[Federal Register Volume 69, Number 2 (Monday, January 5, 2004)]
[Rules and Regulations]
[Pages 272-278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-32109]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

National Institutes of Health

42 CFR Part 52h

RIN 0925-AA


Scientific Peer Review of Research Grant Applications and 
Research and Development Contract Projects

AGENCY: National Institutes of Health, Department of Health and Human 
Services.

ACTION: Final rule.

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SUMMARY: The National Institutes of Health (NIH) is revising the 
regulations governing scientific peer review of research grant 
applications and research and development contract projects and project 
proposals to clarify the review criteria, revise the conflict of 
interest requirements to reflect the fact that members of Scientific 
Review Groups do not become Federal employees by reason of that 
membership, and make other changes necessary to update the regulations.

EFFECTIVE DATE: This final rule is effective on February 4, 2004.

FOR FURTHER INFORMATION CONTACT: Jerry Moore, NIH Regulations Officer, 
Office of Management Assessment, NIH, 6011 Executive Boulevard, Room 
601, MSC 7669, Rockville, MD 20852, telephone 301-496-4607 (not a toll-
free number).

SUPPLEMENTARY INFORMATION: Applications to NIH for grants for 
biomedical and behavioral research and NIH research and development 
contract project concepts and contract proposals are reviewed under a 
two-level scientific peer review system. This dual system separates the 
scientific assessment of proposed projects from policy decisions about 
scientific areas to be supported and the level of resources to be 
allocated, which permits a more objective and complete evaluation than 
would result from a single level of review. The review system is 
designed to provide NIH officials with the best available advice about 
scientific and technical merit as well as program priorities and policy 
considerations.
    The review system consists of two sequential levels of review for 
each application that will be considered for funding. For most grant 
and cooperative agreement (hereafter referred to as grant) 
applications, the initial or first level review involves panels of 
experts established according to scientific disciplines or medical 
speciality areas, whose primary function is to evaluate the scientific 
merit of grant applications. These panels are referred to as Scientific 
Review Groups (SRGs), a generic term that includes both regular study 
sections and Special Emphasis Panels (SEPs). In some cases, SRGs in 
scientifically related areas are organizationally combined into Initial 
Review Groups (IRGs).
    The second level of review of grant applications is performed by 
National Advisory Boards or Councils composed of both scientific and 
lay representatives. The recommendations made by these Boards or 
Councils are based not only on considerations of scientific merit as 
judged by the SRG but also on the relevance of a proposed project to 
the programs and priorities of NIH. In most cases, Councils concur with 
the SRG recommendations. If a Board or Council does not concur with the 
SRG's assessment of scientific merit, the Board or Council can defer 
the application for rereview. Subject to limited exceptions as 
described in Council operating procedures, unless an application is 
recommended by both the SRG and the Board or Council, no award can be 
made.
    The first level of review of grant applications and both levels of 
review of contract project concepts and contract proposals are governed 
by the regulations codified at 42 CFR part 52h, Scientific Peer Review 
of Research Grant Applications and Research and Development Contract 
Projects.
    The regulations at 42 CFR part 52h were last amended in November 
1982. We are revising the regulations to incorporate changes that are 
necessary to update part 52h.
    We are revising the regulations to: (1) Clarify the section 
pertaining to conflict of interest to reinforce the fact that non-
Federal members of SRGs are not

[[Page 273]]

appointed as Special Government Employees (SGEs) and therefore are not 
subject to the conflict of interest statutes and regulations applicable 
to Federal employees; in practical terms, this means that institutional 
conflicts as defined for SGEs do not automatically create conflicts of 
interest for peer reviewers; (2) provide a more practical view of the 
very complex relationships that occur in the scientific community; (3) 
clarify the applicability of the peer review rules to the review of 
grant applications and contract proposals; (4) clarify the review 
criteria applicable to grant applications; and (5) update references, 
add or amend definitions as necessary, and make appropriate editorial 
changes.
    We developed the changes to Sec.  52h.8 ``What are the review 
criteria for grants?'' after extensive input from and discussion with 
the scientific community during 1996-1997 in response to a report 
entitled ``Rating of Grant Applications'' that was shared with the 
scientific community. The report and rating criteria were discussed at 
four open meetings of the Peer Review Oversight Group, whose members 
include representatives from the peer review community. That group made 
recommendations to NIH on review criteria (minutes of these meetings 
are posted on the NIH homepage at (http://grants.nih.gov/grants/peer/peer.htm). There was extensive discussion of how to include the 
concepts of ``innovativeness'' and ``impact'' of the research. After 
due consideration, the Director of NIH decided on the revised review 
criteria for rating unsolicited research grant applications that we 
published in the NIH Guide for Grants and Contracts (NIH Guide) on June 
27, 1997. These review criteria have been well received by the research 
community and by those involved in the review process, who view them as 
beneficial to the review process.
    Section 52h.8 clarifies and rearranges the previous review criteria 
consistent with the criteria published in the NIH Guide. The term 
``originality'' is moved from (a) to the new (c) where it becomes 
``innovativeness and originality of the proposed research.'' Criterion 
(b) is clarified from ``methodology'' to ``approach and methodology.'' 
Criterion (e) is clarified as ``the scientific environment and 
reasonable availability of resources'' instead of only ``reasonable 
availability of resources.'' The Scientific Review Group will assess 
the overall impact that the project could have on the field in light of 
the assessment of individual review criteria. Additionally, review 
criterion (f), concerning plans to include both genders, minorities, 
children and special populations, is added to reflect current statutes 
and NIH policies.
    Additionally, the authority citation is amended to reflect the 
current authorities, and Sec. Sec.  52h.2, 52h.3, 52h.5, and 52h.10 are 
amended to reflect the applicability of the regulations to NIH alone. 
In accordance with the changes in applicability, references to the 
Alcohol, Drug Abuse, and Mental Health Administration (ADAMHA) and the 
Health Resources and Services Administration (HRSA) are deleted. 
Section 52h.2 is amended to include definitions for several additional 
terms, and minor editorial changes are made for several definitions and 
Sec.  52h.6.
    In the Federal Register of September 21, 2000 (65 FR 57133), NIH 
published a notice of proposed rulemaking (NPRM), ``Scientific Peer 
Review of Research Grant Applications and Research and Development 
Contract Projects,'' that provided for a 60-day public comment period. 
NIH received 13 responses. NIH's consideration of and responses to the 
comments are discussed below.

Section 52h.4 Composition of Peer Review Groups

    In Sec.  52h.4(b) and (b)(4), the phrase ``or upon their 
qualifications as authorities knowledgeable in the various disciplines 
and fields related to the scientific areas under review'' was carried 
over from the Sec.  52h.2(i) definition of peer review group to provide 
consistent language about the types of expertise needed to compose a 
peer review group.

Section 52h.4(c)

    The Office of Government Ethics suggested that NIH explain the 
basis for its conclusion in Sec.  52h.4(c) that members of its peer 
review groups are not Special Government Employees. A discussion of the 
statutory and other bases for that conclusion follows.
    Pursuant to the Public Health Service (PHS) Act, as amended by the 
Health Research Extension Act of 1985, the Secretary of Health and 
Human Services (Secretary), acting through the Director of NIH, shall 
by regulation require appropriate technical and scientific peer review 
of applications for grants, cooperative agreements and contracts for 
biomedical and behavioral research. Section 402(b)(6), PHS Act, as 
amended, provides that the Director of NIH can establish peer review 
groups without regard to Title 5 U.S.C. It is further stipulated 
(section 492, PHS Act, as amended (42 U.S.C. 289a)) that such review is 
to be conducted in a manner consistent with the system for technical 
and scientific peer review applicable on November 20, 1985. On that 
date, and for many years prior, peer reviewers were not appointed as or 
considered to be Federal employees because this peer review was 
supported through an extramural award mechanism. As directed by the 
statute, this method of conducting peer review has continued since 
November 20, 1985.
    In fact, the NIH process for peer review has varied little since 
its inception approximately 50 years ago. Members of the scientific 
research community have been selected for service on peer review 
groups, either as members for a specified period of time or on an ad 
hoc basis from time to time, on a per diem basis but not under the 
Civil Service (e.g., not as Special Government Employees). There are no 
appointment papers prepared. These individuals are identified by the 
Federal employees who oversee the peer review process, the Scientific 
Review Administrators (SRAs). The SRAs identify potential peer review 
group members primarily through their knowledge of researchers in the 
various applicable scientific fields. The make-up of these peer review 
groups may be up to one-fourth Federal employees (Sec.  52h.4(c)), such 
as NIH intramural scientists, but in practice, historically 
approximately only 1 percent of peer reviewers are Federal employees. 
Other than the Federal employee reviewers (who cannot be paid any 
amount in excess of their salaries), peer reviewers are reimbursed 
through an extramural award mechanism for their services. The 
reimbursement includes a payment for actual expenses (transportation, 
room, and board) plus a modest consultant fee for the period of time 
they are involved in the review of applications at meetings, commonly 
held in the Bethesda, Maryland area.
    The conduct of meetings is directed by the chairperson, although 
the SRA is the Designated Federal Official who must be present during 
the review of applications to ensure that the reviews are conducted 
according to regulations, which includes adherence to established 
review criteria. Although there is no supervisory relationship between 
the SRA and the peer reviewers, general guidance on the conduct of 
meetings has been developed over time through an agreement between the 
Federal employee overseeing the process and the peer reviewers.

Section 52h.5 Conflict of Interest

    One commenter noted that Sec.  52h.5 greatly improves upon current 
language

[[Page 274]]

regarding how these rules apply to non-Federal employees serving on 
peer review panels, as distinct from other individuals to whom separate 
Federal regulations apply. Section 52h.5(a) was further clarified to 
state that the conflict of interest section applies only to conflict of 
interest involving members of peer review groups. Since it applies to 
all members, the phrase ``who are not Federal employees'' was deleted.

Section 52h.5(b)

    One commenter noted that the distinction in the proposed rule 
between real and apparent conflicts of interest in Sec.  52h.5(b) is 
artificial and misleading because a real conflict of interest is 
limited to financial interests and an apparent conflict of interest 
would encompass all other personal interests that might bias the 
reviewer. The commenter proposed a single definition of conflict of 
interest based on the prospect of a personal advantage to the reviewer, 
whether financial or nonfinancial. A conflict would exist if that 
personal advantage is strong enough to pose a realistic probability 
that the reviewer will not perform an unbiased review. As we understand 
the comment, a distinction would still be made between a conflict 
involving a direct financial benefit, from which an automatic recusal 
from the review would result, and other personal interests, which would 
result in a recusal only if the Scientific Review Administrator and the 
reviewers so determined.
    In response to this comment, definitions of a real conflict of 
interest and the appearance of a conflict of interest are added to the 
definitions section of the regulation. However, the substance of the 
definitions is essentially the same as the meaning given those terms, 
respectively, in Sec.  52h.5(b)(1) and Sec.  52h.5(b)(2) of the 
proposed rule. The definition of a real conflict of interest makes it 
clear that a real conflict of interest exists when certain financial 
interests are present, when the reviewer acknowledges the presence of 
an interest that would likely bias his/her review, or when the official 
managing the review determines the reviewer has such an interest. Thus 
the definition of a real conflict of interest is not limited to 
financial interests. We have further highlighted the definition of 
other (nonfinancial) conflicts of interest by adding subpart (3) to the 
definition of real conflict of interest (Sec.  52h.2(q)); this also 
clarifies our expectation about the professionalism of each reviewer to 
identify real or apparent conflicts of interest known to the reviewer, 
as suggested by one comment. The definition of the appearance of a 
conflict of interest adopts a different test, the perception of a 
reasonable person regarding the reviewer's impartiality. This would 
encompass (1) a financial interest that does not meet the threshold for 
a real conflict of interest and (2) other personal interests that the 
official managing the review determines are not likely to bias the 
reviewer's evaluation of the application or proposal but would cause a 
reasonable person to question the reviewer's impartiality.
    The distinction between a real conflict of interest and an 
appearance of a conflict of interest has important consequences. A 
reviewer with a real conflict of interest cannot participate in the 
review unless the Director of NIH determines that (1) the reviewer's 
interest arises from his/her ties to a component of a large or 
multicomponent organization that is independent of the component 
seeking the funding, (2) the Director makes the determination for a 
contract proposal that the reviewer is the only person available with 
the requisite expertise and that expertise is essential to ensure a 
competent and fair review, or (3) the official managing the review 
determines that the conflict can be obviated by having another review 
group review the application or proposal. If it is determined that 
there is an appearance of a conflict of interest, the reviewer must be 
recused unless the Director determines that it would be difficult or 
impractical to carry out the review without the reviewer and the 
integrity of the review process would not be impaired.
    It is expected that examples of real and apparent conflicts of 
interest will be made available to review officials and reviewers 
through guidance documents noted in Sec.  52h.5(g), but every instance 
of such conflicts cannot be anticipated. In addition, the application 
of the regulations will be reviewed periodically with a view toward any 
changes that would lessen administrative burdens without compromising 
the integrity of the review process.

Section 52h.5(b)(1)(i) (Sec.  52h.5(b)(1) in the Final Rule)

    One commenter strongly supported the proposed new regulations, 
including Sec.  52h.5(b)(1)(i), because they broaden the number of 
scientists who can serve as potential reviewers of a specific 
application and allow the Director to determine that components of a 
multicomponent organization are sufficiently independent so that an 
employee of one component can review an application/proposal from 
another component without a real or apparent conflict of interest. The 
commenter requested that his organization be recognized as analogous to 
separate campuses within the same university system; this request will 
be evaluated separately. Section 52h.5(b)(1) is retained and clarified 
so that it applies, provided that the reviewer has no multicampus 
responsibilities at the institution that would significantly affect the 
other component.

Section 52h.5(b)(1)(ii) (Incorporated in Sec.  52h.2(q)(2) in the Final 
Rule)

    There were several comments regarding Sec.  52h.5(b)(1)(ii), which 
sets $5,000 for non-salaried direct financial benefit as the threshold 
for financial conflict of interest. One commenter stated that this is 
an improvement upon the current regulations by stipulating a threshold 
limit for honoraria received by a reviewer from an institution 
submitting a grant or proposal; however, it should be the same as the 
$10,000 threshold in 42 CFR 50.603. Another commenter stated that any 
association with monetary gain within the previous 12 months or within 
future 12 months could lead to the appearance of conflict, and that the 
amount proposed is immaterial. Another commenter asked whether the 
amount would be periodically adjusted for inflation.
    We agree to setting the threshold at $10,000 (the same threshold as 
in 42 CFR 50.603), and agree that the amount may be adjusted 
periodically for inflation. Adjustments may be made by the Director, 
NIH, after public notice and provision for public comment. Furthermore, 
the definition of ``real conflict of interest'' in 52h.2(q)(2) has been 
clarified to include stock holdings. Consequently, the $10,000 
threshold is a conservative one in that (1) it includes all sources of 
financial benefit, such as honoraria, fees and stock holdings, and (2) 
it includes both currently held assets as well as honoraria and other 
financial benefits accruing over a 12-month period. In all, these 
provisions are intended to allow for routine sharing and exchange of 
scientific information as a result of invitations to speak at seminars, 
scientific consultations, and similar events that would not 
automatically be considered a conflict of interest for the reviewer. At 
the same time, it would relieve excessive administrative burdens for 
the potential reviewer and NIH staff for reporting low levels of 
activity by a reviewer. If there was any concern, it could be treated 
as an apparent conflict of interest.

[[Page 275]]

Section 52h.5(b)(1)(iii) (Sec.  52h.5(b)(2) in the Final Rule)

    We received several comments regarding proposed Sec.  52h.5(b)(1) 
that the definition of conflict of interest that involved attributing 
real conflicts of interest of close relatives or professional 
associates to the reviewer was too broad. It was noted that the 
reviewer may not reasonably be expected to know all of the financial or 
nonfinancial interests that a close relative or professional associate 
has with an organization or other individuals and would not normally 
ask them about all of their financial or nonfinancial interests. If the 
reviewer does not know about a particular interest of the professional 
associate, then it is not clear how this lack of knowledge could bias 
the reviewer's evaluation of an application or proposal.
    We accepted the comments. Accordingly, we modified the new 
definitions of real and apparent conflict of interest in Sec.  52h.2 to 
state that the financial or other interests are ``known to the 
reviewer.''

Section 52.5(b)(3) (Sec.  52h.5(d) in the Final Rule)

    Two commenters objected to Sec.  52h.5(b)(3), which provides that 
when a peer review group meets regularly, it is assumed that a 
relationship among individual members of the group exists that requires 
review of a member's application or proposal by a different qualified 
review group. The commenters suggested that this provision is too 
restrictive, implies that review groups are biased toward one of their 
own and cannot be objective, disadvantages members, and will cause 
potential reviewers to refuse service on standing peer review groups.
    Such concerns and perceptions are long-standing. Particularly 
pervasive has been the assumption that members are disadvantaged by the 
practice of having their applications reviewed by a different review 
group, a practice that the NIH has followed for many years. To the 
contrary, all available data indicate that this assumption is not 
accurate. The Center for Scientific Review, NIH, has published the 
available data on this issue on its Web site. This information can be 
accessed at http://www.csr.nih.gov/reviewmems.htm. Because the 
requirement of Sec.  52h.5(b)(3) corrects a perceived conflict of 
interest without any disadvantage to the reviewer-applicant, we have 
made no change in response to this comment.
    We provide the following as public information.

Executive Order 12866

    Executive Order 12866, Regulatory Planning and Review, requires 
that regulatory actions reflect consideration of the costs and benefits 
they generate, and that they meet certain standards, such as avoiding 
the imposition of unnecessary burdens on the affected public. If a 
regulatory action is deemed to fall within the scope of the definition 
of the term ``significant regulatory action'' contained in section 3(f) 
of the Order, prepublication review by the Office of Management and 
Budget's (OMB) Office of Information and Regulatory Affairs (OIRA) is 
necessary. OIRA reviewed this rule and deemed it significant. 
Therefore, OMB reviewed this rule prior to publication.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. chapter 6) requires that 
agencies analyze regulatory actions to determine whether they will 
create a significant impact on a substantial number of small entities. 
The Secretary certifies that this rule will not have any such impact.

Executive Order 13132

    Executive Order 13132, Federalism, requires that Federal agencies 
consult with State and local government officials in the development of 
regulatory policies with federalism implications. We reviewed the rule 
as required under the Order and determined that it does not have any 
federalism implications. The Secretary certifies that this rule will 
not have an effect on the States or on the distribution of power and 
responsibilities among the various levels of government.

Paperwork Reduction Act

    This rule does not contain any information collection requirements 
that are subject to review by OMB under the Paperwork Reduction Act of 
1995 (44 U.S.C. chapter 35).

List of Subjects in 42 CFR Part 52h

    Government contracts, Grant programs--health, Medical research.

    Dated: April 25, 2003.
Elias A. Zerhouni,
Director, National Institutes of Health.

    Approved: September 16, 2003.
Tommy G. Thompson,
Secretary.

0
For the reasons stated in the preamble, part 52h of title 42 of the 
Code of Federal Regulations is revised to read as set forth below.

PART 52h--SCIENTIFIC PEER REVIEW OF RESEARCH GRANT APPLICATIONS AND 
RESEARCH AND DEVELOPMENT CONTRACT PROJECTS

Sec.
52h.1 Applicability.
52h.2 Definitions.
52h.3 Establishment and operation of peer review groups.
52h.4 Composition of peer review groups.
52h.5 Conflict of interest.
52h.6 Availability of information.
52h.7 What matters must be reviewed for grants?
52h.8 What are the review criteria for grants?
52h.9 What matters must be reviewed for unsolicited contract 
proposals?
52h.10 What matters must be reviewed for solicited contract 
proposals?
52h.11 What are the review criteria for contract projects and 
proposals?
52h.12 Other regulations that apply.

    Authority: 42 U.S.C. 216; 42 U.S.C. 282 (b)(6); 42 U.S.C. 284 
(c)(3); 42 U.S.C. 289a.

Sec.  52h.1  Applicability.

    (a) This part applies to:
    (1) Applications of the National Institutes of Health for grants or 
cooperative agreements (a reference in this part to grants includes 
cooperative agreements) for biomedical and behavioral research; and
    (2) Biomedical and behavioral research and development contract 
project concepts and proposals for contract projects administered by 
the National Institutes of Health.
    (b) This part does not apply to applications for:
    (1) Continuation funding for budget periods within an approved 
project period;
    (2) Supplemental funding to meet increased administrative costs 
within a project period; or
    (3) Construction grants.


Sec.  52h.2  Definitions.

    As used in this part:
    (a) Act means the Public Health Service Act, as amended (42 U.S.C. 
201 et seq.).
    (b) Appearance of a conflict of interest means that a reviewer or 
close relative or professional associate of the reviewer has a 
financial or other interest in an application or proposal that is known 
to the reviewer or the government official managing the review and 
would cause a reasonable person to question the reviewer's impartiality 
if he or she were to participate in the review; the government official 
managing the review (the Scientific Review Administrator or equivalent) 
will evaluate the appearance of a conflict of

[[Page 276]]

interest and determine, in accordance with this subpart, whether or not 
the interest would likely bias the reviewer's evaluation of the 
application or proposal.
    (c) Awarding official means the Secretary of Health and Human 
Services and any other officer or employee of the Department of Health 
and Human Services to whom the authority involved has been delegated; 
except that, where the Act specifically authorizes another official to 
make awards in connection with a particular program, the awarding 
official shall mean that official and any other officer or employee of 
the Department of Health and Human Services to whom the authority 
involved has been delegated.
    (d) Budget period means the interval of time (usually 12 months) 
into which the project period is divided for budgetary and reporting 
purposes.
    (e) Close relative means a parent, spouse, domestic partner, or son 
or daughter.
    (f) Contract proposal means a written offer to enter into a 
contract that is submitted to the appropriate agency official by an 
individual or nonfederal organization which includes, at a minimum, a 
description of the nature, purpose, duration, and cost of the project, 
and the methods, personnel, and facilities to be utilized in carrying 
it out. A contract proposal may be unsolicited by the federal 
government or submitted in response to a request for proposals.
    (g) Development means the systematic use of knowledge gained from 
research to create useful materials, devices, systems, or methods.
    (h) DHHS means the Department of Health and Human Services.
    (i) Director means the Director of the National Institutes of 
Health and any other official or employee of the National Institutes of 
Health to whom the authority involved has been delegated.
    (j) Grant as used in this part, includes cooperative agreements.
    (k) Peer review group means a group of primarily nongovernment 
experts qualified by training and experience in particular scientific 
or technical fields, or as authorities knowledgeable in the various 
disciplines and fields related to the scientific areas under review, to 
give expert advice on the scientific and technical merit of grant 
applications or contract proposals, or the concept of contract 
projects, in accordance with this part.
    (l) Principal investigator has the same meaning as in 42 CFR part 
52.
    (m) Professional associate means any colleague, scientific mentor, 
or student with whom the peer reviewer is currently conducting research 
or other significant professional activities or with whom the member 
has conducted such activities within three years of the date of the 
review.
    (n) Project approach means the methodology to be followed and the 
resources needed in carrying out the project.
    (o) Project concept means the basic purpose, scope, and objectives 
of the project.
    (p) Project period has the same meaning as in 42 CFR part 52.
    (q) Real conflict of interest means a reviewer or a close relative 
or professional associate of the reviewer has a financial or other 
interest in an application or proposal that is known to the reviewer 
and is likely to bias the reviewer's evaluation of that application or 
proposal as determined by the government official managing the review 
(the Scientific Review Administrator, or equivalent), as acknowledged 
by the reviewer, or as prescribed by this part. A reviewer shall have a 
real conflict of interest if he/she or a close relative or professional 
associate of the reviewer:
    (1) Has received or could receive a direct financial benefit of any 
amount deriving from an application or proposal under review;
    (2) Apart from any direct financial benefit deriving from an 
application or proposal under review, has received or could receive a 
financial benefit from the applicant institution, offeror or principal 
investigator that in the aggregate exceeds $10,000 per year; this 
amount includes honoraria, fees, stock or other financial benefit, and 
additionally includes the current value of the reviewer's already 
existing stock holdings. The Director, NIH, may amend the dollar 
threshold periodically, as appropriate, after public notice and 
comment; or
    (3) Has any other interest in the application or proposal that is 
likely to bias the reviewer's evaluation of that application or 
proposal. Regardless of the level of financial involvement or other 
interest, if the reviewer feels unable to provide objective advice, he/
she must recuse him/herself from the review of the application or 
proposal at issue. The peer review system relies on the professionalism 
of each reviewer to identify to the designated government official any 
real or apparent conflicts of interest that are likely to bias the 
reviewer's evaluation of an application or proposal.
    (r) Request for proposals means a Government solicitation to 
prospective offerors, under procedures for negotiated contracts, to 
submit a proposal to fulfill specific agency requirements based on 
terms and conditions defined in the request for proposals. The request 
for proposals contains information sufficient to enable all offerors to 
prepare proposals, and is as complete as possible with respect to: 
nature of work to be performed; descriptions and specifications of 
items to be delivered; performance schedule; special requirements 
clauses, or other circumstances affecting the contract; format for cost 
proposals; and evaluation criteria by which the proposals will be 
evaluated.
    (s) Research has the same meaning as in 42 CFR part 52.
    (t) Research and development contract project means an identified, 
circumscribed activity, involving a single contract or two or more 
similar, related, or interdependent contracts, intended and designed to 
acquire new or fuller knowledge and understanding in the areas of 
biomedical or behavioral research and/or to use such knowledge and 
understanding to develop useful materials, devices, systems, or 
methods.
    (u) Scientific review group has the same meaning as peer review 
group, which is defined in paragraph (k) of this section.
    (v) Solicited contract proposal has the same meaning as the 
definition of offer in 48 CFR 2.101.
    (w) Unsolicited contract proposal has the same meaning as 
unsolicited proposal in 48 CFR 15.601.


Sec.  52h.3  Establishment and operation of peer review groups.

    (a) To the extent applicable, the Federal Advisory Committee Act, 
as amended (5 U.S.C. appendix 2) and chapter 9 of the DHHS General 
Administration Manual \1\ shall govern the establishment and operation 
of peer review groups.
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    \1\ The DHHS General Administration Manual is available for 
public inspection and copying at the Department's information 
centers listed in 45 CFR 5.31 and may be purchased from the 
Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402.
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    (b) Subject to Sec.  52h.5 and paragraph (a) of this section, the 
Director will adopt procedures for the conduct of reviews and the 
formulation of recommendations under Sec. Sec.  52h.7, 52h.9, and 
52h.10.


Sec.  52h.4  Composition of peer review groups.

    (a) To the extent applicable, the selection and appointment of 
members

[[Page 277]]

of peer review groups and their terms of service shall be governed by 
chapter 9 of the DHHS General Administration Manual.
    (b) Subject to paragraph (a) of this section, members will be 
selected based upon their training and experience in relevant 
scientific or technical fields, or upon their qualifications as 
authorities knowledgeable in the various disciplines and fields related 
to the scientific areas under review, taking into account, among other 
factors:
    (1) The level of formal scientific or technical education completed 
or experience acquired by the individual;
    (2) The extent to which the individual has engaged in relevant 
research, the capacities (e.g., principal investigator, assistant) in 
which the individual has done so, and the quality of the research;
    (3) Recognition as reflected by awards and other honors received 
from scientific and professional organizations; and
    (4) The need for the group to have included within its membership 
experts from various areas of specialization within relevant scientific 
or technical fields, or authorities knowledgeable in the various 
disciplines and fields related to the scientific areas under review.
    (c) Except as otherwise provided by law, not more than one-fourth 
of the members of any peer review group to which this part applies may 
be officers or employees of the United States. Being a member of a 
scientific peer review group does not make an individual an officer or 
employee of the United States.


Sec.  52h.5  Conflict of interest.

    (a) This section applies only to conflicts of interest involving 
members of peer review groups. This section does not cover individuals 
serving on National Advisory Councils or Boards, Boards of Scientific 
Counselors, or Program Advisory Committees who, if not already officers 
or employees of the United States, are special Government employees and 
covered by title 18 of the United States Code, the Office of Government 
Ethics Standards of Ethical Conduct for Employees of the Executive 
Branch (5 CFR part 2635), and Executive Order 11222, as amended. For 
those federal employees serving on peer review groups, in accordance 
with Sec.  52h.4, the requirements of title 18 of the United States 
Code, 5 CFR part 2635 and Executive Order 12674, as modified by 
Executive Order 12731, apply.
    (b) A reviewer with a real conflict of interest must recuse him/
herself from the review of the application or proposal, except as 
otherwise provided in this section.
    (1) A reviewer who is a salaried employee, whether full-time or 
part-time, of the applicant institution, offeror, or principal 
investigator, or is negotiating for employment, shall be considered to 
have a real conflict of interest with regard to an application/proposal 
from that organization or principal investigator, except that the 
Director may determine there is no real conflict of interest or an 
appearance of a conflict of interest where the components of a large or 
multicomponent organization are sufficiently independent to constitute, 
in effect, separate organizations, provided that the reviewer has no 
responsibilities at the institution that would significantly affect the 
other component.
    (2) Where a reviewer's real conflict of interest is based upon the 
financial or other interest of a close relative or professional 
associate of the reviewer, that reviewer must recuse him/herself, 
unless the Director provides a waiver in accordance with paragraph 
(b)(4) of this section.
    (3) For contract proposal reviews, an individual with a real 
conflict of interest in a particular proposal(s) is generally not 
permitted to participate in the review of any proposals responding to 
the same request for proposals. However, if there is no other qualified 
reviewer available having that individual's expertise and that 
expertise is essential to ensure a competent and fair review, a waiver 
may be granted by the Director to permit that individual to serve as a 
reviewer of those proposals with which the reviewer has no conflict, 
while recusing him/herself from the review of any particular 
proposal(s) in which there is a conflict of interest.
    (4) The Director may waive any of the requirements in paragraph (b) 
of this section relating to a real conflict of interest if the Director 
determines that there are no other practical means for securing 
appropriate expert advice on a particular grant or cooperative 
agreement application, contract project, or contract proposal, and that 
the real conflict of interest is not so substantial as to be likely to 
affect the integrity of the advice to be provided by the reviewer.
    (c) Any appearance of a conflict of interest will result in recusal 
of the reviewer, unless the Director provides a waiver, determining 
that it would be difficult or impractical to carry out the review 
otherwise, and the integrity of the review process would not be 
impaired by the reviewer's participation.
    (d) When a peer review group meets regularly it is assumed that a 
relationship among individual reviewers in the group exists and that 
the group as a whole may not be objective about evaluating the work of 
one of its members. In such a case, a member's application or proposal 
shall be reviewed by another qualified review group to ensure that a 
competent and objective review is obtained.
    (e) When a member of a peer review group participates in or is 
present during the concept review of a contract proposal that occurs 
after release of the solicitation, as described under Sec.  52h.10(b), 
but before receipt of proposals, the member is not considered to have a 
real conflict of interest as described in paragraph (b) of this 
section, but is subject to paragraph (c) of this section concerning 
appearance of conflict of interest if the member is planning to respond 
to the solicitation. When the concept review occurs after receipt of 
proposals, paragraph (b) applies.
    (f) No member of a peer review group may participate in any review 
of a specific grant application or contract project for which the 
member has had or is expected to have any other responsibility or 
involvement (whether pre-award or post-award) as an officer or employee 
of the United States.
    (g) The Director may periodically issue guidance to the government 
officials responsible for managing reviews and reviewers on what 
interests would constitute a real conflict of interest or an appearance 
of a conflict of interest.


Sec.  52h.6  Availability of information.

    (a) Transcripts, minutes, and other documents made available to or 
prepared for or by a peer review group will be available for public 
inspection and copying to the extent provided by the Freedom of 
Information Act, as amended (5 U.S.C. 552), the Federal Advisory 
Committee Act, as amended (5 U.S.C. appendix 2), the Privacy Act of 
1974, as amended (5 U.S.C. 552a), and implementing DHHS regulations (45 
CFR parts 5, 5b).
    (b) Meetings of peer review groups reviewing grant applications or 
contract proposals are closed to the public in accordance with sections 
552b(c)(4) and 552b(c)(6) of the Government in the Sunshine Act, as 
amended (5 U.S.C. 552b(c)(4) and 552b(c)(6)) and section 10(d) of the 
Federal Advisory Committee Act, as amended (5 U.S.C. appendix 2). 
Documents made available to, or prepared for or by peer review groups 
that contain trade secrets or commercial or financial information 
obtained from a person that is privileged or confidential, and personal

[[Page 278]]

information concerning individuals associated with applications or 
proposals, the disclosure of which would constitute a clearly 
unwarranted invasion of personal privacy, are exempt from disclosure in 
accordance with the Freedom of Information Act, as amended (5 U.S.C. 
552(b)(4) and 552(b)(6)).
    (c) Meetings of peer review groups reviewing contract project 
concepts are open to the public in accordance with the provisions of 
the Federal Advisory Committee Act, as amended (5 U.S.C. appendix 2) 
and the Government in the Sunshine Act, as amended (5 U.S.C. 552b).


Sec.  52h.7  What matters must be reviewed for grants?

    (a) Except as otherwise provided by law, no awarding official shall 
award a grant based upon an application covered by this part unless the 
application has been reviewed by a peer review group in accordance with 
the provisions of this part and the group has made recommendations 
concerning the scientific merit of that application. In addition, where 
under applicable law an awarding official is required to secure the 
approval or advice of a national council or board concerning an 
application, the application may not be considered by the council or 
board unless it has been reviewed by the appropriate peer review group, 
in accordance with the provisions of this part, and the group has made 
recommendations concerning the scientific merit of the application, 
except where the council or board is the peer review group.
    (b) Except to the extent otherwise provided by law, recommendations 
by peer review groups are advisory only and not binding on the awarding 
official or the national advisory council or board.


Sec.  52h.8  What are the review criteria for grants?

    In carrying out its review under Sec.  52h.7, the scientific peer 
review group shall assess the overall impact that the project could 
have on the research field involved, taking into account, among other 
pertinent factors:
    (a) The significance of the goals of the proposed research, from a 
scientific or technical standpoint;
    (b) The adequacy of the approach and methodology proposed to carry 
out the research;
    (c) The innovativeness and originality of the proposed research;
    (d) The qualifications and experience of the principal investigator 
and proposed staff;
    (e) The scientific environment and reasonable availability of 
resources necessary to the research;
    (f) The adequacy of plans to include both genders, minorities, 
children and special populations as appropriate for the scientific 
goals of the research;
    (g) The reasonableness of the proposed budget and duration in 
relation to the proposed research; and
    (h) The adequacy of the proposed protection for humans, animals, 
and the environment, to the extent they may be adversely affected by 
the project proposed in the application.


Sec.  52h.9  What matters must be reviewed for unsolicited contract 
proposals?

    (a) Except as otherwise provided by law, no awarding official shall 
award a contract based upon an unsolicited contract proposal covered by 
this part unless the proposal has been reviewed by a peer review group 
in accordance with the provisions of this part and the group has made 
recommendations concerning the scientific merit of that proposal.
    (b) Except to the extent otherwise provided by law, peer review 
group recommendations are advisory only and not binding on the awarding 
official.


Sec.  52h.10  What matters must be reviewed for solicited contract 
proposals?

    (a) Subject to paragraphs (b) and (c) of this section, no awarding 
official shall issue a request for contract proposals with respect to a 
contract project involving solicited contract proposals, unless the 
project concept has been reviewed by a peer review group or advisory 
council in accordance with this part and the group has made 
recommendations concerning the scientific merit of the concept.
    (b) The awarding official may delay carrying out the requirements 
for peer review of paragraph (a) of this section until after issuing a 
request for proposals if the official determines that the 
accomplishment of essential program objectives would otherwise be 
placed in jeopardy and any further delay clearly would not be in the 
best interest of the Government. The awarding official shall specify in 
writing the grounds on which this determination is based. Under these 
circumstances, the awarding official will not award a contract until 
peer review of the project concept and the proposals has been 
completed. The request for proposals shall state that the project 
concept will be reviewed by a peer review group and that no award will 
be made until the review is conducted and recommendations made based on 
that review.
    (c) The awarding official may determine that peer review of the 
project concept for behavioral or biomedical research and development 
contracts is not needed if one of the following circumstances applies: 
the solicitation is to re-compete or extend a project that is within 
the scope of a current project that has been peer reviewed, or there is 
a Congressional authorization or mandate to conduct specific contract 
projects. If a substantial amount of time has passed since the concept 
review, the awarding official shall determine whether peer review is 
required to ensure the continued scientific merit of the concept.
    (d) Except to the extent otherwise provided by law, the 
recommendations referred to in this section are advisory only and not 
binding on the awarding official.


Sec.  52h.11  What are the review criteria for contract projects and 
proposals?

    (a) In carrying out its review of a project concept under Sec.  
52h.10(a) or Sec.  52h.10(b), the peer review group shall take into 
account, among other pertinent factors:
    (1) The significance from a scientific or technical standpoint of 
the goals of the proposed research or development activity;
    (2) The availability of the technology and other resources 
necessary to achieve those goals;
    (3) The extent to which there are identified, practical uses for 
the anticipated results of the activity; and
    (4) Where the review includes the project approach, the adequacy of 
the methodology to be utilized in carrying out the activity.
    (b) In carrying out its review of unsolicited contract proposals 
under Sec.  52h.9, the peer review group shall take into account, among 
other pertinent factors, the criteria in Sec.  52h.8 which are relevant 
to the particular proposals.
    (c) In carrying out its review of solicited proposals under Sec.  
52h.10(a) or (b), the peer review group shall evaluate each proposal in 
accordance with the criteria set forth in the request for proposals.


Sec.  52h.12  Other regulations that apply.

    The regulations in this part are in addition to, and do not 
supersede other regulations concerning grant applications, contract 
projects, or contract proposals set forth elsewhere in this title, 
title 45, or title 48 of the Code of Federal Regulations.

[FR Doc. 03-32109 Filed 12-31-03; 9:46 am]
BILLING CODE 4140-01-P