under Secretary of Defense for Acquisition and
Technology, the Head of the DoD Component, or the DoD Component
Acquisition Executive.
Sec. 2.4 Designation of participating programs.
(a) Pilot programs may be nominated by a DoD Component Head or
Component Acquisition Executive for participation in the Defense
Acquisition Pilot Program. The Under Secretary of Defense for
Acquisition and Technology shall determine which specific programs will
participate in the pilot program and will transmit to the Congressional
defense committees a written notification of each defense acquisition
program proposed for participation in the pilot program. Programs
proposed for participation must be specifically designated as
participants in the Defense Acquisition Pilot Program in a law
authorizing appropriations for such programs and provisions of law to be
waived must be specifically authorized for waiver.
(b) Once included in the Defense Acquisition Pilot Program, decision
and approval authority for the participating program shall be delegated
to the lowest level allowed in the acquisition regulations consistent
with the total cost of the program (e.g., under DoD Directive 5000.1,
\3\ an acquisition program that is a major defense acquisition program
would be delegated to the appropriate Component Acquisition Executive as
an acquisition category IC program)
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\3\ Copies may be obtained, at cost, from the National Technical
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
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(c) At the time of nomination approval, the Under Secretary of
Defense for Acquisition and Technology will establish measures to judge
the success of a specific program, and will also establish a means of
reporting progress towards the measures.
Sec. 2.5 Criteria for designation of participating programs.
(a) Candidate programs must have an approved requirement, full
program funding assured prior to designation, and low risk. Nomination
of a candidate program to participate in the Defense Acquisition Pilot
Program should occur as early in the program's life-cycle as possible.
Developmental programs will only be considered on an exception basis.
[[Page 11]]
(b) Programs in which commercial or non-developmental items can
satisfy the military requirement are preferred as candidate programs. A
nominated program will address which standard commercial, industrial
practices will be used in the pilot program and how those practices will
be applied.
(c) Nomination of candidate programs must be accompanied by a list
of waivers being requested to Statutes, FAR, DFARS, DoD Directives \4\
and Instructions, \5\ and where applicable, DoD Component regulations.
Waivers being requested must be accompanied by rationale and
justification for the waiver. The justification must include:
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\4\ See footnote 3 to Sec. 2.4(b).
\5\ See footnote 3 to Sec. 2.4(b).
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(1) The provision of law proposed to be waived or limited.
(2) The effects of the provision of law on the acquisition,
including specific examples.
(3) The actions taken to ensure that the waiver or limitation will
not reduce the efficiency, integrity, and effectiveness of the
acquisition process used for the defense acquisition program; and
(4) A discussion of the efficiencies or savings, if any, that will
result from the waiver or limitation.
(d) No nominated program shall be accepted until the Under Secretary
of Defense has determined that the candidate program is properly
planned.
PART 3_TRANSACTIONS OTHER THAN CONTRACTS, GRANTS, OR COOPERATIVE AGREEMENTS
FOR PROTOTYPE PROJECTS--Table of Contents
Sec.
3.1 Purpose.
3.2 Background.
3.3 Applicability.
3.4 Definitions.
3.5 Appropriate use.
3.6 Limitations on cost-sharing.
3.7 Comptroller General access.
3.8 DoD access to records policy.
3.9 Follow-on production contracts.
Authority: Sec. 845, Pub. L. 103-160, 107 Stat. 1547, as amended.
Source: 66 FR 57383, Nov. 15, 2001, unless otherwise noted.
Sec. 3.1 Purpose.
This part consolidates rules that implement section 845 of the
National Defense Authorization Act for Fiscal Year 1994, Public Law 103-
160, 107 Stat. 1547, as amended, and have a significant impact on the
public. Section 845 authorizes the Secretary of a Military Department,
the Director of Defense Advanced Research Projects Agency, and any other
official designated by the Secretary of Defense, to enter into
transactions other than contracts, grants, or cooperative agreements in
certain situations for prototype projects that are directly relevant to
weapons or weapon systems proposed to be acquired or developed by the
Department of Defense.
[67 FR 54956, Aug. 27, 2002]
Sec. 3.2 Background.
``Other transactions'' is the term commonly used to refer to the 10
U.S.C. 2371 authority to enter into transactions other than contracts,
grants or cooperative agreements. ``Other transactions'' are generally
not subject to the Federal laws and regulations limited in applicability
to contracts, grants or cooperative agreements. As such, they are not
required to comply with the Federal Acquisition Regulation (FAR) and its
supplements (48 CFR).
[67 FR 54956, Aug. 27, 2002]
Sec. 3.3 Applicability.
This part applies to the Secretary of a Military Department, the
Directors of the Defense Agencies, and any other official designated by
the Secretary of Defense to enter into transactions other than
contracts, grants or cooperative agreements for prototype projects that
are directly relevant to weapons or weapon systems proposed to be
acquired or developed by the Department of Defense, under authority of
10 U.S.C. 2371. Such transactions are commonly referred to as ``other
transaction'' agreements and are hereafter referred to as agreements.
[65 FR 35576, June 5, 2000. Redesignated at 67 FR 54956, Aug. 27, 2002]
[[Page 12]]
Sec. 3.4 Definitions.
Agency point of contact (POC). The individual identified by the
military department or defense agency as its POC for prototype OTs.
Agreements Officer. An individual with the authority to enter into,
administer, or terminate OTs for prototype projects and make related
determinations and findings.
Approving Official. The official responsible for approving the OTs
acquisition strategy and resulting OT agreement. This official must be
at least one level above the Agreements Officer and at no lower level
than existing agency thresholds associated with procurement contracts.
Awardee. Any business unit that is the direct recipient of an OT
agreement.
Business unit. Any segment of an organization, or an entire business
organization which is not divided into segments.
Contracting activity. An element of an agency designated by the
agency head and delegated broad authority regarding acquisition
functions. It includes elements designated by the Director of a Defense
Agency which has been delegated contracting authority through its agency
charter.
Contracting Officer. A person with the authority to enter into,
administer, and/or terminate contracts and make related determinations
and findings as defined in Chapter 1 of Title 48, CFR, Federal
Acquisition Regulation, Section 2.101(b).
Cost-type OT. Agreements where payments are based on amounts
generated from the awardee's financial or cost records or that require
at least one third of the total costs to be provided by non-Federal
parties pursuant to statute or require submittal of financial or cost
records/reports to determine whether additional effort can be
accomplished for the fixed amount.
Fixed-price type OT. Agreements where payments are not based on
amounts generated from the awardee's financial or cost records.
Head of the contracting activity (HCA). The official who has overall
responsibility for managing the contracting activity.
Nontraditional Defense contractor. A business unit that has not, for
a period of at least one year prior to the date of the OT agreement,
entered into or performed on (1) any contract that is subject to full
coverage under the cost accounting standards prescribed pursuant to
section 26 of the Office of Federal Procurement Policy Act (41 U.S.C.
422) and the regulations implementing such section; or (2) any other
contract in excess of $500,000 to carry out prototype projects or to
perform basic, applied, or advanced research projects for a Federal
agency, that is subject to the Federal Acquisition Regulation.
Procurement contract. A contract awarded pursuant to the Federal
Acquisition Regulation.
Project Manager. The government manager for the prototype project.
Qualified Independent Public Accountant. An accountant that is
licensed or works for a firm that is licensed in the state or other
political jurisdiction where they operate their professional practice
and comply with the applicable provisions of the public accountancy law
and rules of the jurisdiction where the audit is being conducted.
Segment. One of two or more divisions, product departments, plants,
or other subdivisions of an organization reporting directly to a home
office, usually identified with responsibility for profit and/or
producing a product or service.
Senior Procurement Executive. The following individuals:
(1) Department of the Army--Assistant Secretary of the Army
(Acquisition, Logistics and Technology);
(2) Department of the Navy--Assistant Secretary of the Navy
(Research, Development and Acquisition);
(3) Department of the Air Force--Assistant Secretary of the Air
Force (Acquisition).
(4) The Directors of Defense Agencies who have been delegated
authority to act as Senior Procurement Executive for their respective
agencies.
Single Audit Act. Establishes uniform audit requirements for audits
of state and local government, universities, and non-profit
organizations that expend Federal awards.
Subawardee. Any business unit of a party, entity or subordinate
element
[[Page 13]]
performing effort under the OT agreement, other than the awardee.
Traditional Defense contractor. Any business unit that does not meet
the definition of a nontraditional Defense contractor.
[68 FR 27457, May 20, 2003, as amended at 69 FR 16482, Mar. 30, 2004]
Sec. 3.5 Appropriate use.
In accordance with statute, this authority may be used only when:
(a) At least one nontraditional Defense contractor is participating
to a significant extent in the prototype project; or
(b) No nontraditional Defense contractor is participating to a
significant extent in the prototype project, but at least one of the
following circumstances exists:
(1) At least one third of the total cost of the prototype project is
to be paid out of funds provided by non-Federal parties to the
transaction.
(2) The Senior Procurement Executive for the agency determines in
writing that exceptional circumstances justify the use of a transaction
that provides for innovative business arrangements or structures that
would not be feasible or appropriate under a procurement contract.
[67 FR 54956, Aug. 27, 2002]
Sec. 3.6 Limitations on cost-sharing.
(a) When a nontraditional Defense contractor is not participating to
a significant extent in the prototype project and cost-sharing is the
reason for using OT authority, then the non-Federal amounts counted as
provided, or to be provided, by the business units of an awardee or
subawardee participating in the performance of the OT agreement may not
include costs that were incurred before the date on which the OT
agreement becomes effective. Costs that were incurred for a prototype
project by the business units of an awardee or subawardee after the
beginning of negotiations, but prior to the date the OT agreement
becomes effective, may be counted as non-Federal amounts if and to the
extent that the Agreements Officer determines in writing that:
(1) The awardee or subawardee incurred the costs in anticipation of
entering into the OT agreement; and
(2) It was appropriate for the awardee or subawardee to incur the
costs before the OT agreement became effective in order to ensure the
successful implementation of the OT agreement.
(b) As a matter of policy, these limitations on cost-sharing apply
any time cost-sharing may be recognized when using OT authority for
prototype projects.
[67 FR 54956, Aug. 27, 2002]
Sec. 3.7 Comptroller General access.
(a) A clause must be included in solicitations and agreements for
prototype projects awarded under authority of 10 U.S.C. 2371, that
provide for total government payments in excess of $5,000,000 to allow
Comptroller General access to records that directly pertain to such
agreements.
(b) The clause referenced in paragraph (a) of this section will not
apply with respect to a party or entity, or subordinate element of a
party or entity, that has not entered into any other contract, grant,
cooperative agreement or ``other transaction'' agreement that provides
for audit access by a government entity in the year prior to the date of
the agreement. The clause must be included in all agreements described
in paragraph (a) of this section in order to fully implement the law by
covering those participating entities and their subordinate elements
which have entered into prior agreements providing for Government audit
access, and are therefore not exempt. The presence of the clause in an
agreement will not operate to require Comptroller General access to
records from any party or participating entity, or subordinate element
of a party or participating entity, or subordinate element of a party or
participating entity, which is otherwise exempt under the terms of the
clause and the law.
(c)(1) The right provided to the Comptroller General in a clause of
an agreement under paragraph (a) of this part, is limited as provided by
subparagraph (c)(2) of this part in the case of a party to the
agreement, an entity that participates in the performance of the
agreement, or a subordinate element of
[[Page 14]]
that party or entity, if the only cooperative agreements or ``other
transactions'' that the party, entity, or subordinate element entered
into with government entities in the year prior to the date of that
agreement are cooperative agreements or transactions that were entered
into under 10 U.S.C. 2371 or Section 845 of the National Defense
Authorization Act for Fiscal Year 1994 (Pub. L. 103-160; 10 U.S.C. 2371
note).
(c)(2) The only records of a party, other entity, or subordinate
element referred to in subparagraph (c)(1) of this part that the
Comptroller General may examine in the exercise of the right referred to
in that subparagraph, are records of the same type as the records that
the government has had the right to examine under the audit access
clauses of the previous cooperative agreements or transactions referred
to in such subparagraph that were entered into by that particular party,
entity, or subordinate element.
(d) The head of the contracting activity (HCA) that is carrying out
the agreement may waive the applicability of the Comptroller General
access requirement if the HCA determines it would not be in the public
interest to apply the requirement to the agreement. The waiver will be
effective with respect to the agreement only if the HCA transmits a
notification of the waiver to the Committees on Armed Services of the
Senate and the House of Representatives, the Comptroller General, and
the Director, Defense Procurement before entering into the agreement.
The notification must include the rationale for the determination.
(e) The HCA must notify the Director, Defense Procurement of
situations where there is evidence that the Comptroller General Access
requirement caused companies to refuse to participate or otherwise
restricted the Department's access to companies that typically do not do
business with the Department.
(f) In no case will the requirement to examine records under the
clause referenced in paragraph (a) of this section apply to an agreement
where more than three years have passed after final payment is made by
the government under such an agreement.
(g) The clause referenced in paragraph (a) of this section, must
provide for the following:
(1) The Comptroller General of the United States, in the discretion
of the Comptroller General, shall have access to and the right to
examine records of any party to the agreement or any entity that
participates in the performance of this agreement that directly pertain
to, and involve transactions relating to, the agreement.
(2) Excepted from the Comptroller General access requirement is any
party to this agreement or any entity that participates in the
performance of the agreement, or any subordinate element of such party
or entity, that, in the year prior to the date of the agreement, has not
entered into any other contract, grant, cooperative agreement, or
``other transaction'' agreement that provides for audit access to its
records by a government entity.
(3)(A) The right provided to the Comptroller General is limited as
provided in subparagraph (B) in the case of a party to the agreement,
any entity that participates in the performance of the agreement, or a
subordinate element of that party or entity if the only cooperative
agreements or ``other transactions'' that the party, entity, or
subordinate element entered into with government entities in the year
prior to the date of that agreement are cooperative agreements or
transactions that were entered into under 10 U.S.C. 2371 or Section 845
of the National Defense Authorization Act for Fiscal Year 1994 (Pub. L.
103-160; 10 U.S.C. 2371 note).
(B) The only records of a party, other entity, or subordinate
element referred to in subparagraph (A) that the Comptroller General may
examine in the exercise of the right referred to in that subparagraph
are records of the same type as the records that the government has had
the right to examine under the audit access clauses of the previous
agreements or transactions referred to in such subparagraph that were
entered into by that particular party, entity, or subordinate element.
(4) This clause shall not be construed to require any party or
entity, or any
[[Page 15]]
subordinate element of such party or entity, that participates in the
performance of the agreement, to create or maintain any record that is
not otherwise maintained in the ordinary course of business or pursuant
to a provision of law.
(5) The Comptroller General shall have access to the records
described in this clause until three years after the date the final
payment is made by the United States under this agreement.
(6) The recipient of the agreement shall flow down this provision to
any entity that participates in the performance of the agreement.
[65 FR 35576, June 5, 2000. Redesignated at 67 FR 54956, Aug. 27, 2002]
Sec. 3.8 DoD access to records policy.
(a) Applicability. This section provides policy concerning DoD
access to awardee and subawardee records on OT agreements for prototype
projects. This access is separate and distinct from Comptroller General
access.
(1) Fixed-price type OT agreements. (i) General--DoD access to
records is not generally required for fixed-price type OT agreements. In
order for an agreement to be considered a fixed-price type OT agreement,
it must adequately specify the effort to be accomplished for a fixed
amount and provide for defined payable milestones, with no provision for
financial or cost reporting that would be a basis for making adjustment
in either the work scope or price of the effort.
(ii) Termination considerations. The need to provide for DoD access
to records in the case of termination of a fixed-price type OT can be
avoided by limiting potential termination settlements to an amount
specified in the original agreement or to payment for the last completed
milestone. However, if a fixed-price agreement provides that potential
termination settlement amounts may be based on amounts generated from
cost or financial records and the agreement exceeds the specified
threshold, the OT should provide that DoD will have access to records in
the event of termination.
(2) Cost-type OT agreements. (i) Single Audit Act--In accordance
with the requirements of Public Law 98-502, as amended by Public Law
104-156, 110 STAT. 1396-1404, when a business unit that will perform the
OT agreement, or a subawardee, meets the criteria for an audit pursuant
to the Single Audit Act, the DoD must have sufficient access to the
entity's records to assure compliance with the provisions of the Act.
(ii) Traditional Defense contractors. The DoD shall have access to
records on cost-type OT agreements with traditional Defense contractors
that provide for total Government payments in excess of $5,000,000. The
content of the access to records clause shall be in accordance with
paragraph (c) of this section. The value establishing the threshold is
the total value of the agreement including all options.
(iii) Nontraditional Defense contractors. The DoD should have access
to records on cost-type OT agreements with nontraditional Defense
contractors that provide for total Government payments in excess of
$5,000,000. The content of the access to records clause should be in
accordance with paragraph (c) of this section. The value establishing
the threshold is the total value of the agreement including all options.
(iv) DoD access below threshold. The Agreements Officer has the
discretion to determine whether to include DoD access to records when
the OT does not meet any of the requirements in (a)(2)(i) through
(a)(2)(iii) of this section. The content of that access to records
clause should be tailored to meet the particular circumstances of the
agreement.
(v) Examples of cost-type OT agreements. (A) An agreement that
requires at least one-third cost share pursuant to statute.
(B) An agreement that includes payable milestones, but provides for
adjustment of the milestone amounts based on actual costs or reports
generated from the awardee's financial or cost records.
(C) An agreement that is for a fixed-Government amount, but the
agreement provides for submittal of financial or cost records/reports to
determine whether additional effort can be accomplished for the fixed
amount.
(3) Subawardees. When a DoD access to records provision is included
in the OT agreement, the awardee shall use the criteria established in
paragraphs
[[Page 16]]
(a)(2)(i) through (a)(2)(iii) of this section to determine whether DoD
access to records clauses should be included in subawards.
(b) Exceptions--(1) Nontraditional Defense contractors--(i) The
Agreements Officers may deviate, in part or in whole, from the
application of this access to records policy for a nontraditional
Defense contractor when application of the policy would adversely impact
the government's ability to incorporate commercial technology or execute
the prototype project.
(ii) The Agreements Officer will document:
(A) What aspect of the audit policy was not applied;
(B) Why it was problematic;
(C) What means will be used to protect the Government's interest;
and
(D) Why the benefits of deviating from the policy outweigh the
potential risks.
(iii) This determination will be reviewed by the approving official
as part of the pre-award approval of the agreement and submitted to the
agency POC within 10 days of award.
(iv) The agency POC will forward all such documentation received in
any given fiscal year, to the Director, Defense Procurement by 15
October of each year.
(2) Traditional Defense contractor. (i) Any departure from this
policy for other than nontraditional Defense contractors must be
approved by the Head of the Contracting Activity prior to award and set
forth the exceptional circumstances justifying deviation.
(ii) Additionally, the justification will document:
(A) What aspect of the policy was not applied;
(B) Why it was problematic;
(C) What means will be used to protect the Government's interest;
and
(D) Why the benefits of deviating from the policy outweigh the
potential risks.
(iii) The HCA will forward documentation associated with such
waivers in any given fiscal year, to the Director, Defense Procurement
by 15 October of each year.
(3) DoD access below the threshold. When the Agreements Officer
determines that access to records is appropriate for an agreement below
the $5,000,000 threshold, the content, length and extent of access may
be mutually agreed to by the parties, without documenting reasons for
departing from the policy of this section.
(4) Flow down provisions. The awardee shall submit justification for
any exception to the DoD access to records policy to the Agreements
Officer for subawardees. The Agreements Officer will review and obtain
appropriate approval, as set forth in paragraphs (b)(1) and (b)(2) of
this section.
(c) Content of DoD access to records clause. When a DoD access to
records clause is included as part of the OT agreement, address the
following areas during the negotiation of the clause:
(1) Frequency of audits. Audits will be performed when the
Agreements Officer determines it is necessary to verify statutory cost
share or to verify amounts generated from financial or cost records that
will be used as the basis for payment or adjustment of payment.
(2) Means of accomplishing audits. (i) Business units subject to the
Single Audit Act--When the awardee or subawardee is a state government,
local government, or nonprofit organization whose Federal cost
reimbursement contracts and financial assistance agreements are subject
to the Single Audit Act (Public Law 98-502, as amended by Public Law
104-156, 110 STAT. 1396-1404), the clause must apply the provisions of
that Act for purposes of performing audits of the awardee or subawardee
under the agreement.
(ii) Business units not subject to the Single Audit Act currently
performing on procurement contracts. The clause must provide that DCAA
will perform any necessary audits if, at the time of agreement award,
the awardee or subawardee is not subject to the Single Audit Act and is
performing a procurement contract that is subject to the Cost Principles
Applicable to Commercial Organizations (48 CFR part 31.2) and/or the
Cost Accounting Standards (48 CFR part 99).
(iii) Other business units. DCAA or a qualified IPA may perform any
necessary audit of a business unit of the awardee or subawardee if, at
the time of agreement award, the business unit
[[Page 17]]
does not meet the criteria in (c)(2)(i) or (c)(2)(ii) of this section.
The clause must provide for the use of a qualified IPA if such a
business unit will not accept the agreement if the Government has access
to the business unit's records. The Agreements Officer will include a
statement in the file that the business unit is not performing on a
procurement contract subject to the Cost Principles or Cost Accounting
Standards at the time of agreement award, and will not accept the
agreement if the government has access to the business unit's records.
The Agreements Officer will also prepare a report (Part III to the
annual report submission) for the Director, Defense Procurement that
identifies, for each business unit that is permitted to use an IPA: the
business unit's name, address and the expected value of its award. When
the clause provides for use of an IPA to perform any necessary audits,
the clause must state that:
(A) The IPA will perform the audit in accordance with Generally
Accepted Government Auditing Standards (GAGAS). Electronic copies of the
standards may be accessed at www.gao.gov. Printed copies may be
purchased from the U.S. Government Printing Office (for ordering
information, call (202) 512-1800 or access the Internet Site at
www.gpo.gov).
(B) The Agreements Officers' authorized representative has the right
to examine the IPA's audit report and working papers for 3 years after
final payment or three years after issuance of the audit report,
whichever is later, unless notified otherwise by the Agreements Officer.
(C) The IPA will send copies of the audit report to the Agreements
Officer and the Assistant Inspector General (Audit Policy and Oversight)
[AIG(APO)], 400 Army Navy Drive, Suite 737, Arlington, VA 22202.
(D) The IPA will report instances of suspected fraud directly to the
DoDIG.
(E) The Government has the right to require corrective action by the
awardee or subawardee if the Agreements Officer determines (subject to
appeal under the disputes clause of the agreement) that the audit has
not been performed or has not been performed in accordance with GAGAS.
The Agreements Officer should take action promptly once the Agreements
Officer determines that the audit is not being accomplished in a timely
manner or the audit is not performed in accordance with GAGAS but
generally no later than twelve (12) months of the date requested by the
Agreements Officer. The awardee or subawardee may take corrective action
by having the IPA correct any deficiencies identified by the Agreements
Officer, having another IPA perform the audit, or electing to have the
Government perform the audit. If corrective action is not taken, the
Agreements Officer has the right to take one or more of the following
actions:
(1) Withhold or disallow a specified percentage of costs until the
audit is completed satisfactorily. The agreement should include a
specified percentage that is sufficient to enhance performance of
corrective action while also not being unfairly punitive.
(2) Suspend performance until the audit is completed satisfactorily;
and/or
(3) Terminate the agreement if the agreements officer determines
that imposition of either (c)(2)(iii)(E)(1) or (c)(2)(iii)(e)(2) of this
section is not practical.
(F) If it is found that the awardee or subawardee was performing a
procurement contract subject to Cost Principles Applicable to Commercial
Organizations (48 CFR part 31.2) and/or Cost Accounting Standards (48
CFR part 99) at the time of agreement award, the Agreements Officer, or
an authorized representative, has the right to audit records of the
awardee or subawardee to verify the actual costs or reporting
information used as the basis for payment or to verify statutorily
required cost share under the agreement, and the IPA is to be paid by
the awardee or subawardee. The cost of an audit performed in accordance
with this policy is reimbursable based on the business unit's
established accounting practices and subject to any limitations in the
agreement.
(3) Scope of audit. The Agreements Officer should coordinate with
the auditor regarding the nature of any audit envisioned.
[[Page 18]]
(4) Length and extent of access--(i) Clauses that do not provide for
use of an IPA. The clause must provide for the Agreements Officer's
authorized representative to have access to directly pertinent records
of those business units of the awardee or subawardee's performing effort
under the OT agreement, when needed to verify the actual costs or
reporting used as the basis for payment or to verify statutorily
required cost share under the agreement.
(ii) Clauses that provide for use of an IPA to perform the audits.
The clause must:
(A) Provide the Agreements Officer's authorized representative
access to the IPA's audit reports and working papers to ensure that the
IPA has performed the audit in accordance with GAGAS.
(B) State that the Government will make copies of contractor records
contained in the IPA's work papers if needed to demonstrate that the
audit was not performed in accordance with GAGAS.
(C) State that the Government has no direct access to any awardee or
subawardee records unless it is found that the awardee or subawardee was
performing a procurement contract subject to Cost Principles (48 CFR
part 31) and/or Cost Accounting Standards (48 CFR part 99) at the time
of agreement award.
(iii) Business Units subject to the Single Audit Act. The clause
must provide access to the extent authorized by the Single Audit Act.
(iv) Record Retention/Period of Access. The clause must require that
the awardee and subawardee retain, and provide access to, the records
referred to in (c)(4)(i) and (c)(4)(ii) of this section for three years
after final payment, unless notified of a shorter or longer period by
the Agreements Officer.
(5) Awardee flow down responsibilities. Agreements must require
awardees to include the necessary provisions in subawards that meet the
conditions set forth in this DoD access to records policy.
(d) DoDIG and GAO access. In accordance with statute, if an
agreement gives the Agreements Officer or another DoD component official
access to a business unit's records, the DoDIG or GAO are granted the
same access to those records.
[68 FR 27457, May 20, 2003]
Sec. 3.9 Follow-on production contracts.
(a) Authority. A competitively awarded OT agreement for a prototype
project that satisfies the condition set forth in law that requires non-
Federal parties to the OT agreement to provide at least one-third of the
costs of the prototype project may provide for the award of a follow-on
production contract to the awardee of the OT prototype agreement for a
specific number of units at specific target prices, without further
competition.
(b) Conditions. The Agreements Officer must do the following in the
award of the prototype project:
(1) Ensure non-Federal parties to the OT prototype agreement offer
at least one-third of the costs of the prototype project pursuant to
subsection (d)(1)(B)(i), 10 U.S.C. 2371 note.
(2) Use competition to select parties for participation in the OT
prototype agreement and evaluate the proposed quantity and target prices
for the follow-on production units as part of that competition.
(3) Determine the production quantity that may be procured without
further competition, by balancing of the level of the investment made in
the project by the non-Federal parties with the interest of the Federal
Government in having competition among sources in the acquisition of the
product or products prototyped under the project.
(4) Specify the production quantity and target prices in the OT
prototype agreement and stipulate in the agreement that the Contracting
Officer for the follow-on contract may award a production contract
without further competition if the awardee successfully completes the
prototype project and agrees to production quantities and prices that do
not exceed those specified in the OT prototype agreement (see part
206.001 of the Defense Federal Acquisition Regulation Supplement).
(c) Limitation. As a matter of policy, establishing target prices
for production units should only be considered when the risk of the
prototype project permits realistic production pricing
[[Page 19]]
without placing undue risks on the awardee.
(d) Documentation. (1) The Agreements Officer will need to provide
information to the Contracting Officer from the agreement and award file
that the conditions set forth in paragraph (b) of this section have been
satisfied.
(2) The information shall contain, at a minimum:
(i) The competitive procedures used;
(ii) How the production quantities and target prices were evaluated
in the competition;
(iii) The percentage of cost-share; and
(iv) The production quantities and target prices set forth in the OT
agreement.
(3) The Project Manager will provide evidence of successful
completion of the prototype project to the Contracting Officer.
[69 FR 16482, Mar. 30, 2004]
PARTS 4 8 [RESERVED]
SUBCHAPTER B [RESERVED]
[[Page 20]]
SUBCHAPTER C_DoD GRANT AND AGREEMENT REGULATIONS
PART 21_DoD GRANTS AND AGREEMENTS_GENERAL MATTERS--Table of Contents
Subpart A_Introduction
Sec.
21.100 What are the purposes of this part?
Subpart B_Defense Grant and Agreement Regulatory System
21.200 What is the Defense Grant and Agreement Regulatory System
(DGARS)?
21.205 What types of instruments are covered by the DGARS?
21.210 What are the purposes of the DGARS?
21.215 Who is responsible for the DGARS?
21.220 What publications are in the DGARS?
Subpart C_The DoD Grant and Agreement Regulations
21.300 What instruments are subject to the DoD Grant and Agreement
Regulations (DoDGARs)?
21.305 What is the purpose of the DoDGARs?
21.310 Who ensures DoD Component compliance with the DoDGARs?
21.315 May DoD Components issue supplemental policies and procedures to
implement the DoDGARs?
21.320 Are there areas in which DoD Components must establish policies
and procedures to implement the DoDGARs?
21.325 Do acquisition regulations also apply to DoD grants and
agreements?
21.330 How are the DoDGARs published and maintained?
21.335 Who can authorize deviations from the DoDGARs?
21.340 What are the procedures for requesting and documenting
deviations?
Subpart D_Authorities and Responsibilities for Making and Administering
Assistance Awards
21.400 To what instruments does this subpart apply?
21.405 What is the purpose of this subpart?
21.410 Must a DoD Component have statutory authority to make an
assistance award?
21.415 Must the statutory authority specifically mention the use of
grants or other assistance instruments?
21.420 Under what types of statutory authorities do DoD Components award
assistance instruments?
21.425 How does a DoD Component's authority flow to awarding and
administering activities?
21.430 What are the responsibilities of the head of the awarding or
administering activity?
21.435 Must DoD Components formally select and appoint grants officers
and agreements officers?
21.440 What are the standards for selecting and appointing grants
officers and agreements officers?
21.445 What are the requirements for a grants officer's or agreements
officer's statement of appointment?
21.450 What are the requirements for a termination of a grants officer's
or agreements officer's appointment?
21.455 Who can sign, administer, or terminate assistance instruments?
21.460 What is the extent of grants officers' and agreements officers'
authority?
21.465 What are grants officers' and agreements officers'
responsibilities?
Subpart E_Information Reporting on Awards Subject to 31 U.S.C. Chapter
61
21.500 What is the purpose of this subpart?
21.505 What is the Catalog of Federal Domestic Assistance (CFDA)?
21.510 Why does the DoD report information to the CFDA?
21.515 Who reports the information for the CFDA?
21.520 What are the purposes of the Defense Assistance Awards Data
System (DAADS)?
21.525 Who issues policy guidance for the DAADS?
21.530 What are the responsibilities of the DAADS Administrator?
21.535 Do DoD Components have central points for collecting DAADS data?
21.540 What are the duties of the DoD Components' central points for the
DAADS?
21.545 Must DoD Components report every obligation to the DAADS?
21.550 Must DoD Components relate reported actions to listings in the
CFDA?
21.555 When and how must DoD Components report to the DAADS?
21.560 Must DoD Components assign numbers uniformly to awards?
21.565 Must DoD Components' electronic systems accept Data Universal
Numbering System (DUNS) numbers?
Subpart F_Definitions
21.605 Acquisition.
21.610 Agreements officer.
[[Page 21]]
21.615 Assistance.
21.620 Award.
21.625 Contract.
21.630 Contracting activity.
21.635 Contracting officer.
21.640 Cooperative agreement.
21.645 Deviation.
21.650 DoD Components.
21.655 Grant.
21.660 Grants officer.
21.665 Nonprocurement instrument.
21.670 Procurement contract.
21.675 Recipient.
21.680 Technology investment agreements.
Appendix A to Part 21--Instruments to Which DoDGARs Portions Apply
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Source: 68 FR 47153, Aug. 7, 2003, unless otherwise noted.
Subpart A_Introduction
Sec. 21.100 What are the purposes of this part?
This part of the DoD Grant and Agreement Regulations:
(a) Provides general information about the Defense Grant and
Agreement Regulatory System (DGARS).
(b) Sets forth general policies and procedures related to DoD
Components' overall management of functions related to assistance and
certain other nonprocurement instruments subject to the DGARS (see Sec.
21.205(b)).
Subpart B_Defense Grant and Agreement Regulatory System
Sec. 21.200 What is the Defense Grant and Agreement
Regulatory System (DGARS)?
The Defense Grant and Agreement Regulatory System (DGARS) is the
system of regulatory policies and procedures for the award and
administration of DoD Components' assistance and other nonprocurement
awards. DoD Directive 3210.6 \1\ established the DGARS.
---------------------------------------------------------------------------
\1\ Electronic copies may be obtained at the Washington Headquarters
Services Internet site http://www.dtic.mil/whs/directives. Paper copies
may be obtained, at cost, from the National Technical Information
Service, 5285 Port Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------
Sec. 21.205 What types of instruments are covered by the DGARS?
The Defense Grant and Agreement Regulatory System (DGARS) applies to
the following types of funding instruments awarded by DoD Components:
(a) All grants, cooperative agreements, and technology investment
agreements.
(b) Other nonprocurement instruments, as needed to implement
statutes, Executive orders, or other Federal Governmentwide rules that
apply to those other nonprocurement instruments, as well as to grants
and cooperative agreements.
Sec. 21.210 What are the purposes of the DGARS?
The purposes of the DGARS are to provide uniform policies and
procedures for DoD Components' awards, in order to meet DoD needs for:
(a) Efficient program execution, effective program oversight, and
proper stewardship of Federal funds.
(b) Compliance with relevant statutes; Executive orders; and
applicable guidance, such as Office of Management and Budget (OMB)
circulars.
(c) Collection from DoD Components, retention, and dissemination of
management and fiscal data related to awards.
Sec. 21.215 Who is responsible for the DGARS?
The Assistant Secretary of Defense for Research and Engineering
(ASD(R&E)), or his or her designee, develops and implements DGARS
policies and procedures. He or she does so by issuing and maintaining
the DoD publications that comprise the DGARS.
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51240, Aug. 19, 2020]
Sec. 21.220 What publications are in the DGARS?
The DoD Grant and Agreement Regulations comprise the principal
element of the DGARS. The ASD(R&E) also may publish DGARS policies and
procedures in DoD instructions and other DoD publications, as
appropriate.
[85 FR 51240, Aug. 19, 2020]
[[Page 22]]
Subpart C_The DoD Grant and Agreement Regulations
Sec. 21.300 What instruments are subject to the DoD Grant
and Agreement Regulations (DoDGARs)?
(a) The types of instruments that are subject to the DoDGARs vary
from one portion of the DoDGARs to another. The types of instruments
include grants, cooperative agreements, and technology investment
agreements. Some portions of the DoDGARs apply to other types of
assistance or nonprocurement instruments. The term ``awards,'' as
defined in subpart F of this part, is used in this part to refer
collectively to all of the types of instruments that are subject to one
or more portions of the DoDGARs.
(b) Note that each portion of the DoDGARs identifies the types of
instruments to which it applies.
(c) For convenience, the table in Appendix A to this part provides
an overview of the applicability of the various portions of the DoDGARs.
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51240, Aug. 19, 2020]
Sec. 21.305 What is the purpose of the DoDGARs?
The DoD Grant and Agreement Regulations provide uniform policies and
procedures for the award and administration of DoD Components' awards.
The DoDGARs are the primary DoD regulations for achieving the DGARS
purposes described in Sec. 21.210.
Sec. 21.310 Who ensures DoD Component compliance with the DoDGARs?
The Head of each DoD Component that makes or administers awards, or
his or her designee, is responsible for ensuring compliance with the
DoDGARs within that DoD Component.
Sec. 21.315 May DoD Components issue supplemental policies and procedures
to implement the DoDGARs?
Yes, Heads of DoD Components or their designees may issue
regulations, procedures, or instructions to implement the DGARS or
supplement the DoDGARs to satisfy needs that are specific to the DoD
Component, as long as the regulations, procedures, or instructions do
not impose additional costs or administrative burdens on recipients or
potential recipients.
Sec. 21.320 Are there areas in which DoD Components must establish policies
and procedures to implement the DoDGARs?
Yes, Heads of DoD Components or their designees must establish
policies and procedures in areas where uniform policies and procedures
throughout the DoD Component are required, such as for:
(a) Requesting class deviations from the DoDGARs (see Sec. Sec.
21.335(b) and 21.340(a)) or exemptions from the provisions of 31 U.S.C.
6301 through 6308, that govern the appropriate use of contracts, grants,
and cooperative agreements (see 32 CFR 22.220).
(b) Designating one or more Grant Appeal Authorities to resolve
claims, disputes, and appeals (see 32 CFR 22.815).
(c) Reporting data on assistance awards and programs, as required by
31 U.S.C. chapter 61 (see subpart E of this part).
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51240, Aug. 19, 2020]
Sec. 21.325 Do acquisition regulations also apply to DoD grants
and agreements?
Unless the DoDGARs specify that they apply, policies and procedures
in the following acquisition regulations that apply to procurement
contracts do not apply to grants, cooperative agreements, technology
investment agreements, or to other assistance or nonprocurement awards:
(a) The Federal Acquisition Regulation (FAR)(48 CFR parts 1-53).
(b) The Defense Federal Acquisition Regulation Supplement (DFARS)(48
CFR parts 201-270).
(c) DoD Component supplements to the FAR and DFARS.
Sec. 21.330 How are the DoDGARs published and maintained?
(a) The DoD publishes the DoDGARs in the Code of Federal Regulations
(CFR).
(b) The location of the DoDGARs in the CFR currently is in
transition. The regulations are moving from chapter I,
[[Page 23]]
subchapter C, title 32, to a new location in chapter XI, title 2 of the
CFR. During the transition, there will be some parts of the DoDGARs in
each of the two titles.
(c) The DoD publishes updates to the DoDGARs in the Federal Register
for public comment.
(d) A standing working group recommends revisions to the DoDGARs to
the ASD(R&E). The ASD(R&E), Director of Defense Procurement, and each
Military Department must be represented on the working group. Other DoD
Components that make or administer awards may also nominate
representatives. The working group meets when necessary.
[85 FR 51240, Aug. 19, 2020]
Sec. 21.335 Who can authorize deviations from the DoDGARs?
(a) The Head of the DoD Component or his or her designee may
authorize individual deviations from the DoDGARs, which are deviations
that affect only one award, if the deviations are not prohibited by
statute, executive order or regulation.
(b) The ASD(R&E) or his or her designee must approve in advance any
deviation for a class of awards. Note that, as described at 2 CFR
1126.3, OMB concurrence also is required for some class deviations from
requirements included in awards to institutions of higher education,
nonprofit organizations, States, local governments, and Indian tribes.
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51240, Aug. 19, 2020]
Sec. 21.340 What are the procedures for requesting
and documenting deviations?
(a) DoD Components must submit copies of justifications and agency
approvals for individual deviations and written requests for class
deviations to: Principal Deputy Assistant Secretary of Defense for
Research and Engineering, ATTN: Basic Research, 3030 Defense Pentagon,
Washington, DC 20301-3030.
(b) Grants officers and agreements officers must maintain copies of
requests and approvals for individual and class deviations in award
files.
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51240, Aug. 19, 2020]
Subpart D_Authorities and Responsibilities for Making and Administering
Assistance Awards
Sec. 21.400 To what instruments does this subpart apply?
This subpart applies to grants, cooperative agreements, and
technology investment agreements, which are legal instruments used to
reflect assistance relationships between the United States Government
and recipients.
Sec. 21.405 What is the purpose of this subpart?
This subpart describes the sources and flow of authority to make or
administer assistance awards, and assigns the broad responsibilities
associated with DoD Components' use of those instruments.
Sec. 21.410 Must a DoD Component have statutory authority to make
an assistance award?
Yes, the use of an assistance instrument to carry out a program
requires authorizing legislation. That is unlike the use of a
procurement contract, for which Federal agencies have inherent,
Constitutional authority.
Sec. 21.415 Must the statutory authority specifically mention the use
of grants or other assistance instruments?
No, the statutory authority described in Sec. 21.410 need not
specifically say that the purpose of the program is assistance or
mention the use of any type of assistance instrument. However, the
intent of the statute must support a judgment that the use of an
assistance instrument is appropriate. For example, a DoD Component may
judge that the principal purpose of a program for which it has
authorizing legislation is assistance, rather than acquisition. The DoD
Component would properly use an assistance instrument to carry out that
program, in accordance with 31 U.S.C. chapter 63.
[[Page 24]]
Sec. 21.420 Under what types of statutory authorities do DoD Components
award assistance instruments?
DoD Components may use assistance instruments under a number of
statutory authorities that fall into three categories:
(a) Authorities that statutes provide to the Secretary of Defense.
These authorities generally are delegated by the Secretary of Defense to
Heads of DoD Components, usually through DoD directives, instructions,
or policy memoranda that are not part of the Defense Grant and Agreement
Regulatory System. Examples of statutory authorities in this category
are:
(1) Authority under 10 U.S.C. 2391 to award grants or cooperative
agreements to help State and local governments alleviate serious
economic impacts of defense program changes (e.g., base openings and
closings, contract changes, and personnel reductions and increases).
(2) Authority under 10 U.S.C. 2413 to enter into cooperative
agreements with entities that furnish procurement technical assistance
to businesses.
(b) Authorities that statutes may provide directly to Heads of DoD
Components. When a statute authorizes the Head of a DoD Component to use
a funding instrument to carry out a program with a principal purpose of
assistance, use of that authority requires no delegation by the
Secretary of Defense. For example, 10 U.S.C. 2358 authorizes the
Secretaries of the Military Departments, in addition to the Secretary of
Defense, to perform research and development projects through grants and
cooperative agreements. Similarly, 10 U.S.C. 2371 provides authority for
the Secretaries of the Military Departments and Secretary of Defense to
carry out basic, applied, or advanced research projects using assistance
instruments other than grants and cooperative agreements. A Military
Department's use of the authority of 10 U.S.C. 2358 or 10 U.S.C. 2371
therefore requires no delegation by the Secretary of Defense.
(c) Authorities that arise indirectly as the result of statute. For
example, authority to use an assistance instrument may result from:
(1) A federal statute authorizing a program that is consistent with
an assistance relationship (i.e., the support or stimulation of a public
purpose, rather than the acquisition of a good or service for the direct
benefit of the Department of Defense). In accordance with 31 U.S.C.
chapter 63, such a program would appropriately be carried out through
the use of grants or cooperative agreements. Depending upon the nature
of the program (e.g., research) and whether the program statute includes
authority for any specific types of instruments, there also may be
authority to use other assistance instruments.
(2) Exemptions requested by the Department of Defense and granted by
the Office of Management and Budget under 31 U.S.C. 6307, as described
in 32 CFR 22.220.
Sec. 21.425 How does a DoD Component's authority flow to awarding
and administering activities?
The Head of a DoD Component, or his or her designee, may delegate to
the heads of contracting activities (HCAs) within the Component, that
Component's authority to make and administer awards, to appoint grants
officers and agreements officers (see Sec. Sec. 21.435 through 21.450),
and to broadly manage the DoD Component's functions related to
assistance instruments. The HCA is the same official (or officials)
designated as the head of the contracting activity for procurement
contracts, as defined at 48 CFR 2.101. The intent is that overall
management responsibilities for a DoD Component's functions related to
nonprocurement instruments be assigned only to officials that have
similar responsibilities for procurement contracts.
Sec. 21.430 What are the responsibilities of the head of the awarding
or administering activity?
When designated by the Head of the DoD Component or his or her
designee (see 32 CFR 21.425), the head of the awarding or administering
activity (i.e., the HCA) is responsible for the awards made by or
assigned to that activity. He or she must supervise and establish
internal policies and procedures for that activity's awards.
[[Page 25]]
Sec. 21.435 Must DoD Components formally select and appoint grants officers
and agreements officers?
Yes, each DoD Component that awards grants or enters into
cooperative agreements must have a formal process (see Sec. 21.425) for
selecting and appointing grants officers and for terminating their
appointments. Similarly, each DoD Component that awards or administers
technology investment agreements must have a process for selecting and
appointing agreements officers and for terminating their appointments.
Sec. 21.440 What are the standards for selecting and appointing grants
officers and agreements officers?
In selecting grants officers and agreements officers, DoD Components
must use the following minimum standards:
(a) In selecting a grants officer, the appointing official must
judge whether the candidate has the necessary experience, training,
education, business acumen, judgment, and knowledge of assistance
instruments and contracts to function effectively as a grants officer.
The appointing official also must take those attributes of the candidate
into account when deciding the complexity and dollar value of the grants
and cooperative agreements to be assigned.
(b) In selecting an agreements officer, the appointing official must
consider all of the same factors as in paragraph (a) of this section. In
addition, the appointing official must consider the candidate's ability
to function in the less structured environment of technology investment
agreements, where the rules provide more latitude and the individual
must have a greater capacity for exercising judgment. Agreements
officers therefore should be individuals who have demonstrated expertise
in executing complex assistance and acquisition instruments.
Sec. 21.445 What are the requirements for a grants officer's
or agreements officer's statement of appointment?
A statement of a grants officer's or agreements officer's
appointment:
(a) Must be in writing.
(b) Must clearly state the limits of the individual's authority,
other than limits contained in applicable laws or regulations.
Information on those limits of a grants officer's or agreements
officer's authority must be readily available to the public and agency
personnel.
(c) May, if the individual is a contracting officer, be incorporated
into his or her statement of appointment as a contracting officer (i.e.,
there does not need to be a separate written statement of appointment
for assistance instruments).
Sec. 21.450 What are the requirements for a termination of a grants
officer's or agreements officer's appointment?
A termination of a grants officer's or agreements officer's
authority:
(a) Must be in writing, unless the written statement of appointment
provides for automatic termination.
(b) May not be retroactive.
(c) May be integrated into a written termination of the individual's
appointment as a contracting officer, as appropriate.
Sec. 21.455 Who can sign, administer, or terminate assistance instruments?
Only grants officers are authorized to sign, administer, or
terminate grants or cooperative agreements (other than technology
investment agreements) on behalf of the Department of Defense.
Similarly, only agreements officers may sign, administer, or terminate
technology investment agreements.
Sec. 21.460 What is the extent of grants officers'
and agreements officers' authority?
Grants officers and agreements officers may bind the Government only
to the extent of the authority delegated to them in their written
statements of appointment (see Sec. 21.445).
Sec. 21.465 What are grants officers' and agreements
officers' responsibilities?
Grants officers and agreements officers should be allowed wide
latitude to exercise judgment in performing their responsibilities,
which are to ensure that:
(a) Individual awards are used effectively in the execution of DoD
programs, and are made and administered
[[Page 26]]
in accordance with applicable laws, Executive orders, regulations, and
DoD policies.
(b) Sufficient funds are available for obligation.
(c) Recipients of awards receive impartial, fair, and equitable
treatment.
Subpart E_Information Reporting on Awards Subject to 31 U.S.C. Chapter
61
Sec. 21.500 What is the purpose of this subpart?
This subpart prescribes policies and procedures for compiling and
reporting data related to DoD awards and programs that are subject to
information reporting requirements of 31 U.S.C. chapter 61. That chapter
of the U.S. Code requires the Office of Management and Budget to
maintain a Governmentwide information system to collect data on Federal
agencies' domestic assistance awards and programs.
Sec. 21.505 What is the Catalog of Federal Domestic Assistance (CFDA)?
The Catalog of Federal Domestic Assistance (CFDA) is a
Governmentwide compilation of information about assistance programs. It
covers all assistance programs and activities, regardless of the number
of awards made under the program, the total dollar value of assistance
provided, or the duration. In addition to programs using grants and
agreements, covered programs include those providing assistance in other
forms, such as payments in lieu of taxes or indirect assistance
resulting from Federal operations.
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51240, Aug. 19, 2020]
Sec. 21.510 Why does the DoD report information to the CFDA?
The Federal Program Information Act (31 U.S.C. 6101 through 6106),
as implemented through OMB guidance at 2 CFR 200.202 requires the
Department of Defense and other Federal agencies to provide certain
information about their assistance programs to the OMB and the General
Services Administration (GSA). The GSA makes this information available
to the public by publishing it in the Catalog of Federal Domestic
Assistance (CFDA).
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51240, Aug. 19, 2020]
Sec. 21.515 Who reports the information for the CFDA?
(a) Each DoD Component that provides financial assistance must:
(1) Report to the Defense Assistance Awards Data System (DAADS)
Administrator all new programs and changes as they occur or as the DoD
Component submits its annual updates to existing CFDA information. DAADS
is further described in Sec. Sec. 21.520 through 21.555.
(2) Identify to the DAADS Administrator a point-of-contact who will
be responsible for reporting the program information and for responding
to inquiries related to it.
(b) The DAADS Administrator is the Department of Defense's single
liaison with whom DoD Components that collect and compile such program
information work to report the information to OMB and GSA.
[85 FR 51240, Aug. 19, 2020]
Sec. 21.520 What are the purposes of the Defense Assistance Awards
Data System (DAADS)?
Data from the Defense Assistance Awards Data System (DAADS) are used
to provide:
(a) DoD inputs to meet statutory requirements for Federal
Governmentwide reporting of data related to obligations of funds by
assistance instrument.
(b) A basis for meeting Governmentwide requirements to report to
USASpending.gov (or any successor site designated by OMB) and for
preparing other recurring and special reports to the President, the
Congress, the Government Accountability Office, and the public.
(c) Information to support policy formulation and implementation and
to meet management oversight requirements related to the use of awards.
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51240, Aug. 19, 2020]
[[Page 27]]
Sec. 21.525 Who issues policy guidance for the DAADS?
The Principal Deputy Assistant Secretary of Defense for Research and
Engineering (PDASD(R&E)), or his or her designee, issues necessary
policy guidance for the Defense Assistance Awards Data System.
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51241, Aug. 19, 2020]
Sec. 21.530 What are the responsibilities of the DAADS Administrator?
The DAADS Administrator, consistent with guidance issued by the
PDASD(R&E):
(a) Processes DAADS information twice a month and prepares recurring
and special reports using such information.
(b) Prepares, updates, and disseminates instructions for reporting
information to the DAADS. The instructions are to specify procedures,
formats, and editing processes to be used by DoD Components, including
record layout, submission deadlines, media, methods of submission, and
error correction schedules.
[85 FR 51241, Aug. 19, 2020]
Sec. 21.535 Do DoD Components have central points for collecting DAADS data?
Each DoD Component must have a central point for collecting DAADS
information from contracting activities within that DoD Component. The
central points are as follows:
(a) For the Army: As directed by the U.S. Army Contracting Support
Agency.
(b) For the Navy: As directed by the Office of Naval Research.
(c) For the Air Force: As directed by the Office of the Secretary of
the Air Force, Acquisition Contracting Policy and Implementation
Division (SAF/AQCP).
(d) For the Office of the Secretary of Defense, Defense Agencies,
and DoD Field Activities: Each Defense Agency must identify a central
point for collecting and reporting DAADS information to the DAADS
administrator. The DAADS Administrator serves as the central point for
offices and activities within the Office of the Secretary of Defense and
for DoD Field Activities.
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51241, Aug. 19, 2020]
Sec. 21.540 What are the duties of the DoD Components' central points
for the DAADS?
The office that serves, in accordance with Sec. 21.535, as the
central point for collecting DAADS information from contracting
activities within each DoD Component must:
(a) Establish internal procedures to ensure reporting by contracting
activities that make awards subject to 31 U.S.C. chapter 61.
(b) Collect information required by the DAADS User Guide from those
contracting activities, and report it to the DAADS Administrator, in
accordance with Sec. Sec. 21.545 through 21.555. Note that the DAADS
User Guide, which a registered DAADS user may find at the Resources
section of the DAADS website (https://www.dmdc.osd.mil/daads/), provides
further information about required data elements and instructions for
submitting data.
(c) Submit to the DAADS Administrator any recommended changes to the
DAADS.
[68 FR 47153, Aug. 7, 2003, as amended at 85 FR 51241, Aug. 19, 2020]
Sec. 21.545 Must DoD Components report every obligation to the DAADS?
Yes, DoD Components' central points must collect and report the data
required by the DD Form 2566 for each individual action that involves
the obligation or deobligation of Federal funds for an award that is
subject to 31 U.S.C. chapter 61.
Sec. 21.550 Must DoD Components relate reported actions to listings
in the CFDA?
Yes, DoD Components' central points must report each action as an
obligation or deobligation under a specific programmatic listing in the
Catalog of Federal Domestic Assistance (CFDA, see Sec. 21.505). The
programmatic listing to be shown is the one that provided the funds
being obligated or deobligated. For example, if a grants officer or
agreements officer in one
[[Page 28]]
DoD Component obligates appropriations of a second DoD Component's
programmatic listing, the grants officer or agreements officer must show
the CFDA programmatic listing of the second DoD Component on the DD Form
2566.
Sec. 21.555 When and how must DoD Components report to the DAADS?
DoD Components must report:
(a) Each obligating or deobligating action no later than 15 days
after the date of the obligation or deobligation. Doing so enables DAADS
to comply with the deadline in the Federal Funding Accountability and
Transparency Act of 2006 (Pub. L. 109-282; 31 U.S.C. 6101 note) to
report to the Governmentwide data system (USASpending.gov) established
to implement requirements of that Act.
(b) Using a method and in a format permitted either by the DAADS
User Guide described in Sec. 21.540(b) or by agreement with the DAADS
Administrator.
[85 FR 51241, Aug. 19, 2020]
Sec. 21.560 Must DoD Components assign numbers uniformly to awards?
Yes, DoD Components must assign identifying numbers to all awards
subject to this subpart, including grants, cooperative agreements, and
technology investment agreements. The uniform numbering system parallels
the procurement instrument identification (PII) numbering system
specified in 48 CFR 204.70 (in the ``Defense Federal Acquisition
Regulation Supplement''), as follows:
(a) The first six alphanumeric characters of the assigned number
must be identical to those specified by 48 CFR 204.7003(a)(1) to
identify the DoD Component and contracting activity.
(b) The seventh and eighth positions must be the last two digits of
the fiscal year in which the number is assigned to the grant,
cooperative agreement, or other nonprocurement instrument.
(c) The 9th position must be a number:
(1) ``1'' for grants.
(2) ``2'' for cooperative agreements, including technology
investment agreements that are cooperative agreements (see Appendix B to
32 CFR part 37).
(3) ``3'' for other nonprocurement instruments, including technology
investment agreements that are not cooperative agreements.
(d) The 10th through 13th positions must be the serial number of the
instrument. DoD Components and contracting activities need not follow
any specific pattern in assigning these numbers and may create multiple
series of letters and numbers to meet internal needs for distinguishing
between various sets of awards.
Sec. 21.565 Must DoD Components' electronic systems accept Data Universal
Numbering System (DUNS) numbers?
The DoD Components must comply with paragraph 5.e of the Office of
Management and Budget (OMB) policy directive entitled, ``Requirement for
a DUNS number in Applications for Federal Grants and Cooperative
Agreements.'' \2\ Paragraph 5.e requires electronic systems that handle
information about grants and cooperative agreements (which, for the DoD,
include Technology Investment Agreements) to accept DUNS numbers. Each
DoD Component that awards or administers grants or cooperative
agreements must ensure that DUNS numbers are accepted by each such
system for which the DoD Component controls the system specifications.
If the specifications of such a system are subject to another
organization's control and the system can not accept DUNS numbers, the
DoD Component must alert that organization to the OMB policy directive's
requirement for use of DUNS numbers with a copy to: Director for Basic
Research, OASD(R&E), 3040 Defense Pentagon, Washington, DC 20301-3040.
---------------------------------------------------------------------------
\2\ This OMB policy directive is available at the Internet site
http://www.whitehouse.gov/ omb/grants/ grants_docs.html.
[72 FR 34986, June 26, 2007, as amended at 85 FR 51241, Aug. 19, 2020]
Subpart F_Definitions
Sec. 21.605 Acquisition.
The acquiring (by purchase, lease, or barter) of property or
services for the
[[Page 29]]
direct benefit or use of the United States Government (see more detailed
definition at 48 CFR 2.101). In accordance with 31 U.S.C. 6303,
procurement contracts are the appropriate legal instruments for
acquiring such property or services.
Sec. 21.610 Agreements officer.
An official with the authority to enter into, administer, and/or
terminate technology investment agreements.
Sec. 21.615 Assistance.
The transfer of a thing of value to a recipient to carry out a
public purpose of support or stimulation authorized by a law of the
United States (see 31 U.S.C. 6101(3)). Grants, cooperative agreements,
and technology investment agreements are examples of legal instruments
used to provide assistance.
Sec. 21.620 Award.
A grant, cooperative agreement, technology investment agreement, or
other nonprocurement instrument subject to one or more parts of the DoD
Grant and Agreement Regulations (see appendix A to this part).
Sec. 21.625 Contract.
See the definition for procurement contract in this subpart.
Sec. 21.630 Contracting activity.
An activity to which the Head of a DoD Component has delegated broad
authority regarding acquisition functions, pursuant to 48 CFR 1.601.
Sec. 21.635 Contracting officer.
A person with the authority to enter into, administer, and/or
terminate contracts and make related determinations and findings. A more
detailed definition of the term appears at 48 CFR 2.101.
Sec. 21.640 Cooperative agreement.
A legal instrument which, consistent with 31 U.S.C. 6305, is used to
enter into the same kind of relationship as a grant (see definition
``grant''), except that substantial involvement is expected between the
Department of Defense and the recipient when carrying out the activity
contemplated by the cooperative agreement. The term does not include
``cooperative research and development agreements'' as defined in 15
U.S.C. 3710a.
Sec. 21.645 Deviation.
The issuance or use of a policy or procedure that is inconsistent
with the DoDGARs.
Sec. 21.650 DoD Components.
The Office of the Secretary of Defense, the Military Departments,
the Defense Agencies, and DoD Field Activities.
Sec. 21.655 Grant.
A legal instrument which, consistent with 31 U.S.C. 6304, is used to
enter into a relationship:
(a) Of which the principal purpose is to transfer a thing of value
to the recipient to carry out a public purpose of support or stimulation
authorized by a law of the United States, rather than to acquire
property or services for the Department of Defense's direct benefit or
use.
(b) In which substantial involvement is not expected between the
Department of Defense and the recipient when carrying out the activity
contemplated by the grant.
Sec. 21.660 Grants officer.
An official with the authority to enter into, administer, and/or
terminate grants or cooperative agreements.
Sec. 21.665 Nonprocurement instrument.
A legal instrument other than a procurement contract. Examples
include instruments of financial assistance, such as grants or
cooperative agreements, and those of technical assistance, which provide
services in lieu of money.
Sec. 21.670 Procurement contract.
A legal instrument which, consistent with 31 U.S.C. 6303, reflects a
relationship between the Federal Government and a State, a local
government, or other recipient when the principal purpose of the
instrument is to acquire property or services for the direct benefit or
use of the Federal Government.
[[Page 30]]
See the more detailed definition for contract at 48 CFR 2.101.
Sec. 21.675 Recipient.
An organization or other entity receiving an award from a DoD
Component.
Sec. 21.680 Technology investment agreements.
A special class of assistance instruments used to increase
involvement of commercial firms in defense research programs and for
other purposes related to integrating the commercial and defense sectors
of the nation's technology and industrial base. Technology investment
agreements include one kind of cooperative agreement with provisions
tailored for involving commercial firms, as well as one kind of other
assistance transaction. Technology investment agreements are described
more fully in 32 CFR part 37.
Sec. Appendix A to Part 21--Instruments to Which DoDGARs Portions Apply
I. For each DoDGARs part that DoD already has adopted in chapter XI
of title 2 of the Code of Federal Regulations (CFR), the following table
summarizes the general subject area that the part addresses and its
applicability. All of the DoDGARs ultimately will be located in chapter
XI of 2 CFR.
------------------------------------------------------------------------
Which addresses . .
DoDGARs . . . . Applies to . . .
------------------------------------------------------------------------
Part 1104................... DoD's interim grants and
implementation of cooperative
the OMB guidance in agreements other
2 CFR part 200. than TIAs.
Part 1108 (2 CFR part 1108). Definitions of terms terms used
throughout the
DoDGARs in chapter
XI of 2 CFR other
than the portion
containing
regulations
implementing
specific national
policy requirements
that provide their
own definitions of
terms.
Part 1120 (2 CFR part 1120). Award format........ grants and
cooperative
agreements, other
than TIAs.
Part 1122 (2 CFR part 1122). National policy grants and
requirements cooperative
general award terms agreements other
and conditions. than TIAs. Portions
of this part apply
to TIAs, but only
as 32 CFR part 37
refers to them and
makes them apply.
Part 1125 (2 CFR part 1125). Governmentwide nonprocurement
debarment and generally,
suspension including grants,
requirements. cooperative
agreements, TIAs,
and any other
instruments that
are ``covered
transactions''
under OMB guidance
in 2 CFR 180.210
and 180.215, as
implemented by 2
CFR part 1125,
except acquisition
transactions to
carry out prototype
projects (see 2 CFR
1125.20).
Parts 1126, 1128, 1130, Administrative cost-type grants and
1132, 1134, 1136, and 1138 Requirements Terms cooperative
(subchapter D of 2 CFR and Conditions for agreements other
chapter XI). Cost-type Awards to than TIAs. Portions
Nonprofit and of this subchapter
Governmental apply to TIAs, but
Entities. only as 32 CFR part
37 refers to them
and makes them
apply.
------------------------------------------------------------------------
II. For each DoDGARs part that will remain in subchapter C of
chapter I of title 32 of the CFR, pending completion of the DoDGARs
updating needed to fully implement OMB guidance in 2 CFR part 200 and
for other purposes, the following table summarizes the general subject
area that the part addresses and its applicability. All of the
substantive content of these DoDGARs parts ultimately will be located in
new parts in chapter XI of 2 CFR.
------------------------------------------------------------------------
which addresses . .
DoDGARs . . . . applies to . . .
------------------------------------------------------------------------
Part 21 (32 CFR part 21), The Defense Grant ``awards,'' which
all but subparts D and E. and Agreement are grants,
Regulatory System cooperative
and the DoD Grant agreements,
and Agreement technology
Regulations. investment
agreements (TIAs),
and other
nonprocurement
instruments subject
to one or more
parts of the
DoDGARs.
Part 21 (32 CFR part 21), Authorities and grants, cooperative
subpart D. responsibilities agreements, and
for assistance TIAs.
award and
administration.
Part 21 (32 CFR part 21), DoD Components' grants, cooperative
subpart E. information agreements, TIAs,
reporting and other
requirements. nonprocurement
instruments subject
to reporting
requirements in 31
U.S.C. chapter 61.
Part 22 (32 CFR part 22).... DoD grants officers' grants and
responsibilities cooperative
for award and agreements other
administration of than TIAs. Portions
grants and of this part apply
cooperative to TIAs, but only
agreements. as 32 CFR part 37
refers to them and
makes them apply.
[[Page 31]]
Part 26 (32 CFR part 26).... Governmentwide drug- grants, cooperative
free workplace agreements and
requirements. other financial
assistance
instruments,
including TIAs,
that are included
in the definition
of ``award'' at 32
CFR 26.605.
Part 28 (32 CFR part 28).... Governmentwide grants, cooperative
restrictions on agreements and
lobbying. other financial
assistance
instruments,
including TIAs,
that are included
in the definitions
of ``Federal
grant'' and
``Federal
cooperative
agreement'' at 32
CFR 28.105.
Part 34 (32 CFR part 34).... Administrative grants and
requirements for cooperative
grants and agreements other
agreements with for- than TIAs
profit (``award,'' as
organizations. defined in 32 CFR
34.2). Portions of
this part apply to
TIAs, but only as
32 CFR part 37
refers to them and
makes them apply.
Part 37 (32 CFR part 37).... Agreements officers' TIAs. Note that this
responsibilities part refers to
for award and other portions of
administration of DoDGARs that apply
TIAs. to TIAs.
------------------------------------------------------------------------
[85 FR 51241, Aug. 19, 2020]
PART 22_DoD GRANTS AND AGREEMENTS_AWARD AND ADMINISTRATION--Table of Contents
Subpart A_General
Sec.
22.100 Purpose.
22.105 Definitions.
Subpart B_Selecting the Appropriate Instrument
22.200 Purpose.
22.205 Distinguishing assistance from procurement.
22.210 Authority for providing assistance.
22.215 Distinguishing grants and cooperative agreements.
22.220 Exemptions.
Subpart C_Competition
22.300 Purpose.
22.305 General policy and requirement for competition.
22.310 Statutes concerning certain research, development, and facilities
construction grants.
22.315 Merit-based, competitive procedures.
22.320 Special competitions.
Subpart D_Recipient Qualification Matters_General Policies and
Procedures
22.400 Purpose.
22.405 Policy.
22.410 Grants officers' responsibilities.
22.415 Standards.
22.420 Pre-award procedures.
Subpart E_National Policy Matters
22.505 Purpose.
22.510 Certifications, representations, and assurances.
22.515 Provisions of annual appropriations acts.
22.520 Campus access for military recruiting and Reserve Officer
Training Corps (ROTC).
22.525 Paperwork Reduction Act.
22.530 Metric system of measurement.
Subpart F_Award
22.600 Purpose.
22.605 Grants officers' responsibilities.
Subpart G_Field Administration
22.700 Purpose.
22.705 Policy.
22.710 Assignment of grants administration offices.
22.715 Grants administration office functions.
Subpart H_Post-Award Administration
22.800 Purpose and relation to other parts.
22.805 Post-award requirements in other parts.
22.810 Payments.
22.815 Claims, disputes, and appeals.
22.820 Debt collection.
22.825 Closeout audits.
Appendix A to Part 22--Proposal Provision for Required Certification.
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Source: 63 FR 12164, Mar. 12, 1998, unless otherwise noted.
Subpart A_General
Sec. 22.100 Purpose.
This part outlines grants officers' and DoD Components'
responsibilities
[[Page 32]]
related to the award and administration of grants and cooperative
agreements.
[85 FR 51242, Aug. 19, 2020]
Sec. 22.105 Definitions.
Other than the terms defined in this section, terms used in this
part are defined in 32 CFR part 21, subpart F.
Administrative offset. An action whereby money payable by the United
States Government to, or held by the Government for, a recipient is
withheld to satisfy a delinquent debt the recipient owes the Government.
Advanced research. Advanced technology development that creates new
technology or demonstrates the viability of applying existing technology
to new products and processes in a general way. Advanced research is
most closely analogous to precompetitive technology development in the
commercial sector (i.e., early phases of research and development on
which commercial competitors are willing to collaborate, because the
work is not so coupled to specific products and processes that the
results of the work must be proprietary). It does not include
development of military systems and hardware where specific requirements
have been defined. It is typically funded in Advanced Technology
Development (Budget Activity 3 and Research Category 6.3A) programs
within Research, Development, Test and Evaluation (RDT&E).
Applied research. Efforts that attempt to determine and exploit the
potential of scientific discoveries or improvements in technology such
as new materials, devices, methods and processes. It typically is funded
in Applied Research (Budget Activity 2 and Research Category 6.2)
programs within Research, Development, Test and Evaluation (RDT&E).
Applied research normally follows basic research but may not be fully
distinguishable from the related basic research. The term does not
include efforts whose principal aim is the design, development, or
testing of specific products, systems or processes to be considered for
sale or acquisition; these efforts are within the definition of
``development.''
Basic research. Efforts directed toward increasing knowledge and
understanding in science and engineering, rather than the practical
application of that knowledge and understanding. It typically is funded
within Basic Research (Budget Activity 1 and Research Category 6.1)
programs within Research, Development, Test and Evaluation (RDT&E). For
the purposes of this part, basic research includes:
(1) Research-related, science and engineering education, including
graduate fellowships and research traineeships.
(2) Research instrumentation and other activities designed to
enhance the infrastructure for science and engineering research.
Claim. A written demand or written assertion by one of the parties
to a grant or cooperative agreement seeking as a matter of right, the
payment of money in a sum certain, the adjustment or interpretation of
award terms, or other relief arising under or relating to a grant or
cooperative agreement. A routine request for payment that is not in
dispute when submitted is not a claim. The submission may be converted
to a claim by written notice to the grants officer if it is disputed
either as to liability or amount, or is not acted upon in a reasonable
time.
Debt. Any amount of money or any property owed to a Federal Agency
by any person, organization, or entity except another United States
Federal Agency. Debts include any amounts due from insured or guaranteed
loans, fees, leases, rents, royalties, services, sales of real or
personal property, or overpayments, penalties, damages, interest, fines
and forfeitures, and all other claims and similar sources. Amounts due a
nonappropriated fund instrumentality are not debts owed the United
States, for the purposes of this subchapter.
Delinquent debt. A debt:
(1) That the debtor fails to pay by the date specified in the
initial written notice from the agency owed the debt, normally within 30
calendar days, unless the debtor makes satisfactory payment arrangements
with the agency by that date; and
(2) With respect to which the debtor has elected not to exercise any
available appeals or has exhausted all agency appeal processes.
[[Page 33]]
Development. The systematic use of scientific and technical
knowledge in the design, development, testing, or evaluation of
potential new products, processes, or services to meet specific
performance requirements or objectives. It includes the functions of
design engineering, prototyping, and engineering testing.
Electronic commerce. The conduct of business through the use of
automation and electronic media, in lieu of paper transactions, direct
personal contact, telephone, or other means. For grants and cooperative
agreements, electronic commerce can include the use of electronic data
interchange, electronic mail, electronic bulletin board systems, and
electronic funds transfer for: program announcements or solicitations;
applications or proposals; award documents; recipients' requests for
payment; payment authorizations; and payments.
Electronic data interchange. The exchange of standardized
information communicated electronically between business partners,
typically between computers. It is DoD policy that DoD Component EDI
applications conform to the American National Standards Institute
(ANSI), Accredited Standards Committee (ASC) X-12 standard. \1\
---------------------------------------------------------------------------
\1\ Available from Accredited Standards Committee, X-12 Secretariat,
Data Interchange Standards Association, 1800 Diagonal Road, Suite 355,
Alexandria, VA 22314-2852; Attention: Manager Maintenance and
Publications.
---------------------------------------------------------------------------
Electronic funds transfer. A system that provides the authority to
debit or credit accounts in financial institutions by electronic means
rather than source documents (e.g., paper checks). Processing typically
occurs through the Federal Reserve System and/or the Automated Clearing
House (ACH) computer network. It is DoD policy that DoD Component EFT
transmissions conform to the American National Standards Institute
(ANSI), Accredited Standards Committee (ASC) X-12 standard.
Historically Black colleges and universities. Institutions of higher
education determined by the Secretary of Education to meet the
requirements of 34 CFR 608.2. Each DoD Component's contracting
activities and grants officers may obtain a list of historically Black
colleges and universities from that DoD Component's Small and
Disadvantaged Business Utilization office.
Institution of higher education. An educational institution that
meets the criteria in section 1201(a) of the Higher Education Act of
1965 (20 U.S.C. 1141(a)). Note, however, that institution of higher
education has a different meaning in Sec. 22.520, as given at Sec.
22.520(b)(2).
Minority institutions. Institutions of higher education that meet
the criteria for minority institutions specified in 10 U.S.C. 2323. Each
DoD Component's contracting activities and grants officers may obtain
copies of a current list of institutions that qualify as minority
institutions under 10 U.S.C. 2323 from that DoD Component's Small and
Disadvantaged Business Utilization office (the list of minority
institutions changes periodically, based on Department of Education data
on institutions' enrollments of minority students).
Research. Basic, applied, and advanced research, as defined in this
section.
Subaward. An award of financial assistance in the form of money, or
property in lieu of money, made under a DoD grant or cooperative
agreement by a recipient to an eligible subrecipient. The term includes
financial assistance for substantive program performance by the
subrecipient of a portion of the program for which the DoD grant or
cooperative agreement was made. It does not include the recipient's
procurement of goods and services needed to carry out the program.
[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]
Subpart B_Selecting the Appropriate Instrument
Sec. 22.200 Purpose.
This subpart provides the bases for determining the appropriate type
of instrument in a given situation.
Sec. 22.205 Distinguishing assistance from procurement.
Before using a grant or cooperative agreement, the grants officer
shall
[[Page 34]]
make a positive judgment that an assistance instrument, rather than a
procurement contract, is the appropriate instrument, based on the
following:
(a) Purpose. (1) The grants officer must judge that the principal
purpose of the activity to be carried out under the instrument is to
stimulate or support a public purpose (i.e., to provide assistance),
rather than acquisition (i.e., to acquire goods and services for the
direct benefit of the United States Government). If the principal
purpose is acquisition, then the grants officer shall judge that a
procurement contract is the appropriate instrument, in accordance with
31 U.S.C. chapter 63 (``Using Procurement Contracts and Grant and
Cooperative Agreements''). Assistance instruments shall not be used in
such situations, except:
(i) When a statute specifically provides otherwise; or
(ii) When an exemption is granted, in accordance with Sec. 22.220.
(2) For research and development, the appropriate use of grants and
cooperative agreements therefore is almost exclusively limited to the
performance of selected basic, applied, and advanced research projects.
Development projects nearly always shall be performed by contract or
other acquisition transaction because their principal purpose is the
acquisition of specific deliverable items (e.g., prototypes or other
hardware) for the benefit of the Department of Defense.
(b) Fee or profit. Payment of fee or profit is consistent with an
activity whose principal purpose is the acquisition of goods and
services for the direct benefit or use of the United States Government,
rather than an activity whose principal purpose is assistance.
Therefore, the grants officer shall use a procurement contract, rather
than an assistance instrument, in all cases where:
(1) Fee or profit is to be paid to the recipient of the instrument;
or
(2) The instrument is to be used to carry out a program where fee or
profit is necessary to achieving program objectives.
Sec. 22.210 Authority for providing assistance.
(a) Before a grant or cooperative agreement may be used, the grants
officer must:
(1) Identify the program statute, the statute that authorizes the
DoD Component to carry out the activity the principal purpose of which
is assistance (see 32 CFR 21.410 through 21.420.
(2) Review the program statute to determine if it contains
requirements that affect the:
(i) Solicitation, selection, and award processes. For example,
program statutes may authorize assistance to be provided only to certain
types of recipients; may require that recipients meet certain other
criteria to be eligible to receive assistance; or require that a
specific process shall be used to review recipients' proposals.
(ii) Terms and conditions of the award. For example, some program
statutes require a specific level of cost sharing or matching.
(b) The grants officer shall ensure that the award of DoD
appropriations through a grant or cooperative agreement for a research
project meets the standards of 10 U.S.C. 2358, DoD's broad authority to
carry out research, even if the research project is authorized under a
statutory authority other than 10 U.S.C. 2358. The standards of 10
U.S.C. 2358 are that, in the opinion of the Head of the DoD Component or
his or her designee, the projects must be:
(1) Necessary to the responsibilities of the DoD Component.
(2) Related to weapons systems and other military needs or of
potential interest to the DoD Component.
[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003]
Sec. 22.215 Distinguishing grants and cooperative agreements.
(a) Once a grants officer judges, in accordance with Sec. Sec.
22.205 and 22.210, that either a grant or cooperative agreement is the
appropriate instrument, the grants officer shall distinguish between the
two instruments as follows:
(1) Grants shall be used when the grants officer judges that
substantial involvement is not expected between
[[Page 35]]
the Department of Defense and the recipient when carrying out the
activity contemplated in the agreement.
(2) Cooperative agreements shall be used when the grants officer
judges that substantial involvement is expected. The grants officer
should document the nature of the substantial involvement that led to
selection of a cooperative agreement. Under no circumstances are
cooperative agreements to be used solely to obtain the stricter controls
typical of a contract.
(b) In judging whether substantial involvement is expected, grants
officers should recognize that ``substantial involvement'' is a
relative, rather than an absolute, concept, and that it is primarily
based on programmatic factors, rather than requirements for grant or
cooperative agreement award or administration. For example, substantial
involvement may include collaboration, participation, or intervention in
the program or activity to be performed under the award.
Sec. 22.220 Exemptions.
Under 31 U.S.C. 6307, ``the Director of the Office of Management and
Budget may exempt an agency transaction or program'' from the
requirements of 31 U.S.C. chapter 63. Grants officers shall request such
exemptions only in exceptional circumstances. Each request shall specify
for which individual transaction or program the exemption is sought; the
reasons for requesting an exemption; the anticipated consequences if the
exemption is not granted; and the implications for other agency
transactions and programs if the exemption is granted. The procedures
for requesting exemptions shall be:
(a) In cases where 31 U.S.C. chapter 63 would require use of a
contract and an exemption from that requirement is desired:
(1) The grants officer shall submit a request for exemption, through
appropriate channels established by his or her DoD Component (see 32 CFR
21.320(a)), to the Director of Defense Procurement and Acquisition
Policy (DDP&AP).
(2) The DDP&AP, after coordination with the Assistant Secretary of
Defense for Research and Engineering (ASD (R&E)), shall transmit the
request to OMB or notify the DoD Component that the request has been
disapproved.
(b) In other cases, the DoD Component shall submit a request for the
exemption through appropriate channels to the ASD (R&E). The ASD (R&E)
shall transmit the request to OMB or notify the DoD Component that the
request has been disapproved.
(c) Where an exemption is granted, documentation of the approval
shall be maintained in the award file.
[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003; 70
FR 49464, Aug. 23, 2005; 85 FR 51242, Aug. 19, 2020]
Subpart C_Competition
Sec. 22.300 Purpose.
This subpart establishes DoD policy and implements statutes related
to the use of competitive procedures in the award of grants and
cooperative agreements.
Sec. 22.305 General policy and requirement for competition.
(a) It is DoD policy to maximize use of competition in the award of
grants and cooperative agreements. This also conforms with:
(1) 31 U.S.C. 6301(3), which encourages the use of competition in
awarding all grants and cooperative agreements.
(2) 10 U.S.C. 2374(a), which sets out Congressional policy that any
new grant for research, development, test, or evaluation be awarded
through merit-based selection procedures.
(b) Grants officers shall use merit-based, competitive procedures
(as defined by Sec. 22.315) to award grants and cooperative agreements:
(1) In every case where required by statute (e.g., 10 U.S.C. 2361,
as implemented in Sec. 22.310, for certain grants to institutions of
higher education).
(2) To the maximum extent practicable in all cases where not
required by statute.
Sec. 22.310 Statutes concerning certain research, development,
and facilities construction grants.
(a) Definitions specific to this section. For the purposes of
implementing the requirements of 10 U.S.C. 2374 in this
[[Page 36]]
section, the following terms are defined:
(1) Follow-on grant. A grant that provides for continuation of
research and development performed by a recipient under a preceding
grant. Note that follow-on grants are distinct from incremental funding
actions during the period of execution of a multi-year award.
(2) New grant. A grant that is not a follow-on grant.
(b) Statutory requirement to use competitive procedures. (1) A
grants officer shall not award a grant by other than merit-based,
competitive procedures (as defined by Sec. 22.315) to an institution of
higher education for the performance of research and development or for
the construction of research or other facilities, unless:
(i) In the case of a new grant for research and development, there
is a statute meeting the criteria in paragraph (c)(1) of this section;
(ii) In the case of a follow-on grant for research and development,
or of a grant for the construction of research or other facilities,
there is a statute meeting the criteria in paragraph (c)(2) of this
section; and
(iii) The Secretary of Defense submits to Congress a written notice
of intent to make the grant. The grant may not be awarded until 180
calendar days have elapsed after the date on which Congress received the
notice of intent. Contracting activities must submit a draft notice of
intent with supporting documentation through channels to the Principal
Deputy Assistant Secretary of Defense for Research and Engineering.
(2) Because subsequently enacted statutes may, by their terms,
impose different requirements than set out in paragraph (b)(1) of this
section, grants officers shall consult legal counsel on a case-by-case
basis, when grants for the performance of research and development or
for the construction of research or other facilities are to be awarded
to institutions of higher education by other than merit-based
competitive procedures.
(c) Subsequent statutes. In accordance with 10 U.S.C. 2361 and 10
U.S.C. 2374, a provision of law may not be construed as requiring the
award of a grant through other than the merit-based, competitive
procedures described in Sec. 22.315, unless:
(1) Institutions of higher education--new grants for research and
development. In the case of a new grant for research and development to
an institution of higher education, such provision of law specifically:
(i) Identifies the particular institution of higher education
involved;
(ii) States that such provision of law modifies or supersedes the
provisions of 10 U.S.C. 2361 (a requirement that applies only if the
statute authorizing or requiring award by other than competitive
procedures was enacted after September 30, 1989); and
(iii) States that the award to the institution of higher education
involved is required by such provision of law to be made in
contravention of the policy set forth in 10 U.S.C. 2374(a).
(2) Institutions of higher education--follow-on grants for research
and development and grants for the construction of any research or other
facility. In the case of any such grant to an institution of higher
education, such provision of law specifically:
(i) Identifies the particular institution of higher education
involved; and
(ii) States that such provision of law modifies or supersedes the
provisions of 10 U.S.C. 2361 (a requirement that applies only if the
statute authorizing or requiring award by other than competitive
procedures was enacted after September 30, 1989).
(3) Other entities--new grants for research and development--(i)
General. In the case of a new grant for research and development to an
entity other than an institution of higher education, such provision of
law specifically:
(A) Identifies the particular entity involved;
(B) States that the award to that entity is required by such
provision of law to be made in contravention of the policy set forth in
10 U.S.C. 2374(a).
(ii) Exception. The requirement of paragraph (c)(3)(i) of this
section does not apply to any grant that calls upon the National Academy
of Sciences to:
(A) Investigate, examine, or experiment upon any subject of science
or art of significance to the Department of
[[Page 37]]
Defense or any Military Department; and
(B) Report on such matters to the Congress or any agency of the
Federal Government.
[63 FR 12164, Mar. 12, 1998, as amended at 85 FR 51242, Aug. 19, 2020]
Sec. 22.315 Merit-based, competitive procedures.
Competitive procedures are methods that encourage participation in
DoD programs by a broad base of the most highly qualified performers.
These procedures are characterized by competition among as many eligible
proposers as possible, with a published or widely disseminated notice.
Competitive procedures include, as a minimum:
(a) Notice to prospective proposers. The notice may be a notice of
funding availability or Broad Agency Announcement that is publicly
disseminated, with unlimited distribution, or a specific notice that is
distributed to eligible proposers (a specific notice must be distributed
to at least two eligible proposers to be considered as part of a
competitive procedure). Requirements for notices are as follows:
(1) The format and content of each notice must conform with the
Governmentwide format for announcements of funding opportunities
established by the Office of Management and Budget (OMB) in a policy
directive entitled, ``Format for Financial Assistance Program
Announcements.'' \2\
---------------------------------------------------------------------------
\2\ This OMB policy directive is available at the Internet site
http://www.whitehouse.gov/ omb/grants/grants_ docs.html (the link is
``Final Policy Directive on Financial Assistance Program
Announcements'').
---------------------------------------------------------------------------
(2) In accordance with that OMB policy directive, DoD Components
also must post on the Internet any notice under which domestic entities
may submit proposals, if the distribution of the notice is unlimited.
DoD Components are encouraged to simultaneously publish the notice in
other media (e.g., the Federal Register), if doing so would increase the
likelihood of its being seen by potential proposers. If a DoD Component
issues a specific notice with limited distribution (e.g., for national
security considerations), the notice need not be posted on the Internet.
(3) To comply with an OMB policy directive entitled, ``Requirement
to Post Funding Opportunity Announcement Synopses at Grants.gov and
Related Data Elements/Format,'' \3\ DoD Components must post on the
Internet a synopsis for each notice that, in accordance with paragraph
(a)(2) of this section, is posted on the Internet. The synopsis must be
posted at the Governmentwide site designated by the OMB (currently
http://www.Grants.gov). The synopsis for each notice must provide
complete instructions on where to obtain the notice and should have an
electronic link to the Internet location at which the notice is posted.
---------------------------------------------------------------------------
\3\ This OMB policy directive is available at the Internet site
http://www.whitehouse.gov/ omb/grants/grants_ docs.html (the link is
``Office of Federal Financial Management Policy Directive on Use of
Grants.Gov FIND'').
---------------------------------------------------------------------------
(4) In accordance with an OMB policy directive entitled,
``Requirement for a DUNS Number in Applications for Federal Grants and
Cooperative Agreements,'' \4\ each notice must include a requirement for
proposers to include Data Universal Numbering System (DUNS) numbers in
their proposals. If a notice provides for submission of application
forms, the forms must incorporate the DUNS number. To the extent that
unincorporated consortia of separate organizations may submit proposals,
the notice should explain that an unincorporated consortium would use
the DUNS number of the entity proposed to receive DoD payments under the
award (usually, a lead organization that consortium members identify for
administrative matters).
---------------------------------------------------------------------------
\4\ This OMB policy directive is available at the Internet site
http://www.whitehouse.gov/ omb/grants/grants_ docs.html (the link is
``Use of a Universal Identifier by Grant Applicants'').
---------------------------------------------------------------------------
(b) At least two eligible, prospective proposers.
(c) Impartial review of the merits of applications or proposals
received in response to the notice, using the evaluation method and
selection criteria described in the notice. For research and development
awards, in order to be considered as part of a competitive procedure,
the two principal selection
[[Page 38]]
criteria, unless statute provides otherwise, must be the:
(1) Technical merits of the proposed research and development; and
(2) Potential relationship of the proposed research and development
to Department of Defense missions.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005;
72 FR 34988, June 26, 2007; 85 FR 51242, Aug. 19, 2020]
Sec. 22.320 Special competitions.
Some programs may be competed for programmatic or policy reasons
among specific classes of potential recipients. An example would be a
program to enhance U.S. capabilities for academic research and research-
coupled graduate education in defense-critical, science and engineering
disciplines, a program that would be competed specifically among
institutions of higher education. All such special competitions shall be
consistent with program representations in the President's budget
submission to Congress and with subsequent Congressional authorizations
and appropriations for the programs.
Subpart D_Recipient Qualification Matters_General Policies and
Procedures
Sec. 22.400 Purpose.
The purpose of this subpart is to specify policies and procedures
for grants officers' determination of recipient qualifications prior to
award.
Sec. 22.405 Policy.
(a) General. Grants officers normally shall award grants or
cooperative agreements only to qualified recipients that meet the
standards in Sec. 22.415. This practice conforms with the
Governmentwide policy to do business only with responsible persons,
which is stated in OMB guidance at 2 CFR 180.125(a) and implemented by
the Department of Defense in 2 CFR part 1125.
(b) Exception. In exceptional circumstances, grants officers may
make awards to recipients that do not fully meet the standards in Sec.
22.415 and include special award conditions that are appropriate to the
particular situation, in accordance with 32 CFR 34.4 for awards to for-
profit organizations or as described in OMB guidance at 2 CFR 200.207
for awards to institutions of higher education, nonprofit organizations,
States, local governments, and Indian tribes.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005;
72 FR 34988, June 26, 2007; 85 FR 51242, Aug. 19, 2020]
Sec. 22.410 Grants officers' responsibilities.
The grants officer is responsible for determining a recipient's
qualification prior to award. The grants officer's signature on the
award document shall signify his or her determination that either:
(a) The potential recipient meets the standards in Sec. 22.415 and
is qualified to receive the grant or cooperative agreement; or
(b) An award is justified to a recipient that does not fully meet
the standards, pursuant to Sec. 22.405(b). In such cases, grants
officers shall document in the award file the rationale for making an
award to a recipient that does not fully meet the standards.
Sec. 22.415 Standards.
To be qualified, a potential recipient must:
(a) Have the management capability and adequate financial and
technical resources, given those that would be made available through
the grant or cooperative agreement, to execute the program of activities
envisioned under the grant or cooperative agreement.
(b) Have a satisfactory record of executing such programs or
activities (if a prior recipient of an award).
(c) Have a satisfactory record of integrity and business ethics.
(d) Be otherwise qualified and eligible to receive a grant or
cooperative agreement under applicable laws and regulations (see Sec.
22.420(c)).
Sec. 22.420 Pre-award procedures.
(a) The appropriate method to be used and amount of effort to be
expended in deciding the qualification of a potential recipient will
vary. In deciding on the method and level of effort, the grants officer
should consider factors such as:
(1) DoD's past experience with the recipient;
[[Page 39]]
(2) Whether the recipient has previously received cost-type
contracts, grants, or cooperative agreements from the Federal
Government; and
(3) The amount of the prospective award and complexity of the
project to be carried out under the award.
(b) There is no DoD-wide requirement to obtain a pre-award credit
report, audit, or any other specific piece of information. On a case-by-
case basis, the grants officer will decide whether there is a need to
obtain any such information to assist in deciding whether the recipient
meets the standards in Sec. 22.415 (a), (b), and (c).
(1) Should the grants officer in a particular case decide that a
pre-award credit report, audit, or survey is needed, he or she should
consult first with the appropriate grants administration office
(identified in Sec. 22.710), and decide whether pre-existing surveys or
audits of the recipient, such as those of the recipient's internal
control systems under OMB guidance in subpart F of 2 CFR part 200, will
satisfy the need (see Sec. 22.715(a)(1)).
(2) If, after consulting with the grants administration office, the
grants officer decides to obtain a credit report, audit, or other
information, and the report or other information discloses that a
potential recipient is delinquent on a debt to an agency of the United
States Government, then:
(i) The grants officer shall take such information into account when
determining whether the potential recipient is qualified with respect to
the grant or cooperative agreement; and
(ii) If the grants officer decides to make the award to the
recipient, unless there are compelling reasons to do otherwise, the
grants officer shall delay the award of the grant or cooperative
agreement until payment is made or satisfactory arrangements are made to
repay the debt.
(c) In deciding whether a recipient is otherwise qualified and
eligible in accordance with the standard in Sec. 22.415(d), the grants
officer shall ensure that the potential recipient:
(1) Is not identified in the Exclusions area of the System for Award
Management (SAM Exclusions) as being debarred, suspended, or otherwise
ineligible to receive the award (SAM is at www.sam.gov). In addition to
being a requirement for every new award, note that checking SAM
Exclusions also is a requirement for subsequent obligations of
additional funds, such as incremental funding actions, in the case of
pre-existing awards to institutions of higher education, as described at
Sec. 22.520(e)(5). The grants officer's responsibilities include (see
the OMB guidance at 2 CFR 180.425 and 180.430, as implemented by the
Department of Defense at 2 CFR 1125.425) checking SAM Exclusions for:
(i) Potential recipients of prime awards; and
(ii) A recipient's principals (as defined in OMB guidance at 2 CFR
180.995, implemented by the Department of Defense in 2 CFR part 1125),
potential recipients of subawards, and principals of those potential
subaward recipients, if DoD Component approval of those principals or
lower-tier recipients is required under the terms of the award.
(2) Has provided all certifications and assurances required by
Federal statute, Executive order, or codified regulation, unless they
are to be addressed in award terms and conditions at the time of award
(see Sec. 22.510).
(3) Meets any eligibility criteria that may be specified in the
statute authorizing the specific program under which the award is being
made (see Sec. 22.210(a)(2)).
(d) Grants officers shall obtain each recipient's Taxpayer
Identification Number (TIN, which may be the Social Security Number for
an individual and Employer Identification Number for a business or non-
profit entity) and notify the recipient that the TIN is being obtained
for purposes of collecting and reporting on any delinquent amounts that
may arise out of the recipient's relationship with the Government.
Obtaining the TIN and so notifying the recipient is a statutory
requirement of 31 U.S.C. 7701, as amended by the Debt Collection
Improvement Act of 1996 (section 31001(i)(1), Pub. L. 104-134).
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005;
72 FR 34988, June 26, 2007; 85 FR 51242, Aug. 19, 2020]
[[Page 40]]
Subpart E_National Policy Matters
Sec. 22.505 Purpose.
The purpose of this subpart is to supplement other regulations that
implement national policy requirements, to the extent that it is
necessary to provide additional guidance to DoD grants officers.
[85 FR 51242, Aug. 19, 2020]
Sec. 22.510 Certifications, representations, and assurances.
(a) Certifications--(1) Policy. Certifications of compliance with
national policy requirements are to be obtained from recipients only for
those national policies where a statute, Executive order, or codified
regulation specifically states that a certification is required. Other
national policy requirements may be addressed by obtaining
representations or assurances (see paragraph (b) of this section).
Grants officers should utilize methods for obtaining certifications, in
accordance with Executive Order 12866 (3 CFR, 1993 Comp., p. 638), that
minimize administration and paperwork.
(2) Procedures. (i) When necessary, grants officers may obtain
individual, written certifications.
(ii) Whenever possible, and to the extent consistent with statute
and codified regulation, grants officers should identify the
certifications that are required for the particular type of recipient
and program, and consolidate them into a single certification provision
that cites them by reference.
(A) If a grants officer elects to have proposers incorporate
certifications by reference into their proposals, he or she must do so
in one of the two following ways. When required by statute or codified
regulation, the solicitation must include the full text of the
certifications that proposers are to provide by reference. In other
cases, the grants officer may include language in the solicitation that
informs the proposers where the full text may be found (e.g., in
documents or computer network sites that are readily available to the
public) and offers to provide it to proposers upon request.
(B) Appendix A to this part provides language that may be used for
incorporating by reference the certification on lobbying, which
currently is the only certification requirement that commonly applies to
DoD grants and agreements. Because that certification is required by law
to be submitted at the time of proposal, rather than at the time of
award, Appendix A includes language to incorporate the certification by
reference into a proposal.
(C) Grants officers may incorporate certifications by reference in
award documents when doing so is consistent with statute and codified
regulation (that is not the case for the lobbying certification
addressed in paragraph (a)(2)(ii)(B) of this section). The provision
that a grants officer would use to incorporate certifications in award
documents, when consistent with statute and codified regulation, would
be similar to the provision in Appendix A to this part, except that it
would be modified to state that the recipient is providing the required
certifications by signing the award document or by accepting funds under
the award.
(b) Representations and assurances. Many national policies, either
in statute or in regulation, require recipients of grants and
cooperative agreements to make representations or provide assurances
(rather than certifications) that they are in compliance with the
policies. Part 1122 of the DoDGARs (2 CFR part 1122) provides standard
wording of general award terms and conditions to address several of the
more commonly applicable national policy requirements. These terms and
conditions may be used to obtain required assurances and representations
for national policy matters covered in part 1122 at the time of award,
which is as effective and more efficient and less administratively
burdensome than obtaining them at the time of each proposal. If any
other assurances or representations must be obtained at the time of
proposal, grants officers should use the most efficient method for doing
so--e.g., for a program that has a program announcement and applications
using the standard application form
[[Page 41]]
(SF-424 \5\), the program announcement should include the texts of the
required assurances and representations and clearly state that the
applicant's electronic signature of the SF-424 will serve to affirm its
agreement with each representation or assurance.
---------------------------------------------------------------------------
\5\ For copies of Standard Forms listed in this part, contact
regional grants administration offices of the Office of Naval Research.
Addresses for the offices are listed in the ``Federal Directory of
Contract Administration Services (CAS) Components,'' which may be
accessed through the Defense Contract Management Agency homepage at:
http://www.dcma.mil.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49464, Aug. 23, 2005;
85 FR 51242, Aug. 19, 2020]
Sec. 22.515 Provisions of annual appropriations acts.
An annual appropriations act can include general provisions stating
national policy requirements that apply to the use of funds (e.g.,
obligation through a grant or cooperative agreement) appropriated by the
act. Because these requirements are of limited duration (the period
during which a given year's appropriations are available for
obligation), and because they can vary from year to year and from one
agency's appropriations act to another agency's, the grants officer must
know the agency(ies) and fiscal year(s) of the appropriations being
obligated by a given grant or cooperative agreement, and may need to
consult legal counsel if he or she does not know the requirements
applicable to those appropriations.
Sec. 22.520 Campus access for military recruiting and Reserve Officer
Training Corps (ROTC).
(a) Purpose. (1) The purpose of this section is to implement 10
U.S.C. 983 as it applies to grants. Under that statute, DoD Components
are prohibited from providing funds to institutions of higher education
that have policies or practices, as described in paragraph (c) of this
section, restricting campus access of military recruiters or the Reserve
Officer Training Corps (ROTC).
(2) By addressing the effect of 10 U.S.C. 983 on grants and
cooperative agreements, this section supplements the DoD's primary
implementation of that statute in 32 CFR part 216, ``Military Recruiting
and Reserve Officer Training Corps Program Access to Institutions of
Higher Education.'' Part 216 establishes procedures by which the
Department of Defense identifies institutions of higher education that
have a policy or practice described in paragraph (c) of this section.
(b) Definition specific to this section. ``Institution of higher
education'' in this section has the meaning given at 32 CFR 216.3, which
is different than the meaning given at Sec. 22.105 for other sections
of this part.
(c) Statutory requirement of 10 U.S.C. 983. No funds made available
to the Department of Defense may be provided by grant to an institution
of higher education (including any subelement of such institution) if
the Secretary of Defense determines that the institution (or any
subelement of that institution) has a policy or practice that either
prohibits, or in effect prevents:
(1) The Secretary of a Military Department from maintaining,
establishing, or operating a unit of the Senior ROTC (in accordance with
10 U.S.C. 654 and other applicable Federal laws) at that institution (or
any subelement of that institution);
(2) A student at that institution (or any subelement of that
institution) from enrolling in a unit of the Senior ROTC at another
institution of higher education;
(3) The Secretary of a Military Department or Secretary of Homeland
Security from gaining access to campuses, or access to students (who are
17 years of age or older) on campuses, for purposes of military
recruiting in a manner that is at least equal in quality and scope to
the access to campuses and to students that is provided to any other
employer; or
(4) Access by military recruiters for purposes of military
recruiting to the following information pertaining to students (who are
17 years of age or older) enrolled at that institution (or any
subelement of that institution):
(i) Names, addresses, and telephone listings.
(ii) Date and place of birth, levels of education, academic majors,
degrees
[[Page 42]]
received, and the most recent educational institution enrolled in by the
student.
(d) Policy--(1) Applicability to cooperative agreements. As a matter
of DoD policy, the restrictions of 10 U.S.C. 983, as implemented by 32
CFR part 216, apply to cooperative agreements, as well as grants.
(2) Deviations. Grants officers may not deviate from any provision
of this section without obtaining the prior approval of the Assistant
Secretary of Defense for Research and Engineering. Requests for
deviations shall be submitted, through appropriate channels, to:
Director for Basic Research, OASD(R&E), 3040 Defense Pentagon,
Washington, D.C. 20301-3040.
(e) Grants officers' responsibility. (1) A grants officer shall not
award any grant or cooperative agreement to an institution of higher
education that has been identified pursuant to the procedures of 32 CFR
part 216. Such institutions are identified as being ineligible in the
Exclusions area of the System for Award Management (SAM Exclusions). The
exclusion types in SAM Exclusions broadly indicate the nature of an
institution's ineligibility, as well as the effect of the exclusion, and
the Additional Comments field may have further details about the
exclusion. Note that OMB guidance in 2 CFR 180.425 and 180.430, as
implemented by the Department of Defense at 2 CFR part 1125, require a
grants officer to check the SAM Exclusions prior to determining that a
recipient is qualified to receive an award.
(2) A grants officer shall not consent to a subaward of DoD funds to
such an institution, under a grant or cooperative agreement to any
recipient, if the subaward requires the grants officer's consent.
(3) A grants officer shall include the following award term in each
grant or cooperative agreement with an institution of higher education
(note that this requirement does not flow down and that recipients are
not required to include the award term in subawards):
``As a condition for receipt of funds available to the Department of
Defense (DoD) under this award, the recipient agrees that it is not an
institution of higher education (as defined in 32 CFR part 216) that has
a policy or practice that either prohibits, or in effect prevents:
(A) The Secretary of a Military Department from maintaining,
establishing, or operating a unit of the Senior Reserve Officers
Training Corps (in accordance with 10 U.S.C. 654 and other applicable
Federal laws) at that institution (or any subelement of that
institution);
(B) Any student at that institution (or any subelement of that
institution) from enrolling in a unit of the Senior ROTC at another
institution of higher education;
(C) The Secretary of a Military Department or Secretary of Homeland
Security from gaining access to campuses, or access to students (who are
17 years of age or older) on campuses, for purposes of military
recruiting in a manner that is at least equal in quality and scope to
the access to campuses and to students that is provided to any other
employer; or
(D) Access by military recruiters for purposes of military
recruiting to the names of students (who are 17 years of age or older
and enrolled at that institution or any subelement of that institution);
their addresses, telephone listings, dates and places of birth, levels
of education, academic majors, and degrees received; and the most recent
educational institutions in which they were enrolled.
If the recipient is determined, using the procedures in 32 CFR part 216,
to be such an institution of higher education during the period of
performance of this agreement, the Government will cease all payments of
DoD funds under this agreement and all other DoD grants and cooperative
agreements to the recipient, and it may suspend or terminate such grants
and agreements unilaterally for material failure to comply with the
terms and conditions of award.''
(4) If an institution of higher education refuses to accept the
award term in paragraph (e)(3) of this section, the grants officer
shall:
(i) Determine that the institution is not qualified with respect to
the award. The grants officer may award to an alternative recipient.
(ii) Transmit the name of the institution, through appropriate
channels, to the Director for Accession Policy, Office of the Deputy
Under Secretary of Defense for Military Personnel Policy (ODUSD(MPP)),
4000 Defense Pentagon, Washington, DC 20301-4000. This will allow
ODUSD(MPP) to decide whether to initiate an evaluation of the
institution under 32 CFR part 216, to determine whether it is an
institution that
[[Page 43]]
has a policy or practice described in paragraph (c) of this section.
(5) With respect to any pre-existing award to an institution of
higher education that currently is listed in SAM Exclusions pursuant to
a determination under 32 CFR part 216, a grants officer:
(i) Shall not obligate additional funds available to the DoD for the
award. A grants officer therefore must check SAM Exclusions before
approving an incremental funding action or other additional funding for
any pre-existing award to an institution of higher education. The grants
officer may not obligate the additional funds if the cause and treatment
code indicates that the reason for an institution's SAM Exclusions
listing is a determination under 32 CFR part 216 that institutional
policies or practices restrict campus access of military recruiters or
ROTC.
(ii) Shall not approve any request for payment submitted by such an
institution (including payments for costs already incurred).
(iii) Shall:
(A) Terminate the award unless he or she has a reason to believe,
after consulting with the ODUSD(MPP), 4000 Defense Pentagon, Washington,
DC 20301-4000), that the institution may be removed from SAM Exclusions
in the near term and have its eligibility restored; and
(B) Suspend any award that is not immediately terminated, as well as
all payments under it.
(f) Post-award administration responsibilities of the Office of
Naval Research (ONR). As the DoD office assigned responsibility for
performing field administration services for grants and cooperative
agreements with institutions of higher education, the ONR shall
disseminate the list it receives from the ODUSD(MPP) of institutions of
higher education identified pursuant to the procedures of 32 CFR part
216 to:
(1) ONR field administration offices, with instructions to:
(i) Disapprove any payment requests under awards to such
institutions for which post-award payment administration was delegated
to the ONR; and
(ii) Alert the DoD offices that made the awards to their
responsibilities under paragraphs (e)(5)(i) and (e)(5)(iii) of this
section.
(2) Awarding offices in DoD Components that may be identified from
data in the Defense Assistance Awards Data System (see 32 CFR 21.520
through 21.555) as having awards with such institutions for which post-
award payment administration was not delegated to ONR. The ONR is to
alert those offices to their responsibilities under paragraph (e)(5) of
this section.
[70 FR 49465, Aug. 23, 2005, as amended at 72 FR 34988, June 26, 2007;
85 FR 51243, Aug. 19, 2020]
Sec. 22.525 Paperwork Reduction Act.
Grants officers shall include appropriate award terms or conditions,
if a recipient's activities under an award will be subject to the
Paperwork Reduction Act of 1995 (44 U.S.C. 3500, et seq.):
(a) Generally, the Act only applies to Federal agencies--it requires
agencies to obtain clearance from the Office of Management and Budget
before collecting information using forms, schedules, questionnaires, or
other methods calling either for answers to:
(1) Identical questions from ten or more persons other than
agencies, instrumentalities, or employees of the United States.
(2) Questions from agencies, instrumentalities, or employees of the
United States which are to be used for statistical compilations of
general public interest.
(b) The Act applies to similar collections of information by
recipients of grants or cooperative agreements only when:
(1) A recipient collects information at the specific request of the
awarding Federal agency; or
(2) The terms and conditions of the award require specific approval
by the agency of the information collection or the collection
procedures.
Sec. 22.530 Metric system of measurement.
(a) Statutory requirement. The Metric Conversion Act of 1975, as
amended by the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C.
205) and implemented by Executive Order 12770 (3 CFR, 1991 Comp., p.
343), states that:
[[Page 44]]
(1) The metric system is the preferred measurement system for U.S.
trade and commerce.
(2) The metric system of measurement will be used, to the extent
economically feasible, in federal agencies' procurements, grants, and
other business-related activities.
(3) Metric implementation shall not be required to the extent that
such use is likely to cause significant inefficiencies or loss of
markets to United States firms.
(b) Responsibilities. DoD Components shall ensure that the metric
system is used, to the maximum extent practicable, in measurement-
sensitive activities supported by programs that use grants and
cooperative agreements, and in measurement-sensitive outputs of such
programs.
Subpart F_Award
Sec. 22.600 Purpose.
This subpart sets forth grants officers' responsibilities relating
to the award document and other actions at the time of award.
Sec. 22.605 Grants officers' responsibilities.
At the time of award, the grants officer is responsible for ensuring
that:
(a) The award:
(1) Conforms to the award format specified in 2 CFR part 1120.
(2) Includes appropriate general terms and conditions and any
program-specific and award-specific terms and conditions needed to
specify applicable administrative, national policy, and programmatic
requirements. These requirements include:
(i) Federal statutes or Executive orders that apply broadly to
Federal or DoD grants and cooperative agreements; and
(ii) Any requirements specific to the program, as prescribed in the
program statute (see Sec. 22.210(a)(2)), or specific to the funding, as
stated in pertinent Congressional appropriations (see Sec. 22.515).
(b) Information about the award is reported to the Defense
Assistance Award Data System (DAADS), in accordance with Subpart E of 32
CFR part 21.
(c)(1) In addition to the copy of the award document provided to the
recipient, a copy is forwarded to the office designated to administer
the grant or cooperative agreement, and another copy is forwarded to the
finance and accounting office designated to make the payments to the
recipient.
(2) For any award subject to the electronic funds transfer (EFT)
requirement described in Sec. 22.810(b)(2), the grants officer shall
include a prominent notification of that fact on the first page of the
copies forwarded to the recipient, the administrative grants officer,
and the finance and accounting office. On the first page of the copy
forwarded to the recipient, the grants officer also shall include a
prominent notification that the recipient, to be paid, must submit a
Payment Information Form (Standard Form SF-3881 \6\) to the responsible
DoD payment office, if that payment office does not currently have the
information (e.g., bank name and account number) needed to pay the
recipient by EFT.
---------------------------------------------------------------------------
\6\ See footnote 5 to Sec. 22.510(b).
[63 FR 12164, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003; 70
FR 49465, Aug. 23, 2005; 85 FR 51243, Aug. 19, 2020]
Subpart G_Field Administration
Sec. 22.700 Purpose.
This subpart prescribes policies and procedures for administering
grants and cooperative agreements. It does so in conjunction with 32 CFR
part 34 and subchapter D of 2 CFR chapter XI, which prescribe
administrative requirements for particular types of recipients.
[63 FR 12164, Mar. 12, 1998, as amended at 85 FR 51243, Aug. 19, 2020]
Sec. 22.705 Policy.
(a) DoD policy is to have each recipient deal with a single office,
to the maximum extent practicable, for post-award administration of its
grants and cooperative agreements. This reduces burdens on recipients
that can result when multiple DoD offices separately administer grants
and cooperative
[[Page 45]]
agreements they award to a given recipient. It also minimizes
unnecessary duplication of field administration services.
(b) To further reduce burdens on recipients, the office responsible
for performing field administration services for grants and cooperative
agreements to a particular recipient shall be, to the maximum extent
practicable, the same office that is assigned responsibility for
performing field administration services for contracts awarded to that
recipient.
(c) Contracting activities and grants officers therefore shall use
cross-servicing arrangements whenever practicable and, to the maximum
extent possible, delegate responsibility for post-award administration
to the cognizant grants administration offices identified in Sec.
22.710.
Sec. 22.710 Assignment of grants administration offices.
In accordance with the policy stated in Sec. 22.705(b), the DoD
offices (referred to in this part as ``grants administration offices'')
that are assigned responsibility for performing field administration
services for grants and cooperative agreements are (see the ``Federal
Directory of Contract Administration Services (CAS) Components'' \7\ for
specific addresses of administration offices):
---------------------------------------------------------------------------
\7\ The ``Federal Directory of Contract Administration Services
(CAS) Components'' may be accessed through the Defense Contract
Management Agency homepage at http://www.dcma.mil.
---------------------------------------------------------------------------
(a) Regional offices of the Office of Naval Research, for grants and
cooperative agreements with:
(1) Institutions of higher education and laboratories affiliated
with such institutions, to the extent that such organizations are
subject to the cost principles in subpart E of 2 CFR part 200.
(2) Nonprofit organizations that are subject to the cost principles
in subpart E of 2 CFR part 200 if their principal business with the
Department of Defense is research and development.
(b) Field offices of the Defense Contract Management Agency, for
grants and cooperative agreements with all other entities, including:
(1) For-profit organizations.
(2) Nonprofit organizations identified in appendix VIII to 2 CFR
part 200 that are subject to for-profit cost principles in 48 CFR part
31.
(3) Nonprofit organizations subject to the cost principles in
subpart E of 2 CFR part 200, if their principal business with the
Department of Defense is other than research and development.
(4) State and local governments.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49466, Aug. 23, 2005;
72 FR 34989, June 26, 2007; 85 FR 51243, Aug. 19, 2020]
Sec. 22.715 Grants administration office functions.
The primary responsibility of cognizant grants administration
offices shall be to advise and assist grants officers and recipients
prior to and after award, and to help ensure that recipients fulfill all
requirements in law, regulation, and award terms and conditions.
Specific functions include:
(a) Conducting reviews and coordinating reviews, audits, and audit
requests. This includes:
(1) Advising grants officers on the extent to which audits by
independent auditors (i.e., public accountants or Federal auditors) have
provided the information needed to carry out their responsibilities. If
a recipient has had an independent audit in accordance with subpart F of
2 CFR part 200, and the audit report disclosed no material weaknesses in
the recipient's financial management and other management and control
systems, additional preaward or closeout audits usually will not be
needed (see Sec. Sec. 22.420(b) and 22.825(b)).
(2) Performing pre-award surveys, when requested by a grants
officer, after providing advice described in paragraph (a)(1) of this
section.
(3) Reviewing recipients' systems and compliance with Federal
requirements, in coordination with any reviews and compliance audits
performed by independent auditors under subpart F of 2 CFR part 200, or
in accordance with the terms and conditions of the award. This includes:
(i) Reviewing recipients' financial management, property management,
and purchasing systems, to determine the adequacy of such systems.
[[Page 46]]
(ii) Determining that recipients have drug-free workplace programs,
as required under 32 CFR part 26.
(iii) Determining that governmental, university and nonprofit
recipients have complied with requirements in subpart F of 2 CFR part
200, as implemented at subpart E of 2 CFR part 1128, to have single
audits and submit audit reports to the Federal Audit Clearinghouse. If a
recipient has not had a required audit, appropriate action must be taken
(e.g., contacting the recipient and coordinating with the Office of the
Assistant Inspector General for Audit Policy and Oversight (OAIG(P&O)),
Office of the Deputy Inspector General for Inspections and Policy,
Office of the Inspector General of the Department of Defense (OIG, DoD),
4800 Mark Center Drive, Alexandria, VA 22350-1500).
(4) Issuing timely management decisions, in accordance with DoD
Instruction 7640.02, ``Policy for Follow-up on Contract Audit Reports,''
\8\ on single audit findings referred by the OIG, DoD, under DoD
Instruction 7600.10, ``Audits of States, Local Governments, and Non-
Profit Organizations.'' \9\
---------------------------------------------------------------------------
\8\ Electronic copies may be obtained at the Washington Headquarters
Services Internet site http://www.dtic.mil/whs/directives. Paper copies
may be obtained, at cost, from the National Technical Information
Service, 5285 Port Royal Road, Springfield, VA 22161.
\9\ See footnote 8 to this section.
---------------------------------------------------------------------------
(b) Performing property administration services for Government-owned
property, and for any property acquired by a recipient, with respect to
which the recipient has further obligations to the Government.
(c) Ensuring timely submission of required reports.
(d) Executing administrative closeout procedures.
(e) Establishing recipients' indirect cost rates, where the
Department of Defense is the cognizant or oversight Federal agency with
the responsibility for doing so.
(f) Performing other administration functions (e.g., receiving
recipients' payment requests and transmitting approved payment
authorizations to payment offices) as delegated by applicable cross-
servicing agreements or letters of delegation.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49466, Aug. 23, 2005;
72 FR 34989, June 26, 2007; 85 FR 51243, Aug. 19, 2020]
Subpart H_Post-Award Administration
Sec. 22.800 Purpose and relation to other parts.
This subpart sets forth grants officers' and DoD Components'
responsibilities for post-award administration, by providing DoD-
specific requirements on payments; debt collection; claims, disputes and
appeals; and closeout audits.
Sec. 22.805 Post-award requirements in other parts.
Grants officers responsible for post-award administration of grants
and cooperative agreements shall administer such awards in accordance
with the following parts of the DoDGARs, as supplemented by this
subpart:
(a) Awards to domestic recipients. Standard administrative
requirements for grants and cooperative agreements with domestic
recipients are specified in other parts of the DoDGARs, as follows:
(1) For awards to domestic institutions of higher education,
nonprofit organizations, States, local governments, and Indian tribes,
requirements are specified in subchapter D of 2 CFR chapter XI.
(2) For awards to domestic for-profit organizations, requirements
are specified in 32 CFR part 34.
(b) Awards to foreign recipients. DoD Components shall use the
administrative requirements specified in paragraph (a) of this section,
to the maximum extent practicable, for grants and cooperative agreements
to foreign recipients.
[63 FR 12164, Mar. 12, 1998, as amended at 85 FR 51244, Aug. 19, 2020]
Sec. 22.810 Payments.
(a) Purpose. This section prescribes policies and grants officers'
post-award responsibilities, with respect to payments to recipients of
grants and cooperative agreements.
[[Page 47]]
(b) Policy. (1) It is Governmentwide policy to minimize the time
elapsing between any payment of funds to a recipient and the recipient's
disbursement of the funds for program purposes.
(2) It also is a Governmentwide requirement to use electronic funds
transfer (EFT) in the payment of any grant unless the recipient has
obtained a waiver in accordance with Department of the Treasury
regulations at 31 CFR part 208. As a matter of DoD policy, this
requirement applies to cooperative agreements, as well as grants. Within
the Department of Defense, the Defense Finance and Accounting Service
implements this EFT requirement, and grants officers have collateral
responsibilities at the time of award, as described in Sec. 22.605(c),
and in post-award administration, as described in paragraph (c)(3)(iv)
of this section.
(3) Expanding on these Governmentwide policies, DoD policy is for
DoD Components to use electronic commerce, to the maximum extent
practicable, in the portions of the payment process for grants and
cooperative agreements for which grants officers are responsible. In
cases where recipients submit each payment request to the grants
officer, this includes using electronic methods to receive recipients'
requests for payment and to transmit authorizations for payment to the
DoD payment office. Using electronic methods will improve timeliness and
accuracy of payments and reduce administrative burdens associated with
paper-based payments.
(c) Post-award responsibilities. In cases where the recipient
submits each payment request to the grants officer, the administrative
grants officer designated to handle payments for a grant or cooperative
agreement is responsible for:
(1) [Reserved]
(2) Reviewing each payment request to ensure that:
(i) The request complies with the award terms.
(ii) Available funds are adequate to pay the request.
(iii) The recipient will not have excess cash on hand, based on
expenditure patterns.
(3) Maintaining a close working relationship with the personnel in
the finance and accounting office responsible for making the payments. A
good working relationship is necessary, to ensure timely and accurate
handling of financial transactions for grants and cooperative
agreements. Administrative grants officers:
(i) Should be generally familiar with policies and procedures for
disbursing offices that are contained in Chapter 19 of Volume 10 of the
DoD Financial Management Regulation (the FMR, DoD 7000.14-R \10\).
---------------------------------------------------------------------------
\10\ See footnote 8 to Sec. 22.715(a)(4).
---------------------------------------------------------------------------
(ii) Shall forward authorizations to the designated payment office
expeditiously, so that payments may be made in accordance with the
timely payment guidelines in Chapter 19 of Volume 10 of the FMR. Unless
alternative arrangements are made with the payment office,
authorizations should be forwarded to the payment office at least 3
working days before the end of the period specified in the FMR. The
period specified in the FMR is:
(A) No more than seven calendar days after receipt of the
recipient's request by the administrative grants officer, whenever
electronic commerce is used (i.e., EDI to request and authorize payments
and electronic funds transfer (EFT) to make payments).
(B) No more than thirty calendar days after receipt of the
recipient's request by the administrative grants officer, when it is not
possible to use electronic commerce and paper transactions are used.
(C) No more than seven calendar days after each date specified, when
payments are authorized in advance based on a predetermined payment
schedule, provided that the payment schedule was received in the
disbursing office at least 30 calendar days in advance of the date of
the scheduled payment.
(iii) Shall ensure that, for recipients not required to register in
the System for Award Management, the recipients' Taxpayer Identification
Number (TIN) is included with each payment authorization forwarded to
the payment office. This is a statutory requirement of 31 U.S.C. 3325,
as amended by the Debt
[[Page 48]]
Collection Improvement Act of 1996 (section 31001(y), Pub. L. 104-134).
(iv) For each award that is required to be paid by EFT (see Sec.
22.605(c) and (Sec. 22.810(b)(2)), shall prominently indicate that fact
in the payment authorization.
[63 FR 12164, Mar. 12, 1998, as amended at 70 FR 49467, Aug. 23, 2005;
85 FR 51244, Aug. 19, 2020]
Sec. 22.815 Claims, disputes, and appeals.
(a) Award terms. Grants officers shall include in grants and
cooperative agreements a term or condition that incorporates the
procedures of this section for:
(1) Processing recipient claims and disputes.
(2) Deciding appeals of grants officers' decisions.
(b) Submission of claims--(1) Recipient claims. If a recipient
wishes to submit a claim arising out of or relating to a grant or
cooperative agreement, the grants officer shall inform the recipient
that the claim must:
(i) Be submitted in writing to the grants officer for decision;
(ii) Specify the nature and basis for the relief requested; and
(iii) Include all data that supports the claim.
(2) DoD Component claims. Claims by a DoD Component shall be the
subject of a written decision by a grants officer.
(c) Alternative Dispute Resolution (ADR)--(1) Policy. DoD policy is
to try to resolve all issues concerning grants and cooperative
agreements by mutual agreement at the grants officer's level. DoD
Components therefore are encouraged to use ADR procedures to the maximum
extent practicable. ADR procedures are any voluntary means (e.g., mini-
trials or mediation) used to resolve issues in controversy without
resorting to formal administrative appeals (see paragraph (e) of this
section) or to litigation.
(2) Procedures. (i) The ADR procedures or techniques to be used may
either be agreed upon by the Government and the recipient in advance
(e.g., when agreeing on the terms and conditions of the grant or
cooperative agreement), or may be agreed upon at the time the parties
determine to use ADR procedures.
(ii) If a grants officer and a recipient are not able to resolve an
issue through unassisted negotiations, the grants officer shall
encourage the recipient to enter into ADR procedures. ADR procedures may
be used prior to submission of a recipient's claim or at any time prior
to the Grant Appeal Authority's decision on a recipient's appeal (see
paragraph (e)(3)(iii) of this section).
(d) Grants officer decisions. (1) Within 60 calendar days of receipt
of a written claim, the grants officer shall either:
(i) Prepare a written decision, which shall include the reasons for
the decision; shall identify all relevant data on which the decision is
based; shall identify the cognizant Grant Appeal Authority and give his
or her mailing address; and shall be included in the award file; or
(ii) Notify the recipient of a specific date when he or she will
render a written decision, if more time is required to do so. The notice
shall inform the recipient of the reason for delaying the decision
(e.g., the complexity of the claim, a need for more time to complete ADR
procedures, or a need for the recipient to provide additional
information to support the claim).
(2) The decision of the grants officer shall be final, unless the
recipient decides to appeal. If a recipient decides to appeal a grants
officer's decision, the grants officer shall encourage the recipient to
enter into ADR procedures, as described in paragraph (c) of this
section.
(e) Formal administrative appeals--(1) Grant appeal authorities.
Each DoD Component that awards grants or cooperative agreements shall
establish one or more Grant Appeal Authorities to decide formal,
administrative appeals in accordance with paragraph (e)(3) of this
section. Each Grant Appeal Authority shall be either:
(i) An individual at a grade level in the Senior Executive Service,
if civilian, or at the rank of Flag or General Officer, if military; or
(ii) A board chaired by such an individual.
(2) Right of appeal. A recipient has the right to appeal a grants
officer's decision to the Grant Appeal Authority (but note that ADR
procedures, as described in paragraph (c) of this section,
[[Page 49]]
are the preferred means for resolving any appeal).
(3) Appeal procedures--(i) Notice of appeal. A recipient may appeal
a decision of the grants officer within 90 calendar days of receiving
that decision, by filing a written notice of appeal to the Grant Appeal
Authority and to the grants officer. If a recipient elects to use an ADR
procedure, the recipient is permitted an additional 60 calendar days to
file the written notice of appeal to the Grant Appeal Authority and
grants officer.
(ii) Appeal file. Within 30 calendar days of receiving the notice of
appeal, the grants officer shall forward to the Grant Appeal Authority
and the recipient the appeal file, which shall include copies of all
documents relevant to the appeal. The recipient may supplement the file
with additional documents it deems relevant. Either the grants officer
or the recipient may supplement the file with a memorandum in support of
its position. The Grant Appeal Authority may request additional
information from either the grants officer or the recipient.
(iii) Decision. The appeal shall be decided solely on the basis of
the written record, unless the Grant Appeal Authority decides to conduct
fact-finding procedures or an oral hearing on the appeal. Any fact-
finding or hearing shall be conducted using procedures that the Grant
Appeal Authority deems appropriate.
(f) Representation. A recipient may be represented by counsel or any
other designated representative in any claim, appeal, or ADR proceeding
brought pursuant to this section, as long as the representative is not
otherwise prohibited by law or regulation from appearing before the DoD
Component concerned.
(g) Non-exclusivity of remedies. Nothing in this section is intended
to limit a recipient's right to any remedy under the law.
Sec. 22.820 Debt collection.
(a) Purpose. This section prescribes procedures for establishing
debts owed by recipients of grants and cooperative agreements, and
transferring them to payment offices for collection.
(b) Resolution of indebtedness. The grants officer shall attempt to
resolve by mutual agreement any claim of a recipient's indebtedness to
the United States arising out of a grant or cooperative agreement (e.g.,
by a finding that a recipient was paid funds in excess of the amount to
which the recipient was entitled under the terms and conditions of the
award).
(c) Grants officer's decision. In the absence of such mutual
agreement, any claim of a recipient's indebtedness shall be the subject
of a grants officer decision, in accordance with Sec. 22.815(b)(2). The
grants officer shall prepare and transmit to the recipient a written
notice that:
(1) Describes the debt, including the amount, the name and address
of the official who determined the debt (e.g., the grants officer under
Sec. 22.815(d)), and a copy of that determination.
(2) Informs the recipient that:
(i) Within 30 calendar days of the grants officer's decision, the
recipient shall either pay the amount owed to the grants officer (at the
address that was provided pursuant to paragraph (c)(1) of this section)
or inform the grants officer of the recipient's intention to appeal the
decision.
(ii) If the recipient elects not to appeal, any amounts not paid
within 30 calendar days of the grants officer's decision will be a
delinquent debt.
(iii) If the recipient elects to appeal the grants officer's
decision the recipient has 90 calendar days, or 150 calendar days if ADR
procedures are used, after receipt of the grants officer's decision to
file the appeal, in accordance with Sec. 22.815(e)(3)(i).
(iv) The debt will bear interest, and may include penalties and
other administrative costs, in accordance with the debt collection
provisions in Chapters 29, 31, and 32 of Volume 5 and Chapters 18 and 19
of Volume 10 of the DoD Financial Management Regulation (DoD 7000.14-R).
No interest will be charged if the recipient pays the amount owed within
30 calendar days of the grants officer's decision. Interest will be
charged for the entire period from the date the decision was mailed, if
the recipient pays the amount owed after 30 calendar days.
[[Page 50]]
(d) Follow-up. Depending upon the response from the recipient, the
grants officer shall proceed as follows:
(1) If the recipient pays the amount owed within 30 calendar days to
the grants officer, the grants officer shall forward the payment to the
responsible payment office.
(2) If within 30 calendar days the recipient elects to appeal the
grants officer's decision, further action to collect the debt is
deferred, pending the outcome of the appeal. If the final result of the
appeal is a determination that the recipient owes a debt to the Federal
Government, the grants officer shall send a demand letter to the
recipient and transfer responsibility for further debt collection to a
payment office, as described in paragraph (d)(3) of this section.
(3) If within 30 calendar days the recipient has neither paid the
amount due nor provided notice of intent to file an appeal of the grants
officer's decision, the grants officer shall send a demand letter to the
recipient, with a copy to the payment office that will be responsible
for collecting the delinquent debt. The payment office will be
responsible for any further debt collection activity, including issuance
of additional demand letters (see Chapter 19 of volume 10 of the DoD
Financial Management Regulation, DoD 7000.14-R). The grants officer's
demand letter shall:
(i) Describe the debt, including the amount, the name and address of
the official that determined the debt (e.g., the grants officer under
Sec. 22.815(d)), and a copy of that determination.
(ii) Notify the recipient that the debt is a delinquent debt that
bears interest from the date of the grants officer's decision, and that
penalties and other administrative costs may be assessed.
(iii) Identify the payment office that is responsible for the
collection of the debt, and notify the recipient that it may submit a
proposal to that payment office to defer collection, if immediate
payment is not practicable.
(e) Administrative offset. In carrying out the responsibility for
collecting delinquent debts, a disbursing officer may need to consult
grants officers, to determine whether administrative offset against
payments to a recipient owing a delinquent debt would interfere with
execution of projects being carried out under grants or cooperative
agreements. Disbursing officers may also ask grants officers whether it
is feasible to convert payment methods under grants or cooperative
agreements from advance payments to reimbursements, to facilitate use of
administrative offset. Grants officers therefore should be familiar with
guidelines for disbursing officers, in Chapter 19 of Volume 10 of the
Financial Management Regulation (DoD 7000.14-R), concerning withholding
and administrative offset to recover delinquent debts.
Sec. 22.825 Closeout audits.
(a) Purpose. This section establishes DoD policy for obtaining
audits at closeout of individual grants and cooperative agreements.
(b) Policy. Grants officers shall use their judgment on a case-by-
case basis, in deciding whether to obtain an audit prior to closing out
a grant or cooperative agreement (i.e., there is no specific DoD
requirement to obtain an audit prior to doing so). Factors to be
considered include:
(1) The amount of the award.
(2) DoD's past experience with the recipient, including the presence
or lack of findings of material deficiencies in recent:
(i) Audits of individual awards; or
(ii) Systems-wide financial audits and audits of the compliance of
the recipient's systems with Federal requirements, under OMB guidance in
subpart F of 2 CFR part 200, where that guidance is applicable. (See
Sec. 22.715(a)(1)).
[63 FR 12164, Mar. 12, 1998, as amended at 85 FR 51244, Aug. 19, 2020]
[[Page 51]]
Sec. Appendix A to Part 22--Proposal Provision for Required
Certification
[GRAPHIC] [TIFF OMITTED] TR23AU05.028
[70 FR 49468, Aug. 23, 2005]
[[Page 52]]
PART 26_GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE
(FINANCIAL ASSISTANCE)--Table of Contents
Subpart A_Purpose and Coverage
Sec.
26.100 What does this part do?
26.105 Does this part apply to me?
26.110 Are any of my Federal assistance awards exempt from this part?
26.115 Does this part affect the Federal contracts that I receive?
Subpart B_Requirements for Recipients Other Than Individuals
26.200 What must I do to comply with this part?
26.205 What must I include in my drug-free workplace statement?
26.210 To whom must I distribute my drug-free workplace statement?
26.215 What must I include in my drug-free awareness program?
26.220 By when must I publish my drug-free workplace statement and
establish my drug-free awareness program?
26.225 What actions must I take concerning employees who are convicted
of drug violations in the workplace?
26.230 How and when must I identify workplaces?
Subpart C_Requirements for Recipients Who Are Individuals
26.300 What must I do to comply with this part if I am an individual
recipient?
26.301 [Reserved]
Subpart D_Responsibilities of DOD Component Awarding Officials
26.400 What are my responsibilities as a DOD Component awarding
official?
Subpart E_Violations of This Part and Consequences
26.500 How are violations of this part determined for recipients other
than individuals?
26.505 How are violations of this part determined for recipients who are
individuals?
26.510 What actions will the Federal Government take against a recipient
determined to have violated this part?
26.515 Are there any exceptions to those actions?
Subpart F_Definitions
26.605 Award
26.610 Controlled substance.
26.615 Conviction.
26.620 Cooperative agreement.
26.625 Criminal drug statute.
26.630 Debarment.
26.632 DOD Component.
26.635 Drug-free workplace.
26.640 Employee.
26.645 Federal agency or agency.
26.650 Grant.
26.655 Individual.
26.660 Recipient.
26.665 State.
26.670 Suspension.
Authority: 41U.S.C.701, et seq.
Source: 68 FR 66557, 66609, Nov. 26, 2003, unless otherwise noted.
Subpart A_Purpose and Coverage
Sec. 26.100 What does this part do?
This part carries out the portion of the Drug-Free Workplace Act of
1988 (41 U.S.C. 701 et seq., as amended) that applies to grants. It also
applies the provisions of the Act to cooperative agreements and other
financial assistance awards, as a matter of Federal Government policy.
Sec. 26.105 Does this part apply to me?
(a) Portions of this part apply to you if you are either--
(1) A recipient of an assistance award from the DOD Component; or
(2) A(n) DOD Component awarding official. (See definitions of award
and recipient in Sec. Sec. 26.605 and 26.660, respectively.)
(b) The following table shows the subparts that apply to you:
------------------------------------------------------------------------
If you are . . . see subparts . . .
------------------------------------------------------------------------
(1) A recipient who is not an individual.. A, B and E.
(2) A recipient who is an individual...... A, C and E.
(3) A(n) DOD Component awarding official.. A, D and E.
------------------------------------------------------------------------
Sec. 26.110 Are any of my Federal assistance awards exempt from this part?
This part does not apply to any award that the Head of the DOD
Component or his or her designee determines that the application of this
part would be inconsistent with the international obligations of the
United States or the laws or regulations of a foreign government.
[[Page 53]]
Sec. 26.115 Does this part affect the Federal contracts that I receive?
It will affect future contract awards indirectly if you are debarred
or suspended for a violation of the requirements of this part, as
described in Sec. 26.510(c). However, this part does not apply directly
to procurement contracts. The portion of the Drug-Free Workplace Act of
1988 that applies to Federal procurement contracts is carried out
through the Federal Acquisition Regulation in chapter 1 of Title 48 of
the Code of Federal Regulations (the drug-free workplace coverage
currently is in 48 CFR part 23, subpart 23.5).
Subpart B_Requirements for Recipients Other Than Individuals
Sec. 26.200 What must I do to comply with this part?
There are two general requirements if you are a recipient other than
an individual.
(a) First, you must make a good faith effort, on a continuing basis,
to maintain a drug-free workplace. You must agree to do so as a
condition for receiving any award covered by this part. The specific
measures that you must take in this regard are described in more detail
in subsequent sections of this subpart. Briefly, those measures are to--
(1) Publish a drug-free workplace statement and establish a drug-
free awareness program for your employees (see Sec. Sec. 26.205 through
26.220); and
(2) Take actions concerning employees who are convicted of violating
drug statutes in the workplace (see Sec. 26.225).
(b) Second, you must identify all known workplaces under your
Federal awards (see Sec. 26.230).
Sec. 26.205 What must I include in my drug-free workplace statement?
You must publish a statement that--
(a) Tells your employees that the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled substance
is prohibited in your workplace;
(b) Specifies the actions that you will take against employees for
violating that prohibition; and
(c) Lets each employee know that, as a condition of employment under
any award, he or she:
(1) Will abide by the terms of the statement; and
(2) Must notify you in writing if he or she is convicted for a
violation of a criminal drug statute occurring in the workplace and must
do so no more than five calendar days after the conviction.
Sec. 26.210 To whom must I distribute my drug-free workplace statement?
You must require that a copy of the statement described in Sec.
26.205 be given to each employee who will be engaged in the performance
of any Federal award.
Sec. 26.215 What must I include in my drug-free awareness program?
You must establish an ongoing drug-free awareness program to inform
employees about--
(a) The dangers of drug abuse in the workplace;
(b) Your policy of maintaining a drug-free workplace;
(c) Any available drug counseling, rehabilitation, and employee
assistance programs; and
(d) The penalties that you may impose upon them for drug abuse
violations occurring in the workplace.
Sec. 26.220 By when must I publish my drug-free workplace statement
and establish my drug-free awareness program?
If you are a new recipient that does not already have a policy
statement as described in Sec. 26.205 and an ongoing awareness program
as described in Sec. 26.215, you must publish the statement and
establish the program by the time given in the following table:
------------------------------------------------------------------------
If . . . then you . . .
------------------------------------------------------------------------
(a) The performance period of the award is must have the policy
less than 30 days. statement and program in
place as soon as possible,
but before the date on
which performance is
expected to be completed.
(b) The performance period of the award is must have the policy
30 days or more. statement and program in
place within 30 days after
award.
[[Page 54]]
(c) You believe there are extraordinary may ask the DOD Component
circumstances that will require more than awarding official to give
30 days for you to publish the policy you more time to do so. The
statement and establish the awareness amount of additional time,
program. if any, to be given is at
the discretion of the
awarding official.
------------------------------------------------------------------------
Sec. 26.225 What actions must I take concerning employees who are convicted
of drug violations in the workplace?
There are two actions you must take if an employee is convicted of a
drug violation in the workplace:
(a) First, you must notify Federal agencies if an employee who is
engaged in the performance of an award informs you about a conviction,
as required by Sec. 26.205(c)(2), or you otherwise learn of the
conviction. Your notification to the Federal agencies must--
(1) Be in writing;
(2) Include the employee's position title;
(3) Include the identification number(s) of each affected award;
(4) Be sent within ten calendar days after you learn of the
conviction; and
(5) Be sent to every Federal agency on whose award the convicted
employee was working. It must be sent to every awarding official or his
or her official designee, unless the Federal agency has specified a
central point for the receipt of the notices.
(b) Second, within 30 calendar days of learning about an employee's
conviction, you must either--
(1) Take appropriate personnel action against the employee, up to
and including termination, consistent with the requirements of the
Rehabilitation Act of 1973 (29 U.S.C. 794), as amended; or
(2) Require the employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for these purposes
by a Federal, State or local health, law enforcement, or other
appropriate agency.
Sec. 26.230 How and when must I identify workplaces?
(a) You must identify all known workplaces under each DOD Component
award. A failure to do so is a violation of your drug-free workplace
requirements. You may identify the workplaces--
(1) To the DOD Component official that is making the award, either
at the time of application or upon award; or
(2) In documents that you keep on file in your offices during the
performance of the award, in which case you must make the information
available for inspection upon request by DOD Component officials or
their designated representatives.
(b) Your workplace identification for an award must include the
actual address of buildings (or parts of buildings) or other sites where
work under the award takes place. Categorical descriptions may be used
(e.g., all vehicles of a mass transit authority or State highway
department while in operation, State employees in each local
unemployment office, performers in concert halls or radio studios).
(c) If you identified workplaces to the DOD Component awarding
official at the time of application or award, as described in paragraph
(a)(1) of this section, and any workplace that you identified changes
during the performance of the award, you must inform the DOD Component
awarding official.
Subpart C_Requirements for Recipients Who Are Individuals
Sec. 26.300 What must I do to comply with this part if I am
an individual recipient?
As a condition of receiving a(n) DOD Component award, if you are an
individual recipient, you must agree that--
(a) You will not engage in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance in conducting
any activity related to the award; and
(b) If you are convicted of a criminal drug offense resulting from a
violation occurring during the conduct of any award activity, you will
report the conviction:
(1) In writing.
(2) Within 10 calendar days of the conviction.
(3) To the DOD Component awarding official or other designee for
each award that you currently have, unless Sec. 26.301 or the award
document designates a central point for the receipt of the notices. When
notice is made to a central point, it must include the
[[Page 55]]
identification number(s) of each affected award.
Sec. 26.301 [Reserved]
Subpart D_Responsibilities of DOD Component Awarding Officials
Sec. 26.400 What are my responsibilities as a(n) DOD Component
awarding official?
As a(n) DOD Component awarding official, you must obtain each
recipient's agreement, as a condition of the award, to comply with the
requirements in--
(a) Subpart B of this part, if the recipient is not an individual;
or
(b) Subpart C of this part, if the recipient is an individual.
Subpart E_Violations of this Part and Consequences
Sec. 26.500 How are violations of this part determined for recipients
other than individuals?
A recipient other than an individual is in violation of the
requirements of this part if the Head of the DOD Component or his or her
designee determines, in writing, that--
(a) The recipient has violated the requirements of subpart B of this
part; or
(b) The number of convictions of the recipient's employees for
violating criminal drug statutes in the workplace is large enough to
indicate that the recipient has failed to make a good faith effort to
provide a drug-free workplace.
Sec. 26.505 How are violations of this part determined for recipients
who are individuals?
An individual recipient is in violation of the requirements of this
part if the Head of the DOD Component or his or her designee determines,
in writing, that--
(a) The recipient has violated the requirements of subpart C of this
part; or
(b) The recipient is convicted of a criminal drug offense resulting
from a violation occurring during the conduct of any award activity.
Sec. 26.510 What actions will the Federal Government take against
a recipient determined to have violated this part?
If a recipient is determined to have violated this part, as
described in Sec. 26.500 or Sec. 26.505, the DOD Component may take
one or more of the following actions--
(a) Suspension of payments under the award;
(b) Suspension or termination of the award; and
(c) Suspension or debarment of the recipient under 32 CFR Part 25,
for a period not to exceed five years.
Sec. 26.515 Are there any exceptions to those actions?
The Secretary of Defense or Secretary of a Military Department may
waive with respect to a particular award, in writing, a suspension of
payments under an award, suspension or termination of an award, or
suspension or debarment of a recipient if the Secretary of Defense or
Secretary of a Military Department determines that such a waiver would
be in the public interest. This exception authority cannot be delegated
to any other official.
Subpart F_Definitions
Sec. 26.605 Award.
Award means an award of financial assistance by the DOD Component or
other Federal agency directly to a recipient.
(a) The term award includes:
(1) A Federal grant or cooperative agreement, in the form of money
or property in lieu of money.
(2) A block grant or a grant in an entitlement program, whether or
not the grant is exempted from coverage under the Governmentwide rule 32
CFR Part 33 that implements OMB Circular A-102 (for availability, see 5
CFR 1310.3) and specifies uniform administrative requirements.
(b) The term award does not include:
(1) Technical assistance that provides services instead of money.
(2) Loans.
(3) Loan guarantees.
(4) Interest subsidies.
(5) Insurance.
(6) Direct appropriations.
[[Page 56]]
(7) Veterans' benefits to individuals (i.e., any benefit to
veterans, their families, or survivors by virtue of the service of a
veteran in the Armed Forces of the United States).
Sec. 26.610 Controlled substance.
Controlled substance means a controlled substance in schedules I
through V of the Controlled Substances Act (21 U.S.C. 812), and as
further defined by regulation at 21 CFR 1308.11 through 1308.15.
Sec. 26.615 Conviction.
Conviction means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal
or State criminal drug statutes.
Sec. 26.620 Cooperative agreement.
Cooperative agreement means an award of financial assistance that,
consistent with 31 U.S.C. 6305, is used to enter into the same kind of
relationship as a grant (see definition of grant in Sec. 26.650),
except that substantial involvement is expected between the Federal
agency and the recipient when carrying out the activity contemplated by
the award. The term does not include cooperative research and
development agreements as defined in 15 U.S.C. 3710a.
Sec. 26.625 Criminal drug statute.
Criminal drug statute means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing, use, or
possession of any controlled substance.
Sec. 26.630 Debarment.
Debarment means an action taken by a Federal agency to prohibit a
recipient from participating in Federal Government procurement contracts
and covered nonprocurement transactions. A recipient so prohibited is
debarred, in accordance with the Federal Acquisition Regulation for
procurement contracts (48 CFR part 9, subpart 9.4) and the common rule,
Government-wide Debarment and Suspension (Nonprocurement), that
implements Executive Order 12549 and Executive Order 12689.
Sec. 26.632 DOD Component.
DOD Component means the Office of the Secretary of Defense, a
Military Department, a Defense Agency, or the Office of Economic
Adjustment.
[68 FR 66609, Nov. 26, 2003]
Sec. 26.635 Drug-free workplace.
Drug-free workplace means a site for the performance of work done in
connection with a specific award at which employees of the recipient are
prohibited from engaging in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance.
Sec. 26.640 Employee.
(a) Employee means the employee of a recipient directly engaged in
the performance of work under the award, including--
(1) All direct charge employees;
(2) All indirect charge employees, unless their impact or
involvement in the performance of work under the award is insignificant
to the performance of the award; and
(3) Temporary personnel and consultants who are directly engaged in
the performance of work under the award and who are on the recipient's
payroll.
(b) This definition does not include workers not on the payroll of
the recipient (e.g., volunteers, even if used to meet a matching
requirement; consultants or independent contractors not on the payroll;
or employees of subrecipients or subcontractors in covered workplaces).
Sec. 26.645 Federal agency or agency.
Federal agency or agency means any United States executive
department, military department, government corporation, government
controlled corporation, any other establishment in the executive branch
(including the Executive Office of the President), or any independent
regulatory agency.
Sec. 26.650 Grant.
Grant means an award of financial assistance that, consistent with
31 U.S.C.
[[Page 57]]
6304, is used to enter into a relationship--
(a) The principal purpose of which is to transfer a thing of value
to the recipient to carry out a public purpose of support or stimulation
authorized by a law of the United States, rather than to acquire
property or services for the Federal Government's direct benefit or use;
and
(b) In which substantial involvement is not expected between the
Federal agency and the recipient when carrying out the activity
contemplated by the award.
Sec. 26.655 Individual.
Individual means a natural person.
Sec. 26.660 Recipient.
Recipient means any individual, corporation, partnership,
association, unit of government (except a Federal agency) or legal
entity, however organized, that receives an award directly from a
Federal agency.
Sec. 26.665 State.
State means any of the States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, or any territory or
possession of the United States.
Sec. 26.670 Suspension.
Suspension means an action taken by a Federal agency that
immediately prohibits a recipient from participating in Federal
Government procurement contracts and covered nonprocurement transactions
for a temporary period, pending completion of an investigation and any
judicial or administrative proceedings that may ensue. A recipient so
prohibited is suspended, in accordance with the Federal Acquisition
Regulation for procurement contracts (48 CFR part 9, subpart 9.4) and
the common rule, Government-wide Debarment and Suspension
(Nonprocurement), that implements Executive Order 12549 and Executive
Order 12689. Suspension of a recipient is a distinct and separate action
from suspension of an award or suspension of payments under an award.
PART 28_NEW RESTRICTIONS ON LOBBYING--Table of Contents
Subpart A_General
Sec.
28.100 Conditions on use of funds.
28.105 Definitions.
28.110 Certification and disclosure.
Subpart B_Activities by Own Employees
28.200 Agency and legislative liaison.
28.205 Professional and technical services.
28.210 Reporting.
Subpart C_Activities by Other Than Own Employees
28.300 Professional and technical services.
Subpart D_Penalties and Enforcement
28.400 Penalties.
28.405 Penalty procedures.
28.410 Enforcement.
Subpart E_Exemptions
28.500 Secretary of Defense.
Subpart F_Agency Reports
28.600 Semi-annual compilation.
28.605 Inspector General report.
Appendix A to Part 28--Certification Regarding Lobbying
Appendix B to Part 28--Disclosure Form To Report Lobbying
Authority: Section 319, Public Law 102-121 (31 U.S.C. 1352); 5
U.S.C. section 301; 10 U.S.C. 113.
Source: 55 FR 6737, 6752, Feb. 26, 1990, unless otherwise noted.
Redesignated at 57 FR 6199, Feb. 21, 1992.
Cross Reference: See also Office of Management and Budget notice
published at 54 FR 52306, December 20, 1989.
Subpart A_General
Sec. 28.100 Conditions on use of funds.
(a) No appropriated funds may be expended by the recipient of a
Federal contract, grant, loan, or cooperative 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
[[Page 58]]
contract, the making of any Federal grant, the making of any Federal
loan, the entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
(b) Each person who requests or receives from an agency a Federal
contract, grant, loan, or cooperative agreement shall file with that
agency a certification, set forth in Appendix A, that the person has not
made, and will not make, any payment prohibited by paragraph (a) of this
section.
(c) Each person who requests or receives from an agency a Federal
contract, grant, loan, or a cooperative agreement shall file with that
agency a disclosure form, set forth in Appendix B, if such person has
made or has agreed to make any payment using nonappropriated funds (to
include profits from any covered Federal action), which would be
prohibited under paragraph (a) of this section if paid for with
appropriated funds.
(d) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with that agency a statement, set forth in appendix A, whether that
person has made or has agreed to make any payment to influence or
attempt to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with that loan insurance or guarantee.
(e) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with that agency a disclosure form, set forth in Appendix B, if that
person has made or has agreed to make any payment to influence or
attempt to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with that loan insurance or guarantee.
Sec. 28.105 Definitions.
For purposes of this part:
(a) Agency, as defined in 5 U.S.C. 552(f), includes Federal
executive departments and agencies as well as independent regulatory
commissions and Government corporations, as defined in 31 U.S.C.
9101(1).
(b) Covered Federal action means any of the following Federal
actions:
(1) The awarding of any Federal contract;
(2) The making of any Federal grant;
(3) The making of any Federal loan;
(4) The entering into of any cooperative agreement; and,
(5) The extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.
Covered Federal action does not include receiving from an agency a
commitment providing for the United States to insure or guarantee a
loan. Loan guarantees and loan insurance are addressed independently
within this part.
(c) Federal contract means an acquisition contract awarded by an
agency, including those subject to the Federal Acquisition Regulation
(FAR), and any other acquisition contract for real or personal property
or services not subject to the FAR.
(d) Federal cooperative agreement means a cooperative agreement
entered into by an agency.
(e) Federal grant means an award of financial assistance in the form
of money, or property in lieu of money, by the Federal Government or a
direct appropriation made by law to any person. The term does not
include technical assistance which provides services instead of money,
or other assistance in the form of revenue sharing, loans, loan
guarantees, loan insurance, interest subsidies, insurance, or direct
United States cash assistance to an individual.
(f) Federal loan means a loan made by an agency. The term does not
include loan guarantee or loan insurance.
(g) Indian tribe and tribal organization have the meaning provided
in section 4 of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions
of Indian tribes in that Act.
(h) Influencing or attempting to influence means making, with the
intent to
[[Page 59]]
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.
Sec. 28.110 Certification and disclosure.
(a) Each person shall file a certification, and a disclosure form,
if required, with each submission that initiates agency consideration of
such person for:
(1) Award of a Federal contract, grant, or cooperative agreement
exceeding $100,000; or
[[Page 60]]
(2) An award of a Federal loan or a commitment providing for the
United States to insure or guarantee a loan exceeding $150,000.
(b) Each person shall file a certification, and a disclosure form,
if required, upon receipt by such person of:
(1) A Federal contract, grant, or cooperative agreement exceeding
$100,000; or
(2) A Federal loan or a commitment providing for the United States
to insure or guarantee a loan exceeding $150,000,
Unless such person previously filed a certification, and a disclosure
form, if required, under paragraph (a) of this section.
(c) Each person shall file a disclosure form at the end of each
calendar quarter in which there occurs any event that requires
disclosure or that materially affects the accuracy of the information
contained in any disclosure form previously filed by such person under
paragraphs (a) or (b) of this section. An event that materially affects
the accuracy of the information reported includes:
(1) A cumulative increase of $25,000 or more in the amount paid or
expected to be paid for influencing or attempting to influence a covered
Federal action; or
(2) A change in the person(s) or individual(s) influencing or
attempting to influence a covered Federal action; or,
(3) A change in the officer(s), employee(s), or Member(s) contacted
to influence or attempt to influence a covered Federal action.
(d) Any person who requests or receives from a person referred to in
paragraphs (a) or (b) of this section:
(1) A subcontract exceeding $100,000 at any tier under a Federal
contract;
(2) A subgrant, contract, or subcontract exceeding $100,000 at any
tier under a Federal grant;
(3) A contract or subcontract exceeding $100,000 at any tier under a
Federal loan exceeding $150,000; or,
(4) A contract or subcontract exceeding $100,000 at any tier under a
Federal cooperative agreement,
Shall file a certification, and a disclosure form, if required, to the
next tier above.
(e) All disclosure forms, but not certifications, shall be forwarded
from tier to tier until received by the person referred to in paragraphs
(a) or (b) of this section. That person shall forward all disclosure
forms to the agency.
(f) Any certification or disclosure form filed under paragraph (e)
of this section shall be treated as a material representation of fact
upon which all receiving tiers shall rely. All liability arising from an
erroneous representation shall be borne solely by the tier filing that
representation and shall not be shared by any tier to which the
erroneous representation is forwarded. Submitting an erroneous
certification or disclosure constitutes a failure to file the required
certification or disclosure, respectively. If a person fails to file a
required certification or disclosure, the United States may pursue all
available remedies, including those authorized by section 1352, title
31, U.S. Code.
(g) For awards and commitments in process prior to December 23,
1989, but not made before that date, certifications shall be required at
award or commitment, covering activities occurring between December 23,
1989, and the date of award or commitment. However, for awards and
commitments in process prior to the December 23, 1989 effective date of
these provisions, but not made before December 23, 1989, disclosure
forms shall not be required at time of award or commitment but shall be
filed within 30 days.
(h) No reporting is required for an activity paid for with
appropriated funds if that activity is allowable under either subpart B
or C.
Subpart B_Activities by Own Employees
Sec. 28.200 Agency and legislative liaison.
(a) The prohibition on the use of appropriated funds, in Sec.
28.100 (a), does not apply in the case of a payment of reasonable
compensation made to an officer or employee of a person requesting or
receiving a Federal contract, grant, loan, or cooperative agreement if
the payment is for agency and legislative liaison activities not
directly related to a covered Federal action.
[[Page 61]]
(b) For purposes of paragraph (a) of this section, providing any
information specifically requested by an agency or Congress is allowable
at any time.
(c) For purposes of paragraph (a) of this section, the following
agency and legislative liaison activities are allowable at any time only
where they are not related to a specific solicitation for any covered
Federal action:
(1) Discussing with an agency (including individual demonstrations)
the qualities and characteristics of the person's products or services,
conditions or terms of sale, and service capabilities; and,
(2) Technical discussions and other activities regarding the
application or adaptation of the person's products or services for an
agency's use.
(d) For purposes of paragraph (a) of this section, the following
agencies and legislative liaison activities are allowable only where
they are prior to formal solicitation of any covered Federal action:
(1) Providing any information not specifically requested but
necessary for an agency to make an informed decision about initiation of
a covered Federal action;
(2) Technical discussions regarding the preparation of an
unsolicited proposal prior to its official submission; and,
(3) Capability presentations by persons seeking awards from an
agency pursuant to the provisions of the Small Business Act, as amended
by Public Law 95-507 and other subsequent amendments.
(e) Only those activities expressly authorized by this section are
allowable under this section.
[55 FR 6737, 6752, Feb. 26, 1990. Redesignated and amended at 57 FR
6199, 6200, Feb. 21, 1992]
Sec. 28.205 Professional and technical services.
(a) The prohibition on the use of appropriated funds, in Sec.
28.100 (a), does not apply in the case of a payment of reasonable
compensation made to an officer or employee of a person requesting or
receiving a Federal contract, grant, loan, or cooperative agreement or
an extension, continuation, renewal, amendment, or modification of a
Federal contract, grant, loan, or cooperative agreement if payment is
for professional or technical services rendered directly in the
preparation, submission, or negotiation of any bid, proposal, or
application for that Federal contract, grant, loan, or cooperative
agreement or for meeting requirements imposed by or pursuant to law as a
condition for receiving that Federal contract, grant, loan, or
cooperative agreement.
(b) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting of a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
(c) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or
[[Page 62]]
reasonably expected to be required by law or regulation, and any other
requirements in the actual award documents.
(d) Only those services expressly authorized by this section are
allowable under this section.
[55 FR 6737, 6752, Feb. 26, 1990. Redesignated and amended at 57 FR
6199, 6200, Feb. 21, 1992]
Sec. 28.210 Reporting.
No reporting is required with respect to payments of reasonable
compensation made to regularly employed officers or employees of a
person.
Subpart C_Activities by Other Than Own Employees
Sec. 28.300 Professional and technical services.
(a) The prohibition on the use of appropriated funds, in Sec.
28.100 (a), does not apply in the case of any reasonable payment to a
person, other than an officer or employee of a person requesting or
receiving a covered Federal action, if the payment is for professional
or technical services rendered directly in the preparation, submission,
or negotiation of any bid, proposal, or application for that Federal
contract, grant, loan, or cooperative agreement or for meeting
requirements imposed by or pursuant to law as a condition for receiving
that Federal contract, grant, loan, or cooperative agreement.
(b) The reporting requirements in Sec. 28.110 (a) and (b) regarding
filing a disclosure form by each person, if required, shall not apply
with respect to professional or technical services rendered directly in
the preparation, submission, or negotiation of any commitment providing
for the United States to insure or guarantee a loan.
(c) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting of a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
(d) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or reasonably expected to be required by law or regulation,
and any other requirements in the actual award documents.
(e) Persons other than officers or employees of a person requesting
or receiving a covered Federal action include consultants and trade
associations.
(f) Only those services expressly authorized by this section are
allowable under this section.
[55 FR 6737, 6752, Feb. 26, 1990. Redesignated and amended at 57 FR
6199, 6200, Feb. 21, 1992]
Subpart D_Penalties and Enforcement
Sec. 28.400 Penalties.
(a) Any person who makes an expenditure prohibited herein shall be
subject to a civil penalty of not less than
[[Page 63]]
$10,000 and not more than $100,000 for each such expenditure.
(b) Any person who fails to file or amend the disclosure form (see
Appendix B) to be filed or amended if required herein, shall be subject
to a civil penalty of not less than $10,000 and not more than $100,000
for each such failure.
(c) A filing or amended filing on or after the date on which an
administrative action for the imposition of a civil penalty is commenced
does not prevent the imposition of such civil penalty for a failure
occurring before that date. An administrative action is commenced with
respect to a failure when an investigating official determines in
writing to commence an investigation of an allegation of such failure.
(d) In determining whether to impose a civil penalty, and the amount
of any such penalty, by reason of a violation by any person, the agency
shall consider the nature, circumstances, extent, and gravity of the
violation, the effect on the ability of such person to continue in
business, any prior violations by such person, the degree of culpability
of such person, the ability of the person to pay the penalty, and such
other matters as may be appropriate.
(e) First offenders under paragraphs (a) or (b) of this section
shall be subject to a civil penalty of $10,000, absent aggravating
circumstances. Second and subsequent offenses by persons shall be
subject to an appropriate civil penalty between $10,000 and $100,000, as
determined by the agency head or his or her designee.
(f) An imposition of a civil penalty under this section does not
prevent the United States from seeking any other remedy that may apply
to the same conduct that is the basis for the imposition of such civil
penalty.
Sec. 28.405 Penalty procedures.
Agencies shall impose and collect civil penalties pursuant to the
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C.
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and
3812, insofar as these provisions are not inconsistent with the
requirements herein.
Sec. 28.410 Enforcement.
The head of each agency shall take such actions as are necessary to
ensure that the provisions herein are vigorously implemented and
enforced in that agency.
Subpart E_Exemptions
Sec. 28.500 Secretary of Defense.
(a) Exemption authority. The Secretary of Defense may exempt, on a
case-by-case basis, a covered Federal action from the prohibition
whenever the Secretary determines, in writing, that such an exemption is
in the national interest. The Secretary shall transmit a copy of each
such written exemption to Congress immediately after making such a
determination.
(b) Policy. It is the policy of the Department of Defense that
exemptions under paragraph (a) of this section shall be requested only
rarely and in exceptional circumstances.
(c) Procedures. Each DoD Component that awards or administers
Federal grants, Federal cooperative agreements, or Federal loans subject
to this part shall establish procedures whereby:
(1) A grants officer wishing to request an exemption for a grant,
cooperative agreement, or loan shall transmit such request through
appropriate channels to: Director for Research, ODDR&E(R), 3080 Defense
Pentagon, Washington, DC. 20301-3080.
(2) Each such request shall explain why an exemption is in the
national interest, a justification that must be transmitted to Congress
for each exemption that is approved.
[63 FR 12188, Mar. 12, 1998]
Subpart F_Agency Reports
Sec. 28.600 Semi-annual compilation.
(a) The head of each agency shall collect and compile the disclosure
reports (see appendix B) and, on May 31 and November 30 of each year,
submit to the Secretary of the Senate and the Clerk of the House of
Representatives a report containing a compilation of the information
contained in the disclosure reports received during the six-month period
ending on March 31 or
[[Page 64]]
September 30, respectively, of that year.
(b) The report, including the compilation, shall be available for
public inspection 30 days after receipt of the report by the Secretary
and the Clerk.
(c) Information that involves intelligence matters shall be reported
only to the Select Committee on Intelligence of the Senate, the
Permanent Select Committee on Intelligence of the House of
Representatives, and the Committees on Appropriations of the Senate and
the House of Representatives in accordance with procedures agreed to by
such committees. Such information shall not be available for public
inspection.
(d) Information that is classified under Executive Order 12356 or
any successor order shall be reported only to the Committee on Foreign
Relations of the Senate and the Committee on Foreign Affairs of the
House of Representatives or the Committees on Armed Services of the
Senate and the House of Representatives (whichever such committees have
jurisdiction of matters involving such information) and to the
Committees on Appropriations of the Senate and the House of
Representatives in accordance with procedures agreed to by such
committees. Such information shall not be available for public
inspection.
(e) The first semi-annual compilation shall be submitted on May 31,
1990, and shall contain a compilation of the disclosure reports received
from December 23, 1989 to March 31, 1990.
(f) Major agencies, designated by the Office of Management and
Budget (OMB), are required to provide machine-readable compilations to
the Secretary of the Senate and the Clerk of the House of
Representatives no later than with the compilations due on May 31, 1991.
OMB shall provide detailed specifications in a memorandum to these
agencies.
(g) Non-major agencies are requested to provide machine-readable
compilations to the Secretary of the Senate and the Clerk of the House
of Representatives.
(h) Agencies shall keep the originals of all disclosure reports in
the official files of the agency.
Sec. 28.605 Inspector General report.
(a) The Inspector General, or other official as specified in
paragraph (b) of this section, of each agency shall prepare and submit
to Congress each year, commencing with submission of the President's
Budget in 1991, an evaluation of the compliance of that agency with, and
the effectiveness of, the requirements herein. The evaluation may
include any recommended changes that may be necessary to strengthen or
improve the requirements.
(b) In the case of an agency that does not have an Inspector
General, the agency official comparable to an Inspector General shall
prepare and submit the annual report, or, if there is no such comparable
official, the head of the agency shall prepare and submit the annual
report.
(c) The annual report shall be submitted at the same time the agency
submits its annual budget justifications to Congress.
(d) The annual report shall include the following: All alleged
violations relating to the agency's covered Federal actions during the
year covered by the report, the actions taken by the head of the agency
in the year covered by the report with respect to those alleged
violations and alleged violations in previous years, and the amounts of
civil penalties imposed by the agency in the year covered by the report.
Sec. Appendix A to Part 28--Certification Regarding Lobbying
Certification for Contracts, Grants, Loans, and Cooperative Agreements
The undersigned certifies, to the best of his or her knowledge and
belief, that:
(1) No Federal appropriated funds have been paid or will be paid, by
or on behalf of the undersigned, to any person for influencing or
attempting to influence an officer or employee of an agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with the awarding of any Federal contract, the
making of any Federal grant, the making of any Federal loan, the
entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
[[Page 65]]
(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 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 66]]
Sec. Appendix B to Part 28--Disclosure Form To Report Lobbying
[GRAPHIC] [TIFF OMITTED] TC23OC91.000
[[Page 67]]
[GRAPHIC] [TIFF OMITTED] TC23OC91.001
[[Page 68]]
[GRAPHIC] [TIFF OMITTED] TC23OC91.002
[[Page 69]]
PART 34_ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH FOR-PROFIT
ORGANIZATIONS--Table of Contents
Subpart A_General
Sec.
34.1 Purpose.
34.2 Definitions.
34.3 Deviations.
34.4 Special award conditions.
Subpart B_Post-Award Requirements
Financial and Program Management
34.10 Purpose of financial and program management.
34.11 Standards for financial management systems.
34.12 Payment.
34.13 Cost sharing or matching.
34.14 Program income.
34.15 Revision of budget and program plans.
34.16 Audits.
34.17 Allowable costs.
34.18 Fee and profit.
Property Standards
34.20 Purpose of property standards.
34.21 Real property and equipment.
34.22 Federally owned property.
34.23 Property management system.
34.24 Supplies.
34.25 Intellectual property developed or produced under awards.
Procurement Standards
34.30 Purpose of procurement standards.
34.31 Requirements.
Reports and Records
34.40 Purpose of reports and records.
34.41 Monitoring and reporting program and financial performance.
34.42 Retention and access requirements for records.
Termination and Enforcement
34.50 Purpose of termination and enforcement.
34.51 Termination.
34.52 Enforcement.
34.53 Disputes and appeals.
Subpart C_After-the-Award Requirements
34.60 Purpose.
34.61 Closeout procedures.
34.62 Subsequent adjustments and continuing responsibilities.
34.63 Collection of amounts due.
Appendix A to Part 34--Contract Provisions
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Source: 63 FR 12204, Mar. 12, 1998, unless otherwise noted.
Subpart A_General
Sec. 34.1 Purpose.
(a) This part prescribes administrative requirements for awards to
for-profit organizations.
(b) Applicability to prime awards and subawards is as follows:
(1) Prime awards. DoD Components shall apply the provisions of this
part to awards to for-profit organizations. DoD Components shall not
impose requirements that are in addition to, or inconsistent with, the
requirements provided in this part, except:
(i) In accordance with the deviation procedures or special award
conditions in Sec. 34.3 or Sec. 34.4, respectively; or
(ii) As required by Federal statute, Executive order, or Federal
regulation implementing a statute or Executive order.
(2) Subawards. (i) Any legal entity (including any State, local
government, university or other nonprofit organization, as well as any
for-profit entity) that receives an award from a DoD Component shall
apply the provisions of this part to subawards with for-profit
organizations. It should be noted that subawards (see definition in
Sec. 34.2) are financial assistance for substantive programmatic
performance and do not include recipients' procurement of goods and
services.
(ii) For-profit organizations that receive prime awards covered by
this part shall apply to each subaward the administrative requirements
that are applicable to the particular type of subrecipient.
[63 FR 12204, Mar. 12, 1998, as amended at 85 FR 51244, Aug. 19, 2020]
Sec. 34.2 Definitions.
The following are definitions of terms as used in this part. Grants
officers are cautioned that terms may be defined differently in this
part than they are in other parts of the DoD Grant and Agreement
Regulations (DoDGARs).
[[Page 70]]
Advance. A payment made by Treasury check or other appropriate
payment mechanism to a recipient upon its request either before outlays
are made by the recipient or through the use of predetermined payment
schedules.
Award. A grant or a cooperative agreement other than a technology
investment agreement (TIA). TIAs are covered by part 37 of the DoDGARs
(32 CFR part 37). Portions of this part may apply to a TIA, but only to
the extent that 32 CFR part 37 makes them apply.
Cash contributions. The recipient's cash outlay, including the
outlay of money contributed to the recipient by third parties.
Closeout. The process by which the grants officer administering an
award made by a DoD Component determines that all applicable
administrative actions and all required work of the award have been
completed by the recipient and DoD Component.
Contract. Either:
(1) A procurement contract made by a recipient under a DoD
Component's award or by a subrecipient under a subaward; or
(2) A procurement subcontract under a contract awarded by a
recipient or subrecipient.
Cost sharing or matching. That portion of project or program costs
not borne by the Federal Government.
Disallowed costs. Those charges to an award that the grants officer
administering an award made by a DoD Component determines to be
unallowable, in accordance with the applicable Federal cost principles
or other terms and conditions contained in the award.
DoD Component. A Military Department, Defense Agency, DoD Field
Activity, or organization within the Office of the Secretary of Defense
that provides or administers an award to a recipient.
Equipment. Tangible nonexpendable personal property charged directly
to the award having a useful life of more than one year and an
acquisition cost of $5,000 or more per unit. That definition applies for
the purposes of the Federal administrative requirements in this part.
However, the recipient's policy may be to use a lower dollar value for
defining ``equipment,'' and nothing in this part should be construed as
requiring the recipient to establish a higher limit for purposes other
than the administrative requirements in this part.
Excess property. Property under the control of any DoD Component
that, as determined by the head thereof, is no longer required for its
needs or the discharge of its responsibilities.
Expenditures. See the definition for outlays in this section.
Federally owned property. Property in the possession of, or directly
acquired by, the Government and subsequently made available to the
recipient.
Funding period. The period of time when Federal funding is available
for obligation by the recipient.
Intellectual property. Intangible personal property such as patents
and patent applications, trademarks, copyrights, technical data, and
software rights.
Obligations. The amounts of orders placed, contracts and grants
awarded, services received and similar transactions during a given
period that require payment by the recipient during the same or a future
period.
Outlays or expenditures. Charges made to the project or program.
They may be reported on a cash or accrual basis. For reports prepared on
a cash basis, outlays are the sum of cash disbursements for direct
charges for goods and services, the amount of indirect expense charged,
the value of third party in-kind contributions applied and the amount of
cash advances and payments made to subrecipients. For reports prepared
on an accrual basis, outlays are the sum of cash disbursements for
direct charges for goods and services, the amount of indirect expense
incurred, the value of in-kind contributions applied, and the net
increase (or decrease) in the amounts owed by the recipient for goods
and other property received, for services performed by employees,
contractors, subrecipients and other payees and other amounts becoming
owed under programs for which no current services or performance are
required.
Personal property. Property of any kind except real property. It may
be:
(1) Tangible, having physical existence (i.e., equipment and
supplies); or
[[Page 71]]
(2) Intangible, having no physical existence, such as patents,
copyrights, data and software.
Prior approval. Written or electronic approval by an authorized
official evidencing prior consent.
Program income. Gross income earned by the recipient that is
directly generated by a supported activity or earned as a result of the
award. Program income includes, but is not limited to, income from fees
for services performed, the use or rental of real or personal property
acquired under federally-funded projects, the sale of commodities or
items fabricated under an award, license fees and royalties on patents
and copyrights, and interest on loans made with award funds. Interest
earned on advances of Federal funds is not program income. Except as
otherwise provided in program regulations or the terms and conditions of
the award, program income does not include the receipt of principal on
loans, rebates, credits, discounts, etc., or interest earned on any of
them.
Project costs. All allowable costs, as set forth in the applicable
Federal cost principles, incurred by a recipient and the value of the
contributions made by third parties in accomplishing the objectives of
the award during the project period.
Project period. The period established in the award document during
which Federal sponsorship begins and ends.
Property. Real property and personal property (equipment, supplies,
and intellectual property), unless stated otherwise.
Real property. Land, including land improvements, structures and
appurtenances thereto, but excludes movable machinery and equipment.
Recipient. A for-profit organization receiving an award directly
from a DoD Component to carry out a project or program.
Research. Basic, applied, and advanced research activities. Basic
research is defined as efforts directed toward increasing knowledge or
understanding in science and engineering. Applied research is defined as
efforts that attempt to determine and exploit the potential of
scientific discoveries or improvements in technology, such as new
materials, devices, methods, and processes. ``Advanced research,''
advanced technology development that creates new technology or
demonstrates the viability of applying existing technology to new
products and processes in a general way, is most closely analogous to
precommercialization or precompetitive technology development in the
commercial sector (it does not include development of military systems
and hardware where specific requirements have been defined).
Small award. See the definition for this term in 2 CFR part 1108.
Small business concern. A concern, including its affiliates, that is
independently owned and operated, not dominant in the field of operation
in which it has applied for an award, and qualified as a small business
under the criteria and size standards in 13 CFR part 121. For more
details, grants officers should see 48 CFR part 19 in the ``Federal
Acquisition Regulation.''
Subaward. Financial assistance in the form of money, or property in
lieu of money, provided under an award by a recipient to an eligible
subrecipient or by a subrecipient to a lower tier subrecipient. The term
includes financial assistance when provided by any legal agreement, even
if the agreement is called a contract, but the term includes neither
procurement of goods and services nor any form of assistance which is
excluded from the definition of ``award'' in this section.
Subrecipient. The legal entity to which a subaward is made and which
is accountable to the recipient for the use of the funds provided.
Supplies. Tangible expendable personal property that is charged
directly to the award and that has a useful life of less than one year
or an acquisition cost of less than $5000 per unit.
Suspension. An action by a DoD Component that temporarily withdraws
Federal sponsorship under an award, pending corrective action by the
recipient or pending a decision to terminate the award by the DoD
Component. Suspension of an award is a separate action from suspension
of a participant under 2 CFR part 1125.
Termination. The cancellation of an award, in whole or in part,
under an agreement at any time prior to either:
[[Page 72]]
(1) The date on which all work under an award is completed; or
(2) The date on which Federal sponsorship ends, as given on the
award document or any supplement or amendment thereto.
Third party in-kind contributions. The value of non-cash
contributions provided by non-Federal third parties. Third party in-kind
contributions may be in the form of real property, equipment, supplies
and other expendable property, and the value of goods and services
directly benefiting and specifically identifiable to the project or
program.
Unobligated balance. The portion of the funds authorized by a DoD
Component that has not been obligated by the recipient and is determined
by deducting the cumulative obligations from the cumulative funds
authorized.
[63 FR 12204, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003; 72
FR 34998, June 26, 2007; 85 FR 51244, Aug. 19, 2020]
Sec. 34.3 Deviations.
(a) Individual deviations. Individual deviations affecting only one
award may be approved by DoD Components in accordance with procedures
stated in 32 CFR 21.335(a) and 21.340.
(b) Small awards. DoD Components may apply less restrictive
requirements than the provisions of this part when awarding small
awards, except for those requirements which are statutory.
(c) Other class deviations. For classes of awards other than small
awards, the Assistant Secretary of Defense for Research and Engineering,
or his or her designee, may grant exceptions from the requirements of
this part when exceptions are not prohibited by statute. DoD Components
shall request approval for such deviations in accordance with 32 CFR
21.335 (b) and 21.340.
[63 FR 12204, Mar. 12, 1998, as amended at 68 FR 47160, Aug. 7, 2003; 85
FR 51244, Aug. 19, 2020]
Sec. 34.4 Special award conditions.
(a) Grants officers may impose additional requirements as needed,
over and above those provided in this part, if an applicant or
recipient:
(1) Has a history of poor performance;
(2) Is not financially stable;
(3) Has a management system that does not meet the standards
prescribed in this part;
(4) Has not conformed to the terms and conditions of a previous
award; or
(5) Is not otherwise responsible.
(b) Before imposing additional requirements, DoD Components shall
notify the applicant or recipient in writing as to:
(1) The nature of the additional requirements;
(2) The reason why the additional requirements are being imposed;
(3) The nature of the corrective action needed;
(4) The time allowed for completing the corrective actions; and
(5) The method for requesting reconsideration of the additional
requirements imposed.
(c) Any special conditions shall be promptly removed once the
conditions that prompted them have been corrected.
(d) Grants officers:
(1) Should coordinate the imposition and removal of special award
conditions with the cognizant grants administration office identified in
32 CFR 22.710.
(2) Shall include in the award file the written notification to the
recipient, described in paragraph (b) of this section, and the
documentation required by 32 CFR 22.410(b).
Subpart B_Post-award Requirements
Financial and Program Management
Sec. 34.10 Purpose of financial and program management.
Sections 34.11 through 34.17 prescribe standards for financial
management systems; methods for making payments; and rules for cost
sharing and matching, program income, revisions to budgets and program
plans, audits, allowable costs, and fee and profit.
Sec. 34.11 Standards for financial management systems.
(a) Recipients shall be allowed and encouraged to use existing
financial management systems established for
[[Page 73]]
doing business in the commercial marketplace, to the extent that the
systems comply with Generally Accepted Accounting Principles (GAAP) and
the minimum standards in this section. As a minimum, a recipient's
financial management system shall provide:
(1) Effective control of all funds. Control systems must be adequate
to ensure that costs charged to Federal funds and those counted as the
recipient's cost share or match are consistent with requirements for
cost reasonableness, allowability, and allocability in the applicable
cost principles (see Sec. 34.17) and in the terms and conditions of the
award.
(2) Accurate, current and complete records that document for each
project funded wholly or in part with Federal funds the source and
application of the Federal funds and the recipient's required cost share
or match. These records shall:
(i) Contain information about receipts, authorizations, assets,
expenditures, program income, and interest.
(ii) Be adequate to make comparisons of outlays with budgeted
amounts for each award (as required for programmatic and financial
reporting under Sec. 34.41. Where appropriate, financial information
should be related to performance and unit cost data. Note that unit cost
data are generally not appropriate for awards that support research.
(3) To the extent that advance payments are authorized under Sec.
34.12, procedures that minimize the time elapsing between the transfer
of funds to the recipient from the Government and the recipient's
disbursement of the funds for program purposes.
(4) The recipient shall have a system to support charges to Federal
awards for salaries and wages, whether treated as direct or indirect
costs. Where employees work on multiple activities or cost objectives, a
distribution of their salaries and wages will be supported by personnel
activity reports which must:
(i) Reflect an after the fact distribution of the actual activity of
each employee.
(ii) Account for the total activity for which each employee is
compensated.
(iii) Be prepared at least monthly, and coincide with one or more
pay periods.
(b) Where the Federal Government guarantees or insures the repayment
of money borrowed by the recipient, the DoD Component, at its
discretion, may require adequate bonding and insurance if the bonding
and insurance requirements of the recipient are not deemed adequate to
protect the interest of the Federal Government.
(c) The DoD Component may require adequate fidelity bond coverage
where the recipient lacks sufficient coverage to protect the Federal
Government's interest.
(d) Where bonds are required in the situations described above, the
bonds shall be obtained from companies holding certificates of authority
as acceptable sureties, as prescribed in 31 CFR part 223, ``Surety
Companies Doing Business with the United States.''
Sec. 34.12 Payment.
(a) Methods available. Payment methods for awards with for-profit
organizations are:
(1) Reimbursement. Under this method, the recipient requests
reimbursement for costs incurred during a time period. In cases where
the recipient submits each request for payment to the grants officer,
the DoD payment office reimburses the recipient by electronic funds
transfer or check after approval of the request by the grants officer
designated to do so.
(2) Advance payments. Under this method, a DoD Component makes a
payment to a recipient based upon projections of the recipient's cash
needs. The payment generally is made upon the recipient's request,
although predetermined payment schedules may be used when the timing of
the recipient's needs to disburse funds can be predicted in advance with
sufficient accuracy to ensure compliance with paragraph (b)(2)(iii) of
this section.
(b) Selecting a method. (1) The preferred payment method is the
reimbursement method, as described in paragraph (a)(1) of this section
(2) Advance payments, as described in paragraph (a)(2) of this
section, may be used in exceptional circumstances, subject to the
following conditions:
[[Page 74]]
(i) The grants officer, in consultation with the program official,
must judge that advance payments are necessary or will materially
contribute to the probability of success of the project contemplated
under the award (e.g., as startup funds for a project performed by a
newly formed company). The rationale for the judgment shall be
documented in the award file.
(ii) Cash advances shall be limited to the minimum amounts needed to
carry out the program.
(iii) Recipients and the DoD Component shall maintain procedures to
ensure that the timing of cash advances is as close as is
administratively feasible to the recipients' disbursements of the funds
for program purposes, including direct program or project costs and the
proportionate share of any allowable indirect costs.
(iv) Recipients shall maintain advance payments of Federal funds in
interest-bearing accounts, and remit annually the interest earned to the
administrative grants officer responsible for post-award administration
(the grants officer shall forward the payment to the responsible payment
office, for return to the Department of Treasury's miscellaneous
receipts account), unless one of the following applies:
(A) The recipient receives less than $120,000 in Federal awards per
year.
(B) The best reasonably available interest bearing account would not
be expected to earn interest in excess of $250 per year on Federal cash
balances.
(C) 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.
(c) Frequency of payments. For either reimbursements or advance
payments, recipients shall be authorized to submit requests for payment
at least monthly.
(d) Forms for requesting payment. DoD Components may authorize
recipients to use the SF-270, \1\ ``Request for Advance or
Reimbursement;'' the SF-271, \2\ ``Outlay Report and Request for
Reimbursement for Construction Programs;'' or prescribe other forms or
formats as necessary.
---------------------------------------------------------------------------
\1\ For copies of Standard Forms listed in this part, contact
regional grants administration offices of the Office of Naval Research.
Addresses for the offices are listed in the ``Federal Directory of
Contract Administration Services (CAS) Components,'' which is available
through the ``CAS Directory'' link at the Defense Contract Management
Agency homepage (http://www.dcma.mil).
\2\ See footnote 1 to this paragraph (d).
---------------------------------------------------------------------------
(e) Timeliness of payments. Payments normally will be made within 30
calendar days of the receipt of a recipient's request for reimbursement
or advance by the office designated to receive the request (for further
information about timeframes for payments, see 32 CFR 22.810(c)(3)(ii)).
(f) Precedence of other available funds. Recipients shall disburse
funds available from program income, rebates, refunds, contract
settlements, audit recoveries, and interest earned on such funds before
requesting additional cash payments.
(g) Withholding of payments. Unless otherwise required by statute,
grants officers shall not withhold payments for proper charges made by
recipients during the project period for reasons other than the
following:
(1) A recipient has failed to comply with project objectives, the
terms and conditions of the award, or Federal reporting requirements, in
which case the grants officer may suspend payments in accordance with
Sec. 34.52.
(2) The recipient is delinquent on a debt to the United States (see
definitions of ``debt'' and ``delinquent debt'' in 32 CFR 22.105). In
that case, the grants officer may, upon reasonable notice, withhold
payments for obligations incurred after a specified date, until the debt
is resolved.
[63 FR 12204, Mar. 12, 1998, as amended at 85 FR 51244, Aug. 19, 2020]
Sec. 34.13 Cost sharing or matching.
(a) Acceptable contributions. All contributions, including cash
contributions and third party in-kind contributions, shall be accepted
as part of the recipient's cost sharing or matching when such
contributions meet all of the following criteria:
(1) They are verifiable from the recipient's records.
[[Page 75]]
(2) They are not included as contributions for any other federally-
assisted project or program.
(3) They are necessary and reasonable for proper and efficient
accomplishment of project or program objectives.
(4) They are allowable under Sec. 34.17.
(5) They are not paid by the Federal Government under another award,
except:
(i) Costs that are authorized by Federal statute to be used for cost
sharing or matching; or
(ii) Independent research and development (IR&D) costs. In
accordance with the for-profit cost principle in 48 CFR 31.205-18(e),
use of IR&D as cost sharing is permitted, whether or not the Government
decides at a later date to reimburse any of the IR&D as allowable
indirect costs. In such cases, the IR&D must meet all of the criteria in
paragraphs (a) (1) through (4) and (a) (6) through (8) of this section.
(6) They are provided for in the approved budget, when approval of
the budget is required by the DoD Component.
(7) If they are real property or equipment, whether purchased with
recipient's funds or donated by third parties, they must have the grants
officer's prior approval if the contributions' value is to exceed
depreciation or use charges during the project period (paragraphs (b)(1)
and (b)(4)(ii) of this section discuss the limited circumstances under
which a grants officer may approve higher values). If a DoD Component
requires approval of a recipient's budget (see paragraph (a)(6) of this
section), the grants officer's approval of the budget satisfies this
prior approval requirement, for real property or equipment items listed
in the budget.
(8) They conform to other provisions of this part, as applicable.
(b) Valuing and documenting contributions--(1) Valuing recipient's
property or services of recipient's employees. Values shall be
established in accordance with the applicable cost principles in Sec.
34.17, which means that amounts chargeable to the project are determined
on the basis of costs incurred. For real property or equipment used on
the project, the cost principles authorize depreciation or use charges.
The full value of the item may be applied when the item will be consumed
in the performance of the award or fully depreciated by the end of the
award. In cases where the full value of a donated capital asset is to be
applied as cost sharing or matching, that full value shall be the lesser
of the following:
(i) The certified value of the remaining life of the property
recorded in the recipient's accounting records at the time of donation;
or
(ii) The current fair market value. However, when there is
sufficient justification, the grants officer may approve the use of the
current fair market value of the donated property, even if it exceeds
the certified value at the time of donation to the project. The grants
officer may accept the use of any reasonable basis for determining the
fair market value of the property.
(2) Valuing services of others' employees. When an employer other
than the recipient furnishes the services of an employee, those services
shall be valued at the employee's regular rate of pay plus an amount of
fringe benefits and overhead (at an overhead rate appropriate for the
location where the services are performed) provided these services are
in the same skill for which the employee is normally paid.
(3) Valuing volunteer services. Volunteer services furnished by
professional and technical personnel, consultants, and other skilled and
unskilled labor may be counted as cost sharing or matching if the
service is an integral and necessary part of an approved project or
program. Rates for volunteer services shall be consistent with those
paid for similar work in the recipient's organization. In those
instances in which the required skills are not found in the recipient
organization, rates shall be consistent with those paid for similar work
in the labor market in which the recipient competes for the kind of
services involved. In either case, paid fringe benefits that are
reasonable, allowable, and allocable may be included in the valuation.
(4) Valuing property donated by third parties. (i) Donated supplies
may include such items as office supplies or laboratory supplies. Value
assessed to donated supplies included in the cost
[[Page 76]]
sharing or matching share shall be reasonable and shall not exceed the
fair market value of the property at the time of the donation.
(ii) Normally only depreciation or use charges for equipment and
buildings may be applied. However, the fair rental charges for land and
the full value of equipment or other capital assets may be allowed, when
they will be consumed in the performance of the award or fully
depreciated by the end of the award, provided that the grants officer
has approved the charges. When use charges are applied, values shall be
determined in accordance with the usual accounting policies of the
recipient, with the following qualifications:
(A) The value of donated space shall not exceed the fair rental
value of comparable space as established by an independent appraisal of
comparable space and facilities in a privately-owned building in the
same locality.
(B) The value of loaned equipment shall not exceed its fair rental
value.
(5) Documentation. The following requirements pertain to the
recipient's supporting records for in-kind contributions from third
parties:
(i) Volunteer services shall be documented and, to the extent
feasible, supported by the same methods used by the recipient for its
own employees.
(ii) The basis for determining the valuation for personal services
and property shall be documented.
Sec. 34.14 Program income.
(a) DoD Components shall apply the standards in this section to the
disposition of program income from projects financed in whole or in part
with Federal funds.
(b) Recipients shall have no obligation to the Government, unless
the terms and conditions of the award provide otherwise, for program
income earned:
(1) From license fees and royalties for copyrighted material,
patents, patent applications, trademarks, and inventions produced under
an award. Note, however, that the Patent and Trademark Amendments (35
U.S.C. Chapter 18), as implemented in Sec. 34.25, apply to inventions
made under a research award.
(2) After the end of the project period. If a grants officer
anticipates that an award is likely to generate program income after the
end of the project period, the grants officer should indicate in the
award document whether the recipient will have any obligation to the
Federal Government with respect to such income.
(c) If authorized by the terms and conditions of the award, costs
incident to the generation of program income may be deducted from gross
income to determine program income, provided these costs have not been
charged to the award.
(d) Other than any program income excluded pursuant to paragraphs
(b) and (c) of this section, program income earned during the project
period shall be retained by the recipient and used in one or more of the
following ways, as specified in program regulations or the terms and
conditions of the award:
(1) Added to funds committed to the project by the DoD Component and
recipient and used to further eligible project or program objectives.
(2) Used to finance the non-Federal share of the project or program.
(3) Deducted from the total project or program allowable cost in
determining the net allowable costs on which the Federal share of costs
is based.
(e) If the terms and conditions of an award authorize the
disposition of program income as described in paragraph (d)(1) or (d)(2)
of this section, and stipulate a limit on the amounts that may be used
in those ways, program income in excess of the stipulated limits shall
be used in accordance with paragraph (d)(3) of this section.
(f) In the event that the terms and conditions of the award do not
specify how program income is to be used, paragraph (d)(3) of this
section shall apply automatically to all projects or programs except
research. For awards that support research, paragraph (d)(1) of this
section shall apply automatically unless the terms and conditions
specify another alternative or the recipient is subject to special award
conditions, as indicated in Sec. 34.4.
(g) Proceeds from the sale of property that is acquired, rather than
fabricated, under an award are not program income and shall be handled
in
[[Page 77]]
accordance with the requirements of the Property Standards (see
Sec. Sec. 34.20 through 34.25).
Sec. 34.15 Revision of budget and program plans.
(a) The budget plan is the financial expression of the project or
program as approved during the award process. It may include either the
sum of the Federal and non-Federal shares, or only the Federal share,
depending upon DoD Component requirements. It shall be related to
performance for program evaluation purposes whenever appropriate.
(b) Recipients are required to report deviations from budget and
program plans, and request prior approvals for budget and program plan
revisions, in accordance with this section.
(c) Recipients shall immediately request, in writing, prior approval
from the cognizant grants officer when there is reason to believe that
within the next seven calendar days a programmatic or budgetary revision
will be necessary for certain reasons, as follows:
(1) The recipient always must obtain the grants officer's prior
approval when a revision is necessary for either of the following two
reasons (i.e., these two requirements for prior approval may never be
waived):
(i) A change in the scope or the objective of the project or program
(even if there is no associated budget revision requiring prior written
approval).
(ii) A need for additional Federal funding.
(2) The recipient must obtain the grants officer's prior approval
when a revision is necessary for any of the following six reasons,
unless the requirement for prior approval is waived in the terms and
conditions of the award (i.e., if the award document is silent, these
prior approvals are required):
(i) A change in a key person specified in the application or award
document.
(ii) The absence for more than three months, or a 25 percent
reduction in time devoted to the project, by the approved project
director or principal investigator.
(iii) The inclusion of any additional costs that require prior
approval in accordance with applicable cost principles for Federal funds
and recipients' cost share or match, in Sec. 34.17 and Sec. 34.13,
respectively.
(iv) The inclusion of pre-award costs. All such costs are incurred
at the recipient's risk (i.e., the DoD Component is under no obligation
to reimburse such costs if for any reason the recipient does not receive
an award, or if the award is less than anticipated and inadequate to
cover such costs).
(v) A ``no-cost'' extension of the project period that does not
require additional Federal funds and does not change the approved
objectives or scope of the project.
(vi) Any subaward, transfer or contracting out of substantive
program performance under an award, unless described in the application
and funded in the approved awards. This provision does not apply to the
purchase of supplies, material, or general support services, except that
procurement of equipment or other capital items of property always is
subject to the grants officer's prior approval under Sec. 34.21(a), if
it is to be purchased with Federal funds, or Sec. 34.13(a)(7), if it is
to be used as cost sharing or matching.
(3) The recipient also must obtain the grants officer's prior
approval when a revision is necessary for either of the following
reasons, if specifically required in the terms and conditions of the
award document (i.e., if the award document is silent, these prior
approvals are not required):
(i) The transfer of funds among direct cost categories, functions
and activities for 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 DoD Component. No DoD Component
shall permit a transfer that would cause any Federal appropriation or
part thereof to be used for purposes other than those consistent with
the original intent of the appropriation.
(ii) For awards that provide support for both construction and
nonconstruction work, any fund or budget transfers between the two types
of work supported.
[[Page 78]]
(d) Within 30 calendar days from the date of receipt of the
recipient's request for budget revisions, the grants officer shall
review the request and notify the recipient whether the budget revisions
have been approved. If the revision is still under consideration at the
end of 30 calendar days, the grants officer shall inform the recipient
in writing of the date when the recipient may expect the decision.
[63 FR 12204, Mar. 12, 1998, as amended at 85 FR 51244, Aug. 19, 2020]
Sec. 34.16 Audits.
(a) Any recipient that expends $750,000 or more in a year under
Federal awards shall have an audit made for that year by an independent
auditor, in accordance with paragraph (b) of this section. The audit
generally should be made a part of the regularly scheduled, annual audit
of the recipient's financial statements. However, it may be more
economical in some cases to have the Federal awards separately audited,
and a recipient may elect to do so, unless that option is precluded by
award terms and conditions, or by Federal laws or regulations applicable
to the program(s) under which the awards were made.
(b) The auditor shall determine and report on whether:
(1) The recipient has an internal control structure that provides
reasonable assurance that it is managing Federal awards in compliance
with Federal laws and regulations, and with the terms and conditions of
the awards.
(2) Based on a sampling of Federal award expenditures, the recipient
has complied with laws, regulations, and award terms that may have a
direct and material effect on Federal awards.
(c) The recipient shall make the auditor's report available to DoD
Components whose awards are affected.
(d) The requirement for an annual independent audit is intended to
ascertain the adequacy of the recipient's internal financial management
systems and to curtail the unnecessary duplication and overlap that
usually results when Federal agencies request audits of individual
awards on a routine basis. Therefore, a grants officer:
(1) Shall consider whether the independent audit satisfies his or
her requirements, before requesting any additional audits; and
(2) When requesting an additional audit, shall:
(i) Limit the scope of such additional audit to areas not adequately
addressed by the independent audit.
(ii) Coordinate the audit request with the Federal agency with the
predominant fiscal interest in the recipient, as the agency responsible
for the scheduling and distribution of audits. If DoD has the
predominant fiscal interest in the recipient, the Defense Contract
Management Agency (DCMA) is responsible for monitoring audits, ensuring
resolution of audit findings, and distributing audit reports. When an
additional audit is requested and DoD has the predominant fiscal
interest in the recipient, DCMA shall, to the extent practicable, ensure
that the additional audit builds upon the independent audit or other
audits performed in accordance with this section.
(e) There may be instances in which Federal auditors have recently
performed audits, are performing audits, or are planning to perform
audits, of a recipient. In these cases, the recipient and its Federal
cognizant agency should seek to have the non-Federal, independent
auditors work with the Federal auditors to develop a coordinated audit
approach, to minimize duplication of audit work.
(f) Audit costs (including a reasonable allocation of the costs of
the audit of the recipient's financial statement, based on the relative
benefit to the Government and the recipient) are allowable costs of DoD
awards.
[63 FR 12204, Mar. 12, 1998, as amended at 70 FR 49477, Aug. 23, 2005;
85 FR 51244, Aug. 19, 2020]
Sec. 34.17 Allowable costs.
Allowability of costs shall be determined in accordance with the
cost principles applicable to the type of entity incurring the costs, as
follows:
(a) For-profit organizations. Allowability of costs incurred by for-
profit organizations that are recipients of prime awards from DoD
Components, and those that are subrecipients under prime awards to other
organizations, is to be determined in accordance with:
[[Page 79]]
(1) The for-profit cost principles in 48 CFR parts 31 and 231 (in
the Federal Acquisition Regulation, or FAR, and the Defense Federal
Acquisition Regulation Supplement, or DFARS, respectively).
(2) The supplemental information on allowability of audit costs, in
Sec. 34.16(f).
(b) Other types of organizations. Allowability of costs incurred by
other types of organizations that may be subrecipients under a prime
award to a for-profit organization is determined as follows:
(1) Institutions of higher education, nonprofit organizations,
States, local governments, and Indian tribes. Allowability is determined
in accordance with the cost principles in subpart E of OMB guidance in 2
CFR part 200. Note that 2 CFR 200.401(c) provides that a nonprofit
organization listed in appendix VIII to 2 CFR part 200 is subject to the
FAR and DFARS cost principles specified in paragraph (a)(1) of this
section for for-profit organizations.
(2) Hospitals. Allowability is determined in accordance with the
cost principles identified in appendix IX to 2 CFR part 200 (currently
45 CFR part 75).
[63 FR 12204, Mar. 12, 1998, as amended at 85 FR 51244, Aug. 19, 2020]
Sec. 34.18 Fee and profit.
In accordance with 32 CFR 22.205(b), grants and cooperative
agreements shall not:
(a) Provide for the payment of fee or profit to the recipient.
(b) Be used to carry out programs where fee or profit is necessary
to achieving program objectives.
Property Standards
Sec. 34.20 Purpose of property standards.
Sections 34.21 through 34.25 set forth uniform standards for
management, use, and disposition of property. DoD Components shall
encourage recipients to use existing property-management systems, to the
extent that the systems meet these minimum requirements.
Sec. 34.21 Real property and equipment.
(a) Prior approval for acquisition with Federal funds. Recipients
may purchase real property or equipment in whole or in part with Federal
funds under an award only with the prior approval of the grants officer.
(b) Title. Title to such real property or equipment shall vest in
the recipient upon acquisition. Unless a statute specifically authorizes
a DoD Component to vest title in the recipient without further
obligation to the Government, and the DoD Component elects to do so, the
title shall be a conditional title. Title shall vest in the recipient
subject to the conditions that the recipient:
(1) Use the real property or equipment for the authorized purposes
of the project until funding for the project ceases, or until the
property is no longer needed for the purposes of the project.
(2) Not encumber the property without approval of the grants
officer.
(3) Use and dispose of the property in accordance with paragraphs
(d) and (e) of this section.
(c) Federal interest in real property or equipment offered as cost-
share. A recipient may offer the full 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, subject to the prior approval requirement in Sec.
34.13(a)(7). If a recipient does so, the Government has a financial
interest in the property, a share of the property value attributable to
the Federal participation in the project. The property therefore shall
be considered as if it had been acquired in part with Federal funds, and
shall be subject to the provisions of paragraphs (b)(1), (b)(2) and
(b)(3) of this section, and to the provisions of Sec. 34.23.
(d) Use. If real property or equipment is acquired in whole or in
part with Federal funds under an award, and the award provides that
title vests conditionally in the recipient, the real property or
equipment is subject to the following:
(1) During the time that the real property or equipment is used on
the project or program for which it was acquired, the recipient shall
make it available for use on other projects or programs, if such other
use will not interfere with the work on the project
[[Page 80]]
or program for which the real property or equipment was originally
acquired. Use of the real property or equipment on other projects will
be in the following order of priority:
(i) Activities sponsored by DoD Components' 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 shall be
assessed to those activities. For real property or equipment, the use
charges shall be at rates equivalent to those for which comparable real
property or equipment may be leased. The use charges shall be treated as
program income.
(2) After Federal funding for the project ceases, or when the real
property or equipment is no longer needed for the purposes of the
project, the recipient may use the real property or equipment for other
projects, insofar as:
(i) There are Federally sponsored projects for which the real
property or equipment may be used. If the only use for the real property
or equipment is for projects that have no Federal sponsorship, the
recipient shall proceed with disposition of the real property or
equipment, in accordance with paragraph (e) of this section.
(ii) The recipient obtains written approval from the grants officer
to do so. The grants officer shall ensure that there is a formal change
of accountability for the real property or equipment to a currently
funded, Federal award.
(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 (d)(1) of this section.
(e) Disposition. (1) When an item of real property or equipment is
no longer needed for Federally sponsored projects, the recipient shall
proceed as follows:
(i) If the property that is no longer needed is equipment (rather
than real property), the recipient may wish to replace it with an item
that is needed currently for the project. In that case, the recipient
may use the original equipment as trade-in or sell it and use the
proceeds to offset the costs of the replacement equipment, subject to
the approval of the responsible agency (i.e., the DoD Component or the
Federal agency to which the DoD Component delegated responsibility for
administering the equipment).
(ii) 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.
(iii) If the recipient does not elect to retain title to real
property or equipment (see paragraph (e)(1)(ii) of this section), or
request approval to use equipment as trade-in or offset for replacement
equipment (see paragraph (e)(1)(i) of this section), the recipient shall
request disposition instructions from the responsible agency.
(2) If a recipient requests disposition instructions, in accordance
with paragraph (e)(1)(iii) of this section, the responsible grants
officer shall:
(i) For equipment (but not real property), consult with the Federal
program manager and judge whether the age and nature of the equipment
warrant a screening procedure, to determine whether the equipment is
useful to a DoD Component or other Federal agency. If a screening
procedure is warranted, the responsible agency shall determine whether
the equipment can be used to meet a DoD Component's requirement. If no
DoD requirement is found, the responsible agency shall report the
availability of the equipment to the General Services Administration, to
determine whether a requirement for the equipment exists in other
Federal agencies.
(ii) 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 grants officer's options for
disposition are to direct the recipient to:
[[Page 81]]
(A) Transfer title to the real property or equipment to the Federal
Government or to an eligible third party provided that, in such cases,
the recipient shall be entitled to compensation for its attributable
percentage of the current fair market value of the real property or
equipment, plus any reasonable shipping or interim storage costs
incurred. If title is transferred to the Federal Government, it shall be
subject thereafter to provisions for Federally owned property in Sec.
34.22.
(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). When the recipient is
authorized or required to sell the real property or equipment, proper
sales procedures shall be established that provide for competition to
the extent practicable and result in the highest possible return.
(3) If the responsible agency fails to issue disposition
instructions within 120 calendar days of the recipient's request, as
described in paragraph (e)(2)(ii) of this section, the recipient shall
dispose of the real property or equipment through the option described
in paragraph (e)(2)(ii)(B) of this section.
Sec. 34.22 Federally owned property.
(a) Annual inventory. Recipients shall submit annually an inventory
listing of all Federally owned property in their custody (property
furnished by the Federal Government, rather than acquired by the
recipient with Federal funds under the award), to the DoD Component or
other Federal agency responsible for administering the property under
the award.
(b) Use on other activities. (1) Use of federally owned property on
other activities is permissible, if authorized by the DoD Component
responsible for administering the award to which the property currently
is charged.
(2) Use on other activities will be in the following order of
priority:
(i) Activities sponsored by DoD Components' 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 shall be
assessed to those activities. For real property or equipment, the use
charges shall be at rates equivalent to those for which comparable real
property or equipment may be leased. The use charges shall be treated as
program income.
(c) Disposition of property. Upon completion of the award, the
recipient shall report the property to the responsible agency. The
agency may:
(1) Use the property to meet another Federal Government need (e.g.,
by transferring accountability for the property to another Federal award
to the same recipient, or by directing the recipient to transfer the
property to a Federal agency that needs the property, or to another
recipient with a currently funded award).
(2) Declare the property to be excess property and either:
(i) Report the property to the General Services Administration, in
accordance with the Federal Property and Administrative Services Act of
1949 (40 U.S.C. 483(b)(2)), as implemented by General Services
Administration regulations at 41 CFR 101-47.202; or
(ii) Dispose of the property by alternative methods, if there is
statutory authority to do so (e.g., DoD Components are authorized by 15
U.S.C. 3710(i), the Federal Technology Transfer Act, to donate research
equipment to educational and nonprofit organizations for the conduct of
technical and scientific education and research activities. Such
donations shall be in accordance with the DoD implementation of E.O.
12999 (3 CFR, 1996 Comp., p. 180), ``Educational Technology: Ensuring
Opportunity for All Children in the Next Century,'' as applicable.)
Appropriate instructions shall be issued to the recipient by the
responsible agency.
[[Page 82]]
Sec. 34.23 Property management system.
The recipient's property management system shall include the
following, for property that is Federally owned, and for equipment that
is acquired in whole or in part with Federal funds, or that is used as
matching share:
(a) Property records shall be maintained, to include the following
information:
(1) A description of the property.
(2) Manufacturer's serial number, model number, Federal stock
number, national stock number, or any other identification number.
(3) Source of the property, including the award number.
(4) Whether title vests in the recipient or the Federal Government.
(5) Acquisition date (or date received, if the property was
furnished by the Federal Government) and cost.
(6) Information from which one can calculate the percentage of
Federal participation in the cost of the property (not applicable to
property furnished by the Federal Government).
(7) The location and condition of the property and the date the
information was reported.
(8) Ultimate disposition data, including date of disposal and sales
price or the method used to determine current fair market value where a
recipient compensates the Federal Government for its share.
(b) Federally owned equipment shall be marked, to indicate Federal
ownership.
(c) A physical inventory shall be taken and the results reconciled
with the property records at least once every two years. Any differences
between quantities determined by the physical inspection and those shown
in the accounting records shall be investigated to determine the causes
of the difference. The recipient shall, in connection with the
inventory, verify the existence, current utilization, and continued need
for the property.
(d) A control system shall be in effect to insure adequate
safeguards to prevent loss, damage, or theft of the property. Any loss,
damage, or theft of property shall be investigated and fully documented;
if the property was owned by the Federal Government, the recipient shall
promptly notify the Federal agency responsible for administering the
property.
(e) Adequate maintenance procedures shall be implemented to keep the
property in good condition.
Sec. 34.24 Supplies.
(a) Title shall vest in the recipient upon acquisition for supplies
acquired with Federal funds under an award.
(b) Upon termination or completion of the project or program, the
recipient shall retain any unused supplies. If the inventory of unused
supplies exceeds $5,000 in total aggregate value and the items are not
needed for any other Federally sponsored project or program, the
recipient shall retain the items for use on non-Federal sponsored
activities or sell them, but shall, in either case, compensate the
Federal Government for its share.
Sec. 34.25 Intellectual property developed or produced under awards.
(a) Patents. Grants and cooperative agreements with:
(1) Small business concerns shall comply with 35 U.S.C. Chapter 18,
as implemented by 37 CFR part 401, which applies to inventions made
under grants and cooperative agreements with small business concerns for
research and development. 37 CFR 401.14 provides a standard clause that
is required in such grants and cooperative agreements in most cases, 37
CFR 401.3 specifies when the clause shall be included, and 37 CFR 401.5
specifies how the clause may be modified and tailored.
(2) For-profit organizations other than small business concerns
shall comply with 35 U.S.C. 210(c) and Executive Order 12591 (3 CFR,
1987 Comp., p. 220) (which codifies a Presidential Memorandum on
Government Patent Policy, dated February 18, 1983).
(i) The Executive order states that, as a matter of policy, grants
and cooperative agreements should grant to all for-profit organizations,
regardless of size, title to patents made in whole or in part with
Federal funds, in exchange for royalty-free use by or on behalf of the
Government (i.e., it extends the applicability of 35 U.S.C. Chapter 18,
to the extent permitted by law, to for-
[[Page 83]]
profit organizations other than small business concerns).
(ii) 35 U.S.C. 210(c) states that 35 U.S.C. Chapter 18 is not
intended to limit agencies' authority to agree to the disposition of
rights in inventions in accordance with the Presidential memorandum
codified by the Executive order. It also states that such grants and
cooperative agreements shall provide for Government license rights
required by 35 U.S.C. 202(c)(4) and march-in rights required by 35
U.S.C. 203.
(b) Copyright, data and software rights. Requirements concerning
data and software rights are as follows:
(1) The recipient may copyright any work that is subject to
copyright and was developed under an award. DoD Components reserve a
royalty-free, nonexclusive and irrevocable right to reproduce, publish,
or otherwise use the work for Federal purposes, and to authorize others
to do so.
(2) Unless waived by the DoD Component making the award, the Federal
Government has the right to:
(i) Obtain, reproduce, publish or otherwise use for Federal
Government purposes the data first produced under an award.
(ii) Authorize others to receive, reproduce, publish, or otherwise
use such data for Federal purposes.
Procurement Standards
Sec. 34.30 Purpose of procurement standards.
Section 34.31 sets forth requirements necessary to ensure:
(a) Compliance of recipients' procurements that use Federal funds
with applicable Federal statutes and executive orders.
(b) Proper stewardship of Federal funds used in recipients'
procurements.
Sec. 34.31 Requirements.
The following requirements pertain to recipients' procurements
funded in whole or in part with Federal funds or with recipients' cost-
share or match:
(a) Reasonable cost. Recipients procurement procedures shall make
maximum practicable use of competition, or shall use other means that
ensure reasonable cost for procured goods and services.
(b) Pre-award review of certain procurements. Prior to awarding a
procurement contract under an award, a recipient may be required to
provide the grants officer administering the award with pre-award
documents (e.g., requests for proposals, invitations for bids, or
independent cost estimates) related to the procurement. Recipients will
only be required to provide such documents for the grants officer's pre-
award review in exceptional cases where the grants officer judges that
there is a compelling need to do so. In such cases, the grants officer
must include a provision in the award that states the requirement.
(c) Contract provisions. (1) Contracts in excess of the simplified
acquisition threshold shall contain contractual provisions or conditions
that allow for administrative, contractual, or legal remedies in
instances in which a contractor violates or breaches the contract terms,
and provide for such remedial actions as may be appropriate.
(2) All contracts in excess of the simplified acquisition threshold
shall contain suitable provisions for termination for default by the
recipient or for termination due to circumstances beyond the control of
the contractor.
(3) All negotiated contracts in excess of the simplified acquisition
threshold shall include a provision permitting access of the Department
of Defense, the Comptroller General of the United States, or any of
their duly authorized representatives, to any books, documents, papers,
and records of the contractor that are directly pertinent to a specific
program, for the purpose of making audits, examinations, excerpts, and
transcriptions.
(4) All contracts, including those for amounts less than the
simplified acquisition threshold, awarded by recipients and their
contractors shall contain the procurement provisions of Appendix A to
this part, as applicable.
Reports and Records
Sec. 34.40 Purpose of reports and records.
Sections 34.41 and 34.42 prescribe requirements for monitoring and
reporting financial and program performance and for records retention.
[[Page 84]]
Sec. 34.41 Monitoring and reporting program and financial performance.
Grants officers may use the provisions of subparts A and B of 2 CFR
part 1134 for awards to for-profit organizations, or may include
equivalent technical and financial reporting requirements that ensure
reasonable oversight of the expenditure of appropriated funds. As a
minimum, equivalent requirements must include:
(a) Periodic reports (at least annually, and no more frequently than
quarterly) addressing both program status and business status, as
follows:
(1) The program portions of the reports must address progress toward
achieving program performance goals, including current issues, problems,
or developments.
(2) The business portions of the reports shall provide summarized
details on the status of resources (federal funds and non-federal cost
sharing or matching), including an accounting of expenditures for the
period covered by the report. The report should compare the resource
status with any payment and expenditure schedules or plans provided in
the original award; explain any major deviations from those schedules;
and discuss actions that will be taken to address the deviations.
(3) When grants officers previously authorized advance payments,
pursuant to Sec. 34.12(a)(2), they should consult with the program
official and consider whether program progress reported in the periodic
report, in relation to reported expenditures, is sufficient to justify
continued authorization of advance payments.
(b) Unless inappropriate, a final performance report that addresses
all major accomplishments under the award.
[63 FR 12204, Mar. 12, 1998, as amended at 85 FR 51244, Aug. 19, 2020]
Sec. 34.42 Retention and access requirements for records.
(a) This section sets forth requirements for records retention and
access to records for awards to recipients.
(b) Financial records, supporting documents, statistical records,
and all other records pertinent to an award shall be retained for a
period of three years from the date of submission of the final
expenditure report. The only exceptions are the following:
(1) If any litigation, claim, or audit is started before the
expiration of the 3-year period, the records shall be retained until all
litigation, claims or audit findings involving the records have been
resolved and final action taken.
(2) Records for real property and equipment acquired with Federal
funds shall be retained for 3 years after final disposition.
(3) When records are transferred to or maintained by the DoD
Component that made the award, the 3-year retention requirement is not
applicable to the recipient.
(4) Indirect cost rate proposals, cost allocations plans, and
related records, for which retention requirements are specified in Sec.
34.42(g).
(c) Copies of original records may be substituted for the original
records if authorized by the grants officer.
(d) The grants officer shall request that recipients transfer
certain records to DoD Component custody when he or she determines that
the records possess long term retention value. However, in order to
avoid duplicate recordkeeping, a grants officer may make arrangements
for recipients to retain any records that are continuously needed for
joint use.
(e) DoD Components, the Inspector General, Comptroller General of
the United States, or any of their duly authorized representatives, have
the right of timely and unrestricted access to any books, documents,
papers, or other records of recipients that are pertinent to the awards,
in order to make audits, examinations, excerpts, transcripts and copies
of such documents. This right also includes timely and reasonable access
to a recipient's personnel for the purpose of interview and discussion
related to such documents. The rights of access in this paragraph are
not limited to the required retention period, but shall last as long as
records are retained.
(f) Unless required by statute, no DoD Component shall place
restrictions on recipients that limit public access to the records of
recipients that are pertinent to an award, except when the DoD Component
can demonstrate
[[Page 85]]
that such records shall be kept confidential and would have been
exempted from disclosure pursuant to the Freedom of Information Act (5
U.S.C. 552) if the records had belonged to the DoD Component making the
award.
(g) Indirect cost proposals, cost allocation plans, and other cost
accounting documents (such as documents related to computer usage
chargeback rates), along with their supporting records, shall be
retained for a 3-year period, as follows:
(1) If a recipient is required to submit an indirect-cost proposal,
cost allocation plan, or other computation to the cognizant Federal
agency, for purposes of negotiating an indirect cost rate or other
rates, the 3-year retention period starts on the date of the submission.
This retention requirement also applies to subrecipients submitting
similar documents for negotiation to the recipient.
(2) If the recipient or the subrecipient is not required to submit
the documents or supporting records for negotiating an indirect cost
rate or other rates, the 3-year retention period for the documents and
records starts at the end of the fiscal year (or other accounting
period) covered by the proposal, plan, or other computation.
(h) If the information described in this section is maintained on a
computer, recipients shall retain the computer data on a reliable medium
for the time periods prescribed. Recipients may transfer computer data
in machine readable form from one reliable computer medium to another.
Recipients' computer data retention and transfer procedures shall
maintain the integrity, reliability, and security of the original
computer data. Recipients shall also maintain an audit trail describing
the data transfer. For the record retention time periods prescribed in
this section, recipients shall not destroy, discard, delete, or write
over such computer data.
Termination and Enforcement
Sec. 34.50 Purpose of termination and enforcement.
Sections 34.51 through 34.53 set forth uniform procedures for
suspension, termination, enforcement, and disputes.
Sec. 34.51 Termination.
(a) Awards may be terminated in whole or in part only in accordance
with one of the following:
(1) By the grants officer, if a recipient materially fails to comply
with the terms and conditions of an award.
(2) By the grants officer with the consent of the recipient, in
which case the two parties shall agree upon the termination conditions,
including the effective date and, in the case of partial termination,
the portion to be terminated.
(3) By the recipient upon sending to the grants officer written
notification setting forth the reasons for such termination, the
effective date, and, in the case of partial termination, the portion to
be terminated. The recipient must provide such notice at least 30
calendar days prior to the effective date of the termination. However,
if the grants officer determines in the case of partial termination that
the reduced or modified portion of the award will not accomplish the
purposes for which the award was made, he or she may terminate the award
in its entirety.
(b) If costs are allowed under an award, the responsibilities of the
recipient referred to in Sec. 34.61(b), including those for property
management as applicable, shall be considered in the termination of the
award, and provision shall be made for continuing responsibilities of
the recipient after termination, as appropriate.
Sec. 34.52 Enforcement.
(a) Remedies for noncompliance. If a recipient materially fails to
comply with the terms and conditions of an award, whether stated in a
Federal statute, regulation, assurance, application, or notice of award,
the grants officer may, in addition to imposing any of the special
conditions outlined in Sec. 34.4, take one or more of the following
actions, as appropriate in the circumstances:
(1) Temporarily withhold cash payments pending correction of the
deficiency by the recipient or more severe enforcement action by the
grants officer and DoD Component.
(2) Disallow (that is, deny both use of funds and any applicable
matching
[[Page 86]]
credit for) all or part of the cost of the activity or action not in
compliance.
(3) Wholly or partly suspend or terminate the current award. In the
case of termination, the recipient will be reimbursed for allowable
costs incurred prior to termination, with the possible exception of
those for activities and actions described in paragraph (a)(2) of this
section.
(4) Withhold further awards for the project or program.
(5) Take other remedies that may be legally available.
(b) Hearings and appeals. In taking an enforcement action, the
grants officer and DoD Component shall provide the recipient an
opportunity for hearing, appeal, or other administrative proceeding to
which the recipient is entitled under any statute or regulation
applicable to the action involved (see Sec. 34.53 and 32 CFR 22.815).
(c) Effects of suspension and termination. Costs of a recipient
resulting from obligations incurred by the recipient during a suspension
or after termination of an award are not allowable unless the grants
officer expressly authorizes them in the notice of suspension or
termination or subsequently. Other recipient costs during suspension or
after termination which are necessary and not reasonably avoidable are
allowable if the costs:
(1) Result from obligations which were properly incurred by the
recipient before the effective date of suspension or termination, are
not in anticipation of it, and in the case of a termination, are
noncancellable; and
(2) Would be allowable if the award were not suspended or expired
normally at the end of the funding period in which the termination takes
effect.
(d) Relationship to debarment and suspension. The enforcement
remedies identified in this section, including suspension and
termination, do not preclude a recipient from being subject to debarment
and suspension under 2 CFR part 1125.
[63 FR 12188, Mar. 12, 1998, as amended at 72 FR 34998, June 26, 2007]
Sec. 34.53 Disputes and appeals.
Recipients have the right to appeal certain decisions by grants
officers. In resolving such issues, DoD policy is to use Alternative
Dispute Resolution (ADR) techniques, to the maximum practicable extent.
See 32 CFR 22.815 for standards for DoD Components' dispute resolution
and formal, administrative appeal procedures.
Subpart C_After-the-Award Requirements
Sec. 34.60 Purpose.
Sections 34.61 through 34.63 contain procedures for closeout and for
subsequent disallowances and adjustments.
Sec. 34.61 Closeout procedures.
(a) The cognizant grants officer shall, at least six months prior to
the expiration date of the award, contact the recipient to establish:
(1) All steps needed to close out the award, including submission of
financial and performance reports, liquidation of obligations, and
decisions on property disposition.
(2) A schedule for completing those steps.
(b) The following provisions shall apply to the closeout:
(1) The responsible grants officer and payment office shall expedite
completion of steps needed to close out awards and make prompt, final
payments to a recipient for allowable reimbursable costs under the award
being closed out.
(2) The recipient shall promptly refund any unobligated balances of
cash that the DoD Component has advanced or paid and that is not
authorized to be retained by the recipient for use in other projects.
For unreturned amounts that become delinquent debts, see 32 CFR 22.820.
(3) When authorized by the terms and conditions of the award, the
grants officer shall make a settlement for any upward or downward
adjustments to the Federal share of costs after closeout reports are
received.
(4) The recipient shall account for any real property and personal
property acquired with Federal funds or received from the Federal
Government in accordance with Sec. Sec. 34.21 through 34.25.
(5) If a final audit is required and has not been performed prior to
the closeout of an award, the DoD Component
[[Page 87]]
shall retain the right to recover an appropriate amount after fully
considering the recommendations on disallowed costs resulting from the
final audit.
Sec. 34.62 Subsequent adjustments and continuing responsibilities.
(a) The closeout of an award does not affect any of the following:
(1) The right of the Department of Defense to disallow costs and
recover funds on the basis of a later audit or other review.
(2) The obligation of the recipient to return any funds due as a
result of later refunds, corrections, or other transactions.
(3) Audit requirements in Sec. 34.16.
(4) Property management requirements in Sec. Sec. 34.21 through
34.25.
(5) Records retention as required in Sec. 34.42.
(b) After closeout of an award, a relationship created under an
award may be modified or ended in whole or in part with the consent of
the grants officer and the recipient, provided the responsibilities of
the recipient referred to in Sec. 34.61(a), including those for
property management as applicable, are considered and provisions made
for continuing responsibilities of the recipient, as appropriate.
Sec. 34.63 Collection of amounts due.
Any funds paid to a recipient in excess of the amount to which the
recipient is finally determined to be entitled under the terms and
conditions of the award constitute a debt to the Federal Government.
Procedures for issuing the demand for payment and pursuing
administrative offset and other remedies are described in 32 CFR 22.820.
Sec. Appendix A to Part 34--Contract Provisions
All contracts awarded by a recipient, including those for amounts
less than the simplified acquisition threshold, shall contain the
following provisions as applicable:
1. Equal Employment Opportunity--All contracts shall contain a
provision requiring compliance with E.O. 11246 (3 CFR, 1964-1965 Comp.,
p. 339), ``Equal Employment Opportunity,'' as amended by E.O. 11375 (3
CFR, 1966-1970 Comp., p. 684), ``Amending Executive Order 11246 Relating
to Equal Employment Opportunity,'' and as supplemented by regulations at
41 CFR chapter 60, ``Office of Federal Contract Compliance Programs,
Equal Employment Opportunity, Department of Labor.''
2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C.
3145)--All contracts and subawards in excess of $2000 for construction
or repair awarded by recipients and subrecipients shall include a
provision for compliance with the Copeland ``Anti-Kickback'' Act (18
U.S.C. 874), 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 shall
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 is otherwise entitled. The recipient
shall report all suspected or reported violations to the responsible DoD
Component.
3. Contract Work Hours and Safety Standards Act (40 U.S.C., chapter
37)--Where applicable, all contracts awarded by recipients in excess of
$100,000 for construction and other purposes that involve the employment
of mechanics or laborers shall include a provision for compliance with
Sections 102 and 107 of the Contract Work Hours and Safety Standards Act
(40 U.S.C., chapter 37), as supplemented by Department of Labor
regulations (29 CFR part 5). Under Section 102 of the Act, each
contractor shall 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 1\1/2\ times the basic rate of
pay for all hours worked in excess of 40 hours in the work week. Section
107 of the Act is applicable to construction work and provides that no
laborer or mechanic shall be required to work in surroundings or under
working conditions which are unsanitary, 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.
4. Rights to Inventions Made Under a Contract, Grant or Cooperative
Agreement--Contracts, grants, or cooperative agreements for the
performance of experimental, developmental, or research work shall
provide for the rights of the Federal Government and the recipient in
any resulting invention in accordance with 37 CFR part 401, ``Rights to
Inventions Made by Nonprofit Organizations and Small Business Firms
Under Government Grants, Contracts and Cooperative Agreements.''
[[Page 88]]
5. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water
Pollution Control Act (33 U.S.C. 1251 et seq.), as amended--Contracts
and subawards of amounts in excess of $150,000 shall contain a provision
that requires the recipient to agree to comply with all applicable
standards, orders or regulations issued pursuant to the Clean Air Act
(42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as
amended (33 U.S.C. 1251 et seq.). Violations shall be reported to the
responsible DoD Component and the Regional Office of the Environmental
Protection Agency (EPA).
6. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--Contractors who
apply or bid for an award of $100,000 or more shall 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 shall 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 recipient.
7. Debarment and Suspension (E.O.s 12549 and 12689)--A contract
award with an amount expected to equal or exceed $25,000 and certain
other contract awards (see 2 CFR 1125.220, which implements OMB guidance
at 2 CFR 180.220) shall not be made to parties identified in the
Exclusions area of the System for Award Management (SAM Exclusions) as
being currently debarred, suspended, or otherwise excluded. This
restriction is in accordance with the DoD adoption at 2 CFR part 1125 of
the OMB guidance implementing E.O.s 12549 (3 CFR, 1986 Comp., p. 189)
and 12689 (3 CFR, 1989 Comp., p. 235), ``Debarment and Suspension.''
8. Wage Rate Requirements (Construction), formerly the Davis Bacon
Act. When required by Federal program legislation, you must take the
following actions with respect to each construction contract for more
than $2,000 to be awarded using funding provided under this award:
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 (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.
9. Fly America requirements. In each contract under which funds
provided under this award might be used to participate in costs of
international air travel or transportation for people or property, you
must include a clause to require 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 by the General Services Administration at
41 CFR 301-10.131 through 301-10.143, which provides that U.S Government
financed international air travel 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.
10. 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.
[63 FR 12204, Mar. 12, 1998, as amended at 70 FR 49477, Aug. 23, 2005;
72 FR 34998, June 26, 2007; 85 FR 51245, Aug. 19, 2020]
PART 37_TECHNOLOGY INVESTMENT AGREEMENTS--Table of Contents
Subpart A_General
Sec.
37.100 What does this part do?
37.105 Does this part cover all types of instruments that 10 U.S.C. 2371
authorizes?
37.110 What type of instruments are technology investment agreements
(TIAs)?
37.115 For what purposes are TIAs used?
37.120 Can my organization award or administer TIAs?
37.125 May I award or administer TIAs if I am authorized to award or
administer other assistance instruments?
37.130 Which other parts of the DoD Grant and Agreement Regulations
apply to TIAs?
[[Page 89]]
Subpart B_Appropriate Use of Technology Investment Agreements
37.200 What are my responsibilities as an agreements officer for
ensuring the appropriate use of TIAs?
37.205 What judgments must I make about the nature of the project?
37.210 To what types of recipients may I award a TIA?
37.215 What must I conclude about the recipient's commitment and cost
sharing?
37.220 How involved should the Government program official be in the
project?
37.225 What judgment must I make about the benefits of using a TIA?
37.230 May I use a TIA if a participant is to receive fee or profit?
Subpart C_Expenditure-Based and Fixed-Support Technology Investment
Agreements
37.300 What is the difference between an expenditure-based and fixed-
support TIA?
37.305 When may I use a fixed-support TIA?
37.310 When would I use an expenditure-based TIA?
37.315 What are the advantages of using a fixed-support TIA?
Subpart D_Competition Phase
37.400 Must I use competitive procedures to award TIAs?
37.405 What must my announcement or solicitation include?
37.410 Should my announcement or solicitation state that TIAs may be
awarded?
37.415 Should I address cost sharing in the announcement or
solicitation?
37.420 Should I tell proposers that we will not disclose information
that they submit?
Subpart E_Pre-Award Business Evaluation
37.500 What must my pre-award business evaluation address?
37.505 What resources are available to assist me during the pre-award
business evaluation?
Recipient Qualification
37.510 What are my responsibilities for determining that a recipient is
qualified?
37.515 Must I do anything additional to determine the qualification of a
consortium?
Total Funding
37.520 What is my responsibility for determining that the total project
funding is reasonable?
Cost Sharing
37.525 What is my responsibility for determining the value and
reasonableness of the recipient's cost sharing contribution?
37.530 What criteria do I use in deciding whether to accept a
recipient's cost sharing?
37.535 How do I value cost sharing related to real property or
equipment?
37.540 May I accept fully depreciated real property or equipment as cost
sharing?
37.545 May I accept costs of prior research as cost sharing?
37.550 May I accept intellectual property as cost sharing?
37.555 How do I value a recipient's other contributions?
Fixed-Support or Expenditure-Based Approach
37.560 Must I be able to estimate project expenditures precisely in
order to justify use of a fixed-support TIA?
37.565 May I use a hybrid instrument that provides fixed support for
only a portion of a project?
Accounting, Payments, and Recovery of Funds
37.570 What must I do if a CAS-covered participant accounts differently
for its own and the Federal Government shares of project
costs?
37.575 What are my responsibilities for determining milestone payment
amounts?
37.580 What is recovery of funds and when should I consider including it
in my TIA?
Subpart F_Award Terms Affecting Participants' Financial, Property, and
Purchasing Systems
37.600 Which administrative matters are covered in this subpart?
37.605 What is the general policy on participants' financial, property,
and purchasing systems?
37.610 Must I tell participants what requirements they are to flow down
for subrecipients' systems?
Financial Matters
37.615 What standards do I include for financial systems of for-profit
firms?
37.620 What financial management standards do I include for participants
that are nonprofit?
37.625 What cost principles or standards do I require for for-profit
participants?
37.630 Must I require a for-profit firm to use Federally approved
indirect cost rates?
37.635 What cost principles do I require a nonprofit participant to use?
37.640 Must I include a provision for audits of for-profit participants?
[[Page 90]]
37.645 Must I require periodic system audits, as well as award-specific
audits, of for-profit participants?
37.650 Who must I identify as the auditor for a for-profit participant?
37.655 Must I specify the frequency of IPAs' periodic audits of for-
profit participants?
37.660 What else must I specify concerning audits of for-profit
participants by IPAs?
37.665 Must I require nonprofit participants to have periodic audits?
37.670 Must I require participants to flow down audit requirements to
subrecipients?
Property
37.685 May I allow for-profit firms to purchase real property and
equipment with project funds?
37.690 How are nonprofit participants to manage real property and
equipment?
37.695 What are the requirements for Federally owned property?
37.700 What are the requirements for supplies?
Purchasing
37.705 What standards do I include for purchasing systems of for-profit
firms?
37.710 What standards do I include for purchasing systems of nonprofit
organizations?
Subpart G_Award Terms Related to Other Administrative Matters
37.800 Which administrative matters are covered in this subpart?
Payments
37.805 If I am awarding a TIA, what payment methods may I specify?
37.810 What should my TIA's provisions specify for the method and
frequency of recipients' payment requests?
37.815 May the Government withhold payments?
37.820 Must I require a recipient to return interest on advance
payments?
Revision of Budget and Program Plans
37.825 Must I require the recipient to obtain prior approval from the
Government for changes in plans?
37.830 May I let a recipient charge pre-award costs to the agreement?
Program Income
37.835 What requirements do I include for program income?
Intellectual Property
37.840 What general approach should I take in negotiating data and
patent rights?
37.845 What data rights should I obtain?
37.850 Should I require recipients to mark data?
37.855 How should I handle protected data?
37.860 What rights should I obtain for inventions?
37.865 Should my patent provision include march-in rights?
37.870 Should I require recipients to mark documents related to
inventions?
37.875 Should my TIA include a provision concerning foreign access to
technology?
Financial and Programmatic Reporting
37.880 What requirements must I include for periodic reports on program
and business status?
37.885 May I require updated program plans?
37.890 Must I require a final performance report?
37.895 How is the final performance report to be sent to the Defense
Technical Information Center?
37.900 May I tell a participant that information in financial and
programmatic reports will not be publicly disclosed?
37.905 Must I make receipt of the final performance report a condition
for final payment?
Records Retention and Access Requirements
37.910 How long must I require participants to keep records related to
the TIA?
37.915 What requirement for access to a for-profit participant's records
do I include in a TIA?
37.920 What requirement for access to a nonprofit participant's records
do I include in a TIA?
Termination and Enforcement
37.925 What requirements do I include for termination and enforcement?
Subpart H_Executing the Award
37.1000 What are my responsibilities at the time of award?
The Award Document
37.1005 What are my general responsibilities concerning the award
document?
37.1010 What substantive issues should my award document address?
37.1015 How do I decide who must sign the TIA if the recipient is an
unincorporated consortium?
Reporting Information About the Award
37.1020 What must I document in my award file?
37.1025 Must I report information to the Defense Assistance Awards Data
System?
[[Page 91]]
Distributing Copies of the Award Document
37.1045 To whom must I send copies of the award document?
Subpart I_Post-Award Administration
37.1100 What are my responsibilities generally as an administrative
agreements officer for a TIA?
37.1105 What additional duties do I have as the administrator of a TIA
with advance payments or payable milestones?
37.1110 What other responsibilities related to payments do I have?
37.1115 What are my responsibilities related to participants' single
audits?
37.1120 When and how may I request an award-specific audit?
Subpart J_Definitions of Terms Used in this Part
37.1205 Advance.
37.1210 Advanced research.
37.1215 Agreements officer.
37.1220 Applied research.
37.1225 Articles of collaboration.
37.1230 Assistance.
37.1235 Award-specific audit.
37.1240 Basic research.
37.1245 Cash contributions.
37.1250 Commercial firm.
37.1255 Consortium.
37.1260 Cooperative agreement.
37.1265 Cost sharing.
37.1270 Data.
37.1275 DoD Component.
37.1280 Equipment.
37.1285 Expenditure-based award.
37.1290 Expenditures or outlays.
37.1295 Grant.
37.1300 In-kind contributions.
37.1305 Institution of higher education.
37.1310 Intellectual property.
37.1315 Nonprofit organization.
37.1320 Participant.
37.1325 Periodic audit.
37.1330 Procurement contract.
37.1335 Program income.
37.1340 Program official.
37.1345 Property.
37.1350 Real property.
37.1355 Recipient.
37.1360 Research.
37.1365 Supplies.
37.1370 Termination.
37.1375 Technology investment agreements.
Appendix A to Part 37--What Is the Civil-Military Integration Policy
That Is the Basis for Technology Investment Agreements?
Appendix B to Part 37--What Type of Instrument Is a TIA and What
Statutory Authorities Does It Use?
Appendix C to Part 37--What Is the Desired Coverage for Periodic Audits
of For-Profit Participants To Be Audited by IPAs?
Appendix D to Part 37--What Common National Policy Requirements May
Apply and Need To Be Included in TIAs?
Appendix E to Part 37--What Provisions May A Participant Need to Include
When Purchasing Goods or Services Under a TIA?
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Source: 68 FR 47160, Aug. 7, 2003, unless otherwise noted.
Subpart A_General
Sec. 37.100 What does this part do?
This part establishes uniform policies and procedures for the DoD
Components' award and administration of technology investment agreements
(TIAs).
Sec. 37.105 Does this part cover all types of instruments that
10 U.S.C. 2371 authorizes?
No, this part covers only TIAs, some of which use the authority of
10 U.S.C. 2371 (see appendix B to this part). This part does not cover
assistance instruments other than TIAs that use the authority of 10
U.S.C. 2371. It also does not cover acquisition agreements for prototype
projects that use 10 U.S.C. 2371 authority augmented by the authority in
section 845 of Public Law 103-160, as amended.
Sec. 37.110 What type of instruments are technology
investment agreements (TIAs)?
TIAs are assistance instruments used to stimulate or support
research. As discussed in appendix B to this part, a TIA may be either a
kind of cooperative agreement or a type of assistance transaction other
than a grant or cooperative agreement.
Sec. 37.115 For what purposes are TIAs used?
The ultimate goal for using TIAs, like other assistance instruments
used in defense research programs, is to foster the best technologies
for future defense needs. TIAs differ from and complement other
assistance instruments available to agreements officers, in that TIAs
address the goal by fostering civil-military integration (see appendix
[[Page 92]]
A to this part). TIAs therefore are designed to:
(a) Reduce barriers to commercial firms' participation in defense
research, to give the Department of Defense (DoD) access to the broadest
possible technology and industrial base.
(b) Promote new relationships among performers in both the defense
and commercial sectors of that technology and industrial base.
(c) Stimulate performers to develop, use, and disseminate improved
practices.
Sec. 37.120 Can my organization award or administer TIAs?
Your office may award or administer TIAs if it has a delegation of
the authorities in 10 U.S.C. 2371, as well as 10 U.S.C. 2358. If your
office is in a Military Department, it must have a delegation of the
authority of the Secretary of that Military Department under those
statutes. If your office is in a Defense Agency, it must have a
delegation of the authority of the Secretary of Defense under 10 U.S.C.
2358 and 2371. Your office needs those authorities to be able to:
(a) Enter into cooperative agreements to stimulate or support
research, using the authority of 10 U.S.C. 2358, as well as assistance
transactions other than grants or cooperative agreements, using the
authority of 10 U.S.C. 2371. The reason that both authorities are needed
is that a TIA, depending upon its patent rights provision (see appendix
B to this part), may be either a cooperative agreement or a type of
assistance transaction other than a grant or cooperative agreement.
(b) Recover funds from a recipient and reuse the funds for program
purposes, as authorized by 10 U.S.C. 2371 and described in Sec. 37.580.
(c) Exempt certain information received from proposers from
disclosure under the Freedom of Information Act, as authorized by 10
U.S.C. 2371 and described in Sec. 37.420.
Sec. 37.125 May I award or administer TIAs if I am authorized to award
or administer other assistance instruments?
(a) You must have specific authorization to award or administer
TIAs. Being authorized to award or administer grants and cooperative
agreements is not sufficient; a grants officer is an agreements officer
only if the statement of appointment also authorizes the award or
administration of TIAs.
(b) You receive that authorization in the same way that you receive
authority to award other assistance instruments, as described in 32 CFR
21.425 and 21.435 through 21.445.
Sec. 37.130 Which other parts of the DoD Grant and Agreement Regulations
apply to TIAs?
(a) TIAs are explicitly covered in this part and part 21 of the DoD
Grant and Agreement Regulations (DoDGARs). Part 21 (32 CFR part 21)
addresses deviation procedures and other general matters that relate to
the DoDGARs, to DoD Components' authorities and responsibilities for
assistance instruments, and to requirements for reporting information
about assistance awards.
(b) Two additional parts of the DoDGARs apply to TIAs, although they
do not mention TIAs explicitly. They are:
(1) Part 1125 (2 CFR part 1125) on nonprocurement debarment and
suspension, which applies because it covers nonprocurement instruments
in general;
(2) Part 26 (32 CFR part 26), on drug-free workplace requirements,
which applies because it covers financial assistance in general; and
(3) Part 28 (32 CFR part 28), on lobbying restrictions, which
applies by law (31 U.S.C. 1352) to TIAs that are cooperative agreements
and as a matter of DoD policy to all other TIAs.
(c) Portions of other DoDGARs parts apply to TIAs only as cited by
reference in this part.
[68 FR 47160, Aug. 7, 2003, as amended at 70 FR 49477, Aug. 23, 2005; 72
FR 34999, June 26, 2007; 85 FR 51245, Aug. 19, 2020]
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