[Federal Register Volume 59, Number 143 (Wednesday, July 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17974]


[[Page Unknown]]

[Federal Register: July 27, 1994]


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Part III





Department of Labor





_______________________________________________________________________



Office of the Secretary



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29 CFR Part 95




Uniform Administrative Requirements for Grants and Agreements With 
Institutions of Higher Education, et cetera.; Final Rule
DEPARTMENT OF LABOR

Office of the Secretary

29 CFR Part 95

 
Uniform Administrative Requirements for Grants and Agreements 
With Institutions of Higher Education, Hospitals and Other Non-Profit 
Organizations, and With Commercial Organizations, Foreign Governments, 
Organizations Under the Jurisdiction of Foreign Governments, and 
International Organizations

AGENCY: Office of the Secretary, Labor.

ACTION: Final rule.

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SUMMARY: The Department of Labor is issuing these regulations pursuant 
to the requirements of the Office of Management and Budget (OMB) 
Circular No. A-110 (Revised), which provides standards for obtaining 
consistency and uniformity among Federal agencies in the administration 
of grants and agreements with institutions of higher education, 
hospitals, and other non-profit organizations. This rule also applies 
to the Department of Labor's grants to commercial organizations, 
foreign governments, organizations under the jurisdiction of foreign 
governments and international organizations.
    OMB issued Circular A-110 in 1976 and, except for a minor revision 
in February 1987, the Circular remained unchanged until revised in 
1993. To update the Circular, OMB established an interagency task force 
to review the Circular. The task force solicited suggestions for 
changes to the Circular from university groups, non-profit 
organizations and other interested parties and compared for consistency 
the provisions of similar provisions applied to State and local 
governments. The revised Circular and these regulations reflect the 
results of these efforts.

EFFECTIVE DATE: This rule is effective on July 27, 1994.

ADDRESSES: U.S. Department of Labor, Office of the Assistant Secretary 
for Administration and Management, Directorate of Administrative and 
Procurement Programs, Room S-1522, 200 Constitution Ave., NW., 
Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Melvin Goldberg, Office of Acquisition 
Integrity, Division of Procurement and Grant Policy. Telephone 202-219-
9174, Extension 109 (this is not a toll free number).

SUPPLEMENTARY INFORMATION:

A. Background

    OMB published a notice in the Federal Register (57 FR 39018) on 
August 27, 1992, requesting comments on proposed revisions to OMB 
Circular A-110. Interested parties were invited to submit comments. OMB 
received over 200 comments from Federal agencies, non-profit 
organizations, professional organizations and others. All comments were 
considered in developing this final revision.
    On November 29, 1993, at 58 FR 62992, OMB published a notice 
containing its final revision to Circular A-110. In that publication, 
OMB presented a summary of the major comments, grouped by subject, and 
a response to each comment. Other changes were made to increase clarity 
and readability.
    Omitted from part 95 are requirements which DOL must meet pursuant 
to the Circular. Those requirements deal with the relationship between 
DOL and OMB and are not necessary to this rulemaking. OMB Circular A-
110 gives Federal agencies the discretion to make these regulations 
applicable to grants and agreements awarded to commercial 
organizations, foreign governments, organizations under the 
jurisdiction of foreign governments, and international organizations. 
The Department of Labor has chosen to do so. As permitted by OMB 
Circular A-110, the Department has made a few changes to the language 
of the Circular to fit the particular circumstances of the DOL 
programs. The Department has added a definition of ``commercial 
organizations'' and revised the definition of ``program income'' for 
clarification purposes. The Department also has revised the language in 
Sec. 95.25(e)(2), dealing with extensions, for editorial purposes. The 
Department has deleted the words ``at least'' from Sec. 95.22(e)(2) to 
enhance administrative efficiency by limiting invoicing to once a 
month. Other minor editorial, technical, and clarifying changes are 
made as well.

B. Publication in Final

    The Department of Labor has determined, pursuant to 5 U.S.C. 
553(b)(B), that good cause exists for waiving public comment on this 
procedural amendment to the regulation because such comment is 
unnecessary, impracticable, and contrary to the public interest. This 
finding is made because all executive agencies are required to follow 
OMB directives with respect to grants or assistance of property. See 41 
U.S.C. Sec. 405 (The Office of Federal Procurement Policy Act).

C. Dates

    The Department has determined that good cause exists for waiving 
the customary requirement for delay in the effective date of a final 
rule for 30 days following its publication. Therefore, this rule shall 
be effective July 27, 1994. See 5 U.S.C. 553.

D. Procedural Matters

    This rule is not a ``significant regulatory action'' as defined by 
section 3(f) of Executive Order 12866. Since this rule was not preceded 
by a proposed rule, a regulatory flexibility analysis is not required. 
See 5 U.S.C. 601(2). Further, the Department of Labor certifies that 
the rule will not have a significant economic impact on a substantial 
number of small entities, because it does not affect the amount of 
funds provided in the covered programs, but, rather, modifies and 
updates administrative and procedural requirements. The recordkeeping 
requirements in this rule have been approved by the Office of 
Management and Budget, as required by the Paperwork Reduction Act of 
1980 (44 U.S.C. 3501 et seq.). Existing requirements were approved by 
the Office of Management and Budget, Approval Number 1225-0017.

List of Subjects

29 CFR Part 95

    Grants programs, Grants administration, Government contracts, 
Reporting and record-keeping requirements.

    For the reasons set out in the preamble, subtitle A of title 29 of 
the Code of Federal Regulations is amended, by adding a new part 95, as 
set forth below.

    Signed at Washington, DC, this 18th day of July, 1994.
Cynthia A. Metzler,
Assistant Secretary for Administration and Management.

PART 95--GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER 
EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS, AND WITH 
COMMERCIAL ORGANIZATIONS, FOREIGN GOVERNMENTS, ORGANIZATIONS UNDER 
THE JURISDICTION OF FOREIGN GOVERNMENTS, AND INTERNATIONAL 
ORGANIZATIONS

Subpart A--General

Sec.
95.1  Purpose.
95.2  Definitions.
95.3  Effect on other issuances.
95.4  Deviations.
95.5  Subawards.

Subpart B--Pre-Award Requirements

95.10  Purpose.
95.11  Pre-award policies.
95.12  Forms for applying for Federal assistance.
95.13  Debarment and suspension.
95.14  Special award conditions.
95.15  Metric system of measurement.
95.16  Resource Conservation and Recovery Act.
95.17  Certifications and representations.

Subpart C--Post-Award Requirements

Financial and Program Management

95.20  Purpose of financial and program management.
95.21  Standards for financial management systems.
95.22  Payment.
95.23  Cost sharing or matching.
95.24  Program income.
95.25  Revision of budget and program plans.
95.26  Non-Federal audits.
95.27  Allowable costs.
95.28  Period of availability of funds.

Property Standards

95.30  Purpose of property standards.
95.31  Insurance coverage.
95.32  Real property.
95.33  Federally-owned and exempt property.
95.34  Equipment.
95.35  Supplies and other expendable property.
95.36  Intangible property.
95.37  Property trust relationship.

Procurement Standards

95.40  Purpose of procurement standards.
95.41  Recipient responsibilities.
95.42  Codes of conduct.
95.43  Competition.
95.44  Procurement procedures.
95.45  Cost and price analysis.
95.46  Procurement records.
95.47  Contract administration.
95.48  Contract provisions.

Reports and Records

95.50  Purpose of reports and records.
95.51  Monitoring and reporting program performance.
95.52  Financial reporting.
95.53  Retention and access requirements for records.

Termination and Enforcement

95.60  Purpose of termination and enforcement.
95.61  Termination.
95.62  Enforcement.

Subpart D--After-the-Award Requirements

95.70  Purpose.
95.71  Closeout procedures.
95.72  Subsequent adjustments and continuing responsibilities.
95.73  Collection of amounts due.

Appendix A to Part 95--Contract Provisions

    Authority: 5 U.S.C. 301; OMB Circular A-110; Secretary of 
Labor's Order 4-76.

Subpart A--General


Sec. 95.1  Purpose.

    This part establishes uniform administrative requirements for 
Federal grants and agreements awarded to institutions of higher 
education, hospitals, other non-profit organizations, commercial 
organizations, foreign governments, organizations under the 
jurisdiction of foreign governments, and international organizations. 
DOL shall not impose additional or inconsistent requirements, except as 
provided in Secs. 95.4 and 95.14 or unless specifically required by 
Federal statute or executive order. Non-profit and commercial 
organizations that implement Federal programs for the States are also 
subject to State requirements.


Sec. 95.2  Definitions.

    (a) Accrued expenditures means the charges incurred by the 
recipient during a given period requiring the provision of funds for:
    (1) Goods and other tangible property received;
    (2) Services performed by employees, contractors, subrecipients, 
and other payees; and,
    (3) Other amounts becoming owed under programs for which no current 
services or performance is required.
    (b) Accrued income means the sum of:
    (1) Earnings during a given period from
    (i) Services performed by the recipient, and
    (ii) Goods and other tangible property delivered to purchasers, and
    (2) Amounts becoming owed to the recipient for which no current 
services or performance is required by the recipient.
    (c) Acquisition cost of equipment means the net invoice price of 
the equipment, including the cost of modifications, attachments, 
accessories, or auxiliary apparatus necessary to make the property 
usable for the purpose for which it was acquired. Other charges, such 
as the cost of installation, transportation, taxes, duty or protective 
in-transit insurance, shall be included or excluded from the unit 
acquisition cost in accordance with the recipient's regular accounting 
practices.
    (d) Advance means 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.
    (e) Award means financial assistance that provides support or 
stimulation to accomplish a public purpose. Awards include grants and 
other agreements in the form of money or property in lieu of money, by 
DOL to an eligible recipient. The term does not include: technical 
assistance, which provides services instead of money; other assistance 
in the form of loans, loan guarantees, interest subsidies, or 
insurance; direct payments of any kind to individuals; and, contracts 
which are required to be entered into and administered under 
procurement laws and regulations.
    (f) Cash contributions means the recipient's cash outlay, including 
the outlay of money contributed to the recipient by third parties.
    (g) Closeout means the process by which DOL determines that all 
applicable administrative actions and all required work of the award 
have been completed by the recipient and DOL.
    (h) Commercial organization means any business entity organized 
primarily for profit (even if its ownership is in the hands of a 
nonprofit entity) with a place of business located in or outside the 
United States. The term includes, but is not limited to, an individual, 
partnership, corporation, joint venture, association, or cooperative.
    (i) Contract means a procurement contract under an award or 
subaward, and a procurement subcontract under a recipient's or 
subrecipient's contract.
    (j) Cost sharing or matching means that portion of project or 
program costs not borne by DOL.
    (k) Date of completion means the date on which all work under an 
award is completed or the date on the award document, or any supplement 
or amendment thereto, on which DOL sponsorship ends.
    (l) Disallowed costs means those charges to an award that DOL 
determines to be unallowable, in accordance with the applicable Federal 
cost principles or other terms and conditions contained in the award.
    (m) DOL means the U.S. Department of Labor, including its agencies 
and organizational units.
    (n) Equipment means tangible nonexpendable personal property 
including exempt property charged directly to the award having a useful 
life of more than one year and an acquisition cost of $5,000 or more 
per unit. However, consistent with recipient policy, lower limits may 
be established. Equipment includes, but is not limited to, equipment 
acquired before the publication of these regulations and equipment 
transferred from prior years.
    (o) Excess property means property under the control of DOL that, 
as determined by the Secretary of Labor, is no longer required for its 
needs or the discharge of its responsibilities.
    (p) Exempt property means tangible personal property acquired in 
whole or in part with Federal funds, where DOL has statutory authority 
to vest title in the recipient without further obligation to the 
Federal Government.
    (q) Federal 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.
    (r) Federal awarding grantor agency means the Federal agency that 
provides an award to the recipient.
    (s) Federal funds authorized means the total amount of Federal 
funds obligated by DOL for use by the recipient. This amount may 
include any authorized carryover of unobligated funds from prior 
funding periods when permitted by DOL's regulations or DOL's 
implementing instructions.
    (t) Federal share of real property, equipment, or supplies means 
that percentage of the property's acquisition costs and any improvement 
expenditures paid with Federal funds.
    (u) Funding period means the period of time when Federal funding is 
available for obligation by the recipient.
    (v) Grant officer means any person authorized to enter into, modify 
or terminate any financial assistance awards and make related 
determinations and findings. DOL grant officers shall be designated by 
name on a ``Certificate of Appointment.''
    (w) Intangible property and debt instruments means, but is not 
limited to, trademarks, copyrights, patents and patent applications and 
such property as loans, notes and other debt instruments, lease 
agreements, stock and other instruments of property ownership, whether 
considered tangible or intangible.
    (x) Obligations means 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.
    (y) Outlays or expenditures means 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.
    (z) Personal property means property of any kind except real 
property. It may be tangible, having physical existence, or intangible, 
having no physical existence, such as copyrights, patents, or 
securities.
    (aa) Prior approval means written approval by an authorized 
official evidencing prior consent.
    (bb) Program income means gross income earned by the recipient that 
is directly generated by a supported activity or earned as a result of 
the award (see exclusions in Sec. 95.24(e) and (h)). Program income 
includes, but is not limited to, income from fees for services 
performed, the use or rental of real or personal property acquired 
under federally-funded projects, the sale of commodities or items 
fabricated under an award, license fees and royalties on patents and 
copyrights, and interest on loans made with award funds. Interest 
earned on advances of Federal funds is not program income. Except as 
otherwise provided in Federal awarding agency 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.
    (cc) Project costs means 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.
    (dd) Project period means the period established in the award 
document during which Federal sponsorship begins and ends.
    (ee) Property means, unless otherwise stated, real property, 
equipment, intangible property and debt instruments.
    (ff) Real property means land, including land improvements, 
structures and appurtenances thereto, but excludes movable machinery 
and equipment. Real property includes, but is not limited to, real 
property acquired before publication of these regulations and real 
property transferred from prior years.
    (gg) Recipient means an organization receiving financial assistance 
directly from DOL to carry out a project or program. The term includes 
public and private institutions of higher education, public and private 
hospitals, and other quasi-public and private non-profit organizations 
such as, but not limited to, community action agencies, research 
institutes, educational associations, and health centers. The term also 
includes commercial organizations, foreign or international 
organizations (such as agencies of the United Nations) which are 
recipients, subrecipients, or contractors or subcontractors of 
recipients or subrecipients. The term does not include government-owned 
contractor-operated facilities or research centers providing continued 
support for mission-oriented, large-scale programs that are government-
owned or controlled, or are designated as federally-funded research and 
development centers.
    (hh) Research and development means all research activities, both 
basic and applied, and all development activities that are supported at 
universities, colleges, and other non-profit institutions. ``Research'' 
is defined as a systematic study directed toward fuller scientific 
knowledge or understanding of the subject studied. ``Development'' is 
the systematic use of knowledge and understanding gained from research 
directed toward the production of useful materials, devices, systems, 
or methods, including design and development of prototypes and 
processes. The term research also includes activities involving the 
training of individuals in research techniques where such activities 
utilize the same facilities as other research and development 
activities and where such activities are not included in the 
instruction function.
    (ii) Small awards means a grant or cooperative agreement not 
exceeding the small purchase threshold fixed at 41 U.S.C. Sec. 403(11) 
(currently $25,000).
    (jj) Subaward means an award of financial assistance in the form of 
money, or property in lieu of money, made under an award by a recipient 
to an eligible subrecipient or by a subrecipient to a lower tier 
subrecipient. The term includes financial assistance when provided by 
any legal agreement, even if the agreement is called a contract, but 
does not include procurement of goods and services nor does it include 
any form of assistance which is excluded from the definition of 
``award'' in paragraph (e) of this section.
    (kk) Subrecipient means the legal entity to which a subaward is 
made and which is accountable to the recipient for the use of the funds 
provided. The term includes foreign organizations and international 
organizations (such as agencies of the United Nations).
    (ll) Supplies means all personal property excluding equipment, 
intangible property, and debt instruments as defined in this section, 
and inventions of a contractor conceived or first actually reduced to 
practice in the performance of work under a funding agreement 
(``subject inventions''), as defined in 37 CFR part 401, ``Rights to 
Inventions Made by Nonprofit Organizations and Small Business Firms 
Under Government Grants, Contracts, and Cooperative Agreements.''
    (mm) Suspension means an action by DOL that temporarily withdraws 
Federal sponsorship under an award, pending corrective action by the 
recipient or pending a decision to terminate the award by the Federal 
awarding agency. Suspension of an award is a separate action from 
suspension under DOL's regulations at 29 CFR part 98, implementing 
E.O.'s 12549 and 12689, ``Debarment and Suspension.'' See 29 CFR part 
98, subpart D.
    (nn) Termination means the cancellation of Federal sponsorship, in 
whole or in part, under an agreement at any time prior to the date of 
completion.
    (oo) Third party in-kind contributions means 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.
    (pp) Unliquidated obligations, for financial reports prepared on a 
cash basis, means the amount of obligations incurred by the recipient 
that have not been paid. For reports prepared on an accrued expenditure 
basis, they represent the amount of obligations incurred by the 
recipient for which an outlay has not been recorded.
    (qq) Unobligated balance means the portion of the funds authorized 
by DOL that has not been obligated by the recipient and is determined 
by deducting the cumulative obligations from the cumulative funds 
authorized.
    (rr) Unrecovered indirect cost means the difference between the 
amount awarded and the amount which could have been awarded under the 
recipient's approved negotiated indirect cost rate.
    (ss) Working capital advance means a procedure whereby funds are 
advanced to the recipient to cover its estimated disbursement needs for 
a given initial period.


Sec. 95.3  Effect on other issuances.

    For awards subject to this part, all administrative requirements of 
codified program regulations, program manuals, handbooks and other 
nonregulatory materials which are inconsistent with the requirements of 
this part shall be superseded, except to the extent they are required 
by statute, or authorized in accordance with the deviations provision 
in Sec. 95.4.


Sec. 95.4  Deviations.

    The Office of Management and Budget (OMB) may grant exceptions for 
classes of grants or recipients subject to the requirements of this 
part when exceptions are not prohibited by statute. However, in the 
interest of maximum grant-wide uniformity, exceptions from the 
requirements of this part shall be permitted only in unusual 
circumstances. DOL may apply more restrictive requirements to a class 
of recipients when approved by OMB. DOL may apply less restrictive 
requirements when awarding small awards, except for those requirements 
which are statutory. Exceptions on a case-by-case basis may also be 
made by DOL.


Sec. 95.5  Subawards.

    Unless sections of this part specifically exclude subrecipients 
from coverage, the provisions of this part shall be applied to 
subrecipients performing work under awards if such subrecipients are 
institutions of higher education, hospitals, other non-profit 
organizations, commercial organizations, foreign governments, 
organizations under the jurisdiction of foreign governments, and 
international organizations. State and local government subrecipients 
are subject to the provisions of regulations implementing the grants 
management common rule, ``Uniform Administrative Requirements for 
Grants and Cooperative Agreements to State and Local Governments,'' and 
codified by DOL at 29 CFR part 97 or its successor.

Subpart B--Pre-Award Requirements


Sec. 95.10  Purpose.

    Sections 95.11 through 95.17 prescribe forms and instructions and 
other pre-award matters to be used in applying for Federal awards.


Sec. 95.11  Pre-award policies.

    Public Notice and Priority Setting. Federal awarding agencies shall 
notify the public of its intended funding priorities for discretionary 
grant programs, unless funding priorities are established by Federal 
statute.


Sec. 95.12  Forms for applying for Federal assistance.

    (a) Applicants shall use the SF-424 series or those forms and 
instructions prescribed by DOL.
    (b) The applicant shall complete the appropriate sections of the 
SF-424 (Application for Federal Assistance) indicating whether the 
application was subject to review by the State Single Point of Contact 
(SPOC). The name and address of the SPOC for a particular State can be 
obtained from DOL or the Catalog of Federal Domestic Assistance. The 
SPOC shall advise the applicant whether the program for which 
application is made has been selected by that State for review.


Sec. 95.13  Debarment and suspension.

    Recipients shall comply with the nonprocurement debarment and 
suspension common rule implementing E.O.'s 12549 and 12689, ``Debarment 
and Suspension'' codified by DOL at 29 CFR part 98. This common rule 
restricts subawards and contracts with certain parties that are 
debarred, suspended or otherwise excluded from or ineligible for 
participation in Federal assistance programs or activities.


Sec. 95.14  Special award conditions.

    If an applicant or recipient:
    (a) Has a history of poor performance,
    (b) Is not financially stable,
    (c) Has a management system that does not meet the standards 
prescribed in this part,
    (d) Has not conformed to the terms and conditions of a previous 
award, or
    (e) Is not otherwise responsible,

DOL may impose additional requirements as needed, provided that such 
applicant or recipient is notified in writing as to: The nature of the 
additional requirements, the reason why the additional requirements are 
being imposed, the nature of the corrective action needed, the time 
allowed for completing the corrective actions, and the method for 
requesting reconsideration of the additional requirements imposed. Any 
special conditions shall be promptly removed once the conditions that 
prompted them have been corrected.


Sec. 95.15  Metric system of measurement.

    The Metric Conversion Act, as amended by the Omnibus Trade and 
Competitiveness Act (15 U.S.C. 205), declares that the metric system is 
the preferred measurement system for U.S. trade and commerce. The Act 
requires each Federal agency to establish a date or dates in 
consultation with the Secretary of Commerce, when the metric system of 
measurement will be used in the agency's procurements, grants, and 
other business-related activities. Metric implementation may take 
longer where the use of the system is initially impractical or likely 
to cause significant inefficiencies in the accomplishment of federally-
funded activities. DOL shall follow the provisions of E.O. 12770, 
``Metric Usage in Federal Government Programs.''


Sec. 95.16  Resource Conservation and Recovery Act.

    Under the Resource Conservation and Recovery Act (RCRA) (Pub. L. 
94-580 codified at 42 U.S.C. 6962), any State agency or agency of a 
political subdivision of a State which is using appropriated Federal 
funds must comply with Section 6002. Section 6002 requires that 
preference be given in procurement programs to the purchase of specific 
products containing recycled materials identified in guidelines 
developed by the Environmental Protection Agency (EPA) (40 CFR parts 
247-254). Accordingly, State and local institutions of higher 
education, hospitals, and non-profit organizations that receive direct 
Federal awards or other Federal funds shall give preference in their 
procurement programs funded with Federal funds to the purchase of 
recycled products pursuant to the EPA guidelines.


Sec. 95.17  Certifications and representations.

    Unless prohibited by statute or codified regulation, DOL requires 
recipients to submit certifications and representations required by 
statute, executive order, or regulation on an annual basis only, if the 
recipients have ongoing and continuing relationships with the agency. 
Annual certifications and representations shall be signed by 
responsible officials with the authority to ensure recipients' 
compliance with the pertinent requirements.

Subpart C--Post-Award Requirements

Financial and Program Management


Sec. 95.20  Purpose of financial and program management.

    Sections 95.21 through 95.28 prescribe standards for financial 
management systems, methods for making payments and rules for: 
Satisfying cost sharing and matching requirements, accounting for 
program income, budget revision approvals, making audits, determining 
allowability of cost, and establishing fund availability.


Sec. 95.21  Standards for financial management systems.

    (a) Recipients shall relate financial data to performance data and 
develop unit cost information whenever practical.
    (b) Recipients' financial management systems shall provide for the 
following:
    (1) Accurate, current and complete disclosure of the financial 
results of each federally-sponsored project or program in accordance 
with the reporting requirements set forth in Sec. 95.52. Though DOL 
requires reporting on an accrual basis from a recipient that maintains 
its records on other than an accrual basis, the recipient shall not be 
required to establish an accrual accounting system. These recipients 
may develop such accrual data for its reports on the basis of an 
analysis of the documentation on hand.
    (2) Records that identify adequately the source and application of 
funds for federally-sponsored activities. These records shall contain 
information pertaining to Federal awards, authorizations, obligations, 
unobligated balances, assets, outlays, income and interest.
    (3) Effective control over and accountability for all funds, 
property and other assets. Recipients shall adequately safeguard all 
such assets and assure they are used solely for authorized purposes.
    (4) Comparison of outlays with budget amounts for each award. 
Whenever appropriate, financial information should be related to 
performance and unit cost data.
    (5) Written procedures to minimize the time elapsing between the 
transfer of funds to the recipient from the U.S. Treasury and the 
issuance or redemption of checks, warrants or payments by other means 
for program purposes by the recipient. To the extent that the 
provisions of the Cash Management Improvement Act (CMIA) (Pub. L. 101-
453) govern, payment methods of State agencies, instrumentalities, and 
fiscal agents shall be consistent with CMIA Treasury-State Agreements 
or the CMIA default procedures codified at 31 CFR part 205, 
``Withdrawal of Cash from the Treasury for Advances under Federal Grant 
and Other Programs.''
    (6) Written procedures for determining the reasonableness, 
allocability and allowability of costs in accordance with the 
provisions of the applicable Federal cost principles and the terms and 
conditions of the award.
    (7) Accounting records including cost accounting records that are 
supported by source documentation.
    (c) Where the Federal Government guarantees or insures the 
repayment of money borrowed by the recipient, DOL, at its discretion, 
may require adequate bonding and insurance if the bonding and insurance 
requirements of the recipient are not deemed adequate to protect the 
interest of the Federal Government.
    (d) DOL may require adequate fidelity bond coverage where the 
recipient lacks sufficient coverage to protect the Federal Government's 
interest.
    (e) Where bonds are required in the situations described above, the 
bonds shall be obtained from companies holding certificates of 
authority as acceptable sureties, as prescribed in 31 CFR part 223, 
``Surety Companies Doing Business with the United States.''


Sec. 95.22  Payment.

    (a) Payment methods shall minimize the time elapsing between the 
transfer of funds from the United States Treasury and the issuance or 
redemption of checks, warrants, or payment by other means by the 
recipients. Payment methods of State agencies or instrumentalities 
shall be consistent with Treasury-State CMIA agreements or default 
procedures codified at 31 CFR part 205.
    (b) Recipients are to be paid in advance, provided they maintain or 
demonstrate the willingness to maintain:
    (1) Written procedures that minimize the time elapsing between the 
transfer of funds and disbursement by the recipient, and
    (2) Financial management systems that meet the standards for fund 
control and accountability as established in Sec. 95.21.

Cash advances to a recipient organization shall be limited to the 
minimum amounts needed and be timed to be in accordance with the 
actual, immediate cash requirements of the recipient organization in 
carrying out the purpose of the approved program or project. The timing 
and amount of cash advances shall be as close as is administratively 
feasible to the actual disbursements by the recipient organization for 
direct program or project costs and the proportionate share of any 
allowable indirect costs.
    (c) Whenever possible, advances shall be consolidated to cover 
anticipated cash needs for all awards made by DOL to the recipient.
    (1) Advance payment mechanisms include, but are not limited to, 
Treasury check and electronic funds transfer.
    (2) Advance payment mechanisms are subject to 31 CFR part 205.
    (3) Recipients are authorized to submit requests for advances 
monthly when electronic fund transfers are not used.
    (d) Requests for Treasury check advance payment shall be submitted 
on SF-270, ``Request for Advance or Reimbursement,'' or other forms as 
may be authorized by OMB. This form is not to be used when Treasury 
check advance payments are made to the recipient automatically through 
the use of a predetermined payment schedule or if precluded by special 
DOL instructions for electronic funds transfer.
    (e) Reimbursement is the preferred method when the requirements in 
paragraph (b) of this section cannot be met. DOL may also use this 
method on any construction agreement, or if the major portion of the 
construction project is accomplished through private market financing 
or Federal loans, and the Federal assistance constitutes a minor 
portion of the project.
    (1) When the reimbursement method is used, DOL shall make payment 
within 30 days after receipt of the billing, unless the billing is 
improper.
    (2) Recipients are authorized to submit requests for reimbursement 
monthly when electronic funds transfers are not used.
    (f) If a recipient cannot meet the criteria for advance payments 
and DOL has determined that reimbursement is not feasible because the 
recipient lacks sufficient working capital, DOL may provide cash on a 
working capital advance basis. Under this procedure, DOL shall advance 
cash to the recipient to cover its estimated disbursement needs for an 
initial period generally geared to the awardee's disbursing cycle. 
Thereafter, DOL shall reimburse the recipient for its actual cash 
disbursements. The working capital advance method of payment shall not 
be used for recipients unwilling or unable to provide timely advances 
to their subrecipient to meet the subrecipient's actual cash 
disbursements.
    (g) To the extent available, recipients shall disburse funds 
available from repayments to and interest earned on a revolving fund, 
program income, rebates, refunds, contract settlements, audit 
recoveries and interest earned on such funds before requesting 
additional cash payments.
    (h) Unless otherwise required by statute, DOL shall not withhold 
payments for proper charges made by recipients at any time during the 
project period unless paragraphs (h)(1) or (h)(2) of this section 
apply.
    (1) A recipient has failed to comply with the project objectives, 
the terms and conditions of the award, or Federal reporting 
requirements.
    (2) The recipient or subrecipient is delinquent in a debt to the 
United States as defined in OMB Circular A-129, ``Managing Federal 
Credit Programs.'' Under such conditions, DOL may, upon reasonable 
notice, inform the recipient that payments shall not be made for 
obligations incurred after a specified date until the conditions are 
corrected or the indebtedness to the Federal Government is liquidated.
    (i) Standards governing the use of banks and other institutions as 
depositories of funds advanced under awards are as follows:
    (1) Except for situations described in paragraph (i)(2) of this 
section, DOL shall not require separate depository accounts for funds 
provided to a recipient or establish any eligibility requirements for 
depositories for funds provided to a recipient. However, recipients 
must be able to account for the receipt, obligation and expenditure of 
funds.
    (2) Advances of Federal funds shall be deposited and maintained in 
insured accounts whenever possible.
    (j) Consistent with the national goal of expanding the 
opportunities for women-owned and minority-owned business enterprises, 
recipients shall be encouraged to use women-owned and minority-owned 
banks (a bank which is owned at least 50 percent by women or minority 
group members).
    (k) Recipients shall maintain advances of Federal funds in interest 
bearing accounts, unless paragraph (k)(1), (k)(2), or (k)(3) of this 
section apply.
    (1) The recipient receives less than $120,000 in Federal awards per 
year.
    (2) The best reasonably available interest bearing account would 
not be expected to earn interest in excess of $250 per year on Federal 
cash balances.
    (3) The depository would require an average or minimum balance so 
high that it would not be feasible within the expected Federal and non-
Federal cash resources.

In keeping with Electronic Funds Transfer rules, (31 CFR Part 206), 
interest should be remitted to the HHS Payment Management System 
through an electronic medium such as the FEDWIRE Deposit system. 
Recipients who do not have this capability should use a check.
    (l) For those entities where CMIA and its implementing regulations 
do not apply, interest earned on Federal advances deposited in interest 
bearing accounts shall be remitted annually to Department of Health and 
Human Services, Payment Management System, P.O. Box 6021, Rockville, MD 
20852. Interest amounts up to $250 per year may be retained by the 
recipient for administrative expense. State universities and hospitals 
shall comply with CMIA, as it pertains to interest. If an entity 
subject to CMIA uses its own funds to pay pre-award costs for 
discretionary awards without prior written approval from DOL, it waives 
its right to recover the interest under CMIA.
    (m) Except as noted elsewhere in this part, only the following 
forms shall be authorized for the recipients in requesting advances and 
reimbursements. DOL shall not require more than an original and two 
copies of these forms.
    (1) SF-270, Request for Advance or Reimbursement. The SF-270 is the 
standard form for all nonconstruction programs when electronic funds 
transfer or predetermined advance methods are not used. DOL, however, 
has the option of using this form for construction programs in lieu of 
the SF-271, ``Outlay Report and Request for Reimbursement for 
Construction Programs.''
    (2) SF-271, Outlay Report and Request for Reimbursement for 
Construction Programs. The SF-271 is the standard form to be used for 
requesting reimbursement for construction programs. However, DOL may 
substitute the SF-270 when DOL determines that it provides adequate 
information to meet Federal needs.


Sec. 95.23  Cost sharing or matching.

    (a) All contributions, including cash and third party in-kind, 
shall be accepted as part of the recipient's cost sharing or matching 
when such contributions meet all of the following criteria:
    (1) Are verifiable from the recipient's records.
    (2) Are not included as contributions for any other Federally-
assisted project or program.
    (3) Are necessary and reasonable for proper and efficient 
accomplishment of project or program objectives.
    (4) Are allowable under the applicable cost principles.
    (5) Are not paid by the Federal Government under another award, 
except where authorized by Federal statute to be used for cost sharing 
or matching.
    (6) Are provided for in the approved budget when required by DOL.
    (7) Conform to other provisions of this part, as applicable.
    (b) Unrecovered indirect costs may be included as part of cost 
sharing or matching only with prior written approval of the grant 
officer.
    (c) Values for recipient contributions of services and property 
shall be established in accordance with the applicable cost principles. 
If DOL authorizes recipients to donate buildings or land for 
construction/facilities acquisition projects or long-term use, the 
value of the donated property for cost sharing or matching shall be the 
lesser of the value determined under paragraph (c)(1) or paragraph 
(c)(2) of this section.
    (1) The certified value of the remaining life of the property 
recorded in the recipient's accounting records at the time of donation.
    (2) The current fair market value. However, when there is 
sufficient justification, the grant 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.
    (d) Volunteer services furnished by professional and technical 
personnel, consultants, and other skilled and unskilled labor may be 
counted as cost sharing or matching if the service is an integral and 
necessary part of an approved project or program. Rates for volunteer 
services shall be consistent with those paid for similar work in the 
recipient's organization. In those instances in which the required 
skills are not found in the recipient organization, rates shall be 
consistent with those paid for similar work in the labor market in 
which the recipient competes for the kind of services involved. In 
either case, paid fringe benefits that are reasonable, allowable, and 
allocable may be included in the valuation.
    (e) When an employer other than the recipient furnishes the 
services of an employee, these services shall be valued at the 
employee's regular rate of pay (plus an amount of fringe benefits that 
are reasonable, allowable, and allocable, but exclusive of overhead 
costs), provided these services are in the same skill for which the 
employee is normally paid.
    (f) Donated supplies may include such items as expendable 
equipment, office supplies, laboratory supplies or workshop and 
classroom supplies. Value assessed to donated supplies included in the 
cost sharing or matching share shall be reasonable and shall not exceed 
the fair market value of the property at the time of the donation.
    (g) The method used for determining cost sharing or matching for 
donated equipment, buildings and land for which title passes to the 
recipient may differ according to the purpose of the award, if 
paragraph (g)(1) or (g)(2) of this section apply.
    (1) If the purpose of the award is to assist the recipient in the 
acquisition of equipment, buildings or land, the total value of the 
donated property may be claimed as cost sharing or matching.
    (2) If the purpose of the award is to support activities that 
require the use of equipment, buildings or land, normally only 
depreciation or use charges for equipment and buildings may be made. 
However, the full value of equipment or other capital assets and fair 
rental charges for land may be allowed, provided that the grant officer 
has approved the charges.
    (h) The value of donated property shall be determined in accordance 
with the usual accounting policies of the recipient, with the following 
qualifications:
    (1) The value of donated land and buildings shall not exceed its 
fair market value at the time of donation to the recipient as 
established by an independent appraiser (e.g., certified real property 
appraiser or General Services Administration representative) and 
certified by a responsible official of the recipient.
    (2) The value of donated equipment shall not exceed the fair market 
value of equipment of the same age and condition at the time of 
donation.
    (3) The value of donated space shall not exceed the fair rental 
value of comparable space as established by an independent appraisal of 
comparable space and facilities in a privately-owned building in the 
same locality.
    (4) The value of loaned equipment shall not exceed its fair rental 
value.
    (5) 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 service, 
material, equipment, buildings and land shall be documented.


Sec. 95.24  Program income.

    (a) Except as provided in paragraph (e) of this section, program 
income earned during the project period shall be retained by the 
recipient and added to funds committed to the project by DOL and 
recipient, and used to further eligible project or program objectives.
    (b) Recipients shall have no obligation to the Federal Government 
regarding program income earned after the end of the project period.
    (c) 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) Proceeds from the sale of property are not program income and 
shall be handled in accordance with the requirements of the Property 
Standards (See Secs. 95.30 through 95.37).
    (e) Unless DOL's regulations or the terms and condition of the 
award provide otherwise, recipients shall have no obligation to the 
Federal Government with respect to program income earned from license 
fees and royalties for copyrighted material, patents, patent 
applications, trademarks, and inventions produced under an award. 
However, Patent and Trademark Amendments (35 U.S.C. 18) apply to 
inventions made under an experimental, developmental, or research 
award.


Sec. 95.25  Revision of budget and program plans.

    (a) The budget plan is the financial expression of the project or 
program as approved during the award process. It may include either the 
Federal and non-Federal share, or only the Federal share, depending 
upon DOL's 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) For nonconstruction awards, recipients shall request prior 
written approvals from the grant officer for one or more of the 
following program or budget changes:
    (1) Change in the scope or the objective of the project or program 
(even if there is no associated budget revision requiring prior written 
approval).
    (2) Change in a key person specified in the application or award 
document.
    (3) The absence for more than three months, or a 25-percent 
reduction in time devoted to the project, by the approved project 
director or principal investigator.
    (4) The need for additional Federal funding.
    (5) The transfer of amounts budgeted for indirect costs to absorb 
increases in direct costs, or vice versa.
    (6) The inclusion, unless waived by the grant officer, of costs 
that require prior approval in accordance with OMB Circular A-21, 
``Cost Principles for Institutions of Higher Education,'' OMB Circular 
A 122, ``Cost Principles for Non-Profit Organizations,'' or 45 CFR part 
74, Appendix E, ``Principles for Determining Costs Applicable to 
Research and Development under Grants and Contracts with Hospitals,'' 
or 48 CFR part 31, ``Contract Cost Principles and Procedures,'' as 
applicable.
    (7) The transfer of funds allotted for training allowances (direct 
payment to trainees) to other categories of expense.
    (8) Unless described in the application and funded in the approved 
awards, the subaward, transfer or contracting out of any work under an 
award. This provision does not apply to the purchase of supplies, 
material, equipment or general support services.
    (d) No other prior approval requirements for specific items may be 
imposed unless a deviation has been approved by OMB.
    (e) Except for requirements listed in paragraphs (c)(1) and (c)(4) 
of this section, the grant officer may waive cost-related and 
administrative prior written approvals required by this part and OMB 
Circulars A-21 and A-122. Such waivers may include authorizing 
recipients to do any one or more of the following:
    (1) Incur pre-award costs 90 calendar days prior to award or more 
than 90 calendar days with the prior written approval of the grant 
officer. All pre-award costs are incurred at the recipient's risk 
(i.e., the grant officer 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).
    (2) Initiate a one-time extension of the expiration date of the 
award of up to 12 months unless one or more of the following conditions 
apply. For one-time extensions, the recipient must notify the grant 
officer in writing with the supporting reasons and revised expiration 
date at least 10 days before the expiration date specified in the 
award. This one-time extension may not be exercised merely for the 
purpose of using unobligated balances. The one-time extension may not 
be initiated if:
    (i) The terms and conditions of award prohibit the extension.
    (ii) The extension requires additional Federal funds.
    (iii) The extension involves any change in the approved objectives 
or scope of the project.
    (3) Carry forward unobligated balances to subsequent funding 
periods.
    (4) For awards that support research, unless the grant officer 
provides otherwise in the award or in DOL's regulations, the prior 
written approval requirements described in paragraph (e) are 
automatically waived (i.e., recipients need not obtain such prior 
written approvals) unless one of the conditions included in paragraph 
(e)(2) applies.
    (f) DOL may, at its option, restrict the transfer of funds among 
direct cost categories or programs, functions and activities for awards 
in which the Federal share of the project exceeds $100,000 and the 
cumulative amount of such transfers exceeds or is expected to exceed 10 
percent of the total budget as last approved by DOL. DOL shall not 
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.
    (g) All other changes to nonconstruction budgets, except for the 
changes described in paragraph (j), do not require prior approval.
    (h) For construction awards, recipients shall request prior written 
approval promptly from the grant officer for budget revisions whenever 
paragraphs (h)(1), (h)(2) or (h)(3) of this section apply.
    (1) The revision results from changes in the scope or the objective 
of the project or program.
    (2) The need arises for additional Federal funds to complete the 
project.
    (3) A revision is desired which involves specific costs for which 
prior written approval requirements may be imposed consistent with 
applicable OMB cost principles listed in Sec. 95.27.
    (i) No other prior approval requirements for specific items may be 
imposed unless a deviation has been approved by OMB.
    (j) When DOL makes an award that provides support for both 
construction and nonconstruction work, DOL may require the recipient to 
request prior written approval before making any fund or budget 
transfers between the two types of work supported.
    (k) For both construction and nonconstruction awards, recipients 
shall notify the grant officer in writing promptly whenever the amount 
of Federal authorized funds is expected to exceed the needs of the 
recipient for the project period by more than $5,000 or five percent of 
the award, whichever is greater. This notification shall not be 
required if an application for additional funding is submitted for a 
continuation award.
    (l) When requesting written approval for budget revisions, 
recipients shall use the budget forms that were used in the 
application.
    (m) Within 30 calendar days from the date of receipt of the request 
for budget revisions, the grant 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 grant officer shall inform the recipient in writing of the 
date when the recipient may expect the decision.


Sec. 95.26  Non-Federal audits.

    (a) Recipients and subrecipients that are institutions of higher 
education or other non-profit organizations shall be subject to the 
audit requirements contained in OMB Circular A-133, ``Audits of 
Institutions of Higher Education and Other Non-Profit Institutions'' 
and applicable provisions of DOL regulations at 29 CFR part 96.
    (b) Recipients and subrecipients that are State and local 
governments shall be subject to the audit requirements contained in the 
Single Audit Act (31 U.S.C. 7501-7) and DOL's regulations implementing 
OMB Circular A-128, ``Audits of State and Local Governments'' and 
applicable provisions of DOL regulations at 29 CFR part 96.
    (c) Hospitals not covered by the audit provisions of OMB Circular 
A-133 shall be subject to the audit requirements of DOL. See 29 CFR 
part 96.
    (d) Commercial organizations shall be subject to the audit 
requirements specified by the DOL awarding agency or the prime 
recipient as incorporated into the award document. See 29 CFR part 96.


Sec. 95.27  Allowable costs.

    For each kind of recipient, there is a set of Federal principles 
for determining allowable costs. Allowability of costs shall be 
determined in accordance with the cost principles applicable to the 
entity incurring the costs. Thus, allowability of costs incurred by 
State, local or federally-recognized Indian tribal governments is 
determined in accordance with the provisions of OMB Circular A-87, 
``Cost Principles for State and Local Governments.'' The allowability 
of costs incurred by non-profit organizations is determined in 
accordance with the provisions of OMB Circular A-122, ``Cost Principles 
for Non-Profit Organizations.'' The allowability of costs incurred by 
institutions of higher education is determined in accordance with the 
provisions of OMB Circular A-21, ``Cost Principles for Educational 
Institutions.'' The allowability of costs incurred by hospitals is 
determined in accordance with the provisions of Appendix E of 45 CFR 
part 74, ``Principles for Determining Costs Applicable to Research and 
Development Under Grants and Contracts with Hospitals.'' The 
allowability of costs incurred by commercial organizations and those 
non-profit organizations listed in Attachment C to Circular A-122 is 
determined in accordance with the provisions of the Federal Acquisition 
Regulation (FAR) at 48 CFR part 31.


Sec. 95.28  Period of availability of funds.

    Where a funding period is specified, a recipient may charge to the 
grant only allowable costs resulting from obligations incurred during 
the funding period and any pre-award costs authorized by DOL.

Property Standards


Sec. 95.30  Purpose of property standards.

    Sections 95.31 through 95.37 set forth uniform standards governing 
management and disposition of property furnished by the Federal 
Government whose cost was charged to a project supported by a Federal 
award. Recipients are required to observe these standards under awards 
and no additional requirements shall be imposed, unless specifically 
required by Federal statute. The recipient may use its own property 
management standards and procedures provided it observes the provisions 
of Secs. 95.31 through 95.37.


Sec. 95.31  Insurance coverage.

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


Sec. 95.32  Real property.

    DOL shall prescribe requirements for recipients concerning the use 
and disposition of real property acquired in whole or in part under 
awards. Unless otherwise provided by statute, such requirements, at a 
minimum, shall contain the following:
    (a) Title to real property shall vest in the recipient subject to 
the condition that the recipient shall use the real property for the 
authorized purpose of the project as long as it is needed and shall not 
encumber the property without approval of DOL.
    (b) The recipient shall obtain prior written approval from the 
grant officer for the use of real property in other federally-sponsored 
projects when the recipient determines that the property is no longer 
needed for the purpose of the original project. Use in other projects 
shall be limited to those under federally-sponsored projects (i.e., 
awards) or programs that have purposes consistent with those authorized 
for support by DOL.
    (c) When the real property is no longer needed as provided in 
paragraphs (a) and (b) of this section, the recipient shall request 
disposition instructions from the grant officer. The grant officer 
shall issue one or more of the following disposition instructions:
    (1) The recipient may be permitted to retain title without further 
obligation to the Federal Government after it compensates the Federal 
Government for that percentage of the current fair market value of the 
property attributable to the Federal participation in the project.
    (2) The recipient may be directed to sell the property under 
guidelines provided by DOL and pay DOL for that percentage of the 
current fair market value of the property attributable to the Federal 
participation in the project (after deducting actual and reasonable 
selling and fix-up expenses, if any, from the sales proceeds). When the 
recipient is authorized or required to sell the property, proper sales 
procedures shall be established that provide for competition to the 
extent practicable and result in the highest possible return.
    (3) The recipient may be directed to transfer title to the property 
to the Federal Government or to an eligible third party provided that, 
in such cases, the recipient shall be entitled to compensation for its 
attributable percentage of the current fair market value of the 
property.


Sec. 95.33  Federally-owned and exempt property.

    (a) Federally-owned property.
    (1) Title to federally-owned property remains vested in the Federal 
Government. Recipients shall submit annually an inventory listing of 
federally-owned property in their custody to DOL. Upon completion of 
the award or when the property is no longer needed, the recipient shall 
report the property to DOL for further Federal agency utilization.
     (2) If DOL has no further need for the property, it shall be 
declared excess and reported to the General Services Administration, 
unless DOL has statutory authority to dispose of the property by 
alternative methods (e.g., the authority provided by the Federal 
Technology Transfer Act (15 U.S.C. 3710(i)) to donate research 
equipment to educational and non-profit organizations in accordance 
with E.O. 12821, ``Improving Mathematics and Science Education in 
Support of the National Education Goals.'') Appropriate instructions 
shall be issued to the recipient by DOL.
    (b) Exempt property.
    When statutory authority exists, DOL has the option to vest title 
to property acquired with Federal funds in the recipient without 
further obligation to the Federal Government and under conditions DOL 
considers appropriate. Such property is ``exempt property.'' Should DOL 
not establish conditions, title to exempt property upon acquisition 
shall vest in the recipient without further obligation to the Federal 
Government.


Sec. 95.34  Equipment.

    (a) Title to equipment acquired by a recipient with Federal funds 
shall vest in the recipient, subject to conditions of this section.
    (b) The recipient shall not use equipment acquired with Federal 
funds to provide services to non-Federal outside organizations for a 
fee that is less than private companies charge for equivalent services, 
unless specifically authorized by Federal statute, for as long as the 
Federal Government retains an interest in the equipment.
    (c) The recipient shall use the equipment in the project or program 
for which it was acquired as long as needed, whether or not the project 
or program continues to be supported by Federal funds and shall not 
encumber the property without approval of the grant officer. When no 
longer needed for the original project or program, the recipient shall 
use the equipment in connection with its other federally, sponsored 
activities, in the following order of priority:
    (1) Activities sponsored by the DOL agency which funded the 
original project, then
    (2) Activities sponsored by other Federal awarding agencies.
    (d) During the time that equipment is used on the project or 
program for which it was acquired, the recipient shall make it 
available for use on other projects or programs if such other use will 
not interfere with the work on the project or program for which the 
equipment was originally acquired. First preference for such other use 
shall be given to other projects or programs sponsored by the DOL 
agency that financed the equipment; second preference shall be given to 
projects or programs sponsored by other Federal awarding agencies. If 
the equipment is owned by the Federal Government, use on other 
activities not sponsored by the Federal Government shall be permissible 
if authorized by the grant officer. User charges shall be treated as 
program income.
    (e) When acquiring replacement equipment, the recipient may use the 
equipment to be replaced as trade-in or sell the equipment and use the 
proceeds to offset the costs of the replacement equipment subject to 
the written approval of the grant officer.
    (f) The recipient's property management standards for equipment 
acquired with Federal funds and federally-owned equipment shall include 
all of the following:
    (1) Equipment records shall be maintained accurately and shall 
include the following information:
    (i) A description of the equipment.
    (ii) Manufacturer's serial number, model number, Federal stock 
number, national stock number, or other identification number.
    (iii) Source of the equipment, including the award number.
    (iv) Whether title vests in the recipient or the Federal 
Government.
    (v) Acquisition date (or date received, if the equipment was 
furnished by the Federal Government) and cost.
    (vi) Information from which one can calculate the percentage of 
Federal participation in the cost of the equipment (not applicable to 
equipment furnished by the Federal Government).
    (vii) Location and condition of the equipment and the date the 
information was reported.
    (viii) Unit acquisition cost.
    (ix) Ultimate disposition data, including date of disposal and 
sales price or the method used to determine current fair market value 
where a recipient compensates DOL for its share.
    (2) Equipment owned by the Federal Government shall be identified 
to indicate Federal ownership.
    (3) A physical inventory of equipment shall be taken and the 
results reconciled with the equipment records at least once every two 
years. Any differences between quantities determined by the physical 
inspection and those shown in the accounting records shall be 
investigated to determine the causes of the difference. The recipient 
shall, in connection with the inventory, verify the existence, current 
utilization, and continued need for the equipment.
    (4) A control system shall be in effect to insure adequate 
safeguards to prevent loss, damage, or theft of the equipment. Any 
loss, damage, or theft of equipment shall be investigated and fully 
documented; if the equipment was owned by the Federal Government, the 
recipient shall promptly notify the grant officer.
    (5) Adequate maintenance procedures shall be implemented to keep 
the equipment in good condition.
    (6) Where the recipient is authorized or required to sell the 
equipment, proper sales procedures shall be established which provide 
for competition to the extent practicable and result in the highest 
possible return.
    (g) When the recipient no longer needs the equipment, the equipment 
may be used for other activities in accordance with the following 
standards. For equipment with a current per unit fair market value of 
$5,000 or more, the recipient may retain the equipment for other uses 
provided that compensation is made to the original DOL agency. The 
amount of compensation shall be computed by applying the percentage of 
Federal participation in the cost of the original project or program to 
the current fair market value of the equipment. If the recipient has no 
need for the equipment, the recipient shall request disposition 
instructions from DOL. The DOL agency shall determine whether the 
equipment can be used to meet the agency's requirements. If no 
requirement exists within the DOL agency, the availability of the 
equipment shall be reported to the General Services Administration by 
DOL to determine whether a requirement for the equipment exists in 
other Federal agencies. DOL shall issue instructions to the recipient 
no later than 120 calendar days after the recipient's request and the 
following procedures shall govern.
    (1) If so instructed or if disposition instructions are not issued 
within 120 calendar days after the recipient's request, the recipient 
shall sell the equipment and reimburse DOL an amount computed by 
applying to the sales proceeds the percentage of Federal participation 
in the cost of the original project or program. However, the recipient 
shall be permitted to deduct and retain from the Federal share $500 or 
ten percent of the proceeds, whichever is less, for the recipient's 
selling and handling expenses.
    (2) If the recipient is instructed to ship the equipment elsewhere, 
the recipient shall be reimbursed by the Federal Government by an 
amount which is computed by applying the percentage of the recipient's 
participation in the cost of the original project or program to the 
current fair market value of the equipment, plus any reasonable 
shipping or interim storage costs incurred.
    (3) If the recipient is instructed to otherwise dispose of the 
equipment, the recipient shall be reimbursed by the awarding agency for 
such costs incurred in its disposition.
    (4) The DOL agency reserves the right to transfer the title to the 
Federal Government or to a third party named by the Federal Government 
when such third party is otherwise eligible under existing statutes. 
Such transfer shall be subject to the following standards:
    (i) The equipment shall be appropriately identified in the award or 
otherwise made known to the recipient in writing.
    (ii) The DOL agency shall issue disposition instructions within 120 
calendar days after receipt of a final inventory. The final inventory 
shall list all equipment acquired with grant funds and federally-owned 
equipment. If DOL fails to issue disposition instructions within the 
120 calendar day period, the recipient shall apply the standards of 
this section, as appropriate.
    (iii) When DOL exercises its right to take title, the equipment 
shall be subject to the provisions for federally-owned equipment.


Sec. 95.35  Supplies and other expendable property.

    (a) Title to supplies and other expendable property shall vest in 
the recipient upon acquisition. If there is a residual inventory of 
unused supplies exceeding $5,000 in total aggregate value upon 
termination or completion of the project or program and the supplies 
are not needed for any other federally-sponsored project or program, 
the recipient shall retain the supplies for use on non-Federal 
sponsored activities or sell them, but shall, in either case, 
compensate the Federal Government for its share. The amount of 
compensation shall be computed in the same manner as for equipment.
    (b) The recipient shall not use supplies acquired with Federal 
funds to provide services to non-Federal outside organizations for a 
fee that is less than private companies charge for equivalent services, 
unless specifically authorized by Federal statute as long as the 
Federal Government retains an interest in the supplies.


Sec. 95.36  Intangible property.

    (a) The recipient may copyright any work that is subject to 
copyright and was developed, or for which ownership was purchased, 
under an award. DOL reserves a royalty-free, nonexclusive and 
irrevocable right to reproduce, publish, or otherwise use the work for 
Federal purposes, and to authorize others to do so.
    (b) Recipients are subject to applicable regulations governing 
patents and inventions, including government-wide regulations issued by 
the Department of Commerce at 37 CFR part 401, ``Rights to Inventions 
Made by Nonprofit Organizations and Small Business Firms Under 
Government Grants, Contracts and Cooperative Agreements.''
    (c) DOL has the right to:
    (1) Obtain, reproduce, publish or otherwise use the data first 
produced under an award.
    (2) Authorize others to receive, reproduce, publish, or otherwise 
use such data for Federal purposes.
    (d) Title to intangible property and debt instruments acquired 
under an award or subaward vests upon acquisition in the recipient. The 
recipient shall use that property for the originally-authorized 
purpose, and the recipient shall not encumber the property without 
written approval of the grant officer. When no longer needed for the 
originally authorized purpose, disposition of the intangible property 
shall occur in accordance with the provisions of Sec. 95.34(g).


Sec. 95.37  Property trust relationship.

    Real property, equipment, intangible property and debt instruments 
that are acquired or improved with Federal funds shall be held in trust 
by the recipient as trustee for the beneficiaries of the project or 
program under which the property was acquired or improved. Grant 
officers may require recipients to record liens or other appropriate 
notices of record to indicate that personal or real property has been 
acquired or improved with Federal funds and that use and disposition 
conditions apply to the property.

Procurement Standards


Sec. 95.40  Purpose of procurement standards.

    Sections 95.41 through 95.48 set forth standards for use by 
recipients in establishing procedures for the procurement of supplies 
and other expendable property, equipment, real property and other 
services with Federal funds. These standards are furnished to ensure 
that such materials and services are obtained in an effective manner 
and in compliance with the provisions of applicable Federal statutes 
and executive orders. No additional procurement standards or 
requirements shall be imposed by DOL upon recipients, unless 
specifically required by Federal statute or executive order or approved 
by OMB.


Sec. 95.41  Recipient responsibilities.

    The standards contained in this section do not relieve the 
recipient of the contractual responsibilities arising under its 
contract(s). The recipient is the responsible authority, without 
recourse to DOL, regarding the settlement and satisfaction of all 
contractual and administrative issues arising out of procurements 
entered into in support of an award or other agreement. This includes 
disputes, claims, protests of award, source evaluation or other matters 
of a contractual nature. Matters concerning violation of statute are to 
be referred to such Federal, State or local authority as may have 
proper jurisdiction.


Sec. 95.42  Codes of conduct.

    The recipient shall maintain written standards of conduct governing 
the performance of its employees engaged in the award and 
administration of contracts. No employee, officer, or agent shall 
participate in the selection, award, or administration of a contract 
supported by Federal funds if a real or apparent conflict of interest 
would be involved. Such a conflict would arise when the employee, 
officer, or agent, any member of his or her immediate family, his or 
her partner, or an organization which employs or is about to employ any 
of the parties indicated herein, has a financial or other interest in 
the firm selected for an award. The officers, employees, and agents of 
the recipient shall neither solicit nor accept gratuities, favors, or 
anything of monetary value from contractors, or parties to 
subagreements. However, recipients may set standards for situations in 
which the financial interest is not substantial or the gift is an 
unsolicited item of nominal value. The standards of conduct shall 
provide for disciplinary actions to be applied for violations of such 
standards by officers, employees, or agents of the recipient.


Sec. 95.43  Competition.

    All procurement transactions shall be conducted in a manner to 
provide, to the maximum extent practical, open and free competition. 
The recipient shall be alert to organizational conflicts of interest as 
well as noncompetitive practices among contractors that may restrict or 
eliminate competition or otherwise restrain trade. In order to ensure 
objective contractor performance and eliminate unfair competitive 
advantage, contractors that develop or draft specifications, 
requirements, statements of work, invitations for bids and/or requests 
for proposals shall be excluded from competing for such procurements. 
Awards shall be made to the bidder or offeror whose bid or offer is 
responsive to the solicitation and is most advantageous to the 
recipient, price, quality and other factors considered. Solicitations 
shall clearly set forth all requirements that the bidder or offeror 
shall fulfill in order for the bid or offer to be evaluated by the 
recipient. Any and all bids or offers may be rejected when it is in the 
recipient's interest to do so.


Sec. 95.44  Procurement procedures.

    (a) All recipients shall establish written procurement procedures. 
These procedures shall provide for, at a minimum, that paragraphs 
(a)(1), (a)(2), and (a)(3) of this section apply.
    (1) Recipients shall avoid purchasing unnecessary items.
    (2) Where appropriate, an analysis shall be made of lease and 
purchase alternatives to determine which would be the most economical 
and practical procurement for the Federal Government.
    (3) Solicitations for goods and services shall provide for all of 
the following:
    (i) A clear and accurate description of the technical requirements 
for the material, product or service to be procured. In competitive 
procurements, such a description shall not contain features which 
unduly restrict competition.
    (ii) Requirements which the bidder/offeror must fulfill and all 
other factors to be used in evaluating bids or proposals.
    (iii) A description, whenever practicable, of technical 
requirements in terms of functions to be performed or performance 
required, including the range of acceptable characteristics or minimum 
acceptable standards.
    (iv) The specific features of ``brand name or equal'' descriptions 
that bidders are required to meet when such items are included in the 
solicitation.
    (v) The acceptance, to the extent practicable and economically 
feasible, of products and services dimensioned in the metric system of 
measurement.
    (vi) Preference, to the extent practicable and economically 
feasible, for products and services that conserve natural resources and 
protect the environment and are energy efficient.
    (b) Positive efforts shall be made by recipients to utilize small 
businesses, minority-owned firms, and women's business enterprises, 
whenever possible. Recipients of Federal awards shall take all of the 
following steps to further this goal:
    (1) Ensure that small businesses, minority-owned firms, and women's 
business enterprises are used to the fullest extent practicable.
    (2) Make information on forthcoming opportunities available and 
arrange time frames for purchases and contracts to encourage and 
facilitate participation by small businesses, minority-owned firms, and 
women's business enterprises.
    (3) Consider in the contract process whether firms competing for 
larger contracts intend to subcontract with small businesses, minority-
owned firms, and women's business enterprises.
    (4) Encourage contracting with consortiums of small businesses, 
minority-owned firms and women's business enterprises when a contract 
is too large for one of these firms to handle individually.
    (5) Use the services and assistance, as appropriate, of such 
organizations as the Small Business Administration, the Department of 
Commerce's Minority Business Development Agency, and DOL's Office of 
Small Business and Minority Affairs in the solicitation and utilization 
of small businesses, minority-owned firms and women's business 
enterprises.
    (c) The type of procuring instruments used (e.g., fixed price 
contracts, cost reimbursable contracts, purchase orders, and incentive 
contracts) shall be determined by the recipient but shall be 
appropriate for the particular procurement and for promoting the best 
interest of the program or project involved. The ``cost-plus-a-
percentage-of-cost'' or ``percentage of construction cost'' methods of 
contracting shall not be used.
    (d) Contracts shall be made only with responsible contractors who 
possess the potential ability to perform successfully under the terms 
and conditions of the proposed procurement. Consideration shall be 
given to such matters as contractor integrity, record of past 
performance, financial and technical resources or accessibility to 
other necessary resources. In certain circumstances, contracts with 
certain parties are restricted by agencies' implementation of E.O.'s 
12549 and 12689, ``Debarment and Suspension.'' See 29 CFR part 98.
    (e) Recipients shall, on request, make available to DOL, pre-award 
and procurement documents, such as request for proposals or invitations 
for bids, independent cost estimates, etc., when any of the following 
conditions apply:
    (1) A recipient's procurement procedures or operation fails to 
comply with the procurement standards in this part.
    (2) The procurement is expected to exceed the small purchase 
threshold fixed at 41 U.S.C. 403(11) (currently $25,000) and is to be 
awarded without competition or only one bid or offer is received in 
response to a solicitation.
    (3) The procurement, which is expected to exceed the small purchase 
threshold, specifies a ``brand name'' product.
    (4) The proposed award over the small purchase threshold is to be 
awarded to other than the apparent low bidder under a sealed bid 
procurement.
    (5) A proposed contract modification changes the scope of a 
contract or increases the contract amount by more than the amount of 
the small purchase threshold.


Sec. 95.45  Cost and price analysis.

    Some form of cost or price analysis shall be made and documented in 
the procurement files in connection with every procurement action. 
Price analysis may be accomplished in various ways, including the 
comparison of price quotations submitted, market prices and similar 
indicia, together with discounts. Cost analysis is the review and 
evaluation of each element of cost to determine reasonableness, 
allocability and allowability.


Sec. 95.46  Procurement records.

    Procurement records and files for purchases in excess of the small 
purchase threshold shall include the following at a minimum: (a) basis 
for contractor selection, (b) justification for lack of competition 
when competitive bids or offers are not obtained, and (c) basis for 
award cost or price.


Sec. 95.47  Contract administration.

    A system for contract administration shall be maintained to ensure 
contractor conformance with the terms, conditions and specifications of 
the contract and to ensure adequate and timely follow up of all 
purchases. Recipients shall evaluate contractor performance and 
document, as appropriate, whether contractors have met the terms, 
conditions and specifications of the contract.


Sec. 95.48  Contract provisions.

    The recipient shall include, in addition to provisions to define a 
sound and complete agreement, the following provisions in all 
contracts. The following provisions shall also be applied to 
subcontracts:
    (a) Contracts in excess of the small purchase 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.
    (b) All contracts in excess of the small purchase threshold shall 
contain suitable provisions for termination by the recipient, including 
the manner by which termination shall be effected and the basis for 
settlement. In addition, such contracts shall describe conditions under 
which the contract may be terminated for default as well as conditions 
where the contract may be terminated because of circumstances beyond 
the control of the contractor.
    (c) Except as otherwise required by statute, an award that requires 
the contracting (or subcontracting) for construction or facility 
improvements shall provide for the recipient to follow its own 
requirements relating to bid guarantees, performance bonds, and payment 
bonds unless the construction contract or subcontract exceeds $100,000. 
For those contracts or subcontracts exceeding $100,000, DOL may accept 
the bonding policy and requirements of the recipient, provided DOL has 
made a determination that the Federal Government's interest is 
adequately protected. If such a determination has not been made, the 
minimum requirements shall be as follows.
    (1) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' shall consist of a firm commitment 
such as a bid bond, certified check, or other negotiable instrument 
accompanying a bid as assurance that the bidder shall, upon acceptance 
of his bid, execute such contractual documents as may be required 
within the time specified.
    (2) A performance bond on the part of the contractor for 100 
percent of the contract price. A ``performance bond'' is one executed 
in connection with a contract to secure fulfillment of all the 
contractor's obligations under such contract.
    (3) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract to assure payment as required by statute of all persons 
supplying labor and material in the execution of the work provided for 
in the contract.
    (4) Where bonds are required in the situations described herein, 
the bonds shall be obtained from companies holding certificates of 
authority as acceptable sureties pursuant to 31 CFR part 223, ``Surety 
Companies Doing Business with the United States.''
    (d) All negotiated contracts (except those for less than the small 
purchase threshold) awarded by recipients shall include a provision to 
the effect that the recipient, DOL, the Comptroller General of the 
United States, or any of their duly authorized representatives, shall 
have access to any books, documents, papers and records of the 
contractor which are directly pertinent to a specific program for the 
purpose of making audits, examinations, excerpts and transcriptions.
    (e) All contracts, including small purchases, awarded by recipients 
and their contractors shall contain the procurement provisions of 
Appendix A to this part, as applicable.

Reports and Records


Sec. 95.50  Purpose of reports and records.

    Sections 95.51 through 95.53 set forth the procedures for 
monitoring and reporting on the recipient's financial and program 
performance and the necessary standard reporting forms. They also set 
forth record retention requirements.


Sec. 95.51  Monitoring and reporting program performance.

    (a) Recipients are responsible for managing and monitoring each 
project, program, subaward, function or activity supported by the 
award. Recipients shall monitor subawards to ensure subrecipients have 
met the audit requirements as delineated in Sec. 95.26.
    (b) DOL shall prescribe the frequency with which performance 
reports shall be submitted. Except as provided in paragraph (f) of this 
section, performance reports shall not be required more frequently than 
quarterly or, less frequently than annually. Annual reports shall be 
due 90 calendar days after the grant year; quarterly or semi-annual 
reports shall be due 30 days after the reporting period. DOL may 
require annual reports before the anniversary dates of multiple-year 
awards in lieu of these requirements. The final performance reports are 
due 90 calendar days after the expiration or termination of the award.
    (c) If inappropriate, a final technical or performance report shall 
not be required after completion of the project.
    (d) When required, performance reports shall generally contain, for 
each award, brief information on each of the following:
    (1) A comparison of actual accomplishments with the goals and 
objectives established for the period, the findings of the 
investigator, or both. Whenever appropriate and the output of programs 
or projects can be readily quantified, such quantitative data should be 
related to cost data for computation of unit costs.
    (2) Reasons why established goals were not met, if appropriate.
    (3) Other pertinent information including, when appropriate, 
analysis and explanation of cost overruns or high unit costs.
    (e) Recipients shall not be required to submit more than the 
original and two copies of performance reports.
    (f) Recipients shall immediately notify DOL of developments that 
have a significant impact on the award-supported activities. Also, 
notification shall be given in the case of problems, delays, or adverse 
conditions which materially impair the ability to meet the objectives 
of the award. This notification shall include a statement of the action 
taken or contemplated, and any assistance needed to resolve the 
situation.
    (g) DOL may make site visits, as needed.
    (h) DOL shall comply with clearance requirements of 5 CFR part 1320 
when requesting performance data from recipients.

(Approved by the Office of Management and Budget, Approval Number 
1225-0017)


Sec. 95.52  Financial reporting.

    (a) The following forms or such other forms as may be approved by 
OMB are authorized for obtaining financial information from recipients:
    (1) SF-269 or SF-269A, Financial Status Report.
     (i) Recipients shall use the SF-269, SF-269A, or other OMB-
approved forms to report the status of funds for all nonconstruction 
projects or programs. DOL may, however, have the option of not 
requiring the SF-269 or SF-269A when the SF-270, Request for Advance or 
Reimbursement, or SF-272, Report of Federal Cash Transactions, is 
determined to provide adequate information to meet its needs, except 
that a final SF-269 or SF-269A shall be required at the completion of 
the project when the SF-270 is used only for advances.
     (ii) DOL shall prescribe whether the report shall be on a cash or 
an accrual basis. If DOL requires accrual information and the 
recipient's accounting records are not normally kept on the accrual 
basis, the recipient shall not convert its accounting system, but shall 
develop such accrual information through best estimates based on an 
analysis of the documentation on hand.
     (iii) DOL shall determine the frequency of the Financial Status 
Report for each project or program, considering the size and complexity 
of the particular project or program. However, the report shall not be 
required more frequently than quarterly or less frequently than 
annually. A final report shall be required at the completion of the 
agreement.
    (iv) Recipients shall submit to DOL the SF-269, SF-269A, or other 
OMB-approved forms (an original and no more than two copies) no later 
than 30 days after the end of each specified reporting period for 
quarterly and semi-annual reports, and 90 calendar days for annual and 
final reports. Extensions of reporting due dates may be approved by DOL 
upon request of the recipient.
    (2) SF-272, Report of Federal Cash Transactions.
    (i) When funds are advanced to recipients, the recipient shall 
submit the SF-272 and, when necessary, its continuation sheet, SF-272a. 
DOL shall use this report to monitor cash advanced to recipients and to 
obtain disbursement information for each agreement with the recipients.
    (ii) DOL may require forecasts of Federal cash requirements in the 
``Remarks'' section of the report.
    (iii) When practical and deemed necessary, DOL may require 
recipients to report in the ``Remarks'' section the amount of cash 
advances received in excess of three days. Recipients shall provide 
short narrative explanations of actions taken to reduce the excess 
balances.
    (iv) Recipients shall submit not more than the original and two 
copies of the SF-272 15 calendar days following the end of each 
quarter. The DOL agency may require a monthly report from those 
recipients receiving advances totaling $1 million or more per year.
    (v) DOL may waive the requirement for submission of the SF-272 for 
any one of the following reasons:
    (A) When monthly advances do not exceed $25,000 per recipient, 
provided that such advances are monitored through other forms contained 
in this section;
    (B) If, in DOL's opinion, the recipient's accounting controls are 
adequate to minimize excessive Federal advances; or,
    (C) When the electronic payment mechanisms provide adequate data.
    (b) When DOL needs additional information or more frequent reports, 
the following shall be observed.
    (1) When additional information is needed to comply with 
legislative requirements, DOL shall issue instructions to require 
recipients to submit such information under the ``Remarks'' section of 
the reports.
    (2) When DOL determines that a recipient's accounting system does 
not meet the standards in Sec. 95.21, additional pertinent information 
to further monitor awards may be obtained upon written notice to the 
recipient until such time as the system is brought up to standard. DOL, 
in obtaining this information, shall comply with report clearance 
requirements of 5 CFR part 1320.
    (3) DOL may shade out any line item on any report if not necessary.
    (4) DOL may accept the identical information from the recipients in 
machine readable format or computer printouts or electronic outputs in 
lieu of prescribed formats.
    (5) DOL may provide computer or electronic outputs to recipients 
when such expedites or contributes to the accuracy of reporting.

(Approved by the Office of Management and Budget, Approval Number 1225-
0017)


Sec. 95.53  Retention and access requirements for records.

    (a) This section sets forth requirements for record retention and 
access to records for awards to recipients. DOL shall not impose any 
other record retention or access requirements upon 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 or, for awards that are renewed quarterly or 
annually, from the date of the submission of the quarterly or annual 
financial report, as authorized by DOL. 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 DOL, the 3-
year retention requirement is not applicable to the recipient.
    (4) Indirect cost rate proposals, cost allocations plans, etc., as 
specified in paragraph (g) of this section.
    (c) Copies of original records may be substituted for the original 
records if authorized by DOL.
    (d) DOL shall request transfer of certain records to its custody 
from recipients when it determines that the records possess long term 
retention value. However, in order to avoid duplicate recordkeeping, 
DOL may make arrangements for recipients to retain any records that are 
continuously needed for joint use.
    (e) The Federal grantor awarding agency, the Inspector General, the 
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, DOL shall not place restrictions on 
recipients that limit public access to the records of recipients that 
are pertinent to an award, except when DOL can demonstrate 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. 
Sec. 552) if the records had belonged to DOL.
    (g) Indirect cost rate proposals, cost allocations plans, etc. 
Paragraphs (g)(1) and (g)(2) of this section apply to the following 
types of documents, and their supporting records: indirect cost rate 
computations or proposals, cost allocation plans, and any similar 
accounting computations of the rate at which a particular group of 
costs is chargeable (such as computer usage chargeback rates or 
composite fringe benefit rates).
    (1) If submitted for negotiation. If the recipient submits to DOL 
or the subrecipient submits to the recipient the proposal, plan, or 
other computation to form the basis for negotiation of the rate, then 
the 3-year retention period for its supporting records starts on the 
date of such submission.
    (2) If not submitted for negotiation. If the recipient is not 
required to submit to DOL or the subrecipient is not required to submit 
to the recipient the proposal, plan, or other computation for 
negotiation purposes, then the 3-year retention period for the 
proposal, plan, or other computation and its supporting records starts 
at the end of the fiscal year (or other accounting period) covered by 
the proposal, plan, or other computation.

(Approved by the Office of Management and Budget, Approval Number 1225-
0017)

Termination and Enforcement


Sec. 95.60  Purpose of termination and enforcement.

    Sections 95.61 and 95.62 set forth uniform suspension, termination 
and enforcement procedures.


Sec. 95.61  Termination.

    (a) Awards may be terminated in whole or in part only if paragraphs 
(a) (1), (a)(2), or (a)(3) of this section apply.
    (1) By grant officers, if a recipient materially fails to comply 
with the terms and conditions of an award.
    (2) By grant officers, 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 grant 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. However, if the grant officer determines in the case of 
partial termination that the reduced or modified portion of the grant 
will not accomplish the purposes for which the grant was made, the 
grant officer may terminate the grant in its entirety under either 
paragraphs (a) (1) or (2) of this section.
    (b) If costs are allowed under an award, the responsibilities of 
the recipient referred to in Sec. 95.71(a), 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. 95.62  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, DOL may, in addition to imposing any of the special conditions 
outlined in Sec. 95.14, 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 DOL.
    (2) Disallow (that is, deny both use of funds and any applicable 
matching credit for) all or part of the cost of the activity or action 
not in compliance.
    (3) Wholly or partly suspend or terminate the current award.
    (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, DOL 
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.
    (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 
DOL 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 paragraphs (c)(1) and (c)(2) of this section apply.
    (1) The costs 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.
    (2) The costs 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 E.O.'s 12549 and 12689 and DOL's 
implementing regulations. See Sec. 95.13 and 29 CFR part 98.

Subpart D--After-the-Award Requirements


Sec. 95.70  Purpose.

    Sections 95.71 through 95.73 contain closeout procedures and other 
procedures for subsequent disallowances and adjustments.


Sec. 95.71  Closeout procedures.

    (a) Recipients shall submit, within 90 calendar days after the date 
of completion of the award, all financial, performance, and other 
reports as required by the terms and conditions of the award. DOL may 
approve extensions when requested by the recipient.
    (b) Unless DOL authorizes an extension, a recipient shall liquidate 
all obligations incurred under the award not later than 90 calendar 
days after the funding period or the date of completion as specified in 
the terms and conditions of the award or in agency implementing 
instructions.
    (c) DOL shall make prompt payments to a recipient for allowable 
reimbursable costs under the award being closed out.
    (d) The recipient shall promptly refund any balances of unobligated 
cash that DOL has advanced or paid and that is not authorized to be 
retained by the recipient for use in other projects. OMB Circular A-129 
governs unreturned amounts that become delinquent debts.
    (e) When authorized by the terms and conditions of the award, DOL 
shall make a settlement for any upward or downward adjustments to the 
Federal share of costs after closeout reports are received.
    (f) The recipient shall account for any real and personal property 
acquired with Federal funds or received from the Federal Government in 
accordance with Secs. 95.31 through 95.37.
    (g) In the event a final audit has not been performed prior to the 
closeout of an award, DOL retains the right to recover an appropriate 
amount after fully considering the recommendations on disallowed costs 
resulting from the final audit.


Sec. 95.72  Subsequent adjustments and continuing responsibilities.

    (a) The closeout of an award does not affect any of the following:
    (1) The right of DOL 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. 95.26.
    (4) Property management requirements in Secs. 95.31 through 95.37.
    (5) Records retention as required in Sec. 95.53.
    (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 
DOL and the recipient, provided the responsibilities of the recipient 
referred to in Sec. 95.73(a), including those for property management 
as applicable, are considered and provisions made for continuing 
responsibilities of the recipient, as appropriate.


Sec. 95.73  Collection of amounts due.

    (a) 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. If 
not paid within a reasonable period after the demand for payment, DOL 
may reduce the debt by paragraphs (a)(1), (a)(2), or (a)(3) of this 
section.
    (1) Making an administrative offset against other requests for 
reimbursements.
    (2) Withholding advance payments otherwise due to the recipient.
    (3) Taking other action permitted by statute.
    (b) Except as otherwise provided by law, DOL shall charge interest 
on an overdue debt in accordance with 4 CFR Chapter II, ``Federal 
Claims Collection Standards.''

Appendix A to Part 95--Contract Provisions

    All contracts, awarded by a recipient including small purchases, 
shall contain the following provisions as applicable:
    1. Equal Employment Opportunity--All contracts shall contain a 
provision requiring compliance with E.O. 11246, ``Equal Employment 
Opportunity,'' as amended by E.O. 11375, ``Amending Executive Order 
11246 Relating to Equal Employment Opportunity,'' and as 
supplemented by regulations at 41 CFR part 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. 
276c)--All contracts and subgrants 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. Sec. 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 one is otherwise entitled. The 
recipient shall report all suspected or reported violations to the 
Federal awarding agency.
    3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--When 
required by Federal program legislation, all construction contracts 
awarded by the recipients and subrecipients of more than $2000 shall 
include a provision for compliance with the Davis-Bacon Act (40 
U.S.C. Sec. 276a to a-7) and as supplemented by Department of Labor 
regulations (29 CFR part 5, ``Labor Standards Provisions Applicable 
to Contracts Governing Federally Financed and Assisted 
Construction''). Under this Act, contractors shall be required to 
pay wages to laborers and mechanics at a rate not less than the 
minimum wages specified in a wage determination made by the 
Secretary of Labor. In addition, contractors shall be required to 
pay wages not less than once a week. The recipient shall place a 
copy of the current prevailing wage determination issued by the 
Department of Labor in each solicitation and the award of a contract 
shall be conditioned upon the acceptance of the wage determination. 
The recipient shall report all suspected or reported violations to 
the Federal awarding agency.
    4. Contract Work Hours and Safety Standards Act (40 U.S.C. 
Sec. 327-333)--Where applicable, all contracts awarded by recipients 
in excess of $2,000 for construction contracts and in excess of 
$2,500 for other contracts 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. Sec. 327-333), 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.
    5. Rights to Inventions Made Under a Contract or Agreement--
Contracts or 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,'' and any implementing 
regulations issued by the awarding agency.
    6. Clean Air Act (42 U.S.C. Sec. 7401 et seq.) and the Federal 
Water Pollution Control Act (33 U.S.C. Sec. 1251 et seq.), as 
amended--Contracts and subgrants of amounts in excess of $100,000 
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. Sec. 7401 et seq.) and the 
Federal Water Pollution Control Act as amended (33 U.S.C. Sec. 1251 
et seq.). Violations shall be reported to the Federal awarding 
agency and the Regional Office of the Environmental Protection 
Agency (EPA).
    7. Byrd Anti-Lobbying Amendment (31 U.S.C. Sec. 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. Sec. 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. See 29 CFR part 98.
    8. Debarment and Suspension (E.O.'s 12549 and 12689)--No 
contract shall be made to parties listed on the General Services 
Administration's List of Parties Excluded from Federal Procurement 
or Nonprocurement Programs in accordance with E.O.'s 12549 and 
12689, ``Debarment and Suspension.'' This list contains the names of 
parties debarred, suspended, or otherwise excluded by agencies, and 
contractors declared ineligible under statutory or regulatory 
authority other than E.O. 12549. Contractors with awards that exceed 
the small purchase threshold shall provide the required 
certification regarding its exclusion status and that of its 
principal employees.

[FR Doc. 94-17974 Filed 7-26-94; 8:45 am]
BILLING CODE 4510-23-P