[Federal Register Volume 67, Number 165 (Monday, August 26, 2002)]
[Proposed Rules]
[Pages 54850-54875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20967]



[[Page 54849]]

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

Part II





Department of Energy





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



10 CFR Part 600



Financial Assistance Regulations; Proposed Rule

  Federal Register / Vol. 67, No. 165 / Monday, August 26, 2002 / 
Proposed Rules  

[[Page 54850]]


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

DEPARTMENT OF ENERGY

10 CFR Part 600

RIN 1991-AB57


Financial Assistance Regulations

AGENCY: Department of Energy.

ACTION: Notice of proposed rulemaking and opportunity for public 
comment.

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

SUMMARY: The Department of Energy (DOE) proposes adding a new subpart 
to the DOE Assistance Regulations, making minor amendments to existing 
subparts to reflect this change, and eliminating a section that 
contains internal procedures for DOE officials or requirements that are 
contained in other sections. The new subpart would establish new 
administrative requirements that are specifically tailored for awards 
to for-profit organizations and eliminate the need to apply existing 
uniform administrative requirements for awards with institutions of 
higher education, hospitals, and other nonprofit organizations to 
awards with for-profit organizations.

DATES: Written comments must be received by October 25, 2002.

ADDRESSES: Comments (3 copies) should be addressed to: Trudy Wood, U.S. 
Department of Energy, Office of Procurement and Assistance Management, 
ME-61, 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
II. Comments and Responses
III. Discussion of Rule Provisions
IV. Procedural Requirements
    A. Review Under Executive Order 12866
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 13211
V. Approval of the Secretary of Energy

I. Background

    Office of Management and Budget (OMB) Circular A-110 provides 
standards for the administration of grants and agreements with 
institutions of higher education, hospitals, and other nonprofit 
organizations. OMB Circular A-110 also states that ``Federal agencies 
may apply the provisions of this Circular to commercial organizations * 
* *.'' Consistent with this guidance, when DOE implemented the 
requirements of Circular A-110 in its financial assistance regulations 
at 10 CFR part 600, subpart B, the Department, as a matter of 
discretion, also applied the provisions of the Circular to commercial 
organizations.
    DOE has been actively 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, Federal Financial Assistance Management Improvement Act of 
1999 (``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. In 
response to these comments, DOE published a notice in the Federal 
Register on May 8, 2001 (66 FR 23197) requesting comments on whether 
DOE should initiate a rulemaking that established administrative 
requirements for financial assistance awards tailored specifically to 
for-profit organizations. The notice also requested comments on the 
specific changes proposed. DOE received three sets of comments and 
questions on the proposed initiative. The respondents strongly endorsed 
the concept of administrative requirements specifically tailored to 
for-profit organizations.
    Today DOE is proposing to add a new subpart D containing provisions 
similar to subpart B but that have been tailored specifically for 
awards to for-profits organizations. If subpart D is promulgated as a 
final rule, for-profit organizations subject to subpart D would be 
relieved of obligations that would otherwise apply under subpart B. The 
provisions of subpart B would continue to apply to institutions of 
higher education, hospitals, and other nonprofit organizations.

II. Comments and Responses

    This section presents a summary of the major comments and explains 
how DOE addressed the comments in drafting this proposed rule. DOE 
received one comment concerning intellectual property rights under 
Cooperative Research and Development Agreements (CRADAs). CRADAs are 
not financial assistance instruments and are not included in this 
rulemaking. This comment was provided to the Assistant General Counsel 
for Technology Transfer and Intellectual Property for his 
consideration. All other comments were considered in developing this 
proposed rule.
    Comment: The Federal Register notice stated that the new subpart 
would allow DOE to apply less restrictive requirements to small awards. 
DOE should define small to include any award yielding less than $1 
million a year to an individual company.
    Response: The new subpart does not address less restrictive 
requirements for small awards, since subpart A, Sec. 600.29, already 
contains less restrictive requirements for fixed obligation awards, 
which are small awards that may not exceed $100,000. These requirements 
apply to both nonprofit and for-profit organizations.
    Comment: What is meant by certain minimum standards for financial 
management systems?
    Response: Proposed Sec. 600.311 would provide the minimum standards 
for financial management systems, which include: (1) Effective control 
of all funds; (2) accurate, current and complete records that document 
the source and application of funds; (3) to the extent that advance 
payments are authorized, procedures that minimize the time elapsing 
between the transfer of Federal funds to the recipient and the 
recipient's disbursement of these funds; and (4) a system to support 
charges for salaries and wages, whether treated as direct or indirect 
costs.
    Comment: The Notice said that DOE would require a recipient that 
expended $300,000 or more in a year under a Federal award to have an 
audit. DOE should increase the trigger level for audit to $1 million 
per year.
    Response: We agree that the trigger level should be increased. The 
proposed Sec. 600.316, paragraph (a), would require that any recipient 
that expends $500,000 or more in a year under Federal awards have an 
audit made for that year by an independent auditor. DOE would consider 
raising the trigger level to $1 million, if comments to the proposed 
rule provide justification for such an increase.
    Comment: Will audit costs be allowable?
    Response: Yes. Proposed Sec. 600.316, paragraph (f), states that 
audit costs (including a reasonable allocation of the costs of the 
audit of the recipient's

[[Page 54851]]

financial statement, based on the relative benefit to the Government 
and the recipient) are allowable costs of DOE awards.
    Comment: Will the DOE cost principles remain a requirement?
    Response: Yes. Proposed Sec. 600.317 provides for the use of cost 
principles that are applicable to the type of entity incurring the 
costs.
    Comment: The new subpart should clarify the property standards. 
Would ISO9000 certification be deemed adequate compliance in property 
management?
    Response: Proposed Sec. 600.323 would contain the requirements for 
the recipient's property management system. Even if the recipient has 
an ISO9000 certification, it would have to comply with all the 
requirements in Sec. 600.323.
    Comment: DOE should not eliminate certain Intellectual Property 
clauses, namely FAR 52.227-1 Authorization and Consent, with its 
Alternate I, and FAR 52.227-2 Notice of Assistance Regarding Patent and 
Copyright Infringement. Immunity from a claim of patent infringement 
actually eliminates a barrier preventing for-profit organizations from 
participating in the DOE's financial assistance programs.
    Response: This proposed rule would eliminate the routine use of 
these clauses in for-profit and nonprofit research and development 
(R&D) financial assistance agreements because the work performed by the 
recipient is undertaken to carry out a public purpose of support or 
stimulation to an essentially private R&D program rather than to 
acquire property or services for the direct benefit or use of the 
Government. DOE is currently the only agency that routinely includes 
these FAR clauses in its R&D financial assistance agreements. However, 
if the circumstances warrant, the proposed rule would permit DOE to 
determine, on a case-by-case basis, that it would be advantageous to 
the public and the DOE mission to include these clauses.
    Comment: Will the revisions to Rights in Data and Patent Rights 
provisions eliminate DOE's requirement for both background data and 
patent rights of commercial organizations? What certain circumstances 
would prevail for DOE to require recipients to license data or patents 
to third parties?
    Response: Proposed Sec. 600.325 would eliminate DOE's routine use 
of background data and patent provisions, which could, in very rare, 
limited circumstances, require a recipient to license its background 
patents or data to third parties on reasonable terms. DOE would include 
a provision that may require such third party licensing rights only if 
it is necessary to provide heightened assurance of commercialization to 
satisfy the needs of the program.
    Comment: What is DOE's intent regarding U.S. competitiveness 
dealing with substantial manufacturing in the U.S.?
    Response: This rule does not change DOE's policy regarding U.S. 
competitiveness, which is primarily effected through application of the 
patent waiver regulations contained in 10 CFR part 784.
    Comment: DOE should clarify the applicability of ``procurement 
procedures'' and define ``effective competition techniques.''
    Response: Proposed Sec. 600.331 would contain the requirements for 
procurements. Recipients would be obliged to use best commercial 
practices to ensure reasonable cost. The standard is reasonable cost. 
Proposed subpart D does not use the term ``effective competition 
techniques.''

III. Discussion of Rule Provisions

    Proposed subpart D establishes separate administrative requirements 
for grants and cooperative agreements with for-profit organizations. In 
drafting proposed subpart D, DOE reviewed subpart B and tailored its 
requirements by eliminating those applicable to nonprofit organizations 
that are not necessary for financial assistance to for-profit 
organizations. These requirements were not imposed on for-profit 
organizations by Federal statutes, government-wide regulations, or 
executive orders and are not required for proper stewardship of Federal 
funds or accomplishment of DOE mission involving for-profit 
organizations. Proposed subpart D is similar to the Department of 
Defense Grant and Agreements Regulations, 32 CFR part 34, 
Administrative Requirements for Grants and Agreements with For-Profit 
Organizations.
    1. Proposed Sec. 600.302 of subpart D would tailor the definitions 
in subpart B for the specific requirements of subpart D. In some cases, 
the terms are defined differently than they are in other parts of the 
DOE Financial Assistance Rules.
    2. Proposed subpart D would simplify the financial and program 
management requirements as compared to existing requirements under 
subpart B. These requirements would differ from the subpart B 
requirements in that they:
    a. Encourage recipients to use existing financial management 
systems established for doing business in the commercial marketplace to 
the extent that the systems comply with Generally Accepted Accounting 
Principles (GAAP) and certain minimum standards that are contained in 
Sec. 600.311;
    b. Establish a preference for the reimbursement method of payment 
(Sec. 600.312); and
    c. Require recipients that expend $500,000 or more in a year under 
Federal awards to have an audit for that year by an independent auditor 
(Sec. 600.316). The audit generally would be made a part of the 
regularly scheduled, annual audit of the recipient's financial 
statements. DOE selected the $500,000 threshold because OMB is 
considering raising the single audit threshold from $300,000 to 
$500,000. DOE would consider further increasing this threshold up to $1 
million if comments received in response to this proposed rule provided 
adequate justification for such an increase.
    3. Proposed subpart D would clarify and simplify the property 
requirements. The revised property standards would encourage recipients 
to use existing property management systems to the extent that the 
systems meet certain minimum standards contained in Secs. 600.321 
through 600.325.
    4. Proposed subpart D would simplify and clarify the patent and 
data requirements. Proposed Sec. 600.325 would contain the requirements 
for intellectual property developed or produced under an award with a 
for-profit organization. When title to inventions made by recipients 
under DOE awards would normally vest in the United States, such as 
arrangements with for-profit organizations other than small business 
firms, proposed subpart D would maintain the statutorily-based policy 
that DOE may waive all or any part of the invention rights of the 
United States. In accordance with the policies and procedures in 10 CFR 
part 784, virtually all such waiver requests are granted if there is 
sufficient cost-sharing and agreement on appropriate terms and 
conditions.
    Currently, DOE uses the Federal Acquisition Regulation (FAR) and 
the Department of Energy Acquisition Regulation (DEAR) patent and data 
clauses in its financial assistance agreements. These clauses were 
developed primarily for contracts that provide property or services for 
the direct benefit or use by the Government. In proposed subpart D, the 
existing FAR and DEAR patent and data clauses have been tailored 
specifically for financial assistance awards with for-profit 
organizations and are contained in Appendix A to subpart D.

[[Page 54852]]

    Proposed Sec. 600.325 and the standard patent and data provisions 
in Appendix A would eliminate the following requirements that may be 
appropriate for contracts, but are not generally needed in financial 
assistance awards:
    a. DOE's routine use of background data and patent provisions that, 
for example, 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 provide heightened assurance of 
commercialization to satisfy the needs of the program.
    b. The requirement that the recipient always obtain the Contracting 
Officer's approval prior to copyrighting computer software developed 
under the assistance award. DOE would require such prior approval only 
in special circumstances, for example, when software is a required 
deliverable under an award. In addition, in order to satisfy DOE 
programmatic needs, DOE may specify in certain circumstances, such as 
the human genome project, that copyrighted software developed under DOE 
sponsorship be treated as ``open-source'' software. DOE specifically 
invites public comment on the treatment of copyrighted software as 
``open-source'' software.
    c. DOE's routine use of a provision authorizing and consenting to 
the use of a patented invention in the performance of the award, since 
the work performed by a recipient is undertaken to carry out a public 
purpose of support or stimulation to an essentially private research 
and development program rather than to acquire property or services for 
the direct benefit or use of the Government. However, if the 
circumstances warrant, such as awards for research relating to homeland 
security, DOE may determine, on a case-by-case basis, that it would be 
advantageous to the public and the DOE mission to include this clause. 
The public is specifically invited to comment on whether an 
authorization and consent provision should be included in an assistance 
award and to provide justification for this recommendation.
    5. Proposed subpart D would significantly reduce requirements 
imposed on recipient procurement activities. The rule eliminates the 
existing requirements for codes of conduct, written procurement 
procedures that provide for certain requirements, and procurement 
records that would otherwise apply under subpart B. Instead, proposed 
Sec. 600.331 requires:
    a. Recipients' procurement procedures use best commercial practices 
to ensure reasonable cost for procured goods and services. Recipients 
are also encouraged to buy commercial items, when practicable.
    b. Pre-award review of procurements only in exceptional cases where 
the contracting officer determines that there is a compelling need to 
perform such a review and a provision in the award states the 
requirement.
    c. Contracts in excess of the simplified acquisition threshold 
(currently $100,000) contain certain contractual provisions that allow 
for administrative, contractual, or legal remedies in instances in 
which a contractor violates the contract terms.
    d. All contracts contain the provisions of Appendix B to subpart D, 
as applicable. This appendix is similar to Appendix A of subpart B in 
all substantive aspects.
    The following table will assist you in locating and comparing the 
requirements applicable to for-profit organizations in the existing 
subpart B and the proposed subpart D.

------------------------------------------------------------------------
   Existing 10 CFR part 600 subpart B     Corresponding proposed 10 CFR
 applicable to for-profit organizations   part 600 subpart D applicable
----------------------------------------   to for-profit organizations
                                        --------------------------------
                  Sec.                                 Sec.
------------------------------------------------------------------------
600.100  Purpose.......................  600.301  Purpose.
600.101  Definitions...................  600.302  Definitions.
600.102  Effect on other issuances.....  No corresponding section.
600.103  Deviations....................  600.303  Deviations.
600.104  Subawards.....................  600.301  Purpose.
Pre-Award Requirements
600.110  Purpose.......................  No corresponding section.
600.111  Pre-award Policies............  No corresponding section.
600.112  Forms for applying for Federal  No corresponding section.
 assistance.
600.113  Debarment and suspension......  600.305 Debarment and
                                          suspension.
600.114  Special award/conditions......  600.304  Special award
                                          conditions.
600.115  Metric system of measurement..  600.306  Metric system of
                                          measurement.
600.116  Conservation and Recovery Act.  No corresponding section.
600.117  Certifications and              No corresponding section.
 representations.
Financial and Program Management         Financial and Program
                                          Management
600.120  Purpose of financial and        600.310  Purpose of financial
 program management.                      and program management.
600.121  Standards for financial         600.311  Standards for
 management systems.                      financial management systems.
600.122  Payment.......................  600.312  Payment.
600.123  Cost sharing or matching......  600.313  Cost sharing or
                                          matching.
600.124  Program income................  600.314  Program income.
600.125  Revision of budget and program  600.315  Revision of budget and
 plans.                                   program plans.
600.126  Non-Federal Audits............  600.316  Audits.
600.127  Allowable costs...............  600.317  Allowable costs and
                                          600.318 Fee and profit.
600.128  Period of availability of       No corresponding section.
 funds.
Property Standards                       Property Standards
600.130  Purpose of property standards.  600.320  Purpose of property
                                          standards.
600.131  Insurance coverage............  No corresponding section.
600.131  Real property.................  600.321  Real property and
                                          equipment.
600.133  Federally-owned and exempt      600.322  Federally owned
 property.                                property.
600.134  Equipment.....................  600.321  Real property and
                                          equipment and
                                         600.323  Property management
                                          system.
600.135  Supplies and other expendable   600.324  Supplies.
 property.
600.136  Intangible property...........  600.325  Intellectual property.

[[Page 54853]]

 
600.137  Property trust relationship...  No corresponding section.
Procurement Standards                    Procurement Standards
600.140  Purpose of procurement          600.330  Purpose of procurement
 standards.                               standards.
600.141  Recipient responsibilities....  600.331  Requirements.
600.142  Codes of conduct..............  No corresponding section.
600.143  Competition...................  No corresponding section.
600.144  Procurement Procedures........  600.331  Requirements.
600.145  Cost and price analysis.......  No corresponding section.
600.146  Procurement records...........  No corresponding section.
600.147  Contract administration.......  No corresponding section.
600.148  Contract provisions...........  600.331 Requirements.
600.149  Resources Conservation and      No corresponding section.
 Recovery Act (RCRA).
Reports and Records                      Reports and Records
600.150  Purpose of reports and records  600.340  Purpose of reports and
                                          records.
600.151  Monitoring and reporting        600.341  Monitoring and
 program performance.                     reporting program performance
                                          and financial performance.
600.152  Financial reporting...........  600.341  Monitoring and
                                          reporting program and
                                          financial performance.
600.153  Retention and access            600.342  Retention and access
 requirements for records.                requirements for records.
Termination and Enforcement              Termination and Enforcement
600.160  Purpose of termination and      600.350  Purpose of termination
 enforcement.                             and enforcement.
600.161  Termination...................  600.351  Termination.
600.162  Enforcement...................  600.352  Enforcement.
After-the-Award Requirements             After-the-Award Requirements
600.170  Purpose.......................  600.360  Purpose.
600.171  Closeout procedures...........  600.361  Closeout procedures.
600.172  Subsequent adjustments and      600.362  Subsequent adjustments
 continuing responsibilities.             and continuing
                                          responsibilities.
600.173  Collection of amounts due.....  600.363  Collection of amounts
                                          due.
Additional Provisions                    Additional Provisions
600.180  Purpose.......................  600.380  Purpose.
600.181  Special provisions for Small    600.381 Special provisions for
 Business Innovation Research Grants.     Small Business Innovation
                                          Research Grants.
APPENDIX A TO SUBPART B TO PART 600--    APPENDIX B TO SUBPART D TO PART
 CONTRACT PROVISIONS.                     600--CONTRACT PROVISIONS.
No corresponding section...............  APPENDIX A TO SUBPART D TO PART
                                          600--PATENT AND DATA RIGHTS
                                          PROVISIONS.
------------------------------------------------------------------------

    The proposed rule also would make the following amendments to 
existing subparts A and B:
    1. In Sec. 600.15, we would delete paragraphs (b)(4) and (5) as 
part of our effort to eliminate unnecessary patent and data 
requirements in financial assistance awards.
    2. Section 600.27 Patent and data provisions would be removed 
because the provisions are obsolete or contain internal procedures that 
are more appropriately addressed in internal guidance. Patent and data 
requirements are contained in the appropriate administrative 
requirements subpart. References to Sec. 600.27 would also be removed 
in Secs. 600.3, 600.4, and 600.136.
    3. In subpart B, we would revise the subpart title to delete ``and 
Commercial Organizations''. Subpart B would contain requirements 
applicable only to institutions of higher education, hospitals, and 
other nonprofit organizations.
    4. In Sec. 600.100, we would delete the references to commercial 
organizations, since administrative requirements for awards with for-
profit organizations will be contained in subpart D.
    5. In Sec. 600.104, we would delete the reference to commercial 
organizations and add a new subaward requirement for subrecipients that 
are for-profit organizations to reflect the new subpart D requirements.
    6. In Sec. 600.126, we would revise paragraph (c) to reflect the 
new audit requirements in subpart D and delete paragraphs (d) and (e).
    7. In Sec. 600.127, we would amend paragraph (c) to delete the 
reference to Small Business Innovation Research (SBIR) recipients, 
since SBIR recipients are for-profit organizations.
    8. In Sec. 600.136 Intangible property, we would revise paragraphs 
(a) and (e) to delete ``that are institutions of higher education, 
hospitals, and other nonprofit organizations'', delete paragraph (c) 
(3), and make paragraph (b) read the same as Sec. ----.36 in OMB 
Circular A-110, since this section applies only to institutions of 
higher education, hospitals, and other nonprofit organizations.
    9. Sections 600.180 and 600.181 would be removed from subpart B. 
Recipients of Small Business Innovation Research grants are for-profit 
organizations and would be covered by subpart D. Sections 600.180 and 
600.181 have been revised to conform to subpart D and today are 
proposed as Secs. 600.380 and 600.381.

IV. Procedural Requirements

A. Review Under Executive Order 12866

    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, this action is not subject to review under that Executive 
Order by the Office of Information and Regulatory Affairs of the Office 
of Management and Budget (OMB).

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant

[[Page 54854]]

economic impact on a substantial number of small entities. Because DOE 
is not required by the Administrative Procedure Act (5 U.S.C. 553) or 
any other law to propose financial assistance rules for public comment, 
DOE did not prepare a regulatory flexibility analysis for this rule.

C. Review Under the Paperwork Reduction Act

    This regulatory action will not impose any new reporting or record 
keeping requirements under the Paperwork Reduction Act. Reporting and 
record keeping requirements in subpart D have been previously cleared 
under Office of Management and Budget Paperwork Clearance Package 
Numbers 1910-0400 and 1910-0800 or are those promulgated by OMB 
Circular A-110, which the Office of Management and Budget proposed in 
August 1992 (57 FR 39018), asking for public comments, and finalized in 
November 1993 (58 FR 62992). No new collection of information is 
imposed by this proposed rule.

D. Review Under the National Environmental Policy Act

    DOE has concluded that promulgation of this rule falls into a class 
of actions that would not individually or cumulatively have a 
significant impact on the human environment, as determined by DOE's 
regulations implementing the National Environmental Policy Act of 1969 
(42 U.S.C. 4321 et seq.). Specifically, this rule deals only with 
agency procedures, and, therefore, is covered under the Categorical 
Exclusion in paragraph A6 to subpart D, 10 CFR part 1021. Accordingly, 
neither an environmental assessment nor an environmental impact 
statement is required.

E. Review Under Executive Order 13132

    Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain 
requirements on agencies formulating and implementing policies or 
regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. DOE has examined today's proposed rule and 
has determined that it does not preempt State law and does not have a 
substantial direct effect on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government. No further 
action is required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on 
Federal agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. Section 3(b) of Executive 
Order 12988 specifically requires that Executive agencies make every 
reasonable effort to ensure that the regulation: (1) Clearly specifies 
the preemptive effect, if any; (2) clearly specifies any effect on 
existing Federal law or regulation; (3) provides a clear legal standard 
for affected conduct while promoting simplification and burden 
reduction; (4) specifies the retroactive effect, if any; (5) adequately 
defines key terms; and (6) addresses other important issues affecting 
clarity and general draftsmanship under any guidelines issued by the 
Attorney General. Section 3(c) of Executive Order 12988 requires 
Executive agencies to review regulations in light of applicable 
standards in section 3(a) and section 3(b) to determine whether they 
are met or it is unreasonable to meet one or more of them. DOE has 
completed the required review and determined that, to the extent 
permitted by law, this proposed rule meets the relevant standards of 
Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to assess the effects of a Federal 
regulatory action on State, local, and tribal governments, and the 
private sector. The Department has determined that today's regulatory 
action does not impose a Federal mandate on State, local or tribal 
governments or on the private sector.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a 
Family Policymaking Assessment for any proposed rule that may affect 
family well-being. This rulemaking does not have any impact on the 
autonomy or integrity of the family as an institution. Accordingly, DOE 
has concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

I. Review Under Executive Order 13211

    Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use, (66 FR 28355, 
May 22, 2001) requires Federal agencies to prepare and submit to the 
Office of Information and Regulatory Affairs (OIRA), Office of 
Management and Budget, a Statement of Energy Effects for any proposed 
significant energy action. A ``significant energy action'' is defined 
as any action by an agency that promulgated or is expected to lead to 
promulgation of a final rule, and that: (1) Is a significant regulatory 
action under Executive Order 12866, or any successor order; and (2) is 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy, or (3) is designated by the 
Administrator of OIRA as a significant energy action. For any proposed 
significant energy action, the agency must give a detailed statement of 
any adverse effects on energy supply, distribution, or use should the 
proposal be implemented, and of reasonable alternatives to the action 
and their expected benefits on energy supply, distribution, and use. 
Today's regulatory action is not a significant energy action. 
Accordingly, DOE has not prepared a Statement of Energy Effects.

V. Approval of the Office of the Secretary of Energy

    The Office of the Secretary has approved the issuance of this 
notice of proposed rulemaking.

List of Subjects in 10 CFR Part 600

    Administrative practice and procedure.

    Issued in Washington, DC, on August 9, 2002.
Richard H. Hopf,
Director, Office of Procurement and Assistance Management, Department 
of Energy.

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

PART 600--FINANCIAL ASSISTANCE RULES

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

    Authority: 42 U.S.C. 7101 et seq; 31 U.S.C. 6301-6308; 50 U.S.C. 
2401 et seq. unless otherwise noted.


[[Page 54855]]


    2. Section 600.3 is amended by revising the definition of nonprofit 
organization to read as follows:


Sec. 600.3  Definitions

* * * * *
    Nonprofit organization means any corporation, trust, foundation, or 
institution which is entitled to exemption under section 501(c)(3) of 
the Internal Revenue Code, or which is not organized for profit and no 
part of the net earnings of which inure to the benefit of any private 
shareholder or individual (except that the definition of ``nonprofit 
organization'' at 48 CFR 27.301 shall apply for patent matters set 
forth at Secs. 600.136 and 600.325).
* * * * *


Sec. 600.4  [Amended]

    3. Section 600.4 is amended as follows:
    a. Paragraph (a)(1), the last sentence is amended by removing ``or 
the patent requirements of Sec. 600.27.''
    b. Paragraph (c)(2)(i), the last sentence is removed.
    c. Paragraph (c)(2)(ii), the last sentence is removed.


Sec. 600.15  [Amended]

    4. Section 600.15 is amended by removing paragraphs (b)(4) and (5).


Sec. 600.27  [Removed and Reserved]

    5. Section 600.27 is removed and reserved.
    6. The title of subpart B is revised to read as follows:

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


Sec. 600.100  [Amended]

    7. Section 600.100 is amended by removing ``and commercial'' in the 
first and second sentences.


Sec. 600.104  [Amended]

    8. Section 600.104 is amended by removing ``or commercial'' in the 
first sentence and by adding a sentence at the end of the paragraph to 
read as follows:


Sec. 600.104  Subawards.

    * * * For-profit subrecipients are subject to the provisions of 10 
CFR part 600, subpart D, Administrative Requirements for Grants and 
Cooperative Agreements with For-Profit Organizations.
    9. Section 600.126 is amended by removing paragraphs (d) and (e) 
and revising paragraph (c) to read as follows:


Sec. 600.126  Non-Federal audits.

* * * * *
    (c) For-profit organizations that are subrecipients are subject to 
the audit requirements specified in 10 CFR 600.316.


Sec. 600.127  [Amended]

    10. Section 600.127 is amended in paragraph (c) by removing 
``except for SBIR recipients as provided in Sec. 600.181(d)(3).''
    11. Section 600.136 is amended as follows:
    a. Paragraph (a), the first sentence is amended by removing ``that 
are institutions of higher education, hospitals, and other nonprofit 
organizations,''.
    b. Paragraph (b) is revised.
    c. Paragraph (d)(3) is removed.
    d. Paragraph (e), the first sentence is amended by removing ``For 
recipients that are institutions of higher education, hospitals, and 
other nonprofit organizations.''
    The revisions read as follows:


Sec. 600.136  Intangible property.

* * * * *
    (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.''
* * * * *


Secs. 600.180-600.181  [Removed and Reserved]

    12. Sections 600.180 and 600.181 are removed.
    13. Subpart D is added in part 600 to read as follows:

Subpart D--Uniform Administrative Requirements for Grants and 
Cooperative Agreements With For-Profit Organizations.

Sec.

General

600.301   Purpose.
600.302   Definitions.
600.303   Deviations.
600.304   Special award conditions.
600.305   Debarment and suspension.
600.306   Metric system of measurement.

Post-Award Requirements

Financial and Program Management

600.310   Purpose of financial and program management.
600.311   Standards for financial management systems.
600.312   Payment.
600.313   Cost sharing or matching.
600.314   Program income.
600.315   Revision of budget and program plans.
600.316   Audits.
600.317   Allowable costs.
600.318   Fee and profit.

Property Standards

600.320   Purpose of property standards.
600.321   Real property and equipment.
600.322   Federally owned property.
600.323   Property management system.
600.324   Supplies.
600.325   Intellectual property.

Procurement Standards

600.330   Purpose of procurement standards.
600.331   Requirements.

Reports and Records

600.340   Purpose of reports and records.
600.341   Monitoring and reporting program and financial 
performance.
600.342   Retention and access requirements for records.

Termination and Enforcement

600.350   Purpose of termination and enforcement.
600.351   Termination.
600.352   Enforcement.
600.353   Disputes and appeals.

After-the-Award Requirements

600.360   Purpose.
600.361   Closeout procedures.
600.362   Subsequent adjustments and continuing responsibilities.
600.363   Collection of amounts due.

Additional Provisions

600.380   Purpose.
600.381   Special provisions for Small Business Innovation Research 
Grants.

Appendix A to Subpart D to Part 600--Patent and Data Rights Provisions

Appendix B to Subpart D to Part 600--Contract Provisions

Subpart D--Administrative Requirements for Grants and Cooperative 
Agreements With For-Profit Organizations

General


Sec. 600.301  Purpose.

    (a) This subpart prescribes administrative requirements for awards 
to for-profit organizations.
    (b) Applicability to prime awards and subawards is as follows:
    (1) Prime awards. DOE contracting officers must apply the 
provisions of this part to awards to for-profit organizations. 
Contracting officers must not impose requirements that are in addition 
to, or inconsistent with, the requirements provided in this part, 
except:
    (i) In accordance with the deviation procedures or special award 
conditions

[[Page 54856]]

in Sec. 600.303 or Sec. 600.304, respectively; or
    (ii) As required by Federal statute, Executive order, or Federal 
regulation implementing a statute or Executive order.
    (2) Subawards. (i) Any legal entity (including any State, local 
government, university or other nonprofit organization, as well as any 
for-profit entity) that receives an award from DOE must apply the 
provisions of this part to subawards with for-profit organizations.
    (ii) For-profit organizations that receive prime awards covered by 
this part must apply to each subaward the administrative requirements 
that are applicable to the particular type of subrecipient (e.g., 10 
CFR part 600, subpart B, contains requirements for institutions of 
higher education, hospitals, or other nonprofit organizations and 10 
CFR part 600, subpart C, specifies requirements for subrecipients that 
are States or local governments).


Sec. 600.302  Definitions.

    In addition to the definitions used in subpart A of this part, the 
following are definitions of terms as used in this part:
    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.
    Applied research means efforts that seek to determine and exploit 
the potential of scientific discoveries or improvements in technology, 
and is directed toward the development of new materials, devices, 
methods, and processes.
    Basic research means efforts directed solely toward increasing 
knowledge or understanding in science and engineering.
    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.
    Cost sharing or matching means that portion of project or program 
costs not borne by the Federal Government.
    Demonstration means a project designed to determine the technical 
feasibility and economic potential of a technology on either a pilot 
plant or a prototype scale.
    Development means efforts to create or advance new technology or 
demonstrate the viability of applying existing technology to new 
products and processes.
    Disallowed costs means those charges to an award that the DOE 
contracting officer determines to be unallowable, in accordance with 
the applicable Federal cost principles or other terms and conditions 
contained in the award.
    DOE means the Department of Energy, including the National Nuclear 
Security Administration (NNSA).
    Equipment means tangible, nonexpendable personal property charged 
directly to the award having a useful life of more than one year and an 
acquisition cost of $5,000 or more per unit.
    Excess property means property under the control of any DOE 
Headquarters or field office that, as determined by the head thereof, 
is no longer required for its needs or the discharge of its 
responsibilities.
    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.
    Federally owned property means property in the possession of, or 
directly acquired by, the Government and subsequently made available to 
the recipient.
    Funding period means the period of time when Federal funding is 
available for obligation by the recipient.
    Incremental Funding means a method of funding a grant or 
cooperative agreement where the funds initially obligated to the award 
are less than the total amount of the award, and DOE anticipates making 
additional obligations of funds when appropriated funds become 
available.
    Obligations means the amount 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 for 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:
    (1) Tangible, having physical existence (i.e., equipment and 
supplies); or
    (2) Intangible, having no physical existence, such as patents, 
copyrights, data, and software.
    Prior approval means written or electronic approval by an 
authorized official 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. Program income includes, but is not limited to, income from fees 
for services performed, the use or rental of real or personal property 
acquired under federally-funded projects, the sale of commodities or 
items fabricated under an award, license fees and royalties on patents 
and copyrights, and interest on loans made with award funds. Interest 
earned on advances of Federal funds is not program income. Except as 
otherwise provided in program regulations or the terms and conditions 
of the award, program income does not include the receipt of principal 
on loans, rebates, credits, discounts, etc., or interest earned on any 
of them.
    Project costs 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.
    Property means real property and personal property (equipment, 
supplies, and intellectual property), unless otherwise stated.
    Real property means land, including land improvements, structures 
and appurtenances thereto, but excludes movable machinery and 
equipment.
    Small award means an award not exceeding the simplified acquisition 
threshold fixed at 41 U.S.C. 403(11) (currently $100,000).
    Small business concern means a small business as defined at section 
2 of Public Law 85-536 (16 U.S.C. 632) and the implementing regulations 
of the Administrator of the Small Business Administration. The criteria 
and size standards for small business concerns are contained in 13 CFR 
part 121.
    Subaward means financial assistance in the form of money, or 
property in lieu

[[Page 54857]]

of money, provided under an award by a recipient to an eligible 
subrecipient or by a subrecipient to a lower tier subrecipient. The 
term includes financial assistance when provided by any legal 
agreement, even if the agreement is called a contract, but the term 
does not include procurement of goods and services or any form of 
assistance which is not included in the definition of ``award'' in this 
part.
    Subrecipient means the legal entity to which a subaward is made and 
which is accountable to the recipient for the use of the funds or 
property provided.
    Supplies means tangible, expendable personal property that is 
charged directly to the award and that has a useful life of less than 
one year or an acquisition cost of less than $5,000 per unit.
    Suspension means an action by DOE that temporarily withdraws 
Federal sponsorship under an award, pending corrective action by the 
recipient or pending a decision to terminate the award by DOE. 
Suspension of an award is a separate action from suspension of a 
recipient under 10 CFR part 1036.
    Termination means the cancellation of an award, in whole or in 
part, under an agreement at any time prior to either:
    (1) The date on which all work under an award is completed; or
    (2) The date on which Federal sponsorship ends, as provided in the 
award document or any supplement or amendment thereto.
    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.
    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.


Sec. 600.303  Deviations.

    (a) Individual deviations. Individual deviations affecting only one 
award are subject to the procedures stated in 10 CFR 600.4.
    (b) Class deviations. Class deviations affecting more than one 
financial assistance transaction are subject to the procedures stated 
in 10 CFR 600.4.


Sec. 600.304  Special award conditions.

    (a) Contracting officers may impose additional requirements as 
needed, over and above those provided in this subpart, if an applicant 
or recipient:
    (1) Has a history of poor performance;
    (2) Is not financially stable;
    (3) Has a management system that does not meet the standards 
prescribed in this part;
    (4) Has not conformed to the terms and conditions of a previous 
award; or
    (5) Is not otherwise responsible.
    (b) Before imposing additional requirements, DOE must notify the 
applicant or recipient in writing as to:
    (1) The nature of the additional requirements;
    (2) The reason why the additional requirements are being imposed;
    (3) The nature of the corrective action needed;
    (4) The time allowed for completing the corrective actions; and
    (5) The method for requesting reconsideration of the additional 
requirements imposed.
    (c) The contracting officer must remove any special conditions if 
the circumstances that prompted them have been corrected.


Sec. 600.305  Debarment and suspension.

    Recipients must comply with the nonprocurement debarment and 
suspension common rule implemented in 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. 600.306  Metric system of measurement.

    (a) The Metric Conversion Act of 1975, as amended by the Omnibus 
Trade and Competitiveness Act of 1988 (15 U.S.C. 205) and implemented 
by Executive Order 12770, states that:
    (1) The metric system is the preferred measurement system for U.S. 
trade and commerce.
    (2) The metric system of measurement will be used, to the extent 
economically feasible, in federal agencies' procurements, grants, and 
other business-related activities.
    (3) Metric implementation is not required if such use is likely to 
cause significant inefficiencies or loss of markets to United States 
firms.
    (b) Recipients are encouraged to use the metric system to the 
maximum extent practicable in measurement-sensitive activities and in 
measurement-sensitive outputs resulting from DOE funded programs.

Post-Award Requirements

Financial and Program Management


Sec. 600.310  Purpose of financial and program management.

    Sections 600.311 through 600.318 prescribe standards for financial 
management systems; methods for making payments; and rules for cost 
sharing and matching, program income, revisions to budgets and program 
plans, audits, allowable costs, and fee and profit.


Sec. 600.311  Standards for financial management systems.

    (a) Recipients are encouraged to use existing financial management 
systems established for doing business in the commercial marketplace to 
the extent that the systems comply with Generally Accepted Accounting 
Principles (GAAP) and the minimum standards in this section. At a 
minimum, a recipient's financial management system must provide:
    (1) Effective control of all funds. Control systems must be 
adequate to ensure that costs charged to Federal funds and those 
counted as the recipient's cost share or match are consistent with 
requirements for cost reasonableness, allowability, and allocability in 
the applicable cost principles (see Sec. 600.317) and in the terms and 
conditions of the award.
    (2) Accurate, current and complete records that document, for each 
project funded wholly or in part with Federal funds, the source and 
application of the Federal funds and the recipient's required cost 
share or match. These records must:
    (i) Contain information about receipts, authorizations, assets, 
expenditures, program income, and interest.
    (ii) Be adequate to make comparisons of outlays with amounts 
budgeted for each award (as required for programmatic and financial 
reporting under Sec. 600.341). Where appropriate, financial information 
should be related to performance and unit cost data.
    (3) To the extent that advance payments are authorized under 
Sec. 600.312, procedures that minimize the time elapsing between the 
transfer of funds to the recipient from the Government and the 
recipient's disbursement of the funds for program purposes.
    (4) A system to support charges to Federal awards for salaries and 
wages, whether treated as direct or indirect costs. If employees work 
on multiple activities or cost objectives, a distribution of their 
salaries and wages must be supported by personnel activity reports 
which:
    (i) Reflect an after the fact distribution of the actual activity 
of each employee.
    (ii) Account for the total activity for which each employee is 
compensated.
    (iii) Are prepared at least monthly, and coincide with one or more 
pay periods.

[[Page 54858]]

    (b) If the Federal Government guarantees or insures the repayment 
of money borrowed by the recipient, DOE, at its discretion, may require 
adequate bonding and insurance if the bonding and insurance 
requirements of the recipient are not deemed adequate to protect the 
interest of the Federal Government.
    (c) DOE may require adequate fidelity bond coverage if the 
recipient lacks sufficient coverage to protect the Federal Government's 
interest.
    (d) If bonds are required in the situations described in paragraphs 
(b) and (c) of this section, the bonds must be obtained from companies 
holding certificates of authority as acceptable sureties, as prescribed 
in 31 CFR part 223, ``Surety Companies Doing Business with the United 
States.''


Sec. 600.312  Payment.

    (a) Methods available. Payment methods for awards with for-profit 
organizations are:
    (1) Reimbursement. Under this method, the recipient requests 
reimbursement for costs incurred during a particular time period. In 
cases where the recipient submits requests for payment to the 
contracting officer, the DOE payment office reimburses the recipient by 
electronic funds transfer after approval of the request by the 
designated contracting officer.
    (2) Advance payments. Under this method, DOE makes a payment to a 
recipient based upon projections of the recipient's cash needs. The 
payment generally is made upon the recipient's request, although 
predetermined payment schedules may be used when the timing of the 
recipient's needs to disburse funds can be predicted in advance with 
sufficient accuracy to ensure compliance with paragraph (b)(2)(iii) of 
this section.
    (b) Selecting a method. (1) The preferred payment method is the 
reimbursement method, as described in paragraph (a)(1) of this section.
    (2) Advance payments, as described in paragraph (a)(2) of this 
section, may be used in exceptional circumstances, subject to the 
following conditions:
    (i) The contracting officer, in consultation with the program 
official, determines in writing that advance payments are necessary or 
will materially contribute to the probability of success of the project 
contemplated under the award (e.g., as startup funds for a project 
performed by a newly formed company).
    (ii) Cash advances must be limited to the minimum amounts needed to 
carry out the program.
    (iii) Recipients and DOE must maintain procedures to ensure that 
the timing of cash advances is as close as is administratively feasible 
to the recipients' disbursements of the funds for program purposes, 
including direct program or project costs and the proportionate share 
of any allowable indirect costs.
    (iv) Recipients must maintain advance payments of Federal funds in 
interest-bearing accounts, and remit annually the interest earned to 
the contracting officer for return to the Department of Treasury's 
miscellaneous receipts account, unless one of the following applies:
    (A) The recipient receives less than $120,000 in Federal awards per 
year.
    (B) The best reasonably available interest bearing account would 
not be expected to earn interest in excess of $250 per year on Federal 
cash balances.
    (C) The depository would require an average or minimum balance so 
high that establishing an interest bearing account would not be 
feasible, given the expected Federal and non-Federal cash resources.
    (c) Frequency of payments. For either reimbursements or advance 
payments, recipients may submit requests for payment monthly, or more 
often if authorized by the contracting officer.
    (d) Forms for requesting payment. DOE may authorize recipients to 
use the SF-270, ``Request for Advance or Reimbursement;'' the SF-271, 
``Outlay Report and Request for Reimbursement for Construction 
Programs;'' or prescribe other forms or formats as necessary.
    (e) Timeliness of payments. Payments normally will be made within 
30 calendar days of the receipt of a recipient's request for 
reimbursement or advance by the office designated to receive the 
request, unless the billing is improper.
    (f) Precedence of other available funds. Recipients must disburse 
funds available from program income, rebates, refunds, contract 
settlements, audit recoveries, credits, discounts, and interest earned 
on such funds before requesting additional cash payments.
    (g) Withholding of payments. Unless otherwise required by statute, 
contracting officers may not withhold payments for proper charges made 
by recipients during the project period for reasons other than the 
following:
    (1) A recipient failed to comply with project objectives, the terms 
and conditions of the award, or Federal reporting requirements, in 
which case the contracting officer may suspend payments in accordance 
with Sec. 600.352.
    (2) The recipient is delinquent on a debt to the United States (see 
definitions of ``debt'' and ``delinquent debt'' in 32 CFR 22.105). In 
that case, the contracting officer may, upon reasonable notice, 
withhold payments to the recipient until the debt owed is resolved.


Sec. 600.313  Cost sharing or matching.

    (a) Acceptable contributions. All contributions, including cash 
contributions and third party in-kind contributions, must be accepted 
as part of the recipient's cost sharing or matching if such 
contributions meet all of the following criteria:
    (1) They are verifiable from the recipient's records.
    (2) They are not included as contributions for any other federally-
assisted project or program.
    (3) They are necessary and reasonable for proper and efficient 
accomplishment of project or program objectives.
    (4) They are allowable under Sec. 600.317.
    (5) They are not paid by the Federal Government under another award 
unless authorized by Federal statute to be used for cost sharing or 
matching.
    (6) They are provided for in the approved budget.
    (7) They conform to other provisions of this part, as applicable.
    (b) Valuing and documenting contributions. (1) Valuing recipient's 
property or services of recipient's employees. Values are established 
in accordance with the applicable cost principles in Sec. 600.317, 
which means that amounts chargeable to the project are determined on 
the basis of costs incurred. For real property or equipment used on the 
project, the cost principles authorize depreciation or use charges. The 
full value of the item may be applied when the item will be consumed in 
the performance of the award or fully depreciated by the end of the 
award. In cases where the full value of a donated capital asset is to 
be applied as cost sharing or matching, that full value must be the 
lesser of the following:
    (i) The certified value of the remaining life of the property 
recorded in the recipient's accounting records at the time of donation; 
or
    (ii) The current fair market value. If there is sufficient 
justification, the contracting officer may approve the use of the 
current fair market value of the donated property, even if it exceeds 
the certified value at the time of donation to the project. The 
contracting officer may accept the use of any reasonable basis for 
determining the fair market value of the property.
    (2) Valuing services of others' employees. If an employer other 
than

[[Page 54859]]

the recipient furnishes the services of an employee, those services are 
valued at the employee's regular rate of pay plus an amount of fringe 
benefits and overhead (at an overhead rate appropriate for the location 
where the services are performed), provided these services are in the 
same skill for which the employee is normally paid.
    (3) Valuing volunteer services. Volunteer services furnished by 
professional and technical personnel, consultants, and other skilled 
and unskilled labor may be counted as cost sharing or matching if the 
service is an integral and necessary part of an approved project or 
program. Rates for volunteer services must 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 must be consistent with those paid for similar work 
in the labor market in which the recipient competes for the kind of 
services involved. In either case, paid fringe benefits that are 
reasonable, allowable, and allocable may be included in the valuation.
    (4) Valuing property donated by third parties. (i) Donated supplies 
may include such items as office supplies or laboratory supplies. Value 
assessed to donated supplies included in the cost sharing or matching 
share must be reasonable and must not exceed the fair market value of 
the property at the time of the donation.
    (ii) Normally only depreciation or use charges for equipment and 
buildings may be applied. However, the fair rental charges for land and 
the full value of equipment or other capital assets may be allowed, 
when they will be consumed in the performance of the award or fully 
depreciated by the end of the award, provided that the contracting 
officer has approved the charges. When use charges are applied, values 
must be determined in accordance with the usual accounting policies of 
the recipient, with the following qualifications:
    (A) The value of donated space must not exceed the fair rental 
value of comparable space as established by an independent appraisal of 
comparable space and facilities in a privately-owned building in the 
same locality.
    (B) The value of loaned equipment must not exceed its fair rental 
value.
    (5) Documentation. The following requirements pertain to the 
recipient's supporting records for in-kind contributions from third 
parties:
    (i) Volunteer services must be documented and, to the extent 
feasible, supported by the same methods used by the recipient for its 
own employees.
    (ii) The basis for determining the valuation for personal services 
and property must be documented.


Sec. 600.314  Program income.

    (a) DOE must apply the standards in this section to the disposition 
of program income from projects financed in whole or in part with 
Federal funds.
    (b) Unless program regulations or the terms and conditions of the 
award provide otherwise, recipients, without any further accounting to 
DOE, may retain program income earned:
    (1) From license fees and royalties for copyrighted material, 
patents, patent applications, trademarks, and inventions produced under 
an award.
    (2) After the end of the project period.
    (c) Unless program regulations or the terms and conditions of the 
award provide otherwise, costs incident to the generation of program 
income for which there is some obligation to the Government may be 
deducted from gross income to determine program income, provided these 
costs have not been charged to the award.
    (d) Other than any program income excluded pursuant to paragraphs 
(b) and (c) of this section, program income earned during the project 
period must be retained by the recipient and used in one or more of the 
following ways, as specified in program regulations or the terms and 
conditions of the award:
    (1) Added to funds committed to the project by DOE and recipient 
and used to further eligible project or program objectives.
    (2) Used to finance the non-Federal share of the project or 
program.
    (3) Deducted from the total project or program allowable cost in 
determining the net allowable costs on which the Federal share of costs 
is based.
    (e) If the program regulation or terms and conditions of an award 
authorize the disposition of program income as described in paragraph 
(d)(1) or (d)(2) of this section, and stipulate a limit on the amounts 
that may be used in those ways, program income in excess of the 
stipulated limits must be used in accordance with paragraph (d)(3) of 
this section.
    (f) In the event that the program regulation or terms and 
conditions of the award do not specify how program income is to be 
used, paragraph (d)(3) of this section applies automatically to all 
projects or programs except research. For awards that support basic or 
applied research, paragraph (d)(1) of this section applies 
automatically unless the terms and conditions specify another 
alternative or the recipient is subject to special award conditions, as 
indicated in Sec. 600.304.
    (g) Proceeds from the sale of property that is acquired, rather 
than fabricated, under an award are not program income and must be 
handled in accordance with the requirements of Secs. 600.320 through 
600.325 of this part.


Sec. 600.315  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 shares when there are cost sharing 
requirements. The budget plan must be related to performance for 
program evaluation purposes, whenever appropriate.
    (b) The recipient must obtain the contracting officer's prior 
approval if a revision is necessary for either of the following two 
reasons:
    (1) A change in the scope or the objective of the project or 
program (even if there is no associated budget revision requiring prior 
written approval).
    (2) A need for additional Federal funding.
    (c) The recipient must obtain the contracting officer's prior 
approval if a revision is necessary for any of the following six 
reasons, unless the requirement for prior approval is specifically 
waived in the program regulation or terms and conditions of the award:
    (1) A change in the approved project director, principal 
investigator, or other key person specified in the application or award 
document.
    (2) 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.
    (3) The inclusion of any additional costs that require prior 
approval in accordance with the applicable cost principles for Federal 
funds and the requirements applicable to the recipient's cost share or 
match, as provided in Sec. 600.313 and Sec. 600.317, respectively.
    (4) The inclusion of pre-award costs for periods greater than the 
90 calendar days immediately preceding the effective date of the award.
    (5) A ``no-cost'' extension of the project period.
    (6) Any subaward, transfer, or contracting out of substantive 
program performance under an award, unless described in the application 
and funded in the approved awards.
    (d) If specifically required in the program regulation or the terms 
and conditions of the award, the recipient

[[Page 54860]]

must obtain the contracting officer's prior approval for the following 
revisions:
    (1) The transfer of funds among direct cost categories, functions, 
and activities for awards in which the Federal share of the project 
exceeds $100,000 and the cumulative amount of such transfers exceeds or 
is expected to exceed 10 percent of the total budget as last approved 
by DOE.
    (2) For awards that provide support for both construction and 
nonconstruction work, any fund or budget transfers between the two 
types of work supported.
    (e) Within 30 calendar days from the date of receipt of the 
recipient's request for budget revisions, the contracting officer must 
review the request and notify the recipient whether the budget 
revisions have been approved. If the revision is still under 
consideration at the end of 30 calendar days, the contracting officer 
must inform the recipient in writing of the date when the recipient may 
expect the decision.


Sec. 600.316  Audits.

    (a) Any recipient that expends $500,000 or more in a year under 
Federal awards must have an audit made for that year by an independent 
auditor, in accordance with paragraph (b) of this section. The audit 
generally should be made a part of the regularly scheduled, annual 
audit of the recipient's financial statements. However, it may be more 
economical in some cases to have Federal awards separately audited, and 
a recipient may elect to do so, unless that option is precluded by 
award terms and conditions or by Federal laws or regulations applicable 
to the program(s) under which the awards were made.
    (b) The auditor must determine and report on whether:
    (1) The recipient has an internal control structure that provides 
reasonable assurance that it is managing Federal awards in compliance 
with Federal laws and regulations and the terms and conditions of the 
awards.
    (2) Based on a sampling of Federal award expenditures, the 
recipient has complied with laws, regulations, and award terms that may 
have a direct and material effect on Federal awards.
    (c) The recipient must make the auditor's report available to the 
DOE contracting officers whose awards are affected.
    (d) Before requesting an audit in addition to the independent 
audit, the contracting officer must:
    (1) Consider whether the independent audit satisfies his or her 
requirements;
    (2) Limit the scope of such additional audit to areas not 
adequately addressed by the independent audit; and
    (3) If DOE is not the Federal agency with the predominant fiscal 
interest in the recipient, coordinate with the agency that has the 
predominant fiscal interest.
    (e) The recipient and its Federal cognizant agency for audit should 
develop a coordinated audit approach to minimize duplication of audit 
work.
    (f) Audit costs (including a reasonable allocation of the costs of 
the audit of the recipient's financial statement, based on the relative 
benefit to the Government and the recipient) are allowable costs of DOE 
awards.


Sec. 600.317  Allowable costs.

    (a) DOE determines allowability of costs in accordance with the 
cost principles applicable to the type of entity incurring the cost as 
follows:
    (1) For-profit organizations. Allowability of costs incurred by 
for-profit organizations and those nonprofit organizations listed in 
Attachment C to OMB Circular A-122 is determined in accordance with the 
for-profit cost principles in 48 CFR part 31 in the Federal Acquisition 
Regulation, except that patent prosecution costs are not allowable 
unless specifically authorized in the award document.
    (2) Other types of organizations. Allowability of costs incurred by 
other types of organizations that may be subrecipients under a prime 
award to a for-profit organization is determined as follows:
    (i) Institutions of higher education. Allowability is determined in 
accordance with OMB Circular A-21, ``Cost Principles for Educational 
Institutions.''
    (ii) Other nonprofit organizations. Allowability is determined in 
accordance with OMB Circular A-122, ``Cost Principles for Nonprofit 
Organizations.''
    (iii) Hospitals. Allowability is determined in accordance with the 
provisions of 45 CFR part 74, Appendix E, ``Principles for Determining 
Costs Applicable to Research and Development Under Grants and Contracts 
with Hospitals.''
    (iv) Governmental organizations. Allowability for State, local, or 
federally recognized Indian tribal governments is determined in 
accordance with OMB Circular A-87, ``Cost Principles for State and 
Local Governments.''
    (b) Pre-award costs. If a recipient incurs pre-award costs without 
the prior approval of the contracting officer, DOE may pay those costs 
incurred within the ninety calendar day period immediately preceding 
the effective date of the award, if such costs are:
    (1) Necessary for the effective and economical conduct of the 
project;
    (2) Otherwise allowable in accordance with the applicable cost 
principles; and
    (3) Less than the total value of the award.


Sec. 600.318  Fee and profit.

    (a) Grants and cooperative agreements may not provide for the 
payment of fee or profit to recipients or subrecipients, except for 
awards made pursuant to the Small Business Innovation Research or Small 
Business Technology Transfer Research programs.
    (b) A recipient or subrecipient may pay a fee or profit to a 
contractor providing goods or services under a contract.

Property Standards


Sec. 600.320  Purpose of property standards.

    Sections 600.321 through 600.325 set forth uniform standards for 
management, use, and disposition of property. DOE encourages recipients 
to use existing property-management systems to the extent that the 
systems meet these minimum requirements.


Sec. 600.321  Real property and equipment.

    (a) Prior approval for acquisition with Federal funds. Recipients 
may purchase real property or equipment in whole or in part with 
Federal funds under an award only with the prior approval of the 
contracting officer.
    (b) Title. Unless a statute specifically authorizes and the award 
specifies that title to property vests unconditionally in the 
recipient, title to real property or equipment vests in the recipient 
subject to the conditions that the recipient:
    (1) Use the real property or equipment for the authorized purposes 
of the project until funding for the project ceases, or until the 
property is no longer needed for the purposes of the project;
    (2) Not encumber the property without approval of the contracting 
officer; and
    (3) Use and dispose of the property in accordance with paragraphs 
(d) and (e) of this section.
    (c) Federal interest in real property or equipment offered as cost-
share. A recipient may offer the full value of real property or 
equipment that is purchased with recipient's funds or that is donated 
by a third party to meet a portion of any required cost sharing or 
matching, subject to the requirements in Sec. 600.313. If a resulting 
award includes such property as a portion of the recipient's cost 
share, the Government has a financial interest in the property, (i.e., 
a share of the property value equal to the

[[Page 54861]]

Federal participation in the project). The property is considered as if 
it had been acquired in part with Federal funds, and is subject to the 
provisions of paragraphs (b)(1), (b)(2), and (b)(3) of this section and 
to the provisions of Sec. 600.323.
    (d) Insurance. Recipients must, 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.
    (e) Use. If real property or equipment is acquired in whole or in 
part with Federal funds under an award and the award does not specify 
that title vests unconditionally in the recipient, the real property or 
equipment is subject to the following:
    (1) During the time that the real property or equipment is used on 
the project or program for which it was acquired, the recipient must 
make it available for use on other projects or programs, if such other 
use does not interfere with the work on the project or program for 
which the real property or equipment was originally acquired. Use of 
the real property or equipment on other projects is subject to the 
following order of priority:
    (i) Activities sponsored by DOE grants, cooperative agreements, or 
other assistance awards;
    (ii) Activities sponsored by other Federal agencies' grants, 
cooperative agreements, or other assistance awards;
    (iii) Activities under Federal procurement contracts or activities 
not sponsored by any Federal agency. If so used, use charges must be 
assessed to those activities. For real property or equipment, the use 
charges must be at rates equivalent to those for which comparable real 
property or equipment may be leased.
    (2) After Federal funding for the project ceases or if the real 
property or equipment is no longer needed for the purposes of the 
project, the recipient may use the real property or equipment for other 
projects, insofar as:
    (i) There are Federally sponsored projects for which the real 
property or equipment may be used. If the only use for the real 
property or equipment is for projects that have no Federal sponsorship, 
the recipient must proceed with disposition of the real property or 
equipment, in accordance with paragraph (f) of this section.
    (ii) The recipient obtains written approval from the contracting 
officer to do so. The contracting officer must ensure that there is a 
formal change of accountability for the real property or equipment to a 
currently funded, Federal award.
    (iii) The recipient's use of the real property or equipment for 
other projects is in the same order of priority as described in 
paragraph (e)(1) of this section.
    (f) Disposition. (1) If an item of real property or equipment is no 
longer needed for Federally sponsored projects, the recipient has the 
following options:
    (i) If the property is equipment with a current per unit fair 
market value of less than $5,000, it may be retained, sold, or 
otherwise disposed of with no further obligation to DOE.
    (ii) If the property that is no longer needed is equipment (rather 
than real property), the recipient may wish to replace it with an item 
that is needed currently for the project by trading in or selling to 
offset the costs of the replacement equipment, subject to the approval 
of the contracting officer.
    (iii) The recipient may elect to retain title, without further 
obligation to the Federal Government, by compensating the Federal 
Government for that percentage of the current fair market value of the 
real property or equipment that is attributable to the Federal 
participation in the project.
    (iv) If the recipient does not elect to retain title to real 
property or equipment or does not request approval to use equipment as 
trade-in or offset for replacement equipment, the recipient must 
request disposition instructions from the responsible agency.
    (2) If a recipient requests disposition instructions, the 
contracting officer must:
    (i) For equipment (but not real property), consult with the DOE 
Project Director to determine whether the condition and nature of the 
equipment warrant excess screening within DOE. If screening is 
warranted, the equipment will be made available for reutilization 
within DOE through the Energy Asset Disposal System (EADS). If no DOE 
requirement is identified within a 30-day period, EADS automatically 
reports the availability of the equipment to the General Services 
Administration, to determine whether a requirement for the equipment 
exists in other Federal agencies.
    (ii) For either real property or equipment, issue instructions to 
the recipient for disposition of the property no later than 120 
calendar days after the recipient's request. The contracting officer's 
options for disposition are to direct the recipient to:
    (A) Transfer title to the real property or equipment to the Federal 
Government or to an eligible third party provided that, in such cases, 
the recipient is entitled to compensation for its attributable 
percentage of the current fair market value of the real property or 
equipment, plus any reasonable shipping or interim storage costs 
incurred.
    (B) Sell the real property or equipment and pay the Federal 
Government for that percentage of the current fair market value of the 
property that is attributable to the Federal participation in the 
project (after deducting actual and reasonable selling and fix-up 
expenses, if any, from the sale proceeds). If the recipient is 
authorized or required to sell the real property or equipment, the 
recipient must use competitive procedures that result in the highest 
practicable return.
    (3) If the responsible agency fails to issue disposition 
instructions within 120 calendar days of the recipient's request, the 
recipient must dispose of the real property or equipment through the 
option described in paragraph (f)(2)(ii)(B) of this section.


Sec. 600.322  Federally owned property.

    (a) Annual inventory. The recipient must submit annually to the 
contracting officer an inventory listing of all Federally owned 
property in its custody, i.e., property furnished by the Federal 
Government, rather than acquired by the recipient with Federal funds 
under the award.
    (b) Insurance. The recipient may not insure Federally owned 
property unless required by the terms and conditions of the award.
    (c) Use on other activities. (1) Use of federally owned property on 
other activities is permissible, if authorized by the contracting 
officer responsible for administering the award to which the property 
currently is charged.
    (2) Use on other activities must be in the following order of 
priority:
    (i) Activities sponsored by DOE grants, cooperative agreements, or 
other assistance awards;
    (ii) Activities sponsored by other Federal agencies' grants, 
cooperative agreements, or other assistance awards;
    (iii) Activities under Federal procurement contracts or activities 
not sponsored by any Federal agency. If so used, use charges must be 
assessed to those activities. For real property or equipment, the use 
charges must be at rates equivalent to those for which comparable real 
property or equipment may be leased.
    (d) Disposition of property. Upon completion of the award, the 
recipient must submit to the contracting officer a final inventory of 
Federally owned property. DOE may:
    (1) Use the property to meet another Federal Government need (e.g., 
by transferring accountability for the

[[Page 54862]]

property to another Federal award to the same recipient, or by 
directing the recipient to transfer the property to a Federal agency 
that needs the property or to another recipient with a currently funded 
award).
    (2) Declare the property to be excess property and either:
    (i) Report the property to the General Services Administration 
through EADS, in accordance with the Federal Property and 
Administrative Services Act of 1949 (40 U.S.C. 483(b)(2)), as 
implemented by General Services Administration regulations at 41 CFR 
101-47.202; or
    (ii) Dispose of the property by alternative methods, if there is 
authority under law, such as the Federal Technology Transfer Act, 15 
U.S.C. 3710(i).


Sec. 600.323  Property management system.

    The recipient's property management system must include the 
following:
    (a) Property records must be maintained, to include the following 
information for property that is Federally owned, equipment that is 
acquired in whole or in part with Federal funds, or property or 
equipment that is used as cost sharing or matching:
    (1) A description of the property.
    (2) Manufacturer's serial number, model number, Federal stock 
number, national stock number, or any other identification number.
    (3) Source of the property, including the award number.
    (4) Whether title vests in the recipient or the Federal Government.
    (5) Acquisition date (or date received, if the property was 
furnished by the Federal Government) and cost.
    (6) Information from which one can calculate the percentage of 
Federal participation in the cost of the property (not applicable to 
property furnished by the Federal Government).
    (7) The location and condition of the property and the date the 
information was reported.
    (8) Ultimate disposition data, including date of disposal and sales 
price or the method used to determine current fair market value where a 
recipient compensates the Federal Government for its share.
    (b) Federally owned equipment must be marked to indicate Federal 
ownership.
    (c) A physical inventory must be taken and the results reconciled 
with the property records at least once every two years. Any 
differences between quantities determined by the physical inspection 
and those shown in the accounting records must be investigated to 
determine the causes of the difference. The recipient must, in 
connection with the inventory, verify the existence, current 
utilization, and continued need for the property.
    (d) A control system must be in effect to insure adequate 
safeguards to prevent loss, damage, or theft of the property. Any loss, 
damage, or theft of property must be investigated and fully documented. 
If the property is owned by the Federal Government, the recipient must 
promptly notify the Federal agency responsible for administering the 
property.
    (e) Adequate maintenance procedures must be implemented to keep the 
property in good condition.


Sec. 600.324  Supplies.

    (a) Title vests in the recipient upon acquisition of supplies 
acquired with Federal funds under an award.
    (b) Upon termination or completion of the project or program, the 
recipient may retain any unused supplies. If the inventory of unused 
supplies exceeds $5,000 in total aggregate value and the items are not 
needed for any other Federally sponsored project or program, the 
recipient may retain the items for use on non-Federal sponsored 
activities or sell them, but must, in either case, compensate the 
Federal Government for its share.


Sec. 600.325  Intellectual property.

    (a) Scope. This section sets forth the policies with regard to 
disposition of rights to data and to inventions conceived or first 
actually reduced to practice in the course of, or under, a grant or 
cooperative agreement with DOE.
    (b) Patent rights--small business concerns and nonprofit 
organizations. In accordance with 35 U.S.C. 202, if you are a small 
business concern or a nonprofit organization and you receive a grant, 
cooperative agreement, subaward, or contract for research, 
developmental, or demonstration activities, then, unless there are 
``exceptional circumstances'' as described in 35 U.S.C. 202(e), your 
award must contain the standard clause in Appendix A to this subpart, 
entitled ``Patents Rights (Small Business Firms and Nonprofit 
Organizations)'' which provides you the right to elect ownership of 
inventions made under your award.
    (c) Patent rights--other than small business concerns, e.g., large 
businesses.
    (1) No patent waiver. Except as provided by paragraph (d)(2) of 
this section, if you are a large business and you receive an award or a 
subaward for research, development, and demonstration activities, then 
your award must contain the standard clause in Appendix A to this 
subpart, entitled ``Patent Rights (Large Business Firms)--No Waiver'' 
which provides that DOE owns the patent rights to inventions made under 
your award.
    (2) Patent waiver granted. Paragraph (c)(1) of this section does 
not apply if:
    (i) DOE grants a class waiver for a particular program under 10 CFR 
part 784;
    (ii) You request and receive an advance patent waiver under 10 CFR 
part 784; or
    (iii) Your subaward is covered by a waiver granted under the prime 
award.
    (3) Special provision. Normally, your agreement will not include a 
background patent and data provision. However, in order to provide 
heightened assurance of commercialization, a provision providing for a 
right to require licensing of background inventions under special 
circumstances may be included.
    (d) Rights in data--general rule.
    (1) Subject to paragraphs (d)(2) and (3) of this section, and 
except as otherwise provided by paragraphs (e), (f), and (g) of this 
section or other law, any award under this subpart must contain the 
standard clause in Appendix A to this subpart, entitled ``Rights in 
Data--General.''
    (2) Normally, your agreement will not require the delivery of 
limited rights data or restricted computer software. However, if the 
contracting officer, in consultation with DOE patent counsel and the 
DOE program official, determines that delivery of limited rights data 
or restricted computer software is necessary, the contracting officer, 
after negotiation with you, may insert in the award the standard clause 
as modified by Alternates I and/or II set forth in Appendix A to this 
subpart.
    (3) If software is specified for delivery to DOE or if other 
special circumstances exist, e.g., DOE specifying ``open-source'' 
treatment of software, then the contracting officer, after negotiation 
with the recipient, may include in the award special provisions 
requiring the recipient to obtain written approval of the contracting 
officer prior to asserting copyright in the software and/or 
modifications to the retained Government license.
    (e) Rights in data--programs covered under special protected data 
statutes.
    (1) If a statute, other than those providing for the Small Business 
Innovation Research (SBIR) and Small Business Technology Transfer 
Research (STTR) programs, provides for a period of time, typically up 
to five years, during which data produced under an award for research, 
development, and demonstration may be protected from

[[Page 54863]]

public disclosure, then the contracting officer must insert in the 
award the standard clause in Appendix A to this subpart entitled 
``Rights in Data--Programs Covered Under Special Protected Data 
Statutes'' or, as determined in consultation with DOE patent counsel 
and the DOE program official, a modified version of such clause which 
may identify data or categories of data that the recipient must make 
available to the public.
    (2) An award under paragraph (e)(1) of this section is subject to 
the provisions of paragraphs (d)(2) and (3).
    (f) Rights in data--SBIR/STTR programs.
    (1) If you receive an award under the SBIR or STTR program, then 
the contracting officer must insert in the award the standard clause in 
the General Terms and Conditions for SBIR Grants, entitled ``Rights in 
Data--SBIR Program.''
    (2) The data rights provisions for SBIR/STTR grants are contained 
in the award terms and conditions for SBIR grants located at http://www.pr.doe.gov on the Professionals Homepage under Financial 
Assistance, Regulations and Guidance.
    (g) Authorization and consent. (1) Except as provided in paragraph 
(g)(2) of this section, work performed by a recipient under a financial 
assistance award is not subject to authorization and consent to the use 
of a patented invention, and the Government assumes no liability for 
patent infringement by the recipient under 28 U.S.C. 1498.
    (2) To avoid the risk that project work is enjoined by reason of 
patent infringement, in appropriate circumstances, such as a 
cooperative agreement for research related to homeland security or the 
clean up of a DOE facility, DOE may provide authorization and consent 
consistent with the principles set forth in 48 CFR 27.201-1.
    (3) The contracting officer, in consultation with patent counsel, 
may also include clauses in the award addressing patent indemnification 
of the Government by recipient and notice and assistance regarding 
patent and copyright infringement.

Procurement Standards


Sec. 600.330  Purpose of procurement standards.

    Section 600.331 sets forth requirements necessary to ensure:
    (a) Recipients' procurements that use Federal funds comply with 
applicable Federal statutes, regulations, and executive orders.
    (b) Proper stewardship of Federal funds used in recipients' 
procurements.


Sec. 600.331  Requirements.

    The following requirements pertain to recipients' procurements 
funded in whole or in part with Federal funds or with recipients' cost-
share or match:
    (a) Reasonable cost. Recipients' procurement procedures must use 
best commercial practices to ensure reasonable cost for procured goods 
and services. Recipients are encouraged to buy commercial items, if 
practicable.
    (b) Pre-award review of certain procurements. If the contracting 
officer determines that there is a compelling need to perform a pre-
award review of a specific transaction and the terms of the award 
identify the specific transaction and provide for such a review, then 
the recipient must obtain the contracting officer's approval prior to 
awarding the transaction and must provide the contracting officer the 
following documents to review:
    (1) Request for proposals or invitation to bid, if any;
    (2) Cost estimate;
    (3) Proposal/bid;
    (4) Proposed award document; and
    (5) Summary of negotiations or justification for award.
    (c) Contract provisions. (1) Contracts in excess of the simplified 
acquisition threshold must contain contractual provisions or conditions 
that allow for administrative, contractual, or legal remedies in 
instances in which a contractor violates or breaches the contract 
terms, and provide for such remedial actions as may be appropriate.
    (2) All contracts in excess of the simplified acquisition threshold 
must contain suitable provisions for termination for default by the 
recipient and for termination due to circumstances beyond the control 
of the contractor.
    (3) All negotiated contracts in excess of the simplified 
acquisition threshold must include a provision permitting access of 
DOE, the Inspector General, the Comptroller General of the United 
States, or any of their duly authorized representatives, to any books, 
documents, papers, and records of the contractor that are directly 
pertinent to a specific program, for the purpose of making audits, 
examinations, excerpts, transcriptions, and copies of such documents.
    (4) All contracts, including those for amounts less than the 
simplified acquisition threshold, awarded by recipients and their 
contractors must contain the procurement provisions of Appendix B to 
this subpart, as applicable.
    (d) Recipient responsibilities. 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. This includes 
disputes, claims, protests of award, source evaluation or other matters 
of a contractual nature. The recipient should refer matters concerning 
violations of statutes to such Federal, State or local authority as may 
have proper jurisdiction.

Reports and Records


Sec. 600.340  Purpose of reports and records.

    Sections 600.341 and 600.342 prescribe requirements for monitoring 
and reporting financial and program performance and for records 
retention.


Sec. 600.341  Monitoring and reporting program and financial 
performance.

    (a) The terms and conditions of the award prescribe the reporting 
requirements, the frequency, and the due dates for reports. At a 
minimum, requirements must include:
    (1) Periodic progress reports (at least annually, but no more 
frequently than quarterly) addressing both program status and business 
status, as follows:
    (i) The program portions of the reports must address progress 
toward achieving program performance goals and milestones, including 
current issues, problems, or developments.
    (ii) The business portions of the reports must provide summarized 
details on the status of resources (federal funds and non-federal cost 
sharing or matching), including an accounting of expenditures for the 
period covered by the report. The report should compare the resource 
status with any payment and expenditure schedules or plans provided in 
the original award, explain any major deviations from those schedules, 
and discuss actions that will be taken to address the deviations.
    (2) A final technical report if the award is for research and 
development.
    (b) If the contracting officer previously authorized advance 
payments, pursuant to Sec. 600.312(a)(2), he/she should consult with 
the DOE project director and consider whether program progress reported 
in the periodic progress report, in relation to reported expenditures, 
is sufficient to justify continued authorization of advance payments.


Sec. 600.342  Retention and access requirements for records.

    (a) This section sets forth requirements for records retention and 
access to records for awards to recipients and subrecipients.
    (b) Financial records, supporting documents, statistical records, 
and all

[[Page 54864]]

other records pertinent to an award must be retained for a period of 
three years from the date of submission of the final expenditure 
report. The only exceptions are the following.
    (1) If any litigation, claim, or audit is started before the 
expiration of the 3-year period, the records must 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 must be retained for 3 years after final disposition.
    (3) If 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 allocation plans, and 
related records must be retained in accordance with the requirements 
specified in paragraph (g) of this section.
    (c) Copies of original records may be substituted for the original 
records if authorized by the contracting officer.
    (d) The contracting officer may request that recipients transfer 
certain records to DOE custody if he or she determines that the records 
possess long term retention value. However, in order to avoid duplicate 
recordkeeping, a contracting officer 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 must last as long as 
records are retained.
    (f) Unless required by statute, DOE must not place 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 would be kept confidential and would be exempt from disclosure 
pursuant to the Freedom of Information Act (5 U.S.C. 552) if the 
records belonged to DOE.
    (g) Indirect cost proposals, cost allocation plans, and other cost 
accounting documents (such as documents related to computer usage 
chargeback rates), along with their supporting records, must be 
retained for a 3-year period, as follows:
    (1) If the recipient or the subrecipient is required to submit an 
indirect-cost proposal, cost allocation plan, or other computation to 
the cognizant Federal agency for purposes of negotiating an indirect 
cost rate or other rates, the 3-year retention period starts on the 
date of the submission.
    (2) If the recipient or the subrecipient is not required to submit 
the documents or supporting records for negotiating an indirect cost 
rate or other rates, the 3-year retention period for the documents and 
records starts at the end of the fiscal year (or other accounting 
period) covered by the proposal, plan, or other computation.
    (h) If the information described in this section is maintained on a 
computer, recipients must retain the computer data on a reliable medium 
for the time periods prescribed. Recipients may transfer computer data 
in machine readable form from one reliable computer medium to another. 
Recipients' computer data retention and transfer procedures must 
maintain the integrity, reliability, and security of the original 
computer data. Recipients must also maintain an audit trail describing 
the data transfer. For the record retention time periods prescribed in 
this section, recipients must not destroy, discard, delete, or write 
over such computer data.

Termination and Enforcement


Sec. 600.350  Purpose of termination and enforcement.

    Sections 600.351 through 600.353 set forth uniform procedures for 
suspension, termination, enforcement, and disputes.


Sec. 600.351  Termination.

    (a) Awards may be terminated in whole or in part only in accordance 
with one of the following:
    (1) By the contracting officer, if a recipient materially fails to 
comply with the terms and conditions of an award.
    (2) By the contracting officer with the consent of the recipient, 
in which case the two parties must agree upon the termination 
conditions, including the effective date and, in the case of partial 
termination, the portion to be terminated.
    (3) By the recipient upon sending to the contracting officer 
written notification setting forth the reasons for such termination, 
the effective date, and, in the case of partial termination, the 
portion to be terminated. The recipient must provide such notice at 
least 30 calendar days prior to the effective date of the termination. 
However, if the contracting officer determines in the case of partial 
termination that the reduced or modified portion of the award will not 
accomplish the purposes for which the award was made, he or she may 
terminate the award in its entirety.
    (4) For cooperative agreements only, by the contracting officer 
whenever DOE determines, for any reason, that a termination, in whole 
or in part, is in the best interest of the Government. Such termination 
is subject to the conditions specified in Sec. 600.25(e).
    (b) If the recipient incurred allowable costs prior to the 
termination, the responsibilities of the recipient referred to in 
Sec. 600.361(b), including those related to property, apply to the 
termination of the award, and provision must be made for continuing 
responsibilities of the recipient after termination, as appropriate.


Sec. 600.352  Enforcement.

    (a) Remedies for noncompliance. If a recipient materially fails to 
comply with the terms and conditions of an award, whether stated in a 
Federal statute, regulation, assurance, application, or notice of 
award, the contracting officer may, in addition to imposing any of the 
special conditions outlined in Sec. 600.304, take one or more of the 
following actions, as appropriate:
    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the recipient or more severe enforcement action by the 
contracting officer.
    (2) Disallow (that is, deny both the 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) Apply other remedies that may be legally available.
    (b) Hearings and appeals. In taking an enforcement action, DOE must 
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 resulting from 
obligations incurred by the recipient during a suspension or after 
termination of an award are not allowable, unless the contracting 
officer expressly authorizes them in the notice of suspension or 
termination or subsequently authorizes such costs. Other recipient 
costs during suspension

[[Page 54865]]

or after termination, which are necessary and not reasonably avoidable, 
are allowable if the costs:
    (1) Result from obligations which were properly incurred by the 
recipient before the effective date of suspension or termination, are 
not in anticipation of it, and in the case of a termination, are 
noncancellable; and
    (2) Would be allowable if the award expired normally at the end of 
the funding period.
    (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.


Sec. 600.353  Disputes and appeals.

    Consistent with 10 CFR 600.22 and part 1024, recipients have the 
right to appeal certain decisions by contracting officers.

After-the-Award Requirements


Sec. 600.360  Purpose.

    Sections 600.361 through 600.363 contain procedures for closeout 
and for subsequent disallowances and adjustments.


Sec. 600.361  Closeout procedures.

    (a) Recipients must submit, within 90 calendar days after the date 
of completion of the award, all reports required by the terms and 
conditions of the award. DOE may approve extensions when requested by 
the recipient.
    (b) The following provisions must apply to the closeout:
    (1) Unless DOE authorizes an extension, a recipient must liquidate 
all obligations incurred under the award not later than 90 calendar 
days after the funding period or the date of completion of the award as 
specified in the terms and conditions of the award or in agency 
implementing instructions.
    (2) DOE must make prompt, final payments to a recipient for 
allowable reimbursable costs under the award being closed out.
    (3) The recipient must promptly refund any unobligated balances of 
cash that DOE has advanced or paid and that are not authorized to be 
retained by the recipient for use in other projects. OMB Circular A-129 
governs unreturned amounts that become delinquent debts.
    (4) When authorized by the terms and conditions of the award, the 
contracting officer must make a settlement for any upward or downward 
adjustments to the Federal share of costs after closeout reports are 
received.
    (5) The recipient must account for any real property and equipment 
acquired with Federal funds or received from the Federal Government in 
accordance with Secs. 600.321 through 600.325.
    (6) If a final audit is required and has not been performed prior 
to the closeout of an award, DOE retains the right to recover an 
appropriate amount after fully considering the recommendations on 
disallowed costs resulting from the final audit.


Sec. 600.362  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. 600.316.
    (4) Property management requirements in Secs. 600.321 through 
600.325.
    (5) Records retention requirements in Sec. 600.342.
    (b) After closeout of an award, the continuing responsibilities 
under an award may be modified or ended in whole or in part with the 
consent of the contracting officer and the recipient, provided property 
management requirements are considered and provisions made for the 
continuing responsibilities of the recipient, as appropriate.


Sec. 600.363  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 30 days after the demand for payment, DOE may reduce 
the debt in accordance with the procedures and techniques described in 
10 CFR part 1015 and OMB Circular A-129, including:
    (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 or regulation.
    (b) Except as otherwise provided by law, DOE may charge interest 
and administrative fees on an overdue debt in accordance with 31 CFR 
Chapter IX, parts 900-904, ``Federal Claims Collection Standards.''

Additional Provisions


Sec. 600.380  Purpose.

    The purpose of ``Additional Provisions'' is to provide alternative 
requirements for recipients otherwise covered by this subpart D, when 
they are performing under Small Business Innovation Research grants.


Sec. 600.381  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 review under 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 
any variation from the requirement that no more than one-third of Phase 
I work can be done by subcontractors 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. 600.312), 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 
contain a condition that requires 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. 600.341;
    (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

[[Page 54866]]

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 fee or profit may be paid to SBIR recipients.

Appendix A to Subpart D Part 600

Patent and Data Provisions

    1. Patent Rights (Small Business Firms and Nonprofit 
Organizations)
    2. Patent Rights (Large Business Firms)--No Waiver
    3. Rights in Data--General
    4. Rights in Data--Programs Covered Under Special Protected Data 
Statutes

Patent Rights (Small Business Firms and Nonprofit Organizations)

    (a) Definitions.
    Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under title 35 of the U.S.C., or 
any novel variety of plant which is or may be protected under the 
Plant Variety Protection Act (7 U.S.C. 2321 et seq.).
    Made when used in relation to any invention means the conception 
or first actual reduction to practice of such invention.
    Nonprofit organization means a university or other institution 
of higher education or an organization of the type described in 
section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 
501(c)) and exempt from taxation under section 501(a) of the 
Internal Revenue Code (26 U.S.C. 501(a)) or any nonprofit scientific 
or educational organization qualified under a State nonprofit 
organization statute.
    Practical application means to manufacture in the case of a 
composition or product, to practice in the case of a process or 
method, or to operate in the case of a machine or system; and, in 
each case, under such conditions as to establish that the invention 
is being utilized and that its benefits are to the extent permitted 
by law or Government regulations available to the public on 
reasonable terms.
    Small business firm means a small business concern as defined at 
section 2 of Public Law 85-536 (16 U.S.C. 632) and implementing 
regulations of the Administrator of the Small Business 
Administration. For the purpose of this clause, the size standards 
for small business concerns involved in Government procurement and 
subcontracting at 13 CFR 121.3 through 121.8 and 13 CFR 121.3 
through 121.12 respectively, will be used.
    Subject invention means any invention of the Recipient conceived 
or first actually reduced to practice in the performance of work 
under this award, provided that in the case of a variety of plant, 
the date of determination (as defined in section 41(d) of the Plant 
Variety Protection Act, 7 U.S.C. 2401(d) must also occur during the 
period of award performance.
    (b) Allocation of Principal Rights.
    The Recipient may retain the entire right, title, and interest 
throughout the world to each subject invention subject to the 
provisions of this Patent Rights clause and 35 U.S.C. 203. With 
respect to any subject invention in which the Recipient retains 
title, the Federal Government shall have a non-exclusive, 
nontransferable, irrevocable, paid-up license to practice or have 
practiced for or on behalf of the U.S. the subject invention 
throughout the world.
    (c) Invention Disclosure, Election of Title and Filing of Patent 
Applications by Recipient.
    (1) The Recipient will disclose each subject invention to DOE 
within two months after the inventor discloses it in writing to 
Recipient personnel responsible for the administration of patent 
matters. The disclosure to DOE shall be in the form of a written 
report and shall identify the award under which the invention was 
made and the inventor(s). It shall be sufficiently complete in 
technical detail to convey a clear understanding to the extent known 
at the time of disclosure, of the nature, purpose, operation, and 
the physical, chemical, biological or electrical characteristics of 
the invention. The disclosure shall also identify any publication, 
on sale or public use of the invention and whether a manuscript 
describing the invention has been submitted for publication and, if 
so, whether it has been accepted for publication at the time of 
disclosure. In addition, after disclosure to DOE, the Recipient will 
promptly notify DOE of the acceptance of any manuscript describing 
the invention for publication or of any on sale or public use 
planned by the Recipient.
    (2) The Recipient will elect in writing whether or not to retain 
title to any such invention by notifying DOE within two years of 
disclosure to DOE. However, in any case where publication, on sale, 
or public use has initiated the one-year statutory period wherein 
valid patent protection can still be obtained in the U.S., the 
period for election of title may be shortened by the agency to a 
date that is no more than 60 days prior to the end of the statutory 
period.
    (3) The Recipient will file its initial patent application on an 
invention to which it elects to retain title within one year after 
election of title or, if earlier, prior to the end of any statutory 
period wherein valid patent protection can be obtained in the U.S. 
after a publication, on sale, or public use. The Recipient will file 
patent applications in additional countries or international patent 
offices within either ten months of the corresponding initial patent 
application, or six months from the date when permission is granted 
by the Commissioner of Patents and Trademarks to file foreign patent 
applications when such filing has been prohibited by a Secrecy 
Order.
    (4) Requests for extension of the time for disclosure to DOE, 
election, and filing under subparagraphs (1), (2), and (3) may, at 
the discretion of DOE, be granted.
    (d) Conditions When the Government May Obtain Title.
    The Recipient will convey to DOE, upon written request, title to 
any subject invention:
    (1) If the Recipient fails to disclose or elect the subject 
invention within the times specified in paragraph (c) of this Patent 
Rights clause, or elects not to retain title; provided that DOE may 
only request title within 60 days after learning of the failure of 
the Recipient to disclose or elect within the specified times;
    (2) In those countries in which the Recipient fails to file 
patent applications within the times specified in paragraph (c) of 
this Patent Rights clause; provided, however, that if the Recipient 
has filed a patent application in a country after the times 
specified in paragraph (c) of this Patent Rights clause, but prior 
to its receipt of the written request of DOE, the Recipient shall 
continue to retain title in that country; or
    (3) In any country in which the Recipient decides not to 
continue the prosecution of any application for, to pay the 
maintenance fees on, or defend in a reexamination or opposition 
proceeding on, a patent on a subject invention.
    (e) Minimum Rights to Recipient and Protection of the Recipient 
Right To File.
    (1) The Recipient will retain a non-exclusive royalty-free 
license throughout the world in each subject invention to which the 
Government obtains title, except if the Recipient fails to disclose 
the subject invention within the times specified in paragraph (c) of 
this Patent Rights clause. The Recipient's license extends to its 
domestic subsidiaries and affiliates, if any, within the corporate 
structure of which the Recipient is a party and includes the right 
to grant sublicenses of the same scope to the extent the Recipient 
was legally obligated to do so at the time the award was awarded. 
The license is transferable only with the approval of DOE except 
when transferred to the successor of that part of the Recipient's 
business to which the invention pertains.
    (2) The Recipient's domestic license may be revoked or modified 
by DOE to the extent necessary to achieve expeditious practical 
application of the subject invention pursuant to an application for 
an exclusive license submitted in accordance with applicable 
provisions at 37 CFR part 404 and the agency's licensing regulation, 
if any. This license will not be revoked in that field of use or the 
geographical areas in which the Recipient has achieved practical 
application and continues to make the benefits of the invention 
reasonably accessible to the public. The license in any foreign 
country may be revoked or modified at discretion of the funding 
Federal agency to the extent the Recipient, its licensees, or its 
domestic subsidiaries or affiliates have failed to achieve practical 
application in that foreign country.
    (3) Before revocation or modification of the license, the 
funding Federal agency will furnish the Recipient a written notice 
of its intention to revoke or modify the license, and the Recipient 
will be allowed thirty days (or such other time as may be authorized 
by DOE for good cause shown by the Recipient) after the notice to 
show cause why the license should not be revoked or modified. The 
Recipient has the right to appeal, in accordance with applicable 
regulations in 37 CFR part 404 and the agency's licensing

[[Page 54867]]

regulations, if any, concerning the licensing of Government-owned 
inventions, any decision concerning the revocation or modification 
of its license.
    (f) Recipient Action to Protect Government's Interest.
    (1) The Recipient agrees to execute or to have executed and 
promptly deliver to DOE all instruments necessary to:
    (i) establish or confirm the rights the Government has 
throughout the world in those subject inventions for which the 
Recipient retains title; and
    (ii) convey title to DOE when requested under paragraph (d) of 
this Patent Rights clause, and to enable the government to obtain 
patent protection throughout the world in that subject invention.
    (2) The Recipient agrees to require, by written agreement, its 
employees, other than clerical and non-technical employees, to 
disclose promptly in writing to personnel identified as responsible 
for the administration of patent matters and in a format suggested 
by the Recipient each subject invention made under this award in 
order that the Recipient can comply with the disclosure provisions 
of paragraph (c) of this Patent Rights clause, and to execute all 
papers necessary to file patent applications on subject inventions 
and to establish the Government's rights in the subject inventions. 
The disclosure format should require, as a minimum, the information 
requested by paragraph (c)(1) of this Patent Rights clause. The 
Recipient shall instruct such employees through the employee 
agreements or other suitable educational programs on the importance 
of reporting inventions in sufficient time to permit the filing of 
patent applications prior to U.S. or foreign statutory bars.
    (3) The Recipient will notify DOE of any decision not to 
continue prosecution of a patent application, pay maintenance fees, 
or defend in a reexamination or opposition proceeding on a patent, 
in any country, not less than 30 days before the expiration of the 
response period required by the relevant patent office.
    (4) The Recipient agrees to include, within the specification of 
any U.S. patent application and any patent issuing thereon covering 
a subject invention, the following statement: ``This invention was 
made with Government support under (identify the award) awarded by 
(identify DOE). The Government has certain rights in this 
invention.''
    (g) Subaward/contract.
    (1) The Recipient will include this Patent Rights clause, 
suitably modified to identify the parties, in all subawards/
contracts, regardless of tier, for experimental, developmental or 
research work to be performed by a small business firm or nonprofit 
organization. The subrecipient/contractor will retain all rights 
provided for the Recipient in this Patent Rights clause, and the 
Recipient will not, as part of the consideration for awarding the 
subcontract, obtain rights in the subcontractors' subject 
inventions.
    (2) The Recipient will include in all other subawards/contracts, 
regardless of tier, for experimental, developmental or research 
work, the patent rights clause required by DOE implementing 
regulations.
    (h) Reporting on Utilization of Subject Inventions.
    The Recipient agrees to submit on request periodic reports no 
more frequently than annually on the utilization of a subject 
invention or on efforts at obtaining such utilization that are being 
made by the Recipient or its licensees or assignees. Such reports 
shall include information regarding the status of development, date 
of first commercial sale or use, gross royalties received by the 
Recipient and such other data and information as DOE may reasonably 
specify. The Recipient also agrees to provide additional reports in 
connection with any march-in proceeding undertaken by DOE in 
accordance with paragraph (j) of this Patent Rights clause. As 
required by 35 U.S.C. 202(c)(5), DOE agrees it will not disclose 
such information to persons outside the Government without the 
permission of the Recipient.
    (i) Preference for United States Industry.
    Notwithstanding any other provision of this Patent Rights 
clause, the Recipient agrees that neither it nor any assignee will 
grant to any person the exclusive right to use or sell any subject 
invention in the U.S. unless such person agrees that any products 
embodying the subject invention or produced through the use of the 
subject invention will be manufactured substantially in the U.S. 
However, in individual cases, the requirement for such an agreement 
may be waived by DOE upon a showing by the Recipient or its assignee 
that reasonable but unsuccessful efforts have been made to grant 
licenses on similar terms to potential licensees that would be 
likely to manufacture substantially in the U.S. or that under the 
circumstances domestic manufacture is not commercially feasible.
    (j) March-in Rights.
    The Recipient agrees that with respect to any subject invention 
in which it has acquired title, DOE has the right in accordance with 
procedures at 37 CFR 401.6 and any supplemental regulations of the 
agency to require the Recipient, an assignee or exclusive licensee 
of a subject invention to grant a non-exclusive, partially 
exclusive, or exclusive license in any field of use to a responsible 
applicant or applicants, upon terms that are reasonable under the 
circumstances and if the Recipient, assignee, or exclusive licensee 
refuses such a request, DOE has the right to grant such a license 
itself if DOE determines that:
    (1) Such action is necessary because the Recipient or assignee 
has not taken or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (2) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Recipient, assignee, or 
their licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Recipient, assignee, or licensee; or
    (4) Such action is necessary because the agreement required by 
paragraph (i) of this Patent Rights clause has not been obtained or 
waived or because a licensee of the exclusive right to use or sell 
any subject invention in the U.S. is in breach of such agreement.
    (k) Special Provisions for Awards with Nonprofit Organizations.
    If the Recipient is a nonprofit organization, it agrees that:
    (1) Rights to a subject invention in the U.S. may not be 
assigned without the approval of DOE, except where such assignment 
is made to an organization which has as one of its primary functions 
the management of inventions, provided that such assignee will be 
subject to the same provisions as the Recipient;
    (2) The Recipient will share royalties collected on a subject 
invention with the inventor, including Federal employee co-inventors 
(when DOE deems it appropriate) when the subject invention is 
assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;
    (3) The balance of any royalties or income earned by the 
Recipient with respect to subject inventions, after payment of 
expenses (including payments to inventors) incidental to the 
administration of subject inventions, will be utilized for the 
support of scientific or engineering research or education; and
    (4) It will make efforts that are reasonable under the 
circumstances to attract licensees of subject inventions that are 
small business firms and that it will give preference to a small 
business firm if the Recipient determines that the small business 
firm has a plan or proposal for marketing the invention which, if 
executed, is equally likely to bring the invention to practical 
application as any plans or proposals from applicants that are not 
small business firms; provided that the Recipient is also satisfied 
that the small business firm has the capability and resources to 
carry out its plan or proposal. The decision whether to give a 
preference in any specific case will be at the discretion of the 
Recipient. However, the Recipient agrees that the Secretary of 
Commerce may review the Recipient's licensing program and decisions 
regarding small business applicants, and the Recipient will 
negotiate changes to its licensing policies, procedures or practices 
with the Secretary when the Secretary's review discloses that the 
Recipient could take reasonable steps to implement more effectively 
the requirements of this paragraph (k)(4)(l).
    (l) Communications.
    All communications required by this Patent Rights clause should 
be sent to the DOE Patent Counsel address listed in the Award 
Document.
    (m) Electronic Filing.
    Unless otherwise specified in the award, the information 
identified in paragraphs (f)(2) and (f)(3) may be electronically 
filed. [End of Clause]

Patent Rights (Large Business Firms)--No Waiver:

    (a) Definitions.
    DOE patent waiver regulations, as used in this clause, means the 
Department of Energy patent waiver regulations in effect on the date 
of award. See 10 CFR part 784.

[[Page 54868]]

    Invention, as used in this clause, means any invention or 
discovery which is or may be patentable or otherwise protectable 
under title 35 of the United States Code or any novel variety of 
plant that is or may be protectable under the Plant Variety 
Protection Act (7 U.S.C. 2321, et seq.).
    Patent Counsel, as used in this clause, means the Department of 
Energy Patent Counsel assisting the awarding activity.
    Subject invention, as used in this clause, means any invention 
of the Recipient conceived or first actually reduced to practice in 
the course of or under this agreement.
    (b) Allocations of principal rights.
    (1) Assignment to the Government. The Recipient agrees to assign 
to the Government the entire right, title, and interest throughout 
the world in and to each subject invention, except to the extent 
that rights are retained by the Recipient under subparagraph (b)(2) 
and paragraph (d) of this clause.
    (2) Greater rights determinations. The Recipient, or an 
employee-inventor after consultation with the Recipient, may request 
greater rights than the nonexclusive license and the foreign patent 
rights provided in paragraph (d) of this clause on identified 
inventions in accordance with the DOE patent waiver regulations. 
Each determination of greater rights under this agreement shall be 
subject to paragraph (c) of this clause, unless otherwise provided 
in the greater rights determination, and to the reservations and 
conditions deemed to be appropriate by the Secretary of Energy or 
designee.
    (c) Minimum rights acquired by the Government.
    With respect to each subject invention to which the Department 
of Energy grants the Recipient principal or exclusive rights, the 
Recipient agrees to grant to the Government a nonexclusive, 
nontransferable, irrevocable, paid-up license to practice or have 
practiced each subject invention throughout the world by or on 
behalf of the Government of the United States (including any 
Government agency); to ``march-in rights'' as set forth in 37 CFR 
401.14(a)(J)); to preference for U.S. industry as set forth in 37 
CFR 401.14(a)(I); to submit on request periodic reports no more 
frequently than annually on the utilization or intent of utilization 
of a subject invention in a manner consistent with 35 U.S.C. 
202(c)(5); and agrees to provide for such Government rights in any 
instrument transferring rights in a subject invention.
    (d) Minimum rights to the Recipient.
    (1) The Recipient is hereby granted a revocable, nonexclusive, 
royalty-free license in each patent application filed in any country 
on a subject invention and any resulting patent in which the 
Government obtains title, unless the Recipient fails to disclose the 
subject invention within the times specified in subparagraph (e)(2) 
of this clause. The Recipient's license extends to its domestic 
subsidiaries and affiliates, if any, within the corporate structure 
of which the Recipient is a part and includes the right to grant 
sublicenses of the same scope to the extent the Recipient was 
legally obligated to do so at the time the agreement was awarded. 
The license is transferable only with the approval of DOE except 
when transferred to the successor of that part of the Recipient's 
business to which the invention pertains.
    (2) The Recipient may request the right to acquire patent rights 
to a subject invention in any foreign country where the Government 
has elected not to secure such rights, subject to the minimum rights 
acquired by the Government similar to paragraph (c) of this clause. 
Such request must be made in writing to the Patent Counsel as part 
of the disclosure required by subparagraph (e)(2) of this clause, 
with a copy to the DOE Contracting Officer. DOE approval, if given, 
will be based on a determination that this would best serve the 
national interest.
    (e) Invention identification, disclosures, and reports.
    (1) The Recipient shall establish and maintain active and 
effective procedures to assure that subject inventions are promptly 
identified and disclosed to Recipient personnel responsible for 
patent matters within 6 months of conception and/or first actual 
reduction to practice, whichever occurs first in the performance of 
work under this agreement. These procedures shall include the 
maintenance of laboratory notebooks or equivalent records and other 
records as are reasonably necessary to document the conception and/
or the first actual reduction to practice of subject inventions, and 
records that show that the procedures for identifying and disclosing 
the inventions are followed. Upon request, the Recipient shall 
furnish the Contracting Officer a description of such procedures for 
evaluation and for determination as to their effectiveness.
    (2) The Recipient shall disclose each subject invention to the 
DOE Patent Counsel with a copy to the Contracting Officer within 2 
months after the inventor discloses it in writing to Recipient 
personnel responsible for patent matters or, if earlier, within 6 
months after the Recipient becomes aware that a subject invention 
has been made, but in any event before any on sale, public use, or 
publication of such invention known to the Recipient. The disclosure 
to DOE shall be in the form of a written report and shall identify 
the agreement under which the invention was made and the 
inventor(s). It shall be sufficiently complete in technical detail 
to convey a clear understanding, to the extent known at the time of 
the disclosure, of the nature, purpose, operation, and physical, 
chemical, biological, or electrical characteristics of the 
invention. The disclosure shall also identify any publication, on 
sale, or public use of the invention and whether a manuscript 
describing the invention has been submitted for publication and, if 
so, whether it has been accepted for publication at the time of 
disclosure. In addition, after disclosure to DOE, the Recipient 
shall promptly notify Patent Counsel of the acceptance of any 
manuscript describing the invention for publication or of any on 
sale or public use planned by the Recipient. The report should also 
include any request for a greater rights determination in accordance 
with subparagraph (b)(2) of this clause. When an invention is 
disclosed to DOE under this paragraph, it shall be deemed to have 
been made in the manner specified in Sections (a)(1) and (a)(2) of 
42 U.S.C. 5908, unless the Recipient contends in writing at the time 
the invention is disclosed that is was not so made.
    (3) The Recipient shall furnish the Contracting Officer a final 
report, within 3 months after completion of the work listing all 
subject inventions or containing a statement that there were no such 
inventions, and listing all subawards/contracts at any tier 
containing a patent rights clause or containing a statement that 
there were no such subawards/contracts.
    (4) The Recipient agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to 
disclose promptly in writing to personnel identified as responsible 
for the administration of patent matters and in a format suggested 
by the Recipient each subject invention made under subaward/contract 
in order that the Recipient can comply with the disclosure 
provisions of paragraph (c) of this clause, and to execute all 
papers necessary to file patent applications on subject inventions 
and to establish the Government's rights in the subject inventions. 
This disclosure format should require, as a minimum, the information 
required by subparagraph (e)(2) of this clause.
    (5) The Recipient agrees, subject to FAR 27.302(j), that the 
Government may duplicate and disclose subject invention disclosures 
and all other reports and papers furnished or required to be 
furnished pursuant to this clause.
    (f) Examination of records relating to inventions.
    (1) The Contracting Officer or any authorized representative 
shall, until 3 years after final payment under this agreement, have 
the right to examine any books (including laboratory notebooks), 
records, and documents of the Recipient relating to the conception 
or first actual reduction to practice of inventions in the same 
field of technology as the work under this agreement to determine 
whether--
    (i) Any such inventions are subject inventions;
    (ii) The Recipient has established and maintains the procedures 
required by subparagraphs (e)(1) and (4) of this clause;
    (iii) The Recipient and its inventors have complied with the 
procedures.
    (2) If the Contracting Officer learns of an unreported Recipient 
invention which the Contracting Officer believes may be a subject 
invention, the Recipient may be required to disclose the invention 
to DOE for a determination of ownership rights.
    (3) Any examination of records under this paragraph will be 
subject to appropriate conditions to protect the confidentiality of 
the information involved.
    (g) Subaward/contract.
    (1) The Recipient shall include the clause PATENT RIGHTS (SMALL 
BUSINESS FIRMS AND NONPROFIT ORGANIZATIONS) (suitably modified to 
identify the parties) in all subawards/contracts, regardless of 
tier, for experimental, developmental, demonstration, or research 
work to be performed by a small business firm or domestic nonprofit 
organization,

[[Page 54869]]

except where the work of the subaward/contract is subject to an 
Exceptional Circumstances Determination by DOE. In all other 
subawards/contracts, regardless of tier, for experimental, 
developmental, demonstration, or research work, the Recipient shall 
include this clause (suitably modified to identify the parties), or 
an alternate clause as directed by the contracting officer. The 
Recipient shall not, as part of the consideration for awarding the 
subaward/contract, obtain rights in the subrecipient's/contractor's 
subject inventions.
    (2) In the event of a refusal by a prospective subrecipient/
contractor to accept such a clause the Recipient:
    (i) Shall promptly submit a written notice to the Contracting 
Officer setting forth the subrecipient/contractor's reasons for such 
refusal and other pertinent information that may expedite 
disposition of the matter; and
    (ii) Shall not proceed with such subaward/contract without the 
written authorization of the Contracting Officer.
    (3) In the case of subawards/contracts at any tier, DOE, the 
subrecipient/contractor, and Recipient agree that the mutual 
obligations of the parties created by this clause constitute a 
contract between the subrecipient/contractor and DOE with respect to 
those matters covered by this clause.
    (4) The Recipient shall promptly notify the Contracting Officer 
in writing upon the award of any subaward/contract at any tier 
containing a patent rights clause by identifying the subrecipient/
contractor, the applicable patent rights clause, the work to be 
performed under the subaward/contract, and the dates of award and 
estimated completion. Upon request of the Contracting Officer, the 
Recipient shall furnish a copy of such subaward/contract, and, no 
more frequently than annually, a listing of the subawards/contracts 
that have been awarded.
    (5) The Recipient shall identify all subject inventions of a 
subrecipient/contractor of which it acquires knowledge in the 
performance of this agreement and shall notify the Patent Counsel, 
with a copy to the contracting officer, promptly upon identification 
of the inventions.
    (h) Atomic energy.
    (1) No claim for pecuniary award of compensation under the 
provisions of the Atomic Energy Act of 1954, as amended, shall be 
asserted with respect to any invention or discovery made or 
conceived in the course of or under this agreement.
    (2) Except as otherwise authorized in writing by the Contracting 
Officer, the Recipient will obtain patent agreements to effectuate 
the provisions of subparagraph (h)(1) of this clause from all 
persons who perform any part of the work under this agreement, 
except nontechnical personnel, such as clerical employees and manual 
laborers.
    (i) Publication. It is recognized that during the course of the 
work under this agreement, the Recipient or its employees may from 
time to time desire to release or publish information regarding 
scientific or technical developments conceived or first actually 
reduced to practice in the course of or under this agreement. In 
order that public disclosure of such information will not adversely 
affect the patent interests of DOE or the Recipient, patent approval 
for release of publication shall be secured from Patent Counsel 
prior to any such release or publication.
    (j) Forfeiture of rights in unreported subject inventions.
    (1) The Recipient shall forfeit and assign to the Government, at 
the request of the Secretary of Energy or designee, all rights in 
any subject invention which the Recipient fails to report to Patent 
Counsel within six months after the time the Recipient:
    (i) Files or causes to be filed a United States or foreign 
patent application thereon; or
    (ii) Submits the final report required by subparagraph (e)(3) of 
this clause, whichever is later.
    (2) However, the Recipient shall not forfeit rights in a subject 
invention if, within the time specified in subparagraph (e)(2) of 
this clause, the Recipient:
    (i) Prepares a written decision based upon a review of the 
record that the invention was neither conceived nor first actually 
reduced to practice in the course of or under the agreement and 
delivers the decision to Patent Counsel, with a copy to the 
Contracting Officer; or
    (ii) Contending that the invention is not a subject invention, 
the Recipient nevertheless discloses the invention and all facts 
pertinent to this contention to the Patent Counsel, with a copy to 
the Contracting Officer; or
    (iii) Establishes that the failure to disclose did not result 
from the Recipient's fault or negligence.
    (3) Pending written assignment of the patent application and 
patents on a subject invention determined by the Secretary of Energy 
or designee to be forfeited (such determination to be a final 
decision under the Disputes clause of this agreement), the Recipient 
shall be deemed to hold the invention and the patent applications 
and patents pertaining thereto in trust for the Government. The 
forfeiture provision of this paragraph (j) shall be in addition to 
and shall not supersede other rights and remedies which the 
Government may have with respect to subject inventions. (End of 
clause)

Rights in Data--General

    (a) Definitions.
    Computer Data Bases, as used in this clause, means a collection 
of data in a form capable of, and for the purpose of, being stored 
in, processed, and operated on by a computer. The term does not 
include computer software.
    Computer software, as used in this clause, means (i) computer 
programs which are data comprising a series of instructions, rules, 
routines or statements, regardless of the media in which recorded, 
that allow or cause a computer to perform a specific operation or 
series of operations and (ii) data comprising source code listings, 
design details, algorithms, processes, flow charts, formulae, and 
related material that would enable the computer program to be 
produced, created or compiled. The term does not include computer 
data bases.
    Data, as used in this clause, means recorded information, 
regardless of form or the media on which it may be recorded. The 
term includes technical data and computer software. The term does 
not include information incidental to administration, such as 
financial, administrative, cost or pricing, or management 
information.
    Form, fit, and function data, as used in this clause, means data 
relating to items, components, or processes that are sufficient to 
enable physical and functional interchangeability, as well as data 
identifying source, size, configuration, mating, and attachment 
characteristics, functional characteristics, and performance 
requirements; except that for computer software it means data 
identifying source, functional characteristics, and performance 
requirements but specifically excludes the source code, algorithm, 
process, formulae, and flow charts of the software.
    Limited rights, as used in this clause, means the rights of the 
Government in limited rights data as set forth in the Limited Rights 
Notice of subparagraph (g)(2) if included in this clause.
    Limited rights data, as used in this clause, means data (other 
than computer software) developed at private expense that embody 
trade secrets or are commercial or financial and confidential or 
privileged.
    Restricted computer software, as used in this clause, means 
computer software developed at private expense and that is a trade 
secret; is commercial or financial and is confidential or 
privileged; or is published copyrighted computer software; including 
minor modifications of such computer software.
    Restricted rights, as used in this clause, means the rights of 
the Government in restricted computer software, as set forth in a 
Restricted Rights Notice of subparagraph (g)(3) if included in this 
clause, or as otherwise may be provided in a collateral agreement 
incorporated in and made part of this contract, including minor 
modifications of such computer software.
    Technical data, as used in this clause, means data (other than 
computer software) which are of a scientific or technical nature. 
Technical data does not include computer software, but does include 
manuals and instructional materials and technical data formatted as 
a computer data base.
    Unlimited rights, as used in this clause, means the right of the 
Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, and perform publicly and display 
publicly, in any manner and for any purpose, and to have or permit 
others to do so.
    (b) Allocations of rights.
    (1) Except as provided in paragraph (c) of this clause regarding 
copyright, the Government shall have unlimited rights in--
    (i) Data first produced in the performance of this agreement:
    (ii) Form, fit, and function data delivered under this 
agreement;
    (iii) Data delivered under this agreement (except for restricted 
computer software) that constitute manuals or instructional and 
training material for installation, operation, or routine 
maintenance and repair of items, components, or processes delivered 
or furnished for use under this agreement; and

[[Page 54870]]

    (iv) All other data delivered under this agreement unless 
provided otherwise for limited rights data or restricted computer 
software in accordance with paragraph (g) of this clause.
    (2) The Recipient shall have the right to--
    (i) Use, release to others, reproduce, distribute, or publish 
any data first produced or specifically used by the Recipient in the 
performance of this agreement, unless provided otherwise in 
paragraph (d) of this clause;
    (ii) Protect from unauthorized disclosure and use those data 
which are limited rights data or restricted computer software to the 
extent provided in paragraph (g) of this clause;
    (iii) Substantiate use of, add or correct limited rights, 
restricted rights, or copyright notices and to take other 
appropriate action, in accordance with paragraphs (e) and (f) of 
this clause; and
    (iv) Establish claim to copyright subsisting in data first 
produced in the performance of this agreement to the extent provided 
in subparagraph (c)(1) of this clause.
    (c) Copyright.
    (1) Data first produced in the performance of this agreement. 
Unless provided otherwise in paragraph (d) of this clause, the 
Recipient may establish, without prior approval of the Contracting 
Officer, claim to copyright subsisting in data first produced in the 
performance of this agreement. When claim to copyright is made, the 
Recipient shall affix the applicable copyright notices of 17 U.S.C. 
401 or 402 and acknowledgment of Government sponsorship (including 
agreement number) to the data when such data are delivered to the 
Government, as well as when the data are published or deposited for 
registration as a published work in the U.S. Copyright Office. For 
such copyrighted data, including computer software, the Recipient 
grants to the Government, and others acting on its behalf, a paid-
up, nonexclusive, irrevocable worldwide license in such copyrighted 
data to reproduce, prepare derivative works, distribute copies to 
the public, and perform publicly and display publicly, by or on 
behalf of the Government.
    (2) Data not first produced in the performance of this 
agreement. The Recipient shall not, without prior written permission 
of the Contracting Officer, incorporate in data delivered under this 
agreement any data not first produced in the performance of this 
agreement and which contains the copyright notice of 17 U.S.C. 401 
or 402, unless the Recipient identifies such data and grants to the 
Government, or acquires on its behalf, a license of the same scope 
as set forth in subparagraph (c)(1) of this clause; provided, 
however, that if such data are computer software the Government 
shall acquire a copyright license as set forth in subparagraph 
(g)(3) of this clause if included in this agreement or as otherwise 
may be provided in a collateral agreement incorporated in or made 
part of this agreement.
    (3) Removal of copyright notices. The Government agrees not to 
remove any copyright notices placed on data pursuant to this 
paragraph (c), and to include such notices on all reproductions of 
the data.
    (d) Release, publication and use of data.
    (1) The Recipient shall have the right to use, release to 
others, reproduce, distribute, or publish any data first produced or 
specifically used by the Recipient in the performance of this 
agreement, except to the extent such data may be subject to the 
Federal export control or national security laws or regulations, or 
unless otherwise provided in this paragraph of this clause or 
expressly set forth in this agreement.
    (2) The Recipient agrees that to the extent it receives or is 
given access to data necessary for the performance of this award, 
which contain restrictive markings, the Recipient shall treat the 
data in accordance with such markings unless otherwise specifically 
authorized in writing by the contracting officer.
    (e) Unauthorized marking of data.
    (1) Notwithstanding any other provisions of this agreement 
concerning inspection or acceptance, if any data delivered under 
this agreement are marked with the notices specified in subparagraph 
(g)(2) or (g)(3) of this clause and use of such is not authorized by 
this clause, or if such data bears any other restrictive or limiting 
markings not authorized by this agreement, the Contracting Officer 
may at any time either return the data to the Recipient or cancel or 
ignore the markings. However, the following procedures shall apply 
prior to canceling or ignoring the markings.
    (i) The Contracting Officer shall make written inquiry to the 
Recipient affording the Recipient 30 days from receipt of the 
inquiry to provide written justification to substantiate the 
propriety of the markings;
    (ii) If the Recipient fails to respond or fails to provide 
written justification to substantiate the propriety of the markings 
within the 30-day period (or a longer time not exceeding 90 days 
approved in writing by the Contracting Officer for good cause 
shown), the Government shall have the right to cancel or ignore the 
markings at any time after said period and the data will no longer 
be made subject to any disclosure prohibitions.
    (iii) If the Recipient provides written justification to 
substantiate the propriety of the markings within the period set in 
subdivision (e)(1)(i) of this clause, the Contracting Officer shall 
consider such written justification and determine whether or not the 
markings are to be cancelled or ignored. If the Contracting Officer 
determines that the markings are authorized, the Recipient shall be 
so notified in writing. If the Contracting Officer determines, with 
concurrence of the head of the contracting activity, that the 
markings are not authorized, the Contracting Officer shall furnish 
the Recipient a written determination, which determination shall 
become the final agency decision regarding the appropriateness of 
the markings unless the Recipient files suit in a court of competent 
jurisdiction within 90 days of receipt of the Contracting Officer's 
decision. The Government shall continue to abide by the markings 
under this subdivision (e)(1)(iii) until final resolution of the 
matter either by the Contracting Officer's determination becoming 
final (in which instance the Government shall thereafter have the 
right to cancel or ignore the markings at any time and the data will 
no longer be made subject to any disclosure prohibitions), or by 
final disposition of the matter by court decision if suit is filed.
    (2) The time limits in the procedures set forth in subparagraph 
(e)(1) of this clause may be modified in accordance with agency 
regulations implementing the Freedom of Information Act (5 U.S.C. 
552) if necessary to respond to a request thereunder.
    (f) Omitted or incorrect markings.
    (1) Data delivered to the Government without either the limited 
rights or restricted rights notice as authorized by paragraph (g) of 
this clause, or the copyright notice required by paragraph (c) of 
this clause, shall be deemed to have been furnished with unlimited 
rights, and the Government assumes no liability for the disclosure, 
use, or reproduction of such data. However, to the extent the data 
has not been disclosed without restriction outside the Government, 
the Recipient may request, within 6 months (or a longer time 
approved by the Contracting Officer for good cause shown) after 
delivery of such data, permission to have notices placed on 
qualifying data at the Recipient's expense, and the Contracting 
Officer may agree to do so if the Recipient:
    (i) Identifies the data to which the omitted notice is to be 
applied;
    (ii) Demonstrates that the omission of the notice was 
inadvertent;
    (iii) Establishes that the use of the proposed notice is 
authorized; and
    (iv) Acknowledges that the Government has no liability with 
respect to the disclosure, use, or reproduction of any such data 
made prior to the addition of the notice or resulting from the 
omission of the notice.
    (2) The Contracting Officer may also:
    (i) Permit correction at the Recipient's expense of incorrect 
notices if the Recipient identifies the data on which correction of 
the notice is to be made, and demonstrates that the correct notice 
is authorized, or
    (ii) Correct any incorrect notices.
    (g) Protection of limited rights data and restricted computer 
software.
    When data other than that listed in subdivisions (b)(1)(i), 
(ii), and (iii) of this clause are specified to be delivered under 
this agreement and qualify as either limited rights data or 
restricted computer software, if the Recipient desires to continue 
protection of such data, the Recipient shall withhold such data and 
not furnish them to the Government under this agreement. As a 
condition to this withholding, the Recipient shall identify the data 
being withheld and furnish form, fit, and function data in lieu 
thereof. Limited rights data that are formatted as a computer data 
base for delivery to the Government are to be treated as limited 
rights data and not restricted computer software.
    (h) Subaward/contract.
    The Recipient has the responsibility to obtain from its 
subrecipients/contractors all data and rights therein necessary to 
fulfill the Recipient's obligations to the Government under this 
agreement. If a subrecipient/contractor refuses to accept terms 
affording the Government such rights, the Recipient shall promptly 
bring such refusal to the attention of the Contracting Officer and 
not proceed with the subaward/contract award without further 
authorization.

[[Page 54871]]

    (i) Additional data requirements.
    In addition to the data specified elsewhere in this agreement to 
be delivered, the Contracting Officer may, at anytime during 
agreement performance or within a period of 3 years after acceptance 
of all items to be delivered under this agreement, order any data 
first produced or specifically used in the performance of this 
agreement. This clause is applicable to all data ordered under this 
subparagraph. Nothing contained in this subparagraph shall require 
the Recipient to deliver any data the withholding of which is 
authorized by this clause, or data which are specifically identified 
in this agreement as not subject to this clause. When data are to be 
delivered under this subparagraph, the Recipient will be compensated 
for converting the data into the prescribed form, for reproduction, 
and for delivery.
    (j) The recipient agrees, except as may be otherwise specified 
in this award for specific data items listed as not subject to this 
paragraph, that the Contracting Officer or an authorized 
representative may, up to three years after acceptance of all items 
to be delivered under this award, inspect at the Recipient's 
facility any data withheld pursuant to paragraph (g) of this clause, 
for purposes of verifying the Recipient's assertion pertaining to 
the limited rights or restricted rights status of the data or for 
evaluating work performance. Where the Recipient whose data are to 
be inspected demonstrates to the Contracting Officer that there 
would be a possible conflict of interest if the inspection were made 
by a particular representative, the Contracting Officer shall 
designate an alternate inspector.
    As prescribed in 600.325(d)(1), the following Alternate I and/or 
II may be inserted in the clause in the award instrument.

Alternate I

    (g)(2) Notwithstanding subparagraph (g)(1) of this clause, the 
agreement may identify and specify the delivery of limited rights 
data, or the Contracting Officer may require by written request the 
delivery of limited rights data that has been withheld or would 
otherwise be withholdable. If delivery of such data is so required, 
the Recipient may affix the following ``Limited Rights Notice'' to 
the data and the Government will thereafter treat the data, in 
accordance with such Notice:

LIMITED RIGHTS NOTICE

    (a) These data are submitted with limited rights under 
Government agreement No. ---------- (and subaward/contract No. ----
------, if appropriate). These data may be reproduced and used by 
the Government with the express limitation that they will not, 
without written permission of the Recipient, be used for purposes of 
manufacture nor disclosed outside the Government; except that the 
Government may disclose these data outside the Government for the 
following purposes, if any, provided that the Government makes such 
disclosure subject to prohibition against further use and 
disclosure:
    (1) Use (except for manufacture) by Federal support services 
contractors within the scope of their contracts;
    (2) This ``limited rights data'' may be disclosed for evaluation 
purposes under the restriction that the ``limited rights data'' be 
retained in confidence and not be further disclosed;
    (3) This ``limited rights data'' may be disclosed to other 
contractors participating in the Government's program of which this 
Recipient is a part for information or use (except for manufacture) 
in connection with the work performed under their awards and under 
the restriction that the ``limited rights data'' be retained in 
confidence and not be further disclosed;
    (4) This ``limited rights data'' may be used by the Government 
or others on its behalf for emergency repair or overhaul work under 
the restriction that the ``limited rights data'' be retained in 
confidence and not be further disclosed; and
    (5) Release to a foreign government, or instrumentality thereof, 
as the interests of the United States Government may require, for 
information or evaluation, or for emergency repair or overhaul work 
by such government. This Notice shall be marked on any reproduction 
of this data in whole or in part.
    (b) This Notice shall be marked on any reproduction of these 
data, in whole or in part. (End of notice)

Alternate II

    (g)(3)(i) Notwithstanding subparagraph (g)(1) of this clause, 
the agreement may identify and specify the delivery of restricted 
computer software, or the Contracting Officer may require by written 
request the delivery of restricted computer software that has been 
withheld or would otherwise be withholdable. If delivery of such 
computer software is so required, the Recipient may affix the 
following ``Restricted Rights Notice'' to the computer software and 
the Government will thereafter treat the computer software, subject 
to paragraphs (e) and (f) of this clause, in accordance with the 
Notice:

RESTRICTED RIGHTS NOTICE

    (a) This computer software is submitted with restricted rights 
under Government Agreement No. ---------- (and subaward/contract --
--------, if appropriate). It may not be used, reproduced, or 
disclosed by the Government except as provided in paragraph (b) of 
this Notice or as otherwise expressly stated in the agreement.
    (b) This computer software may be--
    (1) Used or copied for use in or with the computer or computers 
for which it was acquired, including use at any Government 
installation to which such computer or computers may be transferred;
    (2) Used or copied for use in a backup computer if any computer 
for which it was acquired is inoperative;
    (3) Reproduced for safekeeping (archives) or backup purposes;
    (4) Modified, adapted, or combined with other computer software, 
provided that the modified, combined, or adapted portions of the 
derivative software are made subject to the same restricted rights;
    (5) Disclosed to and reproduced for use by support service 
Recipients in accordance with subparagraphs (b)(1) through (4) of 
this clause, provided the Government makes such disclosure or 
reproduction subject to these restricted rights; and
    (6) Used or copied for use in or transferred to a replacement 
computer.
    (c) Notwithstanding the foregoing, if this computer software is 
published copyrighted computer software, it is licensed to the 
Government, without disclosure prohibitions, with the minimum rights 
set forth in paragraph (b) of this clause.
    (d) Any other rights or limitations regarding the use, 
duplication, or disclosure of this computer software are to be 
expressly stated in, or incorporated in, the agreement.
    (e) This Notice shall be marked on any reproduction of this 
computer software, in whole or in part. (End of notice)
    (ii) Where it is impractical to include the Restricted Rights 
Notice on restricted computer software, the following short-form 
Notice may be used in lieu thereof:

RESTRICTED RIGHTS NOTICE

    Use, reproduction, or disclosure is subject to restrictions set 
forth in Agreement No. ---------- (and subaward/contract ----------, 
if appropriate) with ---------- (name of Recipient and subrecipient/
contractor).'' (End of notice)
    (iii) If restricted computer software is delivered with the 
copyright notice of 17 U.S.C. 401, it will be presumed to be 
published copyrighted computer software licensed to the Government 
without disclosure prohibitions, with the minimum rights set forth 
in paragraph (b) of this clause, unless the Recipient includes the 
following statement with such copyright notice: ``Unpublished--
rights reserved under the Copyright Laws of the United States.'' 
(End of clause)

Rights in Data--Programs Covered Under Special Data Protected Statutes

    (a) Definitions.
    Computer Data Bases, as used in this clause, means a collection 
of data in a form capable of, and for the purpose of, being stored 
in, processed, and operated on by a computer. The term does not 
include computer software.
    Computer software, as used in this clause, means (i) computer 
programs which are data comprising a series of instructions, rules, 
routines, or statements, regardless of the media in which recorded, 
that allow or cause a computer to perform a specific operation or 
series of operations and (ii) data comprising source code listings, 
design details, algorithms, processes, flow charts, formulae and 
related material that would enable the computer program to be 
produced, created or compiled. The term does not include computer 
data bases.
    Data, as used in this clause, means recorded information, 
regardless of form or the media on which it may be recorded. The 
term includes technical data and computer software. The term does 
not include information incidental to administration, such as 
financial, administrative, cost or pricing or management 
information.
    Form, fit, and function data, as used in this clause, means data 
relating to items, components, or processes that are sufficient to 
enable physical and functional interchangeability as well as data 
identifying

[[Page 54872]]

source, size, configuration, mating and attachment characteristics, 
functional characteristics, and performance requirements except that 
for computer software it means data identifying source, functional 
characteristics, and performance requirements but specifically 
excludes the source code, algorithm, process, formulae, and flow 
charts of the software.
    Limited rights data, as used in this clause, means data (other 
than computer software) developed at private expense that embody 
trade secrets or are commercial or financial and confidential or 
privileged.
    Restricted computer software, as used in this clause, means 
computer software developed at private expense and that is a trade 
secret; is commercial or financial and confidential or privileged; 
or is published copyrighted computer software; including 
modifications of such computer software.
    Protected data, as used in this clause, means technical data or 
commercial or financial data first produced in the performance of 
the award which, if it had been obtained from and first produced by 
a non-federal party, would be a trade secret or commercial or 
financial information that is privileged or confidential under the 
meaning of Title 5, United States Code Section 552(b)(4), (5 U.S.C. 
552(b)(4)), and which data is marked as being protected data by a 
party to the award.
    Protected rights, as used in this clause, mean the rights in 
protected data set forth in the Protected Rights Notice of paragraph 
(g) of this clause.
    Technical data, as used in this clause, means that data which 
are of a scientific or technical nature. Technical data does not 
include computer software, but does include manuals and 
instructional materials and technical data formatted as a computer 
data base.
    Unlimited rights, as used in this clause, means the right of the 
Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, and perform publicly and display 
publicly, in any manner and for any purpose whatsoever, and to have 
or permit others to do so.
    (b) Allocation of rights.
    (1) Except as provided in paragraph (c) of this clause regarding 
copyright, the Government shall have unlimited rights in--
    (i) Data specifically identified in this agreement as data to be 
delivered without restriction;
    (ii) Form, fit, and function data delivered under this 
agreement;
    (iii) Data delivered under this agreement (except for restricted 
computer software) that constitute manuals or instructional and 
training material for installation, operation, or routine 
maintenance and repair of items, components, or processes delivered 
or furnished for use under this agreement; and
    (iv) All other data delivered under this agreement unless 
provided otherwise for protected data in accordance with paragraph 
(g) of this clause or for limited rights data or restricted computer 
software in accordance with paragraph (h) of this clause.
    (2) The Recipient shall have the right to--
    (i) Protect rights in protected data delivered under this 
agreement in the manner and to the extent provided in paragraph (g) 
of this clause;
    (ii) Withhold from delivery those data which are limited rights 
data or restricted computer software to the extent provided in 
paragraph (h) of this clause;
    (iii) Substantiate use of, add, or correct protected rights or 
copyrights notices and to take other appropriate action, in 
accordance with paragraph (e) of this clause; and
    (iv) Establish claim to copyright subsisting in data first 
produced in the performance of this agreement to the extent provided 
in subparagraph (c)(1) of this clause.
    (c) Copyright.
    (1) Data first produced in the performance of this agreement. 
Except as otherwise specifically provided in this agreement, the 
Recipient may establish, without the prior approval of the 
Contracting Officer, claim to copyright subsisting in any data first 
produced in the performance of this agreement. If claim to copyright 
is made, the Recipient shall affix the applicable copyright notice 
of 17 U.S.C. 401 or 402 and acknowledgment of Government sponsorship 
(including agreement number) to the data when such data are 
delivered to the Government, as well as when the data are published 
or deposited for registration as a published work in the U.S. 
Copyright Office. For such copyrighted data, including computer 
software, the Recipient grants to the Government, and others acting 
on its behalf, a paid-up nonexclusive, irrevocable, worldwide 
license to reproduce, prepare derivative works, distribute copies to 
the public, and perform publicly and display publicly, by or on 
behalf of the Government, for all such data.
    (2) Data not first produced in the performance of this 
agreement. The Recipient shall not, without prior written permission 
of the Contracting Officer, incorporate in data delivered under this 
agreement any data that are not first produced in the performance of 
this agreement and that contain the copyright notice of 17 U.S.C. 
401 or 402, unless the Recipient identifies such data and grants to 
the Government, or acquires on its behalf, a license of the same 
scope as set forth in subparagraph (c)(1) of this clause; provided, 
however, that if such data are computer software, the Government 
shall acquire a copyright license as set forth in subparagraph 
(h)(3) of this clause if included in this agreement or as otherwise 
may be provided in a collateral agreement incorporated or made a 
part of this agreement.
    (3) Removal of copyright notices. The Government agrees not to 
remove any copyright notices placed on data pursuant to this 
paragraph (c), and to include such notices on all reproductions of 
the data.
    (d) Release, publication and use of data.
    (1) The Recipient shall have the right to use, release to 
others, reproduce, distribute, or publish any data first produced or 
specifically used by the Recipient in the performance of this 
contract, except to the extent such data may be subject to the 
Federal export control or national security laws or regulations, or 
unless otherwise provided in this paragraph of this clause or 
expressly set forth in this contract.
    (2) The Recipient agrees that to the extent it receives or is 
given access to data necessary for the performance of this agreement 
which contain restrictive markings, the Recipient shall treat the 
data in accordance with such markings unless otherwise specifically 
authorized in writing by the Contracting Officer.
    (e) Unauthorized marking of data.
    (1) Notwithstanding any other provisions of this agreement 
concerning inspection or acceptance, if any data delivered under 
this agreement are marked with the notices specified in subparagraph 
(g)(2) or (g)(3) of this clause and use of such is not authorized by 
this clause, or if such data bears any other restrictive or limiting 
markings not authorized by this agreement, the Contracting Officer 
may at any time either return the data to the Recipient or cancel or 
ignore the markings. However, the following procedures shall apply 
prior to canceling or ignoring the markings.
    (i) The Contracting Officer shall make written inquiry to the 
Recipient affording the Recipient 30 days from receipt of the 
inquiry to provide written justification to substantiate the 
propriety of the markings;
    (ii) If the Recipient fails to respond or fails to provide 
written justification to substantiate the propriety of the markings 
within the 30-day period (or a longer time not exceeding 90 days 
approved in writing by the Contracting Officer for good cause 
shown), the Government shall have the right to cancel or ignore the 
markings at any time after said period and the data will no longer 
be made subject to any disclosure prohibitions.
    (iii) If the Recipient provides written justification to 
substantiate the propriety of the markings within the period set in 
subdivision (e)(1)(i) of this clause, the Contracting Officer shall 
consider such written justification and determine whether or not the 
markings are to be cancelled or ignored. If the Contracting Officer 
determines that the markings are authorized, the Recipient shall be 
so notified in writing. If the Contracting Officer determines, with 
concurrence of the head of the contracting activity, that the 
markings are not authorized, the Contracting Officer shall furnish 
the Recipient a written determination, which determination shall 
become the final agency decision regarding the appropriateness of 
the markings unless the Recipient files suit in a court of competent 
jurisdiction within 90 days of receipt of the Contracting Officer's 
decision. The Government shall continue to abide by the markings 
under this subdivision (e)(1)(iii) until final resolution of the 
matter either by the Contracting Officer's determination becoming 
final (in which instance the Government shall thereafter have the 
right to cancel or ignore the markings at any time and the data will 
no longer be made subject to any disclosure prohibitions), or by 
final disposition of the matter by court decision if suit is filed.
    (2) The time limits in the procedures set forth in subparagraph 
(e)(1) of this clause may be modified in accordance with agency 
regulations implementing the Freedom of Information Act (5 U.S.C. 
552) if necessary to respond to a request thereunder.
    (f) Omitted or incorrect markings.
    (1) Data delivered to the Government without either the limited 
rights or restricted

[[Page 54873]]

rights notice as authorized by paragraph (g) of this clause, or the 
copyright notice required by paragraph (c) of this clause, shall be 
deemed to have been furnished with unlimited rights, and the 
Government assumes no liability for the disclosure, use, or 
reproduction of such data. However, to the extent the data has not 
been disclosed without restriction outside the Government, the 
Recipient may request, within 6 months (or a longer time approved by 
the Contracting Officer for good cause shown) after delivery of such 
data, permission to have notices placed on qualifying data at the 
Recipient's expense, and the Contracting Officer may agree to do so 
if the Recipient--
    (i) Identifies the data to which the omitted notice is to be 
applied;
    (ii) Demonstrates that the omission of the notice was 
inadvertent;
    (iii) Establishes that the use of the proposed notice is 
authorized; and
    (iv) Acknowledges that the Government has no liability with 
respect to the disclosure, use, or reproduction of any such data 
made prior to the addition of the notice or resulting from the 
omission of the notice.
    (2) The Contracting Officer may also--
    (i) permit correction at the Recipient's expense of incorrect 
notices if the Recipient identifies the data on which correction of 
the notice is to be made, and demonstrates that the correct notice 
is authorized, or
    (ii) correct any incorrect notices.
    (g) Rights to protected data.
    (1) The Recipient may, with the concurrence of DOE, claim and 
mark as protected data, any data first produced in the performance 
of this award. Any such claimed ``protected data'' will be clearly 
marked with the following Protected Rights Notice, and will be 
treated in accordance with such Notice, subject to the provisions of 
paragraphs (e) and (f) of this clause.

PROTECTED RIGHTS NOTICE

    These protected data were produced under agreement no. ------ 
with the U.S. Department of Energy and may not be published, 
disseminated, or disclosed to others outside the Government until 
(Note: The period of protection of such data is fully negotiable, 
but cannot exceed the applicable statutorily authorized maximum), 
unless express written authorization is obtained from the recipient. 
Upon expiration of the period of protection set forth in this 
Notice, the Government shall have unlimited rights in this data. 
This Notice shall be marked on any reproduction of this data, in 
whole or in part. (End of notice)
    (2) Any such marked Protected Data may be disclosed under 
obligations of confidentiality for the following purposes: (a) For 
evaluation purposes under the restriction that the ``Protected 
Data'' be retained in confidence and not be further disclosed; or 
(b) To subcontractors or other team members performing work under 
the Government's (insert name of program or other applicable 
activity) program of which this award is a part, for information or 
use in connection with the work performed under their activity, and 
under the restriction that the Protected Data be retained in 
confidence and not be further disclosed.
    (3) The obligations of confidentiality and restrictions on 
publication and dissemination shall end for any Protected Data: (a) 
At the end of the protected period; (b) If the data becomes publicly 
known or available from other sources without a breach of the 
obligation of confidentiality with respect to the Protected Data; 
(c) If the same data is independently developed by someone who did 
not have access to the Protected Data and such data is made 
available without obligations of confidentiality; or (d) If the 
Recipient disseminates or authorizes another to disseminate such 
data without obligations of confidentiality.
    (4) However, the Recipient agrees that the following types of 
data are not considered to be protected and shall be provided to the 
Government when required by this award without any claim that the 
data are Protected Data. The parties agree that notwithstanding the 
following lists of types of data, nothing precludes the Government 
from seeking delivery of additional data in accordance with this 
award, or from making publicly available additional non-protected 
data, nor does the following list constitute any admission by the 
Government that technical data not on the list is Protected Data. 
(Note: It is expected that this paragraph will specify certain types 
of mutually agreed upon data that will be available to the public 
and will not be asserted by the recipient/contractor as limited 
rights or protected data).
    (5) The Government's sole obligation with respect to any 
protected data shall be as set forth in this paragraph (g).
    (h) Protection of limited rights data.
    When data other than that listed in subdivisions (b)(1)(i), 
(ii), and (iii) of this clause are specified to be delivered under 
this agreement and such data qualify as either limited rights data 
or restricted computer software, the Recipient, if the Recipient 
desires to continue protection of such data, shall withhold such 
data and not furnish them to the Government under this agreement. As 
a condition to this withholding the Recipient shall identify the 
data being withheld and furnish form, fit, and function data in lieu 
thereof.
    (i) Subaward/contract.
    The Recipient has the responsibility to obtain from its 
subrecipients/contractors all data and rights therein necessary to 
fulfill the Recipient's obligations to the Government under this 
agreement. If a subrecipient/contractor refuses to accept terms 
affording the Government such rights, the Recipient shall promptly 
bring such refusal to the attention of the Contracting Officer and 
not proceed with subaward/contract award without further 
authorization.
    (j) Additional data requirements.
    In addition to the data specified elsewhere in this agreement to 
be delivered, the Contracting Officer may, at anytime during 
agreement performance or within a period of 3 years after acceptance 
of all items to be delivered under this agreement, order any data 
first produced or specifically used in the performance of this 
agreement. This clause is applicable to all data ordered under this 
subparagraph. Nothing contained in this subparagraph shall require 
the Recipient to deliver any data the withholding of which is 
authorized by this clause, or data which are specifically identified 
in this agreement as not subject to this clause. When data are to be 
delivered under this subparagraph, the Recipient will be compensated 
for converting the data into the prescribed form, for reproduction, 
and for delivery.
    (k) The Recipient agrees, except as may be otherwise specified 
in this agreement for specific data items listed as not subject to 
this paragraph, that the Contracting Officer or an authorized 
representative may, up to three years after acceptance of all items 
to be delivered under this contract, inspect at the Recipient's 
facility any data withheld pursuant to paragraph (h) of this clause, 
for purposes of verifying the Recipient's assertion pertaining to 
the limited rights or restricted rights status of the data or for 
evaluating work performance. Where the Recipient whose data are to 
be inspected demonstrates to the Contracting Officer that there 
would be a possible conflict of interest if the inspection were made 
by a particular representative, the Contracting Officer shall 
designate an alternate inspector.
    As prescribed in 600.325(e)(2), the following Alternate I and/or 
II may be inserted in the clause in the award instrument.

Alternate I

    (h)(2) Notwithstanding subparagraph (h)(1) of this clause, the 
agreement may identify and specify the delivery of limited rights 
data, or the Contracting Officer may require by written request the 
delivery of limited rights data that has been withheld or would 
otherwise be withholdable. If delivery of such data is so required, 
the Recipient may affix the following ``Limited Rights Notice'' to 
the data and the Government will thereafter treat the data, in 
accordance with such Notice:

LIMITED RIGHTS NOTICE

    (a) These data are submitted with limited rights under 
Government agreement No. ------ (and subaward/contract No. ------, 
if appropriate). These data may be reproduced and used by the 
Government with the express limitation that they will not, without 
written permission of the Recipient, be used for purposes of 
manufacture nor disclosed outside the Government; except that the 
Government may disclose these data outside the Government for the 
following purposes, if any, provided that the Government makes such 
disclosure subject to prohibition against further use and 
disclosure:
    (1) Use (except for manufacture) by Federal support services 
contractors within the scope of their contracts;
    (2) This ``limited rights data'' may be disclosed for evaluation 
purposes under the restriction that the ``limited rights data'' be 
retained in confidence and not be further disclosed;
    (3) This ``limited rights data'' may be disclosed to other 
contractors participating in the Government's program of which this 
Recipient is a part for information or use (except for manufacture) 
in connection with the work performed under their awards and under 
the restriction that the ``limited rights data'' be retained in 
confidence and not be further disclosed;
    (4) This ``limited rights data'' may be used by the Government 
or others on its behalf for

[[Page 54874]]

emergency repair or overhaul work under the restriction that the 
``limited rights data'' be retained in confidence and not be further 
disclosed; and
    (5) Release to a foreign government, or instrumentality thereof, 
as the interests of the United States Government may require, for 
information or evaluation, or for emergency repair or overhaul work 
by such government. This Notice shall be marked on any reproduction 
of this data in whole or in part.
    (b) This Notice shall be marked on any reproduction of these 
data, in whole or in part. (End of notice)

Alternate II

    (h)(3)(i) Notwithstanding subparagraph (h)(1) of this clause, 
the agreement may identify and specify the delivery of restricted 
computer software, or the Contracting Officer may require by written 
request the delivery of restricted computer software that has been 
withheld or would otherwise be withholdable. If delivery of such 
computer software is so required, the Recipient may affix the 
following ``Restricted Rights Notice'' to the computer software and 
the Government will thereafter treat the computer software, subject 
to paragraphs (d) and (e) of this clause, in accordance with the 
Notice:

RESTRICTED RIGHTS NOTICE

    (a) This computer software is submitted with restricted rights 
under Government Agreement No. ------ (and subaward/contract ------, 
if appropriate). It may not be used, reproduced, or disclosed by the 
Government except as provided in paragraph (c) of this Notice or as 
otherwise expressly stated in the agreement.
    (b) This computer software may be--
    (1) Used or copied for use in or with the computer or computers 
for which it was acquired, including use at any Government 
installation to which such computer or computers may be transferred;
    (2) Used or copied for use in a backup computer if any computer 
for which it was acquired is inoperative;
    (3) Reproduced for safekeeping (archives) or backup purposes;
    (4) Modified, adapted, or combined with other computer software, 
provided that the modified, combined, or adapted portions of the 
derivative software are made subject to the same restricted rights;
    (5) Disclosed to and reproduced for use by Federal support 
service Contractors in accordance with subparagraphs (b)(1) through 
(4) of this Notice, provided the Government makes such disclosure or 
reproduction subject to these restricted rights; and
    (6) Used or copied for use in or transferred to a replacement 
computer.
    (c) Notwithstanding the foregoing, if this computer software is 
published copyrighted computer software, it is licensed to the 
Government, without disclosure prohibitions, with the minimum rights 
set forth in paragraph (b) of this clause.
    (d) Any other rights or limitations regarding the use, 
duplication, or disclosure of this computer software are to be 
expressly stated in, or incorporated in, the agreement.
    (e) This Notice shall be marked on any reproduction of this 
computer software, in whole or in part. (End of notice)
    (ii) Where it is impractical to include the Restricted Rights 
Notice on restricted computer software, the following short-form 
Notice may be used in lieu thereof:

RESTRICTED RIGHTS NOTICE

    Use, reproduction, or disclosure is subject to restrictions set 
forth in Agreement No. ------ (and subaward/contract ------, if 
appropriate) with ------ (name of Recipient and subrecipient/
contractor).'' (End of notice)
    (iii) If restricted computer software is delivered with the 
copyright notice of 17 U.S.C. 401, it will be presumed to be 
published copyrighted computer software licensed to the Government 
without disclosure prohibitions, with the minimum rights set forth 
in paragraph (b) of this clause, unless the Recipient includes the 
following statement with such copyright notice: ``Unpublished--
rights reserved under the Copyright Laws of the United States.'' 
(End of clause)

Appendix B to Subpart D--Contract Provisions

    All contracts awarded by a recipient, including those for 
amounts less than the simplified acquisition threshold, must contain 
the following provisions as applicable:
    1. Equal Employment Opportunity--All contracts must contain a 
provision requiring compliance with E.O. 11246 (3 CFR, 1964-1965 
Comp., p. 339), ``Equal Employment Opportunity,'' as amended by E.O. 
11375 (3 CFR, 1966-1970 Comp., p. 684), ``Amending Executive Order 
11246 Relating to Equal Employment Opportunity,'' and as 
supplemented by regulations at 41 CFR chapter 60, ``Office of 
Federal Contract Compliance Programs, Equal Employment Opportunity, 
Department of Labor.''
    2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C. 
276c)--All contracts and subawards in excess of $2000 for 
construction or repair awarded by recipients and subrecipients must 
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 must be prohibited from inducing, by 
any means, any person employed in the construction, completion, or 
repair of public work, to give up any part of the compensation to 
which he is otherwise entitled. The recipient must report all 
suspected or reported violations to the responsible DOE contracting 
officer.
    3. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
333)--Where applicable, all contracts awarded by recipients in 
excess of $100,000 for construction and other purposes that involve 
the employment of mechanics or laborers must 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 is 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 is 
required to work in surroundings or under working conditions which 
are unsanitary, hazardous or dangerous. These requirements do not 
apply to the purchases of supplies or materials or articles 
ordinarily available on the open market, or contracts for 
transportation or transmission of intelligence.
    4. Rights to Inventions and Data Made Under a Contract or 
Agreement--Contracts or agreements for the performance of 
experimental, developmental, or research work must provide for the 
rights of the Federal Government and the recipient in any resulting 
invention in accordance with 10 CFR 600.325 and Appendix A--Patent 
and Data Rights to Subpart D, Part 600.
    5. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water 
Pollution Control Act (33 U.S.C. 1251 et seq.), as amended--
Contracts and subawards of amounts in excess of $100,000 must 
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 must be reported to the responsible DOE contracting 
officer and the Regional Office of the Environmental Protection 
Agency (EPA).
    6. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--Contractors 
who apply or bid for an award of $100,000 or more must file the 
required certification. Each tier certifies to the tier above that 
it will not and has not used Federal appropriated funds to pay any 
person or organization for influencing or attempting to influence an 
officer or employee of any agency, a member of Congress, officer or 
employee of Congress, or an employee of a member of Congress in 
connection with obtaining any Federal contract, grant or any other 
award covered by 31 U.S.C. 1352. Each tier must also disclose any 
lobbying with non-Federal funds that takes place in connection with 
obtaining any Federal award. Such disclosures are forwarded from 
tier to tier up to the recipient.
    7. Debarment and Suspension (E.O.s 12549 and 12689)--Contract 
awards that exceed the simplified acquisition threshold and certain 
other contract awards must not be made to parties listed on 
nonprocurement portion of the General Services Administration's 
Lists of Parties Excluded from Federal Procurement and 
Nonprocurement Programs in accordance with E.O.s 12549 (3 CFR, 1986 
Comp., p. 189) and 12689 (3 CFR, 1989 Comp., p. 235), ``Debarment 
and Suspension.'' This list contains the names of parties debarred, 
suspended, or otherwise

[[Page 54875]]

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 must provide 
the required certification regarding its exclusion status and that 
of its principals.
    8. Davis-Bacon Act (40 U.S.C. 276a)--As a general rule, it is 
unlikely that the Davis-Bacon Act, which among other thing requires 
payment of prevailing wages on projects for the construction of 
public works, would apply to financial assistance awards. However, 
the presence of certain factors (e.g., requirement of particular 
program statues; title to a construction facility resting in the 
Government) might necessitate a closer analysis of the award, to 
determine if the Davis-Bacon Act would apply in the particular 
factual situation presented.

[FR Doc. 02-20967 Filed 8-23-02; 8:45 am]
BILLING CODE 6450-01-P