[Federal Register Volume 80, Number 177 (Monday, September 14, 2015)]
[Notices]
[Pages 55152-55153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23015]


=======================================================================
-----------------------------------------------------------------------

NATIONAL SCIENCE FOUNDATION


Management Fee Policy

AGENCY: National Science Foundation.

ACTION: Notice.

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

SUMMARY: On December 30, 2014, the National Science Foundation (NSF) 
published at 79 FR 78497 a notice and request for comments on NSF's 
revised policy on management fee. The payment of a small but 
appropriate management fee has been a long standing practice at NSF in 
limited circumstances related to the construction and operation of 
major facility projects. NSF has strengthened both the criteria used to 
establish such fees and the controls that may be necessary to ensure 
that uses of fees are consistent with those established criteria. These 
efforts resulted in the revised policy that was sent for public 
comment. On June 16, 2015, NSF received OMB approval under the 
Paperwork Reduction Act for the Large Facilities Manual (3145-0239) 
which included NSF's final policy on management fee under Section 
4.2.2.2.

FOR FURTHER INFORMATION CONTACT: Suzanne Plimpton on (703) 292-7556 or 
send email to [email protected]. Individuals who use a 
telecommunications device for the deaf (TDD) may call the Federal 
Information Relay Service (FIRS) at 1-800-877-8339, which is accessible 
24 hours a day, 7 days a week, 365 days a year (including federal 
holidays).

SUPPLEMENTARY INFORMATION: The following final Management Fee Policy 
can be found in NSF's Large Facilities Manual:

4.2.2.2 Management Fee

    Management fee is an amount of money paid to a recipient in excess 
of a cooperative agreement's or cooperative support agreement's 
allowable costs. Generally, NSF does not permit the payment of fee 
(profit) to organizations under financial assistance. However, a 
management fee may be authorized for awards in the limited 
circumstances of construction or operations of a large facility as the 
responsible organization is likely to incur certain legitimate business 
expenses that may not be reimbursable under the governing cost 
principles. NSF provides for a

[[Page 55153]]

management fee in these limited circumstances, as appropriate, 
recognizing that the awardee would only incur such expenses as a result 
of its support of the NSF-funded activity.
    Prior Approval of Management Fees--A management fee proposal must 
be submitted to NSF that provides sufficient visibility into each 
expense category to identify its intended purpose. Agreement on 
management fee amounts shall be completed and a specific dollar amount 
established prior to the initiation of work under an award, or any 
subsequent period not authorized as part of the initial award. Any 
amount negotiated shall be expressly set forth in the terms and 
conditions of the award. Awardees may draw down the management fee in 
proportion to the amount incurred during the performance period. Fee 
established for a period longer than one year shall be subject to 
adjustment in the event of a significant change to the budget or work 
scope.
    The following expense categories will be used in the negotiation 
and award of a management fee:
     Working capital necessary to fund operations under an 
award--An amount for working capital may be necessary to ensure a level 
of retained earnings available to the organization in order to secure 
credit and borrowing to assure the financial health of the 
organization.
     Facilities capital necessary to acquire assets for 
performance--An amount for facilities capital may be necessary to allow 
the organization to acquire major assets and to address expenses that 
require immediate substantive financial outlays but that are only 
reimbursed through depreciation or amortization over a period of years.
     Other ordinary and necessary expenses for business 
operations that are not otherwise reimbursable under the governing cost 
principles--An amount for other expenses that are ordinary and 
necessary but not otherwise reimbursable may be necessary to provide a 
reasonable allowance for management initiative and investments that 
will directly or indirectly benefit the NSF-funded activity. Inclusion 
of amounts under this category warrants careful consideration of the 
benefits that may be obtained when providing management fee. Examples 
of potential appropriate needs include expenses related to contract 
terminations and losses, certain appropriate educational and public 
outreach activities, and financial incentives to obtain and retain high 
caliber staff.
     Prohibited Use of Management Fees--Although not an 
exhaustive list, the following are examples of expenses that are not 
appropriate uses of a management fee:

[cir] Alcoholic beverages
[cir] Tickets to concerts, sporting and other events
[cir] Vacation or other travel for non-business purposes
[cir] Social or sporting club memberships
[cir] Meals or social activities for non-business purposes
[cir] Meals or social activities for business purposes that are so 
extravagant as to constitute entertainment
[cir] Luxury or personal items
[cir] Lobbying as set forth at 2 CFR 200.450 and FAR 31.205-22, as 
appropriate to the recipient type

    In addition, costs incurred under the award that are otherwise 
allowable under the governing cost principles must be classified as 
direct or indirect charges to the award and shall not be included as 
proposed management fee elements.
    Documentation Requirements on Use of Management Fees--Even though 
the management fee represents an amount in excess of allowable cost and 
is therefore not subject to the governing cost principles, NSF, as a 
matter of policy, has determined that review of appropriate use of such 
funds is necessary. Information available on actual uses of management 
fee previously awarded by NSF in the preceding five-year period under 
any award shall be included in the proposing organization's fee 
proposal. As a term and condition of the award, the awardee will be 
required to provide information (typically annually) on the actual 
use(s) of the management fee. NSF will conduct reviews of this 
information regarding the extent to which the awardee fee proposals 
have proven reliable when compared with actual uses of management fee 
(both as to the fee amount as well as the planned uses of the fee). 
Unexplained failure to reasonably adhere to planned uses of fee will 
result in reduction of future management fee amounts under the award.

    Dated: September 9, 2015.
Suzanne H. Plimpton,
Reports Clearance Officer, National Science Foundation.
[FR Doc. 2015-23015 Filed 9-11-15; 8:45 am]
BILLING CODE 7555-01-P