[Federal Register Volume 66, Number 89 (Tuesday, May 8, 2001)]
[Proposed Rules]
[Pages 23197-23198]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11519]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 66, No. 89 / Tuesday, May 8, 2001 / Proposed 
Rules  

[[Page 23197]]



DEPARTMENT OF ENERGY

10 CFR Part 600

RIN 1991-AB57


Grants and Agreements With For-Profit Organizations

AGENCY: Department of Energy.

ACTION: Notice of inquiry and opportunity for public comment.

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SUMMARY: The Department of Energy (the ``Department'' or ``DOE'') is 
seeking comments on whether to initiate a rulemaking that prescribes 
administrative requirements for financial assistance awards tailored 
specifically to for-profit organizations. DOE is also requesting 
comments on the specific changes proposed in the SUPPLEMENTARY 
INFORMATION section. Comments received in response to this document 
should contain no proprietary or confidential business information.

DATES: Written comments must be received by July 9, 2001.

ADDRESSES: Comments (3 copies) should be addressed to: Trudy Wood, U.S. 
Department of Energy, Office of Procurement and Assistance Management, 
MA-51, 1000 Independence Avenue, SW., Washington, DC 20585.
    If possible a copy should also be E-mailed to [email protected].

FOR FURTHER INFORMATION CONTACT: Ms. Trudy Wood, Office of Procurement 
and Assistance Policy, Department of Energy, at (202) 586-5625.

SUPPLEMENTARY INFORMATION:

I. Background

    Currently, DOE is engaged in the Government-wide effort to 
streamline and simplify the application, administrative, and reporting 
procedures for Federal financial assistance programs pursuant to Public 
Law 106-107, the Federal Financial Assistance Management Improvement 
Act of 1999 (henceforth ``the Act''). As part of its initiative to 
consult with non-Federal entities, the Department solicited comments 
and suggestions from the grant community. In response, DOE received 
comments from for-profit organizations relating to issues that were 
unique to DOE and that were not being addressed in the Government-wide 
effort to implement the Act. Therefore, DOE is considering creating a 
new subpart to 10 CFR part 600 that contains administrative 
requirements for grants and cooperative agreements that are tailored to 
for-profit organizations with the goal of eliminating barriers which 
prevent these organizations from participating in the Department's 
financial assistance programs.

II. Current Regulations

    The DOE assistance regulations are contained in 10 CFR part 600. As 
a matter of discretion, these regulations provide that the Office of 
Management and Budget (OMB) administrative requirements for grants and 
cooperative agreements with institutions of higher education, 
hospitals, and other non-profit organizations also apply to for-profit 
organizations.

III. Rulemaking Under Consideration

    DOE is considering initiating a rulemaking that provides 
administrative requirements for grants and cooperative agreements that 
are specifically tailored to for-profit organizations. The changes 
under consideration would: (1) eliminate unnecessary requirements; and 
(2) maximize the effectiveness with which the Department's financial 
assistance programs support the accomplishment of their purposes, 
consistent with good stewardship of public funds and statutory 
requirements.

IV. Proposed Changes

    DOE is considering the following major changes to 10 CFR part 600:
    1. Create a new subpart that provides administrative requirements 
for grants and cooperative agreements that are specifically tailored to 
for-profit organizations, similar to the Department of Defense Grant 
and Agreement Regulations, 32 CFR part 34, Administrative Requirements 
for Grants and Agreements with For-Profit Organizations. Among other 
things, the new subpart would allow DOE to apply less restrictive 
requirements to small awards and to awards made pursuant to the Small 
Business Innovation Research or Small Business Technology Transfer 
Research programs.
    2. Eliminate the requirement for incorporation of the following 
intellectual property clauses in awards with for-profit organizations:

    a. FAR 52.227-1 Authorization and Consent
    b. FAR 52.227.2 Notice and Assistance Regarding Patent and 
Copyright Infringement
    c. FAR 52.227-3 Patent Indemnity
    d. FAR 52.227-23 Rights in Proposal Data

    3. Revise the Rights in Data and Patent Rights Provisions for 
financial assistance awards with large for-profit organizations. The 
new provisions would incorporate the following changes:
    a. Eliminate DOE's routine use of clauses that grant to DOE the 
right to require recipients, under certain circumstances, to license 
background data and patents to third parties, to assure 
commercialization (see DEAR 952.227-13(k) and 952.227-14). DOE would 
require such third party licensing rights only when it is necessary to 
satisfy the needs of the program; and
    b. Eliminate the requirement that the recipient obtain the 
Contracting Officer's approval prior to copyrighting computer software 
developed under the assistance award.
    4. Simplify the advanced patent waiver petition process by making 
advanced waiver approval automatic if the awardee agrees to the 
conditions specified in the solicitation. This simplified process would 
eliminate the detailed 20 question waiver petition. The conditions 
specified in the solicitation would include:
    a. Providing a one paragraph summary of a business plan for 
commercializing the technology;
    b. Non-Federal cost sharing of at least 20 percent to establish a 
corporate commitment to commercializing the technology;
    c. Agreement to statutory requirements attaching to the subject 
inventions, such as subject invention disclosure to DOE, Government 
purpose license rights, march-in rights, and a preference for United 
States industries; and
    d. A U.S. competitiveness requirement dealing with substantial 
manufacturing in the U.S.
    5. Simplify the financial and program management requirements by:
    a. Encouraging recipients to use existing financial management 
systems

[[Page 23198]]

established for conducting business in the commercial marketplace to 
the extent that the systems comply with Generally Accepted Accounting 
Practices (GAAP) and certain minimum standards (i.e., effective control 
of funds, accurate records that document the source and application of 
the Federal funds and the recipient's required cost share, and a system 
to support charges to Federal awards for salaries and wages);
    b. Establishing a preference for the reimbursement method of 
payment; and
    c. Requiring recipients that expend $300,000 or more in a year 
under Federal awards to have an audit for that year by an independent 
auditor. The audit generally would be made a part of the regularly 
scheduled, annual audit of the recipient's financial statements.
    6. Clarify and simplify the property standards. The revised 
property standards would encourage recipients to use existing property 
management systems to the extent that the systems meet certain minimum 
requirements.
    7. Significantly reduce requirements imposed on recipient 
procurement activities in favor of best commercial practices. DOE is 
considering establishing minimum procurement requirements, such as:
    a. Requiring recipients' procurement procedures to use effective 
competition techniques or other means that ensure reasonable cost for 
procured goods and services;
    b. Requiring pre-award review of procurements only when the 
contracting officer judges that there is a compelling need to do so and 
then only if a provision in the award states the requirement; and
    c. Encourage the use of best commercial practices in the 
procurement of commercial items.

    Issued in Washington, D.C. on April 30, 2001.
Richard H. Hopf,
Acting Director, Office of Management and Administration, U.S. 
Department of Energy.
[FR Doc. 01-11519 Filed 5-7-01; 8:45 am]
BILLING CODE 6450-01-P