[Federal Register Volume 81, Number 215 (Monday, November 7, 2016)]
[Proposed Rules]
[Pages 78442-78453]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25717]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Parts 21, 22, 32, 33, 34, and 37

[DOD-2016-OS-0055]
RIN 0790-AJ50


DoD Grant and Agreement Regulations

AGENCY: Office of the Secretary, DoD.

ACTION: Proposed rule.

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SUMMARY: This notice of proposed rulemaking (NPRM) is the last in a 
sequence of six NPRM documents in this Federal Register that 
collectively establishes for DoD grants and cooperative agreements an 
updated interim implementation of Governmentwide guidance on 
administrative requirements, cost principles, and audit requirements 
for Federal awards and make other needed updates to the DoD Grant and 
Agreement Regulations (DoDGARs). This NPRM removes two existing DoDGARs 
parts and revises four others in order to conform them with the 11 
parts of the DoDGARs proposed in the NPRMs preceding this one in this 
section of this Federal Register.

DATES: To ensure that they can be considered in developing the final 
rule, comments must be received at either the Web site or mailing 
address indicated below by February 6, 2017.

ADDRESSES: You may submit comments identified by docket number, or by 
Regulatory Information Number (RIN) and title, by either of the 
following methods:
    The Web site: http://www.regulations.gov. Follow the instructions 
at that site for submitting comments.
    Mail: Department of Defense, Deputy Chief Management Officer, 
Directorate for Oversight and Compliance, 4800 Mark Center Drive, ATTN: 
Box 24, Alexandria, VA 22350-1700.
    Instructions: All submissions received must include the agency name 
and docket number or RIN for this Federal Register document. The 
general policy for comments and other submissions from the public is to 
make the submissions available for public viewing on the Internet at 
http://www.regulations.gov without change (i.e., as they are received, 
including any personal identifiers or contact information).

FOR FURTHER INFORMATION CONTACT: Wade Wargo, Basic Research Office, 
telephone 571-372-2941.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

A. Purpose of the Regulatory Action

1. The Need for the Regulatory Action and how the Action Meets That 
Need
    As explained in the Supplementary Information section of the first 
of the sequence of six NPRMs in this section of this Federal Register, 
these NPRMs collectively make a major portion of the updates to the 
Department of Defense Grant and Agreement Regulations (DoDGARs) that 
are needed in order to implement OMB guidance at 2 CFR part 200 and for 
other purposes. The first five NPRMs in the sequence propose eleven new 
DoDGARs parts located in chapter XI of title 2 of the Code of Federal 
Regulations (CFR), which will ultimately be the location in the CFR for 
all of the DoDGARs. This sixth and final NPRM in the sequence proposes 
conforming changes to the portion of the DoDGARs that will remain for 
an interim period in subchapter C of chapter I of title 32 of the CFR, 
which is where all of the DoDGARs were originally located. A second 
round of DoDGARs updates to be proposed for comment in the future will 
relocate the

[[Page 78443]]

content of the remaining portion of the DoDGARs from title 32 to title 
2 of the CFR. The conforming changes proposed by this NPRM are 
essential to ensuring internal consistency within the DoDGARs during 
this interim period of transition.
2. Legal Authorities for the Regulatory Action
    There are two statutory authorities for this NPRM:
     10 U.S.C. 113, which establishes the Secretary of Defense 
as the head of the Department of Defense; and
     5 U.S.C. 301, which authorizes the head of an Executive 
department to prescribe regulations for the governance of that 
department and the performance of its business.

B. Summary of the Major Provisions of the Regulatory Action

    This NPRM proposes to remove two of the eight DoDGARs parts 
currently located in subchapter C of chapter I of 32 CFR, revise four 
parts in that subchapter, and make no changes to the other two parts. 
Specifically, it:
     Removes existing DoDGARs parts 32 and 33 (32 CFR parts 32 
and 33). Section I.B.1 of this Supplementary Information section 
provides further information about the proposed removal of parts 32 and 
33.
     Revises existing DoDGARs parts 21, 22, 34, and 37 (32 CFR 
parts 21, 22, 34, and 37). Section I.B.2 of this Supplementary 
Information section describes some of the more significant revisions to 
those four parts that: (1) Update outdated references; and (2) 
eliminate internal inconsistencies between the portion of the DoDGARs 
that will remain in 32 CFR for an interim period and the new DoDGARs 
parts in chapter XI of 2 CFR that are proposed in the five NPRMs 
preceding this one in this Federal Register.
     Makes no revisions to existing DoDGARs parts 26 and 28 (32 
CFR parts 26 and 28). Part 26 is the part in which DoD adopted a 
Governmentwide common rule on drug-free workplace requirements for 
financial assistance awards. Part 28 is the part in which it adopted 
the Governmentwide common rule implementing statutory restrictions on 
lobbying. There are no changes needed in either of these parts in order 
to conform them with the DoDGARs parts proposed in the other NPRMs in 
this section of this Federal Register. The drug-free workplace 
requirements and lobbying restrictions in these parts ultimately will 
be relocated from 32 CFR to chapter XI of 2 CFR.
1. Removal of DoDGARs Parts 32 and 33
    Part 32 of the DoDGARs (32 CFR part 32) is the CFR part in which 
DoD implemented OMB Circular A-110, which governed the administrative 
requirements for grant and cooperative agreement awards to institutions 
of higher education, hospitals, and other nonprofit organizations. Part 
33 is the part in which DoD adopted the Governmentwide common rule 
implementing OMB Circular A-102, which governed the administrative 
requirements for grant and cooperative agreement awards to States, 
local governments, and Indian tribal governments. Both Circulars A-110 
and A-102 were superseded by Governmentwide guidance for grants and 
cooperative agreements that OMB issued at 2 CFR part 200, ``Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards.'' DoD therefore issued an interim final rule, 
pending updates to the DoDGARs to implement that OMB guidance, on 
December 19, 2014, at 2 CFR part 1103, to: (1) Direct DoD Components to 
conform requirements for recipients in their award terms and conditions 
with those in 2 CFR part 200,; and (2) grant a deviation from the 
administrative requirements in DoDGARs parts 32 and 33. The third and 
fourth of the six NPRMs in this section of today's Federal Register 
propose new DoDGARs parts that take the next major step in the interim 
implementation of the OMB guidance. They do so by establishing standard 
wording of general terms and conditions for awards to institutions of 
higher education, nonprofit organizations, States, local governments, 
and Indian tribes, including terms and conditions addressing 
administrative requirements. This NPRM's proposed removal of DoDGARs 
parts 32 and 33 from title 32 of the CFR precludes any apparent 
conflict between the administrative requirements in parts 32 and 33 and 
the administrative requirements in the proposed new DoDGARs parts 
addressing general terms and conditions.
2. Revisions to DoDGARs Parts 21, 22, 34, and 37
    Since the proposed new parts of the DoDGARs to be created in 2 CFR 
chapter XI supersedes parts 32 and 33 of 32 CFR, various references to 
parts 32 and 33 found in the remaining parts 21, 22, 34, and 37 of 32 
CFR must be updated to their new locations in 2 CFR chapter XI. Related 
changes are necessary to eliminate other internal inconsistencies 
between parts 21, 22, 34, and 37 and the new proposed parts of the 
DoDGARs in Chapter XI that implement 2 CFR part 200. The following are 
examples of these latter types of changes:
     Replacing references to the superseded OMB Circulars A-21, 
A-87, A-89, A-102, A-110, A-122, and A-133 with the new locations in 2 
CFR part 200.
     Removing Appendix B to 32 CFR part 22 that provided 
suggested award provisions for national policy requirements that often 
apply as they are superseded by the requirements in the proposed 2 CFR 
part 1122.
     Removing appendix C to 32 CFR part 22 that discussed 
administrative requirements and issues to be addressed in award terms 
and conditions as they are superseded by the requirements in the 
proposed parts in Subchapter D of 2 CFR chapter XI.
     Removing 32 CFR 22.610 that covered requirements for the 
content of awards as those requirements are superseded by 2 CFR part 
1120.
    The amendatory language in this notice updates other references and 
language in these remaining parts that are not related to the deletion 
of parts 32 and 33 or generally to the implementation of the guidance 
at 2 CFR part 200. Some of these changes are necessary mainly to 
conform these four remaining parts of the DoDGARs in 32 CFR to 
statutes, regulations, or policy that were issued, revised, or repealed 
subsequent to the last revision of those parts. The following are 
examples of such changes:
     Removing references to the separate internal DoD document 
for the DoDGARs issued under DoD 3210.6-R. Previously, the DoD 
published the DoDGARs in both the CFR and a separate internal DoD 
document. The separate internal document was cancelled by the February 
6, 2014 update to DoD Directive 3210.06. This directive establishes 
policy and assigns responsibilities for the Defense Grant and Agreement 
Regulatory System (DGARS) and, as a part of this system, provides for 
DoD Components' use of the policies and procedures in the DoDGARs.
     Replacing the outdated references to Director of Defense 
Research and Engineering (DDR&E) with Assistant Secretary of Defense 
for Research and Engineering (ASD(R&E)).
     Replacing references to the Excluded Parties List System 
(EPLS) with the System for Award Management (SAM).
     Replacing the references to the Director of Information, 
Operations and Reports, Washington Headquarters

[[Page 78444]]

Services (DIOR, WHS), which was the entity previously responsible for 
reporting Catalog of Federal Domestic Assistance (CFDA) program 
information to OMB and GSA and for operating the Defense Assistance 
Awards Data System (DAADS), with the DAADS Administrator, which is a 
function that is now part of the Defense Manpower Data Center.
     Revising the requirements related to when DoD Components 
must report obligating actions to DAADS from quarterly reporting to 
reporting each individual obligating action within 15 days after action 
execution. This change is necessary to allow sufficient time for the 
DAADS System Administrator to comply with Federal Funding 
Accountability and Transparency Act reporting requirements.
     Because they generally derive from the same source 
requirements, revising the contract provisions in appendix A to part 
34, which applies to for-profit organizations, to align with the 
contract provisions for national policy requirements proposed in 2 CFR 
part 1132, which applies to States, local governments, Indian tribes, 
institutions of higher education, and nonprofit organizations. The 
amended appendix A to part 34 includes 10 of the 11 national policy 
requirements proposed in 2 CFR part 1132. In addition to several 
revisions to the national policy requirements previously included in 
this appendix to part 34, there are also three additional national 
policy requirements proposed for inclusion in this appendix that are 
commonly applicable to certain types of contracts issued by for-profit 
recipients.
     Since appendix B to 32 CFR part 22 is proposed for removal 
under this NPRM, incorporating language in appendices D and E to part 
37 related to national policy requirements for Technology Investment 
Agreements (TIAs) that was previously only incorporated into part 37 by 
reference to appendix B of 32 CFR part 22. Other changes to appendices 
D and E to part 37 include: (1) Incorporating language that generally 
requires DoD Components to use the standard wording found in 2 CFR part 
1122 for the terms and conditions of those national policy requirements 
that are applicable to TIAs; (2) updating the description of the scope 
of the equal employment opportunity requirements (41 CFR chapter 60) 
referenced in Section C of appendix D; (3) incorporating language into 
Section C of appendix D related to the National Environmental Policy 
Act and other environmental requirements by referencing appendix B of 
the proposed 2 CFR part 1122; (4) incorporating an additional national 
policy requirement (Archaeological and Historic Preservation Act of 
1974) in Section C of appendix D that applies in certain circumstances; 
and (5) also incorporating the three national policy requirements added 
to appendix A of part 34 in Section C of appendix E.
     Removing from various locations in 32 CFR part 37 a 
requirement in 10 U.S.C. 2371 that is no longer in effect to report 
annually to Congress information on cooperative agreements or 
transactions other than contracts, cooperative agreements, and grants 
that employ certain provisions of 10 U.S.C. 2371.

C. Costs and Benefits

    The primary benefit of the regulatory action proposed in this NPRM 
results from allowing DoD to more quickly implement the portions of 
OMB's Governmentwide guidance on uniform administrative requirements, 
cost principles, and audit requirements that have an impact on its 
grant and cooperative agreement terms and conditions. If DoD were to 
wait until all parts of the DoDGARs affected by OMB's uniform guidance 
were revised before proposing them for public comment, it would delay 
the implementation of the portion of OMB's uniform guidance most 
directly affecting States, local governments, Indian tribes, 
institutions of higher education, and nonprofit organizations.
    Therefore, this NPRM proposes conforming changes, updating of 
references, and other minor changes and technical corrections in four 
of the existing parts of DoDGARs in title 32 until all remaining parts 
can be fully implemented in 2 CFR chapter XI at a later date. Thus, the 
administrative burdens and associated costs to recipients due to the 
regulatory action proposed in this NPRM are essentially the same as 
those resulting from the Governmentwide guidance to agencies contained 
in 2 CFR part 200. However, two of the proposed changes in this NPRM, 
not directly related to the implementation of 2 CFR part 200, provide 
notable benefits and reductions in costs to recipients.
    The first of those two changes relates to the audit requirements 
for grants and agreements with for-profit organizations, which are 
found in 32 CFR part 34. Although this part is not subject to the 
guidance in 2 CFR part 200, it was modeled on administrative 
requirements for grants and agreements with institutions of higher 
education, hospitals, and other non-profit organizations found in the 
superseded OMB Circular A-110. This NPRM proposes an increase to the 
dollar threshold at which for-profit organizations are required to 
receive an annual audit. Currently, 32 CFR 34.16 requires for-profit 
organizations to have an independent auditor perform an audit in a year 
in which it expends $500,000 or more under Federal awards. This 
regulatory action proposes to increase that threshold from $500,000 to 
$750,000 to parallel the threshold for States, local governments, 
Indian tribes, institutions of higher education, and nonprofit 
organizations located in 2 CFR 200.501. This threshold increase is 
expected to reduce administrative burden to for-profit organizations, 
as well as to decrease the associated costs to those organizations and 
to the Government.
    The other of those two proposed changes relates to the part of the 
DoDGARs dealing with TIAs, 32 CFR part 37. This change benefits DoD 
Components and reduces costs by removing from this regulation a 
requirement in 10 U.S.C. 2371 that is no longer in effect to report 
annually to Congress information on cooperative agreements or 
transactions other than contracts, cooperative agreements, and grants 
that employ certain provisions of 10 U.S.C. 2371. Public Law 113-291 
removed this annual reporting requirement from 10 U.S.C. 2371.

II. Regulatory Analysis

Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review''

    Executive Order 12866, as supplemented by Executive Order 13563, 
directs each Federal agency to: Propose regulations only after 
determining that benefits justify costs; tailor regulations to minimize 
burdens on society, consistent with achieving regulatory objectives; 
maximize net benefits when selecting among regulatory approaches; to 
the extent feasible, specify performance objectives rather than the 
behavior or manner of compliance; and seek the views of those likely to 
be affected before issuing a notice of proposed rulemaking, where 
feasible and appropriate. The Department of Defense has determined that 
this regulatory implementation, which includes proposed changes that 
largely conform existing parts of the DoDGARs to the new proposed parts 
implementing 2 CFR part 200, will maximize long-term benefits in 
relation to costs and burdens for recipients of those awards in the 
same fashion as those resulting from that Governmentwide guidance to 
agencies.

[[Page 78445]]

This rule has been designated a ``significant regulatory action'' under 
section 3(f) of Executive Order 12866, although not an economically 
significant one. Accordingly, the rule has been reviewed by OMB.

Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded 
Mandates Act) (2 U.S.C. 1532) requires that a Federal agency prepare a 
budgetary impact statement before issuing a rule that includes any 
Federal mandate that may result in the expenditure in any one year by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more in 1995 dollars, updated 
annually for inflation. In 2015, that inflation-adjusted amount in 
current dollars is approximately $146 million. The Department of 
Defense has determined that this proposed regulatory action will not 
result in expenditures by State, local, and tribal governments, or by 
the private sector, of that amount or more in any one year.

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires an agency that is proposing 
a rule to provide a regulatory flexibility analysis or to certify that 
the rule will not have a significant economic impact on a substantial 
number of small entities. The Department of Defense certifies that this 
proposed regulatory action will not have a significant economic impact 
on substantial number of small entities beyond any impact due to 
provisions of it that implement OMB guidance at 2 CFR part 200.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35; 5 CFR part 1320, appendix A.1) (PRA), the Department of 
Defense has determined that there are no new collections of information 
contained in this proposed regulatory action.

Executive Order 13132, ``Federalism''

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it proposes a regulation that has Federalism 
implications. This proposed regulatory action does not have any 
Federalism implications.

List of Subjects in 32 CFR Parts 21, 22, 32, 33, 34, and 37

    Business and Industry, Colleges and universities, Cooperative 
agreements, Grants administration, Hospitals, Indians, Nonprofit 
organizations, Small business, State and local governments.
    Accordingly, under the authority of 5 U.S.C. 301 and 10 U.S.C. 113, 
32 CFR chapter I, subchapter C is proposed to be amended as follows:

PART 21--[AMENDED]

0
1. The authority citation for part 21 continues to read as follows:

    Authority:  5 U.S.C. 301 and 10 U.S.C. 113.


Sec.  21.215   [Amended]

0
2. Section 21.215 is amended by removing ``Director of Defense Research 
and Engineering'' and adding ``Assistant Secretary of Defense for 
Research and Engineering (ASD(R&E))'' in its place.
0
3. Section 21.220 is revised to read as follows:


Sec.  21.220  What publications are in the DGARS?

    The DoD Grant and Agreement Regulations comprise the principal 
element of the DGARS. The ASD(R&E) also may publish DGARS policies and 
procedures in DoD instructions and other DoD publications, as 
appropriate.
0
 4. Section 21.300 is amended by:
0
a. In paragraph (a), removing ``subpart D'' and adding ``subpart F'' in 
its place; and
0
c. Revising paragraph (b).
    The revision reads as follows:


Sec.  21.300   What instruments are subject to the DoD Grant and 
Agreement Regulations (DoDGARs)?

* * * * *
    (b) Note that each portion of the DoDGARs identifies the types of 
instruments to which it applies.
* * * * *


Sec.  21.320  [Amended]

0
5. Section 21.320 is amended by removing paragraph (d).
0
6. Revise Sec.  21.330 to read as follows:


Sec.  21.330   How are the DoDGARs published and maintained?

    (a) The DoD publishes the DoDGARs in the Code of Federal 
Regulations (CFR).
    (b) The location of the DoDGARs in the CFR currently is in 
transition. The regulations are moving from chapter I, subchapter C, 
title 32, to a new location in chapter XI, title 2 of the CFR. During 
the transition, there will be some parts of the DoDGARs in each of the 
two titles.
    (c) The DoD publishes updates to the DoDGARs in the Federal 
Register for public comment.
    (d) A standing working group recommends revisions to the DoDGARs to 
the ASD(R&E). The ASD(R&E), Director of Defense Procurement, and each 
Military Department must be represented on the working group. Other DoD 
Components that make or administer awards may also nominate 
representatives. The working group meets when necessary.
0
7. Section 21.335 is amended by revising paragraph (b) to read as 
follows:


Sec.  21.335  Who can authorize deviations from the DoDGARs?

* * * * *
    (b) The ASD(R&E) or his or her designee must approve in advance any 
deviation for a class of awards. Note that, as described at 2 CFR 
1126.3, OMB concurrence also is required for some class deviations from 
requirements included in awards to institutions of higher education, 
nonprofit organizations, States, local governments, and Indian tribes.
0
8. Section 21.340 is amended by revising paragraph (a) to read as 
follows:


Sec.  21.340   What are the procedures for requesting and documenting 
deviations?

    (a) DoD Components must submit copies of justifications and agency 
approvals for individual deviations and written requests for class 
deviations to: Principal Deputy Assistant Secretary of Defense for 
Research and Engineering, ATTN: Basic Research, 3030 Defense Pentagon, 
Washington, DC 20301-3030.
* * * * *


Sec.  21.505   [Amended]

0
9. Section 21.505 is amended by removing ``domestic assistance 
programs'' and adding ``assistance programs'' in its place.


Sec.  21.510   [Amended]

0
10. Section 21.510 is amended by:
0
a. Removing ``OMB Circular A-89'' and adding ``OMB guidance at 2 CFR 
200.202'' in its place;
0
b. Removing ``domestic assistance programs'' and adding ``assistance 
programs'' in its place;
0
c. Removing ``and maintaining the Federal Assistance Programs Retrieval 
System, a computerized data base of the information''; and
0
d. Removing footnote 4.
0
11. Section 21.515 is revised to read as follows:


Sec.  21.515  Who reports the information for the CFDA?

    (a) Each DoD Component that provides financial assistance must:
    (1) Report to the Defense Assistance Awards Data System (DAADS) 
Administrator all new programs and changes as they occur or as the DoD 
Component submits its annual updates to existing CFDA information. 
DAADS is further described in Sec. Sec.  21.520 through 21.555.

[[Page 78446]]

    (2) Identify to the DAADS Administrator a point-of-contact who will 
be responsible for reporting the program information and for responding 
to inquiries related to it.
    (b) The DAADS Administrator is the Department of Defense's single 
liaison with whom DoD Components that collect and compile such program 
information work to report the information to the OMB and GSA.
0
12. Section 21.520 is amended by revising paragraph (b) to read as 
follows:


Sec.  21.520  What are the purposes of the Defense Assistance Awards 
Data System (DAADS)?

* * * * *
    (b) A basis for meeting Governmentwide requirements to report to 
USASpending.gov (or any successor site designated by OMB) and for 
preparing other recurring and special reports to the President, the 
Congress, the Government Accountability Office, and the public.
* * * * *


Sec.  21.525  [Amended]

0
13. Section 21.525 is amended by removing ``Deputy Director, Defense 
Research and Engineering (DDDR&E)'' and adding ``Principal Deputy 
Assistant Secretary of Defense for Research and Engineering 
(PDASD(R&E))'' in its place.
0
14. Section 21.530 is revised to read as follows:


Sec.  21.530  Who operates the DAADS?

    (a) The Defense Manpower Data Center operates and maintains the 
DAADS for the ASD(R&E).
    (b) The DAADS Administrator, consistent with guidance issued by the 
PDASD(R&E):
    (1) Processes DAADS information twice a month and prepares 
recurring and special reports using such information.
    (2) Prepares, updates, and disseminates instructions for reporting 
information to the DAADS. The instructions are to specify procedures, 
formats, and editing processes to be used by DoD Components, including 
record layout, submission deadlines, media, methods of submission, and 
error correction schedules.


Sec.  21.535  [Amended]

0
15. Section 21.535 is amended in paragraph (d) by removing ``to the 
DIOR, WHS, at the address given in Sec.  21.555(a). DIOR, WHS serves as 
the central point'' and adding ``to the DAADS administrator. The DAADS 
Administrator serves as the central point'' in its place.
0
16. Section 21.540 is amended by revising paragraphs (b) and (c) to 
read as follows:


Sec.  21.540  What are the duties of the DoD Components' central points 
for the DAADS?

* * * * *
    (b) Collect information required by the DAADS User Guide from those 
contracting activities, and report it to the DAADS Administrator, in 
accordance with Sec. Sec.  21.545 through 21.555. Note that the DAADS 
User Guide, which a registered DAADS user may find at the Resources 
section of the DAADS Web site (https://www.dmdc.osd.mil/daads/), 
provides further information about required data elements and 
instructions for submitting data.
    (c) Submit to the DAADS Administrator any recommended changes to 
the DAADS.
0
17. Section 21.555 is revised to read as follows:


Sec.  21.555  When and how must DoD Components report to the DAADS?

    DoD Components must report:
    (a) Each obligating or deobligating action no later than 15 days 
after the date of the obligation or deobligation. Doing so enables 
DAADS to comply with the deadline in the Federal Funding Accountability 
and Transparency Act of 2006 (Pub. L. 109-282; 31 U.S.C. 6101 note) to 
report to the Governmentwide data system (USASpending.gov) established 
to implement requirements of that Act.
    (b) Using a method and in a format permitted either by the DAADS 
User Guide described in Sec.  21.540(b) or by agreement with the DAADS 
Administrator.


Sec.  21.565  [Amended]

0
18. Section 21.565 is amended by:
0
a. Redesignating footnote number 6 as footnote number 2; and
0
b. Removing ``Director for Basic Sciences, ODDR&E'' and adding 
``Director for Basic Research, OASD(R&E)'' in its place.
0
19. Appendix A is revised to read as follows:

Appendix A to Part 21--Instruments To Which DoDGARs Portions Apply

    I. For each DoDGARs part that DoD already has adopted in chapter 
XI of title 2 of the Code of Federal Regulations (CFR), the 
following table summarizes the general subject area that the part 
addresses and its applicability. All of the DoDGARs ultimately will 
be located in chapter XI of 2 CFR.

------------------------------------------------------------------------
                                which addresses .
         DoDGARs . . .                 . .            applies to . . .
------------------------------------------------------------------------
Part 1104.....................  DoD's interim      grants and
                                 implementation     cooperative
                                 of the OMB         agreements other
                                 guidance in 2      than TIAs.
                                 CFR part 200.
Part 1108 (2 CFR part 1108)...  Definitions of     terms used throughout
                                 terms.             the DoDGARs in
                                                    chapter XI of 2 CFR
                                                    other than the
                                                    portion containing
                                                    regulations
                                                    implementing
                                                    specific national
                                                    policy requirements
                                                    that provide their
                                                    own definitions of
                                                    terms.
Part 1120 (2 CFR part 1120)...  Award format.....  grants and
                                                    cooperative
                                                    agreements, other
                                                    than TIAs.
Part 1122 (2 CFR part 1122)...  National policy    grants and
                                 requirements       cooperative
                                 general award      agreements other
                                 terms and          than TIAs. Portions
                                 conditions.        of this part apply
                                                    to TIAs, but only as
                                                    32 CFR part 37
                                                    refers to them and
                                                    makes them apply.
Part 1125 (2 CFR part 1125)...  Governmentwide     nonprocurement
                                 debarment and      generally, including
                                 suspension         grants, cooperative
                                 requirements.      agreements, TIAs,
                                                    and any other
                                                    instruments that are
                                                    ``covered
                                                    transactions'' under
                                                    OMB guidance in 2
                                                    CFR 180.210 and
                                                    180.215, as
                                                    implemented by 2 CFR
                                                    part 1125, except
                                                    acquisition
                                                    transactions to
                                                    carry out prototype
                                                    projects (see 2 CFR
                                                    1125.20).
Parts 1126, 1128, 1130, 1132,   Administrative     cost-type grants and
 1134, 1136, and 1138            Requirements       cooperative
 (subchapter D of 2 CFR          Terms and          agreements other
 chapter XI).                    Conditions for     than TIAs. Portions
                                 Cost[dash]type     of this subchapter
                                 Awards to          apply to TIAs, but
                                 Nonprofit and      only as 32 CFR part
                                 Governmental       37 refers to them
                                 Entities.          and makes them
                                                    apply.
------------------------------------------------------------------------


[[Page 78447]]

    II. For each DoDGARs part that will remain in subchapter C of 
chapter I of title 32 of the CFR, pending completion of the DoDGARs 
updating needed to fully implement OMB guidance in 2 CFR part 200 
and for other purposes, the following table summarizes the general 
subject area that the part addresses and its applicability. All of 
the substantive content of these DoDGARs parts ultimately will be 
located in new parts in chapter XI of 2 CFR.

------------------------------------------------------------------------
                                which addresses .
         DoDGARs . . .                 . .            applies to . . .
------------------------------------------------------------------------
Part 21 (32 CFR part 21), all   The Defense Grant  ``awards,'' which are
 but subparts D and E.           and Agreement      grants, cooperative
                                 Regulatory         agreements,
                                 System and the     technology
                                 DoD Grant and      investment
                                 Agreement          agreements (TIAs),
                                 Regulations.       and other
                                                    nonprocurement
                                                    instruments subject
                                                    to one or more parts
                                                    of the DoDGARs.
Part 21 (32 CFR part 21),       Authorities and    grants, cooperative
 subpart D.                      responsibilities   agreements, and
                                 for assistance     TIAs.
                                 award and
                                 administration.
Part 21 (32 CFR part 21),       DoD Components'    grants, cooperative
 subpart E.                      information        agreements, TIAs,
                                 reporting          and other
                                 requirements.      nonprocurement
                                                    instruments subject
                                                    to reporting
                                                    requirements in 31
                                                    U.S.C. chapter 61.
Part 22 (32 CFR part 22)......  DoD grants         grants and
                                 officers'          cooperative
                                 responsibilities   agreements other
                                 for award and      than TIAs. Portions
                                 administration     of this part apply
                                 of grants and      to TIAs, but only as
                                 cooperative        32 CFR part 37
                                 agreements.        refers to them and
                                                    makes them apply.
Part 26 (32 CFR part 26)......  Governmentwide     grants, cooperative
                                 drug[dash]free     agreements and other
                                 workplace          financial assistance
                                 requirements.      instruments,
                                                    including TIAs, that
                                                    are included in the
                                                    definition of
                                                    ``award'' at 32 CFR
                                                    26.605.
Part 28 (32 CFR part 28)......  Governmentwide     grants, cooperative
                                 restrictions on    agreements and other
                                 lobbying.          financial assistance
                                                    instruments,
                                                    including TIAs, that
                                                    are included in the
                                                    definitions of
                                                    ``Federal grant''
                                                    and ``Federal
                                                    cooperative
                                                    agreement'' at 32
                                                    CFR 28.105.
Part 34 (32 CFR part 34)......  Administrative     grants and
                                 requirements for   cooperative
                                 grants and         agreements other
                                 agreements with    than TIAs
                                 for[dash]profit    (``award,'' as
                                 organizations.     defined in 32 CFR
                                                    34.2). Portions of
                                                    this part apply to
                                                    TIAs, but only as 32
                                                    CFR part 37 refers
                                                    to them and makes
                                                    them apply.
Part 37 (32 CFR part 37)......  Agreements         TIAs. Note that this
                                 officers'          part refers to other
                                 responsibilities   portions of DoDGARs
                                 for award and      that apply to TIAs.
                                 administration
                                 of TIAs.
------------------------------------------------------------------------

PART 22--[Amended]

0
20. The authority citation for part 22 continues to read as follows:

    Authority:  5 U.S.C. 301 and 10 U.S.C. 113.

0
21. Section 22.100 is revised to read as follows:


Sec.  22.100  Purpose.

    This part outlines grants officers' and DoD Components' 
responsibilities related to the award and administration of grants and 
cooperative agreements.


Sec.  22.220  [Amended]

0
22. Section 22.220 is amended by:
0
a. In paragraph (a)(2), removing ``Director of Defense Research and 
Engineering (DDR&E)'' and adding ``Assistant Secretary of Defense for 
Research and Engineering (ASD(R&E))'' in its place; and
0
b. In paragraph (b), removing ``DDR&E'' everywhere it appears and 
adding ``ASD(R&E)'' in its place.


Sec.  22.310  [Amended]

0
23. Section 22.310 is amended in paragraph (b)(1)(iii) by removing 
``Deputy Director, Defense Research and Engineering'' and adding 
``Principal Deputy Assistant Secretary of Defense for Research and 
Engineering'' in its place.


Sec.  22.315  [Amended]

0
24. Section 22.315 is amended in paragraph (a)(3) by removing ``http://www.FedGrants.gov'' and adding ``http://www.Grants.gov'' in its place.


Sec.  22.325  [Removed]

0
25. Section 22.325 is removed.


Sec.  22.405  [Amended]

0
26. Section 22.405 is amended in paragraph (b) by removing ``32 CFR 
32.14, 33.12, or 34.4'' and adding ``32 CFR 34.4 for awards to for-
profit organizations or as described in OMB guidance at 2 CFR 200.207 
for awards to institutions of higher education, nonprofit 
organizations, States, local governments, and Indian tribes'' in its 
place.
0
27. Section 22.420 is amended by revising paragraphs (b)(1), (c)(1) 
introductory text, and (c)(1)(ii) to read as follows:


Sec.  22.420  Pre-award procedures.

* * * * *
    (b) * * *
    (1) Should the grants officer in a particular case decide that a 
pre-award credit report, audit, or survey is needed, he or she should 
consult first with the appropriate grants administration office 
(identified in Sec.  22.710), and decide whether pre-existing surveys 
or audits of the recipient, such as those of the recipient's internal 
control systems under OMB guidance in subpart F of 2 CFR part 200, will 
satisfy the need (see Sec.  22.715(a)(1)).
* * * * *
    (c) * * *
    (1) Is not identified in the Exclusions area of the System for 
Award Management (SAM Exclusions) as being debarred, suspended, or 
otherwise ineligible to receive the award (SAM is at www.sam.gov). In 
addition to being a requirement for every new award, note that checking 
SAM Exclusions also is a requirement for subsequent obligations of 
additional funds, such as incremental funding actions, in the case of 
pre-existing awards to institutions of higher education, as described 
at Sec.  22.520(e)(5). The grants officer's responsibilities include 
(see the OMB guidance at 2 CFR 180.425 and 180.430, as implemented by 
the Department of Defense at 2 CFR 1125.425) checking SAM Exclusions 
for:
* * * * *
    (ii) A recipient's principals (as defined in OMB guidance at 2 CFR 
180.995, implemented by the Department of Defense in 2 CFR part 1125), 
potential recipients of subawards, and principals of those potential 
subaward recipients, if DoD Component approval of those principals or 
lower-tier recipients is required under the terms of the award.
* * * * *
0
28. Section 22.505 is revised to read as follows:


Sec.  22.505  Purpose.

    The purpose of this subpart is to supplement other regulations that

[[Page 78448]]

implement national policy requirements, to the extent that it is 
necessary to provide additional guidance to DoD grants officers.
0
29. Section 22.510 is amended by revising paragraph (b) to read as 
follows:


Sec.  22.510  Certifications, representations, and assurances.

* * * * *
    (b) Representations and assurances. Many national policies, either 
in statute or in regulation, require recipients of grants and 
cooperative agreements to make representations or provide assurances 
(rather than certifications) that they are in compliance with the 
policies. Part 1122 of the DoDGARs (2 CFR part 1122) provides standard 
wording of general award terms and conditions to address several of the 
more commonly applicable national policy requirements. These terms and 
conditions may be used to obtain required assurances and 
representations for national policy matters covered in part 1122 at the 
time of award, which is as effective and more efficient and less 
administratively burdensome than obtaining them at the time of each 
proposal. If any other assurances or representations must be obtained 
at the time of proposal, grants officers should use the most efficient 
method for doing so--e.g., for a program that has a program 
announcement and applications using the standard application form (SF-
424 \5\), the program announcement should include the texts of the 
required assurances and representations and clearly state that the 
applicant's electronic signature of the SF-424 will serve to affirm its 
agreement with each representation or assurance.

    \5\ For copies of Standard Forms listed in this part, contact 
regional grants administration offices of the Office of Naval 
Research. Addresses for the offices are listed in the ``Federal 
Directory of Contract Administration Services (CAS) Components,'' 
which may be accessed through the Defense Contract Management Agency 
homepage at: http://www.dcma.mil.

0
30. Section 22.520 is amended by:
0
a. In paragraph (d)(2):
0
 i. Removing ``Director of Defense Research and Engineering'' and 
adding ``Assistant Secretary of Defense for Research and Engineering'' 
in its place.
0
ii. Removing ``Director for Basic Sciences, ODUSD(LABS)'' and adding 
``Director for Basic Research, OASD(R&E)'' in its place.
0
b. Revising paragraph (e)(1).
0
c. In paragraph (e)(5) introductory text, removing ``on the EPLS'' and 
adding ``in SAM Exclusions'' in its place.
0
d. In paragraph (e)(5)(i):
0
i. Removing ``check the EPLS'' and adding ``check SAM Exclusions'' in 
its place.
0
ii. Removing ``an institution's EPLS listing'' and adding ``an 
institution's SAM Exclusions listing'' in its place.
0
e. In paragraph (e)(5)(iii)(A), removing ``removed from the EPLS'' and 
adding ``removed from SAM Exclusions'' in its place.
    The revision reads as follows:


Sec.  22.520  Campus access for military recruiting and Reserve Officer 
Training Corps (ROTC).

* * * * *
    (e) Grants officers' responsibility. (1) A grants officer shall not 
award any grant or cooperative agreement to an institution of higher 
education that has been identified pursuant to the procedures of 32 CFR 
part 216. Such institutions are identified as being ineligible in the 
Exclusions area of the System for Award Management (SAM Exclusions). 
The exclusion types in SAM Exclusions broadly indicate the nature of an 
institution's ineligibility, as well as the effect of the exclusion, 
and the Additional Comments field may have further details about the 
exclusion. Note that OMB guidance in 2 CFR 180.425 and 180.430, as 
implemented by the Department of Defense at 2 CFR part 1125, require a 
grants officer to check the SAM Exclusions prior to determining that a 
recipient is qualified to receive an award.
* * * * *
0
31. Section 22.605 is amended by:
0
a. Revising the introductory text and paragraphs (a) and (b).
0
b. In paragraph (c)(2), redesignating footnote number 9 as footnote 
number 6 and revising newly redesignated footnote 6.
    The revisions read as follows:


Sec.  22.605  Grants officers' responsibilities.

    At the time of award, the grants officer is responsible for 
ensuring that:
    (a) The award:
    (1) Conforms to the award format specified in 2 CFR part 1120.
    (2) Includes appropriate general terms and conditions and any 
program-specific and award-specific terms and conditions needed to 
specify applicable administrative, national policy, and programmatic 
requirements. These requirements include:
    (i) Federal statutes or Executive orders that apply broadly to 
Federal or DoD grants and cooperative agreements; and
    (ii) Any requirements specific to the program, as prescribed in the 
program statute (see Sec.  22.210(a)(2)), or specific to the funding, 
as stated in pertinent Congressional appropriations (see Sec.  22.515).
    (b) Information about the award is reported to the Defense 
Assistance Award Data System (DAADS), in accordance with Subpart E of 
32 CFR part 21.
    (c) * * *
    (2) * * *

    \6\ See footnote 5 to Sec.  22.510(b).


Sec.  22.610   [Removed]

0
32. Section 22.610 is removed.


Sec.  22.700   [Amended]

0
33. Section 22.700 is amended by removing ``32 CFR parts 32, 33, and 
34'' and adding ``32 CFR part 34 and subchapter D of 2 CFR chapter XI'' 
in its place.
0
34. Section 22.710 is amended by:
0
a. In the introductory text, redesignating footnote number 10 as 
footnote number 7 and revising newly redesignated footnote 7;
0
b. In paragraph (a)(1):
0
i. Removing ``the university cost principles in OMB Circular A-21'' and 
adding ``the cost principles in subpart E of 2 CFR part 200'' in its 
place;
0
ii. Removing footnote 11;
0
 c. In paragraph (a)(2):
0
i. Removing ``OMB Circular A-122'' and adding ``subpart E of 2 CFR part 
200'' in its place;
0
ii. Removing footnote 12;
0
d. In paragraph (b) introductory text, removing ``Defense Contract 
Management Command'' and adding ``Defense Contract Management Agency'' 
in its place;
0
e. In paragraph (b)(2), removing ``Attachment C of OMB Circular A-122'' 
and adding ``appendix VIII to 2 CFR part 200'' in its place; and
0
f. In paragraph (b)(3), removing ``OMB Circular A-122'' and adding 
``subpart E of 2 CFR part 200'' in its place.
    The revision reads as follows:


Sec.  22.710  Assignment of grants administration offices.

* * * * *

    \7\ The ``Federal Directory of Contract Administration Services 
(CAS) Components'' may be accessed through the Defense Contract 
Management Agency homepage at http://www.dcma.mil.
* * * * *
0
35. Section 22.715 is amended by:
0
a. In paragraph (a)(1) and paragraph (a)(3) introductory text, removing 
``OMB Circular A-133'' and adding ``subpart F of 2 CFR part 200'' in 
its place.
0
b. In paragraph (a)(3)(iii):
0
i. Removing ``OMB Circular A-133, as implemented at 32 CFR 32.26 and 
33.26'' and adding ``subpart F of 2 CFR part 200, as implemented at 
subpart E of 2 CFR part 1128'' in its place.

[[Page 78449]]

0
ii. Removing ``400 Army-Navy Drive, Arlington, VA 22202'' and adding 
``4800 Mark Center Drive, Alexandria, VA 22350-1500'' in its place.
0
c. In paragraph (a)(4):
0
i. Removing ``DoD Directive 7640.2'' and adding ``DoD Instruction 
7640.02'' in its place.
0
ii. Removing ``DoD Directive 7600.10'' and adding ``DoD Instruction 
7600.10'' in its place.
0
iii. Redesignating footnote numbers 13 and 14 as footnote numbers 8 and 
9, respectively, and revising newly redesignated footnote 9.


Sec.  22.715  Grants administration office functions.

* * * * *
    (a) * * *
    (4) * * *

    \9\ See footnote 8 to this section.
* * * * *
0
36. Section 22.805 is amended by revising the introductory text and 
paragraph (a) to read as follows:


Sec.  22.805  Post-award requirements in other parts.

    Grants officers responsible for post-award administration of grants 
and cooperative agreements shall administer such awards in accordance 
with the following parts of the DoDGARs, as supplemented by this 
subpart:
    (a) Awards to domestic recipients. Standard administrative 
requirements for grants and cooperative agreements with domestic 
recipients are specified in other parts of the DoDGARs, as follows:
    (1) For awards to domestic institutions of higher education, 
nonprofit organizations, States, local governments, and Indian tribes, 
requirements are specified in subchapter D of 2 CFR chapter XI.
    (2) For awards to domestic for-profit organizations, requirements 
are specified in 32 CFR part 34.
* * * * *
0
37. Section 22.810 is amended by:
0
a. Revising paragraphs (b)(1) and (2).
0
 b. Removing and reserving paragraph (c)(1).
0
c. In paragraph (c)(3)(i), redesignating footnote number 15 as footnote 
number 10 and revising newly redesignated footnote 10.
0
d. In paragraph (c)(3)(iii), removing ``ensure that the recipients' 
Taxpayer Identification Number (TIN)'' and adding ``ensure that, for 
recipients not required to register in the System for Award Management, 
the recipients' Taxpayer Identification Number (TIN)'' in its place.
    The revisions read as follows:


Sec.  22.810  Payments.

* * * * *
    (b) Policy. (1) It is Governmentwide policy to minimize the time 
elapsing between any payment of funds to a recipient and the 
recipient's disbursement of the funds for program purposes.
    (2) It also is a Governmentwide requirement to use electronic funds 
transfer (EFT) in the payment of any grant unless the recipient has 
obtained a waiver in accordance with Department of the Treasury 
regulations at 31 CFR part 208. As a matter of DoD policy, this 
requirement applies to cooperative agreements, as well as grants. 
Within the Department of Defense, the Defense Finance and Accounting 
Service implements this EFT requirement, and grants officers have 
collateral responsibilities at the time of award, as described in Sec.  
22.605(c), and in postaward administration, as described in paragraph 
(c)(3)(iv) of this section.
* * * * *
    (c) * * *
    (3) * * *
    (i) * * *

    \10\ See footnote 8 to Sec.  22.715(a)(4).
* * * * *
0
38. Section 22.825 is amended by:
0
a. Revising paragraph (a).
0
b. In paragraph (b)(2)(ii), removing ``OMB Circular A-133, where that 
Circular is applicable'' and adding ``OMB guidance in subpart F of 2 
CFR part 200, where that guidance is applicable'' in its place.
    The revision reads as follows:


Sec.  22.825  Closeout audits.

    (a) Purpose. This section establishes DoD policy for obtaining 
audits at closeout of individual grants and cooperative agreements.
* * * * *

APPENDIX B TO PART 22--[REMOVED]

0
39. Appendix B to part 22 is removed.

APPENDIX C TO PART 22--[REMOVED]

0
40. Appendix C to part 22 is removed.

PART 32--[REMOVED]

0
41. Under the authority of 5 U.S.C. 301 and 10 U.S.C. 113, part 32 is 
removed.

PART 33--[REMOVED]

0
42. Under the authority of 5 U.S.C. 301 and 10 U.S.C. 113, part 33 is 
removed.

PART 34--[Amended]

0
43. The authority citation for part 34 continues to read as follows:

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.


Sec.  34.1  [Amended]

0
44. Section 34.1 is amended in paragraph (b)(2)(ii) by removing 
``(e.g., 32 CFR part 33 specifies requirements for subrecipients that 
are States or local governments, and 32 CFR part 32 contains 
requirements for universities or other nonprofit organizations)''.
0
45. Section 34.2 is amended by revising the definition of ``Small 
award'' to read as follows:


Sec.  34.2  Definitions.

* * * * *
    Small award. See the definition for this term in 2 CFR part 1108.
* * * * *


Sec.  34.3  [Amended]

0
46. Section 34.3 is amended in paragraph (c) by removing ``Director, 
Defense Research and Engineering'' and adding ``Assistant Secretary of 
Defense for Research and Engineering'' in its place.
0
47. Section 34.12 is amended in paragraph (d) by revising footnote 1 to 
read as follows:


Sec.  34.12  Payment.

* * * * *
    (d) * * *

    \1\ For copies of Standard Forms listed in this part, contact 
regional grants administration offices of the Office of Naval 
Research. Addresses for the offices are listed in the ``Federal 
Directory of Contract Administration Services (CAS) Components,'' 
which is available through the ``CAS Directory'' link at the Defense 
Contract Management Agency homepage (http://www.dcma.mil).

* * * * *


Sec.  34.15  [Amended]

0
48. Section 34.15 is amended in paragraph (c)(3)(i) by removing 
``$100,000'' and adding ``the simplified acquisition threshold'' in its 
place.


Sec.  34.16  [Amended]

0
49. Section 34.16 is amended by:
0
a. In paragraph (a), removing ``$500,000'' and adding ``$750,000'' in 
its place; and
0
b. In paragraph (d)(2)(ii):
0
i. In the second sentence, removing ``Defense Contract Management 
Command (DCMC)'' and adding ``Defense Contract Management Agency 
(DCMA)'' in its place; and
0
ii. In the third sentence, removing ``DCMC'' and adding ``DCMA'' in its 
place.

[[Page 78450]]

0
50. Section 34.17 is amended by revising paragraph (b) to read as 
follows:


Sec.  34.17  Allowable costs.

* * * * *
    (b) Other types of organizations. Allowability of costs incurred by 
other types of organizations that may be subrecipients under a prime 
award to a for-profit organization is determined as follows:
    (1) Institutions of higher education, nonprofit organizations, 
States, local governments, and Indian tribes. Allowability is 
determined in accordance with the cost principles in subpart E of OMB 
guidance in 2 CFR part 200. Note that 2 CFR 200.401(c) provides that a 
nonprofit organization listed in appendix VIII to 2 CFR part 200 is 
subject to the FAR and DFARS cost principles specified in paragraph 
(a)(1) of this section for for-profit organizations.
    (2) Hospitals. Allowability is determined in accordance with the 
cost principles identified in appendix IX to 2 CFR part 200 (currently 
45 CFR part 75).


Sec.  34.41  [Amended]

0
51. Section 34.41 is amended in the introductory text by removing ``32 
CFR 32.51 and 32.52'' and adding ``subparts A and B of 2 CFR part 
1134'' in its place.
0
52. Appendix A to part 34 is amended by:
0
a. In paragraph 2, removing ``40 U.S.C. 276c'' and adding ``40 U.S.C. 
3145'' in its place.
0
 b. In paragraph 3, removing ``40 U.S.C. 327-333'' in both places it 
appears and adding ``40 U.S.C., chapter 37'' in their places.
0
c. In paragraph 5, removing ``$100,000'' and adding ``$150,000'' in its 
place.
0
d. Revising paragraph 7.
0
e. Adding paragraphs 8 through 10.
    The revision and additions read as follows:

Appendix A to Part 34--Contract Provisions

* * * * *
    7. Debarment and Suspension (E.O.s 12549 and 12689)--A contract 
award with an amount expected to equal or exceed $25,000 and certain 
other contract awards (see 2 CFR 1125.220, which implements OMB 
guidance at 2 CFR 180.220) shall not be made to parties identified 
in the Exclusions area of the System for Award Management (SAM 
Exclusions) as being currently debarred, suspended, or otherwise 
excluded. This restriction is in accordance with the DoD adoption at 
2 CFR part 1125 of the OMB guidance implementing E.O.s 12549 (3 CFR, 
1986 Comp., p. 189) and 12689 (3 CFR, 1989 Comp., p. 235), 
``Debarment and Suspension.''
    8. Wage Rate Requirements (Construction), formerly the Davis 
Bacon Act. When required by Federal program legislation, you must 
take the following actions with respect to each construction 
contract for more than $2,000 to be awarded using funding provided 
under this award:
    a. Place in the solicitation under which the contract will be 
awarded a copy of the current prevailing wage determination issued 
by the Department of Labor;
    b. Condition the decision to award the contract upon the 
contractor's acceptance of that prevailing wage determination;
    c. Include in the contract the clauses specified at 29 CFR 
5.5(a) in Department of Labor regulations (29 CFR part 5, ``Labor 
Standards Provisions Applicable to Contracts Governing Federally 
Financed and Assisted Construction'') to require the contractor's 
compliance with the Wage Rate Requirements (Construction), as 
amended (40 U.S.C. 3141-44, 3146, and 3147); and
    d. Report all suspected or reported violations to the award 
administration office identified in this award.
    9. Fly America requirements. In each contract under which funds 
provided under this award might be used to participate in costs of 
international air travel or transportation for people or property, 
you must include a clause to require the contractor to:
    a. Comply with the International Air Transportation Fair 
Competitive Practices Act of 1974 (49 U.S.C. 40118, also known as 
the ``Fly America'' Act), as implemented by the General Services 
Administration at 41 CFR 301-10.131 through 301-10.143, which 
provides that U.S Government financed international air travel and 
transportation of personal effects or property must use a U.S. Flag 
air carrier or be performed under a cost sharing arrangement with a 
U.S. carrier, if such service is available; and
    b. Include the requirements of the Fly America Act in all 
subcontracts that might involve international air transportation.
    10. Cargo preference for United States flag vessels. In each 
contract under which equipment, material, or commodities may be 
shipped by oceangoing vessels, you must include the clause specified 
in Department of Transportation regulations at 46 CFR 381.7(b) to 
require that at least 50 percent of equipment, materials or 
commodities purchased or otherwise obtained with Federal funds under 
this award, and transported by ocean vessel, be transported on 
privately owned U.S. flag commercial vessels, if available.

PART 37 [Amended]

0
53. The authority citation for part 37 continues to read as follows:

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

0
54. Section 37.130 is amended by revising paragraph (c) to read as 
follows:


Sec.  37.130  Which other parts of the DoD Grant and Agreement 
Regulations apply to TIAs?

* * * * *
    (c) Portions of other DoDGARs parts apply to TIAs only as cited by 
reference in this part.


Sec.  37.225  [Amended]

0
55. Section 37.225 is amended in the introductory text by removing ``In 
accordance with Sec.  37.1030, you will report your answers to these 
questions to help the DoD measure the Department-wide benefits of using 
TIAs and meet requirements to report to the Congress.'' and adding ``In 
accordance with Sec.  37.1020, you must document your answers to these 
questions in the award file.'' in its place.
0
56. Section 37.620 is revised to read as follows:


Sec.  37.620  What financial management standards do I include for 
participants that are nonprofit?

    So as not to force system changes for any State, local government, 
institution of higher education, or other nonprofit organization, your 
expenditure-based TIA's requirements for the financial management 
system of any nonprofit participant are the same as those that apply to 
the participant's other Federal assistance awards.
0
57. Section 37.635 is revised to read as follows:


Sec.  37.635  What cost principles do I require a nonprofit participant 
to use?

    So as not to force financial system changes for any nonprofit 
participant, your expenditure-based TIA will provide that costs to be 
charged to the research project by any nonprofit participant must be 
determined to be allowable in accordance with:
    (a) Subpart E of OMB guidance in 2 CFR part 200, if the participant 
is a State, local government, Indian tribe, institution of higher 
education, or nonprofit organization. In conformance with 2 CFR 
200.401(c) of that OMB guidance, a nonprofit organization listed in 
appendix VIII to 2 CFR part 200 is subject to the cost principles in 
the Federal Acquisition Regulation (48 CFR subpart 31.2) and Defense 
Federal Acquisition Regulation Supplement (48 CFR subpart 231.2).
    (b) The cost principles identified in appendix IX to the OMB 
guidance in 2 CFR part 200 (see 45 CFR part 75), if the participant is 
a hospital.


Sec.  37.645  [Amended]

0
58. Section 37.645 is amended in paragraph (b)(1) by removing 
``$500,000'' and adding ``$750,000'' in its place.


Sec.  37.650   [Amended]

0
59. Section 37.650 is amended in paragraph (c) by removing ``400 Army-

[[Page 78451]]

Navy Drive, Arlington, VA 22202'' and adding ``4800 Mark Center Drive, 
Alexandria, VA 22350-1500'' in its place.


Sec.  37.660  [Amended]

0
60. Section 37.660 is amended by redesignating footnote number 4 as 
footnote number 2.
0
61. Section 37.665 is revised to read as follows:


Sec.  37.665  Must I require nonprofit participants to have periodic 
audits?

    Yes, expenditure-based TIAs are assistance instruments subject to 
the Single Audit Act (31 U.S.C. 7501-7507), so nonprofit participants 
are subject to their usual requirements under that Act, as implemented 
by subpart F of 2 CFR part 200. Specifically, the requirements are the 
same as those in subpart E of 2 CFR part 1128 for grants and 
cooperative agreements to institutions of higher education, nonprofit 
organizations, States, local governments, and Indian tribes. Note that 
those requirements also apply to Federally Funded Research and 
Development Centers (FFRDCs) and other Government-owned, Contractor-
Operated (GOCO) facilities administered by nonprofit organizations, 
because nonprofit FFRDCs and GOCOs are subject to the Single Audit Act.


Sec.  37.675  [Removed]

0
62. Section 37.675 is removed.


Sec.  37.680   [Removed]

0
63. Section 37.680 is removed.
0
64. Section 37.690 is revised to read as follows:


Sec.  37.690  How are nonprofit participants to manage real property 
and equipment?

    For nonprofit participants, your 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.
0
65. Section 37.695 is amended by:
0
a. Revising paragraph (b); and
0
b. Removing paragraph (c).
    The revision reads as follows:


Sec.  37.695  What are the requirements for Federally owned property?

* * * * *
    (b) The requirements that apply to the participant's other Federal 
awards, if it is an entity other than a for-profit firm. If the other 
Federal awards of a participant that is a GOCO or FFRDC administered by 
a nonprofit organization are procurement contracts, it is appropriate 
for you to specify the same property standards that apply to those 
Federal procurement contracts.
0
66. Section 37.710 is amended by revising paragraph (a) to read as 
follows:


Sec.  37.710  What standards do I include for purchasing systems of 
nonprofit organizations?

    (a) So as not to force system changes for any nonprofit 
participant, your expenditure-based TIA will provide that each 
nonprofit participant's purchasing system comply with standards that 
conform as much as practicable with requirements that apply to the 
participant's other Federal awards.
* * * * *


Sec.  37.875   [Amended]

0
67. Section 37.875 is amended by redesignating footnote number 6 as 
footnote number 3.
0
68. Section 37.880 is revised to read as follows:


Sec.  37.880  What requirements must I include for periodic reports on 
program and business status?

    Your TIA must include requirements that, as a minimum, include 
periodic reports addressing program and, if it is an expenditure-based 
award, business status. You must require submission of the reports at 
least annually, and you 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.  
37.810(a)). The requirements for the content of the reports are as 
follows:
    (a) The program portions of the reports must address progress 
toward achieving program performance goals, including current issues, 
problems, or developments.
    (b) The business 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. You 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 you, after consulting with the program official, judge that 
those additional details are needed for good stewardship.
0
69. Section 37.890 is amended by redesignating footnote number 7 as 
footnote number 4 and revising newly redesignated footnote 4 to read as 
follows:


Sec.  37.890  Must I require a final performance report?

* * * * *

    \4\ See footnote 3 to Sec.  37.875(b)(1).


Sec.  37.895  [Amended]

0
70. Section 37.895 is amended by redesignating footnote number 8 as 
footnote number 5.
0
71. Section 37.920 is revised to read as follows:


Sec.  37.920  What requirement for access to a nonprofit participant's 
records do I include in a TIA?

    Your TIA must include for any nonprofit participant, including any 
FFRDC or GOCO administered by a nonprofit organization, the standard 
access-to-records requirement that subpart B of 2 CFR part 1136 
specifies in Section F of OAR Article II (the standard wording for 
Section F of OAR Article II is provided in appendix B to 2 CFR part 
1136).


Sec.  37.1000  [Amended]

0
72. Section 37.1000 is amended in paragraph (c) by removing 
``Sec. Sec.  37.1025 through 37.1035'' and adding ``Sec.  37.1025'' in 
its place.


Sec.  37.1010  [Amended]

0
73. Section 37.1010 is amended in paragraph (l) by removing ``and Sec.  
37.680.''


Sec.  37.1030  [Removed]

0
74. Section 37.1030 is removed.


Sec.  37.1035  [Removed]

0
75. Section 37.1035 is removed.


Sec.  37.1040   [Removed]

0
76. Section 37.1040 is removed.


Sec.  37.1100  [Amended]

0
77. Section 37.1100 is amended by removing paragraph (g).
0
78. Appendix D to part 37 is amended by revising Sections B and C to 
read as follows:

Appendix D to Part 37--What Common National Policy Requirements May 
Apply and Need to be Included in TIAS?

* * * * *

B. Assurances That Apply to All TIAs

    DoD policy is to use a certification, as described in the 
preceding paragraph, only for a national policy requirement that 
specifically requires one. The usual approach to communicating other 
national policy

[[Page 78452]]

requirements to recipients is to incorporate them as award terms or 
conditions, or assurances. Part 1122 of 2 CFR lists national policy 
requirements that commonly apply to DoD grants and cooperative 
agreements. It also has standard wording of general terms and 
conditions to incorporate the requirements in award documents. Of 
those requirements, the following six apply to all TIAs. (Note that 
TIAs must generally use the standard wording in 2 CFR part 1122 for 
the terms and conditions of these six requirements, but not the 
standard format.)
    1. Requirements concerning debarment and suspension in the OMB 
guidance in 2 CFR part 180, as implemented by the DoD at 2 CFR part 
1125. The requirements apply to all nonprocurement transactions.
    2. Requirements concerning drug-free workplace in the 
Governmentwide common rule that the DoD has codified at 32 CFR part 
26. The requirements apply to all financial assistance.
    3. 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 DoD regulations at 32 CFR 
part 195. These apply to all financial assistance. They require 
recipients to flow down the prohibitions to any subrecipients 
performing a part of the substantive research program (as opposed to 
suppliers from whom recipients purchase goods or services).
    4. Prohibitions on discrimination on the basis of age, in the 
Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.). They apply 
to all financial assistance and require flow down to subrecipients, 
as implemented by Department of Health and Human Services 
regulations at 45 CFR part 90.
    5. 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 Department of Justice regulations at 28 CFR part 41 
and DoD regulations at 32 CFR part 56. They apply to all financial 
assistance recipients and require flow down to subrecipients.
    6. 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), commonly referred to as the ``Fly America 
Act,'' and implementing regulations at 41 CFR 301-10.131 through 
301-10.143, which apply to uses of U.S. Government funds.

C. Other National Policy Requirements

    Additional national policy 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, as amended, on discrimination on the basis of race, color, 
religion, sex, sexual orientation, gender identity, or national 
origin. You must include the clause provided in 41 CFR 60-1.4(b) in 
any ``federally assisted construction contract'' (as defined in 41 
CFR 60-1.3) under this award unless provisions of 41 CFR part 60-1 
exempt the contract from the requirement. The clause will require 
the contractor to comply with equal opportunity requirements in 41 
CFR chapter 60.
    2. If the research involves human subjects or animals, it is 
subject to the applicable requirements identified in appendix C of 2 
CFR part 1122.
    3. If the research involves actions that may affect the human 
environment, it is subject to the requirements of the National 
Environmental Policy Act in paragraph A.4.a of NP Article II, which 
is found in appendix B of 2 CFR part 1122. It also may be subject to 
one or more of the other requirements in paragraphs A.4.b through 
A.4.f, A.5, and A.6 of NP Article II, which concern flood-prone 
areas, coastal zones, coastal barriers, wild and scenic rivers, 
underground sources of drinking water, endangered species, and 
marine mammal protection.
    4. If the project may impact any property listed or eligible for 
listing on the National Register of Historic Places, it is subject 
to the National Historic Preservation Act of 1966 (54 U.S.C. 306108) 
as specified in paragraph 11.a of NP Article IV, which is found in 
appendix D of 2 CFR part 1122.
    5. If the project has potential under this award for irreparable 
loss or destruction of significant scientific, prehistorical, 
historical, or archeological data, it is subject to the 
Archaeological and Historic Preservation Act of 1974 (54 U.S.C. 
Chapter 3125) as specified in paragraph 11.b of NP Article IV, which 
is found in appendix D of 2 CFR part 1122.
0
79. Appendix E to part 37 is revised to read as follows:

Appendix E To Part 37--What Provisions May a Participant Need to 
Include When Purchasing Goods or Services Under a TIA?

    A. As discussed in Sec.  37.705, you must inform recipients of 
any national policy requirements that flow down to their purchases 
of goods or services (e.g., supplies or equipment) under their TIAs. 
Note that purchases of goods or services differ from subawards, 
which are for substantive research program performance.
    B. Appendix A to 32 CFR part 34 lists ten national policy 
requirements that commonly apply to firms' purchases under grants or 
cooperative agreements. Of those ten, two that apply to all 
recipients' purchases under TIAs 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 32 CFR part 28, the DoD's 
codification of the Governmentwide common rule implementing this 
amendment.
    2. Debarment and suspension. A contract award with an amount 
expected to equal or exceed $25,000 and certain other contract 
awards (see 2 CFR 1125.220, which implements OMB guidance at 2 CFR 
180.220) shall not be made to parties identified in the Exclusions 
area of the System for Award Management (SAM Exclusions) as being 
currently debarred, suspended, or otherwise excluded. This 
restriction is in accordance with the DoD adoption at 2 CFR part 
1125 of the OMB guidance implementing E.O.s 12549 (3 CFR, 1986 
Comp., p. 189) and 12689 (3 CFR, 1989 Comp., p. 235), ``Debarment 
and Suspension.''
    C. The following requirements apply to recipient's purchases 
under TIAs in the situations specified below:
    1. Equal Employment Opportunity. Although construction work 
should happen rarely under a TIA, the agreements officer in that 
case should inform the recipient that Department of Labor 
regulations at 41 CFR 60-1.4(b) prescribe a clause that must be 
incorporated into recipients' and subrecipients' construction 
contracts under their awards and subawards, respectively. Further 
details are provided in appendix B to part 22 of the DoDGARs (32 CFR 
part 22), in section b. under the heading ``Nondiscrimination.'' any 
``federally assisted construction contract'' (as defined in 41 CFR 
60-1.3) under the award unless provisions of 41 CFR part 60-1 exempt 
the contract from the requirement. The clause will require the 
contractor to comply with equal opportunity requirements in 41 CFR 
chapter 60.
    2. Wage Rate Requirements (Construction), formerly the Davis 
Bacon Act. When required by Federal program legislation, you must 
take the following actions with respect to each construction 
contract for more than $2,000 to be awarded using funding provided 
under this award:
    a. Place in the solicitation under which the contract will be 
awarded a copy of the current prevailing wage determination issued 
by the Department of Labor;
    b. Condition the decision to award the contract upon the 
contractor's acceptance of that prevailing wage determination;
    c. Include in the contract the clauses specified at 29 CFR 
5.5(a) in Department of Labor regulations (29 CFR part 5, ``Labor 
Standards Provisions Applicable to Contracts Governing Federally 
Financed and Assisted Construction'') to require the contractor's 
compliance with the Wage Rate Requirements (Construction), as 
amended (40 U.S.C. 3141-44, 3146, and 3147); and
    d. Report all suspected or reported violations to the award 
administration office identified in this award.
    3. Fly America requirements. In each contract under which funds 
provided under this award might be used to participate in costs of 
international air travel or transportation for people or property, 
you must include a clause to require the contractor to:
    a. Comply with the International Air Transportation Fair 
Competitive Practices Act of 1974 (49 U.S.C. 40118, also known as 
the ``Fly America'' Act), as implemented by the General Services 
Administration at 41 CFR 301-10.131 through 301-10.143, which 
provides that U.S Government financed international air travel and 
transportation of personal effects or property must use a U.S. Flag 
air carrier or be performed under a cost sharing arrangement with a 
U.S. carrier, if such service is available; and
    b. Include the requirements of the Fly America Act in all 
subcontracts that might involve international air transportation.

[[Page 78453]]

    4. Cargo preference for United States flag vessels. In each 
contract under which equipment, material, or commodities may be 
shipped by oceangoing vessels, you must include the clause specified 
in Department of Transportation regulations at 46 CFR 381.7(b) to 
require that at least 50 percent of equipment, materials or 
commodities purchased or otherwise obtained with Federal funds under 
this award, and transported by ocean vessel, be transported on 
privately owned U.S. flag commercial vessels, if available.

    Dated: October 19, 2016.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2016-25717 Filed 11-4-16; 8:45 am]
 BILLING CODE 5001-06-P