[Federal Register Volume 80, Number 196 (Friday, October 9, 2015)]
[Proposed Rules]
[Pages 61142-61146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-25735]
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LEGAL SERVICES CORPORATION
45 CFR Part 1630
Cost Standards and Procedures; Property Acquisition and
Management Manual
AGENCY: Legal Services Corporation.
ACTION: Advance notice of proposed rulemaking.
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SUMMARY: The Legal Services Corporation (LSC or the Corporation) is
issuing this advance notice of proposed rulemaking (ANPRM) to request
comment on the Corporation's considerations for revising 45 CFR part
1630 and the Property Acquisition and Management Manual (PAMM). The
Corporation has chosen to address both part 1630 and the PAMM in a
single rulemaking due to the level of similarity and overlap between
them, particularly with regard to the provisions governing real and
personal property acquisition and prior approval procedures. This ANPRM
seeks input and recommendations on how to address most effectively
those provisions of part 1630 and the PAMM that impact LSC's ability to
promote clarity, efficiency, and accountability in its grant-making and
grants oversight practices.
DATES: Comments must be submitted by December 8, 2015.
ADDRESSES: You may submit comments by any of the following methods:
Email: [email protected]. Include ``Part 1630/PAMM Rulemaking''
in the subject line of the message.
Fax: (202) 337-6519.
Mail: Stefanie K. Davis, Assistant General Counsel, Legal Services
Corporation, 3333 K Street NW., Washington, DC 20007, ATTN: Part 1630/
PAMM Rulemaking.
Hand Delivery/Courier: Stefanie K. Davis, Assistant General
Counsel, Legal Services Corporation, 3333 K Street NW., Washington, DC
20007, ATTN: Part 1630/PAMM Rulemaking.
Instructions: Electronic submissions are preferred via email with
attachments in Acrobat PDF format. Written comments sent via any method
not described in this notice or received after the end of the comment
period may not be considered by LSC.
FOR FURTHER INFORMATION CONTACT: Stefanie K. Davis, Assistant General
Counsel, Legal Services Corporation, 3333 K Street NW., Washington, DC
20007, (202) 295-1563 (phone), (202) 337-6519 (fax), [email protected].
SUPPLEMENTARY INFORMATION:
I. Regulatory Background of Part 1630 and the PAMM
The purpose of 45 CFR part 1630 is ``to provide uniform standards
for allowability of costs and to provide a comprehensive, fair, timely,
and flexible process for the resolution of questioned costs.'' 45 CFR
1630.1. LSC last revised Part 1630 in 1997, when it published a final
rule intended to ``bring the Corporation's cost standards and
procedures into conformance with applicable provisions of the Inspector
General Act, the Corporation's appropriations action, and relevant
Office of Management and Budget (OMB) Circulars.'' 62 FR 68219, Dec.
31, 1997. Although the OMB Circulars are not binding on LSC because it
is not a federal agency, LSC adopted certain provisions from relevant
OMB Circulars pertaining to non-profit grants, audits, and cost
principles into the final rule for part 1630. Id. at 68219-20 (citing
OMB Circulars A-50, A-110, A-122, and A-133).
LSC published the PAMM in 2001 ``to provide recipients with a
single complete and consolidated set of policies and procedures related
to property acquisition, use and disposal.'' 66 FR 47688, Sept. 13,
2001. Prior to the PAMM's issuance, such policies and procedures were
``incomplete, outdated and dispersed among several different LSC
documents.'' Id. The PAMM contains policies and procedures that govern
both real and non-expendable personal property, but, with the exception
of contract services for capital improvements, the PAMM does not apply
to expendable personal property or to contracts for services. Id. at
47695. The PAMM's policies and procedures were developed with guidance
from the Federal Acquisition Regulations, the Federal Property
Management Regulations, and OMB Circular A-110. Id. at 47688. The PAMM
also incorporates several references to provisions of part 1630
pertaining to costs requiring LSC prior approvals and the proper
allocation of derivative income. Id. at 47696-98 (containing references
to 45 CFR 1630.5(b)(2-4), 1630.5(c), and 1630.12, respectively).
II. Impetus for This Rulemaking
Part 1630 and the PAMM have not been revised since 1997 and 2001,
respectively. Since that time, procurement practices and cost
allocation principles applicable to awards of federal funds have
changed significantly. For instance, in 2013, OMB revised and
consolidated several Circulars into a single Uniform Guidance. 78 FR
78589, Dec. 26, 2013; 2 CFR part 200. OMB consolidated and simplified
its guidance to ``reduce administrative burden for non-Federal entities
receiving Federal awards while reducing the risk of waste, fraud and
abuse.'' 78 FR 78590, Dec. 26, 2013.
LSC has determined that it should undertake regulatory action at
this time for three reasons. The first reason is to account, where
appropriate for LSC, for corresponding changes in Federal grants
policy. The second reason is to address the difficulties that LSC and
its grantees experience in applying ambiguous provisions of Part 1630
and the PAMM. Finally, LSC believes rulemaking is appropriate at this
time to address the limitations that certain provisions of both
documents place on the
[[Page 61143]]
Corporation's ability to ensure clarity, efficiency, and accountability
in its grant-making and grants oversight practices.
LSC has identified several aspects of part 1630 and the PAMM that
reduce efficiency, create confusion, and fail to ensure accountability
in the use of LSC funds. For example, part 1630 and the PAMM both
require recipients to seek prior approval for certain purchases of real
and non-expendable personal property. 45 CFR 1630.5 (describing costs
requiring prior approval), 1630.6 (establishing the timetable and bases
for granting prior approval); PAMM sections 3(d), 4(d). LSC has
determined that the text of its prior approval provisions does not
accurately reflect the intent of its drafters or the current practice
of the Corporation and its grantees. Clarifying when recipients must
seek prior approval of purchases will align the text of these
provisions with current practice and eliminate uncertainty about their
application. This revision would also be consistent with LSC's original
purpose in issuing the PAMM ``to provide recipients with a single
complete and consolidated set of policies and procedures related to
property acquisition, use and disposal.'' 66 FR 47688, Sept. 13, 2001.
LSC's Office of Inspector General (OIG) and LSC management have
also recommended that the Corporation consider revising 45 CFR
1630.7(b). Section 1630.7(b) provides that LSC shall provide written
notice to a grantee of LSC's decision to disallow certain costs if LSC
determines that there is a basis to disallow the costs and not more
than five years has passed since the grantee incurred the costs. OIG
and Management have expressed concern that the lack of specificity
regarding the point at which LSC has sufficient basis to disallow costs
and to notify a recipient of LSC's intent to disallow costs impedes
LSC's ability to recover misspent funds.
In July 2014, the Operations and Regulations Committee (Committee)
of LSC's Board of Directors (Board) approved Management's proposed
2014-2015 rulemaking agenda, which included revising part 1630 and the
PAMM as a priority item. On July 16, 2015, Management presented the
Committee with a Justification Memorandum recommending publication of
an ANPRM to seek public comment on possible revisions to Part 1630 and
the PAMM. Management stated that collecting input from the regulated
community through an ANPRM would significantly aid LSC in determining
the scope of this rulemaking and in developing a more accurate
understanding of the potential costs and benefits that certain
revisions may entail. On July 18, 2015, the LSC Board authorized
rulemaking and approved the preparation of an ANPRM to revise Part 1630
and the PAMM.
On October 4, 2015, the Committee voted to publish this ANPRM in
the Federal Register for notice and comment.
III. Discussion of Revisions Under Consideration
LSC requests comment on the following proposals and specific
questions. When submitting responses to specific questions, please
refer to each question by number.
A. Revising, Restructuring, and Consolidating Prior Approval Provisions
To improve organization and clarity, LSC is considering
restructuring 45 CFR 1630.5, which currently governs three discrete
topics:
(1) Recipient requests for advance understanding of whether an
unusual or special cost is allowable (Sec. 1630.5(a));
(2) Costs for which prior approval is necessary (Sec.
1630.5(b)); and
(3) The duration of a prior approval or advance understanding
(Sec. 1630.5(c)).
Section 1630.5(b) further lists four types of costs requiring prior
approval, three of which apply exclusively to property:
(1) Pre-award costs and costs incurred after the cessation of
funding;
(2) Purchases and leases of personal, non-expendable property if
the purchase price of any individual item exceeds $10,000;
(3) Purchases of real property; and
(4) Capital expenditures exceeding $10,000 to improve real
property.
LSC is considering expressly incorporating into the PAMM all of the
procedures and requirements governing prior approval that are related
to property. By its own terms, the PAMM represents the consolidation of
``all of the relevant policies and requirements related to the
acquisition, use and disposal of real and personal property'' in a
single document. 66 FR 47688, Sept. 13, 2001. In fact, the PAMM merely
incorporates some of these policies and requirements by reference and
excludes others altogether. For example, 45 CFR 1630.5(b)-(c) are
referenced throughout sections 3 and 4 of the PAMM, which govern
acquisition procedures for personal and real property. Id. at 47696.
The PAMM omits 45 CFR 1630.6, which establishes the timetable and basis
for granting prior approval. Similarly, while some of the provisions of
Program Letter 98-4, which established the processes for requesting
prior approval, are incorporated throughout the PAMM, others are
distinctly absent. Id. at 47689. The omitted provisions include the
process for requesting approval of pre-award costs and costs incurred
after the cessation of funding, both of which may involve property.
Question 1: How should LSC restructure the provisions discussed
above to best provide clarity to its grantees?
Question 2: In addition to the provisions discussed above, are
there any additional provisions from other LSC documents related to
prior approval that should also be restructured or consolidated?
Management is also considering revising 45 CFR 1630.5(b)(2) and
section 3(d) of the PAMM to require prior approval for each transaction
in which the aggregate cost of all items of personal property purchased
through the transaction exceeds a specific threshold. Both sections
currently require recipients to obtain prior approval only for
acquisition of an ``individual'' item of personal property that has a
value exceeding $10,000. LSC's Office of Compliance and Enforcement
(OCE) and OIG, however, have applied 45 CFR 1630.5(c) and section 3(d)
of the PAMM as requiring prior approval for a single acquisition of
multiple related items that have an aggregate value exceeding $10,000.
The proposed revision would, therefore, make the rules consistent with
LSC and OIG's practice.
Finally, LSC is considering raising the $10,000 prior-approval
threshold set by 45 CFR 1630.5(b)(2) and section 3(d) of the PAMM. LSC
is also considering drafting the rule to allow for adjustment when
economic circumstances indicate adjustment is appropriate. LSC adopted
the $10,000 threshold over 20 years ago and did not provide for
adjustment due to inflation. As a result, recipients must seek prior
approval for purchases considerably smaller than those for which LSC
intended to require prior approval at the time it published the PAMM.
Question 3: Are there any potential concerns or problems that could
arise from revising the rule to specify that recipients must seek prior
approval of single acquisitions of multiple items whose aggregate value
exceeds the prior approval threshold?
Question 4: Would the proposed approach generally be consistent
with other funders' requirements for all purchases of nonexpendable
personal property costing more than the prior-approval threshold?
Question 5: Should LSC raise the prior approval threshold? If yes,
what
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amount should LSC set as the threshold? Are there any similar prior
approval requirements imposed by funders other than the federal
government that may help LSC make this determination? Should LSC
automatically adjust the threshold on a scheduled basis to account for
inflation, or should LSC consider another mechanism to allow for
adjustment on a discretionary or as-needed basis?
B. Clarifying When LSC Provides Notice of Its Intent To Disallow Costs
LSC is considering revising 45 CFR 1630.7(b), which currently
states that LSC may commence a disallowed cost proceeding only if (1)
it has made a determination of ``a basis for disallowing a questioned
cost,'' (2) ``not more than five years have elapsed since the recipient
incurred the cost,'' and (3) the Corporation provides written notice to
the recipient ``of its intent to disallow the cost. . . . [stating] the
amount of the cost and the factual and legal basis for disallowing
it.'' OIG, Management, and the LSC Board have expressed concern that
the lack of clarity regarding the point at which such notice may be
provided unnecessarily impedes LSC's ability to recover misspent funds.
LSC currently interprets the phrase ``determination of a basis for
disallowing a questioned cost'' to mean the point at which LSC
determines that a recipient has in fact incurred a questioned cost as
defined in 45 CFR 1630.2(g).
Based on its experience with questioned-cost proceedings, LSC
proposes to revise Sec. 1630.7(b) to state that LSC may issue
``written notice . . . of its intent to disallow the cost'' at the time
LSC has enough evidence to support a reasonable belief that the cost is
unallowable. The notice would not necessarily initiate a questioned
cost proceeding, but would instead inform the recipient that LSC
believes a cost could be questioned and will investigate further. LSC
would subsequently notify the recipient whether LSC intends to initiate
a questioned cost proceeding.
LSC proposes to revise Sec. 1630.7(b) for four reasons. First,
giving notice at the time LSC reasonably believes that it could
disallow a cost would allow the recipient to ensure that it retains all
records related to the cost in the event that it needs to respond to a
notice of questioned costs. Second, notice at an earlier stage of LSC's
investigation would inform a recipient sooner about problems identified
by LSC and encourage the recipient to change its practice giving rise
to the questioned cost, which would potentially save the recipient
money. Third, changing the rule to provide notice at the time LSC has a
reasonable basis for a questioned cost proceeding, rather than at the
time LSC initiates the proceeding, would allow LSC to recover misspent
funds in cases that require lengthy investigations. The good faith
notice that LSC has enough evidence to support a reasonable belief that
the cost is unallowable would establish the five-year period for
recovery and permit LSC to recover misspent funds if the time for
investigation exceeds five years from the date the recipient incurred
the cost. The current rule restricts LSC's recovery regardless of how
unreasonable or unlawful the questioned cost may be.
Example: A recipient incurred deferred compensation costs for
its executive director beginning in February, 2009. LSC had a
reasonable basis for questioning the costs in 2014, but it took
until February, 2015 for LSC to complete its investigation, which
included an on-site visit, requesting and receiving documentation to
support the costs from the recipient, and reviewing the
documentation provided. If LSC issued notice of its intent to
disallow costs associated with the deferred compensation package in
February, 2015, LSC could not question incurred between February,
2009 and February, 2010 because those costs would fall outside the
five-year period in Sec. 1630.7(b).
Finally, giving notice at an earlier stage in the investigative
process would be more consistent with the definition of questioned cost
at 45 CFR 1630.2(g). The definition of questioned cost lists three
findings that may cause OIG, LSC, the Government Accountability Office
(formerly the General Accounting Office), or an independent auditor to
question costs: 1) the recipient may have violated a law, regulation,
contract, grant, or other agreement governing the use of LSC funds; 2)
the cost is not supported by adequate documentation; and 3) the cost
appears unreasonable or unnecessary. Two of these findings involve
potential, rather than definite, occurrences--a potential violation of
law, or the apparent unreasonableness or unnecessary incurring of a
given cost. A recipient ultimately may be able to properly document a
cost after adequate time and incentive, and thereby avoid returning
funds to LSC. For these reasons, LSC proposes to revise the notice
requirement in Sec. 1630.7(b).
Question 6: Are there any other changes LSC should consider when
revising Sec. 1630.7(b)? How would the proposed approach affect
recipients who are subject to a questioned cost proceeding?
C. Revising the Requirements for Using LSC Funds for Federal Matching
Purposes
LSC is considering eliminating the requirement in 45 CFR
1630.3(a)(8) that recipients obtain written consent from a federal
agency before using LSC funds to match a grant awarded by that agency.
Under this paragraph, recipients may use LSC funds to satisfy the
matching requirement of a federally funded program only if ``the agency
whose funds are being matched determines in writing that Corporation
funds may be used for federal matching purposes[.]'' 45 CFR
1630.3(a)(8). The preamble to the 1986 final rule for part 1630
describes this section as ``a standard federal provision to ensure that
[matching funds for federal grants] must be raised from a source other
than the federal treasury and taxpayer.'' 51 FR 29076, 29077, Aug. 13,
1986. Section 1005 of the Legal Services Corporation Act states that,
``[e]xcept as otherwise specifically provided in [the Act],'' LSC is
not ``considered a department, agency, or instrumentality, of the
Federal Government.'' 42 U.S.C. 2996d(e)(1). Therefore, LSC funds are
not ``federal funds'' for matching purposes, even though they are
appropriated by Congress, and they could be used to match a federal
grant award.
LSC understands that grantees find the requirement in Sec.
1630.3(a)(8) burdensome because awarding agencies do not normally
confirm in writing that the proposed source of a funding applicant's
non-federal match is a permissible source. Even if the agency would
allow the match, Sec. 1630.3(a)(8) currently prohibits the match if
the agency will not provide written consent. LSC also believes that the
requirement is not necessary to ensure that grantees using LSC funds to
match a federal grant continue using those funds consistent with the
Corporation's governing statutes and regulations. LSC is considering
removing the requirement to obtain written consent and replacing it
with an alternative method of conveying the Corporation's position on
the use of LSC funds as matching funds. One possible solution would be
for LSC to issue a program letter explaining why LSC funds are not
federal funds for matching purposes. LSC recipients could then provide
that program letter to any awarding agencies that question the non-
federal character of LSC funds.
Question 7: Based on the experiences of grantees who have applied
to receive awards from federal agencies with matching requirements,
would a program letter stating the Corporation's
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position on the use of LSC funds as matching funds be an effective
alternative to the current requirement of obtaining written consent
from the awarding agency? Are there any other workable replacements for
this requirement that LSC should consider in this rulemaking?
D. Revising the PAMM's Requirements for Disposal of Property
LSC is considering revising sections 6(f) and 7(a) and (d) of the
PAMM to require recipients and former recipients to provide notice to
and obtain approval from LSC prior to disposing of personal or real
property acquired with LSC funds. Section 6(f) requires recipients that
cease receiving LSC funding to seek LSC's approval prior to disposing
of personal property. Section 6(c) requires recipients to seek LSC's
approval to transfer an item of personal property to another nonprofit
organization serving the poor in the same service area. See PAMM,
section 6(c)(5). In all other instances, a recipient may dispose of
personal property purchased in whole or in part with LSC funds without
seeking LSC's approval.
Like section 6(f), section 7(c) requires entities that no longer
receive LSC funding to seek LSC's approval before disposing of real
property purchased in whole or in part with LSC funds. The provisions
of the PAMM that do not require approval by LSC are section 7(a),
governing the disposal of real property during the term of an LSC
grant, and section 7(d), governing the transfer of real property by an
entity that ceases to receive LSC funding to a recipient who has merged
with or succeeded that entity. LSC's recent agreements governing
grantee purchases of real property, however, generally require
recipients to give LSC 30 days' notice of a pending sale or to seek
LSC's approval of the sale 30 days prior to the completion of the sale.
These conditions apply whether the sale occurs during the term of the
LSC grant or after a grantee ceases to receive funding.
Under the Uniform Guidance, a recipient of Federal funds must
request disposition instructions from the funding agency any time it
wants to dispose of real property, equipment, or intangible property
purchased with the agency's funds. See 2 CFR 200.311(c) (real
property), 200.313(e) (equipment), and 200.315(a) (intangible
property). In contrast, LSC requires a recipient to seek LSC's approval
to dispose of real property or personal property only when the
recipient ceases to receive LSC funding. Unlike the Uniform Guidance,
the PAMM allows a recipient to choose the method of disposition and
seek LSC's approval of that method.
Question 8: Would revising the provisions discussed above to
require notice and approval by the Corporation prior to any disposal of
personal or real property create or remove problems for grantees?
Should any provision governing a particular type of property disposal
have its own unique requirements or exceptions?
Question 9: How would it affect recipients if LSC revised the
disposal provisions of the PAMM to require grantees to seek disposition
instructions from LSC?
Question 10: What is an appropriate length of time for recipients
to provide LSC with written notice prior to disposing of real property?
LSC is also considering revising sections 6(f) and 7(c) of the
PAMM. Pursuant to those sections, when an entity that owns personal or
real property acquired with LSC funds ceases to receive funding from
LSC, it may: (1) Transfer the property to another LSC recipient; (2)
retain the property and pay LSC that percentage of the fair market
value of the property that represents the percentage of the acquisition
cost attributable to LSC funds; or (3) sell the real property and
compensate LSC as described in (2), minus actual and reasonable selling
and fix-up expenses. In the case of personal property, section 6(f)
permits a recipient to transfer the property to another nonprofit
organization serving the poor in the same service area and pay LSC that
percentage of the property's current fair market value that is equal to
that percentage of the acquisition cost attributable to LSC funds.
Although these provisions are consistent with the Uniform Guidance, LSC
requests comments from grantees and others about whether it is
appropriate for LSC to seek compensation.
Question 11: Should LSC continue to require former recipients to
compensate LSC when the recipients dispose of personal or real property
purchased with LSC funds? If so, what are some of the problems facing
grantees with regard to the current requirements? How could LSC
effectively address such problems in a way that is consistent with the
goal of ensuring efficiency and accountability in grant-making and
grants oversight practices?
E. Revising Definitions in the PAMM for Clarity and Consistency With
Current Practices
LSC is considering revising the PAMM's definitions of ``acquisition
costs for real property'' and ``capital improvement,'' which are
incomplete and produce inconsistencies throughout the PAMM. Section
2(a) of the PAMM defines ``acquisition costs for real property'' as
``the initial down payment and principle [sic] and interest on debt
secured to finance the acquisition of the property. . . .'' Section
2(c) of the PAMM defines ``capital improvement'' as ``an expenditure of
an amount of LSC funds exceeding $10,000 to improve real property
through construction or the purchase of immovable items which become an
integral part of real property.'' The fact that the definitions of
neither ``acquisition costs for real property'' nor ``capital
improvement'' expressly cover renovations causes several problematic
inconsistencies. For example, section 4(c) of the PAMM requires ``an
analysis of the average annual cost of the acquisition, including the
costs of a down payment, interest and principal payments on debt
acquired to finance the acquisition, closing costs, renovation costs,
and the costs of utilities, maintenance, and taxes, where applicable.''
Section (d)(7)(i) of the PAMM similarly requires recipients to estimate
the ``total cost of the acquisition, including renovations, moving, and
closing costs'' when seeking prior approval to purchase real property.
As a result, a renovation cost in excess of $10,000 may be considered
as an acquisition cost, despite also constituting a ``capital
improvement.'' Section 7(f) of the PAMM further requires that
recipients follow separate procedures when using LSC funds to make
``capital improvements.''
Question 12: How should LSC revise the definitions of ``acquisition
costs for real property'' and ``capital improvements'' in order to
address the inconsistencies described in the above proposal? Should the
definitions differentiate between renovations done as part of the
acquisition process and renovations done on real property already owned
by the grantee?
LSC is also considering revising the PAMM's definition of
``personal property'' to clarify that it includes data, software, and
other types of intellectual property. Just as federal procurement
practices have changed substantially since the PAMM's publication in
2001, there have also been significant developments in intellectual
property and the methods by which both private and public organizations
incorporate it into their grant-making and procurement processes. The
definition of ``personal property'' in section 2(f) of the PAMM
currently includes both ``tangible'' and ``intangible'' property, with
the specific examples of ``copyrights or patents'' listed under the
latter. However, the definition does not
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expressly include ``intellectual property'' as a category of intangible
property, nor does it include items such as data and software that are
often considered to be intellectual and/or personal property. The only
other provision of the PAMM governing a type of intellectual property
is section 5(g), which provides that recipients may copyright work that
is obtained or developed with LSC funds as long as the Corporation
``reserves a royalty-free, nonexclusive, and irrevocable license to
reproduce, publish, or otherwise use'' such copyrighted work.
Question 13: Should LSC revise the PAMM's definition of ``personal
property'' to include intellectual property? Should LSC create a new
provision that governs exclusively rights in intellectual property
created using LSC grant funding? Should general rights in data produced
under LSC grants be addressed separately from any new provisions
governing the acquisition of intellectual property?
Question 14: Do other funders impose rights-in-data requirements
that LSC should be aware of when revising the PAMM, such as the
retention of a royalty-free, nonexclusive license to reproduce,
publish, or otherwise use products developed by the recipient using
those funds? If so, what are those requirements?
F. Revising Procedures and Requirements for Procurements; Including
Procurements of Services Within the Scope of Part 1630 and the PAMM
LSC is considering revising the procedures and requirements
applicable to grantee procurements paid for in whole or in part with
LSC funds. Unlike the Uniform Guidance and its relevant predecessors,
OMB Circulars A-87 and A-122, neither part 1630 nor the PAMM describes
the minimum standards that LSC recipients' procurement policies should
have. Program Letter 98-4, which established the procedures that
recipients must use to seek prior approval of certain leases and
procurements of personal and real property, requires a recipient to
give LSC minimal information about the process by which the recipient
selected a contractor, including whether the recipient solicited bids
or awarded a contract on a sole source basis. The annual grant
assurances applicable to Basic Field Grant awards do not require
recipients to certify that they have procurement policies that meet
prescribed minimum standards. By contrast, recipients of Technology
Initiative Grant (TIG) awards must comply with the procurement
requirements set forth in the annual grant assurances applicable to the
TIG program. As a result, recipients of special grants from LSC are
subject to more robust procurement requirements than recipients of only
Basic Field Grants are. LSC believes that revising part 1630 and the
PAMM to incorporate minimum standards for recipient procurement
policies is necessary to ensure that recipients have adequate
procurement policies and that all LSC-funded grant programs are subject
to the same requirements.
Question 15: Should LSC model its revised procurement standards on
the standards contained in the Uniform Guidance? What standards do
other funders require recipients' procurement policies to meet?
LSC is also considering including contracts for services within the
scope of part 1630 and the PAMM. Neither part 1630 nor the PAMM
currently requires prior approval or specific procurement procedures
for services contracts, either alone or accompanying a purchase of
personal property. For example, contracts with information technology
providers often include both equipment (personal property) and
services. Recipients currently may separate services from personal
property in order to demonstrate that the cost of the personal property
falls below the PAMM's threshold for prior approval, even if the total
contract cost, including services, exceeds the threshold. Recipients
may also enter into contracts for services costing significant amounts
of LSC funds, even though there is no requirement that LSC approve the
recipient's selection of a contractor and formation of the contract. By
contrast, TIG recipients must follow procurement procedures, but not
obtain prior approval, for all procurements of any kind over $5,000.
Question 16: What procedures and requirements should LSC adopt to
govern services contracts? How can LSC incorporate such procedures and
requirements in a way that promotes clarity, efficiency, and
accountability, while also minimizing any potential burden to grantees?
G. Adopting the PAMM as a Codified Rule
LSC is considering codifying the PAMM into a rule published in the
Code of Federal Regulations. Although the PAMM technically is not a
rule, it has several characteristics in common with legislative rules.
For example, the PAMM was adopted after notice and an opportunity for
public comment. LSC also assesses recipients' compliance with the
provisions of the PAMM. Management believes that the codification of
the PAMM may further promote and preserve the effectiveness and
consistency of LSC's property acquisition, use, and disposal policies
and procedures.
Question 17: Would codification of the PAMM as a rule create
potential burdens to grantees or otherwise unduly disrupt grantees'
current property acquisition and management practices?
H. Other Questions
Question 18: Are there any significant conflicts between the
Corporation's requirements in Part 1630 and the PAMM and rules
implemented by other public and private funders? If so, what steps
should LSC take to address such conflicts, whether through rulemaking
or otherwise?
Question 19: Are there any aspects of Part 1630 and the PAMM not
identified in this ANPRM that the Corporation should address in this
rulemaking?
Dated: October 5, 2015.
Stefanie K. Davis,
Assistant General Counsel.
[FR Doc. 2015-25735 Filed 10-8-15; 8:45 am]
BILLING CODE 7050-01-P