[Federal Register Volume 68, Number 124 (Friday, June 27, 2003)]
[Notices]
[Pages 38314-38315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-16251]


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DEPARTMENT OF DEFENSE

Office of the Secretary


Cost Sharing in Department of Defense Research Programs Using 
Assistance Instruments

AGENCY: Office of the Under Secretary of Defense for Acquisition, 
Technology, and Logistics, DoD.

ACTION: Notice of availability.

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SUMMARY: The Department of Defense (DoD) proposes to issue a DoD 
Instruction on the use of cost sharing in basic, applied, and advanced 
research projects carried out through grants and other assistance 
instruments. The purposes of the DoD Instruction are to ensure that 
cost sharing is used appropriately and to make awarding offices' cost 
sharing policies and practices clear to potential proposers. The DoD 
Instruction will provide consistent policies and procedures for 
assistance instruments awarded under the many research programs of the 
Army, Navy, Air Force, Defense Advanced Research Projects Agency and 
other Defense Agencies. The draft DoD Instruction is available on the 
Director of Defense Research and Engineering Web site located at http://www.acq.osd.mil/ddre/research/draftcostsharing.pdf.

DATES: Comments must be received by August 26, 2003.

ADDRESSES: Comments should be addressed to: Dr. Anne Matsuura, DoD 
Basic Research Office, 4015 Wilson Blvd., Suite 216, Arlington, VA 
22203. Comments may be submitted via e-mail ([email protected]).

FOR FURTHER INFORMATION CONTACT: Dr. Anne Matsuura, DoD Basic Research 
Office, at (703) 696-2530.

SUPPLEMENTARY INFORMATION: Over the past few years, research performers 
have expressed concern to Federal awarding agencies about their cost 
sharing policies and practices. In the late 1990s, for example, the 
Committee of Science of the National Science and Technology Council 
(NSTC) received commented on cost sharing when it conducted a review 
designed to find ways to relieve unnecessary sources of stress on the 
Government-university research partnership. Comments from universities 
suggested a need for clearer and more consistent agency policies on 
cost sharing practices and expectations. As a result of the NSTC 
review, the President issued Executive Order 13185 in December 2000 to 
establish guiding principles and operating principles for the research 
partnership between universities and Federal agencies. (The Executive 
order can be found at http://www.ostp.gov/html/011001_3.html. One 
operating principle is that Federal ``agency cost sharing policies and 
practices must be transparent.'' The Executive order refers to the full 
explanation of this operating principle in the April 1999 NSTC report 
entitled ``Renewing the Government-University Partnership:''

    ``As in any investment partnership, each partner cointributes to 
the research endeavor. While the primary contribution of 
universities is the intellectual capital of the researchers' ideas, 
knowledge, and creativity, it is sometimes appropriate for 
universities to share in the costs of the research (and in some 
cases cost sharing is required by statute). Cost sharing can be 
appropriate when there are compelling policy reasons for it, such as 
in programs whose principal purpose is to build infrastructure and 
enhance an awardee's institution's ability to compete for future 
Federal awards. Cost sharing is rarely appropriate when an awardee 
is acting solely as a supplier of goods or services to the 
government since this would entail a university subsidy of goods 
purchased by the government. If agency funds are not sufficient to 
cover the costs of a research project, the agency and the university 
should re-examine the scope of the project, unless there are 
compelling policy reasons to require university cost sharing. 
Agencies should be clear about their cost sharing policies and 
announce when and how sharing will figure in selection processes, 
including explicit information regarding the amount of cost sharing 
expected.''


[[Page 38315]]


    The cost sharing issue arose again after the Congress enacted the 
Federal Financial Assistance Management Improvement Act of 1999 (Pub. 
L. 106-107). That law requires Federal agencies to streamline and 
simplify the award and administration of Federal grants. It also 
mandates that agencies obtain input from the affected public. Comments 
that Federal agencies received from grant applicants and recipients 
pointed out a need for agency action on cost sharing, reinforcing the 
earlier findings of the NSTC review.
    The Department of Defense, which is active in the leadership of the 
interagency streamlining efforts under Public Law 106-107 and helped 
develop the guiding and operating principles set forth in Executive 
Order 13185, proposes to address cost sharing for assistance 
instruments through a DoD Instruction. This Instruction for assistance 
instruments will parallel and complement action the Department already 
has taken to address cost sharing issues for research and development 
contracts (a DoD policy memorandum of May 16, 2001, established a 
policy, since incorporated into paragraph E1.1.6 of DoD Directive 
5000.1, that prohibits contractor cost sharing if there is no 
reasonable probability of commercial applications).
    The proposed Instruction for assistance instruments would 
disseminate guidance for program managers and grants officers in 
research program offices in the DoD Components. The guidance is drafted 
in plain language, in a question-and-answer format. The intent is ot 
establish an easily understood DoD-wide policy framework to help ensure 
that proposers and research performers receive consistent, as well as 
fair and equitable, treatment on cost sharing matters. We invite input 
from potential proposers and performers of DoD basic, applied, and 
advanced research efforts to help us improve the proposed Instryctuib 
and better achieve this goal.

    Dated: June 20, 2003.
Patricia L. Toppings,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 03-16251 Filed 6-26-03; 8:45 am]
BILLING CODE 5001-08-M