[Federal Register Volume 59, Number 203 (Friday, October 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25750]


[[Page Unknown]]

[Federal Register: October 21, 1994]


_______________________________________________________________________

Part III





Department of Energy





_______________________________________________________________________



Office of the Secretary



_______________________________________________________________________



10 CFR Part 600




Financial Assistance Rules; Implementation of OMB Circular A-110; 
Interim Final Rule
DEPARTMENT OF ENERGY

Office of the Secretary

10 CFR Part 600

RIN 1991-AB13

 
Financial Assistance Rules; Implementation of OMB Circular A-110

AGENCY: Department of Energy.

ACTION: Interim final rule.

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

SUMMARY: The Department of Energy (DOE) today is amending its Financial 
Assistance Rules (Rules) to implement Office of Management and Budget 
(OMB) Circular A-110, ``Uniform Administrative Requirements for Grants 
and Agreements With Institutions of Higher Education, Hospitals, and 
Other Non-Profit Organizations,'' to reorganize the subparts of the 
Rules, to update citations throughout the Rules, and to change 
citations to conform to the reorganization.

DATES: This regulation is effective November 21, 1994. Written comments 
on the interim final rule must be received by December 20, 1994.

ADDRESSES: Comments should be addressed to: Gwendolyn Cowan, Director, 
Business and Financial Policy Division (HR-521.2), Office of 
Procurement and Assistance Management, U.S. Department of Energy, 1000 
Independence Ave., SW, Washington, D.C. 20585.

FOR FURTHER INFORMATION CONTACT: Cherlyn Seckinger, Business and 
Financial Policy Division, (HR-521.2), U.S. Department of Energy, 1000 
Independence Avenue, SW., Washington, D.C. 20585, (202) 586-8192.

SUPPLEMENTARY INFORMATION:

Table of Contents:

I. Introduction
II. Changes to 10 CFR Part 600
III. Explanation for ``Interim Final'' Rulemaking
IV. Review Under Executive Order 12612
V. Regulatory Review
VI. Review Under the Regulatory Flexibility Act
VII. Review Under the Paperwork Reduction Act
VIII. Review Under the National Environmental Policy Act
IX. Review Under Executive Order 12778
X. Public Comments

I. Introduction

    OMB Circular A-110 was published in final form on November 29, 1993 
(58 FR 62992) with the direction to Federal agencies that they were to 
implement the Circular by regulation. For DOE that implementation is 
taking place through this rulemaking. Subpart B of the Financial 
Assistance Rules (10 CFR Part 600) is DOE's implementation of the 
previous version of Circular A-110. In this rulemaking, Subpart B will 
be revised as a modified version of the published text of Circular A-
110, as explained below.
    As part of this rulemaking, DOE is restructuring the Financial 
Assistance Rules. Current Subpart E, which is DOE's implementation of 
the Common Rule on Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments, is being moved 
to Subpart C. It contains the general administrative rules for awards 
to governmental entities and is being moved forward for more 
prominence. Current Subpart C is being moved to Subpart D. Current 
Subpart D is being moved to Subpart E. There are no substantive changes 
made by this rule in the text of these three Subparts except for 
changing the references due to the restructuring.

II. Changes to 10 CFR Part 600

    Sections 600.2, 600.4, 600.5, 600.7, 600.9, 600.10, 600.14, 600.15, 
600.20, 600.25, 600.26, 600.28, 600.29, 600.31, 600.32, and 600.33 of 
Subpart A are amended to correct the references resulting from this 
implementation of OMB Circular A-110 and to make some minor technical 
changes to revise cross-references, update citations, and reflect DOE 
organizational changes.
    The current text of Subpart B is being revised as a modified 
version of OMB Circular A-110, which was published in the Federal 
Register on November 29, 1993 (58 FR 62992). A discussion of the 
modifications that were made to A-110 for this implementation is 
contained below in the section entitled ``Incorporation of OMB Circular 
A-110 Into the Financial Assistance Rules.''
    Sections 600.200, 600.202, 600.203, 600.206 and 600.207 of Subpart 
C are amended to correct the references resulting from this 
implementation of OMB Circular A-110 and to correct some existing minor 
errors in citations and grammar.
    Sections 600.302, 600.303, 600.306 and 600.314 of Subpart D are 
amended to correct the references resulting from this implementation of 
OMB Circular A-110 and to correct some existing typographical errors.
    Section 600.441 of Subpart E is amended to correct a reference 
resulting from this implementation of OMB Circular A-110 and to correct 
an existing error.

Incorporation of OMB Circular A-110 Into the Financial Assistance Rules

    In the process of incorporating Circular A-110 into the Financial 
Assistance Rules, several types of changes have been made to the text 
of the Circular as it was published by OMB. Those changes are 
categorized and discussed below.
A. Provisions Involving Change From Circular to Regulatory Language
    Office of Management and Budget (OMB) Circular A-110 is a directive 
to all Federal agencies. Consequently, specific agency terms are not 
used and some of the text is phrased as OMB speaking to Federal 
agencies. Therefore, portions of this rulemaking have been rewritten to 
be phrased as the DOE speaking to affected recipients. For example, the 
fourth sentence of the definition of ``program income'' in A-110 
begins: ``Except as otherwise provided in Federal awarding agency 
regulations * * *.'' In this rulemaking it begins: ``Except as 
otherwise provided in this subpart, Program regulations, or the * * 
*.''
    Those sections of the rulemaking in which changes were made from 
the text of A-110 to be more appropriately phrased as a rulemaking by 
DOE directed at affected recipients rather than as a circular by OMB 
directed at Federal agencies are as follows:
    The words ``Federal,'' ``Federal Government,'' ``Federal awarding 
agency(ies)'' were changed to ``DOE'' or ``the DOE'' in the following 
sections of the interim final rule: In Sec. 600.102, the definitions of 
the following terms: Award, closeout, cost sharing or matching, date of 
completion, disallowed costs, funding period, program income, project 
period, recipient, suspension, termination, unobligated balance; 
Secs. 600.110; 600.111(a) and (b); 600.114(a); 600.115; 600.121(b)(1), 
(c), and (d); 600.122(c), (d), (e), (e)(1), (f), (h), (h)(1), (i)(1); 
600.123 (c) and (c)(2); 600.124(c); 600.125(c), (e)(1), (f), (j), (k), 
and (m); 600.128; 600.131; 600.132(a), (b), (c), and (c)(2); 
600.133(a)(1) and (2), (b); 600.134(c), (d), (e), (f)(1)(ix), (f)(4), 
(g), (g)(1), (g)(3), (h), (h)(2), and (h)(3); 600.136(a), (c) and (d); 
600.140; 600.141; 600.144(b), (d), (e), and (e)(1)d; 600.148(c), (d), 
and (e); 600.148(c) and (d); 600.151(b), (f), (g), and (h); 
600.152(a)(1)(i), (a)(1)(iii), (a)(1)(iv), (a)(2)(i), (a)(2)(iii), 
(a)(2)(iv), (a)(2)(v), (b)(1), (b)(2); 600.153(a), (b), (b)(3), (c), 
(d), (e), and (f); 600.161(a)(1), (a)(2), and (a)(3); 600.162(a), 
(a)(1), and (b); 600.171(a), (b), (c), (d), (e), and (g); 600.172(a)(1) 
and (b); 600.173(a) and (b).
    The word ``circular'' was changed to ``subpart'' in the following 
sections: Secs. 600.100; 600.102; 600.104; 600.114(a); 600.123(a)(7); 
600.125(e); 600.144(e)(1); and 600.148(e).
    The phrases ``Federal awarding agency regulations'' or ``Federal 
awarding agency'' were changed to the appropriate terminology to 
integrate the Circular into the DOE rules, such as ``contracting 
officer,'' ``program regulations,'' ``terms and conditions of the 
award,'' ``Subpart,'' or some combination of the four in the following 
sections: the definition of ``program income'' in Secs. 600.101; 
600.124(b), (d), (e), (f), and (h); 600.125(c)(6), (e), (e)(4), and 
(f); 600.126(b); 600.152(a)(1)(ii), (a)(2)(v), and (b)(3).
    The words ``shall'' or ``shall be authorized to'' that refer to 
Federal agency or recipient were changed to ``will'' when referring to 
DOE or the recipient, as appropriate, in the following sections: 
Secs. 600.115; 600.122(c)(3), (e)(2), (f), (h) and (j); 600.132(c); 
600.134(g); and 600.152(a)(2)(i).
B. Agency Options
    Circular A-110 contains a number of opportunities for Federal 
agencies to exercise options as to what policies they want to follow. 
The list and description of the options that DOE has selected are as 
follows:
    In Sec. 600.101 Definitions, DOE has decided to include commercial 
organizations in the definition of ``recipient.''
    In Sec. 600.104 Subawards, the applicability of this subpart to 
commercial organizations is included to be consistent with existing DOE 
policy as provided in the current subpart B.
    In Sec. 600.123(a)(6) under Cost sharing, ``when required by the 
Federal awarding agency'' is deleted to reflect that DOE is requiring 
cost-sharing contributions to be shown in the approved budget.
    In Sec. 600.123(b) under Cost sharing, ``only with the prior 
approval of the Federal awarding agency'' is deleted to reflect that 
DOE is permitting unrecovered indirect costs to be included in cost 
sharing.
    In Sec. 600.124(f) under Program income, ``If authorized by Federal 
awarding agency'' is deleted and replaced with ``Unless program * * * 
provide otherwise'' to reflect that DOE is permitting incidental costs 
to be deducted from program income unless there are contravening 
program regulations.
    In Sec. 600.125 (c)(5) under Revision of budget and program plans, 
``if approval is required by the Federal awarding agency'' is deleted 
and replaced by ``If required by program regulations'' to reflect that 
DOE is permitting rebudgeting between direct and indirect costs without 
prior approval, unless program regulations provide otherwise.
    In Sec. 600.125(c)(6) under Revisions of budget and program plan 
``the Federal awarding agency'' is deleted and replaced by ``program 
regulations or the terms and conditions of award'' to reflect that the 
prior approvals included in the Circulars and regulations cited in the 
subparagraph are required unless specifically waived in DOE program 
regulations or in the specific award document.
    In Sec. 600.125(e) pertaining to prior approval requirements, 
``Federal awarding agencies are authorized, at their option'' and 
``Circular and OMB Circulars A-21 and A-122'' are deleted and replaced 
by ``program regulations may'' and ``subpart and its Appendices'' to 
reflect that DOE is choosing to limit the waivers of prior approvals to 
those contained in program regulations or in this implementation of 
Circular A-110 and not extending it to waive prior approval 
requirements contained in the cost principal Circulars A-21 and A-122.
    In Sec. 600.125(f) on rebudgeting, ``The Federal awarding agency 
may, at its option'' is deleted and replaced by ``Program regulations 
may'' to reflect that DOE is choosing to allow unrestricted rebudgeting 
by a recipient (provided the uses are consistent with the original 
appropriation) unless program regulations provide otherwise.
    In Sec. 600.125(i) regarding imposing other prior approval 
requirements, ``unless a deviation has been approved by OMB'' is 
deleted and replaced by ``Except in accordance with the deviation 
procedures in Sec. 600.4 or as may be provided for in program 
regulations'' and ``by the DOE'' to reflect that there may be program 
regulations that need to be considered in understanding what prior 
approval requirements may exist for a particular financial assistance 
program. Additionally, ``may'' has been changed to ``will'' to more 
emphatically state what DOE policy is.
    In Sec. 600.125(l) on budget request formats, the entire text is 
deleted and replaced by ``Requests for budget revisions may be made by 
letter'' to reflect DOE policy that the use of budget forms are not 
required (although, of course, they may be used) for requesting budget 
revisions.
    In Sec. 600.126 (c) and (d) on Non-Federal audits, the entire text 
is deleted and replaced with the language shown to reflect DOE policy 
that the Contracting Officer has wide discretion in determining the 
nature of the audits needed for hospitals not covered by A-133 and 
commercial organizations. In addition, subparagraph (e) is added to 
address audits of individuals who are financial assistance recipients.
    In Sec. 600.130 Property Standards, ``or program regulations'' is 
added to reflect that there may be program regulations that need to be 
considered in understanding property management requirements.
    In Sec. 600.132 Real property (introductory paragraph), the entire 
text is deleted and replaced with the language shown to reflect that 
the provisions of this section address real property use and 
disposition.
    In Sec. 600.133(b) Exempt property, the text has been deleted and 
replaced with the language shown to reflect that, with regard to exempt 
property, DOE shall retain the right to issue disposition instructions 
within 120 days of receipt of a request for disposition of unneeded 
equipment or receipt of final inventory. If DOE fails to issue such 
instructions within that time period, title to equipment vests in the 
recipient without further obligation to the Federal Government.
    In Sec. 600.136(c) pertaining to intangible property, ``Unless 
waived by the Federal awarding agency, the Federal Government'' has 
been deleted and replaced with ``DOE'' to reflect the DOE policy that 
DOE retains the indicated rights in data.
    In Sec. 600.137 Property trust relationship, ``Agencies may 
require'' has been deleted and replaced with ``shall'' to reflect that 
liens will be recorded on personal or real property acquired or 
improved with Federal funds.
    In Sec. 600.152(a)(2)(ii) regarding Financial reports, ``Federal 
awarding agencies may require'' has been deleted and replaced with 
``Recipients shall'' to reflect that recipients will forecast cash 
requirements on the SF-272.
    In Sec. 600.153 regarding record retention and access, ``unless 
such requirements are established in program regulations'' has been 
added to reflect that there may be program regulations that need to be 
considered in understanding record retention and access requirements.
C. Cross-References
    Those portions of this rulemaking that have added cross-references 
to the text of A-110 are as follows:
    In Secs. 600.101 Definitions (under the definition of 
``Suspension''), 600.113 Debarment and Suspension, 600.144(d) 
Procurement Procedures, and 600.162(d) Enforcement, a reference to 10 
CFR Part 1036, DOE's implementation of the non-procurement debarment 
and suspension executive orders, has been added.
    The text of Sec. 600.103 Deviations has been deleted and a cross-
reference to DOE's deviation provisions in Sec. 600.4 has been added. 
The deleted text entails directions to Federal agencies about the 
degree to which OMB will permit deviations from the provisions of the 
Circular. These provisions are binding upon Federal agencies by virtue 
of their inclusion in Circular A-110 and do not need to be provided for 
in agency implementing regulations. DOE deviation provisions in 
Sec. 600.4 make reference to the fact that OMB approval may be needed 
for certain types of deviations. Additional cross-references to the 
deviation provisions of Sec. 600.4 are in Secs. 600.125(d) and (i) on 
Budget and project reviews, and Sec. 600.140 Procurement standards.
    In Sec. 600.121(b) on Financial Management Standards, references to 
Sec. 600.121(f) and Sec. 600.181 are added to identify exceptions to 
the financial management provisions of this subparagraph.
    Section 600.149 has been added to cross-reference the Resource 
Conservation and Recovery Act provisions in Sec. 600.116.
D. Provisions From the Current Financial Assistance Rules
    In this rulemaking implementing OMB Circular A-110, the basic 
approach is to replace the current text of Subpart B of 10 CFR part 600 
with the appropriately modified text of Circular A-110. However, 
certain portions of Subpart B have been retained and integrated into 
the A-110 language. They are as follows:
    In Sec. 600.112 on application forms, subparagraphs (a), (b) and 
(c) are deleted and replaced with the provisions which are carried over 
from 10 CFR 600.102. These sections are being added to provide detailed 
application and budgetary forms information to recipients. Subparagraph 
(d) has been slightly reworded and included under Sec. 600.112(a) of 
this rulemaking.
    Section 600.114(b) regarding special restrictive conditions is 
carried over from 10 CFR 600.105(c) and concerns the issue of a 
recipient placing special restrictive conditions on subawards, which is 
not addressed in Circular A-110.
    Section 600.121(f) on financial management system requirements is 
carried over from Sec. 600.109 and concerns the issue of the financial 
management system required for individual recipients of awards, which 
is not addressed in Circular A-110.
    The language at the end of Sec. 600.122(h)(2) on Payments beginning 
with ``Before withholding any payment'' is carried over from 
Sec. 600.112(g)(3) and provides 30 days notice, and an opportunity to 
cure the noncompliance or indebtedness within that time period, before 
withholding of payment occurs. Such a provision is not addressed in 
Circular A-110.
    Sections 600.123(j), (k), and (l) cost-sharing provisions are 
carried over from Secs. 600.107(a), (b), and (c). The provisions of 
Secs. 600.123(j) and (k) are continued because of the concern that the 
requirements for cost sharing be specifically stated (so that all 
applicants clearly understand the provisions they are operating under) 
and justified (so that any required cost sharing is really a program 
need). Section 600.123(l) is continued to address program income, 
patent rights, rights in data and foregone fees in the context of cost 
sharing, provisions which are not included in Circular A-110.
    The language at the end of Sec. 600.125(e)(4) on pre-award costs, 
beginning with ``For continuation awards,'' is carried over from 
Sec. 600.103(g)(2)(ii). This language permits costs incurred more than 
90 days before the beginning of a continuation award to be charged to 
that continuation year, without the need to receive prior approval from 
DOE, should the award be made. As always, pre-award costs are incurred 
at the recipient's risk that the award may not be made. This is, in 
effect, a waiver of Section ______.25(e)(1) of OMB Circular A-110, and 
is a permitted agency option under Section ______.25(e) of the 
Circular.
    Sections 600.125(n) and (o) pertaining to budget and project 
changes are carried over from Secs. 600.114(e)(3), (4), and (5). These 
provisions provide more procedural detail for DOE recipients in dealing 
with budget and project revisions than is included in Circular A-110.
    Sections 600.127(b) and (c) allowable cost provisions are carried 
over from Secs. 600.103(f) and (h). Section 600.127(b) provides more 
detail about DOE evaluation of indirect cost requests than is provided 
in Circular A-110. Section 600.127(h) states the DOE policy of 
opposition to paying fees or profits on financial assistance awards 
with the exception of Small Business Innovation Research Awards. This 
subject is not addressed directly in Circular A-110, although the 
second Response under the Comments and Responses in the preamble to the 
Circular states: ``Generally fees and profits are not paid to 
recipients unless authorized by legislation.''
    Section 600.144(f) under Procurement procedures is carried over 
from Sec. 600.119(e) and addresses payments of interest penalties on 
dealings between recipients and subrecipients, a subject not addressed 
in OMB Circular A-110.
    The final paragraph of Section 151(d) on program reporting is a 
combination of provisions carried over from Secs. 600.115(b)(3) and 
(f). This language lists specific performance reporting forms that DOE 
has developed, has received OMB clearance to use and may use as the 
Contracting Officer sees fit.
    Section 600.151(i) on program reporting is carried over from 
Sec. 600.115(i) and states provisions regarding performance reporting 
requirements on subawards not addressed in OMB Circular A-110.
    Section 600.153(h) on record retention requirements is carried over 
from Sec. 600.124(c) and states provisions regarding record retention 
for program income which was not addressed in OMB Circular A-110.
    The segment of the subpart titled ``Additional Provisions'' was 
added as a location for rules for types of recipients not otherwise 
covered in this subpart. The provisions of Sec. 600.181 are carried 
over from Sec. 600.125.
E. Miscellaneous Changes
    Further miscellaneous changes of this regulatory implementation of 
A-110 from the text of Circular A-110 as published that have not been 
included above are as follows:
    In Sec. 600.104 Subawards, the sentence beginning ``Thus, this 
subpart is'' was added to clarify the applicability of these provisions 
to subrecipients. It does not change the policy of the Circular.
    In Sec. 600.111(b) pertaining to public notice requirements, 
``shall'' is changed to ``will, whenever practical,'' because of the 
possibility that awards may need to be made without sufficient lead 
time to provide the notification.
    The last sentence of Sec. 600.121(a) regarding financial 
requirements for research awards has been added for emphasis.
    The last sentence of Sec. 600.121(b)(4) reiterates Sec. 600.121(a).
    In Sec. 600.122(f) on payment, ``awardee's'' was changed to 
``recipient's'' to be consistent with DOE usage.
    The phrase ``as defined in OMB Circular A-129, ``Managing Federal 
Credit Programs'''' in Sec. 600.122(h)(2) is deleted as an unnecessary 
cross-reference that may also restrict the applicability of this 
provision unnecessarily.
    Section 600.123(a) under Cost sharing or matching has been 
rewritten to improve the syntax.
    In Sec. 600.123(f) under Cost sharing or matching, ``expendable 
equipment'' has been deleted because it is an example that does not fit 
the subject of the paragraph.
    Section 600.124(a) under Program income has been rewritten to 
improve the syntax.
    In Sec. 600.124(b)(1), (2) and (3), ``program'' has been deleted to 
reflect that DOE is limiting the use of program income to the project 
on which it is earned, not more generally to undefined programs.
    Section 600.124(d) has been rewritten to improve the syntax and to 
add the applicability to commercial organizations.
    Section 600.125(a) on budget plans has been rewritten to improve 
the syntax.
    Section 600.125(e)(2) on budget period extensions has been 
rewritten to improve the syntax.
    In Secs. 600.128, 600.151(b), and 600.161(a)(3), ``grant'' was 
changed to ``award'' to be consistent with DOE usage.
    In Sec. 600.134(c) under Equipment, ``Federal awarding agency which 
funded the original project'' has been deleted and replaced with 
``DOE.'' The word ``awarding'' between ``Federal'' and ``agencies'' has 
been deleted as unnecessary.
    In Sec. 600.134(g) under Equipment, the following has been added: 
``Equipment with a current per-unit fair market value of less than 
$5000 may be retained, sold or otherwise disposed of with no further 
obligation to the awarding agency.'' This makes explicit what is 
intended but not directly stated in Circular A-110. This policy, it 
should be noted, is consistent with Section ______.32(e)(1) of the A-
102 Common Rule.
    Section 600.134(h) under Equipment and its subparagraphs have been 
renumbered from Circular A-110, in which it was listed as Section 
______.34(g)(4). Subparagraph (g)(4) was a different subject from the 
rest of the paragraph (g). Also, the language ``the recipient shall 
apply the standards of this section, as appropriate'' was deleted and 
replaced by ``the provisions of 600.134(g)(1) apply'' to give a more 
precise cross-reference to the applicable standards.
    In Sec. 600.144(a)(2) under Procurement procedures, ``for the 
Federal Government'' is deleted as an inappropriate standard for 
financial assistance.
    In Sec. 600.151(h) pertaining to performance reports, 
``applicable'' was added to emphasize that not all provisions of 5 CFR 
Part 1320 apply in requesting performance data.
    Section 600.152(a)(1)(i) under Financial reporting has been 
rewritten to improve syntax.
    In Sec. 600.153(b)(4) pertaining to record retention requirements, 
``etc. as'' is deleted and replaced by ``and related records, for which 
retention requirements are'' to provide more specific examples.
    In Sec. 600.153(g) pertaining to record retention requirements, the 
first sentence in the A-110 text was deleted because it had the 
appearance of a subparagraph title, which the rest of the subparagraphs 
did not have.
    In Sec. 600.153(g) (1) and (2), ``awarding'' was deleted and 
replaced by ``responsible for negotiating the recipient's indirect cost 
rate'' in (g)(1) and ``cognizant'' in (g)(2) to emphasize the role of 
cognizant agencies in indirect cost rate negotiation.
    Appendix A, No. 8 has been rewritten to more accurately state the 
circumstances under which Executive Orders 12549 and 12689 apply.

III. Explanation for ``Interim Final'' Rulemaking

    As the foregoing preamble discussion indicates, the vast majority 
of the provisions of the interim final rule issued today follow the 
provisions of revised OMB Circular A-110.
    For the reasons that follow, DOE has determined that none of the 
provisions of the interim final rule need to be proposed for public 
comment. The final version of revised OMB Circular A-110 resulted from 
a lengthy public comment process involving all of the Executive 
agencies including DOE. In 1987, an interagency task force recommended 
that OMB Circular A-110, ``Uniform Administrative Requirements for 
Grants and Agreements With Institutions of Higher Education, Hospitals 
and Other Non-Profit Organizations'' be combined with OMB Circular A-
102, ``Uniform Requirements for Grants and Agreements with State and 
Local Governments,'' as a consolidated ``common rule.'' In November, 
1988, a proposed consolidated ``common rule'' was published by OMB in 
the Federal Register, 53 FR 44716. That proposal elicited a substantial 
number of adverse comments. Subsequently, in August 1992, a revised 
proposal, developed by another interagency task force which also 
included DOE, was published for public comment. 57 FR 39018. The 
revised proposal drew over 200 comments from a wide variety of sources.
    All relevant comments were considered in the final revision of OMB 
Circular A-110 when it was issued for government-wide use on November 
29, 1993, 58 FR 62992. The revised circular states that Federal 
agencies responsible for awarding and administering grants and other 
agreements to recipients described therein shall adopt the language in 
the circular unless other provisions are required by Federal statute or 
exceptions or deviations are approved by OMB.
    As noted above, OMB Circular A-110 identifies certain areas where 
agencies have options, but the available options are explicitly 
limited. These areas are discussed in section I.B. of this Preamble 
under Supplementary Information. For the most part, the provisions of 
the interim final rule discussed in that preamble section represent a 
continuation or a technical clarification of existing policy under 10 
CFR part 600. To the extent that there are changes in existing policy, 
they are either the choice of the most permissive available option 
under OMB Circular A-110 (e.g., Sec. 600.123(b) permitting unrecovered 
indirect costs to be included in cost sharing) or a purely procedural 
change (e.g., Sec. 600.125 limiting prior approval requirements for 
revisions of budget and program plans.)
    Given the extensive public comment process on the OMB circular, 
DOE's participation in the resolution of comments, and the lack of 
discretion to change the policies in the circular, DOE concluded that a 
notice of proposed rulemaking for its implementing rules would be 
unnecessary, impracticable, and contrary to public policy.
    There is no obligation to issue a proposed rule with respect to 
those provisions of today's regulations that are procedural, 
interpretative, or non-substantive clarifications.
    With respect to the provisions of today's rule that exercise the 
options that are allowable under OMB Circular A-110, DOE has reached a 
similar conclusion because those substantive policies represent the 
most permissive option permitted under the circular.
    Finally, to the extent that existing policies are being continued, 
DOE also relies on its discretion to reissue existing regulations, with 
minor technical editing, without proposing them for public comment.

IV. Review Under Executive Order 12612

    Executive Order 12612 requires that regulations, rules, 
legislation, and any other policy actions be reviewed for any 
substantial direct effects on States, on the relationship between the 
Federal Government and the States, or in the distribution of power and 
responsibilities among various levels of Government. If there are 
sufficient substantial direct effects, then the Executive Order 
requires preparation of a federalism assessment to be used in all 
decisions involved in promulgating and implementing a policy action. 
Today's interim final rule will revise certain policy and procedural 
requirements. However, DOE has determined that this rulemaking will not 
have a substantial direct effect on the institutional interests or 
traditional functions of States.

V. Regulatory Review

    Today's regulatory action has been determined not to be a 
``significant regulatory action'' under Executive Order 12866, 
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993). 
Accordingly, today's action was not subject to review under the 
Executive Order by the Office of Information and Regulatory Affairs.

VI. Review Under the Regulatory Flexibility Act

    This interim final rule was reviewed under the Regulatory 
Flexibility Act of 1980, Pub. L. 96-354, 94 Stat. 1164, which requires 
preparation of a regulatory flexibility analysis for any regulation 
that will have a significant economic impact on a substantial number of 
small entities; i.e., small businesses, small organizations, and small 
governmental jurisdictions. DOE has concluded that the interim final 
rule would only affect small entities as they apply for and receive 
financial assistance, and does not create additional economic impact on 
small entities as a whole. DOE certifies that this interim final rule 
will not have a significant economic impact on a substantial number of 
small entities and, therefore, no regulatory flexibility analysis has 
been prepared.

VII. Review Under the Paperwork Reduction Act

    No information collection or recordkeeping requirements are imposed 
upon the public by this interim final rulemaking. Accordingly, no OMB 
clearance is required under the Paperwork Reduction Act of 1980, 44 USC 
3501, et seq., or OMB implementing regulations at 5 CFR Part 1320.

VIII. Review Under the National Environmental Policy Act

    DOE has concluded that this rule falls into a class of actions 
(categorical exclusion A5) that are categorically excluded from NEPA 
review because they would not individually or cumulatively have 
significant impact on the human environment, as determined by the 
Department's regulations (10 CFR Part 1021, Subpart D) implementing the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321, 4331-4335, 
4341-4347 (1976)). Therefore, this rule does not require an 
environmental impact statement or an environmental assessment pursuant 
to NEPA.

IX. Review Under Executive Order 12778

    Section 2 of Executive Order 12778 instructs each agency to adhere 
to certain requirements in promulgating new regulations and reviewing 
existing regulations. These requirements, set forth in sections 2(a) 
and (b)(2), include eliminating drafting errors and needless ambiguity, 
drafting the regulations to minimize litigation, providing clear and 
certain legal standards for affected conduct, and promoting 
simplification and burden reduction. Agencies are also instructed to 
make every reasonable effort to ensure that the regulation specifies 
clearly any preemptive effect, effect on existing Federal law or 
regulation, and retroactive effect; describes any administrative 
proceedings to be available prior to judicial review and any provisions 
for the exhaustion of such administrative proceedings; and defines key 
terms. DOE certifies that today's interim final rule meets the 
requirements of sections 2 (a) and (b) of Executive Order 12778.

X. Public Comments

    Interested persons are invited to participate in this rulemaking by 
submitting data, views, or arguments with respect to the changes set 
forth in this notice. Three copies of written comments should be 
submitted to the address indicated in the ADDRESSES section of this 
notice. All comments received will be available for public inspection 
in the DOE Reading Room, Room 1E-190, Forrestal Building, 1000 
Independence Avenue, SW., Washington, D.C. 20585, between the hours of 
9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. All 
written comments received by the date given in the DATES section will 
be fully considered. Any information considered to be confidential must 
be so identified and submitted in writing, one copy only. The DOE 
reserves the right to determine the confidential status of the 
information and to treat it according to our determination.
    The Department has concluded that this interim final rule does not 
involve a substantial issue of fact or law and that the interim final 
rule should not have substantial impact on the nation's economy or a 
large number of individuals or businesses. Therefore, pursuant to Pub. 
L. 95-91, the DOE Organization Act, and the Administrative Procedure 
Act (5 U.S.C. 553), the Department does not plan to hold a public 
hearing on this interim final rule.

List of Subjects in 10 CFR Part 600

    Accounting; Administrative practice and procedure; Government 
contracts; Grant programs; Indians; Intergovernmental relations; Loan 
programs; Lobbying; Penalties; Reporting and recordkeeping 
requirements.

    Issued in Washington, DC., October 13, 1994.
Richard H. Hopf,
Deputy Assistant Secretary for Procurement and Assistance Management.

    For the reasons set out in the preamble, Part 600 of Chapter II, 
Title 10 of the Code of Federal Regulations is amended as follows:

PART 600--FINANCIAL ASSISTANCE RULES

    1. The authority citation for Part 600 continues to read as 
follows:

    Authority: Secs. 644 and 646, Pub. L. 95-91, 91 Stat. 599 (42 
U.S.C. 7254 and 7256); Pub. L. 97-258, 96 Stat. 1003-1005 (31 U.S.C. 
6301-6308), unless otherwise noted.

Subparts C, D, and E [Redesignated as Subparts D, E, and C]

    2. Subparts C, D, and E are redesignated as Subparts D, E, and C 
respectively, the sections are redesignated, and the section headings 
are revised as follows:
Subpart C--Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments

New Section (Subpart C) and Old Section (Subpart E)

General

600.200  [600.400]  Purpose and scope of this subpart.
600.201  [600.401]  Scope of Sections 600.200 through 600.205.
600.202  [600.402]  Definitions.
600.203  [600.403]  Applicability.
600.204  [600.404]  Effect on other issuances.
600.205  [600.405]  Additions and Exceptions.

Pre-Award Requirements

600.210  [600.410]  Forms for applying for grants.
600.211  [600.411]  State plans.
600.212  [600.412]  Special grant or subgrant conditions for ``high 
risk'' recipients.

Post-Award Requirements

Financial Administration

600.220  [600.420]  Standards for financial management systems.
600.221  [600.421]  Payment.
600.222  [600.422]  Allowable costs.
600.223  [600.423]  Period of availability of funds.
600.224  [600.424]  Matching or Cost sharing.
600.225  [600.425]  Program income.
600.226  [600.426]  Non-Federal audit.

Changes, Property, and Subawards

600.230  [600.430]  Changes.
600.231  [600.431]  Real property.
600.232  [600.432]  Equipment.
600.233  [600.433]  Supplies.
600.234  [600.434]  Copyrights.
600.235  [600.435]  Subawards to debarred and suspended parties.
600.236  [600.436]  Procurement.
600.237  [600.437]  Subgrants.

Reports, Records Retention, and Enforcement

600.240  [600.440]  Monitoring and reporting program performance.
600.241  [600.441]  Financial reporting.
600.242  [600.442]  Retention and access requirements for records.
600.243  [600.443]  Enforcement.
600.244  [600.444]  Termination for convenience.

After-the-Grant Requirements

600.250  [600.450] Closeout.
600.251  [600.451] Later disallowances and adjustments.
600.252  [600.452] Collection of amounts due.

Entitlements [Reserved]

Subpart D--Cooperative Agreements

New Section (Subpart D) and Old Section (Subpart C)

600.300  [600.200]  Scope and applicability.
600.301  [600.201]  Definitions.
600.302  [600.202]  Selection of cooperative agreement as financial 
assistance instrument.
600.303  [600.203]  Application budgetary information.
600.304  [600.204]  Instrument conversion.
600.305  [600.205]  Application, funding, and administrative 
requirements.
600.306  [600.206]  Cost sharing.
600.307  [600.207]  Patents, data, and copyrights.

Subpart E--Audits of State and Local Governments

New Section (Subpart E) and Old Section (Subpart D)

600.400  [600.300]  Scope and applicability.
600.401  [600.301]  Definitions.
600.402  [600.302]  Policy.
600.403  [600.303]  Scope of audit.
600.404  [600.304]  Frequency of audit.
600.405  [600.305]  Internal control and compliance reviews.
600.406  [600.306]  Subrecipients.
600.407  [600.307]  Relation to other audit requirements.
600.408  [600.308]  Cognizant agency responsibilities.
600.409  [600.309]  Illegal acts or irregularities.
600.410  [600.310]  Audit reports.
600.411  [600.311]  Audit resolution.
600.412  [600.312]  Audit workpapers and reports.
600.413  [600.313]  Audit costs.
600.414  [600.314]  Sanctions.
600.415  [600.315]  Auditor selection.
600.416  [600.316]  Small and minority audit firms.
600.417  [600.317]  Reporting.

    Part 600 is further amended as set forth below:


Sec. 600.2  [Amended]

    5. Section 600.2(g)(1)(i) is amended by adding to the Federal 
Register citation in parentheses ``as amended by 58 FR 62992, Nov. 29, 
1993'' before the closing parenthesis and Sec. 600.2(g)(1)(ii) is 
amended by adding to the Federal Register citation in parentheses ``and 
58 FR 58393, July 26, 1993'' before the closing parenthesis.


Sec. 600.4  [Amended]

    6. Section 600.4 is amended as follows:
    A. In paragraph (a)(1)(second sentence) revise ``Secs. 600.105 and 
600.412'' to read ``Secs. 600.114 and 600.212''; and
    B. In paragraphs (c)(2)(i)(second sentence) and (c)(3)(second 
sentence) revise ``Sec. 600.207'' to read ``Sec. 600.307''.


Sec. 600.5  [Amended]

    7. Section 600.5(first sentence) is amended by adding ``(as 
codified at 31 U.S.C. 6301-6306)'' after ``Public Law 95-224''.


Sec. 600.7  [Amended]

    8. Section 600.7(b)(2)(first sentence, parenthetical phrase) is 
amended by revising ``Sec. 600.106(b)'' to read ``Sec. 600.31(b)''.


Sec. 600.9  [Amended]

    9. Section 600.9(c)(19)(second sentence, parenthetical phrase) is 
amended by revising ``Sec. 600.1093'' to read ``Sec. 600.127''.


Sec. 600.10  [Amended]

    10. Section 600.10(e)(3)(parenthetical phrase) is amended by 
revising ``Secs. 600.31, 600.102, and 600.203'' to read ``Secs. 600.31, 
600.112, and 600.303''.


Sec. 600.14  [Amended]

    11. Section 600.14(c) is amended by removing ``(PR-132)'' and 
revising ``Procurement, Assistance and Program Management'' to read 
``Procurement and Assistance Management''.


Sec. 600.15  [Amended]

    12. Section 600.15(b)(4) is amended by removing ``(MA-942)'' and 
revising ``Procurement and Assistance Management Directorate'' to read 
``Office of Procurement and Assistance Management''.


Sec. 600.20  [Amended]

    13. Section 600.20(c)(first sentence) is amended by revising 
``Sec. 600.103(g), Sec. 600.32 or Sec. 600.442(b)'' to read 
``Sec. 600.32, Sec. 600.125(e) or Sec. 600.230.''


Sec. 600.25  [Amended]

    14. Section 600.25(d)(second sentence) is amended by revising 
``Sec. 600.124 and Sec. 600.442'' to read ``Secs. 600.153 and 
600.242''.


Sec. 600.26  [Amended]

    15. Section 600.26 is amended as follows:
    A. In paragraph (d)(1)(i), revise ``Sec. 600.105 or Sec. 600.412'' 
to read ``Sec. 600.114 or Sec. 600.212''.
    B. In paragraph (d)(1)(ii), revise ``Sec. 600.406'' to read 
``Sec. 600.206''.
    C. In paragraph (d)(1)(iii), revise ``Secs. 600.103, 600.114, 
600.422, or 600.430'' to read ``Secs. 600.125, 600.127, 600.222, or 
600.230''.
    D. In paragraph (d)(1)(iv), revise ``Secs. 600.121(b) (1), (2), (3) 
or (5); or Sec. 600.443 (a)(1), (a)(3) for suspensions only; or 
Sec. 600.443(a)(4)'' to read ``Secs. 600.122(n); Sec. 600.162(a) (1), 
(3) for suspensions only, (4); or Sec. 600.243 (a)(1), (a)(3) for 
suspensions only; or Sec. 600.243 (a)(4)''.
    E. In paragraph (d)(1)(v), revise ``Sec. 600.112(g), Sec. 600.119, 
or Sec. 600.436'' to read ``Sec. 600.122(h), Secs. 600.140 through 
600.149, Sec. 600.221(g) or Sec. 600.236''.


Sec. 600.28  [Amended]

    16. Section 600.28 is amended as follows:
    A. In paragraph (a)(3), revise ``Sec. 600.121(b) or 
Sec. 600.443(a)'' to read ``Sec. 600.122(n), Sec. 600.162(a), or 
Sec. 600.243(a)''.
    B. In paragraph (b) (introductory paragraph), revise 
``Sec. 600.121(b) or Sec. 600.443(a)'' to read ``Sec. 600.122(n), 
Sec. 600.162(a), or Sec. 600.243(a)''.


Sec. 600.29  [Amended]

    17. Section 600.29 is amended as follows:
    A. In paragraph (a)(1), revise ``Sec. 600.121 or Sec. 600.28'' to 
read ``Sec. 600.28, Sec. 600.122(n), Sec. 600.162(a) or 
Sec. 600.243(a)''.
    B. In paragraph (b) (introductory paragraph), revise 
``Sec. 600.121(c) or Sec. 600.28'' to read ``Sec. 600.28, 
Sec. 600.162(a) or Sec. 600.243(a)'' and revise ``Sec. 600.121(a) or 
Sec. 600.28(a)'' to read ``Sec. 600.28(a), Sec. 600.162(a) or 
Sec. 600.243(a)''.
    C. In paragraph (b)(5), revise ``Sec. 600.123'' to read 
``Secs. 600.170 through 600.173 and Secs. 600.250 through 600.252''.
    D. In paragraph (d), revise ``Sec. 600.121 or Sec. 600.28'' to read 
``Sec. 600.28, Secs. 600.160 through 600.162 or Secs. 600.243 through 
600.244''.
    E. In paragraph (f), revise ``Sec. 600.121 or Sec. 600.28'' to read 
``Sec. 600.28, Secs. 600.160 through 600.162 or Secs. 600.243 through 
600.244''.


Sec. 600.31  [Amended]

    18. Section 600.31 is amended as follows:
    A. In paragraph (b) (introductory text, parenthetical phrase), 
revise ``Sec. 600.102(c)'' to read ``Sec. 600.112(c) and 
Sec. 600.210(b)''.
    B. In paragraph (b)(1), remove the parenthetical phrase ``(see 
Sec. 600.115(d)(1))''.
    C. In paragraph (d)(1), revise ``Sec. 600.125(d)'' to read 
``Sec. 600.181(d)''.
    D. In paragraph (f)(4), revise ``SBIR award (see Sec. 600.125(c))'' 
to read ``SBIR awards (see Sec. 600.181(c))''.


Sec. 600.32  [Amended]

    19. Section 600.32(c)(1) (parenthetical phrase) is amended by 
revising ``(See Sec. 600.116)'' to read ``(See Sec. 600.152 and 
Sec. 600.241)''.


Sec. 600.33  [Amended]

    20. Section 600.33(b)(2) is amended, in clause paragraph (e)(2) of 
PATENT RIGHTS (SHORT FORM), by revising ``Sec. 600.118(b)(1)'' to read 
``Sec. 600.33(b)(1)''.


Sec. 600.200  [Amended]

    21. Section 600.200(c) is amended in the first sentence by revising 
``Sec. 600.121'' to read ``Sec. 600.162 and Sec. 600.243,'' revising in 
the second sentence ``Sec. 600.123'' to read ``Secs. 600.170 through 
600.173 and Secs. 600.250 through 600.252,'' and revising in the first 
and second sentences ``Sec. 600.205'' to read ``Sec. 600.305''.


Sec. 600.202  [Amended]

    22. Section 600.202(b)(1)(iii) is amended by revising 
``Sec. 600.122 does'' to read ``Secs. 600.160 through 600.162 and 
Secs. 600.243 and 600.244 do''.


Sec. 600.203  [Amended]

    23. Section 600.203 is amended by revising ``Sec. 600.102'' to read 
``Sec. 600.112'' in all occurrences.


Sec. 600.205  [Amended]

    24. In the first sentence, ``Subpart E'' is revised to read 
``Subpart C''.


Sec. 600.206  [Amended]

    25. Section 600.206 is amended as follows:
    A. In the introductory text, revise ``Sec. 600.107 or 
Sec. 600.424'' to read
``Sec. 600.123 or Sec. 600.224''.
    B. In paragraph (c), revise ``Sec. 600.107(c) or Sec. 600.424'' to 
read     ``Sec.  600.123 or Sec. 600.224''.


Sec. 600.207  [Amended]

    26. Sec. 600.207(b)(1) is amended by revising 
``Sec. 600.118(b)(1)'' to read ``Sec. 600.33(b)(1)'' in the first and 
second sentences and revising ``Sec. 600.118'' to read ``Sec. 600.33'' 
in the third sentence.


Sec. 600.302  [Amended]

    27. Section 600.302(d) is amended by revising ``Secs. 600.25, 
600.124, and 600.271'' to read ``Secs. 600.25, 600.153, 600.242, and 
600.305''.


Sec. 600.303  [Amended]

    28. Section 600.303(c)(second sentence) is amended by revising 
``Secs. 600.120(c) and 600.271'' to read ``Secs. 600.126, 600.226, and 
600.305''.


Sec. 600.306  [Amended]

    29. Sections 600.306(a) and (b) are amended by revising 
``Sec. 600.120(c)'' to read ``Sec. 600.126(a)''.


Sec. 600.314  [Amended]

    30. Section 600.314(b)(introductory paragraph) is amended by 
revising ``Sec. 600.121'' to read ``Secs. 600.162 and 600.243''.


Sec. 600.441  [Amended]

    31. Section 600.441(e)(2)(i)(second sentence) is amended by 
revising ``Sec. 600.41(b)(3) and (4)'' to read ``Sec. 600.241(b)(3) and 
(4)''.
    32. Subpart B of Part 600 is revised to read as set forth below:
Subpart B--Uniform Administrative Requirements for Grants and 
Cooperative Agreements With Institutions of Higher Education, 
Hospitals, Other Non-Profit Organizations and Commercial Organizations

General

Secs.
600.100 Purpose.
600.101 Definitions.
600.102 Effect on other issuances.
600.103 Deviations.
600.104 Subawards.

Pre-Award Requirements

600.110 Purpose.
600.111 Pre-award policies.
600.112 Forms for applying for Federal assistance.
600.113 Debarment and suspension.
600.114 Special award conditions.
600.115 Metric system of measurement.
600.116 Resource Conservation and Recovery Act.
600.117 Certifications and representations.

Post-Award Requirements

Financial and Program Management

600.120 Purpose of financial and program management.
600.121 Standards for financial management systems.
600.122 Payment.
600.123 Cost sharing or matching.
600.124 Program income.
600.125 Revision of budget and program plans.
600.126 Non-Federal audits.
600.127 Allowable costs.
600.128 Period of availability of funds.

Property Standards

600.130 Purpose of property standards.
600.131 Insurance coverage.
600.132 Real property.
600.133 Federally-owned and exempt property.
600.134 Equipment.
600.135 Supplies and other expendable property.
600.136 Intangible property.
600.137 Property trust relationship.

Procurement Standards

600.140 Purpose of procurement standards.
600.141 Recipient responsibilities.
600.142 Codes of conduct.
600.143 Competition.
600.144 Procurement procedures.
600.145 Cost and price analysis.
600.146 Procurement records.
600.147 Contract administration.
600.148 Contract provisions.
600.149 Resource Conservation and Recovery Act (RCRA)

Reports and Records

600.150 Purpose of reports and records.
600.151 Monitoring and reporting program performance.
600.152 Financial reporting.
600.153 Retention and access requirements for records.

Termination and Enforcement

600.160 Purpose of termination and enforcement.
600.161 Termination.
600.162 Enforcement.

After-the-Award Requirements

600.170 Purpose.
600.171 Closeout procedures.
600.172 Subsequent adjustments and continuing responsibilities.
600.173 Collection of amounts due.

Additional Provisions

600.180 Purpose.
600.181 Special provisions for Small Business Innovation Research 
Grants.

Appendix A to Subpart B of Part 600--Contract Provisions

Subpart B--Uniform Administrative Requirements for Grants and 
Cooperative Agreements With Institutions of Higher Education, 
Hospitals, Other Non-Profit Organizations and Commercial 
Organizations.

General


Sec. 600.100  Purpose.

    This Subpart implements OMB Circular A-110 and establishes uniform 
administrative requirements for grants and agreements awarded to 
institutions of higher education, hospitals, and other non-profit and 
commercial organizations. It also establishes rules governing subawards 
to institutions of higher education, hospitals, and non-profit and 
commercial organizations (including grants and cooperative agreements 
administered by State, local and Indian Tribal governments).


600.101  Definitions.

    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.
    Accrued income means the sum of:
    (1) Earnings during a given period from services performed by the 
recipient, and 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.
    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.
    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.
    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 
DOE 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.
    Cash contributions means the recipient's cash outlay, including the 
outlay of money contributed to the recipient by third parties.
    Closeout means the process by which DOE determines that all 
applicable administrative actions and all required work of the award 
have been completed by the recipient and DOE.
    Contract means a procurement contract under an award or subaward, 
and a procurement subcontract under a recipient's or subrecipient's 
contract.
    Cost sharing or matching means that portion of project or program 
costs not borne by DOE.
    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 DOE sponsorship ends.
    Disallowed costs means those charges to an award that the DOE 
determines to be unallowable, in accordance with the applicable Federal 
cost principles or other terms and conditions contained in the award.
    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 $5000 or more per unit. 
However, consistent with recipient policy, lower limits may be 
established.
    Excess property means property under the control of any Federal 
awarding agency that, as determined by the head thereof, is no longer 
required for its needs or the discharge of its responsibilities.
    Exempt property means tangible personal property acquired in whole 
or in part with Federal funds, where the Federal awarding agency has 
statutory authority to vest title in the recipient without further 
obligation to the Federal Government. An example of exempt property 
authority is contained in the Federal Grant and Cooperative Agreement 
Act (31 U.S.C. 6306), for property acquired under an award to conduct 
basic or applied research by a non-profit institution of higher 
education or non-profit organization whose principal purpose is 
conducting scientific research.
    Federal awarding agency means the Federal agency that provides an 
award to the recipient.
    Federal funds authorized means the total amount of Federal funds 
obligated by the Federal Government for use by the recipient. This 
amount may include any authorized carryover of unobligated funds from 
prior funding periods when permitted by agency regulations or agency 
implementing instructions.
    Federal share of real property, equipment, or supplies means that 
percentage of the property's acquisition costs and any improvement 
expenditures paid with Federal funds.
    Funding period or budget period means the period of time when DOE 
funding is available for obligation by the recipient.
    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.
    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.
    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.
    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.
    Prior approval means written approval by a contracting officer 
evidencing prior consent.
    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 Secs. 600.124 (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 DOE funds is not program income. Except as 
otherwise provided in this Subpart, program regulations, or the terms 
and conditions of the award, program income does not include the 
receipt of principal on loans, rebates, credits, discounts, etc., or 
interest earned on any of them.
    Project costs 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.
    Project period means the period established in the award document 
during which DOE sponsorship begins and ends.
    Property means, unless otherwise stated, real property, equipment, 
intangible property and debt instruments.
    Real property means land, including land improvements, structures 
and appurtenances thereto, but excludes movable machinery and 
equipment.
    Recipient means an organization receiving financial assistance 
directly from DOE 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 
shall include commercial organizations 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.
    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.
    Small award means a grant or cooperative agreement not exceeding 
the small purchase threshold fixed at 41 U.S.C. 403(11) (currently 
$25,000).
    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'' above.
    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 may include foreign or international organizations 
(such as agencies of the United Nations).
    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.''
    Suspension means an action by DOE that temporarily withdraws DOE 
sponsorship under an award, pending corrective action by the recipient 
or pending a decision to terminate the award by the DOE. Suspension of 
an award is a separate action from suspension under DOE regulations 
implementing E.O.'s 12549 and 12689, ``Debarment and Suspension'' (see 
10 CFR Part 1036).
    Termination means the cancellation of DOE sponsorship, in whole or 
in part, under an agreement at any time prior to the date of 
completion.
    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.
    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.
    Unobligated balance means the portion of the funds authorized by 
DOE that has not been obligated by the recipient and is determined by 
deducting the cumulative obligations from the cumulative funds 
authorized.
    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.
    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. 600.102  Effect on other issuances.

    For awards subject to this Subpart, all administrative requirements 
of codified program regulations, program manuals, handbooks and other 
nonregulatory materials which are inconsistent with the requirements of 
this Subpart shall be superseded, except to the extent they are 
required by statute, or authorized in accordance with the deviations 
provision in Sec. 600.4.


Sec. 600.103  Deviations.

    The deviation provisions of Sec. 600.4 apply to this Subpart.


Sec. 600.104  Subawards.

    Unless sections of this Subpart specifically exclude subrecipients 
from coverage, all DOE recipients, including State, local and Indian 
tribal governments, shall apply the provisions of this Subpart to 
subrecipients performing work under awards if such subrecipients are 
institutions of higher education, hospitals, other non-profit 
organizations or commercial organizations. Thus, this Subpart is 
applicable to those types of organizations regardless of the type of 
recipient receiving the primary award. State and local government 
subrecipients are subject to the provisions of 10 CFR part 600, Subpart 
C, ``Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments.''

Pre-Award Requirements


Sec. 600.110  Purpose.

    Sections 600.111 through 600.117 prescribe forms and instructions 
and other pre-award matters to be used in applying for DOE awards.


Sec. 600.111  Pre-award policies.

    (a) Use of Grants and Cooperative Agreements, and Contracts. In 
each instance, the DOE shall decide on the appropriate award instrument 
(i.e., grant, cooperative agreement, or contract). The Federal Grant 
and Cooperative Agreement Act (31 U.S.C. 6301-08) governs the use of 
grants, cooperative agreements and contracts. A grant or cooperative 
agreement shall be used only when the principal purpose of a 
transaction is to accomplish a public purpose of support or stimulation 
authorized by Federal statute. The statutory criterion for choosing 
between grants and cooperative agreements is that for the latter, 
``substantial involvement is expected between the executive agency and 
the State, local government, or other recipient when carrying out the 
activity contemplated in the agreement.'' Contracts shall be used when 
the principal purpose is acquisition of property or services for the 
direct benefit or use of the Federal Government.
    (b) Public Notice and Priority Setting. DOE will, whenever 
practical, notify the public of its intended funding priorities for 
discretionary grant programs, unless funding priorities are established 
by Federal statute.


Sec. 600.112  Forms for applying for Federal assistance.

    (a) General. An application for an award shall be on the form or in 
the format specified in a program rule, in the solicitation, or in 
these regulations (see Section 600.10). When the SF-424 form is not 
used, DOE shall indicate whether the application is subject to review 
by the State under E.O. 12372. DOE may also require applicants to 
complete--
    (1) The Notice of Energy RD&D Project (DOE Form 538) if the 
application is for a research, development, or demonstration project; 
or
    (2) The Federal Assistance Management Summary Report (DOE F 4600.5) 
or the Federal Assistance Milestone Plan (DOE F 4600.3) as a baseline 
plan in accordance with the terms and conditions of award if required 
by program rule or the solicitation. If a solicitation other than a 
program rule requires the use of one or both of these forms, the 
solicitation shall contain an explanation of how the information to be 
provided relates to the objectives of the program.
    (b) Budgetary information. DOE may request and the applicant shall 
submit the minimum budgetary information necessary to evaluate the 
costs of the proposed project.
    (1) Applicants for research awards, other than State, local, or 
Indian tribal governments, will use DOE budget forms ERF 4620.1 and ERF 
4620.1A. All other applicants shall use the budget formats established 
in the solicitation or program regulations.
    (2) DOE may, subsequent to receipt of an application, request 
additional information from an applicant when necessary for 
clarification or to make informed preaward determinations.
    (c) Continuation and renewal applications. DOE may require that an 
application for a continuation or renewal award (see Sec. 600.31 (b) 
and (c)) be made in the format or on the forms authorized by paragraphs 
(a) and (b) of this section.


Sec. 600.113  Debarment and suspension.

    Recipients shall comply with the nonprocurement debarment and 
suspension common rule implementing E.O.'s 12549 and 12689, ``Debarment 
and Suspension,'' 10 CFR Part 1036. 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. 600.114  Special award conditions.

    (a) If an applicant or recipient has a history of poor performance, 
is not financially stable, has a management system that does not meet 
the standards prescribed in this Subpart, has not conformed to the 
terms and conditions of a previous award, or is not otherwise 
responsible, DOE may impose additional requirements as needed, without 
regard to the deviation provisions of Sec. 600.4. Such applicant or 
recipient will be 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, and the time 
allowed for completing the corrective actions. Reconsideration of the 
additional requirements may be requested at any time. Any special 
conditions shall be promptly removed once the conditions that prompted 
them have been corrected.
    (b) A recipient may place a special restrictive condition, as 
specified in paragraph (a) of this section, in a subaward. In any such 
case, the recipient must notify DOE in writing within 15 days of the 
subaward. DOE shall decide whether to notify OMB and other interested 
parties.


Sec. 600.115  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. DOE will follow the provisions of E.O. 12770, 
``Metric Usage in Federal Government Programs.''


Sec. 600.116  Resource Conservation and Recovery Act.

    Under the Act (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. 600.117  Certifications and representations.

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

Post-Award Requirements

Financial and Program Management


Sec. 600.120  Purpose of financial and program management.

    Sections 600.121 through 600.128 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. 600.121  Standards for financial management systems.

    (a) Recipients shall relate financial data to performance data and 
develop unit cost information whenever practical. For awards that 
support research, it should be noted that it is generally not 
appropriate to develop unit cost information.
    (b) Except for the provisions of 600.121(f) and 600.181, 
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. 600.152. If a DOE 
award 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 their reports on the basis 
of an analysis of the documentation on hand.
    (2) Records that identify adequately the source and application of 
funds for federally-sponsored activities. These records shall contain 
information pertaining to Federal awards, authorizations, obligations, 
unobligated balances, assets, outlays, income and interest.
    (3) Effective control over and accountability for all funds, 
property and other assets. Recipients shall adequately safeguard all 
such assets and assure they are used solely for authorized purposes.
    (4) Comparison of outlays with budget amounts for each award. 
Whenever appropriate, financial information should be related to 
performance and unit cost data. As discussed in paragraph (a) of this 
section, unit cost data is generally not appropriate for awards that 
support research.
    (5) Written procedures to minimize the time elapsing between the 
transfer of funds to the recipient from the U.S. Treasury and the 
issuance or redemption of checks, warrants or payments by other means 
for program purposes by the recipient. To the extent that the 
provisions of the Cash Management Improvement Act (CMIA) (Pub. L. 101-
453) govern, payment methods of State agencies, instrumentalities, and 
fiscal agents 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, the Contracting Officer, 
at his or her discretion, may require adequate bonding and insurance if 
the bonding and insurance requirements of the recipient are not deemed 
adequate to protect the interest of the Federal Government.
    (d) The Contracting Officer 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 in 
Secs. 600.121 (c) and (d), 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.''
    (f) Individuals whose financial management systems do not meet the 
minimum standards of Sec. 600.121 (b) shall maintain a separate bank 
account for deposit of award or subaward funds. Disbursements by the 
recipient or subrecipient from this account shall be supported by 
source documentation such as canceled checks, paid bills, receipts, 
payrolls, etc.


600.122  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 will 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. 600.121. Cash 
advances to a recipient organization shall be limited to the minimum 
amounts needed and be timed to be in accordance with the actual, 
immediate cash requirements of the recipient organization in carrying 
out the purpose of the approved program or project. The timing and 
amount of cash advances shall be as close as is administratively 
feasible to the actual disbursements by the recipient organization for 
direct program or project costs and the proportionate share of any 
allowable indirect costs.
    (c) Whenever possible, advances shall be consolidated to cover 
anticipated cash needs for all awards made by the DOE 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 may submit requests for advances and reimbursements 
at least monthly when electronic fund transfers are not used.
    (d) Requests for Treasury check advance payment shall be submitted 
on SF-270, ``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 
DOE instructions for electronic funds transfer.
    (e) Reimbursement is the preferred method when the requirements in 
paragraph (b) of this section cannot be met. DOE 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, DOE 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 
at least monthly when electronic funds transfers are not used.
    (f) If a recipient cannot meet the criteria for advance payments 
and DOE has determined that reimbursement is not feasible because the 
recipient lacks sufficient working capital, DOE may provide cash on a 
working capital advance basis. Under this procedure, DOE advances cash 
to the recipient to cover its estimated disbursement needs for an 
initial period generally geared to the recipient's disbursing cycle. 
Thereafter, DOE reimburses the recipient for its actual cash 
disbursements. The working capital advance method of payment will 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, DOE will not withhold 
payments for proper charges made by recipients at any time during the 
project period unless paragraph (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 DOE reporting requirements.
    (2) The recipient or subrecipient is delinquent in a debt to the 
United States. Under such conditions, the Federal awarding agency 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. Before withholding any payment, DOE shall notify the 
recipient that payments shall not be made for obligations incurred 
after a specified date, which shall ordinarily be no sooner than 30 
days from the date of the notice, until the recipient corrects the 
noncompliance or pays the indebtedness to the Federal government.
    (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, DOE 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 are 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), (2) or (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.
    (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 the HHS Payment 
Management System through an electronic medium such as the FEDWIRE 
Deposit system. Recipients which do not have this capability should use 
a check. The address is the 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 the Federal awarding agency, it 
waives its right to recover the interest under CMIA.
    (m) Except as noted elsewhere in this Subpart, only the following 
forms shall be authorized for the recipients in requesting advances and 
reimbursements. Federal agencies shall not require more than an 
original and two copies of these forms.
    (1) SF-270, Request for Advance or Reimbursement. Each Federal 
awarding agency shall adopt the SF-270 as a standard form for all 
nonconstruction programs when electronic funds transfer or 
predetermined advance methods are not used. Federal awarding agencies, 
however, have 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. Each Federal awarding agency shall adopt the SF-
271 as the standard form to be used for requesting reimbursement for 
construction programs. However, a Federal awarding agency may 
substitute the SF-270 when the Federal awarding agency determines that 
it provides adequate information to meet Federal needs.
    (n) The DOE may convert a recipient from advance payment to 
reimbursement whenever the recipient no longer meets the criteria for 
advance payment specified in paragraph (b) of this section. Any such 
conversion may be accomplished only after the DOE has advised the 
recipient in writing of the reasons for the proposed action and has 
provided a period of at least 30 days within which the recipient may 
take corrective action or provide satisfactory assurances of its 
intention to take such action.
    (o) With prior DOE approval and in accordance with written DOE 
instructions, a recipient may assign to a bank, trust company or other 
financing institution, including any Federal lending agency, 
reimbursement by Treasury check due from DOE under the following 
conditions:
    (1) The award provides for reimbursement totaling $1,000 or more;
    (2) The assignment covers all amounts payable under the award that 
have not already been paid;
    (3) Reassignment is prohibited; and
    (4) The assignee files a written notice of award payment assignment 
and a true copy of the instrument of assignment with DOE. Any interest 
costs resulting from a loan obtained on the basis of an assignment are 
unallowable charges to DOE award funds or any required cost sharing.
    (p) Recipients shall observe the requirements of this section in 
making or withholding payments to subrecipients except that the forms 
used by recipients are not required to be used by subrecipients when 
requesting advances or reimbursement.


Sec. 600.123  Cost sharing or matching.

    (a) All cost sharing or matching contributions, including cash and 
third party in-kind, shall 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.
    (7) Conform to other provisions of this Subpart, as applicable.
    (b) Unrecovered indirect costs may be included as part of cost 
sharing or matching.
    (c) Values for recipient contributions of services and property 
shall be established in accordance with the applicable cost principles. 
If DOE 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 either paragraph (c)(1) or (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, DOE 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 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 either 
paragraph (g)(1) or (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 DOE 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.
    (i) The following requirements pertain to the recipient's 
supporting records for in-kind contributions from third parties.
    (1) Volunteer services shall be documented and, to the extent 
feasible, supported by the same methods used by the recipient for its 
own employees.
    (2) The basis for determining the valuation for personal service, 
material, equipment, buildings and land shall be documented.
    (j) DOE shall specify in the solicitation or in the program rule, 
if any, any cost sharing requirement. The award document shall be 
specific as to whether the cost sharing is based on a minimum amount 
for the recipient or on a percentage of total costs.
    (k) If DOE requires that a recipient provide cost sharing which is 
not required by statute or which exceeds a statutory minimum, DOE shall 
state in the program rule or solicitation the reasons for requiring 
such cost sharing, recommended or required levels of cost sharing, and 
the circumstances under which the requirement for cost sharing may be 
waived or adjusted during any negotiation.
    (l) Whenever DOE negotiates the amount of cost sharing, DOE may 
take into account such factors as the use of program income (see 
Sec. 600.124), patent rights, and rights in data. Foregone fee or 
profit shall not be considered in establishing the extent of cost 
sharing.


Sec. 600.124  Program income.

    (a) The standards set forth in this section shall be used to 
account for program income related to projects financed in whole or in 
part with DOE funds.
    (b) Except as provided in paragraph (h) of this section, program 
income earned during the project period shall be retained by the 
recipient and, in accordance with program regulations or the terms and 
conditions of the award, shall be used in one or more of the following 
ways.
    (1) Added to funds committed to the project and used to further 
eligible project objectives.
    (2) Used to finance the non-DOE share of the project.
    (3) Deducted from the total project allowable cost in determining 
the net allowable costs on which the share of costs is based.
    (c) When DOE authorizes the disposition of program income as 
described in paragraphs (b)(1) or (b)(2) of this section, program 
income in excess of any limits stipulated shall be used in accordance 
with paragraph (b)(3) of this section.
    (d) In the event that the program regulations or the terms and 
conditions of the award do not specify how program income is to be 
used, paragraph (b)(3) of this section shall apply automatically to all 
projects or programs except research. For awards that support research, 
paragraph (b)(1) of this section shall apply automatically unless the 
award indicates another alternative in the terms and conditions, the 
recipient is subject to special award conditions, as indicated in 
Sec. 600.114, or the recipient is a commercial organization.
    (e) Unless program regulations or the terms and conditions of the 
award provide otherwise, recipients shall have no obligation to the 
Federal Government regarding program income earned after the end of the 
project period.
    (f) Unless program regulations or the terms and conditions of the 
award provide otherwise, costs incident to the generation of program 
income may be deducted from gross income to determine program income, 
provided these costs have not been charged to the award.
    (g) Proceeds from the sale of property shall be handled in 
accordance with the requirements of the Property Standards (See 
Secs. 600.130 through 600.137).
    (h) Unless program regulations or the terms and condition of the 
award provide otherwise, recipients shall have no obligation to the 
Federal Government with respect to program income earned from license 
fees and royalties for copyrighted material, patents, patent 
applications, trademarks, and inventions produced under an award. 
However, Patent and Trademark Amendments (35 U.S.C. Chapter 18) apply 
to inventions made under an experimental, developmental, or research 
award.


Sec. 600.125  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 includes the sum of 
the Federal and non-Federal share when there are cost sharing 
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 
approvals from the DOE for one or more of the following program or 
budget related reasons.
    (1) Change in the scope or the objective of the project or program 
(even if there is no associated budget revision requiring prior written 
approval).
    (2) Change in a key person specified in the application or award 
document.
    (3) The absence for more than three months, or a 25 percent 
reduction in time devoted to the project, by the approved project 
director or principal investigator.
    (4) The need for additional Federal funding.
    (5) If required by program regulations, the transfer of amounts 
budgeted for indirect costs to absorb increases in direct costs, or 
vice versa.
    (6) The inclusion, unless waived by program regulations or the 
terms and conditions of award, 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 in accordance with 
Sec. 600.4.
    (e) Except for requirements listed in paragraphs (c)(1) and (c)(4) 
of this section, program regulations may waive cost-related and 
administrative prior written approvals required by this Subpart and its 
Appendices. 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 without 
prior approval or more than 90 calendar days with the prior approval of 
DOE. All pre-award costs are incurred at the recipient's risk (i.e., 
DOE 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 
final budget period of the project of up to 12 months unless one or 
more of the following conditions apply.
    (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.
    (iv) The extension is being exercised merely for the purpose of 
using unobligated balances. For one-time extensions, the recipient must 
notify the DOE in writing with the supporting reasons and revised 
expiration date at least 10 days before the expiration date specified 
in the award.
    (3) Carry forward unobligated balances to subsequent funding 
periods.
    (4) For awards that support research, unless the terms and 
conditions of award provide otherwise, the prior approval requirements 
described in paragraph (e) of this section are automatically waived 
(i.e., recipients need not obtain such prior approvals) unless one of 
the conditions included in Sec. 600.125(e)(2) applies.
    (5) For continuation awards within a multiple year project in 
support of research, prior to receipt of continuation funding, preaward 
expenditures by recipients are not subject to the limitation or 
approval requirements of Sec. 600.125(e)(1). Nevertheless, incurrence 
by the recipient does not impose any obligation on DOE if a 
continuation award is not subsequently made, or if an award is made for 
a lesser amount than the recipient expected.
    (f) Program regulations may restrict the transfer of funds among 
direct cost categories or programs, functions and activities for awards 
in which DOE's 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 DOE. However, no program 
regulation shall permit a transfer that would cause any Federal 
appropriation or part thereof to be used for purposes other than those 
consistent with the original intent of the appropriation.
    (g) All other changes to nonconstruction budgets, except for the 
changes described in paragraph (j) of this section, do not require 
prior approval.
    (h) For construction awards, recipients shall request prior written 
approval promptly from the Contracting Officer for budget revisions 
whenever paragraph (h) (1), (2) or (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. 600.127.
    (i) Except in accordance with the deviation procedures in 600.4 or 
as may be provided for in program regulations, no other prior approval 
requirements for specific items will be imposed by DOE.
    (j) When DOE makes an award that provides support for both 
construction and nonconstruction work, DOE may require the recipient to 
request prior approval from DOE before making any fund or budget 
transfers between the two types of work supported.
    (k) For both construction and nonconstruction awards, recipients 
shall notify DOE in writing promptly whenever the amount of Federal 
authorized funds is expected to exceed the needs of the recipient for 
the project period by more than $5000 or five percent of the Federal 
award, whichever is greater. This notification shall not be required if 
an application for additional funding is submitted for a continuation 
award.
    (l) Requests for budget revisions may be made by letter.
    (m) Within 30 calendar days from the date of receipt of the request 
for budget revisions, DOE 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, 
DOE shall inform the recipient in writing of the date when the 
recipient may expect the decision.
    (n) DOE approval or disapproval of a request for a budget or 
project revision shall be in writing and signed by a DOE Contracting 
Officer.
    (o) A request by a subrecipient for prior approval shall be 
addressed in writing to the recipient. The recipient shall promptly 
review such request and shall approve or disapprove the request in 
writing within 30 days from the date of the recipient's request for the 
revision. A recipient shall not approve any budget or project revision 
which is inconsistent with the purpose or terms and conditions of the 
DOE award. If the revision requested by the subrecipient would result 
in a change to the recipient's approved budget or approved project 
which requires DOE prior approval, the recipient shall obtain DOE 
approval before approving such revision.


Sec. 600.126  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.''
    (b) State and local governments shall be subject to the audit 
requirements contained in the Single Audit Act (31 U.S.C. 7501-7) and 
Federal awarding agency regulations implementing OMB Circular A-128, 
``Audits of State and Local Governments.''
    (c) The Contracting Officer may audit, or cause to be audited, 
awards to hospitals not covered by the audit provisions of OMB Circular 
A-133 whenever and in the degree of detail he/she deems necessary. The 
Contracting Officer shall rely on available audit reports in 
determining the need for and scope of such audits. The hospital has 
similar authority in auditing subrecipients.
    (d) The Contracting Officer may audit, or cause to be audited, 
awards to commercial organizations whenever and in the degree of detail 
he/she deems necessary. The Contracting Officer shall rely on available 
audit reports in determining the need for and scope of such audits. The 
commercial organization has similar authority in auditing 
subrecipients.
    (e) The Contracting Officer may audit, or cause to be audited, 
awards to individuals whenever and in the degree of detail he/she deems 
necessary. The Contracting Officer shall rely on available audit 
reports in determining the need for and scope of such audits.


Sec. 600.127  Allowable costs.

    (a) General. 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.
    (b) Indirect costs. Unless restricted by Federal statute or program 
rule, DOE shall provide for the reimbursement of appropriate indirect 
costs.
    (1) DOE shall include an amount for indirect costs in an award only 
if the applicant requests reimbursement of such costs and--
    (i) Submits evidence that a cognizant Federal agency has been 
assigned to establish indirect cost rates for the applicant and 
indicates or provides evidence that--
    (A) A current agreement containing an applicable approved indirect 
cost rate(s) covering all or part of the budget period for which DOE 
may provide funding has been established; or
    (B) An indirect cost proposal has been submitted to the cognizant 
agency in order to establish an applicable approved indirect cost 
rate(s) covering all or part of the budget period for which DOE may 
provide funding; or
    (C) An indirect cost proposal covering all or part of the budget 
period and applicable to the activities for which DOE may provide 
funding will be submitted to the cognizant agency for approval no later 
than three months after the beginning date of the initial budget period 
of the DOE award or, for subsequent budget periods, in accordance with 
any schedule established by the cognizant agency; or
    (ii) If not assigned to a cognizant agency, the applicant includes, 
in the application, data that is current, complete, accurate, and 
sufficient to allow the Contracting Officer to determine a rate(s) for 
indirect costs. If the total approved budget will not exceed $100,000 
or if the amount requested for indirect costs does not exceed $5,000, 
DOE may waive the requirement for negotiation of a rate and, in lieu 
thereof, provide a reasonable allowance for such costs.
    (2) Indirect cost proposals shall be prepared and submitted in 
accordance with the applicable Federal cost principles and instructions 
from the cognizant agency or from DOE, as appropriate.
    (3) If a subaward under an award or subaward provides for the 
payment of indirect costs, the recipient or subrecipient shall be 
responsible for negotiating appropriate indirect costs, using the cost 
principles applicable to the subrecipient or contractor, unless the 
subrecipient or contractor has negotiated an applicable rate directly 
with DOE or another Federal department or agency. DOE may review and 
audit the procedures a recipient or subrecipient uses in conducting 
indirect cost negotiations.
    (c) Fee or profit. No increment above cost may be paid to a 
recipient or subrecipient under a DOE award or subaward, except for 
SBIR recipients as provided in Sec. 600.181(d)(3). A fee or profit may 
be paid to a contractor providing goods or services under a contract 
with a recipient or subrecipient.


Sec. 600.128  Period of availability of funds.

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

Property Standards


Sec. 600.130  Purpose of property standards.

    Sections 600.131 through 600.137 set forth uniform standards 
governing management and disposition of property furnished by the 
Federal Government or whose cost was charged to a project supported by 
a Federal award. Recipients shall observe these standards under awards 
and shall not impose additional requirements, unless specifically 
required by Federal statute or program regulations. The recipient may 
use its own property management standards and procedures provided it 
observes the provisions of Secs. 600.131 through 600.137.


Sec. 600.131  Insurance coverage.

    Recipients shall, at a minimum, provide the equivalent insurance 
coverage for real property and equipment acquired with DOE 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. 600.132  Real property.

    Unless otherwise provided by statute or program regulations, the 
requirements concerning the use and disposition of real property 
acquired in whole or in part under awards are as follows.
    (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 DOE.
    (b) The recipient shall obtain written approval by DOE 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 DOE.
    (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 DOE or its successor Federal awarding 
agency. DOE will give 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 DOE and pay the Federal Government for that 
percentage of the current fair market value of the property 
attributable to the Federal participation in the project (after 
deducting actual and reasonable selling and fix-up expenses, if any, 
from the sales proceeds). When the recipient is authorized or required 
to sell the property, proper sales procedures shall be established that 
provide for competition to the extent practicable and result in the 
highest possible return.
    (3) The recipient may be directed to transfer title to the property 
to the Federal Government or to an eligible third party provided that, 
in such cases, the recipient shall be entitled to compensation for its 
attributable percentage of the current fair market value of the 
property.


Sec. 600.133  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 DOE. Upon completion of 
the award or when the property is no longer needed, the recipient shall 
report the property to DOE for further Federal agency utilization.
    (2) If DOE has no further need for the property, it shall be 
declared excess and reported to the General Services Administration, 
unless DOE 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 DOE.
    (b) Exempt property. When statutory authority exists, DOE may vest 
title to property acquired with Federal funds in the recipient without 
further obligation to the Federal Government and under conditions DOE 
considers appropriate. For example, under 31 U.S.C. 6306, DOE may so 
vest title to tangible personal property under a grant or cooperative 
agreement for basic or applied research in a nonprofit institution of 
higher education or in a nonprofit organization whose primary purpose 
is conducting scientific research. Such property is ``exempt 
property.'' Program regulations or the terms and conditions of award 
may establish provisions for vesting title to exempt property. Should 
such conditions not be established and the recipient has no need for 
the equipment, the recipient shall request disposition instructions 
from DOE. If DOE does not issue disposition instructions within 120 
calendar days of receipt of the request, title to the property shall 
vest in the recipient without further obligation to the Federal 
Government. If, at the end of the project, DOE fails to issue 
disposition instructions within 120 calendar days of the receipt of a 
final inventory, title to the property shall vest in the recipient 
without further obligation to the Federal Government.


Sec. 600.134  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 DOE. 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 DOE, then
    (2) Activities sponsored by other Federal agencies.
    (d) During the time that equipment is used on the project or 
program for which it was acquired, the recipient shall make it 
available for use on other projects or programs if such other use will 
not interfere with the work on the project or program for which the 
equipment was originally acquired. First preference for such other use 
shall be given to other projects or programs sponsored by DOE 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 DOE. User charges shall be treated as program income.
    (e) When acquiring replacement equipment, the recipient may use the 
equipment to be replaced as trade-in or sell the equipment and use the 
proceeds to offset the costs of the replacement equipment subject to 
the approval of DOE.
    (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 DOE 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 DOE.
    (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. Equipment with a current per-unit fair market value of less 
than $5000 may be retained, sold or otherwise disposed of with no 
further obligation to the awarding agency. For equipment with a current 
per unit fair market value of $5000 or more, the recipient may retain 
the equipment for other uses provided that compensation is made to the 
original Federal awarding agency or its successor. The amount of 
compensation shall be computed by applying the percentage of Federal 
participation in the cost of the original project or program to the 
current fair market value of the equipment. If the recipient has no 
need for the equipment, the recipient shall request disposition 
instructions from DOE. DOE shall determine whether the equipment can be 
used to meet DOE's requirements. If no requirement exists within DOE, 
the availability of the equipment shall be reported to the General 
Services Administration by DOE to determine whether a requirement for 
the equipment exists in other Federal agencies. DOE will 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 DOE 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 DOE for such costs 
incurred in its disposition.
    (h) DOE reserves the right, at the end of a project, to transfer 
the title to the Federal Government or to a third party named by DOE 
when such third party is otherwise eligible under existing statutes. 
Such transfer shall be subject to the following standards.
    (1) The equipment shall be appropriately identified in the award or 
otherwise made known to the recipient in writing.
    (2) DOE shall issue disposition instructions within 120 calendar 
days after receipt of a final inventory. The final inventory shall list 
all equipment acquired with award funds and federally-owned equipment. 
If DOE fails to issue disposition instructions within the 120 calendar 
day period, the provisions of Sec. 600.134(g)(1) apply.
    (3) When DOE exercises its right to take title, the equipment shall 
be subject to the provisions for federally-owned equipment.


Sec. 600.135  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 $5000 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. 600.136  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. DOE 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) DOE 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 
approval of DOE. When no longer needed for the originally authorized 
purpose, disposition of the intangible property shall occur in 
accordance with the provisions of Sec. 600.134(g).


Sec. 600.137  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. Recipients 
shall 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. 600.140  Purpose of procurement standards.

    Sections 600.141 through 600.148 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 DOE upon recipients, unless 
specifically required by Federal statute or executive order or in 
accordance with the deviation procedures of Sec. 600.4.


Sec. 600.141  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 DOE 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. 600.142  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. 600.143  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. 600.144  Procurement procedures.

    (a) All recipients shall establish written procurement procedures. 
These procedures shall provide for, at a minimum, that paragraphs 
(a)(1), (2) and (3) of this section apply.
    (1) Recipients avoid purchasing unnecessary items.
    (2) Where appropriate, an analysis is made of lease and purchase 
alternatives to determine which would be the most economical and 
practical procurement.
    (3) Solicitations for goods and services provide for all of the 
following.
    (i) A clear and accurate description of the technical requirements 
for the material, product or service to be procured. In competitive 
procurements, such a description shall not contain features which 
unduly restrict competition.
    (ii) Requirements which the bidder/offeror must fulfill and all 
other factors to be used in evaluating bids or proposals.
    (iii) A description, whenever practicable, of technical 
requirements in terms of functions to be performed or performance 
required, including the range of acceptable characteristics or minimum 
acceptable standards.
    (iv) The specific features of ``brand name or equal'' descriptions 
that bidders are required to meet when such items are included in the 
solicitation.
    (v) The acceptance, to the extent practicable and economically 
feasible, of products and services dimensioned in the metric system of 
measurement.
    (vi) Preference, to the extent practicable and economically 
feasible, for products and services that conserve natural resources and 
protect the environment and are energy efficient.
    (b) Positive efforts shall be made by recipients to utilize small 
businesses, minority-owned firms, and women's business enterprises, 
whenever possible. Recipients of DOE 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 wned firms and women's business enterprises when a contract is 
too large for one of these firms to handle individually.
    (5) Use the services and assistance, as appropriate, of such 
organizations as the Small Business Administration and the Department 
of Commerce's Minority Business Development Agency in the solicitation 
and utilization of small businesses, minority-owned firms and women's 
business enterprises.
    (c) The type of procuring instruments used (e.g., fixed price 
contracts, cost reimbursable contracts, purchase orders, and incentive 
contracts) shall be determined by the recipient but shall be 
appropriate for the particular procurement and for promoting the best 
interest of the program or project involved. The ``cost-plus-a-
percentage-of-cost'' or ``percentage of construction cost'' methods of 
contracting shall not be used.
    (d) Contracts shall be made only with responsible contractors who 
possess the potential ability to perform successfully under the terms 
and conditions of the proposed procurement. Consideration shall be 
given to such matters as contractor integrity, record of past 
performance, financial and technical resources or accessibility to 
other necessary resources. In certain circumstances, contracts with 
certain parties are restricted by DOE's implementation, in 10 CFR Part 
1036, of E.O.'s 12549 and 12689, ``Debarment and Suspension.''
    (e) Recipients shall, on request, make available for DOE, pre-award 
review 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 Subpart.
    (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.
    (f) By agreement of the recipient or subrecipient and the 
contractor, if consistent with the recipient's or subrecipient's usual 
business practices and applicable state and local law, any contract to 
which this section applies may provide for the payment of interest 
penalties on amounts overdue under such contract except that--
    (1) In no case shall any obligation to pay such interest penalties 
be construed to be an obligation of the Federal government, and
    (2) Any payment of such interest penalties may not be made from DOE 
funds nor be counted toward meeting a cost sharing requirement of a DOE 
award.


Sec. 600.145  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. 600.146  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. 600.147  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. 600.148  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, DOE may accept 
the bonding policy and requirements of the recipient, provided the DOE 
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, DOE, 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 Subpart, as applicable.


Sec. 600.149  Resource Conservation and Recovery Act (RCRA).

    Recipients' procurements shall comply with applicable requirements 
of RCRA, as described at Section 600.116 of this Subpart.

Reports and Records


Sec. 600.150  Purpose of reports and records.

    Sections 600.151 through 600.153 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. 600.151  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. 600.126.
    (b) The terms and conditions of the award will prescribe the 
frequency with which the 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 award 
year; quarterly or semi-annual reports shall be due 30 days after the 
reporting period. DOE 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.

DOE may specify in the award that the recipient provide this 
information on the Federal Assistance Program/Project Status Report 
(DOE F 4600.6), the technical reporting formats, or the Federal 
Assistance Management Summary Report. DOE may require that the Federal 
Assistance Management Summary Report be used as a performance report 
only when such use is authorized by program rule or the need for this 
form is explained in the solicitation. The requirements of this section 
concerning reporting frequency and deadlines shall apply to the Federal 
Assistance Management Summary Report. (See also Section 600.112 with 
regard to use of this form as part of the award application.)
    (e) Recipients shall not be required to submit more than the 
original and two copies of performance reports.
    (f) Recipients shall immediately notify DOE 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) DOE may make site visits, as needed.
    (h) DOE shall comply with applicable clearance requirements of 5 
CFR Part 1320 when requesting performance data from recipients.
    (i) Recipients may place performance reporting requirements on 
subawards consistent with the provisions of this section and shall 
require interim reporting in accordance with Sec. 600.151(f).


Sec. 600.152  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 or SF-269A to report the status 
of funds for all nonconstruction projects or programs, except that DOE 
has 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 DOE 
needs. However, 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) The terms and conditions of award shall prescribe whether the 
report shall be on a cash or accrual basis. DOE may require accrual 
reporting only if such reporting is required by program statute or 
rule. If the award requires accrual information and the recipient's 
accounting records are not normally kept on the accrual basis, the 
recipient shall not be required to convert its accounting system, but 
shall develop such accrual information through best estimates based on 
an analysis of the documentation on hand.
    (iii) DOE 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) DOE shall require recipients to submit the SF-269 or SF-269A 
(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 the DOE upon 
request of the recipient.
    (2) SF-272, Report of Federal Cash Transactions.
    (i) When funds are advanced, each recipient shall submit the SF-272 
and, when necessary, its continuation sheet, SF-272a. DOE will use this 
report to monitor cash advanced to recipients and to obtain 
disbursement information for each agreement with the recipients.
    (ii) Recipients shall forecast Federal cash requirements in the 
``Remarks'' section of the report.
    (iii) When practical and deemed necessary, DOE 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 be required to submit not more than the 
original and two copies of the SF-272 15 calendar days following the 
end of each quarter. DOE may require a monthly report from those 
recipients receiving advances totaling $1 million or more per year.
    (v) DOE 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 the contracting officer's opinion, the recipient's 
accounting controls are adequate to minimize excessive Federal 
advances; or,
    (C) When electronic payment mechanisms provide adequate data.
    (b) When DOE needs additional information or more frequent reports, 
the following shall be observed:
    (1) When additional information is needed to comply with 
legislative requirements, DOE shall issue instructions to require 
recipients to submit such information under the ``Remarks'' section of 
the reports.
    (2) When DOE determines that a recipient's accounting system does 
not meet the standards in Section 600.121, 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. DOE, in obtaining this information, shall comply with report 
clearance requirements of 5 CFR Part 1320.
    (3) Contracting officers are encouraged to shade out any line item 
on any report if not necessary.
    (4) DOE may accept the identical information from the recipients in 
machine readable format or computer printouts or electronic outputs in 
lieu of prescribed formats.
    (5) Computer or electronic outputs may be provided to recipients 
when that expedites or contributes to the accuracy of reporting.


Sec. 600.153  Retention and access requirements for records.

    (a) This section sets forth requirements for record retention and 
access to records for awards to recipients. DOE shall not impose any 
other record retention or access requirements upon recipients, unless 
such requirements are established in program regulations.
    (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 DOE. 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 DOE, the 3-
year retention requirement is not applicable to the recipient.
    (4) Indirect cost rate proposals, cost allocations plans, and 
related records, for which retention requirements are specified in 
Sec. 600.153(g).
    (c) Copies of original records may be substituted for the original 
records if authorized by DOE.
    (d) DOE 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, 
DOE may make arrangements for recipients to retain any records that are 
continuously needed for joint use.
    (e) DOE, the Inspector General, Comptroller General of the United 
States, or any of their duly authorized representatives, have the right 
of timely and unrestricted access to any books, documents, papers, or 
other records of recipients that are pertinent to the awards, in order 
to make audits, examinations, excerpts, transcripts and copies of such 
documents. This right also includes timely and reasonable access to a 
recipient's personnel for the purpose of interview and discussion 
related to such documents. The rights of access in this paragraph are 
not limited to the required retention period, but shall last as long as 
records are retained.
    (f) Unless required by statute, DOE shall place no restrictions on 
recipients that limit public access to the records of recipients that 
are pertinent to an award, except when DOE 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. 552) if 
the records had belonged to DOE.
    (g) 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 the 
Federal agency responsible for negotiating the recipient's indirect 
cost rate 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 the cognizant Federal agency 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.
    (h) If, by the terms and conditions of the award, the recipient or 
subrecipient--
    (1) Is accountable for program income earned or received after the 
end of the project period or after the termination of an award or 
subaward, or
    (2) If program income earned during the project period is required 
to be applied to costs incurred after the end of the project period or 
after termination of an award or subaward, the record retention period 
shall start on the last day of the recipient's or subrecipient's fiscal 
year in which such income was earned or received or such costs were 
incurred. All other program income records shall be retained in 
accordance with Sec. 600.153(b).

Termination and Enforcement


Sec. 600.160  Purpose of termination and enforcement.

    Sections 600.161 and 600.162 set forth uniform suspension, 
termination and enforcement procedures.


Sec. 600.161  Termination.

    (a) Awards may be terminated in whole or in part only if paragraph 
(a) (1), (2) or (3) of this section apply.
    (1) By DOE, if a recipient materially fails to comply with the 
terms and conditions of an award.
    (2) By DOE 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 DOE 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 DOE determines in the case of partial termination that the 
reduced or modified portion of the award will not accomplish the 
purposes for which the award was made, it may terminate the award in 
its entirety under either paragraph (a) (1) or (2) of this section.
    (b) If costs are allowed under an award, the responsibilities of 
the recipient referred to in Section 600.171(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. 600.162  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, DOE may, in addition to imposing any of the special conditions 
outlined in Sec. 600.114, 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 DOE.
    (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, DOE 
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 
the awarding agency 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 paragraph (c) (1) and (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 10 CFR part 1036.

After-the-Award Requirements


Sec. 600.170  Purpose.

    Sections 600.171 through 600.173 contain closeout procedures and 
other procedures for subsequent disallowances and adjustments.


Sec. 600.171  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. DOE may 
approve extensions when requested by the recipient.
    (b) Unless DOE 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) DOE 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 DOE 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, DOE 
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. 600.131 through 600.137.
    (g) In the event a final audit has not been performed prior to the 
closeout of an award, DOE shall retain the right to recover an 
appropriate amount after fully considering the recommendations on 
disallowed costs resulting from the final audit.


Sec. 600.172  Subsequent adjustments and continuing responsibilities.

    (a) The closeout of an award does not affect any of the following.
    (1) The right of DOE 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. 600.126.
    (4) Property management requirements in Secs. 600.131 through 
600.137.
    (5) Records retention as required in Sec. 600.153.
    (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 
DOE and the recipient, provided the responsibilities of the recipient 
referred to in paragraph 600.173(a), including those for property 
management as applicable, are considered and provisions made for 
continuing responsibilities of the recipient, as appropriate.


Sec. 600.173  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, DOE 
may reduce the debt by paragraph (a) (1), (2) or (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, DOE shall charge interest 
on an overdue debt in accordance with 4 CFR Chapter II, ``Federal 
Claims Collection Standards.''

Additional Provisions


Sec. 600.180  Purpose.

    The purpose of ``Additional Provisions'' is to provide additional 
rules for certain types of recipients which are otherwise covered by 10 
CFR Part 600, Subpart B when they are performing under Small Business 
Innovation Research grants.


Sec. 600.181  Special provisions for small business innovation research 
grants.

    (a) General. This section contains provisions applicable to the 
Small Business Innovation Research (SBIR) Program. This codifies six 
class deviations pertaining to the SBIR program.
    (b) Provisions Applicable to Phase I SBIR Awards. Phase I SBIR 
awards may be made on a fixed obligation basis, subject to the 
following requirements:
    (1) While proposed costs must be analyzed in detail to ensure 
consistency with applicable cost principles, incurred costs are not 
subject to regulation by the standards of cost allowability;
    (2) Although detailed budgets are submitted by a recipient and 
reviewed by DOE for purposes of establishing the amount to be awarded, 
budget categories are not stipulated in making an award;
    (3) Prior approval from the DOE for rebudgeting among categories by 
the recipient is not required. Prior approval from DOE is required for 
situations involving sole source or single bid procurements as provided 
in Sec. 600.181(d)(2). Prior approval from DOE is also required for any 
variation from the requirement under the SBIR program that no more than 
one-third of Phase I work can be done by sub-contractors or consortium 
partners;
    (4) Pre-award expenditure approval is not required;
    (5) Payments are to be made in the same manner as other financial 
assistance (see Sec. 600.122), except that, when determined appropriate 
by the cognizant program official and contracting officer, a lump sum 
payment may be made. If a lump sum payment is made, the award must be 
conditioned to require the recipient to return to DOE amounts remaining 
unexpended at the end of the project if those amounts exceed $500;
    (6) Recipients will certify in writing to the Contracting Officer 
at the end of the project that the activity was completed or the level 
of effort was expended. Should the activity or effort not be carried 
out, the recipient would be expected to make appropriate 
reimbursements;
    (7) Requirements for periodic reports may be established for each 
award so long as they are consistent with Sec. 600.151;
    (8) Changes in principal investigator or project leader, scope of 
effort, or institution, require the prior approval of DOE.
    (c) Provision Applicable to Phase II SBIR Awards. Phase II SBIR 
awards may be made for a single budget period of 24 months.
    (d) Provisions Applicable to Phase I and Phase II SBIR Awards.
    (1) The prior approval of the cognizant DOE Contracting Officer is 
required before the final budget period of the project period may be 
extended without additional funds.
    (2) A recipient or subrecipient must receive the prior written 
approval of the awarding party before entering into any sole source 
contract or a contract where only one bid or proposal is received when 
the value of the contract is expected to exceed $25,000 in the 
aggregate.
    (3) A fee or profit may be paid to SBIR recipients.

Appendix A to Subpart B to Part 600--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. 874), as supplemented by Department of 
Labor regulations (29 CFR Part 3, ``Contractors and Subcontractors 
on Public Building or Public Work Financed in Whole or in Part by 
Loans or Grants from the United States''). The Act provides that 
each contractor or subrecipient shall be prohibited from inducing, 
by any means, any person employed in the construction, completion, 
or repair of public work, to give up any part of the compensation to 
which he is otherwise entitled. The recipient shall report all 
suspected or reported violations to the 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. 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. 327-
333)--Where applicable, all contracts awarded by recipients in 
excess of $2000 for construction contracts and in excess of $2500 
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. 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. 7401 et seq.) and the Federal Water 
Pollution Control Act (33 U.S.C. 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. 7401 et seq.) and the Federal Water 
Pollution Control Act as amended (33 U.S.C. 1251 et seq.). 
Violations shall be reported to the Federal awarding agency and the 
Regional Office of the Environmental Protection Agency (EPA).
    7. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--Contractors 
who apply or bid for an award of $100,000 or more shall file the 
required certification. Each tier certifies to the tier above that 
it will not and has not used Federal appropriated funds to pay any 
person or organization for influencing or attempting to influence an 
officer or employee of any agency, a member of Congress, officer or 
employee of Congress, or an employee of a member of Congress in 
connection with obtaining any Federal contract, grant or any other 
award covered by 31 U.S.C. 1352. Each tier shall also disclose any 
lobbying with non-Federal funds that takes place in connection with 
obtaining any Federal award. Such disclosures are forwarded from 
tier to tier up to the recipient.
    8. Debarment and Suspension (E.O.s 12549 and 12689)--Contract 
awards that exceed the small purchase threshold and certain other 
contract awards shall not be made to parties listed on the 
nonprocurement portion of 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 principals.

[FR Doc. 94-25750 Filed 10-20-94; 8:45 am]
BILLING CODE 6450-01-P