[Federal Register Volume 71, Number 89 (Tuesday, May 9, 2006)]
[Rules and Regulations]
[Pages 27158-27180]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-4119]



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Part III





Department of Energy





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10 CFR Parts 600 and 603



Assistance Regulations; Final Rule

  Federal Register / Vol. 71, No. 89 / Tuesday, May 9, 2006 / Rules and 
Regulations  

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DEPARTMENT OF ENERGY

10 CFR Parts 600 and 603

RIN 1991-AB72


Assistance Regulations

AGENCY: Department of Energy.

ACTION: Final rule.

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SUMMARY: The Department of Energy (DOE) is adopting, with minor 
changes, the interim final rule published on November 15, 2005, that 
established a new part to the DOE assistance regulations and revised 10 
CFR part 600, subpart A to conform with the new part. The new part 
establishes policies and procedures to implement the ``other 
transactions'' authority granted to the Secretary of Energy by Section 
1007 of the Energy Policy Act of 2005. DOE is implementing this new 
authority through the award and administration of technology investment 
agreements (TIAs).

DATES: Effective Date: This final rule is effective on July 10, 2006.

FOR FURTHER INFORMATION CONTACT: Ms. Trudy Wood, Office of Procurement 
and Assistance Policy, Department of Energy, at 202-287-1336.

SUPPLEMENTARY INFORMATION:

I. Background
II. Discussion of Public Comments
III. Revisions Incorporated in This Final Rule
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 the Treasury and General Government 
Appropriations Act, 2001
    J. Review Under Executive Order 13211
    K. Review Under the Small Business Regulatory Enforcement 
Fairness Act
V. Approval of the Office of the Secretary of Energy

I. Background

    Section 1007 of the Energy Policy Act of 2005 (Public Law 109-58) 
amends section 646 of the Department of Energy (DOE) Organization Act 
by adding a subsection (g) which authorizes the Secretary of Energy to 
enter into transactions other than contracts, cooperative agreements, 
and grants (``other transactions'') subject to the same terms and 
conditions as the Secretary of Defense under section 2371 of title 10, 
United States Code. On November 15, 2005 (70 FR 69250), DOE published 
an interim final rule to establish policies and procedures for 
technology investment agreements (TIAs) to implement the Department's 
``other transactions'' authority. These regulations were developed on 
an expedited basis in order to comply with the statutory requirement to 
issue guidance within 90 days of enactment of the Energy Policy Act of 
2005. In addition to considering public comments, DOE continued to 
evaluate transactions authorized and carried out by other Federal 
agencies under similar authority. This evaluation has been considered 
in formulating the final rule and in developing internal guidance on 
training and experience requirements for contracting officers, tracking 
of transactions, audit guidance for for-profit organizations and 
independent public accountants (IPA), and reporting to Congress.
    DOE used the DoD TIA regulation as the basis for developing the new 
part 603, but tailored the regulation to fit DOE requirements and 
procedures. Today's final rule permits DOE to enter into a TIA, a 
special type of assistance instrument, with a for-profit firm or a 
consortium that includes a for-profit firm after a determination is 
made that a contract, grant, or cooperative agreement is not feasible 
or appropriate. A TIA can be either a type of cooperative agreement 
with more flexible provisions tailored to accommodate the financial 
management, property management, and purchasing systems of commercial 
firms, but with standard intellectual property provisions, or an 
``other transaction'' if the intellectual property requirements vary 
from the Bayh-Dole statute (Chapter 18 of Title 35, U.S.C.) and the DOE 
patent statutes (42 U.S.C. 5908 and 42 U.S.C 2182). The two types of 
TIAs have similar requirements except for the intellectual property 
requirements.

II. Discussion of Public Comments

    The majority of the commenters supported the creation of the new 
part 603 and considered it an important step forward for the 
Department. The following paragraphs summarize the significant 
comments, grouped by subject, and DOE's responses. Where appropriate, 
the responses explain how we have changed part 603 in the final rule.

General Comments

    Comment: The proposed use of TIAs allows for little discretion on 
the part of the contracting officer. Lack of flexibility will deter 
non-traditional sources from participating.
    Response: The rule establishes minimum requirements for proper 
stewardship of federal funds, including audits, financial systems that 
comply with Generally Accepted Accounting Principles and effectively 
control project funds, and reporting requirements. These requirements 
are similar to the requirements established by the Department of 
Defense for TIAs. Contracting officers have considerable latitude to 
negotiate TIA terms and conditions as long as they comply with the 
minimum requirements established by the rule.
    Comment: The use of an ``other transaction'' may require 
substantial and burdensome negotiations since standard government 
administrative and financial requirements and terms and conditions may 
not apply.
    Response: We understand that a TIA that is an ``other 
transaction,'' may require additional negotiations because the standard 
provisions do not automatically apply. The point of the ``other 
transactions'' authority is to permit DOE to enter into agreements that 
are not burdened by standard provisions that would serve as a 
disincentive to non-traditional Government contractors. While these 
agreements may require additional negotiations, the flexibility of the 
other transaction instrument will out weigh the burden of the 
additional negotiations. The ``other transactions'' authority granted 
to the Secretary requires that a written determination be made that a 
contract, grant, or cooperative agreement is not feasible or 
appropriate for a particular project. DOE will award a TIA only after 
such a determination is made.

Cost Sharing

    Comment: No guidance is provided as to whether current independent 
research and development (IR&D) costs may be used for the cost share 
portion.
    Response: We have added a paragraph to Sec.  603.530(f) to explain 
that current IR&D costs may be used for cost sharing if they meet the 
criteria in paragraphs (a) through (e) of Sec.  603.530.

Cost Accounting Standards

    Comment: The goal of using a TIA is to attract ``non-traditional 
contractors'' which generally do not have United States Government 
contracts under the Federal Acquisition Regulations (FAR). ``Non-
traditional contractors'' will likely not have cost accounting or CAS-
compliant systems.
    Response: For the purposes of a TIA, a non-traditional contractor 
is not

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required to have CAS-compliant systems. The rule specifies in Sec.  
603.615(b) that a contracting officer is to allow and encourage each 
for-profit participant that does not currently perform under 
expenditure-based Federal procurement contracts or assistance awards 
(other than a TIA) to use its existing financial management system as 
long as the system complies with Generally Accepted Accounting 
Principles, effectively controls all project funds, and, if advance 
payments are authorized, includes procedures to minimize the time 
elapsing between the payment of funds by the Government and the firm's 
disbursement of the funds.

Flowdown Requirements for DOE FFRDC Contractors

    Comment: DOE should require that any funds provided to a DOE FFRDC 
emanating from a TIA, be via a ``Funds-in-CRADA'' or ``Work for 
Others'' agreement and, notwithstanding any ``flowdown'' requirements 
contained in the TIA, the existing property, procurement, finance, 
accounting and audit systems in place for the FFRDC Prime Contract be 
used for performing work under a TIA.
    Response: In accordance with Sec.  603.650, the general policy for 
an expenditure-based TIA is to avoid requirements that force 
participants, including FFRDC contractors, to use different financial 
management, property management, and purchasing systems than they 
currently use for expenditure-based Federal procurement contracts and 
assistance awards. We have revised Sec.  603.610 to identify the 
flowdown requirements for GOCO and FFRDC contractors. We have also 
revised Sec.  603.650 to clarify that the Federal cognizant agency 
would perform audits of GOCO and FFRDC contractors. If a DOE FFRDC 
contractor is a member of a consortium or a subrecipient under a TIA 
award, the FFRDC work would normally be authorized under the DOE Work 
Authorization System for M&O contractors or other appropriate 
instrument that would specify the terms and conditions of the award.

Intellectual Property

    Comment: Anticipated development costs to be paid by the contractor 
should be considered by the contracting officer in deciding appropriate 
invention rights arrangements.
    Response: Section 603.860(b) has been modified to instruct the 
contracting officer to consider anticipated future investments of 
recipient to the development of the technology.
    Comment: Regarding rights to inventions, it is recommended that 
model outcomes be provided to help guide the contracting officer in 
deciding what best represents a ``reasonable arrangement.''
    Response: The regulation, at Sec.  603.860(c)(2), addresses some 
typical ``outcomes'' for a TIA that is an ``other transaction.'' These 
include the retention by recipient/participant of title to subject 
inventions or the elimination or modification of a paid up government 
license in subject inventions. Section 603.865 addresses modification, 
or possible elimination, of march-in rights. Section 603.875(c) allows 
for waiver or modification of ``substantial U.S. manufacture'' 
requirements. Contracting officers will be guided by these provisions, 
and the requirement in Sec.  603.860(b) that any changes to the 
standard patent rights provision must be approved by intellectual 
property counsel. Specifying ``model outcomes'' in more detail would 
result in less flexibility to accommodate a wide variety of anticipated 
or unforeseen circumstances.
    Comment: It is unclear as to the need for the use of march-in 
rights, as the U.S. Government has yet to invoke this clause, and the 
use of march-in rights will likely deter non-traditional contractors. 
The example provided is not very specific.
    Response: Preserving ``march-in rights'' is important as a 
safeguard against non-use of important technology made with U.S. 
Government assistance. We continue to believe that its elimination 
should be limited to relatively rare circumstances. However, DOE 
intends to be flexible in considering modifications to the Bayh-Dole 
``march-in'' language.
    Comment: No process is provided for the waiver of the requirement 
for substantial manufacture in the U.S. of products embodying subject 
inventions.
    Response: DOE has not specified in the past, nor is it specifying 
in this regulation, a formal process for waiver of the ``substantial 
U.S. manufacture'' requirement. Instead, a written request for such a 
waiver may be made directly to the contracting officer, with reasons 
therefor, addressing one or more of the specified grounds for such a 
waiver or modification. DOE has used this approach for many years as 
part of its patent waiver process, and has demonstrated ample 
flexibility on this issue.
    Comment: Only three reasons are specified as acceptable for 
granting a waiver of the ``substantial U.S. manufacture'' requirement. 
The ``alternative benefits'' requirement appears to be more stringent 
than that previously required by DOE, and more onerous than that of 
DoD.
    Response: While three alternate reasons are specified, they can be 
applied very flexibly, in accordance with the ``informal'' procedure 
mentioned in response to the previous comment. The third specified 
reason, that under the circumstances domestic manufacture is not 
commercially feasible, is very broad and could accommodate a wide 
variety of circumstances, including unforeseen circumstances. As to the 
contention that this requirement is more stringent than previously, it 
is consistent with DOE's practice under its patent waiver authority at 
10 CFR part 784, which allows DOE to include additional terms and 
conditions in its patent waiver determinations. DOE's programmatic 
mission and statutory authority, including patent waiver authority, are 
different from that of DoD. DOE has included, for many years, 
provisions addressing substantial U.S. manufacture that may be more 
comprehensive than those used by DoD.
    Comment: Use of ``other transactions'' may erode the essential 
Bayh-Dole Act balancing of incentives and obligations, and public and 
private interests in rights to federally supported inventions. DoD 
policies provide that a TIA generally would include the patent rights 
clause (37 CFR 401.14) that implements Bayh-Dole requirements. There is 
no indication that the normal default should be to include Bayh-Dole 
rights.
    Response: Unlike DoD, which is generally subject only to Bayh-Dole 
and ``other transactions'' authority regarding rights to federally 
supported inventions, DOE is also subject to 42 U.S.C. 2182 and 5908, 
which require title to inventions in Government, unless a patent waiver 
is approved. Therefore, DOE cannot simply follow the DoD practice of 
having a TIA generally include the Bayh-Dole government-wide patent 
rights clause at 37 CFR 401.14. However, for a TIA that is an ``other 
transaction'' as set forth in Sec.  603.860(c)(2), the normal clause 
would be a patent waiver clause as required by 10 CFR 784, which 
provides for recipient to retain title to subject inventions in a 
fashion similar to that of 37 CFR 401.14.
    Comments: In federally-funded university industry collaborations 
supported by ``other transactions,'' there is no requirement to flow 
down ``Bayh-Dole rights'' to nonprofit subcontractors. If a consortium 
includes nonprofits,

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normal ``Bayh-Dole rights'' should be required to be flowed down to 
these nonprofit recipients.
    Response: DOE anticipates that in most cases of TIAs involving 
nonprofits or small businesses, ``Bayh-Dole rights'' will be 
applicable. However, for situations involving industry-university 
collaborations such as consortia or teaming arrangements, DOE believes 
it is important to retain flexibility to vary normal ``Bayh-Dole 
rights.'' This would be the case, for example, in order to harmonize 
licensing rights to inventions among collaborating parties when some 
are nonprofits and others are large for-profit businesses who are 
providing substantial cost-sharing, or otherwise demonstrating a 
compelling reason for mutual access to license rights to inventions of 
a collaborating partner. This type of ``harmonization'' of rights among 
team members may serve to foster, rather than inhibit, the formation of 
effective industry-university collaborations. However, to address these 
concerns, DOE has included an additional paragraph at Sec.  603.860(d) 
to provide further guidance for a subaward under a TIA that is an 
``other transaction.''
    Comment: It is unclear if FFRDC/GOCO's are to negotiate 
intellectual property rights based on the terms of the TIA, or on the 
terms of the FFRDC/GOCO's prime contract. We recommend that the 
invention rights requirements in the FFRDC/GOCO prime contract apply to 
a TIA subaward.
    Response: DOE does not believe it is appropriate, or in keeping 
with the intent of the ``other transactions'' authority, to require 
that the terms of the FFRDC/GOCO prime contract dictate the terms of a 
FFRDC/GOCO subaward under a TIA that is an ``other transaction.'' 
However, as described in the response to the previous comment, DOE has 
added language at Sec.  603.860(d) that provides flexibility to a 
contracting officer to consider circumstances where a FFRDC/GOCO 
subawardee (or other subawardee) may obtain title to, or other 
disposition of, inventions they make.

Reporting Requirements

    Comment: Section 603.890 states that a TIA must require a final 
performance report that addresses all major accomplishments under the 
TIA. This requirement is in conflict with Sec.  603.900, which begins, 
``If a final report is required. . .''
    Response: We have amended Sec.  603.900 to delete the words, ``If a 
final report is required.''
    Comment: Section 603.870, Marking of documents related to 
inventions, implies that contractors are required to report inventions, 
yet in Sec.  603.880 there is no mention of disclosure of inventions 
only program performance and business/financial status.
    Response: Section 603.880 states that a TIA must include 
requirements that, as a minimum, provide for periodic reports 
addressing program performance and, if it is an expenditure-based 
award, business/financial status. The DOE standard financial assistance 
patent invention provisions already include a requirement to report 
subject inventions. While Sec.  603.860 allows the contracting officer 
to negotiate patent rights requirements that vary from that which the 
Bayh-Dole statute requires, such requirements will most likely include 
reporting subject inventions. The TIA award will identify all required 
reports and the submittal process for these reports.

III. Revisions Incorporated in This Final Rule

    In addition to the changes made in response to public comments, we 
have:
    1. Deleted the first sentence in Sec.  603.405, which required the 
use of the government-wide standard format for program announcements, 
since a TIA may also be awarded under a broad agency announcement (BAA) 
or other similar announcement.
    2. Revised Sec.  603.515 by reordering the paragraphs and adding 
language to clarify that a consortium, which is not formally 
incorporated, must provide a collaboration agreement.
    3. Revised Sec.  603.860 by adding a new paragraph (e) that states 
``Consortium members may allocate in their collaboration agreement 
invention rights, subject to the review of the contracting officer.''
    4. Added the designation Sec.  603.1200 to the paragraph 
immediately following the Subpart J heading.

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 (OIRA) of the 
Office of Management and Budget (OMB).

B. Review Under Regulatory Flexibility Act of 1980

    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 
economic impact on a substantial number of small entities. As required 
by Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking'' (67 FR 53461, August 16, 2002), DOE published 
procedures and policies to ensure that the potential impacts of its 
draft rules on small entities are properly considered during the 
rulemaking process (68 FR 7990, February 19, 2003), and has made them 
available on the Office of General Counsel's Web site: http://www.gc.doe.gov. DOE has reviewed today's rule under the provisions of 
the Regulatory Flexibility Act and the procedures and policies 
published on February 19, 2003. This regulatory action will not have a 
significant adverse impact on a substantial number of small entities 
because under part 603, small entities are subject either to 
requirements that parallel government wide requirements that OMB 
Circular A-110 establishes for other assistance awards, or to less 
burdensome requirements that enable firms from the commercial 
marketplace to participate in DOE research, development, and 
demonstration. On the basis of the foregoing, DOE certifies that the 
rule does not have a significant economic impact on a substantial 
number of small entities. DOE did not prepare a regulatory flexibility 
analysis for this rulemaking.

C. Review Under the Paperwork Reduction Act of 1995

    This regulatory action will not impose any additional reporting or 
recordkeeping requirements subject to approval under the Paperwork 
Reduction Act. Participant reporting and recordkeeping requirements in 
part 603 either are parallel to, or less burdensome than, government 
wide requirements already established in OMB Circular A-110.

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 establishes 
guidelines and procedures for application and review, administration, 
audit and closeout of assistance instruments, and, therefore, is 
covered under the Categorical Exclusion

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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. The Executive Order also requires agencies 
to have an accountable process to ensure meaningful and timely input by 
State and local officials in the development of regulatory policies 
that have federalism implications. On March 14, 2000, DOE published a 
statement of policy describing the intergovernmental consultation 
process it will follow in the development of such regulations (65 FR 
13735). DOE has examined today's 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 rule meets the relevant standards of Executive 
Order 12988.

G. Review Under the Unfunded Mandates Act of 1995

    This regulatory action does not contain a Federal mandate that will 
result in the expenditure by State, local, and tribal governments, in 
aggregate, or by the private sector of $100 million or more in any one 
year.

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 or policy that may affect 
family well-being. Today's rule will 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 the Treasury and General Government Appropriations Act, 
2001

    The Treasury and General Government Appropriations Act, 2001, 44 
U.S.C. 3516 note, provides for agencies to review most disseminations 
of information to the public under implementing guidelines established 
by each agency pursuant to general guidelines issued by OMB. OMB's 
guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's 
guidelines were published at 67 FR 62446 (October 7, 2002). DOE has 
reviewed today's rule under the OMB and DOE guidelines and has 
concluded that it is consistent with applicable policies in those 
guidelines.

J. 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 OIRA 
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.

K. Review Under the Small Business Regulatory Enforcement Fairness Act

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of today's rule prior to its effective date. The report 
will state that it has been determined that the rule is not a ``major 
rule'' as defined by 5 U.S.C. 801(2).

V. Approval of the Office of the Secretary of Energy

    The Office of the Secretary has approved the issuance of this rule.

List of Subjects

10 CFR Part 600

    Administrative practice and procedure, Assistance programs.

10 CFR Part 603

    Accounting, Administrative practice and procedure, Financial 
assistance programs, Grant programs, Reporting and recordkeeping 
requirements, Technology investments.

    Issued in Washington, DC on April 26, 2006.
Edward R. Simpson,
Director, Office of Procurement and Assistance Management, Office of 
Management, Department of Energy.
Robert C. Braden,
Director, Office of Acquisition and Supply Management, National Nuclear 
Security Administration, Department of Energy.

0
Accordingly, the interim final rule amending part 600 of chapter II, 
title 10 of the Code of Federal Regulations and adding part 603 of 
chapter II, title 10 of the Code of Federal Regulations, which was 
published at 70 FR 69250 on November 15, 2005, is adopted as a final 
rule, with the following changes:
0
1. Part 603 is revised to read as follows:

[[Page 27162]]

PART 603--TECHNOLOGY INVESTMENT AGREEMENTS

Subpart A-General
Sec.
603.100 Purpose.
603.105 Description.
603.110 Use of TIAs.
603.115 Approval requirements.
603.120 Contracting officer warrant requirements.
603.125 Applicability of other parts of the DOE Assistance 
Regulations.
Subpart B-Appropriate Use of Technology Investment Agreements
603.200 Contracting officer responsibilities.
603.205 Nature of the project.
603.210 Recipients.
603.215 Recipient's commitment and cost sharing.
603.220 Government participation.
603.225 Benefits of using a TIA.
603.230 Fee or profit.
Subpart C--Requirements for Expenditure-Based and Fixed-Support 
Technology Investment Agreements
603.300 Difference between an expenditure-based and a fixed-support 
TIA.
603.305 Use of a fixed-support TIA.
603.310 Use of an expenditure-based TIA.
603.315 Advantages of a fixed-support TIA.
Subpart D--Competition Phase
603.400 Competitive procedures.
603.405 Announcement format.
603.410 Announcement content.
603.415 Cost sharing.
603.420 Disclosure of information.
Subpart E--Pre-Award Business Evaluation
603.500 Pre-award business evaluation.
603.505 Program resources.

Recipient Qualification

603.510 Recipient qualifications.
603.515 Qualification of a consortium.

Total Funding

603.520 Reasonableness of total project funding.

Cost Sharing

603.525 Value and reasonableness of the recipient's cost sharing 
contribution.
603.530 Acceptable cost sharing.
603.535 Value of proposed real property or equipment.
603.540 Acceptability of fully depreciated real property or 
equipment.
603.545 Acceptability of costs of prior RD&D.
603.550 Acceptability of intellectual property.
603.555 Value of other contributions.

Fixed-Support or Expenditure-Based Approach

603.560 Estimate of project expenditures.
603.565 Use of a hybrid instrument.

Accounting, Payments, and Recovery of Funds

603.570 Determining milestone payment amounts.
603.575 Repayment of Federal cost share.
Subpart F--Award Terms Affecting Participants' Financial, Property, and 
Purchasing Systems
603.600 Administrative matters.
603.605 General policy.
603.610 Flow down requirements.

Financial Matters

603.615 Financial management standards for for-profit firms.
603.620 Financial management standards for nonprofit participants.
603.625 Cost principles or standards applicable to for-profit 
participants.
603.630 Use of Federally-approved indirect cost rates for for-profit 
firms.
603.635 Cost principles for nonprofit participants.
603.640 Audits of for-profit participants.
603.645 Periodic audits and award-specific audits of for-profit 
participants.
603.650 Designation of auditor for for-profit participants.
603.655 Frequency of periodic audits of for-profit participants.
603.660 Other audit requirements.
603.665 Periodic audits of nonprofit participants.
603.670 Flow down audit requirements to subrecipients.
603.675 Reporting use of IPA for subawards.

Property

603.680 Purchase of real property and equipment by for-profit firms.
603.685 Management of real property and equipment by nonprofit 
participants.
603.690 Requirements for Federally-owned property.
603.695 Requirements for supplies.

Purchasing

603.700 Standards for purchasing systems of for-profit firms.
603.705 Standards for purchasing systems of nonprofit organizations.
Subpart G--Award Terms Related to Other Administrative Matters
603.800 Scope.

Payments

603.805 Payment methods.
603.810 Method and frequency of payment requests.
603.815 Withholding payments.
603.820 Interest on advance payments.

Revision of Budget and Program Plans

603.825 Government approval of changes in plans.
603.830 Pre-award costs.

Program Income

603.835 Program income requirements.

Intellectual Property

603.840 Negotiating data and patent rights.
603.845 Data rights requirements.
603.850 Marking of data.
603.855 Protected data.
603.860 Rights to inventions.
603.865 March-in rights.
603.870 Marking of documents related to inventions.
603.875 Foreign access to technology and U.S. Competitiveness 
provisions.

Financial and Programmatic Reporting

603.880 Reporting requirements.
603.885 Updated program plans and budgets.
603.890 Final performance report.
603.895 Protection of information in programmatic reports.
603.900 Receipt of final performance report.

Records Retention and Access Requirements

603.905 Record retention requirements.
603.910 Access to a for-profit participant's records.
603.915 Access to a nonprofit participant's records.

Termination and Enforcement

603.920 Termination and enforcement requirements.
Subpart H--Executing the Award
603.1000 Contracting officer's responsibilities at time of award.

The Award Document

603.1005 General responsibilities.
603.1010 Substantive issues.
603.1015 Execution.

Reporting Information About the Award

603.1020 File documents.
Subpart I--Post-Award Administration
603.1100 Contracting officer's post-award responsibilities.
603.1105 Advance payments or payable milestones.
603.1110 Other payment responsibilities.
603.1115 Single audits.
603.1120 Award-specific audits.
Subpart J--Definitions of Terms Used in This Part
603.1200 Definitions.
603.1205 Advance.
603.1210 Articles of collaboration.
603.1215 Assistance.
603.1220 Award-specific audit.
603.1225 Cash contributions.
603.1230 Commercial firm.
603.1235 Consortium.
603.1240 Cooperative agreement.
603.1245 Cost sharing.
603.1250 Data.
603.1255 Equipment.
603.1260 Expenditure-based award.
603.1265 Expenditures or outlays.
603.1270 Grant.
603.1275 In-kind contributions.
603.1280 Institution of higher education.
603.1285 Intellectual property.
603.1290 Participant.
603.1295 Periodic audit.
603.1300 Procurement contract.
603.1305 Program income.
603.1310 Program official.
603.1315 Property.
603.1320 Real property.
603.1325 Recipient.
603.1330 Supplies.
603.1335 Termination.
603.1340 Technology investment agreement.

[[Page 27163]]

Appendix A to Part 603--Applicable Federal Statutes, Executive 
Orders, and Government-wide Regulations
Appendix B to Part 603--Flow Down Requirements for Purchases of 
Goods and Services

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

Subpart A--General


Sec.  603.100  Purpose.

    This part establishes uniform policies and procedures for the 
implementation of DOE's ``other transactions'' authority and for award 
and administration of a technology investment agreement (TIA).


Sec.  603.105  Description.

    (a) A TIA is a special type of assistance instrument used to 
increase involvement of commercial firms in the Department of Energy's 
(DOE) research, development and demonstration (RD&D) programs. A TIA, 
like a cooperative agreement, requires substantial Federal involvement 
in the technical or management aspects of the project. A TIA may be 
either a type of cooperative agreement or a type of assistance 
transaction other than a cooperative agreement, depending on the 
intellectual property provisions. A TIA is either:
    (1) A type of cooperative agreement with more flexible provisions 
tailored for commercial firms (as distinct from a cooperative agreement 
subject to all of the requirements in 10 CFR 600), but with 
intellectual property provisions in full compliance with the DOE 
intellectual property statutes (i.e., Bayh-Dole statute and 42 U.S.C. 
2182 and 5908, as implemented in 10 CFR 600.325). The authority to 
award this type of TIA is 42 U.S.C. 7256(a), as well as any program-
specific statute that provides authority to award cooperative 
agreements; or
    (2) An assistance transaction other than a cooperative agreement, 
if its intellectual property provisions vary from the Bayh-Dole statute 
and 42 U.S.C. 2182 and 5908, which require the Government to retain 
certain intellectual property rights and require differing treatment 
between large businesses and nonprofit organizations or small 
businesses. The authority to award this type of TIA is 42 U.S.C. 
7256(g), as well as any program-specific statute that provides 
authority to award assistance agreements.
    (b) The two types of TIAs have similar requirements, except for the 
intellectual property requirements. If the contracting officer 
determines there is a unique, exceptional need to vary from the 
standard intellectual property requirements in 10 CFR 600.325, the TIA 
becomes an assistance transaction other than a cooperative agreement.


Sec.  603.110  Use of TIAs.

    The ultimate goal for using a TIA is to broaden the technology base 
available to meet DOE mission requirements and foster within the 
technology base new relationships and practices to advance the national 
economic and energy security of the United States, to promote 
scientific and technological innovation in support of that mission, and 
to ensure the environmental cleanup of the national nuclear weapons 
complex. A TIA therefore is designed to:
    (a) Reduce barriers to participation in RD&D programs by commercial 
firms that deal primarily in the commercial marketplace. A TIA allows 
contracting officers to tailor Government requirements and lower or 
remove barriers if it can be done with proper stewardship of Federal 
funds.
    (b) Promote new relationships among performers in the technology 
base. Collaborations among commercial firms that deal primarily in the 
commercial marketplace, firms that regularly perform on the DOE RD&D 
programs and nonprofit organizations can enhance overall quality and 
productivity.
    (c) Stimulate performers to develop and use new business practices 
and disseminate best practices throughout the technology base.


Sec.  603.115  Approval requirements.

    An officer of the Department who has been appointed by the 
President by and with the advice and consent of the Senate and who has 
been delegated the authority from the Secretary must approve the award 
of a TIA and may perform other functions of the Secretary as set forth 
in 42 U.S.C. 7256(g). This authority may not be re-delegated. The DOE 
or National Nuclear Security Administration (NNSA) Senior Procurement 
Executive also must concur in the award of a TIA.


Sec.  603.120  Contracting officer warrant requirements.

    A contracting officer may award or administer a TIA only if the 
contracting officer's warrant authorizes the award or administration of 
a TIA.


Sec.  603.125  Applicability of other parts of the DOE Assistance 
Regulations.

    (a) TIAs are explicitly covered in this part and 10 CFR part 600, 
subpart A--General. 10 CFR part 600, subpart A, addresses general 
matters that relate to assistance instruments.
    (b) Three additional parts of the DOE Assistance Regulations apply 
to TIAs, although they do not mention a TIA explicitly. They are:
    (1) 10 CFR part 601--lobbying restrictions apply by law (31 U.S.C. 
1352) to a TIA that is a cooperative agreement and as a matter of DOE 
policy to a TIA that is an assistance transaction other than a 
cooperative agreement.
    (2) 10 CFR part 606--debarment and suspension requirements apply 
because they cover nonprocurement instruments in general; and
    (3) 10 CFR part 607--drug-free work-place (financial assistance) 
requirements apply because they cover all assistance instruments.
    (c) Other portions of 10 CFR part 600 apply to a TIA as referenced 
in part 603.

Subpart B--Appropriate Use of Technology Investment Agreements


Sec.  603.200  Contracting officer se acquisition responsibilities.

    Contracting officers may use a TIA only in appropriate situations. 
To do so, the use of a TIA must be justified based on:
    (a) The nature of the project, as discussed in Sec.  603.205;
    (b) The type of recipient, addressed in Sec.  603.210;
    (c) The recipient's commitment and cost sharing, as described in 
Sec.  603.215;
    (d) The degree of involvement of the Government program official, 
as discussed in Sec.  603.220; and
    (e) The contracting officer's judgment that the use of a TIA could 
benefit the RD&D objectives in ways that likely would not happen if 
another type of instrument were used (i.e., a contract, grant or 
cooperative agreement is not feasible or appropriate). Answers to the 
four questions in Sec.  603.225 form the basis for the contracting 
officer's judgment.


Sec.  603.205  Nature of the project.

    Judgments relating to the nature of the project include:
    (a) The principal purpose of the project is to carry out a public 
purpose of support or stimulation of RD&D (i.e., assistance), rather 
than acquiring goods or services for the benefit of the Government 
(i.e., acquisition);
    (b) To the maximum extent practicable, the TIA does not support 
RD&D that duplicates other RD&D being conducted under existing programs 
carried out by the DOE; and
    (c) The use of a standard contract, grant or cooperative agreement 
for the project is not feasible or appropriate (see questions in Sec.  
603.225).


Sec.  603.210  Recipients.

    (a) A TIA requires one or more for-profit firms, not acting in 
their capacity

[[Page 27164]]

as the contractor of a FFRDC, to be involved either in the:
    (1) Performance of the RD&D project; or
    (2) The commercial application of the results.
    (i) In those cases where there is only a non-profit performer or a 
consortium of non-profit performers or non-profit performers and FFRDC 
contractors, if and as authorized, the performers must have at least a 
tentative agreement with a specific for-profit partner or partners who 
plan on being involved in the commercial application of the results.
    (ii) In consultation with legal counsel, the contracting officer 
should review the agreement between the performers and their for-profit 
partner to ensure that the for-profit partner is committed to being 
involved in the commercial application of the results.
    (b) A TIA may be particularly useful for awards to consortia (a 
consortium may include one or more for-profit firms, as well as State 
or local government agencies, institutions of higher education, other 
nonprofit organizations, or FFRDC contractors, if and as authorized) 
because:
    (1) If multiple performers are participating as a consortium, they 
may be more equal partners in the performance of the project than 
usually is the case with a prime recipient and subrecipients. All of 
the performers are more likely to be directly involved in developing 
and revising plans for the RD&D effort, reviewing technical progress, 
and overseeing financial and other business matters. That feature makes 
consortia well suited to building new relationships among performers in 
the technology base, a principal objective for the use of a TIA.
    (2) In addition, interactions among the participants within a 
consortium potentially provide a self-governance mechanism. The 
potential for additional self-governance is particularly good when a 
consortium includes multiple for-profit participants that normally are 
competitors within an industry.
    (c) A TIA may be used for carrying out RD&D performed by single 
firms or multiple performers (e.g., a teaming arrangement) in prime 
award-subaward relationships. In awarding a TIA in those cases, 
however, consideration should be given to providing for greater 
involvement of the program official or a way to increase self-
governance (e.g., a prime award with multiple subawards arranged so as 
to give the subrecipients more insight into and authority and 
responsibility for the programmatic and business aspects of the overall 
project than they usually have).


Sec.  603.215  Recipient's commitment and cost sharing.

    (a) The contracting officer should evaluate whether the recipient 
has a strong commitment to and self-interest in the success of the 
project and incorporating the technology into products and processes 
for the commercial marketplace. Evidence of that commitment and 
interest should be found in the proposal, in the recipient's management 
plan, or through other means.
    (b) The contracting officer must seek cost sharing. The purpose of 
cost sharing is to ensure that the recipient incurs real risk that 
gives it a vested interest in the project's success; the willingness to 
commit to meaningful cost sharing is a good indicator of a recipient's 
self-interest. The requirements are that:
    (1) To the maximum extent practicable, the non-Federal parties 
carrying out a RD&D project under a TIA are to provide at least half of 
the costs of the project; and
    (2) The parties must provide the cost sharing from non-Federal 
resources unless otherwise provided by law.
    (c) The contracting officer may consider whether cost sharing is 
impracticable in a given case, unless there is a statutory requirement 
for cost sharing that applies to the particular program under which the 
award is to be made. Before deciding that cost sharing is 
impracticable, the contracting officer should carefully consider if 
there are other factors that demonstrate the recipient's self-interest 
in the success of the current project.


Sec.  603.220  Government participation.

    A TIA is used to carry out cooperative relationships between the 
Federal Government and the recipient(s) which require substantial 
involvement of the Government in the execution of the RD&D. For 
example, program officials will participate in recipients' periodic 
reviews of progress and may be substantially involved with the 
recipients in the resulting revisions of plans for future effort.


Sec.  603.225  Benefits of using a TIA.

    Before deciding that a TIA is appropriate, the contracting officer 
also must judge that using a TIA could benefit the RD&D objectives in 
ways that likely would not happen if another type of assistance 
instrument were used (e.g., a cooperative agreement subject to all of 
the requirements of 10 CFR part 600). The contracting officer, in 
conjunction with Government program officials, must consider the 
questions in paragraphs (a) through (d) of this section, to help 
identify the benefits that may justify using a TIA and reducing some of 
the usual requirements. The contracting officer must report the answers 
to these questions to help the DOE measure the benefits of using a TIA. 
Note full concise answers are required only to questions that relate to 
the benefits perceived for using the TIA, rather than another type of 
funding instrument, for the particular project. A simple ``no'' or 
``not applicable'' is a sufficient response for other questions. The 
questions are:
    (a) Will the use of a TIA permit the involvement of any commercial 
firms or business units of firms that would not otherwise participate 
in the project? If so:
    (1) What are the expected benefits of those firms' or divisions' 
participation (e.g., is there a specific technology that could be 
better, more readily available, or less expensive)?
    (2) Why would they not participate if an instrument other than a 
TIA were used? The contracting officer should identify specific 
provisions of the TIA or features of the TIA award process that enable 
their participation. For example, if the RD&D effort is based 
substantially on a for-profit firm's privately developed technology and 
the Government may be a major user of any commercial product developed 
as a result of the award, a for-profit firm may not participate unless 
the Government's intellectual property rights in the technology are 
modified.
    (b) Will the use of a TIA allow the creation of new relationships 
among participants in a consortium, at the prime or subtier levels, 
among business units of the same firm, or between non-Federal 
participants and the Federal Government that will foster better 
technology? If so:
    (1) Why do these new relationships have the potential for fostering 
technology that is better, more affordable, or more readily available?
    (2) Are there provisions of the TIA or features of the TIA award 
process that enable these relationships to form? If so, the contracting 
officer should be able to identify specifically what they are. If not, 
the contracting officer should be able to explain specifically why the 
relationships could not be created if another type of assistance 
instrument were used. For example, a large business firm may not be 
willing to participate in a consortium or teaming arrangement with 
small business firms and nonprofit firms under a standard cooperative 
agreement because those entities have invention rights under the Bayh-
Dole statute that are not available to large businesses. A large 
business

[[Page 27165]]

firm may be willing to participate in a consortium or teaming 
arrangement only if all partners are substantially equal with regard to 
the allocation of intellectual property rights.
    (c) Will the use of a TIA allow firms or business units of firms 
that traditionally accept Government awards to use new business 
practices in the execution of the RD&D project that will foster better 
technology, new technology more quickly or less expensively, or 
facilitate partnering with commercial firms? If so:
    (1) What specific benefits result from the use of these new 
practices? The contracting officer should be able to explain 
specifically the potential for those benefits.
    (2) Are there provisions of the TIA or features of the TIA award 
process that enable the use of the new practices? If so, the 
contracting officer should be able to identify those provisions or 
features and explain why the practices could not be used if the award 
were made using another type of assistance instrument.
    (d) Are there any other benefits of the use of a TIA that could 
help DOE meet its objectives in carrying out the project? If so, the 
contracting officer should be able to identify specifically what they 
are, how they can help meet the objectives, what features of the TIA or 
award process enable DOE to realize them, and why the benefits likely 
would not be realized if an assistance instrument other than a TIA were 
used.


Sec.  603.230  Fee or profit.

    The contracting officer may not use a TIA if any participant is to 
receive fee or profit. Note that this policy extends to all performers 
of the project, including any subawards for substantive program 
performance, but it does not preclude participants' or subrecipients' 
payment of reasonable fee or profit when making purchases from 
suppliers of goods (e.g., supplies and equipment) or services needed to 
carry out the RD&D.

Subpart C--Requirements for Expenditure-Based and Fixed-Support 
Technology Investment Agreements


Sec.  603.300  Difference between an expenditure-based and a fixed-
support TIA.

    The contracting officer may negotiate expenditure-based or fixed-
support award terms for either types of TIA subject to the requirements 
in this subpart. The fundamental difference between an expenditure-
based and a fixed-support TIA is:
    (a) For an expenditure-based TIA, the amounts of interim payments 
or the total amount ultimately paid to the recipient are based on the 
amounts the recipient expends on project costs. If a recipient 
completes the project specified at the time of award before it expends 
all of the agreed-upon Federal funding and recipient cost sharing, the 
Federal Government may recover its share of the unexpended balance of 
funds or, by mutual agreement with the recipient, amend the agreement 
to expand the scope of the RD&D project. An expenditure-based TIA, 
therefore, is analogous to a cost-type procurement contract or grant.
    (b) For a fixed-support TIA, the amount of assistance is 
established at the time of award and is not meant to be adjusted later. 
In that sense, a fixed-support TIA is somewhat analogous to a fixed-
price procurement contract.


Sec.  603.305  Use a fixed-support TIA.

    The contracting officer may use a fixed-support TIA if:
    (a) The agreement is to support or stimulate RD&D with outcomes 
that are well defined, observable, and verifiable;
    (b) The resources required to achieve the outcomes can be estimated 
well enough to ensure the desired level of cost sharing (see example in 
Sec.  603.560(b)); and
    (c) The agreement does not require a specific amount or percentage 
of recipient cost sharing. In cases where the agreement does require a 
specific amount or percentage of cost sharing, a fixed-support TIA is 
not practicable because the agreement has to specify cost principles or 
standards for costs that may be charged to the project; require the 
recipient to track the costs of the project; and provide access for 
audit to allow verification of the recipient's compliance with the 
mandatory cost sharing. A fixed-support TIA may not be used if there 
is:
    (1) A requirement (e.g., in statute or policy determination) for a 
specific amount or percentage of recipient cost sharing; or
    (2) The contracting officer, in consultation with the program 
official, otherwise elects to include in the TIA a requirement for a 
specific amount or percentage of cost sharing.


Sec.  603.310  Use of an expenditure-based TIA.

    In general, the contracting officer must use an expenditure-based 
TIA under conditions other than those described in Sec.  603.305. 
Reasons for any exceptions to this general rule must be documented in 
the award file and must be consistent with the policy in Sec.  603.230 
that precludes payment of fee or profit to participants.


Sec.  603.315  Advantages of a fixed-support TIA.

    In situations where the use of a fixed-support TIA is permissible 
(see Sec. Sec.  603.305 and 603.310), its use may encourage some 
commercial firms' participation in the RD&D. With a fixed-support TIA, 
the contracting officer can eliminate or reduce some post-award 
requirements that sometimes are cited as disincentives for those firms 
to participate. For example, a fixed-support TIA need not:
    (a) Specify minimum standards for the recipient's financial 
management system;
    (b) Specify cost principles or standards stating the types of costs 
the recipient may charge to the project;
    (c) Provide for financial audits by Federal auditors or independent 
public accountants of the recipient's books and records;
    (d) Set minimum standards for the recipient's purchasing system; or
    (e) Require the recipient to prepare financial reports for 
submission to the Federal Government.

Subpart D--Competition Phase


Sec.  603.400  Competitive procedures.

    DOE policy is to award a TIA using competitive procedures and a 
merit-based selection process, as described in 10 CFR 600.6 and 600.13, 
respectively:
    (a) In every case where required by statute; and
    (b) To the maximum extent feasible, in all other cases. If it is 
not feasible to use competitive procedures, the contracting officer 
must comply with the requirements in 10 CFR 600.6(c).


Sec.  603.405  Announcement format.

    If the contracting officer, in consultation with the program 
official, decides that a TIA is among the types of instruments that may 
be awarded, the additional elements described in Sec. Sec.  603.410 
through 603.420 should be included in the announcement.


Sec.  603.410  Announcement content.

    Once the contracting officer, in consultation with the program 
official, considers the factors described in Subpart B of this part and 
decides that a TIA is among the types of instruments that may be 
awarded pursuant to a program announcement, it is important to state 
that fact in the announcement. The announcement also should state that 
a TIA is more flexible than a traditional financial assistance 
agreement and that requirements are negotiable in areas such as audits 
and intellectual property rights that may cause concern for commercial 
firms.

[[Page 27166]]

Doing so should increase the likelihood that commercial firms will be 
willing to submit proposals.


Sec.  603.415  Cost sharing.

    To help ensure a competitive process that is fair and equitable to 
all potential proposers, the announcement should state clearly:
    (a) That, to the maximum extent practicable, the non-Federal 
parties carrying out a RD&D project under a TIA are to provide at least 
half of the costs of the project (see Sec.  603.215(b));
    (b) The types of cost sharing that are acceptable;
    (c) How any in-kind contributions will be valued, in accordance 
with Sec. Sec.  603.530 through 603.555; and
    (d) Whether any consideration will be given to alternative 
approaches a proposer may offer to demonstrate its strong commitment to 
and self-interest in the project's success, in accordance with Sec.  
603.215.


Sec.  603.420  Disclosure of information.

    The announcement should tell potential proposers that:
    (a) For all TIAs, information described in paragraph (b) of this 
section is exempt from disclosure requirements of the Freedom of 
Information Act (FOIA)(codified at 5 U.S.C. 552) for a period of five 
years after the date on which the DOE receives the information from 
them; and
    (b) As provided in 42 U.S.C. 7256(g) incorporating certain 
provisions of 10 U.S.C. 2371, disclosure is not required, and may not 
be compelled, under FOIA during that period if:
    (1) A proposer submits the information in a competitive or 
noncompetitive process that could result in the award of a TIA; and
    (2) The type of information is among the following types that are 
exempt:
    (i) Proposals, proposal abstracts, and supporting documents; and
    (ii) Business plans and technical information submitted on a 
confidential basis.
    (c) If proposers desire to protect business plans and technical 
information for five years from FOIA disclosure requirements, they must 
mark them with a legend identifying them as documents submitted on a 
confidential basis. After the five-year period, information may be 
protected for longer periods if it meets any of the criteria in 5 
U.S.C. 552(b) (as implemented by the DOE in 10 CFR part 1004) for 
exemption from FOIA disclosure requirements.

Subpart E--Pre-Award Business Evaluation


Sec.  603.500  Pre-award business evaluation.

    (a) The contracting officer must determine the qualification of the 
recipient, as described in Sec. Sec.  603.510 and 603.515.
    (b) As the business expert working with the program official, the 
contracting officer also must address the financial aspects of the 
proposed agreement. The contracting officer must:
    (1) Determine that the total amount of funding for the proposed 
effort is reasonable, as addressed in Sec.  603.520.
    (2) Assess the value and determine the reasonableness of the 
recipient's proposed cost sharing contribution, as discussed in 
Sec. Sec.  603.525 through 603.555.
    (3) If contemplating the use of a fixed-support rather than 
expenditure-based TIA, ensure that its use is justified, as explained 
in Sec. Sec.  603.560 and 603.565.
    (4) Determine amounts for milestone payments, if used, as discussed 
in Sec.  603.570.


Sec.  603.505  Program resources.

    Program officials can be a source of information for determining 
the reasonableness of proposed funding (e.g., on labor rates, as 
discussed in Sec.  603.520) or establishing observable and verifiable 
technical milestones for payments (see Sec.  603.570).

Recipient Qualification


Sec.  603.510  Recipient qualifications.

    Prior to award of a TIA, the contracting officer's responsibilities 
for determining that the recipient is qualified are the same as those 
for awarding a grant or cooperative agreement. If the recipient is a 
consortium that is not formally incorporated, the contracting officer 
has the additional responsibility described in Sec.  603.515.


Sec.  603.515  Qualification of a consortium.

    (a) A consortium that is not formally incorporated must provide a 
collaboration agreement, commonly referred to as the articles of 
collaboration, which sets out the rights and responsibilities of each 
consortium member. This agreement binds the individual consortium 
members together and should discuss, among other things, the 
consortium's
    (1) Management structure;
    (2) Method of making payments to consortium members;
    (3) Means of ensuring and overseeing members' efforts on the 
project;
    (4) Provisions for members' cost sharing contributions; and
    (5) Provisions for ownership and rights in intellectual property 
developed previously or under the agreement.
    (b) If the prospective recipient of a TIA is a consortium that is 
not formally incorporated, the contracting officer must, in 
consultation with legal counsel, review the management plan in the 
consortium's collaboration agreement to ensure that the management plan 
is sound and that it adequately addresses the elements necessary for an 
effective working relationship among the consortium members. An 
effective working relationship is essential to increase the project's 
chances of success.

Total Funding


Sec.  603.520  Reasonableness of total project funding.

    In cooperation with the program official, the contracting officer 
must assess the reasonableness of the total estimated budget to perform 
the RD&D that will be supported by the agreement.
    (a) Labor. Much of the budget likely will involve direct labor and 
associated indirect costs, which may be represented together as a 
``loaded'' labor rate. The program official is an essential advisor on 
reasonableness of the overall level of effort and its composition by 
labor category. The contracting officer also may rely on experience 
with other awards as the basis for determining reasonableness.
    (b) Real property and equipment. In almost all cases, the project 
costs should normally include only depreciation or use charges for real 
property and equipment of for-profit participants, in accordance with 
Sec.  603.680. Remember that the budget for an expenditure-based TIA 
may not include depreciation of a participant's property as a direct 
cost of the project if that participant's practice is to charge the 
depreciation of that type of property as an indirect cost, as many 
organizations do.

Cost Sharing


Sec.  603.525  Value and reasonableness of the recipient's cost sharing 
contribution.

    The contracting officer must:
    (a) Determine that the recipient's cost sharing contributions meet 
the criteria for cost sharing and determine values for them, in 
accordance with Sec. Sec.  603.530 through 603.555. In doing so, the 
contracting officer must:
    (1) Ensure that there are affirmative statements from any third 
parties identified as sources of cash contributions, and
    (2) Include in the award file an evaluation that documents how the 
values of the recipient's contributions to

[[Page 27167]]

the funding of the project were determined.
    (b) Judge that the recipient's cost sharing contribution, as a 
percentage of the total budget, is reasonable. To the maximum extent 
practicable, the recipient must provide at least half of the costs of 
the project, in accordance with Sec.  603.215.


Sec.  603.530  Acceptable cost sharing.

    The contracting officer may accept any cash or in-kind 
contributions that meet all of the following criteria.
    (a) In the contracting officer's judgment, they represent 
meaningful cost sharing that demonstrates the recipient's commitment to 
the success of the RD&D project. Cash contributions clearly demonstrate 
commitment and they are strongly preferred over in-kind contributions.
    (b) They are necessary and reasonable for accomplishment of the 
RD&D project's objectives.
    (c) They are costs that may be charged to the project under Sec.  
603.625 and Sec.  603.635, as applicable to the participant making the 
contribution.
    (d) They are verifiable from the recipient's records.
    (e) They are not included as cost sharing contributions for any 
other Federal award.
    (f) They are not paid by the Federal Government under another 
award, except:
    (1) Costs that are authorized by Federal statute to be used for 
cost sharing.
    (2) Independent research and development (IR&D) costs, as described 
in 48 CFR part 31.208-18, that meet all of the criteria in paragraphs 
(a) through (e) of this section. IR&D is acceptable as cost sharing, 
even though it may be reimbursed by the Government through other 
awards. It is standard business practice for all for-profit firms, 
including commercial firms, to recover their IR&D costs through prices 
charged to their customers. Thus, the cost principles at 48 CFR part 31 
allow a for-profit firm that has expenditure-based, Federal procurement 
contracts to recover through those procurement contracts the allocable 
portion of its research and development costs associated with a 
technology investment agreement. Contracting officers should note that 
in accordance with section 603.545, they may not count participant's 
costs of prior research, including IR&D, as a cost sharing 
contribution.


Sec.  603.535  Value of proposed real property or equipment.

    The contracting officer rarely should accept values for cost 
sharing contributions of real property or equipment that are in excess 
of depreciation or reasonable use charges, as discussed in Sec.  
603.680 for for-profit participants. The contracting officer may accept 
the full value of a donated capital asset if the real property or 
equipment is to be dedicated to the project and the contracting officer 
expects that it will have a fair market value that is less than $5,000 
at the project's end. In those cases, the contracting officer should 
value the donation at the lesser of:
    (a) The value of the property as shown in the recipient's 
accounting records (i.e., purchase price less accumulated 
depreciation); and
    (b) The current fair market value. The contracting officer may 
accept the use of any reasonable basis for determining the fair market 
value of the property. If there is a justification to do so, the 
contracting officer may accept the current fair market value even if it 
exceeds the value in the recipient's records.


Sec.  603.540  Acceptability of fully depreciated real property or 
equipment.

    The contracting officer should limit the value of any contribution 
of a fully depreciated asset to a reasonable use charge. In determining 
what is reasonable, the contracting officer must consider:
    (a) The original cost of the asset;
    (b) Its estimated remaining useful life at the time of the 
negotiations;
    (c) The effect of any increased maintenance charges or decreased 
performance due to age; and
    (d) The amount of depreciation that the participant previously 
charged to Federal awards.


Sec.  603.545  Acceptability of costs of prior RD&D.

    The contracting officer may not count any participant's costs of 
prior RD&D as a cost sharing contribution. Only the additional 
resources that the recipient will provide to carry out the current 
project (which may include pre-award costs for the current project, as 
described in Sec.  603.830) are to be counted.


Sec.  603.550  Acceptability of intellectual property.

    (a) In most instances, the contracting officer should not count 
costs of patents and other intellectual property (e.g., copyrighted 
material, including software) as cost sharing because:
    (1) It is difficult to assign values to these intangible 
contributions;
    (2) Their value usually is a manifestation of prior research costs, 
which are not allowed as cost share under Sec.  603.545; and
    (3) Contributions of intellectual property rights generally do not 
represent the same cost of lost opportunity to a recipient as 
contributions of cash or tangible assets. The purpose of cost share is 
to ensure that the recipient incurs real risk that gives it a vested 
interest in the project's success.
    (b) The contracting officer may include costs associated with 
intellectual property if the costs are based on sound estimates of 
market value of the contribution. For example, a for-profit firm may 
offer the use of commercially available software for which there is an 
established license fee for use of the product. The costs of the 
development of the software would not be a reasonable basis for valuing 
its use.


Sec.  603.555  Value of other contributions.

    For types of participant contributions other than those addressed 
in Sec. Sec.  603.535 through 603.550, the general rule is that the 
contracting officer is to value each contribution consistently with the 
cost principles or standards in Sec.  603.625 and Sec.  603.635 that 
apply to the participant making the contribution. When valuing services 
and property donated by parties other than the participants, the 
contracting officer may use as guidance the provisions of 10 CFR 
600.313(b)(2) through (b)(5).

Fixed-Support or Expenditure-Based Approach


Sec.  603.560  Estimate of project expenditures.

    (a) To use a fixed-support TIA, rather than an expenditure-based 
TIA, the contracting officer must have confidence in the estimate of 
the expenditures required to achieve well-defined outcomes. Therefore, 
the contracting officer must work carefully with program officials to 
select outcomes that, when the recipient achieves them, are reliable 
indicators of the amount of effort the recipient expended. However, the 
estimate of the required expenditures need not be a precise dollar 
amount, as illustrated by the example in paragraph (b) of this section, 
if:
    (1) The recipient is contributing a substantial share of the costs 
of achieving the outcomes, which must meet the criteria in Sec.  
603.305(a); and
    (2) The contracting officer is confident that the costs of 
achieving the outcomes will be at least a minimum amount that can be 
specified and the recipient is willing to accept the possibility that 
its cost sharing percentage ultimately will

[[Page 27168]]

be higher if the costs exceed that minimum amount.
    (b) To illustrate the approach, consider a project for which the 
contracting officer is confident that the recipient will have to expend 
at least $800,000 to achieve the specified outcomes. The contracting 
officer must determine, in conjunction with program officials, the 
minimum level of recipient cost sharing required to demonstrate the 
recipient's commitment to the success of the project. For purposes of 
this illustration, let that minimum recipient cost sharing be 60% of 
the total project costs. In that case, the Federal share should be no 
more than 40% and the contracting officer could set a fixed level of 
Federal support at $320,000 (40% of $800,000). With that fixed level of 
Federal support, the recipient would be responsible for the balance of 
the costs needed to complete the project.
    (c) Note, however, that the level of recipient cost sharing 
negotiated should be based solely on the level needed to demonstrate 
the recipient's commitment. The contracting officer may not use a 
shortage of Federal Government funding for the program as a reason to 
try to persuade a recipient to accept a fixed-support TIA, rather than 
an expenditure-based instrument, or to accept responsibility for a 
greater share of the total project costs than it otherwise is willing 
to offer. If there is insufficient funding to provide an appropriate 
Federal Government share for the entire project, the contracting 
officer should re-scope the effort covered by the agreement to match 
the available funding.


Sec.  603.565  Use of a hybrid instrument.

    For a RD&D project that is to be carried out by a number of 
participants, the contracting officer may award a TIA that provides for 
some participants to perform under fixed-support arrangements and 
others to perform under expenditure-based arrangements. This approach 
may be useful, for example, if a commercial firm that is a participant 
will not accept an agreement with all of the post-award requirements of 
an expenditure-based award. Before using a fixed-support arrangement 
for that firm's portion of the project, the agreement must meet the 
criteria in Sec.  603.305.

Accounting, Payments, and Recovery of Funds


Sec.  603.570  Determining milestone payment amounts.

    (a) If the contracting officer selects the milestone payment method 
(see Sec.  603.805), the contracting officer must assess the 
reasonableness of the estimated amount for reaching each milestone. 
This assessment enables the contracting officer to set the amount of 
each milestone payment to approximate the Federal share of the 
anticipated resource needs for carrying out that phase of the RD&D 
effort.
    (b) The Federal share at each milestone need not be the same as the 
Federal share of the total project. For example, the contracting 
officer might deliberately set payment amounts with a larger Federal 
share for early milestones if a project involves a start-up company 
with limited resources.
    (c) For an expenditure-based TIA, if the contracting officer 
establishes minimum cost sharing percentages for each milestone, those 
percentages should be indicated in the agreement.
    (d) For a fixed-support TIA, the milestone payments should be 
associated with the well-defined, observable, and verifiable technical 
outcomes (e.g., demonstrations, tests, or data analysis) that are 
established for the project in accordance with Sec. Sec.  603.305(a) 
and 603.560(a).


Sec.  603.575  Repayment of Federal cost share.

    In accordance with the Energy Policy Act of 2005 (Public Law 109-
58), section 988(e), the contracting officer may not require repayment 
of the Federal share of a cost-shared TIA as a condition of making an 
award, unless otherwise authorized by statute.

Subpart F--Award Terms Affecting Participants' Financial, Property, 
and Purchasing Systems


Sec.  603.600  Administrative matters.

    This subpart addresses ``systemic'' administrative matters that 
place requirements on the operation of a participant's financial 
management, property management, or purchasing system. Each 
participant's systems are organization-wide and do not vary with each 
agreement. Therefore, a TIA should address systemic requirements in a 
uniform way for each type of participant organization.


Sec.  603.605  General policy.

    The general policy for an expenditure-based TIA is to avoid 
requirements that would force participants to use different financial 
management, property management, and purchasing systems than they 
currently use for:
    (a) Expenditure-based Federal procurement contracts and assistance 
awards in general, if they receive them; or
    (b) Commercial business, if they have no expenditure-based Federal 
procurement contracts and assistance awards.


Sec.  603.610  Flow down requirements.

    If it is an expenditure-based award, the TIA must require 
participants to provide the same financial management, property 
management, and purchasing systems requirements to a subrecipient that 
would apply if the subrecipient were a participant. For example, a for-
profit participant would require a university subrecipient to comply 
with requirements that apply to a university participant and would 
require a GOCO or FFRDC subrecipient to comply with standards that 
conform as much as practicable with the requirements in the GOCO/FFRDC 
procurement contract. Note that this policy applies to subawards for 
substantive performance of portions of the RD&D project supported by 
the TIA and not to participants' purchases of goods or services needed 
to carry out the RD&D.

Financial Matters


Sec.  603.615  Financial management standards for-profit firms.

    (a) To avoid causing needless changes in participants' financial 
management systems, an expenditure-based TIA will make for-profit 
participants that currently perform under other expenditure-based 
Federal procurement contracts or assistance awards subject to the same 
standards for financial management systems that apply to those other 
awards. Therefore, if a for-profit participant has expenditure-based 
DOE assistance awards other than a TIA, the TIA must apply the 
standards in 10 CFR 600.311. The contracting officer may grant an 
exception and allow a for-profit participant that has other 
expenditure-based Federal Government awards to use an alternative set 
of standards that meets the minimum criteria in paragraph (b) of this 
section, if there is a compelling programmatic or business reason to do 
so. For each case in which an exception is granted, the contracting 
officer must document the reason in the award file.
    (b) For an expenditure-based TIA, the contracting officer is to 
allow and encourage each for-profit participant that does not currently 
perform under expenditure-based Federal procurement contracts or 
assistance awards (other than a TIA) to use its existing financial 
management system as long as the system, as a minimum:
    (1) Complies with Generally Accepted Accounting Principles.
    (2) Effectively controls all project funds, including Federal funds 
and any required cost share. The system must have complete, accurate, 
and current

[[Page 27169]]

records that document the sources of funds and the purposes for which 
they are disbursed. It also must have procedures for ensuring that 
project funds are used only for purposes permitted by the agreement 
(see Sec.  603.625).
    (3) Includes, if advance payments are authorized under Sec.  
603.805, procedures to minimize the time elapsing between the payment 
of funds by the Government and the firm's disbursement of the funds for 
program purposes.


Sec.  603.620  Financial management standards for nonprofit 
participants.

    So as not to force system changes for any State, local government, 
institution of higher education, or other nonprofit organization, 
expenditure-based TIA requirements for the financial management system 
of any nonprofit participant are to be the same as those that apply to 
the participant's other Federal assistance awards. Specifically, the 
requirements are those in:
    (a) 10 CFR 600.220 for State and local governments; and
    (b) 10 CFR 600.121(b) for other nonprofit organizations, with the 
exception of nonprofit Government-owned, contractor-operated (GOCO) 
facilities and Federally Funded Research and Development Centers 
(FFRDCs) that are excepted from the definition of ``recipient'' in 10 
CFR 600.101. If a GOCO or FFRDC is a participant, the contracting 
officer must specify appropriate standards that conform as much as 
practicable with requirements in their procurement contract.


Sec.  603.625  Cost principles or standards applicable to for-profit 
participants.

    (a) So as not to require any firm to needlessly change its cost 
accounting system, an expenditure-based TIA is to apply the Government 
cost principles in 48 CFR part 31 to for-profit participants that 
currently perform under expenditure-based Federal procurement contracts 
or assistance awards (other than a TIA) and therefore have existing 
systems for identifying allowable costs under those principles. If 
there are programmatic or business reasons to do otherwise, the 
contracting officer may grant an exception from this requirement and 
use alternative standards as long as the alternative satisfies the 
conditions described in paragraph (b) of this section; if an exception 
is granted the reasons must be documented in the award file.
    (b) For other for-profit participants, the contracting officer may 
establish alternative standards in the agreement as long as that 
alternative provides, as a minimum, that Federal funds and funds 
counted as recipients' cost sharing will be used only for costs that:
    (1) A reasonable and prudent person would incur in carrying out the 
RD&D project contemplated by the agreement. Generally, elements of cost 
that appropriately are charged are those identified with RD&D 
activities under the Generally Accepted Accounting Principles (see 
Statement of Financial Accounting Standards Number 2, ``Accounting for 
Research and Development Costs,'' October 1974). Moreover, costs must 
be allocated to DOE and other projects in accordance with the relative 
benefits the projects receive. Costs charged to DOE projects must be 
given consistent treatment with costs allocated to the participants' 
other RD&D activities (e.g., activities supported by the participants 
themselves or by non-Federal sponsors).
    (2) Are consistent with the purposes stated in the governing 
Congressional authorizations and appropriations. The contracting 
officer is responsible for ensuring that provisions in the award 
document address any requirements that result from authorizations and 
appropriations.


Sec.  603.630  Use Federally approved indirect cost rates for for-
profit firms.

    In accordance with the general policy in Sec.  603.605, the 
contracting officer must require a for-profit participant that has 
federally approved indirect cost rates for its Federal procurement 
contracts to use those rates to accumulate and report costs under an 
expenditure-based TIA. This includes both provisional and final rates 
that are approved up until the time that the TIA is closed out.


Sec.  603.635  Cost principles for nonprofit participants.

    So as not to force financial system changes for any nonprofit 
participant, an expenditure-based TIA will provide that costs to be 
charged to the RD&D project by any nonprofit participant must be 
determined to be allowable in accordance with:
    (a) OMB Circular A-87, if the participant is a State or local 
governmental organization;
    (b) OMB Circular A-21, if the participant is an institution of 
higher education;
    (c) 45 CFR Part 74, Appendix E, if the participant is a hospital; 
or
    (d) OMB Circular A-122, if the participant is any other type of 
nonprofit organization (the cost principles in 48 CFR parts 31 and 231 
are to be used by any nonprofit organization that is identified in 
Circular A-122 as being subject to those cost principles).


Sec.  603.640  Audits of for-profit participants.

    If the TIA is an expenditure-based award, the contracting officer 
must include in it an audit provision that addresses, for each for-
profit participant:
    (a) Whether the for-profit participant must have periodic audits, 
in addition to any award-specific audits, as described in Sec.  
603.645;
    (b) Whether the Defense Contract Audit Agency (DCAA) or an 
independent public accountant (IPA) will perform required audits, as 
discussed in Sec.  603.650;
    (c) How frequently any periodic audits are to be performed, 
addressed in Sec.  603.655; and
    (d) Other matters described in Sec.  603.660, such as audit 
coverage, allowability of audit costs, auditing standards, and remedies 
for noncompliance.


Sec.  603.645  Periodic audits and award-specific audits of for-profit 
participants.

    The contracting officer needs to consider requirements for both 
periodic audits and award-specific audits (as defined in Sec.  603.1295 
and Sec.  603.1220, respectively). The way that an expenditure-based 
TIA addresses the two types of audits will vary, depending upon the 
type of for-profit participant.
    (a) For for-profit participants that are audited by the DCAA or 
other Federal auditors, as described in Sec. Sec.  603.650(b) and 
603.655, specific requirements for periodic audits need not be added 
because the Federal audits should be sufficient to address whatever may 
be needed. The inclusion in the TIA of the standard access-to-records 
provision for those for-profit participants, as discussed in Sec.  
603.910(a), gives the necessary access in the event that the 
contracting officer later needs to request audits to address award-
specific issues that arise.
    (b) For each other for-profit participant, the contracting officer:
    (1) Should require that the participant have an independent auditor 
(i.e., the DCAA or an independent public accountant (IPA)) conduct 
periodic audits of its systems if it expends $500,000 or more per year 
in TIAs and other Federal assistance awards. A prime reason for 
including this requirement is that the Federal Government, for an 
expenditure-based award, necessarily relies on amounts reported by the 
participant's systems when it sets payment amounts or adjusts 
performance outcomes. The

[[Page 27170]]

periodic audit provides some assurance that the reported amounts are 
reliable.
    (2) Must ensure that the award provides an independent auditor the 
access needed for award-specific audits, to be performed at the request 
of the contracting officer if issues arise that require audit support. 
However, consistent with the government-wide policies on single audits 
that apply to nonprofit participants (see Sec.  603.665), the 
contracting officer should rely on periodic audits to the maximum 
extent possible to resolve any award-specific issues.


Sec.  603.650  Designation of auditor for for-profit participants.

    The auditor identified in an expenditure-based TIA to perform 
periodic and award-specific audits of a for-profit participant depends 
on the circumstances, as follows:
    (a) The Federal cognizant agency or an IPA will be the auditor for 
a for-profit participant that does not meet the criteria in paragraph 
(b) of this section. Note that the allocable portion of the costs of 
the IPA's audit may be reimbursable under the TIA, as described in 
Sec.  603.660(b). The IPA should be the one that the participant uses 
to perform other audits (e.g., of its financial statement), to minimize 
added burdens and costs.
    (b) Except as provided in paragraph (c) of this section, the 
Federal cognizant agency (e.g., DCAA) must be identified as the auditor 
for a GOCO or FFRDC and for any for-profit participant that is subject 
to Federal audits because it is currently performing under a Federal 
award that is subject to the:
    (1) Cost principles in 48 CFR part 31 of the Federal Acquisition 
Regulation (FAR); or
    (2) Cost Accounting Standards in 48 CFR Chapter 99.
    (c) If there are programmatic or business reasons that justify the 
use of an auditor other than the Federal cognizant agency for a for-
profit participant that meets the criteria in paragraph (b) of this 
section, the contracting officer may provide that an IPA will be the 
auditor for that participant in which case the reasons for this 
decision must be documented in the award file.


Sec.  603.655  Frequency of periodic audits of for-profit participants.

    If an expenditure-based TIA provides for periodic audits of a for-
profit participant by an IPA, the contracting officer must specify the 
frequency for those audits. The contracting officer should consider 
having an audit performed during the first year of the award, when the 
participant has its IPA do its next financial statement audit, unless 
the participant already had a systems audit due to other Federal awards 
within the past two years. The frequency thereafter may vary depending 
upon the dollars the participant is expending annually under the award, 
but it is not unreasonable to require an updated audit every two to 
three years to verify that the participant's systems continue to be 
reliable (the audit then would cover the two or three-year period 
between audits).


Sec.  603.660  Other audit requirements.

    If an expenditure-based TIA provides for audits of a for-profit 
participant by an IPA, the contracting officer also must specify:
    (a) What periodic audits are to cover. It is important to specify 
audit coverage that is only as broad as needed to provide reasonable 
assurance of the participant's compliance with award terms that have a 
direct and material effect on the RD&D project.
    (b) Who will pay for periodic and award-specific audits. The 
allocable portion of the costs of any audits by IPAs may be 
reimbursable under the TIA. The costs may be direct charges or 
allocated indirect costs, consistent with the participant's accounting 
system and practices.
    (c) The auditing standards that the IPA will use. The contracting 
officer must provide that the IPA will perform the audits in accordance 
with the Generally Accepted Government Auditing Standards.
    (d) The available remedies for noncompliance. The agreement must 
provide that the participant may not charge costs to the award for any 
audit that the contracting officer determines was not performed in 
accordance with the Generally Accepted Government Auditing Standards or 
other terms of the agreement. It also must provide that the Government 
has the right to require the participant to have the IPA take 
corrective action and, if corrective action is not taken, that the 
agreements officer has recourse to any of the remedies for 
noncompliance identified in 10 CFR 600.352(a).
    (e) Where the IPA is to send audit reports. The agreement must 
provide that the IPA is to submit audit reports to the contracting 
officer. It also must require that the IPA report instances of fraud 
directly to the Office of Inspector General (OIG), DOE.
    (f) The retention period for the IPA's working papers. The 
contracting officer must specify that the IPA is to retain working 
papers for a period of at least three years after the final payment, 
unless the working papers relate to an audit whose findings are not 
fully resolved within that period or to an unresolved claim or dispute 
(in which case, the IPA must keep the working papers until the matter 
is resolved and final action taken).
    (g) Who will have access to the IPA's working papers. The agreement 
must provide for Government access to working papers.


Sec.  603.665  Periodic audits of nonprofit participants.

    An expenditure-based TIA is an assistance instrument subject to the 
Single Audit Act (31 U.S.C. 7501-7507), so nonprofit participants are 
subject to the requirements under that Act and OMB Circular A-133. 
Specifically, the requirements are those in:
    (a) 10 CFR 600.226 for State and local governments; and
    (b) 10 CFR 600.126 for other nonprofit organizations.


Sec.  603.670  Flow down audit requirements to subrecipients.

    (a) In accordance with Sec.  603.610, an expenditure-based TIA must 
require participants to flow down the same audit requirements to a 
subrecipient that would apply if the subrecipient were a participant.
    (b) For example, a for-profit participant that is audited by the 
DCAA:
    (1) Would flow down to a university subrecipient the Single Audit 
Act requirements that apply to a university participant;
    (2) Could enter into a subaward allowing a for-profit participant, 
under the circumstances described in Sec.  603.650(a), to use an IPA to 
do its audits.
    (c) This policy applies to subawards for substantive performance of 
portions of the RD&D project supported by the TIA, and not to 
participants' purchases of goods or services needed to carry out the 
RD&D.


Sec.  603.675  Reporting use of IPA for subawards.

    An expenditure-based TIA should require participants to report to 
the contracting officer when they enter into any subaward allowing a 
for-profit subawardee to use an IPA, as described in Sec.  
603.670(b)(2).

Property


Sec.  603.680  Purchase of real property and equipment by for-profit 
firms.

    (a) With the two exceptions described in paragraph (b) of this 
section, the contracting officer must require a for-profit firm to 
purchase real property or

[[Page 27171]]

equipment with its own funds that are separate from the RD&D project. 
The contracting officer should allow the firm to charge to an 
expenditure-based TIA only depreciation or use charges for real 
property or equipment (and the cost estimate for a fixed-support TIA 
only would include those costs). Note that the firm must charge 
depreciation consistently with its usual accounting practice. Many 
firms treat depreciation as an indirect cost. Any firm that usually 
charges depreciation indirectly for a particular type of property must 
not charge depreciation for that property as a direct cost to the TIA.
    (b) In two situations, the contracting officer may grant an 
exception and allow a for-profit firm to use project funds, which 
includes both the Federal Government and recipient shares, to purchase 
real property or equipment (i.e., to charge to the project the full 
acquisition cost of the property). The two circumstances, which should 
be infrequent for equipment and extremely rare for real property, are 
those in which either:
    (1) The real property or equipment will be dedicated to the project 
and has a current fair market value that is less than $5,000 by the 
time the project ends; or
    (2) The contracting officer gives prior approval for the firm to 
include the full acquisition cost of the real property or equipment as 
part of the cost of the project (see Sec.  603.535).
    (c) If the contracting officer grants an exception in either of the 
circumstances described in paragraphs (b)(1) and (2) of this section, 
the real property or equipment must be subject to the property 
management standards in 10 CFR 600.321(b) through (e). As provided in 
those standards, the title to the real property or equipment will vest 
conditionally in the for-profit firm upon acquisition. A TIA, whether 
it is a fixed-support or expenditure-based award, must specify that any 
item of equipment that has a fair market value of $5,000 or more at the 
conclusion of the project also will be subject to the disposition 
process in 10 CFR 600.321(f), whereby the Federal Government will 
recover its interest in the property at that time.


Sec.  603.685  Management of real property and equipment by nonprofit 
participants.

    For nonprofit participants, a TIA's requirements for vesting of 
title, use, management, and disposition of real property or equipment 
acquired under the award are the same as those that apply to the 
participant's other Federal assistance awards. Specifically, the 
requirements are those in:
    (a) 10 CFR 600.231 and 600.232, for participants that are States 
and local governmental organizations; and
    (b) 10 CFR 600.132 and 600.134, for other nonprofit participants, 
with the exception of nonprofit GOCOs and FFRDCs that are exempted from 
the definition of ``recipient'' in 10 CFR 600.101. If a GOCO or FFRDC 
is a participant, the contracting officer must specify appropriate 
standards that conform as much as practicable with the requirements in 
its procurement contract. Note also that:
    (1) If the TIA is a cooperative agreement, 31 U.S.C. 6306 provides 
authority to vest title to tangible personal property in a nonprofit 
institution of higher education or in a nonprofit organization whose 
primary purpose is conducting scientific research, without further 
obligation to the Federal Government; and
    (2) A TIA therefore must specify any conditions on the vesting of 
title to real property or equipment acquired by any such nonprofit 
participant.


Sec.  603.690  Requirements for Federally-owned property.

    If DOE provides Federally-owned property to any participant for the 
performance of RD&D under a TIA, the contracting officer must require 
that participant to account for, use, and dispose of the property in 
accordance with:
    (a) 10 CFR 600.322, if the participant is a for-profit firm.
    (b) 10 CFR 600.232(f), if the participant is a State or local 
governmental organization. Note that 10 CFR 600.232(f) contains 
additional requirements for managing the property.
    (c) 10 CFR 600.133(a) and 600.134(f), if the participant is a 
nonprofit organization other than a GOCO or FFRDC (requirements for 
GOCOs and FFRDCs should conform with the property standards in their 
procurement contracts).


Sec.  603.695  Requirements for supplies.

    An expenditure-based TIA's provisions should permit participants to 
use their existing procedures to account for and manage supplies. A 
fixed-support TIA should not include requirements to account for or 
manage supplies.

Purchasing


Sec.  603.700  Standards for purchasing systems of for-profit firms.

    (a) If the TIA is an expenditure-based award, it should require 
for-profit participants that currently perform under DOE assistance 
instruments subject to the purchasing standards in 10 CFR 600.331 to 
use the same requirements for the TIA, unless there are programmatic or 
business reasons to do otherwise (in which case the reasons must be 
documented in the award file).
    (b) Other for-profit participants under an expenditure-based TIA 
should be allowed to use their existing purchasing systems, as long as 
they flow down the applicable requirements in Federal statutes, 
Executive Orders or Government-wide regulations (see Appendices A and B 
to this part for a list of those requirements).


Sec.  603.705  Standards for purchasing systems of nonprofit 
organizations.

    So as not to force system changes for any nonprofit participant, an 
expenditure-based TIA should provide that each nonprofit participant's 
purchasing system comply with:
    (a) 10 CFR 600.236, if the participant is a State or local 
governmental organization.
    (b) 10 CFR 600.140 through 10 CFR 600.149, if the participant is a 
nonprofit organization other than a GOCO or FFRDC that is excepted from 
the definition of ``recipient'' in 10 CFR 600.101. If a GOCO or FFRDC 
is a participant, the TIA must specify appropriate standards that 
conform as much as practicable with requirements in its procurement 
contract.

Subpart G--Award Terms Related to Other Administrative Matters


Sec.  603.800  Scope.

    This subpart addresses administrative matters that do not impose 
organization-wide requirements on a participant's financial management, 
property management, or purchasing system. Because an organization does 
not have to redesign its systems to accommodate award-to-award 
variations in these requirements, TIAs may differ in the requirements 
that they specify for a given participant, based on the circumstances 
of the particular RD&D project. To eliminate needless administrative 
complexity, the contracting officer should handle some requirements, 
such as the payment method, in a uniform way for the agreement as a 
whole.

Payments


Sec.  603.805  Payment methods.

    A TIA may provide for:
    (a) Reimbursement, as described in 10 CFR 600.312(a)(1), if it is 
an expenditure-based award.
    (b) Advance payments, as described in 10 CFR 600.312(a)(2), subject 
to the conditions in 10 CFR 600.312(b)(2)(i) through (iii).

[[Page 27172]]

    (c) Payments based on payable milestones. These are payments made 
according to a schedule that is based on predetermined measures of 
technical progress or other payable milestones. This approach relies 
upon the fact that, as the RD&D progresses throughout the term of the 
agreement, observable activity will be taking place. The recipient is 
paid upon the accomplishment of a predetermined measure of progress. A 
fixed-support TIA must use this payment method (this does not preclude 
use of an initial advance payment, if there is no alternative to 
meeting immediate cash needs). Payments based on payable milestones is 
the preferred method of payment for an expenditure-based TIA if well-
defined outcomes can be identified.


Sec.  603.810  Method and frequency of payment requests.

    The procedure and frequency for payment requests depend upon the 
payment method, as follows:
    (a) For either reimbursements or advance payments, the TIA must 
allow recipients to submit requests for payment at least monthly. The 
contracting officer may authorize the recipients to use the forms or 
formats described in 10 CFR 600.312(d).
    (b) If the payments are based on payable milestones, the recipient 
will submit a report or other evidence of accomplishment to the program 
official at the completion of each predetermined activity. If the award 
is an expenditure-based TIA that includes minimum cost sharing 
percentages for milestones (see 10 CFR 603.570(c)), the recipient must 
certify in the report that the minimum cost sharing requirement has 
been met. The contracting officer may approve payment to the recipient 
after receiving validation from the program manager that the milestone 
was successfully reached.


Sec.  603.815  Withholding payments.

    A TIA must provide that the contracting officer may withhold 
payments in the circumstances described in 10 CFR 600.312(g), but not 
otherwise.


Sec.  603.820  Interest on advance payments.

    If an expenditure-based TIA provides for either advance payments or 
payable milestones, the agreement must require the recipient to:
    (a) Maintain in an interest-bearing account any advance payments or 
milestone payment amounts received in advance of needs to disburse the 
funds for program purposes unless:
    (1) The recipient receives less than $120,000 in Federal grants, 
cooperative agreements, and TIAs per year;
    (2) The best reasonably available interest-bearing account would 
not be expected to earn interest in excess of $1,000 per year on the 
advance or milestone payments; or
    (3) The depository would require an average or minimum balance so 
high that it would not be feasible within the expected Federal and non-
Federal cash resources for the project.
    (b) Remit annually the interest earned to the contracting officer.

Revision of Budget and Program Plans


Sec.  603.825  Government approval of changes in plans.

    If it is an expenditure-based award, a TIA must require the 
recipient to obtain the contracting officer's prior approval if there 
is to be a change in plans that may result in a need for additional 
Federal funding (this is unnecessary for a fixed-support TIA because 
the recipient is responsible for additional costs of achieving the 
outcomes). Other than that, the program official's substantial 
involvement in the project should ensure that the Government has 
advance notice of changes in plans.


Sec.  603.830  Pre-award costs.

    Pre-award costs, as long as they are otherwise allowable costs of 
the project, may be charged to an expenditure-based TIA only with the 
specific approval of the contracting officer. All pre-award costs are 
incurred at the recipient's risk (e.g., DOE is not obligated to 
reimburse the costs if, for any reason, the recipient does not receive 
an award, or if the award is less than anticipated and inadequate to 
cover the costs).

Program Income


Sec.  603.835  Program income requirements.

    A TIA must apply the standards of 10 CFR 600.314 for program income 
that may be generated. The TIA must also specify if the recipient is to 
have any obligation to the Federal Government with respect to program 
income generated after the end of the project period (i.e., the period, 
as established in the award document, during which Federal support is 
provided).

Intellectual Property


Sec.  603.840  Negotiating data and patent rights.

    (a) The contracting officer must confer with program officials and 
assigned intellectual property counsel to develop an overall strategy 
for intellectual property that takes into account inventions and data 
that may result from the project and future needs the Government may 
have for rights in them. The strategy should take into account program 
mission requirements and any special circumstances that would support 
modification of standard patent and data terms, and should include 
considerations such as the extent of the recipient's contribution to 
the development of the technology; expected Government or commercial 
use of the technology; the need to provide equitable treatment among 
consortium or team members; and the need for the DOE to engage non-
traditional Government contractors with unique capabilities.
    (b) Because a TIA entails substantial cost sharing by recipients, 
the contracting officer must use discretion in negotiating Government 
rights to data and patentable inventions resulting from the RD&D under 
the agreements. The considerations in Sec. Sec.  603.845 through 
603.875 are intended to serve as guidelines, within which there is 
considerable latitude to negotiate provisions appropriate to a wide 
variety of circumstances that may arise.


Sec.  603.845  Data rights requirements.

    (a) If the TIA is a cooperative agreement, the requirements at 10 
CFR 600.325(d), Rights in data-general rule, apply. The ``Rights in 
Data--General'' provision in Appendix A to Subpart D of 10 CFR 600 
normally applies. This provision provides the Government with unlimited 
rights in data first produced in the performance of the agreement, 
except as provided in paragraph (c) Copyright. However, in certain 
circumstances, the ``Rights in Data--Programs Covered Under Special 
Protected Data Statutes'' provision in Appendix A may apply.
    (b) If the TIA is an assistance transaction other than a 
cooperative agreement, the requirements at 10 CFR 600.325(e), Rights in 
data--programs covered under special protected data statutes, normally 
apply. The ``Rights in Data--Programs Covered Under Special Data 
Statutes'' provision in Appendix A to Subpart D of 10 CFR 600 may be 
modified to accommodate particular circumstances (e.g., access to or 
expanded use rights in protected data among consortium or team 
members), or to list data or categories of data that the recipient must 
make available to the public. In unique cases, the contracting officer 
may negotiate special data rights requirements that vary from those in 
10 CFR 600.325. Modifications to the standard data provisions must be 
approved by intellectual property counsel.

[[Page 27173]]

Sec.  603.850  Marking of data.

    To protect the recipient's interests in data, the TIA should 
require the recipient to mark any particular data that it wishes to 
protect from disclosure with a specific legend specified in the 
agreement identifying the data as data subject to use, release, or 
disclosure restrictions.


Sec.  603.855  Protected data.

    In accordance with law and regulation, the contracting officer must 
not release or disclose data marked with a restrictive legend (as 
specified in 603.850) to third parties, unless they are parties 
authorized by the award agreement or the terms of the legend to receive 
the data and are subject to a written obligation to treat the data in 
accordance with the marking.


Sec.  603.860  Rights to inventions.

    (a) The contracting officer should negotiate rights in inventions 
that represent an appropriate balance between the Government's 
interests and the recipient's interests.
    (1) The contracting officer has the flexibility to negotiate patent 
rights requirements that vary from that which the Bayh-Dole statute 
(Chapter 18 of Title 35, U.S.C.) and 42 U.S.C. 2182 and 5908 require. A 
TIA becomes an assistance transaction other than a cooperative 
agreement if its patent rights requirements vary from those required by 
these statutes.
    (2) If the TIA is a cooperative agreement, the patent rights 
provision of 10 CFR 600.325(b) or (c) or 10 CFR 600.136 applies, 
depending on the type of recipient. Unless a class waiver has been 
issued under 10 CFR 784.7, it will be necessary for a large, for-profit 
business to request a patent waiver to obtain title to subject 
inventions.
    (b) The contracting officer may negotiate Government rights that 
vary from the statutorily-required patent rights requirements described 
in paragraph (a)(2) of this section when necessary to accomplish 
program objectives and foster the Government's interests. Doing so 
would make the TIA an assistance transaction other than a cooperative 
agreement. The contracting officer must decide, with the help of the 
program manager and assigned intellectual property counsel, what best 
represents a reasonable arrangement considering the circumstances, 
including past investments and anticipated future investments of the 
recipient to the development of the technology, contributions under the 
current TIA, and potential commercial and Government markets. Any 
change to the standard patent rights provisions must be approved by 
assigned intellectual property counsel.
    (c) Taking past investments as an example, the contracting officer 
should consider whether the Government or the recipient has contributed 
more substantially to the prior RD&D that provides the foundation for 
the planned effort. If the predominant past contributor to the 
particular technology has been:
    (1) The Government, then the TIA's patent rights provision should 
be the standard provision as set forth in 10 CFR 600.325(b) or (c), or 
10 CFR 600.136, as applicable.
    (2) The recipient, then less restrictive patent requirements may be 
appropriate, which would make the TIA an assistance transaction other 
than a cooperative agreement. The contracting officer normally would, 
with the concurrence of intellectual property counsel, allow the 
recipient to retain title to subject inventions without going through 
the process of obtaining a patent waiver as required by 10 CFR 784. For 
example, with the concurrence of intellectual property counsel, the 
contracting officer also could eliminate or modify the nonexclusive 
paid-up license for practice by or on behalf of the Government to allow 
the recipient to benefit more directly from its investments.
    (d) For subawards under a TIA that is other than a cooperative 
agreement, the TIA should normally specify that subrecipients' 
invention rights are to be negotiated between recipient and 
subrecipient; that subrecipients will get title to inventions they 
make; or some other disposition of invention rights. Factors to be 
considered by the contracting officer in addressing subrecipient's 
invention rights include: the extent of cost sharing by parties at all 
tiers; a subrecipient's status as a small business, nonprofit, or 
FFRDC; and whether an appropriate field of use licensing requirement 
would meet the needs of the parties.
    (e) Consortium members may allocate invention rights in their 
collaboration agreement, subject to the review of the contracting 
officer (See Sec.  603.515). The contracting officer, in performing 
such review, should consider invention rights to be retained by the 
Government and rights that may be obtained by small business, nonprofit 
or FFRDC consortium members.


Sec.  603.865  March-in rights.

    A TIA's patent rights provision should include the Bayh-Dole march-
in rights set out in paragraph (j) of the Patent Rights (Small Business 
Firms and Nonprofit Organization) provision in Appendix A to subpart D 
of 10 CFR 600, or an equivalent clause, concerning actions that the 
Government may take to obtain the right to use subject inventions, if 
the recipient fails to take effective steps to achieve practical 
application of the subject inventions within a reasonable time. The 
march-in provision may be modified to best meet the needs of the 
program. However, only infrequently should the march-in provision be 
entirely removed (e.g., if a recipient is providing most of the funding 
for a RD&D project, with the Government providing a much smaller 
share).


Sec.  603.870  Marking of documents related to inventions.

    To protect the recipient's interest in inventions, the TIA should 
require the recipient to mark documents disclosing inventions it 
desires to protect by obtaining a patent. The recipient should mark the 
documents with a legend identifying them as intellectual property 
subject to public release or public disclosure restrictions, as 
provided in 35 U.S.C. 205.


Sec.  603.875  Foreign access to technology and U.S. competitiveness 
provisions.

    (a) Consistent with the objective of enhancing national security 
and United States competitiveness by increasing the public's reliance 
on the United States commercial technology, the contracting officer 
must include provisions in a TIA that addresses foreign access to 
technology developed under the TIA.
    (b) A provision must provide, as a minimum, that any transfer of 
the technology must be consistent with the U.S. export laws, 
regulations and the Department of Commerce Export Regulation at Chapter 
VII, Subchapter C, Title 15 of the CFR (15 CFR parts 730-774), as 
applicable.
    (c) A provision should also provide that any products embodying, or 
produced through the use of, any created intellectual property, will be 
manufactured substantially in the United States, and that any transfer 
of the right to use or sell the products must, unless the Government 
grants a waiver, require that the products will be manufactured 
substantially in the United States. In individual cases, the 
contracting officer, with the approval of the program official and 
intellectual property counsel, may waive or modify the requirement of 
substantial manufacture in the United States at the time of award, or 
subsequent thereto, upon a showing by the recipient that:
    (1) Alternative benefits are being secured for the United States 
taxpayer

[[Page 27174]]

(e.g., increased domestic jobs notwithstanding foreign manufacture);
    (2) Reasonable but unsuccessful efforts have been made to transfer 
the technology under similar terms to those likely to manufacture 
substantially in the United States; or
    (3) Under the circumstances domestic manufacture is not 
commercially feasible.

Financial and Programmatic Reporting


Sec.  603.880  Reports requirements.

    A TIA must include requirements that, as a minimum, provide for 
periodic reports addressing program performance and, if it is an 
expenditure-based award, business/financial status. The contracting 
officer must require submission of the reports at least annually, and 
may require submission as frequently as quarterly (this does not 
preclude a recipient from electing to submit more frequently than 
quarterly the financial information that is required to process payment 
requests if the award is an expenditure-based TIA that uses 
reimbursement or advance payments under Sec.  603.810(a)). The 
requirements for the content of the reports are as follows:
    (a) The program portions of the reports must address progress 
toward achieving performance goals and milestones, including current 
issues, problems, or developments.
    (b) The business/financial portions of the reports, applicable only 
to expenditure-based awards, must provide summarized details on the 
status of resources (federal funds and non-federal cost sharing), 
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. The contracting officer 
may require a recipient to separately identify in these reports the 
expenditures for each participant in a consortium and for each 
programmatic milestone or task, if the contracting officer, after 
consulting with the program official, judges that those additional 
details are needed for good stewardship.


Sec.  603.885  Updated program plans and budgets.

    In addition to reports on progress to date, a TIA may include a 
provision requiring the recipient to annually prepare an updated 
technical plan for future conduct of the research effort and a revised 
budget if there is a significant change from the initial budget.


Sec.  603.890  Final performance report.

    A TIA must require a final performance report that addresses all 
major accomplishments under the TIA.


Sec.  603.895  Protection of information in programmatic reports.

    If a TIA is awarded under the authority of 42 U.S.C. 7256(g) (i.e., 
it is a type of assistance transaction ``other than'' a contract, grant 
or a cooperative agreement), the contracting officer may inform a 
participant that the award is covered by a special protected data 
statute, which provides for the protection from public disclosure, for 
a period of up to 5 years after the date on which the information is 
developed, any information developed pursuant to this transaction that 
would be trade secret, or commercial or financial information that is 
privileged or confidential, if the information had been obtained from a 
non-Federal party.


Sec.  603.900  Receipt of final performance report.

    The TIA should make receipt of the final report a condition for 
final payment. If the payments are based on payable milestones, the 
submission and acceptance of the final report by the Government 
representative will be incorporated as an event that is a prerequisite 
for one of the payable milestones.

Records Retention and Access Requirements


Sec.  603.905  Record retention requirements

    A TIA must require participants to keep records related to the TIA 
(for which the agreement provides Government access under Sec.  
603.910) for a period of three years after submission of the final 
financial status report for an expenditure-based TIA or final program 
performance report for a fixed-support TIA, with the following 
exceptions:
    (a) The participant must keep records longer than three years after 
submission of the final financial status report if the records relate 
to an audit, claim, or dispute that begins but does not reach its 
conclusion within the 3-year period. In that case, the participant must 
keep the records until the matter is resolved and final action taken.
    (b) Records for any real property or equipment acquired with 
project funds under the TIA must be kept for three years after final 
disposition.


Sec.  603.910  Access to a for-profit participant's records.

    (a) If a for-profit participant currently grants access to its 
records to the DCAA or other Federal Government auditors, the TIA must 
include for that participant the standard access-to-records 
requirements at 10 CFR 600.342(e). If the agreement is a fixed-support 
TIA, the language in 10 CFR 600.342(e) may be modified to provide 
access to records concerning the recipient's technical performance, 
without requiring access to the recipient's financial or other records. 
Note that any need to address access to technical records in this way 
is in addition to, not in lieu of, the need to address rights in data 
(see Sec.  603.845).
    (b) For other for-profit participants that do not currently give 
the Federal Government direct access to their records and are not 
willing to grant full access to records pertinent to the award, the 
contracting officer may negotiate limited access to the recipient's 
financial records. For example, if the audit provision of an 
expenditure-based TIA gives an IPA access to the recipient's financial 
records for audit purposes, the Federal Government must have access to 
the IPA's reports and working papers and the contracting officer need 
not include a provision requiring direct Government access to the 
recipient's financial records. For both fixed-support and expenditure-
based TIAs, the TIA must include the access-to-records requirements at 
10 CFR 600.342(e) for records relating to technical performance.


Sec.  603.915  Access to a nonprofit participant's records.

    A TIA must include for any nonprofit participant the standard 
access-to-records requirement at:
    (a) 10 CFR 600.242(e), for a participant that is a State or local 
governmental organization;
    (b) 10 CFR 600.153(e), for a participant that is a nonprofit 
organization. The same requirement applies to any GOCO or FFRDC, even 
though nonprofit GOCOs and FFRDCs are exempted from the definition of 
``recipient'' in 10 CFR 600.101.

Termination and Enforcement


Sec.  603.920  Termination and enforcement requirements.

    (a) Termination. A TIA must include the following conditions for 
termination:
    (1) An award may be terminated in whole or in part by the 
contracting officer, if a recipient materially fails to comply with the 
terms and conditions of the award.
    (2) Subject to a reasonable determination by either party that the 
project will not produce beneficial results commensurate with the 
expenditure of resources, that party may terminate in whole or in part 
the

[[Page 27175]]

agreement by providing at least 30 days advance written notice to the 
other party, provided such notice is preceded by consultation between 
the parties. The two parties will negotiate the termination conditions, 
including the effective date and, in the case of partial termination, 
the portion to be terminated. If either party determines in the case of 
partial termination that the reduced or modified portion of the award 
will not accomplish the purpose for which the award was made, the award 
may be terminated in its entirety.
    (3) Unless otherwise negotiated, for terminations of an expenditure 
based TIA, DOE's maximum liability is the lesser of:
    (i) DOE's share of allowable costs incurred up to the date of 
termination, or
    (ii) The amount of DOE funds obligated to the TIA.
    (4) Unless otherwise negotiated, for terminations of a fixed-
support based TIA, DOE shall pay the recipient a proportionate share of 
DOE's financial commitment to the project based on the percent of 
project completion as of the date of termination.
    (5) Notwithstanding paragraphs (3) and (4) of this section, if the 
award includes milestone payments, the Government has no obligation to 
pay the recipient beyond the last completed and paid milestone if the 
recipient decides to terminate.
    (b) Enforcement. The standards of 10 CFR 600.352 (for enforcement) 
and the procedures in 10 CFR 600.22 (for disputes and appeals) apply.

Subpart H--Executing the Award


Sec.  603.1000  Contracting officer's responsibilities at time of 
award.

    At the time of the award, the contracting officer must:
    (a) Ensure that the award document contains the appropriate terms 
and conditions and is signed by the appropriate parties, in accordance 
with Sec. Sec.  603.1005 through 603.1015.
    (b) Document the analysis of the agreement in the award file, as 
discussed in Sec.  603.1020.
    (c) Provide information about the award to the office responsible 
for reporting on TIAs.

The Award Document


Sec.  603.1005  General responsibilities.

    The contracting officer is responsible for ensuring that the award 
document is complete and accurate. The document should:
    (a) Address all issues;
    (b) State requirements directly. It is not helpful to readers to 
incorporate statutes or rules by reference, without sufficient 
explanation of the requirements. The contracting officer generally 
should not incorporate clauses from the Federal Acquisition Regulation 
(48 CFR parts 1-53) or Department of Energy Acquisition Regulation (48 
CFR parts 901-970) because those provisions are designed for 
procurement contracts that are used to acquire goods and services, 
rather than for a TIA or other assistance instruments.
    (c) Be written in clear and concise language, to minimize potential 
ambiguity.


Sec.  603.1010  Substantive issues.

    Each TIA is designed and negotiated individually to meet the 
specific requirements of the particular project, so the list of 
substantive issues that will be addressed in the award document may 
vary. Every award document must address:
    (a) Project scope. The scope is an overall vision statement for the 
project, including a discussion of the project's purpose, objectives, 
and detailed commercial goals. It is a critical provision because it 
provides a context for resolving issues that may arise during post-
award administration. In a fixed-support TIA, the well-defined outcomes 
that reliably indicate the amount of effort expended and serve as the 
basis for the level of the fixed support must be clearly specified (see 
Sec. Sec.  603.305 and 603.560(a)).
    (b) Project management. The TIA should describe the nature of the 
relationship between the Federal Government and the recipient; the 
relationship among the participants, if the recipient is an 
unincorporated consortium; and the overall technical and administrative 
management of the project. A TIA is used to carry out collaborative 
relationships between the Federal Government and the recipient. 
Consequently, there must be substantial involvement of the DOE program 
official (see Sec.  603.220) and usually the contracting officer. The 
program official provides technical insight, which differs from the 
usual technical oversight of a project. The management provision also 
should discuss how modifications to the TIA are made.
    (c) Termination, enforcement, and disputes. A TIA must provide for 
termination, enforcement remedies, and disputes and appeals procedures, 
in accordance with Sec.  603.920.
    (d) Funding. The TIA must:
    (1) Show the total amount of the agreement and the total period of 
performance.
    (2) If the TIA is an expenditure-based award, state the 
Government's and recipient's agreed-upon cost shares for the project 
period and for each budget period. The award document should identify 
values for any in-kind contributions, determined in accordance with 
Sec. Sec.  603.530 through 603.555, to preclude later disagreements 
about them.
    (3) Specify the amount of Federal funds obligated and the 
performance period for those obligated funds.
    (4) State, if the agreement is to be incrementally funded, that the 
Government's obligation for additional funding is contingent upon the 
availability of funds and that no legal obligation on the part of the 
Government exists until additional funds are made available and the 
agreement is amended. The TIA also must include a prior approval 
requirement for changes in plans requiring additional Government 
funding, in accordance with Sec.  603.825.
    (e) Payment. The TIA must identify the payment method and tell the 
recipient how, when, and where to submit payment requests, as discussed 
in Sec. Sec.  603.805 through 603.815. The payment method must take 
into account sound cash management practices by avoiding unwarranted 
cash advances. For an expenditure-based TIA, the payment provision must 
require the return of interest should excess cash balances occur, in 
accordance with Sec.  603.820. For any TIA using the milestone payment 
method described in Sec.  603.805(c), the TIA must include language 
notifying the recipient that the contracting officer may adjust amounts 
of future milestone payments if a project's expenditures fall too far 
below the projections that were the basis for setting the amounts (see 
Sec.  603.575(c) and Sec.  603.1105(c)).
    (f) Records retention and access to records. The TIA must include 
the records retention requirement at Sec.  603.910. The TIA also must 
provide for access to for-profit and nonprofit participants' records, 
in accordance with Sec.  603.915 and Sec.  603.920.
    (g) Patents and data rights. In designing the patents and data 
rights provision, the TIA must set forth the minimum required Federal 
Government rights in intellectual property generated under the award 
and address related matters, as provided in Sec. Sec.  603.840 through 
603.875. It is important to define all essential terms in the patent 
rights provision.
    (h) Foreign access to technology and U.S. competitiveness. The TIA 
must include provisions, in accordance with Sec.  603.875, concerning 
foreign access and domestic manufacture of products using technology 
generated under the award.

[[Page 27176]]

    (i) Title to, management of, and disposition of tangible property. 
The property provisions for for-profit and nonprofit participants must 
be in accordance with Sec. Sec.  603.685 through 603.700.
    (j) Financial management systems. For an expenditure-based award, 
the TIA must specify the minimum standards for financial management 
systems of both for-profit and nonprofit participants, in accordance 
with Sec. Sec.  603.615 and 603.620.
    (k) Allowable costs. If the TIA is an expenditure-based award, it 
must specify the standards that both for-profit and nonprofit 
participants are to use to determine which costs may be charged to the 
project, in accordance with Sec. Sec.  603.625 through 603.635, as well 
as Sec.  603.830.
    (l) Audits. If a TIA is an expenditure-based award, it must include 
an audit provision for both for-profit and nonprofit participants and 
subrecipients, in accordance with Sec. Sec.  603.640 through 603.670 
and Sec.  603.675.
    (m) Purchasing system standards. The TIA should include a provision 
specifying the standards in Sec. Sec.  603.700 and 603.705 for 
purchasing systems of for-profit and nonprofit participants, 
respectively.
    (n) Program income. The TIA should specify requirements for program 
income, in accordance with Sec.  603.835.
    (o) Financial and programmatic reporting. The TIA must specify the 
reports that the recipient is required to submit and tell the recipient 
when and where to submit them, in accordance with Sec. Sec.  603.880 
through 603.900.
    (p) Assurances for applicable national policy requirements. The TIA 
must incorporate assurances of compliance with applicable requirements 
in Federal statutes, Executive Orders, or regulations (except for 
national policies that require certifications). Appendix A to this part 
contains a list of commonly applicable requirements that should be 
augmented with any specific requirements that apply to a particular TIA 
(e.g., general provisions in the appropriations act for the specific 
funds that are being obligating).
    (q) Other matters. The agreement should address any other issues 
that need clarification, including the name of the contracting officer 
who will be responsible for post-award administration and the statutory 
authority or authorities for entering into the TIA. In addition, the 
agreement must specify that it takes precedence over any inconsistent 
terms and conditions in collateral documents such as attachments to the 
TIA or the recipient's articles of collaboration.


Sec.  603.1015  Execution.

    (a) If the recipient is a consortium that is not formally 
incorporated and the consortium members prefer to have the agreement 
signed by all of them individually, the agreement may be executed in 
that manner.
    (b) If they wish to designate one consortium member to sign the 
agreement on behalf of the consortium as a whole, the determination 
whether to execute the agreement in that way should not be made until 
the contracting officer reviews the consortium's articles of 
collaboration with legal counsel.
    (1) The purposes of the review are to:
    (i) Determine whether the articles properly authorize one 
participant to sign on behalf of the other participants and are binding 
on all consortium members with respect to the RD&D project; and
    (ii) Assess the risk that otherwise could exist when entering into 
an agreement signed by a single member on behalf of a consortium that 
is not a legal entity. For example, the contracting officer should 
assess whether the articles of collaboration adequately address 
consortium members' future liabilities related to the RD&D project 
(e.g., whether they will have joint and severable liability).
    (2) After the review, in consultation with legal counsel, the 
contracting officer should determine whether it is better to have all 
of the consortium members sign the agreement individually or to allow 
them to designate one member to sign on all members' behalf.

Reporting Information About the Award


Sec.  603.1020  File documents.

    The award file should include an analysis which:
    (a) Briefly describes the program and details the specific 
commercial benefits that should result from the project supported by 
the TIA. If the recipient is a consortium that is not formally 
incorporated, a copy of the signed articles of collaboration should be 
attached.
    (b) Describes the process that led to the award of the TIA, 
including how DOE solicited and evaluated proposals and selected the 
one supported through the TIA.
    (c) Explains the basis for the decision that a TIA was the most 
appropriate instrument, in accordance with the factors in Subpart B of 
this part. The explanation must include the answers to the relevant 
questions in Sec.  603.225(a) through (d).
    (d) Explains how the recipient's cost sharing contributions was 
valued in accordance with Sec. Sec.  603.530 through 603.555. For a 
fixed-support TIA, the file must document the analysis required (see 
Sec.  603.560) to set the fixed level of Federal support; the 
documentation must explain how the recipient's minimum cost share was 
determined and how the expenditures required to achieve the project 
outcomes were estimated.
    (e) Documents the results of the negotiation, addressing all 
significant issues in the TIA's provisions.

Subpart I--Post-Award Administration


Sec.  603.1100  Contracting officer's post-award responsibilities.

    Generally, the contracting officer's post-award responsibilities 
are the same responsibilities as those for any cooperative agreement. 
Responsibilities for a TIA include:
    (a) Participating as the business partner to the DOE program 
official to ensure the Government's substantial involvement in the RD&D 
project. This may involve attendance with program officials at kickoff 
meetings or post-award conferences with recipients. It also may involve 
attendance at the consortium management's periodic meetings to review 
technical progress, financial status, and future program plans.
    (b) Tracking and processing of reports required by the award terms 
and conditions, including periodic business status reports, 
programmatic progress reports, and patent reports.
    (c) Handling payment requests and related matters. For a TIA using 
advance payments, that includes reviews of progress to verify that 
there is continued justification for advancing funds, as discussed in 
Sec.  603.1105(b). For a TIA using milestone payments, it includes 
making any needed adjustments in future milestone payment amounts, as 
discussed in Sec.  603.1105(c).
    (d) Making continuation awards for subsequent budget periods, if 
the agreement includes separate budget periods. See 10 CFR 600.26(b). 
Any continuation award is contingent on availability of funds, 
satisfactory progress towards meeting the performance goals and 
milestones, submittal of required reports, and compliance with the 
terms and conditions of the award.
    (e) Coordinating audit requests and reviewing audit reports for 
both single audits of participants' systems and any award-specific 
audits that may be

[[Page 27177]]

needed, as discussed in Sec. Sec.  603.1115 and 603.1120.
    (f) Responding, after coordination with program officials and 
intellectual property counsel, to recipient requests for permission to 
assign or license intellectual property to entities that do not agree 
to manufacture substantially in the United States, as described in 
Sec.  603.875(b). Before granting approval for any technology, the 
contracting officer must secure assurance that any such assignment is 
consistent with license rights for Government use of the technology, 
and that other conditions for any such transfer are met.


Sec.  603.1105  Advance payments or payable milestones.

    The contracting officer must:
    (a) For any expenditure-based TIA with advance payments or payable 
milestones, forward to the responsible payment office any interest that 
the recipient remits in accordance with Sec.  603.820(b). The payment 
office will return the amounts to the Department of the Treasury's 
miscellaneous receipts account.
    (b) For any expenditure-based TIA with advance payments, consult 
with the program official and consider whether program progress 
reported in periodic reports, in relation to reported expenditures, is 
sufficient to justify the continued authorization of advance payments 
under Sec.  603.805(b).
    (c) For any expenditure-based TIA using milestone payments, work 
with the program official at the completion of each payable milestone 
or upon receipt of the next business status report to:
    (1) Compare the total amount of project expenditures, as recorded 
in the payable milestone report or business status report, with the 
projected budget for completing the milestone; and
    (2) Adjust future payable milestones, as needed, if expenditures 
lag substantially behind what was originally projected and the 
contracting officer judges that the recipient is receiving Federal 
funds sooner than necessary for program purposes. Before making 
adjustments, the contracting officer should consider how large a 
deviation is acceptable at the time of the milestone. For example, 
suppose that the first milestone payment for a TIA is $50,000, and that 
the awarding official set the amount based on a projection that the 
recipient would have to expend $100,000 to reach the milestone (i.e., 
the original plan was for the recipient's share at that milestone to be 
50% of project expenditures). If the milestone payment report shows 
$90,000 in expenditures, the recipient's share at this point is 44% 
($40,000 out of the total $90,000 expended, with the balance provided 
by the $50,000 milestone payment of Federal funds). For this example, 
the contracting officer should adjust future milestones if a 6% 
difference in the recipient's share at the first milestone is judged to 
be too large, but not otherwise. Remember that milestone payment 
amounts are not meant to track expenditures precisely at each milestone 
and that a recipient's share will increase as it continues to perform 
RD&D and expend funds, until it completes another milestone to trigger 
the next Federal payment.


Sec.  603.1110  Other payment responsibilities.

    Regardless of the payment method, the contracting officer should 
ensure that:
    (a) The request complies with the award terms;
    (b) Available funds are adequate to pay the request;
    (c) The recipient will not have excess cash on hand, based on 
expenditure patterns; and
    (d) Payments are not withheld, except in one of the circumstances 
described in 10 CFR 600.312(g).


Sec.  603.1115  Single audits.

    For audits of for-profit participant's systems, under Sec. Sec.  
603.640 through 603.660, the contracting officer is the focal point for 
ensuring that participants submit audit reports and for resolving any 
findings in those reports. The contracting officer's responsibilities 
regarding single audits of nonprofit participant's systems are 
identified in the DOE ``Guide to Financial Assistance.''


Sec.  603.1120  Award-specific audits.

    Guidance on when and how the contracting officer should request 
additional audits for an expenditure-based TIA is identical to the 
guidance in 10 CFR 600.316(d). If the contracting officer requires an 
award-specific examination or audit of a for-profit participant's 
records related to a TIA, the contracting officer must use the auditor 
specified in the award terms and conditions, which should be the same 
auditor who performs periodic audits of the participant.

Subpart J--Definitions of Terms Used in this Part


Sec.  603.1200  Definitions

    The terms defined in 10 CFR 600.3 apply to all DOE financial 
assistance, including a TIA. In addition to those terms, the following 
terms are used in this part.


Sec.  603.1205  Advance.

    A payment made to a recipient before the recipient disburses the 
funds for program purposes. Advance payments may be based upon a 
recipient's request or a predetermined payment schedule.


Sec.  603.1210  Articles of collaboration.

    An agreement among the participants in a consortium that is not 
formally incorporated as a legal entity, by which they establish their 
relative rights and responsibilities (see Sec.  603.515).


Sec.  603.1215  Assistance.

    The transfer of a thing of value to a recipient to carry out a 
public purpose of support or stimulation authorized by a law of the 
United States (see 31 U.S.C. 6101(3)). Grants, cooperative agreements, 
and technology investment agreements are examples of legal instruments 
used to provide assistance.


Sec.  603.1220  Award-specific audit.

    An audit of a single TIA, usually done at the cognizant contracting 
officer's request, to help resolve issues that arise during or after 
the performance of the RD&D project. An award-specific audit of an 
individual award differs from a periodic audit of a participant (as 
defined in Sec.  603.1295).


Sec.  603.1225  Cash contributions.

    A recipient's cash expenditures made as contributions toward cost 
sharing, including expenditures of money that third parties contributed 
to the recipient.


Sec.  603.1230  Commercial firm.

    A for-profit firm or segment of a for-profit firm (e.g., a division 
or other business unit) that does a substantial portion of its business 
in the commercial marketplace.


Sec.  603.1235  Consortium.

    A group of RD&D-performing organizations that either is formally 
incorporated or that otherwise agrees to jointly carry out a RD&D 
project (see definition of ``articles of collaboration,'' in Sec.  
603.1210).


Sec.  603.1240  Cooperative agreement.

    A legal instrument which, consistent with 31 U.S.C. 6305, is used 
to enter into the same kind of relationship as a grant (see definition 
of ``grant,'' in Sec.  603.1270), except that substantial involvement 
is expected between the DOE and the recipient when carrying out the 
activity contemplated by the cooperative agreement. The term does not 
include ``cooperative research and development agreements'' as defined 
in 15 U.S.C. 3710a.

[[Page 27178]]

Sec.  603.1245  Cost sharing.

    A portion of project costs from non-Federal sources that are borne 
by the recipient or non-Federal third parties on behalf of the 
recipient, rather than by the Federal Government.


Sec.  603.1250  Data.

    Recorded information, regardless of form or the media on which it 
may be recorded. The term includes technical data and computer 
software. It does not include information incidental to administration, 
such as financial, administrative, cost or pricing, or other management 
information related to the administration of a TIA.


Sec.  603.1255  Equipment.

    Tangible property, other than real property, that has a useful life 
of more than one year and an acquisition cost of $5,000 or more per 
unit.


Sec.  603.1260  Expenditure-based award.

    A Federal Government assistance award for which the amounts of 
interim payments or the total amount ultimately paid (i.e., the sum of 
interim payments and final payment) are subject to redetermination or 
adjustment, based on the amounts expended by the recipient in carrying 
out the purposes for which the award was made, as long as the 
redetermination or adjustment does not exceed the total Government 
funds obligated to the award. Most Federal Government grants and 
cooperative agreements are expenditure-based awards.


Sec.  603.1265  Expenditures or outlays.

    Charges made to the project or program. They may be reported either 
on a cash or accrual basis, as shown in the following table:

------------------------------------------------------------------------
If reports are prepared on a . . .
                                      Expenditures are the sum of . . .
------------------------------------------------------------------------
(a) Cash basis....................  (1) Cash disbursements for direct
                                     charges for goods and services;
                                    (2) The amount of indirect expense
                                     charge;
                                    (3) The value of third party in-kind
                                     contributions applied; and
                                    (4) The amount of cash advances and
                                     payments made to any other
                                     organizations for the performance
                                     of a part of the RD&D effort.
(b) Accrual basis.................  (1) Cash disbursements for direct
                                     charges for goods and services;
                                    (2) The amount of indirect expense
                                     incurred;
                                    (3) The value of in-kind
                                     contributions applied; and
                                    (4) The net increase (or decrease)
                                     in the amounts owed by the
                                     recipient for goods and other
                                     property received, for services
                                     performed by employees,
                                     contractors, and other payees and
                                     other amounts becoming owed under
                                     programs for which no current
                                     services or performance are
                                     required.
------------------------------------------------------------------------

Sec.  603.1270  Grant.

    A legal instrument which, consistent with 31 U.S.C. 6304, is used 
to enter into a relationship:
    (a) The principal purpose of which is to transfer a thing of value 
to the recipient to carry out a public purpose of support or 
stimulation authorized by a law of the United States, rather than to 
acquire property or services for the Department of Energy's direct 
benefit or use.
    (b) In which substantial involvement is not expected between the 
DOE and the recipient when carrying out the activity contemplated by 
the grant.


Sec.  603.1275  In-kind contributions.

    The value of non-cash contributions made by a recipient or non-
Federal third parties toward cost sharing.


Sec.  603.1280  Institution of higher education.

    An educational institution that:
    (a) Meets the criteria in section 101 of the Higher Education Act 
of 1965 (20 U.S.C. 1001); and
    (b) Is subject to the provisions of OMB Circular A-110, 
``Administrative Requirements for Grants and Agreements with 
Institutions of Higher Education, Hospitals, and Other Non-Profit 
Organizations,'' as implemented by the Department of Energy at 10 CFR 
600, Subpart B.


Sec.  603.1285  Intellectual property.

    Patents, trademarks, copyrights, mask works, protected data, and 
other forms of comparable property protected by Federal law and foreign 
counterparts.


Sec.  603.1290  Participant.

    A consortium member or, in the case of an agreement with a single 
for-profit entity, the recipient. Note that a for-profit participant 
may be a firm or a segment of a firm (e.g., a division or other 
business unit).


Sec.  603.1295  Periodic audit.

    An audit of a participant, performed at an agreed-upon time 
(usually a regular time interval), to determine whether the participant 
as a whole is managing its Federal awards in compliance with the terms 
of those awards. Appendix A to this part describes what such an audit 
may cover. A periodic audit of a participant differs from an award-
specific audit of an individual award (as defined in Sec.  603.1220).


Sec.  603.1300  Procurement contract.

    A Federal Government procurement contract. It is a legal instrument 
which, consistent with 31 U.S.C. 6303, reflects a relationship between 
the Federal Government and a State, a local government, or other non-
government entity when the principal purpose of the instrument is to 
acquire property or services for the direct benefit or use of the 
Federal Government. See the more detailed definition of the term 
``contract'' at 48 CFR 2.101.


Sec.  603.1305  Program income.

    Gross income earned by the recipient or a participant that is 
generated by a supported activity or earned as a direct result of a 
TIA. Program income includes but is not limited to: income from fees 
for performing services; the use or rental of real property, equipment, 
or supplies acquired under a TIA; the sale of commodities or items 
fabricated under a TIA; and license fees and royalties on patents and 
copyrights. Interest earned on advances of Federal funds is not program 
income.


Sec.  603.1310  Program official.

    A Federal Government program manager, project officer, scientific 
officer, or other individual who is responsible for managing the 
technical program being carried out through the use of a TIA.


Sec.  603.1315  Property.

    Real property, equipment, supplies, and intellectual property, 
unless stated otherwise.


Sec.  603.1320  Real property.

    Land, including land improvements, structures and appurtenances 
thereto, but excluding movable machinery and equipment.


Sec.  603.1325  Recipient.

    An organization or other entity that receives a TIA from DOE. Note 
that a for-profit recipient may be a firm or a

[[Page 27179]]

segment of a firm (e.g., a division or other business unit).


Sec.  603.1330  Supplies.

    Tangible property other than real property and equipment. Supplies 
have a useful life of less than one year or an acquisition cost of less 
than $5,000 per unit.


Sec.  603.1335  Termination.

    The cancellation of a TIA, in whole or in part, at any time prior 
to either:
    (a) The date on which all work under the TIA is completed; or
    (b) The date on which Federal sponsorship ends, as given in the 
award document or any supplement or amendment thereto.


Sec.  603.1340  Technology investment agreement.

    A TIA is a special type of assistance instrument used to increase 
involvement of commercial firms in the DOE research, development and 
demonstration (RD&D) programs. A TIA, like a cooperative agreement, 
requires substantial Federal involvement in the technical or management 
aspects of the project. A TIA may be either a type of cooperative 
agreement or a type of assistance transaction other than a cooperative 
agreement, depending on the intellectual property provisions. A TIA is 
either:
    (a) A type of cooperative agreement with more flexible provisions 
tailored for involving commercial firms (as distinct from a cooperative 
agreement subject to all of the requirements in 10 CFR Part 600), but 
with intellectual property provisions in full compliance with the DOE 
intellectual property statutes (i.e., Bayh-Dole statute and 42 U.S.C. 
Sec. Sec.  2182 and 5908, as implemented in 10 CFR 600.325); or
    (b) An assistance transaction other than a cooperative agreement, 
if its intellectual property provisions vary from the Bayh-Dole statute 
and 42 U.S.C. Sec. Sec.  2182 and 5908, which require the Government to 
retain certain intellectual property rights, and require differing 
treatment between large businesses and nonprofit organizations or small 
businesses.

Appendix A to Part 603--Applicable Federal Statutes, Executive Orders, 
and Government-wide Regulations

    Whether the TIA is a cooperative agreement or a type of 
assistance transaction other than a cooperative agreement, the terms 
and conditions of the agreement must provide for recipients' 
compliance with applicable Federal statutes, Executive Orders and 
Government-wide regulations. This appendix lists some of the more 
common requirements to aid in identifying ones that apply to a 
specific TIA. The list is not intended to be all-inclusive, however; 
the contracting officer may need to consult legal counsel to verify 
whether there are others that apply (e.g., due to a provision in the 
appropriations act for the specific funds in use or due to a statute 
or rule that applies to a particular program or type of activity).

A. Certifications

    All financial assistance applicants, including applicants 
requesting a TIA must comply with the prohibitions concerning 
lobbying in a Government-wide common rule that the DOE has codified 
at 10 CFR part 601. The ``List of Certifications and Assurances for 
SF 424(R&R)'' on the DOE Applicant and Recipient page at http://grants.pr.doe.gov includes the Government-wide certification that 
must be provided with a proposal for a financial assistance award, 
including a TIA.

B. Assurances That Apply to a TIA

    Currently the DOE approach to communicating Federal statutes, 
Executive Orders and Government-wide regulations is to provide 
potential applicants a list of ``National Policies Assurances to be 
Incorporated as Award Terms'' in the program announcement (This list 
is available on the Applicant and Recipient Page at http://grants.pr.doe.gov under Award Terms). The contracting officer should 
follow this approach for announcements that allow for the award of a 
TIA. The contracting officer should normally incorporate by 
reference or attach the list of national policy assurances to a TIA 
award. Of these requirements, the following four assurances apply to 
all TIA:
    1. Prohibitions on discrimination on the basis of race, color, 
or national origin in Title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000d, et seq.) as implemented by DOE regulations at 10 CFR 
part 1040. These apply to all financial assistance. They require 
recipients to flow down the prohibitions to any subrecipients 
performing a part of the substantive RD&D program (as opposed to 
suppliers from whom recipients purchase goods or services).
    2. Prohibitions on discrimination on the basis of age, in the 
Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) as 
implemented by DOE regulations at 10 CFR part 1040. They apply to 
all financial assistance and require flow down to subrecipients.
    3. Prohibitions on discrimination on the basis of handicap, in 
section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) as 
implemented by DOE regulations at 10 CFR part 1041. They apply to 
all financial assistance and require flow down to subrecipients.
    4. Preferences for use of U.S.-flag air carriers in the 
International Air Transportation Fair Competitive Practices Act of 
1974 (49 U.S.C. 40118), which apply to uses of U.S. Government 
funds.

C. Other Assurances

    Additional assurance requirements may apply in certain 
circumstances, as follows:
    1. If construction work is to be done under a TIA or its 
subawards, it is subject to the prohibitions in Executive Order 
11246 on discrimination on the basis of race, color, religion, sex, 
or national origin.
    2. If the RD&D involves human subjects or animals, it is subject 
to the requirements codified by the Department of Health and Human 
Services at 45 CFR part 46 and implemented by DOE at 10 CFR part 745 
and rules on animal acquisition, transport, care, handling and use 
in 9 CFR parts 1 through 4, Department of Agriculture rules and 
rules of the Department of Interior at 50 CFR parts 10 through 24 
and Commerce at 50 CFR parts 217 through 277, respectively. See item 
a. or b., respectively, under the heading ``Live organisms'' 
included on the DOE ``National Policy Assurances To Be Incorporated 
As Award Terms'' on the Applicant and Recipient Page.
    3. If the RD&D involves actions that may affect the environment, 
it is subject to the National Environmental Policy Act, and may also 
be subject to national policy requirements for flood-prone areas, 
coastal zones, coastal barriers, wild and scenic rivers, and 
underground sources of drinking water.
    4. If the project may impact a historic property, it is subject 
to the National Historic Preservation Act of 1966 (16 U.S.C. 470, et 
seq.).

Appendix B to Part 603--Flow Down Requirements for Purchases of Goods 
and Services

    A. As discussed in Sec.  603.705, the contracting officer must 
inform recipients of any requirements that flow down to their 
purchases of goods or services (e.g., supplies or equipment) under 
their TIA. Note that purchases of goods or services differ from 
subawards, which are for substantive RD&D program performance.
    B. Appendix A to 10 CFR part 600, subpart D lists eight 
requirements that commonly apply to firms' purchases under grants or 
cooperative agreements. Of those eight, two that apply to all 
recipients' purchases under a TIA are:
    1. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). A contractor 
submitting a bid to the recipient for a contract award of $100,000 
or more must file a certification with the recipient that it has not 
and will not use Federal appropriations for certain lobbying 
purposes. The contractor also must disclose any lobbying with non-
Federal funds that takes place in connection with obtaining any 
Federal award. For further details, see 10 CFR part 601, the DOE's 
codification of the Government-wide common rule implementing this 
amendment.
    2. Debarment and suspension. Recipients may not make contract 
awards that exceed the simplified acquisition threshold (currently 
$100,000) and certain other contract awards may not be made to 
parties listed on the General Services Administration (GSA) ``List 
of Parties Excluded from Federal Procurement and Nonprocurement 
Programs.'' The GSA list contains the names of parties debarred, 
suspended, or otherwise excluded by agencies, and parties declared 
ineligible under statutory or regulatory authority other than 
Executive Orders 12549 (3 CFR, 1986 Comp., p. 189) and 12689 (3

[[Page 27180]]

CFR, 1989 Comp., p. 235). For further details, see subparts A 
through E of 10 CFR part 606, which is the DOE's codification of the 
Government-wide common rule implementing Executive Orders 12549 and 
12689.
    C. One other requirement applies only in cases where 
construction work is to be performed under the TIA with Federal 
funds or recipient funds counted toward required cost sharing:
    1. Equal Employment Opportunity. If the TIA includes 
construction work, the contracting officer should inform the 
recipient that Department of Labor regulations at 41 CFR 60-1.4(b) 
prescribe a clause that must be incorporated into construction 
awards and subawards. Further details are provided in Appendix B to 
10 CFR 600 subpart D, item 1.

[FR Doc. 06-4119 Filed 5-8-06; 8:45 am]
BILLING CODE 6450-01-P