[Federal Register Volume 91, Number 103 (Friday, May 29, 2026)]
[Proposed Rules]
[Pages 32198-32305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-10817]
[[Page 32197]]
Vol. 91
Friday,
No. 103
May 29, 2026
Part II
Office of Management and Budget et al.
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2 CFR Parts 1, 25, 170 et al.
Regulation for Federal Financial Assistance; Proposed Rule
Federal Register / Vol. 91, No. 103 / Friday, May 29, 2026 / Proposed
Rules
[[Page 32198]]
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OFFICE OF MANAGEMENT AND BUDGET
2 CFR Parts 1, 25, 170, 175, 176, 180, 182, 183, and 200
DEPARTMENT OF HEALTH AND HUMAN SERVICES
2 CFR Parts 300, 376, and 382
RIN 0991-AC35
DEPARTMENT OF AGRICULTURE
2 CFR Parts 400, 417, and 421
RIN 0505-AA20
DEPARTMENT OF STATE
2 CFR Parts 600 and 601
RIN 1400-AG22
AGENCY FOR INTERNATIONAL DEVELOPMENT
2 CFR Parts 700, 701, 780, and 782
RIN 0412-AB19
DEPARTMENT OF VETERANS AFFAIRS
2 CFR Parts 801 and 802
RIN 2900-AT02
DEPARTMENT OF ENERGY
2 CFR Parts 901, 902, and 910
RIN 1991-AC21
DEPARTMENT OF THE TREASURY
2 CFR Part 1000
RIN 1505-AC92
DEPARTMENT OF DEFENSE
2 CFR Parts 1104, 1120, 1122, 1125, and 1126
RIN 0790-AM03
DEPARTMENT OF TRANSPORTATION
2 CFR Parts 1200 and 1201
RIN 2105-AF44
DEPARTMENT OF COMMERCE
2 CFR Parts 1326, 1327, and 1329
RIN 0605-AA85
DEPARTMENT OF THE INTERIOR
2 CFR Parts 1400, 1401, and 1402
RIN 1090-AB34
ENVIRONMENTAL PROTECTION AGENCY
2 CFR Parts 1500, 1532, and 1536
RIN 2030-AB05
U.S. INTERNATIONAL DEVELOPMENT FINANCE CORPORATION
2 CFR Part 1600
RIN 3015-AA00
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
2 CFR Parts 1800, 1880, and 1882
RIN 2700-AE90
U.S. AGENCY FOR GLOBAL MEDIA
2 CFR Part 1900
RIN 3112-AA07
NUCLEAR REGULATORY COMMISSION
2 CFR Parts 2000 and 2001
RIN 3150-AL41
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
2 CFR Parts 2200, 2205, and 2245
RIN 3045-AA94
SOCIAL SECURITY ADMINISTRATION
2 CFR Parts 2300, 2336, and 2339
RIN 0960-AJ11
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
2 CFR Parts 2400, 2424, and 2429
RIN 2501-AE01
NATIONAL SCIENCE FOUNDATION
2 CFR Parts 2500 and 2520
RIN 3145-AA75
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
2 CFR Part 2600
RIN 3095-AC31
SMALL BUSINESS ADMINISTRATION
2 CFR Parts 2700 and 2701
RIN 3245-AI70
DEPARTMENT OF JUSTICE
2 CFR Parts 2800 and 2867
RIN 1105-AB81
DEPARTMENT OF LABOR
2 CFR Parts 2900 and 2998
RIN 1291-AA53
DEPARTMENT OF HOMELAND SECURITY
2 CFR Parts 3000, 3001 and 3002
RIN 1601-AB23
NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES
Institute of Museum and Library Services
2 CFR Parts 3185, 3186, and 3187
RIN 3137-AA31
NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES
National Endowment for the Arts
2 CFR Parts 3254, 3255, and 3256
RIN 3135-AA36
NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES
National Endowment for the Humanities
2 CFR Parts 3369, 3373, and 3374
RIN 3136-AA47
DEPARTMENT OF EDUCATION
2 CFR Parts 3474 and 3485
RIN 1801-AA30
EXPORT IMPORT BANK
2 CFR Part 3513
RIN 3048-AA03
EXECUTIVE OFFICE OF THE PRESIDENT
Office of National Drug Control Policy
2 CFR Part 3603
RIN 3201-AA03
PEACE CORPS
2 CFR Parts 3700 and 3701
RIN 0420-AA37
ELECTION ASSISTANCE COMMISSION
2 CFR Parts 5800 and 5801
RIN 3265-AA00
GULF COAST ECOSYSTEM RESTORATION COUNCIL
2 CFR Part 5900
RIN 3600-AA05
FEDERAL COMMUNICATIONS COMMISSION
2 CFR Part 6000
RIN 3060-AM35
CONSUMER PRODUCT SAFETY COMMISSION
2 CFR Part 6100
RIN 3041-AE26
DELTA REGIONAL AUTHORITY
2 CFR Part 6200
RIN 4718-AA00
APPRAISAL SUBCOMMITTEE OF THE FEDERAL FINANCIAL INSTITUTIONS
EXAMINATION COUNCIL
2 CFR Part 6300
RIN 3139-AA07
MARINE MAMMAL COMMISSION
2 CFR Part 6400
RIN 0415-AA00
MILLENNIUM CHALLENGE CORPORATION
2 CFR Part 6500
RIN 0414-AA00
NATIONAL CREDIT UNION ADMINISTRATION
2 CFR Part 6600
RIN 3133-AG07
Regulation for Federal Financial Assistance
AGENCY: Office of Federal Financial Management, Office of Management
and Budget; Department of Health And Human Services; Department of
Agriculture; Department of State;
[[Page 32199]]
Agency for International Development; Department of Veterans Affairs;
Department of Energy; Department of Treasury; Department of Defense;
Department of Transportation; Department of Commerce; Department of the
Interior; Environmental Protection Agency; U.S. International
Development Finance Corporation; National Aeronautics and Space
Administration; U.S. Agency for Global Media; Nuclear Regulatory
Commission; Corporation for National and Community Service; Social
Security Administration; Department of Housing and Urban Development;
National Science Foundation; National Archives and Records
Administration; Small Business Administration; Department of Justice;
Department of Labor; Department of Homeland Security; Institute of
Museum and Library Services; National Endowment for the Arts; National
Endowment for the Humanities; Department of Education; Export Import
Bank; Executive Office of the President, Office of National Drug
Control Policy; Peace Corps; Election Assistance Commission; Gulf Coast
Ecosystem Restoration Council; Federal Communications Commission;
Consumer Product Safety Commission; Delta Regional Authority; Appraisal
Subcommittee of the Federal Financial Institutions Examination Council;
Marine Mammal Commission; Millennium Challenge Corporation; National
Credit Union Administration.
ACTION: Proposed rule.
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SUMMARY: The Office of Management and Budget (OMB) proposes to revise
the Guidance for Federal Financial Assistance to improve government-
wide policies and requirements related to the management of grants,
cooperative agreements, and other forms of assistance. OMB is proposing
revisions that would improve transparency, accountability, and
oversight for Federal awards across the Federal Government. This
includes ensuring that American tax dollars are not wasted or misused,
activities performed under Federal awards are consistent with law and
policy, and recipients are held accountable when they fail to meet
relevant standards. The revisions also aim to ensure that basic
American principles of equality and equal opportunity are upheld
throughout all stages of the award making process and that unlawful
discrimination is no longer permitted. Proposed changes also include
providing further clarification on the regulatory status of the OMB
requirements and on the process for future updates to the government-
wide requirements. Finally, OMB also proposes changes to reduce
recipient burden. The listed Federal grant-making agencies propose
conforming changes to their respective adopting regulations, or, in the
case of some agencies and other entities, establishing new adopting
regulations or policies. The proposed changes reflect the
administration's commitment to transparency, accountability, and proper
oversight for the Federal grantmaking process. The proposed regulations
seek to ensure that American tax dollars are ultimately used to serve
the needs of the American public.
DATES: Comments are due on or before July 13, 2026. Late comments will
be considered only to the extent practicable.
ADDRESSES: Comments on this proposal must be submitted electronically
before the comment closing date to www.regulations.gov. In submitting
comments, please search for recent submissions by OMB to find docket
OMB-2026-0034, which includes the full text of the proposed revisions
and submit comments there. Please provide clarity as to the section of
the regulation that each comment is referencing by beginning each
comment with the relevant section number in brackets. For example; if
the comment is on 2 CFR 200.414, include the following before the
comment [200.414].
Public comments received by OMB and Federal agencies will be posted
at www.regulations.gov and be a matter of public record. Accordingly,
please do not include any confidential business information or personal
privacy information in your comments.
FOR FURTHER INFORMATION CONTACT: Andrew Reisig or Joel Savary at the
OMB Office of Federal Financial Management via email at
[email protected].
SUPPLEMENTARY INFORMATION:
I. Executive Summary
The Office of Management and Budget (OMB) proposes to revise
several parts of the OMB Guidance for Federal Financial Assistance
located in title 2 of the Code of Federal Regulations (CFR), subtitle
A, to improve and clarify government-wide policies and requirements
related to the management of Federal financial assistance including
grants and cooperative agreements. In 2 CFR subtitle B, the listed
Federal agencies also propose conforming changes to their respective
implementing regulations for the OMB policy requirements in subtitle A.
As explained in further detail below, OMB proposes revising 2 CFR for
reasons including to: (1) improve transparency, accountability, and
oversight for use of Federal taxpayer dollars; (2) clarify the status
of OMB's policies and requirements set forth in the 2 CFR regulatory
text as an OMB regulation; and (3) reduce recipient burden.
Transparency, Accountability, and Oversight. The overarching goal
of OMB's proposed revisions is to improve transparency, accountability,
and oversight for how Federal taxpayer dollars are used in the context
of Federal grantmaking.\1\ It is essential for the Federal Government
to provide more oversight over the design and implementation of Federal
programs to prevent wasteful spending and misuse or mismanagement of
Federal funds.
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\1\ Executive Order (E.O.) 14332, 90 FR 38929, ``Improving
Oversight of Federal Grantmaking'' (Aug. 7, 2025); White House Fact
Sheet of Aug. 7, 2025, ``President Donald J. Trump Stops Wasteful
Grantmaking;'' and White House Fact Sheet of Feb. 18, 2025,
``President Donald J. Trump Requires Transparency for the American
People About Wasteful Spending.''
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Although Federal spending through grants and other types of Federal
financial assistance has grown exponentially since the initial
establishment of OMB's policies in earlier Circulars and 2 CFR,
corresponding policies capable of ensuring transparency,
accountability, and oversight for this increased level of spending
remain deficient in the current regulatory text. As a result, Federal
financial assistance programs, and the activities performed under
Federal awards, have not always remained properly aligned with core
purposes authorized by law, nor served the needs of the American public
as intended.
This lack of transparency, accountability, and proper oversight
became increasingly clear between 2021 and 2024. Federal awards were
often used during those years to promote a ``woke'' policy agenda that
did not reflect the values of the vast majority of the American
public.\2\ For example, Federal programs and funding opportunities were
designed to advance unlawful identity-based ``Diversity, Equity, and
Inclusion'' (DEI) policies and preferences across the country.\3\ These
policies were inconsistent with basic American values and civil rights
laws, including the equal protection principles of the U.S.
Constitution.\4\
[[Page 32200]]
They were also misaligned in many cases with underlying public purposes
authorized by law.\5\ Collectively, these policies wasted a great
amount of taxpayer resources and caused great harm to public trust in
government.
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\2\ E.O. 14332, sec. 1.
\3\ See, e.g., David Ditch, Mike Gonzalez, Hans von Spakovsky
and Erin Dwinell, ``President Biden's `Equity Action Plans' Reveal
Radical, Divisive Agenda.'' Heritage Foundation Backgrounder No.
3710, May 25, 2022 (hereinafter ``Ditch I'').
\4\ E.O. 14151 of January 20, 2025, ``Ending Radical and
Wasteful Government DEI Programs and Preferencing;'' E.O. 14173 of
January 21, 2025, ``Ending Illegal Discrimination and Restoring
Merit-Based Opportunity;'' E.O. 14281 of April 23, 2025, ``Restoring
Equality of Opportunity and Meritocracy.''
\5\ E.O. 14332, sec. 1; see also, e.g., David Ditch, ``Funding
Leftism, Making Power Grabs: The Biden Administration's Bureaucratic
Radicalism.'' Heritage Foundation, Apr. 18, 2024 (hereinafter
``Ditch II'').
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The White House Fact Sheet of August 7, 2025, describes examples of
the types of wasteful spending that occurred as a result of such
policies. For example, Federal grants funded unlawful DEI practices,\6\
various anti-American ideologies in American education,\7\ non-
replicable and highly misleading studies,\8\ labs engaged in gain-of-
function research,\9\ and AI-powered social media censorship tools.\10\
More recently, another White House Fact Sheet of January 8, 2026
provided examples of the rampant and pervasive problem of fraud in the
United States, including under assistance programs in Minnesota.\11\
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\6\ E.O. 14332, sec. 1.
\7\ E.O. 14332, sec. 1.
\8\ E.O. 14303 of May 23, 2025, ``Restoring Gold Standard
Science.''
\9\ White House Fact Sheet of Aug. 7, 2025. See also E.O. 14292
of May 5, 2025, ``Improving the Safety and Security of Biological
Research;'' and White House Fact Sheet of May 5, 2025, ``President
Donald J. Trump Achieves Improved Safety and Security of Biological
Research.''
\10\ White House Fact Sheet of Aug. 7, 2025. See also E.O. 14149
of Jan. 20, 2025, ``Restoring Freedom of Speech and Ending Federal
Censorship;'' and E.O. 14319 of Jul. 23, 2025, ``Preventing `Woke
AI' in the Federal Government.''
\11\ White House Fact Sheet of Jan. 8, 2026, ``President Donald
J. Trump Establishes New Department of Justice Division for National
Fraud Enforcement.'' See also White House Fact Sheet of Jan. 2,
2026, ``Here's What the Trump Administration Is Doing to Crush
Minnesota's Fraud Epidemic;'' DOJ Press Release of Nov. 24, 2025,
``Feeding Our Future Defendant Sentenced to 10 Years in Prison.''
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Another example of wasteful spending is provided by a 2023 report
from Office of Inspector General for the Department of Homeland
Security (DHS). That report found that recipients of Federal awards
from the Federal Emergency Management Agency (FEMA) potentially misused
funds to provide services for illegal immigrants.\12\ Such potential
abuse of taxpayer funds highlights the need for proper oversight of
taxpayer dollars.
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\12\ DHS Office of Inspector General, ``FEMA Should Increase
Oversight to Prevent Misuse of Humanitarian Relief Funds,'' DHS OIG-
23-20.
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In another prominent example, prior to this administration, far-
left activists hijacked the critical work done by the U.S. President's
Emergency Plan for AIDS Relief (PEPFAR), which was established to
respond to the AIDS crisis in Africa. Due to wasteful spending, PEPFAR
became a left-wing foreign aid entitlement that attempted to promote
abortion and gender ideology. Additionally, an August 2025 report from
the Heritage Foundation noted that, according to the U.S. House Foreign
Affairs Committee, billions of dollars in overhead and program charges
flow to nongovernmental organizations (NGOs) and contractors in
Washington, DC rather than providing direct humanitarian aid; and
insufficient oversight has resulted in significant waste of taxpayer
resources.\13\
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\13\ Max Primorac, PEPFAR: From AIDS Relief to Leftwing Funding
Apparatus,'' Heritage Foundation, Aug. 11, 2025. Available at:
https://www.heritage.org/global-politics/report/pepfar-aids-relief-leftwing-funding-apparatus. See also Tim Meisburger. U.S. Foreign
Aid Used to Push Abortion, Gender Ideology Around the World.
Heritage Foundation. Jun. 8, 2023. Available at: https://www.heritage.org/global-politics/commentary/us-foreign-aid-used-push-abortion-gender-ideology-around-the-world.
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An additional example is provided by a 2024 report from the U.S.
Senate Committee on Commerce, Science, and Transportation regarding the
growing failure of objectivity at the National Science Foundation (NSF)
during the previous administration.\14\ That report found that out of a
sample of over three thousand grants, more than ten percent--totaling
over two billion dollars in Federal funding--went to ``questionable
projects that promoted diversity, equity, and inclusion (DEI) tenets or
pushed onto science neo-Marxist perspectives about enduring class
struggle.'' The report also found that, by 2024, over a quarter of new
grants made by NSF (27 percent) directed funding to DEI initiatives and
other far-left perspectives. This marked a huge proportional increase
over the course of only three years from the 0.29 percent of new grants
made by NSF with a similar focus in 2021.\15\ This is just a small
sample of many examples across the Federal Government of wasteful
spending and other misuse and mismanagement of Federal funds.
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\14\ U.S. Senate Committee on Commerce, Science, and
Transportation, ``D.E.I. Diversion. Extremism. Ideology. How the
Biden-Harris NSF Politicized Science.'' (2024). Available at https://www.commerce.senate.gov/services/files/4BD2D522-2092-4246-91A5-58EEF99750BC#.
\15\ Subsequent to this report, NSF took action during this
Administration to review its award portfolio and, to the extent
permitted by law, ensure alignment with Federal agency priorities.
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Scarce Federal taxpayer dollars should be directed exclusively to
achieving results for the American people. Wasteful and divisive
activities unrelated to core purposes of Federal grant programs should
not be subsidized with taxpayer dollars. Grantmaking practices
resulting in wasteful spending that became prevalent during the
previous administration can only be stopped through adherence to strong
internal controls at Federal agencies and enhanced oversight regarding
how Federal dollars are spent.
The Federal Government must provide more oversight and transparency
regarding how Federal funds are used in grantmaking to avoid the
recurrence of similar issues in the future. Under the proposal
described in this document, Federal agencies must return to designing
assistance programs and award activities to align with essential public
purposes authorized by law. Effective oversight also includes following
Executive Branch policies that eliminate various kinds of wasteful
spending that occurred in previous years, such as unlawful DEI mandates
and other unnecessary add-on activities that increase project costs and
complexity without serving the underlying public purpose of the
award.\16\ The proposed reforms are necessary to ensure greater
accountability for use of public funds, and that every taxpayer dollar
the Federal Government spends either improves American lives or
advances American interests.\17\
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\16\ See, e.g., E.O. 14332; and White House Fact Sheets of Aug.
7, 2025 and Feb. 18, 2025.
\17\ E.O. 14332, sec. 1.
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Clarification of status of regulatory text. A second objective of
this rulemaking is to clarify the status of the 2 CFR regulatory text
as an OMB regulation. The proposed revisions align with OMB's statutory
authority to provide overall direction and leadership to Federal
agencies on financial management matters by establishing financial
management policies and requirements. See 31 U.S.C. 503(a)(2).
Additional authorities for OMB's proposed revisions are set forth
below.
Reducing recipient burden. A third and final objective of this
rulemaking is to reduce recipient burden. For example, rather than
needing to focus extensive efforts and resources on DEI mandates or
other unnecessary add-on requirements frequently included in funding
opportunities in previous years, under the proposed version of the
regulation recipients will be able to restore focus on efficient
project delivery and actually achieving the basic public purposes of
support authorized in law.
OMB also proposes a number of additional revisions throughout
chapters I and II of subtitle A of 2 CFR.
[[Page 32201]]
OMB summarizes the proposed changes in this preamble. In proposing
changes, OMB aimed to maintain the existing structure of the 2 CFR
guidance consistent with earlier iterations, including, for example,
the structure of parts, subparts, and section numbering.
Plain Language Summary: A plain language summary of this rule may
be found at https://www.regulations.gov/.
II. Background and Regulatory History
The Office of Management and Budget (OMB) has assisted every modern
President in ensuring that the President's priorities, consistent with
applicable law, are appropriately accounted for in government-wide
grant management policies and agency grant-making decisions. In service
of that goal, in 1958, the Bureau of the Budget, OMB's predecessor,
first issued Circular A-21, ``Cost Principles for Educational
Institutions.'' In 1968, the Bureau of the Budget first issued Circular
A-87, ``Cost Principles for State, Local, and Indian Tribal
Governments.'' In 1976, OMB first issued both Circular A-110, ``Uniform
Administrative Requirements for Grants and Other Agreements with
Institutions of Higher Education, Hospitals and Other Non-Profit
Organizations;'' \18\ and Circular A-122, ``Cost Principles for Non-
Profit Organizations.'' All of these Circulars were repeatedly revised
in the decades following their initial issuance. Other now-superseded
OMB Circulars providing requirements related to grants administration
included Circular A-89, ``Federal Domestic Assistance Program
Information;'' and Circular A-133, ``Audits of States, Local
Governments, and Non-Profit Organizations.'' \19\
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\18\ See, e.g., OMB Circular A-110 (1993). The guidance in
Circular A-110 was relocated to 2 CFR part 215 in 2004. See 69 FR
26281 (May 11, 2004).
\19\ 79 FR 78589 (Dec. 26, 2013).
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Between 2012 and 2013, OMB worked with Federal agencies to revise
and streamline existing OMB guidance and Circulars related to grants
administration to develop the ``Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards'' (Uniform
Guidance) located in part 200 of 2 CFR. 79 FR 78589 (Dec. 26, 2013)
(2013 Final Guidance). See also 77 FR 11778 (Feb. 28, 2012) (2012
Advance Notice of Proposed Guidance); 78 FR 7282 (Feb. 1, 2013) (2013
Proposed Guidance). This effort was designed to assist programs in
delivering better outcomes on behalf of the American people while also
reducing administrative burden and the risk of fraud, waste, and abuse.
The Uniform Guidance, published in 2013, consolidated, streamlined, and
superseded requirements from several earlier OMB Circulars and guidance
documents related to grants management and implementation of the Single
Audit Act. At the time, OMB explained that the guidance was also
intended to improve clarity and accessibility of the requirements
across the Federal Government.
Federal award-making agencies implemented the Uniform Guidance
through an interim final rule, which became effective on December 26,
2014. 79 FR 75867 (Dec. 19, 2014) (2014 Federal Agency Interim Final
Rule). Following the 2014 Federal Agency Interim Final Rule, most
agencies did not reissue implementing regulations each time that the
government-wide policies and requirements contained in 2 CFR subtitle A
were updated by OMB following public notice and comment rulemaking
procedures.\20\ Instead, Federal agencies only occasionally issued or
reissued implementing regulations. This generally occurred when
specific changes were needed in the agency regulations. Because OMB has
exclusive statutory authority under 31 U.S.C. 503(a)(2) to set
government-wide financial management policies and requirements, the
public comment period for the government-wide policies and requirements
has been provided by OMB, not agencies.\21\
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\20\ See 2 CFR 1.230.
\21\ See, e.g., OMB Memorandum M-24-11, Section I
(``Implementation of Title 2 of the CFR'') (Apr. 4, 2024); and
Council on Federal Financial Assistance (COFFA) Memoranda for the
Federal Financial Assistance Community dated January 15, 2025 and
August 15, 2024.
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OMB periodically reviews the Uniform Guidance in accordance with 2
CFR 200.109. Following establishment of the Uniform Guidance in 2013,
OMB made further revisions to the regulatory text in 2020 (85 FR 49506
(Aug. 13, 2020)) and 2024 (89 FR 30046 (Apr. 22, 2024). The 2020
revisions addressed topics including program planning and design,
performance measurement to improve program goals and outcomes, sharing
lessons learned, and adopting promising practices. OMB again revised
the regulatory text in 2024. The objectives of the 2024 update included
incorporating statutory requirements and certain policy priorities of
the previous administration, reducing agency and recipient burden,
clarifying sections that recipients or agencies have interpreted in
different ways, rewriting certain sections of the regulatory text in
plainer language, improving flow, and resolving inconsistent use of
terms.
Since the inception of OMB financial management policies and
requirements under now-superseded Circulars,\22\ and the initial
establishment of the Uniform Guidance in 2013 based on policies
contained in the earlier Circulars, the landscape of Federal financial
assistance funding has changed markedly--including massive growth in
the scale and volume of assistance provided by the Federal Government,
increasing diversification in the purposes and types of assistance, and
increasing responsibilities for executive agency administration of
discretionary programs. A wide array of new Federal financial
assistance programs and statutory responsibilities for executive
agencies have been established by Congress, but the oversight and
stewardship of Federal financial assistance by executive branch
agencies has not always kept pace with or accounted for these changes.
Revisions to OMB's policies in 2 CFR part 200 are now warranted to
improve transparency, accountability, and efficiency of Federal
financial assistance programs.
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\22\ OMB's 2012 Advance Notice of Proposed Guidance explained
that, prior to establishment of 2 CFR part 200, government-wide
audit requirements were contained in OMB Circulars A-133 and A-50;
cost principles were contained in OMB Circulars A-21, A-87, and A-
122; and administrative requirements were contained in the
government-wide Common Rule implementing Circular A-102, Circular A-
110, and Circular A-89. See 77 FR 11778 (Feb. 28, 2012).
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III. Statutory Authority for OMB Regulation for Federal Financial
Assistance
The Deputy Director for Management of OMB is authorized under 31
U.S.C. 503 to, among other things, provide ``overall direction and
leadership to the executive branch on financial management matters by
establishing financial management policies and requirements.'' 31
U.S.C. 503(a)(2). The Director of OMB is authorized under 31 U.S.C.
6307 to ``issue supplementary interpretative guidelines to promote
consistent and efficient use of . . . grant agreements . . . and
cooperative agreements.''
OMB also relies on authorities including the Single Audit Act
Amendments of 1996 (Pub. L. 104-156, as amended, codified at 31 U.S.C.
7501-7507); the Federal Funding Accountability and Transparency Act of
2006 (FFATA or the Transparency Act) (Pub. L. 109-282), as amended; the
Digital Accountability and Transparency Act of 2014 (DATA Act of 2014)
(Pub. L. 113-101), as amended; the Federal Program Information Act
(Pub. L. 95-220 and Public Law 98-169, as amended, codified at 31
U.S.C. 6101-6106); the Federal Grant and
[[Page 32202]]
Cooperative Agreement Act of 1977 (Pub. L. 95-224, as amended, codified
at 31 U.S.C. 6301-6309); the Office of Federal Procurement Policy Act
(codified at 41 U.S.C. 1101-1131); the Budget and Accounting Procedures
Act of 1950, as amended (codified at 31 U.S.C. 1101-1126); the Chief
Financial Officers Act of 1990 (codified at 31 U.S.C. 503-504); the
Trafficking Victims Protection Act of 2000 (TVPA), as amended (codified
at 22 U.S.C. 7101-7115); and Executive Order 11541, ``Prescribing the
Duties of the Office of Management and Budget and the Domestic Policy
Council in the Executive Office of the President.''
IV. OMB Objectives for 2026 Proposed Revisions
OMB's objectives for the current proposed revisions to several
parts of subtitle A of 2 CFR include: (1) improving transparency,
accountability, and oversight for use of Federal funds; (2) clarifying
the status of the 2 CFR regulatory text as an OMB regulation; and (3)
reducing recipient burden. The proposed revisions generally support one
or more of these three objectives. The following is a high-level
overview of the proposed rule's three primary objectives, which is
followed by a section-by-section discussion of the proposed changes.
A. Objective 1: Improved Transparency, Accountability, and Oversight
OMB's first objective for the proposed revisions is to improve
transparency, accountability, and oversight for how Federal funds,
including taxpayer dollars, are used in the context of Federal
grantmaking.\23\
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\23\ See E.O. 14332 of Aug. 7, 2025, ``Improving Oversight of
Federal Grantmaking;'' White House Fact Sheet of Aug. 7, 2025,
``President Donald J. Trump Stops Wasteful Grantmaking;'' and White
House Fact Sheet of Feb. 18, 2025, ``President Donald J. Trump
Requires Transparency for the American People About Wasteful
Spending.''
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A.1. Background
For too long, the Federal Government has paid insufficient
attention to providing proper oversight for Federal financial
assistance programs. Deficiencies currently exist throughout the
lifecycle of grants--from program design, to award selection, to
project delivery and oversight--that impact the ability of the Federal
Government to prevent wasteful spending and efficiently implement
assistance programs in a manner consistent with law and the needs of
the American public. If finalized, OMB's proposed revisions in 2 CFR
will improve transparency, accountability, and oversight in the
government-wide system of grants administration, including by ensuring
that Federal award programs are properly aligned with law and policy
and that Federal agencies act as responsible stewards of taxpayer
dollars.
Recent years have provided evidence of the need for meaningful
reform in Federal grants administration. Instead of aiming to broadly
serve the needs of all Americans, in 2021 Federal agencies became
increasingly focused on using their award programs to serve a ``woke''
policy agenda that deliberately favored certain identity groups over
others. In seeking to advance this agenda, programs were often designed
to include a long list of ideological terms and conditions with little
connection to the core purpose of public support.\24\ These burdensome
conditions were consistently imposed through funding opportunities and
award agreements regardless of the objective of the assistance program.
This approach contributed to long delays in program implementation as
Federal agencies and recipients focused their efforts and taxpayer
resources on divisive policy requirements that were often unrelated to
or misaligned with core purposes of Federal grant programs. Various
commenters have remarked on how this approach resulted in waste,
inefficiency, long delays in project delivery, and reduced program
effectiveness across a range of activities receiving Federal
support.\25\ In one notorious example, under a $42.5 billion broadband
internet access program, the previous administration failed to connect
a single person to the internet over the course of three years--instead
focusing efforts and attention on imposing a long list of burdensome
policy requirements.\26\
---------------------------------------------------------------------------
\24\ See, e.g., Ditch II (including summary of the ``ideological
terms and conditions bundled into'' funding opportunities for
infrastructure grants by the previous administration.).
\25\ See, e.g., Ezra Klein, ``The Problem with Everything-Bagel
Liberalism,'' The New York Times, April 2, 2023 (describing the
tendency of the previous administration to structure Federal award
programs to address many unrelated policy goals at once, leading to
a dramatic increase in the cost and complexity of projects, long
delays in project delivery, and poor outcomes for American
taxpayers); Ditch II (explaining how the prior administration
structured award programs to simultaneously include a wide array of
``novel and contentious'' policy requirements, which diverted focus
from core public purposes authorized in law and caused ``tremendous
amounts of waste and inefficiency'').
\26\ ``Fact Sheet: Ending Biden's Broadband Burdens,'' National
Telecommunications and Information Administration (NTIA), June 6,
2025; John Thune, ``Broadband Blunders Leave Americans
Disconnected,'' Prairie Pioneer, Oct. 2, 2024; Donald Kimball, ``The
$42 billion internet program that has connected 0 people,''
Washington Policy Center, Sept. 18, 2024.
---------------------------------------------------------------------------
Among various other policy requirements, Federal programs were
frequently designed between 2021 and 2024 to include preferences and
selection criteria aimed at advancing identity-based DEI policies.\27\
This included using a variety of labels, such as promoting DEI, or
using other intentional proxies for race, sex, or sexual identity, to
give priority to certain favored identity characteristics and groups at
the expense of others in the distribution of Federal awards and
associated benefits.\28\ The concerted effort to impose unlawful DEI
policies on Federal award programs began on the very first day of the
previous administration through issuance of Executive Order 13985.\29\
That order instructed Federal agencies to set aside the decision-making
processes used in previous years--which generally aimed to ensure that
all Americans were treated equally--and to instead focus on remaking
the system of grants administration with divisive identity-based DEI
policies imposed throughout.\30\ Following issuance of Executive Order
13985 in January 2021, Federal agencies began attaching these policies
to all aspects of their award programs, including program design, award
selection, and award conditions imposed on recipients. This continued
for the duration of the previous administration.
---------------------------------------------------------------------------
\27\ See E.O. 14151 of Jan. 20, 2025, ``Ending Radical and
Wasteful Government DEI Programs and Preferencing;'' see also Ditch
I; Ditch II.
\28\ See Lisa Friedman, ``White House Takes Aim at Environmental
Racism, But Won't Mention Race,'' The New York Times, Feb. 15, 2022
(explaining how the previous administration used various intentional
proxies for race to continue directing Federal grants and associated
benefits to preferred racial-identity groups); see also Ditch I;
Ditch II.
\29\ E.O. 14151, sec. 1 (Discussing E.O. 13985); E.O. 13985 of
Jan. 20, 2021, ``Advancing Racial Equity and Support for Underserved
Communities Through the Federal Government,'' revoked by E.O. 14148
of Jan. 20, 2025.
\30\ E.O. 13985.
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Based on these efforts, Federal funding was used between 2021 and
2024 to advance unlawful DEI policies and preferences across the
country.\31\ These and other burdensome policies and requirements
imposed through Federal award programs diverted substantial amounts of
taxpayer funding away from traditional public purposes recognized in
law--such as transportation, infrastructure, scientific research,
public health, and other essential public goods that serve all
Americans--to instead support favored identity groups and left-wing
activists.\32\
[[Page 32203]]
As a result, Federal award programs that once had broad public support
became tied to a divisive policy agenda that unlawfully discriminated
against many of the Americans those programs were intended to serve.
These policies were inconsistent with basic American values and civil
rights laws, including the equal protection principles of the U.S.
Constitution.\33\ They were also misaligned with core purposes of
relevant assistance programs.\34\ All together, these policies wasted a
large amount of American taxpayer resources and significantly
undermined public trust in government across the country.
---------------------------------------------------------------------------
\31\ See, e.g., E.O. 14151, sec. 1.
\32\ See, e.g., U.S. Senate Committee on Commerce, Science, and
Transportation, ``D.E.I. Diversion. Extremism. Ideology. How the
Biden-Harris NSF Politicized Science,'' (2024) (finding an increase
of more than 9,000 percent between 2021 and 2024 of new NSF grants
focused on funding and promoting DEI initiatives); Ditch II
(explaining how the previous administration tied nearly every major
infrastructure program to DEI mandates and other add-on policy
requirements unrelated to, and often conflicting with, the core
objective of delivering needed infrastructure improvements across
the country in a timely and cost-efficient manner); Ditch I
(explaining how ``equity plans'' issued by Federal agencies
including the Departments of Commerce, Defense, Education, Energy,
Justice, and State, and the National Science Foundation, called for
``group-based preferential treatment in grant and research programs
and foreign aid''); U.S. DOT Press Release of Mar. 10, 2025, ``U.S.
Transportation Secretary Sean P. Duffy Rescinds Memos Issued By
Biden Administration That Injected Social Justice, Radical
Environmental Agenda Into Infrastructure Funding Decisions''
(summarizing DOT decision to rescind policies from the last
administration attempting ``to push a radical social and
environmental agenda'' with ``no basis in statute'' on Federal
infrastructure programs); Judge Glock, ``Biden's Progressive
Infrastructure Boondoggle,'' City Journal, Summer 2025 (explaining
that, in working to implement the Infrastructure Investment and Jobs
Act, many in the previous administration were not ``especially
interested in traditional infrastructure'' or advancing ``core
transportation goals--[instead] elevating a host of progressive
priorities in their place''); James B. Meigs, ``The Big Squeeze: How
Biden's Environmental Justice Agenda Hurts the Economy and the
Environment,'' Manhattan Institute, Sep. 7, 2023 (explaining how
``environmental justice'' (EJ) policies diverted ``spending and
administrative resources away from straightforward environmental
goals;'' made ``government programs less focused and less effective
across the board;'' and were ``particularly burdensome for
environmental and infrastructure projects,'' adding ``layers of
bureaucracy and red tape to existing programs'' and making
individual projects ``more time-consuming'' and ``more expensive''
to deliver); James B. Meigs, ``Biden's `Justice40' Is Bad
Environmental Policy,'' National Review, Nov. 9, 2023 (describing EJ
policies as diverting ``spending and administrative resources from
straightforward environmental goals, such as reducing pollution,''
and redirecting ``them toward vague social goals,'' such as
``satisfy[ing] community activists' demands.'').
\33\ E.O. 14151; E.O. 14173 of January 21, 2025, ``Ending
Illegal Discrimination and Restoring Merit-Based Opportunity;'' E.O.
14281 of April 23, 2025, ``Restoring Equality of Opportunity and
Meritocracy.''
\34\ E.O. 14332, sec. 1; see also Ditch II.
---------------------------------------------------------------------------
In January 2025, President Trump announced the end of the
discriminatory DEI policies and requirements that had extended through
virtually all aspects of the Federal Government in the prior
administration.\35\ In the grantmaking context, the President's
Executive orders released Federal programs from the divisive DEI
mandates and other burdensome policy requirements imposed in previous
years. Free of these constraints, Federal programs were able to restore
focus on efficiently supporting core program purposes and public goods
that serve all Americans, including ensuring that scarce public
resources are best used in support of the essential public goods at
which they aim.
---------------------------------------------------------------------------
\35\ See, e.g., E.O. 14151, sec. 1.
---------------------------------------------------------------------------
Among other things, the President's Executive orders announced that
the Federal Government would renew its commitment to serving every
American with equal dignity and respect; \36\ restore its policy of
prohibiting, rather than mandating, illegal discrimination; \37\ and
make necessary changes to ensure that the grant review process is no
longer used to undermine the interests of American taxpayers.\38\ A
subsequent Executive order in August 2025 emphasized that Federal
agencies must ensure that all Americans are treated equally and make
merit-based decisions related to the ability of an applicant or
recipient to produce actual results for the American taxpayer.\39\ On
July 29, 2025, the U.S. Department of Justice (DOJ) also issued new
government-wide guidance intended to ensure that recipients of Federal
funding do not engage in unlawful discrimination.\40\ On December 2,
2025, DOJ's Office of Legal Counsel (OLC) also released an opinion
finding that certain race-based grant programs administered by the
Department of Education violate the Fifth Amendment's equal-protection
component.\41\ That opinion explained that any ``allocation of benefits
and burdens based on a person's race is anathema to the U.S.
Constitution.'' \42\
---------------------------------------------------------------------------
\36\ Id.
\37\ E.O. 14281, sec. 1.
\38\ E.O. 14151.
\39\ E.O. 14332; White House Fact Sheet of Aug. 7, 2025.
\40\ DOJ Memorandum of July 29, 2025, ``Guidance for Recipients
of Federal Funding Regarding Unlawful Discrimination.''
\41\ Constitutionality of Race-Based Dep't of Educ. Programs,
2025 WL 4055305 (Dec. 2, 2025).
\42\ Slip Op. 2.
---------------------------------------------------------------------------
This rulemaking proposes to institutionalize needed reforms in the
Federal grantmaking process to address the unlawful discrimination and
other serious problems that occurred during the previous
administration. The basic values embedded in the Federal Government's
decision-making processes for grants management must be consistent with
law and designed to serve the public good of all Americans. OMB's 2 CFR
regulations are a key instrument for improving the standards,
processes, and requirements that apply to all Federal grant programs.
They are also an important tool for making needed reforms to the
organizational culture within Federal grantmaking agencies. These
agencies are entrusted to make discretionary decisions regarding the
use of many billions of dollars of precious taxpayer resources, and
must remain accountable to the American people when doing so.\43\
Consistent with policies in recent executive orders, taxpayer dollars
must be used to support essential public purposes authorized by law--
not wasted to promote divisive doctrines of the far left.\44\
---------------------------------------------------------------------------
\43\ E.O. 14151, sec. 1; E.O. 14332, sec. 1.
\44\ Id.
---------------------------------------------------------------------------
OMB and Federal agencies now propose to address the problems
summarized above as they impact Federal grantmaking. This includes
removal of any remaining pieces of the old discriminatory policies that
agencies may still apply to decision-making processes in the area of
grants management. It also includes ending government sponsorship of
gender ideology and other radical doctrines the previous administration
sought to impose across the country through Federal funding programs.
By renewing the Federal Government's commitment to basic American
values, and proposing other needed reforms to responsibly manage and
safeguard taxpayer funds used in grantmaking, OMB seeks to prevent the
types of unlawful discrimination, wasteful spending, and other
significant problems that arose in recent years from recurring in the
future. As explained in Executive Order 14332, the Federal Government
holds tax revenue in trust for the American people, and Federal
agencies should treat it accordingly.
A.2. Improved Transparency
Changes are needed to ensure improved transparency for how Federal
funds are used. American taxpayers have a right to know the projects
that their tax dollars are supporting and the entities to which those
dollars are flowing. They should also feel confident that recipients
and subrecipients of Federal awards are engaged in activities
consistent with the basic public purposes of support authorized by law,
that do not unlawfully discriminate against American citizens, that do
not harm the interests or reputation of the
[[Page 32204]]
Federal Government, and that do not threaten the national or economic
security of the United States. For example, Federal grant funds should
not be used to support recipients and subrecipients that work in
partnership with our foreign adversaries. Improved transparency will
shine a light on the full scope of Federal agency activities and the
network of recipients and subrecipients of Federal awards that the
American people are trusting to accomplish public purposes of support
on their behalf.
A 2023 report from the Government Accountability Office (GAO) also
emphasized the benefits of greater transparency in Federal grants
management.\45\ The report explained that ``greater transparency of how
the Federal Government spends its funds offers many potential
benefits,'' which may include ``enabling data-driven decisions about
how to use government resources, opportunities for improving the
efficiency and effectiveness of Federal spending, and improving
government's accountability to the public.'' OMB agrees that certain
reforms are needed to provide greater transparency and accountability
for use of public funds, and greater oversight to ensure that every
taxpayer dollar the Federal Government spends improves Americans' lives
or advances American interests.\46\
---------------------------------------------------------------------------
\45\ Jeff Arkin, ``Grants Management, Observations on Challenges
with Access, Use, and Oversight,'' United States Government
Accountability Office, GAO-23-106797, May 2, 2023.
\46\ E.O. 14332, sec. 1.
---------------------------------------------------------------------------
A.3. Improved Accountability
Proposed revisions related to improved accountability aim to ensure
that recipients are held properly accountable for how Federal award
funds are used. This includes ensuring that recipients only use Federal
award funds for authorized public purposes, and comply with
requirements related to reporting, nondiscrimination, and other topics.
A.4. Improved Oversight
The proposed revisions related to improved oversight aim to ensure
that every discretionary award program is designed by Federal agencies
to effectively achieve its underlying statutory purpose, and to align,
where applicable, with administration policies and priorities set by
the President.\47\ This includes treating every American with equal
dignity and respect, applying the principle of merit-based opportunity
throughout the grant lifecycle, and avoiding unlawful discrimination
when selecting recipients to receive awards.\48\ Improved oversight
refers both to oversight of decision-making processes within Federal
agencies and oversight of recipients using Federal award funding.
---------------------------------------------------------------------------
\47\ E.O. 14332, sec. 4(b)(i).
\48\ See, e.g., E.O. 14151; E.O. 14173 of January 21, 2025,
``Ending Illegal Discrimination and Restoring Merit-Based
Opportunity;'' and E.O. 14281 of April 23, 2025, ``Restoring
Equality of Opportunity and Meritocracy.''
---------------------------------------------------------------------------
A.5. Examples of Proposed Changes Related to First Objective
OMB proposes many changes throughout this document related to
improving transparency, accountability, and oversight for Federal
grants. For example, OMB proposes updated language related to conflicts
of interest (Sec. 200.112) and mandatory disclosures (Sec. 200.113).
In Sec. 200.202 related to program planning and design, OMB proposes a
variety of changes seeking to ensure that programs align with law and
Executive Branch policy.
In Sec. Sec. 200.201 and 200.333, and throughout part 200, OMB
proposes to eliminate the use of fixed amount awards and subawards,
which can limit transparency and hinder effective oversight. For
example, under fixed amount awards there is no expected routine
monitoring of actual costs incurred by the recipient or subrecipient,
and no financial reporting is required.\49\ This proposed change
further ensures that Federal agencies exercise an appropriate level of
oversight on how tax dollars are spent under all types of awards. This
will help to ensure that Federal dollars are not wasted on activities
that may not fully support the achievement of program outcomes. The
American people deserve to know where all Federal tax dollars are
flowing.
---------------------------------------------------------------------------
\49\ See 2 CFR 200.201(b)(1) (existing version).
---------------------------------------------------------------------------
In Sec. Sec. 200.204 through 200.206 related to funding
opportunities, selection of recipients, and reviewing risk of
applicants, OMB proposes a variety of changes designed to ensure and
emphasize the need for merit-based selection of recipients for
discretionary awards.\50\ Other proposed changes seek to align the
regulatory text with requirements in Executive Order 14332 regarding
oversight in grantmaking. In Sec. 200.206, some of the proposed
changes seek to ensure that recipients with a history of questionable
practices or poor financial management are not rewarded with scarce
taxpayer resources.
---------------------------------------------------------------------------
\50\ See, e.g., E.O. 14173 of January 21, 2025, ``Ending Illegal
Discrimination and Restoring Merit-Based Opportunity;'' and E.O.
14281 of April 23, 2025, ``Restoring Equality of Opportunity and
Meritocracy.''
---------------------------------------------------------------------------
In Sec. 200.208, OMB proposes to update the standards for
including specific conditions in Federal awards. In Sec. 200.211, OMB
proposes to clarify information that must be included in Federal
awards. In Sec. Sec. 200.218, 200.219, 200.220, and 200.300, OMB
proposes various changes to ensure that award funds are not used for
unlawful discrimination or other purposes inconsistent with law and
Executive Branch policy.
In Sec. 200.305, proposed changes seek to ensure that both Federal
agencies and pass-through entities exercise appropriate due diligence
before issuing payments of Federal funds, including requiring a
justification for payment requests. Proposed revisions also address use
of Treasury's ``Do Not Pay'' system before issuing payments.
In Sec. Sec. 200.329 through 200.332, OMB proposes changes related
to further ensuring that pass-through entities follow through on their
statutorily-required responsibility to report subawards on SAM.gov. In
addition to ensuring that required reporting occurs, the proposed
changes seek to ensure that Federal dollars are tracked as subawards in
circumstances in which recipients transfer funds to affiliates,
subsidiaries, or other related organizations. Proposed changes also
emphasize the need for Federal agencies to ensure that their recipients
comply with subrecipient reporting requirements on SAM.gov. The 2023
GAO report referenced above also identified ``challenges with the
completeness and accuracy of subaward data displayed on
USAspending.gov.'' OMB is proposing several revisions in 2 CFR to
ensure that pass-through entities meet this reporting obligation and
that Federal agencies exercise appropriate monitoring and oversight
over the responsibilities of the recipients they decide to partner with
under their programs.
In Sec. 200.340, OMB proposes to further clarify the existing
regulatory text related to award termination and further ensure that
Federal agencies provide clear notice to all recipients of the Federal
Government's ability to terminate discretionary awards for
discretionary reasons in a manner consistent with law.\51\ This
proposed clarification is similar to the existing authority at Sec.
200.340(a)(4) to terminate awards found to be inconsistent with program
goals or agency priorities. It would also be similar to the long-
standing authority to terminate Federal contracts for convenience at 48
CFR 49.502 and 52.249-2. If finalized, this revision will further
ensure that Federal agencies retain ongoing programmatic
[[Page 32205]]
discretion after an award is made, consistent with law, to terminate a
discretionary award that is not effective at achieving program goals or
Federal agency priorities, or that an agency otherwise determines is no
longer in the Federal Government's interest. In the same section, OMB
also proposes similar changes related to award suspension.
---------------------------------------------------------------------------
\51\ E.O. 14332, sec. 5 and 6.
---------------------------------------------------------------------------
In addition, OMB proposes additional changes in subpart E (cost
principles at Sec. Sec. 200.400 through 200.476) related to improving
transparency, accountability, and oversight. For example, OMB proposes
various changes to further distinguish between allowable and
unallowable costs.
B. Objective 2: Clarification of Regulatory Structure
OMB's second objective for the current proposed revisions is to
clarify the status of OMB's government-wide financial management
policies and requirements contained in 2 CFR subtitle A, as an OMB
regulation. In support of this objective, OMB and the grantmaking
agencies joining this rulemaking collectively propose revisions in 2
CFR to clarify the regulatory status of OMB's government-wide policies
and requirements. This change is intended to establish a standardized
framework across all Federal grantmaking agencies--now including those
that did not join the 2014 Federal Agency Interim Final Rule--and to
promote predictability, transparency, and consistency across the
Federal Government. This proposal would modernize and streamline
Federal grants management consistent with OMB's statutory authority to
enhance financial management across the Executive Branch.
The current framework in which each agency issues a brief
regulation to adopt OMB's requirements will generally be preserved
through this interagency rulemaking, but OMB proposes to make minor
adjustments in the regulatory text to clarify that OMB's requirements
in subtitle A carry regulatory effect in their own right. Agencies will
participate in this one-time joint interagency rulemaking to implement
the clarified regulatory structure and amend their adopting regulations
accordingly. Thereafter--in rulemakings following the current one--when
OMB amends the regulatory text of 2 CFR through a government-wide
notice-and-comment (N&C) rulemaking, those changes will apply
government-wide on the effective date of OMB's final rule. This
distinction is less relevant for the present rulemaking because
relevant grantmaking agencies are joining OMB in proposing these
changes.\52\ In the future, the public will continue to have a full and
meaningful opportunity to comment during OMB's N&C rulemakings, and
agencies will continue providing input to OMB during interagency review
periods and implementing the requirements. As discussed below, this
proposal is generally consistent with the way that most agencies have
implemented OMB amendments of the 2 CFR regulatory text since 2013.
---------------------------------------------------------------------------
\52\ All, or nearly all, grantmaking agencies in the Executive
Branch have joined this proposed rulemaking and plan to actively
adopt the specific policy changes in tandem with OMB through the
joint interagency final rule. Thus, the proposed clarifications in
this document regarding the process that OMB will follow for 2 CFR
amendments will primarily affect future OMB amendments of the
government-wide requirements in which other agencies are not
directly participating. Although OMB and agencies are currently
undertaking a joint interagency rulemaking process through this
document, it would be inefficient to repeat this process of
assembling every grantmaking agency in the Federal Government to
directly join all future OMB rulemakings. As discussed in this
document, OMB is authorized by law to set government-wide policies
and requirements for grants management. Moreover, as also discussed
in this document, the proposed process for 2 CFR amendments is very
similar to how the existing process for such amendments has already
worked for the last decade.
---------------------------------------------------------------------------
This proposal maintains the familiar structure of 2 CFR, but will
increase predictability, transparency, and uniformity regarding how OMB
amendments are implemented following future N&C rulemakings. Consistent
with OMB's government-wide authorities, the proposal will allow for
timely amendments of administrative requirements, cost principles, and
audit requirements for grants and other Federal awards across the
Federal Government.
B.1. Current Regulatory Structure
In 2013, OMB combined previously separate OMB circulars and
guidance documents into one centralized guidance document published in
2 CFR subtitle A. 2 CFR part 200 is commonly referred to as OMB's
``Uniform Guidance'' or ``Uniform Grants Guidance.'' Following
establishment of the guidance by OMB in 2013, most Federal grantmaking
agencies initially adopted the guidance in 2014 through implementing
regulations in 2 CFR subtitle B.\53\ The guidance currently provides
that ``[p]ublication of the OMB guidance in the CFR does not change its
nature--it is guidance, not regulation.'' \54\
---------------------------------------------------------------------------
\53\ 78 FR 78590; (Dec. 26, 2013); 79 FR 75871 (Dec. 26, 2014).
\54\ 2 CFR 1.105.
---------------------------------------------------------------------------
The existing structure of 2 CFR--including its classification as
guidance--has tended to result in questions and uncertainty in the
Federal grants community regarding the process for agency
implementation of OMB amendments of the government-wide requirements in
the regulatory text of subtitle A.\55\ The existing version of 2 CFR
200.110(a) already provides that part 200's requirements become
effective for the ``administration of Federal awards by Federal
agencies'' either ``once implemented by Federal agencies [under the
process described at 200.106 (existing version)] or when any future
[OMB] amendment to . . . part [200] becomes final.'' 2 CFR 200.110(a)
(existing version) (emphasis added). As explained below, OMB proposes
to retain the quoted regulatory text without change, but further
clarify its meaning to address recurring questions regarding the effect
of OMB amendments.
---------------------------------------------------------------------------
\55\ See, e.g., OMB Memorandum M-24-11, Section I
(``Implementation of Title 2 of the CFR'') (Apr. 4, 2024); and COFFA
Memoranda for the Federal Financial Assistance Community dated
January 15, 2025 and August 15, 2024.
---------------------------------------------------------------------------
After the initial agency adoption of part 200 in 2014, secondary or
follow-on rulemakings by Federal agencies to implement OMB amendments
of part 200 or other parts have generally either not occurred at all
\56\ or not been initiated by agencies in a timely manner. The sporadic
secondary rulemakings that have occurred following 2014 have generally
only been initiated in circumstances in which an agency had something
specific to add or modify in its own adopting regulations. In most
cases, consistent with 2 CFR 200.110(a) (existing version), agencies
have simply implemented OMB amendments of the 2 CFR regulatory text
based on the text of their existing adopting regulations, and through
the terms and conditions of Federal awards issued following the
government-wide effective date of the OMB amendments.\57\
---------------------------------------------------------------------------
\56\ Following initial agency adoption, implementing revisions
on the effective date provided in OMB's final rulemaking is
consistent with the information provided to the public in 2 CFR
200.110(a) (existing version) regarding the process for implementing
future amendments.
\57\ See 2 CFR 200.105(b) (existing version).
---------------------------------------------------------------------------
There are many practical reasons why agencies have not generally
completed secondary rulemakings to readopt OMB amendments following
2014. Beginning dozens of secondary agency N&C rulemakings only after
OMB has already completed a year-long government-wide N&C rulemaking
process--including extensive interagency coordination before the formal
rulemaking process even begins--would generally be
[[Page 32206]]
redundant, create long administrative delays, constitute a major drain
on agency resources, and frustrate the objective of government-wide
uniformity for OMB policy changes. For example--as with the Federal
Acquisition Regulation (FAR) that applies to Federal procurement
contracts--it is sometimes necessary for OMB to amend the regulatory
text to align with legislative changes on specific government-wide
effective dates. Secondary agency rulemakings could result in staggered
and sometimes wildly inconsistent effective dates for OMB's amendments
and associated policies across the Federal Government--with agency
rules only being proposed and finalized as agency resources allow. This
would effectively delay implementation of OMB's government-wide
requirements by an extended period of time. Such delays would create
confusion for recipients, auditors, and the entire Federal grants
community, and be inconsistent with OMB's statutory authority to set
government-wide requirements for grants administration that agencies
must follow. Moreover, agencies would generally have little of
substance to say in response to public comments on government-wide
policy requirements already settled by OMB pursuant to its own
statutory authorities and firmly established in the regulatory text of
subtitle A.
B.2. Proposed Clarification of Regulatory Structure
a. In general. Through this rulemaking, OMB and Federal grantmaking
agencies seek to collectively clarify how government-wide ``financial
management policies and requirements'' codified in OMB's 2 CFR
regulatory text in subtitle A will be implemented by Federal agencies
in the future.\58\ The current classification of the OMB regulatory
text as ``guidance, not regulation'' is confusing for award recipients,
is generally inconsistent with the history of agency implementation of
OMB amendments since 2014, and fails to provide adequate predictability
and transparency for the Federal grants community regarding how future
OMB amendments of the regulatory text of subtitle A will be implemented
by agencies. To promote predictability, transparency, uniformity,
efficiency, and other objectives described in this document, OMB seeks
to provide further clarity regarding the regulatory structure and
status of 2 CFR through this rulemaking.
---------------------------------------------------------------------------
\58\ 31 U.S.C. 503(a)(2).
---------------------------------------------------------------------------
b. Similar to existing frameworks. The proposed clarification in
this document is similar to the already existing process for agency
implementation of OMB amendments of the regulatory text in part 200.
Information on the existing process is provided at 2 CFR 200.110(a) and
discussed in this document above. Thus, at least for agencies that have
already implemented the OMB requirements, OMB's proposed amendments
related to this objective are primarily intended to clarify the status
of the regulatory text in subtitle A, rather than constituting a
fundamentally new approach or change in direction. As discussed above,
the approach described in this document is consistent with how most
agencies have implemented OMB amendments of the regulatory text of 2
CFR subtitle A since the Uniform Guidance was first adopted by agencies
in 2014.
The proposed clarification is also procedurally similar to the
long-standing ``adoptable guidance'' model for the suspension and
debarment requirements in 2 CFR part 180.\59\ In the 2005 preamble
establishing part 180, OMB observed the need to ``[s]treamline the
process for updating the government-wide requirements'' by centralizing
the process for substantive updates to the rule at OMB--with agencies
only needing to complete one initial adoption. The ``adoptable
guidance'' approach allowed OMB to ``publish proposed changes to the
[government-wide requirements] in the Federal Register, with an
opportunity for the public to comment.'' Once agencies had completed
the initial step of adopting the part 180 guidance in agency
regulations, ``the process for future updates [would] be complete [each
time that] OMB issues . . . final guidance'' amending the regulatory
text. In other words, agencies would ``not need to amend their
regulations adopting the guidance'' through dozens of separate agency
rulemakings following future OMB amendments. That regulatory structure
has remained the status quo for 2 CFR part 180 for the past 20 years.
---------------------------------------------------------------------------
\59\ 70 FR 51863, 51864 (Aug. 31, 2005).
---------------------------------------------------------------------------
Like part 180, OMB also issued part 200 for agency adoption in
2013, which represented a major improvement from the older patchwork of
OMB Circulars and agency-specific regulations. However, despite the
information provided at 2 CFR 200.110(a), questions regarding the
process for agency implementation of OMB amendments of part 200 have
lingered, which has impacted the predictability, transparency, and
consistency of government-wide implementation of the OMB requirements.
Consistent with the approach described in the preamble for part 180
and the existing regulatory text at Sec. 200.110(a), this document
proposes to further clarify how agency adopting regulations in subtitle
B apply to future amendments of subtitle A. The proposal will also
clarify the status of OMB's regulatory text throughout subtitle A as an
OMB regulation. Agencies will remain partners with OMB in the process
for future amendments by participating in OMB's development of proposed
policy changes and continuing to implement the effective requirements.
However, OMB proposes to clarify that the legal mechanism for futures
updates will be streamlined to a single Federal Register document
issued by OMB following public N&C, rather than dozens of rulemakings
across the Federal Government with generally identical requirements but
inconsistent effective dates. For the reasons discussed above,
beginning dozens of agency N&C rulemakings after OMB has completed its
own N&C rulemaking process would be impractical, inefficient, and
impede OMB's ability to timely exercise its own statutory authorities
to set government-wide requirements for grants management.
c. OMB government-wide authorities related to grants
administration. Congress authorized OMB at 31 U.S.C. 503 to set
government-wide requirements for grants administration, and agencies
must follow the OMB requirements in their award programs. Congress also
authorized OMB under the Federal Grant and Cooperative Agreement Act of
1977, codified in relevant part at 31 U.S.C. 6307, to issue
interpretative guidelines to Federal agencies to promote consistent and
efficient use of Federal financial assistance awards. Congress also
authorized OMB at 31 U.S.C. 7505 to provide government-wide
requirements for Single Audits of recipients, and agencies must also
follow those requirements. Congress also authorized OMB under the
Transparency Act (Pub. L. 109-282), as amended, to provide instructions
to agencies related to ensuring public transparency of their assistance
programs--including with respect to award recipients, award amounts,
unique entity identifiers, subawards, and various other information--
which agencies are also required to follow. At 31 U.S.C. 6105, Congress
also assigned oversight responsibility to OMB for the exercise of all
authorities and responsibilities related to Federal program
information. At 41 U.S.C. 1125, Congress authorized
[[Page 32207]]
OMB to prescribe government-wide requirements that agencies must follow
in providing for the procurement of property or services by recipients
of Federal grants or other forms of financial assistance. Pursuant to
all of these authorities, and others described in this document, the
proposed rule clarifies that 2 CFR subtitle A is OMB's issuance of
government-wide requirements under Federal law that agencies must carry
out.
d. Summary of proposed Uniform Grants Regulation (UGR). Under the
proposed rule, OMB will issue the ``Uniform Grants Regulation'' as an
OMB regulation with one government-wide effective date, pursuant to
OMB's statutory authority described above, to provide government-wide
grants management requirements. The text of 2 CFR subtitle A will be
revised to reflect its status as an OMB regulation, especially in key
provisions in parts 1 and 200. OMB proposes to remove the statement in
2 CFR 1.05 that the regulatory text is only guidance and ``not
regulation.'' Otherwise, the structure of title 2 of the CFR will
generally remain the same, with OMB requirements in subtitle A and
agency ``adopting'' chapters in subtitle B. Federal agencies join this
proposal, and plan to issue the final rule as a joint rulemaking with a
common preamble to implement this structure.
The proposed changes will provide regulatory clarity to the entire
Federal grants community regarding the effective date and binding
effect of OMB's policies and requirements, and their application to
agencies and recipients for new awards issued after the effective date
of OMB's amendments. The ``Uniform Grants Regulation'' framework will
avoid the need for dozens of secondary agency rulemakings merely to
reaffirm identical requirements that apply government-wide--which OMB
is authorized by statute to determine. Following 2014, such secondary
agency rulemakings have generally not occurred under the existing
structure. Advantages of the clarifications provided through the
``Uniform Grants Regulation'' proposal include: (1) uniform,
transparent requirements; (2) reduced redundancy and regulatory volume;
and (3) a streamlined approach allowing for efficient updates and
responsive government-wide policy changes. The proposed approach will
also maintain public participation.
(i) Uniformity, transparency, and regulatory clarity. The ``Uniform
Grants Regulation'' framework will make it easier for recipients and
auditors to find and understand the rules that apply to Federal awards,
and the date on which those rules become effective. The modified
regulatory text would resolve recurring questions on these topics, and
reinforce that OMB's government-wide requirements are legally binding
pursuant to OMB's statutory authorities for future updates on the
effective date of OMB's amendments of the regulatory text. OMB's
authorities contemplate OMB setting binding policy related to financial
assistance for all agencies--which is effectively what the Uniform
Guidance already does today. This proposal will simply clarify the
regulatory status of subtitle A, and ensure that OMB policies apply
uniformly across all agencies on the effective date intended by OMB
without the need for redundant and open-ended agency rulemaking
processes to implement them. From a recipient's perspective, OMB's
requirements in 2 CFR will still generally carry the same weight as
before, but calling them OMB regulations will further emphasize and
clarify their binding effect across the Federal Government.
(ii) Reduced redundancy. The proposed clarification will promote
efficiency and save government resources by preventing the need for
dozens of secondary agency rulemakings. Agencies may still undertake
such rulemakings as appropriate to make adjustments in their own
chapters, but will not be required to in the case of every OMB
amendment. Existing provisions in the regulatory text, which OMB
proposes to retain, also provide mechanisms for exceptions and
otherwise maintaining alignment with agency program statutes in the
case of conflict.\60\
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\60\ See 2 CFR 200.100(a)(1), 200.101(a)(2) and (d), 200.102,
200.105, and 200.106.
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Moreover, agencies will not be entirely removed from the process of
2 CFR updates, but will remain involved as partners in OMB's regulatory
process, and through participation in interagency workgroups such as
the Council on Federal Financial Assistance. Although, in general,
agencies will not need to directly join future OMB rulemakings, they
will remain engaged in the interagency review processes, ensuring that
agency grant experts have appropriate input on legal and practical
considerations for their agencies before rules are proposed or
finalized by OMB.\61\
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\61\ See also section IV.C.2.g of this preamble regarding
``continued public and agency participation.''
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(iii) Efficiency and responsiveness. The ``Uniform Grants
Regulation'' framework recognizes the practical reality of needing to
ensure that OMB is able to efficiently exercise its statutory authority
to provide government-wide grants management requirements in a timely
and responsive manner. Given that updates to OMB's requirements in
subtitle A may already take upwards of a year to complete prior to any
secondary agency rulemakings--from initial policy development at OMB to
inter-agency coordination, drafting and obtaining clearance for
proposed rulemaking documents, completing N&C procedures, responding to
comments, drafting and obtaining clearance for final rulemaking
documents, additional inter-agency coordination, and typically, but not
necessarily, providing some gap between issuance of the final rule and
its effective date--the proposal will ensure that OMB can actually
establish government-wide requirements within a reasonable timeframe.
The proposal will clarify that agencies do not need to initiate another
lengthy N&C rulemaking process just to implement OMB amendments for
which OMB already followed robust public N&C procedures. The framework
will ensure that OMB remains able to efficiently respond to emerging
compliance issues or implement new statutory requirements in a timely
manner across all agencies.
Both the Federal Government and American public will benefit from
such timely adjustments. This may include, for example, faster
incorporation of legislative changes from Congress. This is far more
workable and efficient than an alternative model in which dozens of
agency rulemakings to implement new requirements would only begin after
OMB has already completed a year-long process to propose and make
amendments. Such an alternative model would effectively prevent timely
implementation of needed government-wide policy reforms related to
grants management, and frustrate OMB's ability to efficiently perform
its own statutory functions.
(iv) Note regarding proposed names for title 2 and part 200. This
document proposes to use ``Uniform Grants Regulation'' (UGR) as a plain
language name or designation for 2 CFR part 200 following issuance of a
final rule. See Sec. 1.100 (proposed version). OMB does not propose a
change to the existing header for Title 2, which would remain ``Federal
Financial Assistance.'' Thus, the various parts of Title 2 would
collectively constitute the Federal Government's ``Regulation for
Federal Financial Assistance'' (RFFA), while part 200 would constitute
the UGR. OMB also does not propose a change to the (formal) header for
part 200, which
[[Page 32208]]
would remain ``Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards'' (UAR). Thus, the name UGR,
as referred to in Sec. 1.100 (proposed version), would be used in a
way similar to how ``Uniform Guidance'' is currently used as a plain
language way of referring to part 200--despite its formal header. The
acronym UAR would also remain acceptable and accurate, as would simply
referring to ``part 200.''
The proposed name of UGR for part 200 would not have any impact on
the part's broader applicability to cooperative agreements and other
forms of financial assistance, which remain subject to part 200 under
the proposed regulatory text. See 2 CFR 200.1 and 200.101 (proposed
versions). Grants are a common and widely used form of Federal
financial assistance. See 2 CFR 200.1. Outside of its technical
meaning, the term ``grant'' is also generally understood and used in
ordinary speech by the general public in a way that more technical
terms may not be. OMB proposes to refer to part 200 as the UGR to
retain a name that will be widely understood, easy to say, and still
similar to the existing name for part 200--the ``Uniform Guidance''--
which is widely known and used throughout the Federal financial
assistance community. Under the existing structure, ``Uniform Guidance
on Grants'' and ``Uniform Grants Guidance'' (UGG) are also frequently
used to refer to part 200, which are also similar to the name proposed
in this document.
In selecting a proposed plain language name and acronym, OMB also
considered ``Financial Assistance Regulation,'' but determined that the
acronym for this name would conflict with the acronym that is already
used for, and widely known as applying to, the Federal Acquisition
Regulation (FAR). Creating a second FAR that applies to Federal
financial assistance instead of Federal procurement contracts would
cause confusion and be unworkable. OMB believes that UGR will be a
simple and clear way to refer to part 200 following issuance of the
final rule and easily distinguishable from the FAR. As is currently the
case, the regulatory text of 2 CFR part 200 may also be referred to as
the UAR (based on the formal header) or simply as ``part 200.''
e. Continued public and agency participation. Finally, the proposed
``Uniform Grants Regulation'' framework will also maintain public and
agency participation in the development of policies. OMB will continue
to follow public N&C rulemaking procedures for substantive updates, and
all stakeholders will have the ability to comment on any changes
proposed by OMB. Thus, interested parties can focus on a single unified
proposal rather than tracking and commenting on dozens of separate
agency proposals. Agencies will still be involved during the
development stage for OMB policy amendments and various interagency
review periods, and still have the ability to raise agency-specific
issues with OMB before amendments are proposed or finalized. After
OMB's final determination, secondary public N&C periods at each agency
would serve little practical purpose, as the key policy decisions would
already have been made by OMB with input from both public commenters
and Federal agencies.\62\
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\62\ A Federal agency would still be permitted to engage in such
secondary rulemaking procedures if it determines that codified
exceptions are needed and consistent with procedures and basic
parameters for codified exceptions set forth in the regulatory text
of subtitle A. As under the existing regulatory text, an agency
could immediately implement any exceptions required by statute in
advance of a secondary rulemaking and without the need for
additional approval from OMB under 2 CFR. See 200.101(d)(1) and
200.102(b) (proposed version).
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B.3. Proposed Changes to Agency Chapters in Subtitle B of 2 CFR
Through this proposed rulemaking, certain Federal grantmaking
agencies that currently lack an existing chapter in 2 CFR subtitle B
propose to add chapters, which is intended to streamline implementation
and reduce variability across the Federal Government. Federal agencies
that have existing chapters in 2 CFR subtitle B propose certain
targeted and conforming changes to support OMB's broader rulemaking
effort. Following this rulemaking, subtitle B will provide a complete
list of all grantmaking Federal agencies,\63\ including certain agency-
specific policies and procedures. This proposed change will make OMB's
policies and requirements in 2 CFR truly ``uniform'' across the Federal
Government for first time since OMB's ``Uniform Guidance'' was
established in 2013.
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\63\ Limited exceptions are noted at 2 CFR 1.221 (proposed
version) for agencies with limited, if any, rulemaking authorities.
Like all other agencies, the listed agencies at 2 CFR 1.221
(proposed version) would be required to implement OMB's government-
wide requirements in 2 CFR subtitle A, but would not be required to
issue regulations due to the limited nature of their authorities.
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C. Objective 3: Reducing Recipient Burden
The third and final objective of this rulemaking is to reduce
recipient burden. The proposed revisions in support of this objective
are aimed at ensuring that the requirements contained in 2 CFR are only
those that OMB finds necessary for the efficient implementation and
oversight of assistance programs authorized by law.
Some of the changes related to this objective are aimed at ensuring
that recipients can focus on timely and efficient delivery of core
program purposes. As discussed under the first objective in this
document, in previous years Federal agencies often required award
recipients to spend great amounts of time, effort, and financial
resources to implement unlawful DEI mandates and other unnecessary add-
on requirements that increased project costs, complexity, and
completion timelines, but did not serve the underlying public purpose
of support of the relevant assistance program. By contrast, under the
proposed version of the regulation, OMB seeks to ensure that Federal
agencies will appropriately reduce the scope of award activities to
only what is necessary to achieve the objectives identified in law
consistent with Executive Branch policy. If finalized, recipients
should be able to restore focus on achieving core public purposes in a
cost-efficient and timely manner.
In seeking to reduce recipient burden, OMB also reviewed the
guidance to look for other opportunities to further standardize and
streamline the grantmaking process where feasible. For example, in
Sec. 200.202, the proposed regulation encourages the use of multi-year
awards, thereby reducing the frequency of applications and individual
awards that are generated each year. In Sec. 200.204, OMB encourages
Federal agencies to adopt more efficient Notice of Funding
Opportunities and application practices, including the use of
statements of interest, which will simplify the process for thousands
of prospective applicants. In addition, the proposal would require that
all Federal funding opportunities be posted on Grants.gov ensuring
agencies use a single, consistent platform that reduces duplicative
processes and increases transparency for award applicants. Under the
proposed regulation, agencies are not prohibited from announcing
opportunities on their websites or in other locations in addition to
Grants.gov. Federal agency heads (or designees) may approve exceptions
to this requirement when the agency determines that publicly announcing
an opportunity would pose a national security risk or is in the
national interest of the United States. The removal of superfluous
policy requirements reduces costs and complexity without undermining
[[Page 32209]]
accountability for Federal financial assistance awards.
OMB is also committed to continuing to support this objective
following the current rulemaking process. For example, efforts to
address this objective may also involve longer-term initiatives to: (i)
review and streamline existing government-wide forms to ensure that
only necessary data is being collected a single time; and (ii) work
with Federal grantmaking agencies to eliminate or reduce burdensome
program regulations and requirements.
V. Regulatory Impact Analysis
The attached Regulatory Impact Analysis (RIA) evaluates the
benefits, costs, and transfers associated with the proposed rule. For
example, the RIA evaluates the proposed elimination of fixed amount
awards and fixed amount subawards; proposed payment accountability
reforms, including requirements for Federal payment requests; proposed
reforms related to subrecipient oversight; proposed clarifications of
authority for termination and suspension of Federal awards; proposed
changes to national policy provisions; and proposed changes related to
eligibility restrictions for research and development awards. The draft
RIA finds that the proposed rule is expected to generate qualitative
benefits, modest administrative costs, and minimal transfer effects.
OMB invites comments on the analysis provided in the attached RIA.
VI. Section-By-Section Discussion of the Proposed Revisions to Subtitle
A of 2 CFR
OMB invites comments on the proposed revisions throughout subtitle
A of 2 CFR.
Part 1--About Title 2 of the Code of Federal Regulations and Subtitle A
OMB proposes to revise various sections of 2 CFR part 1 to replace
references to ``guidance'' with ``regulation'' to reflect that the OMB
policies contained in 2 CFR subtitle A constitute an OMB regulation.
Additional analysis related to this change is provided in this document
above.
OMB proposes to add a new Sec. 1.221 to explain that certain
listed Federal agencies received approval from OMB to implement the OMB
regulations in subtitle A as policy applicable to their Federal awards
without establishing agency regulations in subtitle B. Approval of this
alternative implementation method is generally based on the limited
rulemaking authorities of these agencies.
Parts 25, 170, 175, 180, 182, and 183
OMB proposes limited revisions in parts 25, 170, 175, 180, 182, and
183. As throughout the regulatory text, OMB proposes to replace the
term ``guidance'' with ``regulation'' or ``policy,'' as appropriate,
for the reasons set forth above. In some cases, depending on the
context, the use of the word ``guidance'' is maintained, such as
instances in which the term does not refer to the regulatory text of 2
CFR. OMB also proposes various grammatical changes in these parts.
In part 170, OMB proposes certain revisions to reflect that, as of
March 8, 2025, FSRS.gov was retired, and all subaward reporting data
and functionality are now on SAM.gov. Thus, certain references to FSRS
are replaced with references to SAM.gov.
In part 180, consistent with other changes throughout the
regulatory text, OMB proposes to remove the statement in Sec. 180.15
that the policy contained in the regulatory text ``is guidance not
regulation.'' OMB also proposes to revise Sec. 180.25 to clarify that
agencies must not deviate from the requirements of this part on matters
for which discretion is not provided.
OMB proposes to revise Sec. Sec. 180.745 and 180.840 to require
agencies to provide entities or individuals with a transcribed record
of fact-finding proceedings for suspensions and debarments within five
business days. Under this proposal, the entity or individual requesting
the transcript would remain responsible for purchasing it and paying
applicable costs. Although not addressed directly in either the
existing or proposed regulatory text, in some cases it is possible that
other laws may restrict what information may be provided in this
context, such as classified information.
In Sec. 180.915, OMB proposes to update the reference to the
Program Fraud Civil Remedies Act (PFCRA) of 1986 to reflect that, on
December 23, 2024, Congress amended the PFCRA, including changing its
name to the Administrative False Claims Act (AFCA).\64\
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\64\ Public Law 118-159, sec. 5203(a).
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Similarly, in part 182, OMB proposes to remove the statement in
Sec. 182.15 that the policy contained in the regulatory text ``is
guidance not regulation.'' In Sec. 182.25, OMB also proposes to
clarify that Federal agencies must not deviate from the requirements of
this part on matters for which discretion is not provided.
OMB also proposes to revise part 183 to replace the term
``guidance'' with ``regulation.'' Finally, OMB proposes to update the
definition of ``covered combatant command'' in Sec. 183.35 to simply
reference the definition existing in law.
Part 176--Award Terms for Assistance Agreements That Include Funds
Under the American Recovery and Reinvestment Act of 2009
OMB proposes to remove the guidance in part 176 related to the
American Recovery and Reinvestment Act of 2009 (ARRA). Part 176 was
initially issued to govern the use of funds appropriated under ARRA as
part of the Nation's economic recovery efforts following the 2008
financial crisis. The regulations in part 176 are no longer needed
because awards are no longer being made under ARRA. The removal of part
176 aligns with OMB's broader objective of streamlining Federal
financial assistance regulations by eliminating outdated or unnecessary
provisions that no longer serve a practical function.
Part 200--Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards
Throughout part 200, consistent with changes discussed above, OMB
proposes to replace the term ``guidance'' with ``regulation'' when
referring to the regulatory text of 2 CFR. In some cases, OMB also
proposes to replace the term ``guidance'' with ``policy'' or other
terms that fit within the context of the regulatory text.
Subpart A--Acronyms and Definitions
Section 200.1--Definitions
OMB proposes to revise Sec. 200.1 to align with the proposed
policy changes and to be consistent with Federal law. These changes
include revisions to the definitions for ``Federal award date,''
``improper payment,'' ``personally identifiable information (PII),''
and ``unobligated balance.'' Other proposed changes include removing
definitions for ``fixed amount awards'' and ``protected personally
identifiable information (Protected PII).'' The existing definition of
Protected PII is not necessarily consistent with other OMB guidance,
which does not distinguish between PII and Protected PII. Other
conforming changes were proposed in other sections of the regulatory
text that use the term Protected PII.
OMB also proposes to revise the definition of ``compliance
supplement'' to delete the words ``annually updated.'' OMB is in the
process of reevaluating the appropriate frequency for issuing the
compliance supplement. Pursuant to the Financial Management Risk
[[Page 32210]]
Reduction Act (Pub. L. 118-207), OMB and the Office of Inspector
General for the Department of Health and Human Services (HHS) are
currently analyzing the single audit process. OMB plans to engage
stakeholders ahead of any substantial changes.
Subpart B--General Provisions
Section 200.101--Applicability
OMB proposes to revise Sec. 200.101(b)(4) to remove references to
fixed amount awards. OMB proposes to remove the reference to fixed
amount awards for consistency with other changes proposed in this
document, which eliminate the use of both fixed amount awards and
subawards, which can limit transparency and hinder effective oversight.
OMB also proposes to include a reference to the FAR in Sec.
200.101(c)(2).
OMB also proposes to make certain clarifying edits regarding which
provisions govern in the case of conflict in paragraph (d) of Sec.
200.101. OMB now proposes to address statutory and regulatory conflicts
in separate paragraphs. Paragraph (d)(1) regarding statutory conflicts
remains substantially unchanged except for the proposed deletion of the
reference to regulations. OMB proposes a new paragraph (d)(2) under
Sec. 200.101 addressing non-statutory conflicts with agency
regulations. OMB proposes to specify that the following provisions of
part 200 will govern in any circumstances where they conflict with a
regulatory provision not required by Federal statute: all sections in
subpart F and Sec. 200.340 in subpart D. For other non-statutory
conflicts with an agency's regulatory provision, the proposed
regulatory text would encourage Federal agencies to apply the
government-wide policies in part 200 to the greatest extent permitted
by law. OMB also proposes to recommend that Federal agencies clarify
which provisions govern in funding opportunities and Federal award
documents. The proposed text explains that the default presumption
would generally be for the Federal agency to apply the government-wide
policies in this part if it can do so consistent with law. Finally, the
proposed revision recommends that Federal agencies also work to resolve
such non-statutory conflicts consistent with their rulemaking
authorities; applicable provisions in part 200, such as Sec. Sec.
200.102, 200.106, and 200.110; or both. For example, this may involve
amending an agency regulation outside of 2 CFR to eliminate the
conflict or codifying an exception to the government-wide policy in the
agency's implementing regulations in subtitle B.
It should be recognized that Sec. 200.101(d)--under both the
existing and proposed versions--only applies to Federal programs to
which part 200 applies. The proposed policy regarding program
applicability in this section remains generally unchanged. The proposed
edits regarding regulatory conflicts seek to increase uniformity and
transparency regarding management and administration of Federal
financial assistance across the Federal Government. Recipients,
subrecipients, and auditors should not have to speculate or guess
regarding which regulatory provisions govern a Federal program or
specific Federal award.
Section 200.102--Exceptions
OMB proposes to revise Sec. 200.102(b) regarding ``statutory and
regulatory exceptions'' to include reference to the proposed change at
Sec. 200.101(d)(2) discussed above. OMB also proposes to revise Sec.
200.102(c) regarding ``Federal agency exceptions'' to remove reference
to fixed amount awards for reasons discussed elsewhere in this
document. Additionally, OMB proposes to revise the authority for case-
by-case exceptions made by a Federal agency to highlight examples of
sections in which other approval by OMB is expressly required by this
part, such as at Sec. 200.340.
Section 200.106--Agency Implementation and Responsibilities
OMB proposes to revise Sec. 200.106 to add a new paragraph (b)
regarding agency responsibilities. The proposed paragraph references
the responsibilities of Federal agencies under other parts of OMB's
grants administration policies in the regulatory text of 2 CFR. This
proposed change will further clarify that Federal agencies are
responsible for adhering not only to part 200, but also to the other
existing parts contained in subtitle A, including parts 25, 170, 175,
180, 182, 183, and 184.
Section 200.110--Effective Date
OMB proposes to revise Sec. 200.110 to clarify and supplement the
existing policy in paragraph (a). The proposed changes to paragraph (a)
are discussed in further detail in section IV.C of this preamble
regarding the proposed clarification of the regulatory structure of 2
CFR. As discussed above, the proposed changes to paragraph (a) are
generally consistent with the existing regulatory text, but provide
further clarity and context regarding its meaning.
Section 200.111--English Language
OMB proposes to revise Sec. 200.111 to focus only on the basic
requirement that all Federal announcements, applications, and Federal
award information must be in the English language and must be in terms
of U.S. dollars. This revision is intended to highlight the importance
of recipients being able to understand Federal award requirements and
program information in English to effectively meet program objectives
and communicate with Federal officials about program and Federal
financial assistance matters.
Section 200.112--Conflict of Interest
OMB proposes to revise Sec. 200.112 to require, in the interest of
transparency, that a recipient or subrecipient must disclose whether
any employees who worked on the proposal or will support the resulting
Federal award were employed by the awarding Federal agency within the
preceding two years prior to application submission. OMB further
clarifies that this information is for informational purposes and does
not by itself represent a conflict of interest. This revision is
intended to enhance transparency and allow Federal agencies to identify
potential conflicts of interest arising from recent employment
relationships between agency staff and recipient personnel. While the
disclosure does not create a prohibition or automatic bar to
participation, it provides awarding Federal agencies with visibility
into situations where prior employment could give rise to questions
about impartiality, preferential treatment, or insider knowledge. This
change strengthens integrity standards in the award-making process
while limiting burdens by requiring only disclosure, not additional
approval or review.
Section 200.113--Mandatory Disclosures
OMB proposes to revise Sec. 200.113 to require an Office of
Inspector General to transmit any disclosures it receives under this
section to the United States Attorney's Office for the District of
Columbia within ten days of receipt. The purpose of this revision is to
strengthen enforcement and accountability by ensuring that credible
allegations of fraud or misconduct are promptly transmitted to
prosecutorial authorities. This 10-day transmission standard would
reduce delays and accelerate prosecutorial awareness, thereby reducing
the risk that criminal (or civil) misconduct continues without the
initiation of appropriate remedies if warranted.
[[Page 32211]]
Subpart C--Pre-Federal Award Requirements and Contents of Federal
Awards
Section 200.201--Use of Grants, Cooperative Agreements, and Contracts
OMB proposes to revise Sec. 200.201(b) to eliminate the use of
fixed amount awards unless otherwise authorized by Federal statute.
Fixed amount awards were introduced in 2014 with the initial release of
the Uniform Guidance. Extensive standards and guardrails regarding the
use of fixed amount awards were never established in the regulatory
text of part 200, sometimes resulting in inconsistent use or
application of this type of award across Federal agencies. In response
to public comments on the 2024 rulemaking, OMB attempted to establish
additional standards and provisions related to fixed amount awards in
the 2024 revisions. OMB now proposes to change course, and eliminate
this type of award from part 200. OMB is concerned that use of this
type of award can limit transparency and hinder effective oversight,
and believes the limited standards for fixed amount awards in part 200
remain inadequate to address these concerns. The existing regulatory
text also remains ambiguous with respect to application of the cost
principles and certain other requirements to fixed amount awards, with
important context, in some cases, only provided in the 2024 preamble.
This proposed change will ensure increased consistency across Federal
agencies in the execution and implementation of Federal financial
assistance and promote greater transparency and oversight. OMB proposes
to relocate the definition of ``fixed amount awards'' to this section.
This proposed change is not intended to impact any existing fixed
amount awards or subawards issued prior to the effective date of the
proposed rule.
OMB also proposes a minor revision to Sec. 200.201(a) to make
Federal agencies the exclusive focus. OMB proposes to add a cross-
reference to Sec. 200.331, which more directly addresses how pass-
through entities determine the appropriate type of agreement for a
subaward or contract.
Section 200.202--Program Planning and Design
OMB proposes to revise Sec. 200.202(a) to further clarify the
elements of program design. As ``goals and objectives'' do not directly
``provide'' meaningful results, OMB proposes to clarify that the goals
and objectives must ``aim to achieve meaningful results.'' OMB also
proposes to clarify that goals and objectives must be consistent with
the public purpose of Federal authorizing legislation and aligned with
administration policies and priorities.
OMB also proposes to add five new paragraphs. In Sec. 200.202(c),
OMB proposes to clarify that Federal agencies must develop Federal
programs and implement activities under those programs in a manner that
ensures compliance with all applicable restrictions on the use of
Federal funds, including ensuring that Federal program funds are only
used for public purposes of support authorized by law. This proposed
addition reiterates what has long been a foundational principle of
Federal financial assistance: funding must only be used to ``carry out
a public purpose of support or stimulation authorized by law,'' \65\
not for other extraneous activities or initiatives of recipient
organizations. This proposed revision increases transparency and
predictability for applicants and recipients by ensuring that program
announcements are aligned with statutory authority from the outset. OMB
proposes to include an example related to ensuring that program funds
are not used to subsidize political activities or initiatives unrelated
to authorized public purposes.
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\65\ See 31 U.S.C. 6304, 6305, and 6307.
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In Sec. 200.202(d), OMB proposes to add a paragraph explaining
that Federal agencies may, to the extent permitted by law, restrict
eligibility among different types of nonprofit organizations. This
proposed revision promotes transparency by ensuring applicants can
determine eligibility without guessing or interpreting agency intent.
In addition, the proposed revision ensures that such restrictions are
not applied in a manner inconsistent with law. As a result, applicants
will have greater clarity and confidence about eligibility requirements
before spending time and resources on preparing applications.
In Sec. 200.202(e), OMB proposes to add a paragraph to establish a
government-wide policy governing eligibility and the use of
international elements in Federal research and development awards.
Through this proposed change, OMB seeks to strengthen alignment between
Federal research and development funding and national priorities,
enhance consistency across grant-making agencies, and clarify
expectations for applicants, while preserving appropriate flexibility
to support international engagement that demonstrably advances the
interests of the United States. Consistent with OMB's authorities
discussed above, which authorize the establishment of uniform policies
governing the management of Federal financial assistance, this proposed
change is intended to ensure consistent application of eligibility
limitations applicable to research and development awards. OMB and the
participating agencies seek to ensure that such awards remain aligned
with the national interest of the United States. As with other sections
of the regulatory text, the policy must be implemented consistent with
relevant appropriations and authorizing statues.
In Sec. 200.202(f), OMB proposes to add a paragraph that
encourages agencies to design awards as multi-year award when
consistent with program objectives and subject to restrictions in law.
Under this approach, awards would use budget periods longer than one
year instead of requiring annual re-competition. Such awards must be
structured to avoid Antideficiency Act violations. This proposed
revision promotes efficiency and reduces unnecessary administrative
burden on both agencies and recipients. In addition, the proposed
revision provides greater funding stability for recipients, enabling
long-term planning and execution of complex projects.
Lastly, in Sec. 200.202(g), OMB proposes to add a paragraph that
would require agencies that issue Federal financial assistance for
scientific research to categorize those awards as basic research,
applied research, and experimental development consistent with the
definitions in OMB Circular A-11. This categorization would need to be
communicated to the recipient and included in the terms and conditions
of the award.
Section 200.204--Notices of Funding Opportunities
OMB proposes to revise in Sec. 200.204 to clarify, supplement, and
revise the government-wide policy regarding notices of funding
opportunity, commonly referred to as NOFOs. OMB proposes to require
that Federal agencies must publicly announce funding opportunities for
all discretionary awards--not just those that will be openly competed.
Consistent with the definition of discretionary award and longstanding
practice, OMB also proposes to clarify that, as appropriate and
consistent with authorizing law, funding opportunities may allow for
open competition, limited competition, or selection on a non-
competitive basis. In addition, OMB also proposes to require that
applicants apply for awards using Grants.gov unless a program specific
exception is
[[Page 32212]]
expressly authorized by Federal statute or approved by the Federal
agency head (or designee). OMB also highlights the importance of
drafting NOFOs in plain language so that completing the application
generally does not require the applicant to employ technical or legal
experts. These proposed revisions streamline and standardize the
policies for Federal funding opportunities, while also promoting
transparency regarding the use of Federal tax dollars. In addition, the
proposed revisions reduce barriers for participation by promoting
greater accessibility for eligible applicants.
OMB also proposes to revise this section by adding a new paragraph
(c) regarding use of Statements of Interest (SOI). The proposed
paragraph encourages agencies to use SOIs as part of their NOFOs when
high application volume or lengthy proposals are expected. These
revisions are intended to reduce burden on applicants who would
otherwise prepare lengthy, resource-intensive proposals with little
chance of being selected for funding in some cases. The proposed
revision would also improve efficiency by focusing agency review on the
most competitive applicants.
OMB also proposes to revise the existing best practice that
executive summaries should not exceed 500 words. OMB proposes to make
this a requirement, but allow Federal agency heads (or their designee)
to authorize exceptions. This proposed revision would more consistently
provide applicants with a clear, concise overview of NOFOs while
maintaining agency flexibility when needed to communicate complex
opportunities. As a result, applicants will more often be able to
quickly assess whether a program is relevant before reading the entire
funding opportunity.
OMB also proposes to revise the requirement that opportunities be
posted for no less than 30 days unless the agency determines that
exigent circumstances exist. Under the proposed revision, agencies
would be required to include such a determination in the NOFO. This
proposed revision is intended to prevent unreasonably short application
windows that disadvantage certain applicants. The proposed revision
also promotes fairness, accountability by Federal agencies, and
adequate preparation time for applicants. As a result, applicants will
have a more predictable timeframe to prepare strong applications.
Lastly, OMB proposes several revisions related to the full text of
funding opportunities. Specifically, OMB proposes that Federal
agencies, when feasible, should strive to ensure that NOFOs are
accessible to a broad range of applicants, including those that have
not previously received Federal awards. In addition, OMB proposes a new
requirement that Federal agencies may be required to submit a report to
OMB detailing the specific recipients or types of recipients that
received Federal awards from the Federal agency over a specific time
period. These proposed revisions strengthen clarity and accessibility
obligations for agencies and provide OMB with oversight tools to ensure
funding is not inappropriately concentrated among a narrow set of
recipients.
Section 200.205--Federal Agency Review of Merit of Proposals
OMB proposes to revise Sec. 200.205 to strengthen requirements for
agency merit review and to establish a new pre-issuance review process
consistent with Executive Order 14332. Under the proposed requirements
for pre-issuance review, as part of the broader merit review process,
agencies must ensure that proposals selected for funding are consistent
with applicable law, Federal agency priorities, and the national
interest. Consistent with the Executive order, senior appointees must
conduct these reviews and apply specific principles when evaluating
proposals. These principles include ensuring that discretionary awards
advance the President's policy priorities, prohibit the use of funds
for discriminatory or otherwise impermissible purposes, and emphasize
ensuring compliance with applicable law. Additionally, the proposed
revisions encourage agencies to broaden the range of recipients,
prioritize institutions demonstrating rigorous and reproducible
scholarship, incorporate benchmarks for measuring performance of ``Gold
Standard Science,'' and direct agencies to weigh institutional
commitment to research integrity when making award decisions. Proposed
revisions in this section also clarify that peer review remains
advisory and does not replace agency discretion. Finally, the proposed
revisions clarify that agencies are not required to issue awards solely
as a result of issuing a NOFO. These proposed updates are intended to
enhance consistency across agencies, accountability, and alignment of
Federal awards with administration priorities, while also reducing the
risk of award being made contrary to statutory or policy requirements.
Section 200.206--Federal Agency Review of Risk Posed by Applicants
OMB proposes to revise Sec. 200.206(b)(2) to expand the list of
factors that agencies may consider when evaluating applicant risk. The
changes clarify that agencies may assess an applicant's financial
capacity to manage high-dollar awards, in addition to overall financial
stability. The revisions also clarify that prior performance must be
evaluated against the goals of the funding opportunity, and that both
positive and negative outcomes must be given equal weight. OMB also
proposes to add a provision that agencies may consider an applicant's
history of questionable practices based on publicly available and
verifiable information. In addition, OMB proposes to add a provision
that agencies may consider an applicant's compliance with foreign gift
and contract disclosure requirements, as applicable. Additionally, OMB
proposes a new provision that agencies may consider an applicant's
affiliations with organizations engaged in activities that violate
Federal law, undermine public safety or national security, or advocate
for the overthrow of the United States Government. Lastly, OMB proposes
a new provision that agencies should consider, as applicable, an
applicant's compliance with foreign gift and contract disclosure
requirements under section 117 of the Higher Education Act of 1965
(Pub. L. 89-329, as amended, codified at 20 U.S.C. 1011f). The proposed
revisions are intended to provide agencies with clearer authority to
evaluate financial and organizational capacity, integrity, and
institutional affiliations in order to mitigate risks and protect the
integrity of Federal programs.
Section 200.207--Standard Application Requirements
OMB proposes to revise Sec. 200.207 to clarify that Federal
agencies must periodically review programmatic and administrative
requirements specific to the agency, program, or award(s) to determine
whether such requirements are unnecessary and not required by this
part. Federal agencies should also update OMB annually on any such
requirements that have been removed.
Section 200.208--Specific Conditions
OMB proposes to revise Sec. 200.208 to clarify how agencies may
apply, adjust, and remove specific conditions under Federal awards. OMB
proposes to authorize agencies, subject to applicable law, to add or
remove specific conditions throughout the period of performance based
on the risk factors
[[Page 32213]]
identified in paragraph (c) or other factors associated with a
recipient or program.
A new requirement is proposed to require that any such adjustments
based on any of the factors listed in paragraph (c) must occur within
15 calendar days after the agency's determination. The existing
regulatory text already preserves the right of agencies to impose
specific conditions based on these enumerated factors, which recipients
knowingly accept when they agree to receive awards. OMB also proposes
to clarify that specific conditions not based on factors in paragraph
(c) may be added or removed during the period of performance only with
the agreement of the recipient.
In Sec. 200.208(d), OMB also proposes to expand the list of
examples of specific conditions to include requiring information on
payments to contractors or vendors, or financial integrity-related site
visits. These examples are intended to provide agencies with more
practical tools to address risk identified during the administration of
Federal awards.
At Sec. 200.208(f), OMB also proposes a new paragraph recognizing
that agencies may impose program-level specific conditions when
elevated programmatic risks are identified across a Federal program.
The proposed text explains that agencies may remove such conditions
once the underlying risks have been resolved, thereby allowing the use
of program-level conditions to remain tied to ongoing risk management
rather than continuing indefinitely. Collectively, these proposed
changes provide agencies with greater flexibility to manage risk during
award administration while establishing safeguards related to
transparency and fairness.
Section 200.211--Information Contained in the Federal Award
OMB proposes to revise Sec. 200.211 to clarify that Federal
agencies must always include the termination provisions under Sec.
200.340 in each Federal award or expressly incorporate them by
reference, and must inform recipients of any additional termination
provisions that apply to the award. This revision is intended to ensure
recipients are always clearly and unambiguously informed of the
potential for termination under Sec. 200.340, including termination
based on discretion of the Federal agency. OMB also proposes deleting
the reference to providing ``a copy of the terms and conditions'' to
the recipient upon request. This requirement is outdated given the
access that applicants and recipients now have to general terms and
conditions on the internet. To the extent that applicable general term
and conditions are not available on the internet, agencies would be
responsible for providing them to the recipient--typically in
electronic form--with the Federal award instrument. Federal agencies
would still be permitted to mail a hard copy of the terms and
conditions to recipients upon request even with removal of this
provision, but would not be required to provided that the recipient has
electronic access.
Section 200.216--Prohibition of Certain Equipment, Services, and
Systems
OMB proposes to revise Sec. 200.216 to incorporate a new legal
requirement related to the use of unmanned aircraft systems procured
with Federal financial assistance. First, OMB proposes amending the
section header to reflect a broader scope that continues to include,
but is no longer limited to, telecommunications and video surveillance.
A new paragraph (a) is proposed to appropriately frame the existing
prohibition on certain telecommunications and video surveillance
equipment or services. OMB also proposes removing the existing
paragraph (d). Although still technically a legal requirement,
considering that the statute has been in effect since 2020 and Federal
agencies are unlikely to still be funding a transition to different
systems, OMB considers this language to be outdated and no longer
necessary for express inclusion in 2 CFR.
OMB proposes to add a new paragraph (b) in Sec. 200.216 under the
header: ``Prohibition on procurement and operation of prohibited
unmanned aircraft systems.'' This paragraph will implement the
requirements of section 1825 of the American Security Drone Act of 2023
(Pub. L. 118-31). This statute prohibits Federal agencies from issuing
Federal financial assistance that results in the procurement of
unmanned aircraft systems prohibited by the Federal Acquisition
Security Council (FASC), and requires recipients and subrecipients to
implement specific safeguards and compliance measures for these
systems. The statutory requirements became effective on December 22,
2025. Thus, agencies, recipients, and subrecipients should be aware
that the statute already applies even before the proposed revision of
this section becomes final. See OMB Memorandum M-26-02 dated November
21, 2025, ``Ensuring Government Use of Secure Unmanned Aircraft Systems
and Supporting United States Producers.''
Section 200.218--Prohibition of Using Federal Awards To Promote or
Support Theories of Disparate-Impact Liability
OMB proposes a new Sec. 200.218 related to Executive Order 14281,
``Restoring Equality of Opportunity and Meritocracy.'' Consistent with
the Executive order, this section proposes to establish a government-
wide policy in 2 CFR regarding use of Federal financial assistance to
promote or support theories that impose disparate-impact liability
based on federally protected characteristics such as race, sex, or age.
OMB proposes to direct agencies and pass-through entities, to the
maximum extent permitted by law, to ensure that awards are administered
in a manner that does not promote or support theories of disparate-
impact liability, including by not issuing terms, conditions, or
guidance that would advance theories of disparate-impact liability.
Recipients and subrecipients are also directed to avoid using Federal
award funds for this purpose unless expressly required by law. OMB
proposes to recognize an exception related to analysis for internal use
if the activities are not funded by the Federal award and not used in
connection with activities under the award. OMB proposes a definition
of disparate-impact liability to ensure clarity and consistency. The
proposed definition is generally consistent with the Executive order.
These proposed revisions are intended to align government-wide
administration of Federal financial assistance with administration
policy and to reinforce the principle that merit-based opportunity--
rather than theories of disparate-impact liability or other forms of
unlawful discrimination based on race or other protected
characteristics--will govern the administration of Federal awards.
The legal authority for this section (hereinafter referred to as
the ``Disparate-Impact Provision'') is similar to the authority for
including the unlawful DEI provision in Sec. 200.300, as both are
generally intended to prevent discrimination on the basis of federally
protected characteristics. To limit repetition in this preamble, OMB
includes further analysis of the Disparate-Impact Provision under Sec.
200.300 in connection with the unlawful DEI provision, including
analysis of legal authority and related considerations.\66\
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\66\ See also 90 FR 57141 (Dec. 10, 2025) (rule amending DOJ's
implementing regulations for Title VI of the Civil Rights Act of
1964 to remove disparate-impact provisions); DOJ Press Release of
Dec. 9, 2025, ``Department of Justice Rule Restores Equal Protection
for All in Civil Rights Enforcement.''
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[[Page 32214]]
Section 200.219--Prohibition of Discriminatory Event Services
To ensure that Federal funds are not used, directly or indirectly,
to subsidize violations of the First Amendment of the U.S. Constitution
involving suppression of free speech of disfavored groups, OMB proposes
a new Sec. 200.219. The proposed provision would establish in the
regulatory text that public entities that are a recipient or
subrecipient of Federal financial assistance must not discriminate on
the basis of the viewpoint, content, or subject matter of speech--
including on the basis of political, ideological, or religious
affiliation or perspective--in providing services for events, meetings,
or other expressive activities. This requirement would ensure that
public entities do not improperly use control over facilities or
services to disadvantage or suppress the speech of disfavored groups.
The proposed text further provides that it applies regardless of
whether an event is directly funded by the Federal award if it occurs
on property or facilities under the control of the public entity. As
public entities are subject to the First Amendment in their own right,
this broad application is constitutionally permissible.\67\
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\67\ See, e.g., Christian Legal Soc. Chapter of the Univ. of
California, Hastings Coll. of the L. v. Martinez, 561 U.S. 661
(2010) (holding that public universities may adopt neutral,
generally applicable access rules but cannot invoke their own
expressive autonomy to exclude disfavored viewpoints); Bd. of
Regents of Univ. of Wisconsin Sys. v. Southworth, 529 U.S. 217
(2000) (holding that viewpoint neutrality is mandatory when
distributing student activity funds).
---------------------------------------------------------------------------
The proposed additions are intended to prevent public entities from
using Federal funds--including indirect costs used for buildings and
facilities--in a discriminatory manner. This requirement would further
ensure that public entities receiving Federal awards do not use their
control over facilities or services to disadvantage disfavored groups,
such as colleges and universities charging additional fees--sometimes
referred to as ``heckler's fees''--to provide security for conservative
speakers.\68\ Consistent with the First Amendment, the proposed
language should not be construed to prohibit public entities from
enforcing content- and viewpoint-neutral time, place, and manner
restrictions, or from applying reasonable, viewpoint-neutral
restrictions in nonpublic forms. If finalized, public entities must not
seek to evade these requirements through pretextual or post hoc forum
classifications.
---------------------------------------------------------------------------
\68\ See, e.g., Young America's Foundation Press Release, ``YAF
Wins Landmark Free Speech Lawsuit, UC Berkeley To Pay $70,000 And
Rescind Unconstitutional Policies,'' Dec. 3, 2018.
---------------------------------------------------------------------------
The proposed language in Sec. 200.219 is not intended to alter the
allowability of costs under subpart E, including costs associated with
speakers or events. Rather, it would require that any fees, security
costs, or other charges imposed in connection with events be applied in
a viewpoint-neutral and consistent manner.
OMB also proposes to clarify application to non-public entities. To
ensure that Federal funds are not used in a manner inconsistent with
the First Amendment, OMB proposes to apply the requirements of
paragraph (a) to non-public entities to the extent that the relevant
activities are within the scope of a Federal program under which the
non-public entity accepts a Federal award. Applying the prohibition to
activities within the scope of a Federal program does not present
constitutional concerns under the First Amendment, provided that the
Federal agency does not seek to leverage funding to regulate speech
outside the contours of the Federal program.\69\ By knowingly accepting
such a Federal award, the recipient or subrecipient acknowledges its
ability to perform the federally funded activities in a manner
consistent with law and its own constitutional rights. For example, if
a non-public recipient or subrecipient agrees to accept a Federal award
that includes hosting a public forum, it must comply with the terms and
conditions of the Federal award in a viewpoint-neutral manner.
---------------------------------------------------------------------------
\69\ See, e.g., Agency for Int'l Dev. v. All. for Open Soc'y
Int'l, Inc., 570 U.S. 205 (2013) (holding that, as a general matter,
if a party objects to limits imposed by a grant, its recourse is to
decline the funds).
---------------------------------------------------------------------------
Proposed paragraph (b) must be implemented in full accordance with
the U.S. Constitution. Outside of performance of award activities, the
proposed revision must not be construed to require a non-public entity
to make its property, facilities, or services available for speech,
expression, or events in a manner that would either directly violate
its First Amendment rights or otherwise require access or association
that would constitute compelled speech or association under the U.S.
Constitution. Consistent with law, a Federal agency may consider
adjusting the terms and conditions of a Federal award to a non-public
entity to clarify the application of this provision and to ensure that
performance of required award activities can proceed consistent with
law.
Section 200.220--Prohibition of Using Federal Funds for Covered Foreign
Collaborations
To protect the national security interests of the United States and
to ensure consistent implementation of longstanding statutory
restrictions, OMB proposes a new Sec. 200.220 to prohibit the
obligation or expenditure of Federal funds to support certain foreign
collaborations involving covered foreign countries or covered foreign
entities.
Some Federal statutes direct Federal agencies to restrict the use
of appropriated funds for bilateral or multilateral activities with
foreign adversaries and entities affiliated with foreign military or
intelligence services. Most notably, section 1340 (a) of the
``Department of Defense and Full-Year Continuing Appropriations Act''
for fiscal year 2011 (Pub. L. 112-10) (commonly referred to as the
``Wolf Amendment'') prohibited the National Aeronautics and Space
Administration and the Office of Science and Technology Policy from
using appropriated funds to develop, design, plan, promulgate,
implement, or execute any bilateral policy, program, order, or contract
of any kind to participate, collaborate, or coordinate bilaterally with
China or any Chinese-owned company, absent specific statutory
authorization. The Wolf Amendment has continued to apply as a rider in
subsequent annual appropriations acts.\70\
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\70\ See, e.g., Public Law 117-103, sec. 526, which applied to
the National Aeronautics and Space Administration (NASA), the Office
of Science and Technology Policy (OSTP), and the National Space
Council (NSC).
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Federal financial assistance is frequently awarded through grants,
cooperative agreements, and subawards that may support collaborative
research, technical assistance, or programmatic activities involving
foreign entities. While the Wolf Amendment only applies directly to
specific agencies and appropriations, OMB proposes to find that a
uniform regulatory standard, providing consistent application of these
restrictions across Federal assistance programs, would reduce risk
related to national security and program integrity for all agencies and
the Federal Government as a whole.
The proposed Sec. 200.220 establishes a government-wide baseline
rule prohibiting recipients and subrecipients from using Federal funds
to support bilateral or multilateral collaborations, agreements,
programs, or activities with covered foreign countries or covered
foreign entities, unless expressly authorized by Federal statute or
[[Page 32215]]
approved by the Federal agency in accordance with the proposed
exception authority and applicable law. This provision is intended to
ensure that Federal financial assistance is not used, directly or
indirectly, to support activities that may pose a risk to U.S. national
security, defense, or intelligence interests. Congress has expressly
determined that such a risk exists in the case of some agencies.
The prohibition would apply regardless of whether Federal funds are
used for direct programmatic activities, research, technical
assistance, travel, or indirect costs allocable to such collaborations.
This approach would ensure that restrictions on foreign collaboration--
including those expressly required by law--are not circumvented through
the structure of funding mechanisms or cost allocation practices.
The proposed rule also provides for limited exceptions where
expressly authorized by Federal statute or where the head of the
Federal agency (or designee) determines that the activity does not pose
a risk to national security and is in the national interest of the
United States. These exceptions are intended to preserve necessary
agency discretion while ensuring that any departure from the general
prohibition is subject to appropriate senior level review and
accountability at grantmaking agencies. This provision does not
prohibit recipients from engaging in foreign collaborations using non-
Federal funds.
Subpart D--Post Federal Award Requirements
Section 200.300--Statutory and National Policy Requirements
OMB proposes to revise Sec. 200.300 to streamline existing
references to legal and policy obligations. OMB also proposes to
supplement Sec. 200.300 to reflect key administration policies and
priorities.
1. Executive orders and Executive Branch guidance. In January 2025,
President Trump issued a series of Executive orders (EOs) establishing
a government-wide policies to, consistent with applicable law, end
Federal funding for unlawful DEI programs, promotion of ``gender
ideology,'' and the so-called ``transition'' of a child under 19 years
of age from one sex to another. These include Executive Order 14151 of
January 20, 2025, ``Ending Radical and Wasteful Government DEI Programs
and Preferencing'' (DEI Executive Order); \71\ Executive Order 14173 of
January 21, 2025, ``Ending Illegal Discrimination and Restoring Merit-
Based Opportunity'' (Ending Discrimination Executive Order); \72\
Executive Order 14168 of January 20, 2025, ``Defending Women from
Gender Ideology Extremism and Restoring Biological Truth to the Federal
Government'' (Gender Ideology Executive Order); \73\ and Executive
Order 14187 of January 28, 2025, ``Protecting Children from Chemical
and Surgical Mutilation'' (Protecting Children Executive Order). The
President later issued Executive Order 14281 of April 23, 2025,
``Restoring Equality of Opportunity and Meritocracy'' (Restoring
Equality Executive Order).
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\71\ 90 FR 8339.
\72\ 90 FR 8633.
\73\ 90 FR 8650.
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On March 21, 2025, the Department of Justice (DOJ) issued guidance
to all Federal agencies regarding implementation of EOs 14151 and 14173
(March 2025 DOJ Guidance).\74\ Subsequently, on July 29, 2025, DOJ
issued additional guidance regarding unlawful discrimination (July 2025
DOJ Guidance).\75\ The July 2025 DOJ Guidance was intended to ensure
that recipients of Federal funding do not engage in unlawful
discrimination.\76\ In particular, it clarified that Federal
antidiscrimination laws apply to programs or initiatives that involve
discriminatory practices, including those labeled as DEI programs.
Entities that receive Federal funds, like all other entities subject to
Federal antidiscrimination laws, must ensure that their programs and
activities comply with Federal law and do not discriminate on the basis
of race, color, national origin, sex, religion, or other protected
characteristics--no matter the program's labels, objectives, or
intentions. DOJ's guidance emphasized the significant legal risks of
initiatives that involve discrimination based on protected
characteristics and offered non-binding best practices to help entities
that receive Federal funds avoid the risk of violations and the
revocation of Federal grant funding.\77\ On September 12, 2025, OMB
issued Memorandum M-25-33, which instructed agencies to follow the July
2025 DOJ Guidance when managing Federal programs and overseeing
recipients of Federal funding. Most recently, on December 2, 2025,
DOJ's OLC released an opinion finding that certain race-based grant
programs administered by the Department of Education violate the Fifth
Amendment's equal-protection component.\78\
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\74\ DOJ Memorandum of March 21, 2025, ``Implementation of
Executive Orders 14151 And 14173: Eliminating Unlawful DEI Programs
in Federal Operations.''
\75\ DOJ Memorandum of July 29, 2025, ``Guidance for Recipients
of Federal Funding Regarding Unlawful Discrimination'' (``July 2025
DOJ Guidance'').
\76\ DOJ Press Release of Jul. 30, 2025, ``Justice Department
Releases Guidance for Recipients of Federal Funding Regarding
Unlawful Discrimination.''
\77\ For additional Executive Branch guidance regarding
application of Federal anti-discrimination laws, see also U.S. Equal
Employment Opportunity Commission (EEOC) Letter to the Fortune 500
Companies Regarding Title VII Compliance Related to DEI Initiatives,
Feb. 26, 2026; and EEOC Questions and Answers about ``What You
Should Know About DEI-Related Discrimination at Work,'' https://www.eeoc.gov/wysk/what-you-should-know-about-dei-related-discrimination-work (last visited April 14, 2026).
\78\ Constitutionality of Race-Based Dep't of Educ. Programs,
2025 WL 4055305 (Dec. 2, 2025).
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2. Proposed revisions. OMB, in consultation with DOJ and other
agencies, proposes to amend paragraph (b) of Sec. 200.300, to provide
that, in administering Federal awards, to the maximum extent permitted
by law, the Federal agency or pass-through entity must ensure that the
Federal award is not used to fund, promote, encourage, subsidize, or
facilitate:
``Diversity, equity, and inclusion'' (DEI) or ``diversity,
equity, inclusion, and accessibility'' (DEIA) policies, principles, or
practices that violate any applicable Federal anti-discrimination laws.
This includes racial preferences or other forms of racial
discrimination used by the recipient or subrecipient that violate any
applicable Federal anti-discrimination laws, including activities where
race or intentional proxies for race will be used as a selection
criterion for employment or program participation (the ``Unlawful DEI
Provision'');
Gender ideology as defined in Executive Order 14168.
Gender ideology includes theories or ideologies that deny the
biological reality of sex or the sex binary in humans, or endorse or
advocate for the notion that sex is a chosen or mutable characteristic
(the ``Gender Ideology Provision''); or
The so-called ``transition'' of a child under 19 years of
age from one sex to another, including the chemical and surgical
mutilation of children. The term ``chemical and surgical mutilation''
has the meaning provided in Executive Order 14187 (the ``Protecting
Children Provision'').
The qualifier ``to the maximum extent permitted by law'' is
intended to ensure that Federal agencies give due consideration to
applicable authorizing legislation for their programs when applying
this provision. As discussed above, OMB also proposes a related
[[Page 32216]]
provision at Sec. 200.218 (the ``Disparate-Impact Provision'').
The existing language in paragraph (a) of Sec. 200.300 already
provides that the Federal agency or pass-through entity ``must manage
and administer the Federal award in a manner so as to ensure that
Federal funding is expended and associated programs are implemented in
full accordance with the U.S. Constitution'' and ``applicable Federal
statutes and regulations,'' including ``those prohibiting
discrimination.'' The proposed amendments would clarify and emphasize
specific applications of that principle consistent with direction in
the President's EOs and recent DOJ guidance. In addition, the proposed
revisions would also reinforce that use of Federal funds must remain
properly aligned with core public purposes authorized by law, not
diverted to subsidizing radical political ideologies, harmful
experimentation on American children,\79\ or unlawful discrimination.
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\79\ White House Fact Sheet of Apr. 28, 2025, ``Report to the
President on Protecting Children from Surgical and Chemical
Mutilation Executive Summary.''
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OMB also proposes to add revised language in Sec. 200.300(a)
clarifying that, in managing and administering Federal awards, no
person otherwise eligible will be excluded from participation in,
unlawfully denied the benefits of, or otherwise subjection to unlawful
discrimination in the administration of Federal programs, activities,
projects, assistance, and services. Such non-discrimination language
would encompass requirements, as applicable, not to discriminate on
various bases, including race, color, national origin, disability, sex,
religion, or conscience.
OMB also proposes to amend paragraphs (b) and (c) of the 2024
version of Sec. 200.300 to remove commentary on the Supreme Court's
decision in Bostock v. Clayton County, 140 S. Ct. 1731 (2020). OMB
proposes to find that this commentary is unnecessary within the
government-wide regulatory text, and no longer consistent with
Administration policy. The Gender Ideology Executive Order explained at
section (3)(f) that the prior Administration's position regarding
Bostock v. Clayton County is legally untenable and has harmed women.
The order also directed the Attorney General to issue guidance to
agencies to correct the misapplication of the Supreme Court's decision,
and to assist agencies in protecting sex-based distinctions. The Acting
Associate Attorney General issued guidance to the DOJ Civil Rights
Division on February 12, 2025 clarifying DOJ's position regarding
Bostock v. Clayton County (``February 2025 Bostock Memo''). Consistent
with the February 2025 Bostock Memo and the July 2025 DOJ Guidance,
Federal agencies may decide what additional guidance, if any, to
provide recipients of Federal financial assistance regarding the
Supreme Court's decision in Bostock v. Clayton County. To the extent
additional government-wide guidance regarding the decision is provided
in the future, it would most likely come from the Attorney General or
the Civil Rights Division at DOJ.
Finally, OMB proposes to add a new paragraph (c) regarding non-
discrimination against faith-based organizations. The proposed
paragraph (c) provides that Federal agencies and pass-through entities
may not discriminate against or in favor of an applicant on the basis
of the organization's religious character, affiliation, exercise, or
lack thereof, nor on the basis of conduct that would not be considered
ground to favor or disfavor a similarly situated secular organization.
It also provides that faith-based organizations are eligible to apply
for Federal financial assistance on the same basis as any other
organization. It also explains that applicants that meet all
eligibility requirements may be considered for a Federal award under a
notice of funding opportunity.
In both the existing and proposed versions of Sec. 200.300(a), the
examples of laws applicable to Federal awards include ``religious
liberty [laws] . . . and those [laws] prohibiting discrimination.'' All
Federal agencies must comply with the Religious Freedom Restoration Act
(RFRA) (42 U.S.C. 2000bb, et seq.) and any applicable statutes
prohibiting discrimination on the basis of religion or protecting the
exercise of conscience. The First Amendment, RFRA, and applicable
statutes prohibiting discrimination based on religion or protecting the
exercise of conscience require Federal agencies, pass-through entities,
recipients, and subrecipients to respect the exercise of religion. This
includes considering and providing reasonable accommodations or
exemptions for religious or conscience-based objections as required by
law.\80\ Where such legal protections apply, Federal agencies, pass-
through entities, recipients, and subrecipients should not structure
internal procedures in a way that would require discretionary case-by-
case approval of requests for an accommodation or exemption.\81\
Federal agencies, pass-through entities, recipients, and subrecipients
should be aware of their ongoing statutory obligations regarding
religious liberty and conscience. The proposed revision of Sec.
200.300 is intended to clarify that conscience and religious liberty
are protected under multiple statutes and the Federal Government will
enforce such statutes as applicable.
---------------------------------------------------------------------------
\80\ See, e.g., Burwell v. Hobby Lobby Stores, Inc., 573 U.S.
682 (2014) (holding that RFRA requires the government to use the
least restrictive means when substantially burdening religious
exercise).
\81\ A ``case-by-case exemption procedure leaves religious
organizations unable to predict their legal exposure'' and does not
``further[ ] any compelling antidiscrimination interests.'' Catholic
Benefits Ass'n v. Kennedy, No. 3:23-cv-00203-PDW-ARS (D.N.D. June 5,
2025), Dkt. 78 at 14. See also Catholic Benefits Association, ``CBA
Permanently Protected from Federal Gender Transition Mandates,''
Jun. 9, 2025.
---------------------------------------------------------------------------
Recent and ongoing litigation regarding some of the topics
addressed in Sec. 200.300 indicates the need for a clear regulatory
framework reflecting administration policy that can be uniformly
applied by Federal agencies to recipients of Federal financial
assistance. By engaging in N&C rulemaking, OMB seeks to provide clarity
regarding government-wide policies, consider public input, and arrive
at a final policy that is consistent with law, including longstanding
legal principles applicable to Federal financial assistance.
3. Authorities of OMB and agencies. OMB's legal authorities for
this rulemaking are discussed in various sections of this preamble, and
need not be repeated here at length. Generally, OMB relies on
authorities including 31 U.S.C. 503 and 31 U.S.C. 6307 to establish
government-wide policies and requirements related to the management of
Federal financial assistance across all Federal agencies. These
provisions authorize OMB to set uniform conditions on Federal awards to
ensure that Federal funds are expended in accordance with U.S. law and
policy.
In addition, Congress has broadly authorized Federal agencies--
including those participating in this rulemaking--to enforce Federal
nondiscrimination laws in their assistance programs. Recipient of
Federal financial assistance must comply with applicable civil rights
laws, including Title VI of the Civil Rights Act of 1964, Title VII of
the Civil Rights Act of 1964, Title IX of the Education Amendments of
1972, and the Equal Protection Clause of the Fourteenth Amendment.\82\
OMB's statutory authority includes coordinating such cross-cutting
requirements as applied to
[[Page 32217]]
administration of Federal financial assistance.
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\82\ See July 2025 DOJ Guidance.
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In designing assistance programs and making new Federal awards, it
is both permissible and required for Federal agencies to review
proposed uses of funds to ensure they remain aligned with Congressional
intent, and are not improperly diverted to subsidizing activities that
fall outside of public purposes authorized by law--especially if those
activities conflict with key administration policies expressed in EOs.
The use of Federal funds must always remain consistent with the purpose
of appropriations and the authorizing program statutes of the Federal
agency. See, for example, 31 U.S.C. 1301(a) (commonly referred to as
the ``Purpose Statute''). The Federal Grants and Cooperative Agreements
Act of 1977--which authorizes OMB to provide government-wide guidelines
``to promote consistent and efficient use'' of grants and cooperative
agreements--also recognizes that Federal awards must be used to ``carry
out a public purpose of support or stimulation authorized by law.'' 31
U.S.C. 6304, 6305, and 6307. Federal agencies are not required to
subsidize activities that fall outside of the core public purposes of
the programs they administer. OMB is not aware of Federal laws that
expressly require funding the relevant activities referenced in the
proposed regulatory text of Sec. 200.300. Multiple Federal statutes,
however, support not funding them, including Federal nondiscrimination
laws and other laws referenced in relevant EOs and the July 2025 DOJ
Guidance.
The EOs discussed above also provide further indication of
Executive Branch policy relevant to these proposals to be implemented
consistent with law. While EOs themselves do not supersede statutes,
they guide Executive Branch polices and actions where discretion exists
under statute. Here, OMB and the participating agencies are using their
discretion to shape financial assistance policy consistent with
applicable law and the clear direction from the President provided in
the recent EOs. Similar to the EOs, the proposed rule expressly
includes the qualifier ``to the maximum extent permitted by law'' to
recognize that particular assistance programs could have purposes,
requirements, or limitations affecting application of this provision--
although, as discussed below, that generally should not occur based on
the way OMB has designed the proposed regulatory text.
The proposed revisions in Sec. 200.300 are consistent with
relevant authorizing laws. By defining public purposes for particular
assistance programs, Congress certainly afforded executive agencies
with authority to condition Federal awards to only be used for those
congressionally-sanctioned purposes, and not for extraneous ideological
activities inconsistent with anti-discrimination laws or Executive
Branch policy. Discretion to attach award conditions can be analyzed by
reference to both authorizing legislation for particular assistance
programs and other government-wide legislation that applies to all
assistance programs, such as Federal anti-discrimination laws and OMB's
authorities related to providing coordinated requirements for the
management and administration of Federal financial assistance across
the Federal Government.
Based on the authorities of OMB and agencies summarized above,
Congress has afforded the Executive Branch discretion to establish the
proposed provisions, which ensure that award funds are used solely for
authorized public purposes and not for other extraneous activities that
conflict with anti-discrimination laws or Executive Branch policy.
Unlike a hypothetical award condition designed to induce recipients to
undertake activities unrelated to the underlying purposes of a
particular Federal award program, these provisions are designed to
ensure that Federal funds are only used for authorized public
purposes--not ideological side missions that are misaligned with
Federal law and policy, including program goals and objectives as
designed by Federal agencies in accordance with law. Activities
performed under Federal awards must be aligned with both relevant
legislation for assistance programs and the discretionary design of
those programs by Federal agencies within legislative bounds. Under the
proposed text, OMB will clarify that award funds must not be used in
support of activities that violate Federal anti-discrimination laws,
promote divisive ideologies unrelated to program goals and objectives,
or are otherwise unrelated to Federal agency's discretionary design of
programs to satisfy core public purposes authorized by law.
4. Clear and unambiguous incorporation in award agreements. By
codifying the provisions in 2 CFR, and incorporating them in new award
agreements, applicants and recipients will be provided with clear and
unambiguous notice of their applicability. The Supreme Court has
explained that if ``Congress intends to impose a condition on the grant
of federal [funds], it must do so unambiguously.'' Pennhurst State Sch.
& Hosp. v. Halderman, 451 U.S. 1, 17 (1981). The Court has further
explained that ``Congress must express clearly its intent to impose
conditions on the grant of federal funds so that the States can
knowingly decide whether or not to accept those funds.'' Id. at 24. The
Pennhurst notice principle also generally applies to an executive
agency's discretionary decision to impose conditions on awards based on
its discretion available under law. By defining these parameters in the
regulatory text of 2 CFR based on the statutory authorities outlined
above, OMB and the participating agencies will further ensure that such
conditions are unambiguously incorporated by the Federal agencies in
award agreements.
The formal codification of the principles in regulation will
eliminate any ambiguity for the Federal grants community regarding what
conditions apply to Federal awards on these topics. Following issuance
of a final rule, a recipient will have no basis to claim that it was
unaware that, for example, DEI practices that violate Federal anti-
discrimination laws, such as disparate treatment on the basis of race
or sex, would jeopardize its Federal funding. Even under the existing
version of OMB's guidance, there is already little or no basis for such
claims considering that the relevant principles arise under long-
standing anti-discrimination statues already referenced in the
regulatory text, governing constitutional principles, and binding
Supreme Court precedent. See, for example, Students for Fair
Admissions, Inc. v. President & Fellows of Harvard Coll., 600 U.S. 181
(2023) (``Students for Fair Admissions''). The principles were also
recently highlighted and reinforced by a series of high-profile
Presidential EOs and guidance documents from DOJ. Following formal
codification of these principles in 2 CFR through issuance of a final
rule, OMB will make these conditions even more clear and unambiguous to
all applicants for and recipients of financial assistance. This
promotes fairness, as all applicants will know the rules upfront when
applying for and accepting new awards. It will also avoid the ``unfair
surprise'' concerns discussed in Pennhurst and similar cases.
5. Spending Clause framework. The proposed revisions are also
consistent with established jurisprudence related to the Spending
Clause. In South Dakota v. Dole, the Supreme Court outlined the
framework governing the authority of Congress under the Spending Clause
to attach funding conditions to Federal award programs. 483 U.S. 203
(1987). Under this framework, a funding
[[Page 32218]]
condition must: (1) promote ``the general welfare;'' (2) be clear and
unambiguous so that recipients can ``knowingly'' accept the term; (3)
be reasonably related ``to the federal interest in particular national
projects or programs'' at issue (or ``reasonably calculated'' to
support ``a purpose for which the funds are expended''); (4) not induce
recipients to engage in activities ``that would themselves be
unconstitutional;'' and (5) not be unduly coercive such that ``pressure
turns into compulsion.'' Id., at 207-11 (quotations omitted). Because
executive authority to attach funding conditions to assistance awards
is derived from the enactment of legislation by Congress, evaluating
executive authority to attach such conditions also generally involves
consideration of this framework. The proposed amendment of Sec.
200.300 is well within the bounds of the framework provided in Dole.
First, the proposed revision promotes the general welfare by
ensuring that Federal funds are not used to undermine the U.S.
Constitution or Federal anti-discrimination laws, to support divisive
ideologies misaligned with core purposes of discretionary assistance
programs and Executive Branch policy, or to harm minors. Ensuring that
Federal tax dollars are only used for purposes authorized by the
Federal Government--and not for extraneous ideological missions
unrelated to Federal awards--certainly promotes the general welfare.
Second, the proposed rule is designed to clearly define the
prohibited activities in the regulatory text of 2 CFR and Federal
awards made after its effective date. This satisfies the requirement to
allow recipients to ``knowingly'' accept the provisions. See also
Pennhurst, 451 U.S., at 17. Further discussion of the Pennhurst notice
principle as applied to Sec. 200.300 is provided in the immediately
preceding section of this analysis.
Third, the amended provision is designed to ensure that activities
preformed under a Federal award remain aligned with the ``federal
interest'' in particular appropriations and program statutes. See also
New York v. United States, 505 U.S. 144, 167 (1992) (grant ``conditions
must (among other requirements) bear some relationship to the purpose
of the federal spending''). In other words, the provision seeks to
ensure that Federal funds are only used for the core public purposes
for which the funds are expended, and not for illegal discrimination or
promoting divisive ideologies or harmful practices. The provision would
further ensure that activities carried out under Federal awards are
reasonably related to the Federal interest in the project or program at
issue, and not improperly diverted to other activities or ideological
initiatives unrelated to the purposes authorized by Congress and
implemented by discretion of the Executive Branch. There is a strong
Federal interest in ensuring that award activities do not drift away
from authorized public purposes into activities that conflict with key
Executive Branch policies expressed in Presidential Executive orders
and reflected in program design by agencies. Thus, preventing
violations of nondiscrimination laws, avoiding circumstances in which
Federal award funds are improperly used to support divisive ideologies
misaligned with core public purposes authorized by law, and protecting
the health and safety of children are all Federal interests applicable
to all discretionary assistance programs.
To the extent that some as-yet unidentified assistance program
expressly required performance of such activities without violating the
U.S. Constitution, the proposed qualifier ``to the maximum extent
permitted by law'' could apply in those circumstances. The government-
wide presumption, however, would be that Federal financial assistance
programs will not be designed or administered by Federal agencies to
support such activities, which are not expressly authorized by Congress
and conflict with Executive Branch policy. All statutes must be
administered in accordance with the U.S. Constitution and Federal anti-
discrimination laws, and OMB is not aware of legislation establishing
an entitlement to funds for the purposes of unlawful discrimination,
promoting ``gender ideology'' as defined by Executive Order 14168, or
assisting in the so-called ``transition'' of a child from one sex to
another as discussed in Executive Order 14187.
Fourth, the proposed revisions do not induce unconstitutional
conduct. On the contrary, the Unlawful DEI Provision and related
Disparate-Impact Provision at Sec. 200.218 align with the
Constitution's equal protection principles by clarifying that Federal
awards may not be used to support activities involving unlawful
discrimination based on protected characteristics--as discussed in more
detail in section 8.a below. Regarding the Protecting Children
Provision, no court has recognized a constitutional entitlement to such
procedures, and certainly not at the public expense. Moreover, with
regard to all provisions, the proposed regulatory text for this
rulemaking merely says that Federal award funds may not be used for
certain defined activities--which will generally fall outside of the
authorized public purposes a particular award program is intended to
support--without attempting to more broadly regulate other activities
beyond the scope of the Federal award.
Fifth and finally, the proposed revision is not unduly coercive. An
applicant or prospective recipient may simply opt out of particular
Federal award or program if it cannot manage to design its project or
program in a way that does not violate Federal anti-discrimination laws
or use Federal funds to promote gender ideology or assist in sex-
transition procedures for minors.
6. Permissibility under the First Amendment. The proposed revisions
also do not implicate free speech concerns under the First Amendment.
All of OMB's proposed revisions related to national policy are merely
providing clear notice to applicants for, and recipients of, Federal
awards that, unless expressly required by law, executive agencies do
not intend to use their discretionary authority to fund these
categories of activities. As such, the proposed provisions do not
infringe on protected speech--they merely set parameters for Federal
funding or subsidization of speech, clarifying that the Federal
Government will not subsidize certain categories of ideological
activities. All executive agencies have received clear policy direction
through the President's Executive orders and other executive actions,
which they will follow in their administration of discretionary award
programs. The proposed provisions only apply to activities performed
under the federally funded award programs, and do not penalize or
scrutinize recipients' speech outside of the Federal award.
The Supreme Court has long been clear that the First Amendment
provides the government significant flexibility when it acts as patron
to subsidize speech under Federal spending programs, as opposed to when
it acts as sovereign to regulate speech beyond the scope of such
programs. The distinction that has emerged from the Supreme Court
regarding whether a funding condition may result in an unconstitutional
burden on First Amendment rights is between: (i) conditions that define
the limits of the government spending program by specifying the
activities the Federal Government wants to subsidize; and (ii)
conditions that seek to leverage funding to regulate speech outside the
contours
[[Page 32219]]
of the Federal program itself. Agency for Int'l Dev. v. All. for Open
Soc'y Int'l, Inc., 570 U.S. 205, 206, 215-15 (2013). The ``decision not
to subsidize the exercise of a fundamental right does not infringe the
right.'' Regan v. Taxation with Representation of Washington, 461 U.S.
540, 549 (1983). The government is permitted to make a value judgment
regarding the public interest and ``implement that [value] judgment by
the allocation of public funds.''' Rust v. Sullivan, 500 U.S. 173, 192-
93 (1991) (quoting Maher v. Roe, 432 U.S. 464, 474 (1977)). Thus, when
acting as a patron to subsidize speech--using discretion to fund
certain activities under a Federal program and not others--the
government can choose which activities to fund without implicating
concerns under the First Amendment. ``[C]ho[osing] to fund one activity
to the exclusion of the other'' is permissible. National Endowment for
the Arts v. Finley, 524 U.S. 569, 588 (1988) (citation omitted). The
``Government can, without violating the Constitution, selectively fund
a program to encourage certain activities it believes to be in the
public interest.'' Rust at 193. Conversely, the government is not
required to subsidize activities that it does not wish to promote. Id.
Constitutional concerns arise only when the Federal Government is using
the funding to affect speech beyond the scope of the federally-funded
spending program. See also California ex rel. Becerra v. Azar, 950 F.3d
1067, 1093 n.24 (9th Cir. 2020) (``The Supreme Court has repeatedly
reaffirmed . . . that the government may constitutionally preclude
recipients of federal funds from addressing specified subjects so long
as the limitation does not interfere with a recipient's conduct outside
the scope of the federally funded program.'').
The proposed revisions to Sec. 200.300 are focused on activities
within the scope of federally-funded programs. In the previous
administration, executive agencies frequently chose to subsidize and
expressly prioritize projects based on their ideological alignment with
the categories of activities discussed in the proposed version of Sec.
200.300. See, for example, E.O. 13985, sec. 1, 86 FR 7009, 7009 (Jan.
25, 2021) (``It is therefore the policy of [the Biden] Administration
that the Federal Government should pursue a comprehensive approach to
advancing equity . . . .''). In this administration, executive agencies
will continue to use their discretionary authorities in a manner
consistent with current Executive Branch policy. If executive agencies
were entitled to subsidize those types of activities during the
previous administration, there is no constitutional basis to prevent
the government from reaching a different policy determination regarding
which activities to fund during this administration. For the purposes
of the proposed regulatory text for this rulemaking--which is all that
is relevant to this analysis--the government does not propose to deny
recipients the right to pursue such activities outside of activities
performed under their Federal awards. In the context of Federal grants
administration, OMB and Federal agencies propose to make a
constitutionally permissible decision not to subsidize those activities
with Federal funds unless expressly required by law. The First
Amendment does not require providing taxpayer resources to support,
promote, or advocate for policies that the government finds are not in
the public interest. Selective government funding that leaves private
entities free to express themselves as they wish outside of Federal
award activities, and using their own resources, does not implicate
concerns under the First Amendment.
7. Permissibility under equal protection principles. The proposed
revisions are permissible under the equal protection component of Fifth
Amendment's Due Process Clause. The revisions provide clear notice that
the government will not fund these categories of activities, but do not
direct agencies to take actions that discriminate on the basis of
protected characteristics such as race or sex.
First, the Unlawful DEI and Disparate-Impact Provisions seek to
ensure that unlawful discrimination is not permitted to continue in the
future. For example, the Equal Protection doctrine rejects the notion
that the Constitution permits--let alone requires--the Government to
``intentionally allocate preference to those who may have little in
common with one another but the color of their skin.'' See Students for
Fair Admissions, 600 U.S. 181, 200 (2023) (citation and quotation
omitted). OMB's intent in proposing these provisions is to prevent
unlawful discrimination from occurring under federally-funded programs.
Further discussion of the Unlawful DEI provision is provided in section
8.a below.
Second, the Gender Ideology and Protecting Children provisions
distinguish between the concept of biological ``sex'' and other
amorphous concepts associated with gender ideology. These provisions
give notice that executive branch agencies will no longer use their
discretionary authorities to subsidize projects or activities promoting
gender ideology, including those seeking to replace the concept of
biological ``sex'' with a divisive, unstable, and subjective concept of
``gender identity.'' The previous administration attempted to impose
this contentious concept on all members of the American public through
various funding streams, including by reinterpreting Federal sex-
discrimination statutes for this purpose.\83\ In doing so, it promoted
and subsidized activities that diminished the rights, dignity, safety,
and well-being of women; infringed on fundamental religious liberties;
and caused life-long harm to vulnerable children. See Gender Ideology
Executive Order, secs. 1 and 2; Protecting Children Executive Order,
sec. 1. Pursuant to the President's Executive orders, the Executive
Branch no longer wishes to endorse the ideological doctrine that
``sex'' and self-assessed ``gender identity'' are interchangeable. The
proposed revisions direct agencies to ensure that, to the extent
permitted by law, Federal money is no longer used to fund programs or
projects that violate Federal antidiscrimination laws or promote gender
ideology.
---------------------------------------------------------------------------
\83\ See, e.g., Rachel N. Morrison, ``Gender Identity Policy
Under the Biden Administration,'' Federalist Society Review, May 2,
2022.
---------------------------------------------------------------------------
The Supreme Court's recent decision in United States v. Skrmetti,
605 U.S. 495 (2025) is instructive in relation to the Gender Ideology
and Protecting Children provisions. The Supreme Court evaluated a
Tennessee law prohibiting medical interventions for ``gender dysphoria,
gender identity disorder, or gender incongruence'' in minors. Id. at
495-7. The Skrmetti plaintiffs argued that the law ``discriminates on
the basis of sex and transgender status'' and could not withstand
intermediate scrutiny. Id. at 520. The Supreme Court rejected these
arguments and upheld Tennessee's law on rational-basis review. It first
held that Tennessee's law does not classify based on sex because it
``does not prohibit conduct for one sex that it permits for the
other.'' Id. at 497. Rather, the prohibition turns on the treatment of
``gender dysphoria'' and ``applies regardless of a minor's sex.'' Id.
at 511.
The same principle holds true for the proposed 2 CFR revisions. The
proposed regulatory text gives notice that Federal funding will no
longer be used to subsidize or promote the doctrine that sex and
``gender identity'' are interchangeable concepts--or other activities
based on that doctrine such as harmful medical procedures performed
[[Page 32220]]
on children. The notice regarding the Executive Branch's funding
priorities does not discriminate on the basis of the sex of any group
or individual. Rather, it applies equally to all.
8. Analysis of specific national policy provisions.
a. Unlawful DEI Provision (and related Disparate-Impact Provision).
The proposed restriction on funding for unlawful DEI activities is
based on the obligation of every Federal grant recipient to comply with
Federal anti-discrimination laws as a condition of receiving Federal
funds. See July 2025 DOJ Memorandum. Expressly stating this condition
at Sec. 200.300--and the related provision at Sec. 200.218--is
consistent with Federal law and well within OMB's authority to clarify
and coordinate award conditions used by the Federal Government.
Government-wide coordination is needed to ensure that recipients of
Federal awards do not continue to engage in unlawful discrimination. In
recent years, the Federal Government has ``turned a blind eye toward,
or even encouraged, various discriminatory practices.'' \84\ For
example, some recipients have adopted unlawful DEI initiatives or
practices that include providing benefits or opportunities based on
race or sex; imposing race-conscious quotas or objectives under a
variety of names, labels, or proxies; or conducting training sessions
that endorse and encourage racial stereotyping and scapegoating,
promote unlawful discrimination, or create a hostile environment.\85\
---------------------------------------------------------------------------
\84\ July 2025 DOJ Guidance.
\85\ See examples of unlawful discriminatory policies and
practices in July 2025 DOJ Guidance.
---------------------------------------------------------------------------
The Supreme Court's decision in Students for Fair Admissions
reaffirmed that racially discriminatory practices are unlawful even if
labeled as promoting ``diversity'' or ``equity.'' 600 U.S. 181
(2023).\86\ Executive Order 14173 explains that ``the Federal
Government is charged with enforcing our civil-rights laws'' and states
plainly that the purpose of the order is to ensure that the Federal
Government now fulfills that responsibility ``by ending illegal
preferences and discrimination.'' Consistent with Supreme Court
precedent interpreting civil-rights statutes, protecting and enforcing
civil rights includes ensuring that Federal funds are not used to
support unlawful discrimination based on protected characteristics.\87\
This rule reflects that principle and is intended to promote equal
treatment consistent with the purposes of Federal civil-rights law.
Similar principles are reaffirmed in the July 2025 DOJ Guidance and the
OLC opinion dated December 2, 2025.\88\
---------------------------------------------------------------------------
\86\ Specifically, the Court held that racial classifications by
public institutions are subject to strict scrutiny and racial
classifications by private institutions can serve as basis for
revoking funding under Title VI. See also, e.g., Ricci v. DeStefano,
557 U.S. 557, 579 (2009) (``[E]xpress, race-based decision-making
violates Title VII's command that employers cannot take adverse
employment actions because of an individual's race.''); Wtolo u.
Guzman, 999 F.3d 353,361 (6th Cir. 2021) (holding grant program with
race and sex preferences is unlawful under Equal Protection Clause).
\87\ EO 14281, sec. 1.
\88\ 2025 WL 4055305 (Dec. 2, 2025).
---------------------------------------------------------------------------
The proposed provisions at Sec. Sec. 200.300 and 200.218 are
consistent with the Federal Government's commitment to treat every
American with equal dignity and respect discussed in Executive Order
14151, the principle of merit-based opportunity discussed in Executive
Order 14173, and the principles regarding unlawful discrimination
discussed in the July 2025 DOJ Guidance. The proposed provisions will
provide clear notice to all recipients of the need to ensure that their
programs and activities comply with Federal law and do not discriminate
on the basis of race, color, national origin, sex, religion, or other
protected characteristics--no matter the program's labels, objectives,
or intentions. The proposed provisions benefit both recipients and the
Federal Government by promoting consistency, transparency, and fairness
through a uniform award condition. The provisions will put recipients
on clear notice that such practices constitute a material breach of the
Federal award, and further strengthen the government's rights to
recover misused funds or terminate awards based on noncompliance.\89\
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\89\ Additional grounds for terminating awards are also
available under the existing and proposed versions of regulatory
text in part 200.
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Based on other public comments, OMB anticipates that some
commenters for this rulemaking may contend that the Unlawful DEI
Provision is excessively vague or open to misinterpretation, including
by suggesting that it could be read to prohibit lawful activities under
Federal awards that do not discriminate based on protected
characteristics such as race or sex. Commenters should focus their
attention on the regulatory text proposed in this document, which would
prohibit Federal agencies from using Federal awards to ``fund, promote,
encourage, subsidize, or facilitate . . . policies, principles, or
practices that violate any applicable Federal anti-discrimination
laws.'' This proposed text does not expand the scope of applicable
statutes. Rather, consistent with OMB's authorities to establish
government-wide policies for the administration of Federal financial
assistance, the proposed text clarifies how those requirements apply in
the context of Federal awards and the responsibilities of agencies and
recipients under part 200. It also reflects the established function of
implementing regulations and the terms and conditions of Federal awards
in ensuring that Federal financial assistance is administered and used
in a manner consistent with statutory requirements and governing
constitutional principles.
The July 2025 DOJ Guidance provides illustrative examples of
practices that may violate underlying anti-discrimination statutes
depending on the facts and circumstances of particular matters. The
guidance reflects the longstanding Executive Branch practice of issuing
interpretive guidance regarding the application of Federal anti-
discrimination statutes in specific contexts. Whether a violation
exists in any particular case would continue to be determined by
reference to the governing legal standards under applicable anti-
discrimination laws as interpreted in light of controlling Supreme
Court precedent.
Consistent with longstanding Executive Branch practice, OMB's
interpretation of Federal anti-discrimination laws in the context of
this proposed rulemaking is informed in part by guidance issued by DOJ
regarding the application of those laws. The principles and
illustrative examples discussed in the July 2025 DOJ Guidance provide
additional context regarding the application of those laws in certain
circumstances. OMB's interpretation is also informed by the Supreme
Court's decision in Students for Fair Admissions, which addresses the
application of Federal anti-discrimination statutes in light of
constitutional equal protection principles, and by the December 2, 2025
OLC opinion addressing the administration of Federal programs
consistent with statutory requirements and governing limitations under
the U.S. Constitution. Thus, commenters may also review those sources
in reviewing and responding to this document.
OMB believes the regulatory text provides sufficient clarity
regarding prohibited forms of discrimination, but seeks comment on
whether the final rule should include additional discussion or
elaboration in the regulatory text or preamble. The proposed regulatory
text explains that
[[Page 32221]]
unlawful DEI would include, for example, racial preferences or other
forms of racial discrimination used by the recipient or subrecipient
that violate any applicable Federal anti-discrimination laws, including
circumstances in which race or intentional proxies for race are used as
a selection criterion for employment or program participation. This
example is not exhaustive, but reflects a major category of conduct
addressed by the Supreme Court in Students for Fair Admissions. Thus,
the proposed regulatory text clarifies that Federal awards may not be
used to support activities involving disparate treatment based on
protected characteristics under applicable law, including race or
intentional proxies for race. Commenters may also consider the
definitions and model contract clause set forth in E.O. 14398 of March
26, 2026, ``Addressing DEI Discrimination by Federal Contractors,'' and
provide input regarding whether any similar language would be
appropriate or informative in the context of this rulemaking, such as
language further clarifying the application of disparate treatment
standards in connection with activities under Federal awards.\90\ OMB
also seeks comment on whether such additional discussion or elaboration
would be helpful to recipients and subrecipients in meeting their
obligations under part 200 for activities carried out under Federal
awards, including their internal control responsibilities under Sec.
200.303. In addition, OMB seeks comment on whether further
clarification would be helpful regarding the relationship between Sec.
200.300 and other provisions of part 200--including Sec. 200.204,
Sec. 200.211, Sec. 200.303, and Sec. 200.403--as well as the
relationship between those provisions and the terms and conditions of
Federal awards issued by Federal agencies pursuant to this proposed
rulemaking.
---------------------------------------------------------------------------
\90\ E.O. 14398 applies to Federal procurement contracts and
contract-like instruments.
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Executive Branch agencies have long issued government-wide and
program-specific regulations and guidance interpreting Federal civil
rights requirements as applied to recipients of Federal financial
assistance. This proposed rulemaking continues that established
practice by clarifying how existing nondiscrimination requirements
apply within the scope of Federally-funded activities. Consistent with
longstanding Executive Branch practice, OMB seeks to ensure that
Federal financial assistance is not used by recipients or subrecipients
for discriminatory policies or practices, including those that
discriminate based on a person's protected characteristics.
Although DOJ's guidance is described as non-binding, OMB and
Federal agencies intend to clarify through this N&C rulemaking process
how applicable anti-discrimination laws apply to Federal financial
assistance programs. Recipients and subrecipients should be aware that
discriminatory practices already present compliance risks under
existing anti-discrimination laws enforced by the Executive Branch.\91\
In light of the clarification provided through recent Executive Branch
guidance--which would be given regulatory effect through this N&C
rulemaking--recipients and subrecipients should not assume that
practices previously viewed as consistent with prior Executive Branch
guidance will necessarily satisfy applicable Federal anti-
discrimination requirements as applied to Federal awards. Recipients
and subrecipients should evaluate existing policies and practices in
reference to the legal standards reflected in this rulemaking and the
applicable anti-discrimination laws discussed above. Following issuance
of a final rule, the policy proposed in this document will have
regulatory effect as part of the government-wide regulations for
Federal financial assistance set forth in 2 CFR.
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\91\ See, e.g., July 2025 DOJ Guidance.
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b. Gender Ideology Provision. The proposed restriction on funding
the promotion of gender ideology is based on ensuring that Federal
awards are only used for public purposes authorized by law. Within
legislative bounds, Federal agencies must also design their assistance
programs and funding opportunities to be consistent with Executive
Branch policy.
The Federal Government has no obligation to provide taxpayer funds
to promote divisive and harmful ideologies. On the contrary, it has
compelling reasons not to do so. As explained in Executive Order 14168,
government-sponsored efforts ``to eradicate the biological reality of
sex'' harm women by ``depriving them of their dignity, safety, and
well-being.'' Various commenters have explained how such efforts also
do significant harm to public trust in government.\92\ Rather than
continuing to waste Federal funds in support of divisive gender
ideologies, which harm women, have a corrosive effect on public trust
in Federal grantmaking agencies, infringe on religious liberties, and
fall outside of specifically enumerated purposes of authorizing
legislation, the Federal Government should instead refocus its efforts
more squarely on using Federal awards for core purposes authorized by
law. Discretionary awards must also be channeled through an agency's
careful design of programs and funding opportunities for consistency
with both law and, where applicable, administration policy
priorities.\93\ Ending government-sponsored promotion of divisive
gender ideology is critical to scientific inquiry, public safety, and
trust in government.\94\
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\92\ See, e.g., Sarah Parshall Perry, ``The Uprising: Families
Clash with Schools Over LGBTQ Propaganda,'' Heritage Foundation,
Jun. 22, 2023; Emilie Kao, ``Safeguarding Parental Rights and
Protecting Children from Federally Mandated Gender Ideology.''
Heritage Foundation Backgrounder No. 3744, Jan. 10, 2023; Carl R.
Trueman, ``Gender Ideology and the Future of the Human Person.''
Heritage Foundation, Mar. 20, 2023.
\93\ EO 14332, sec. 4(b).
\94\ EO 14168.
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Consistent with the principles outlined in Executive Order 14168,
the proposed provision will provide clear notice to recipients that
promoting gender ideology is not something that the Federal Government
wishes to fund as part of any Federal program. The proposed rule
ensures that federally appropriated award funds--which are intended for
purposes like education, research, and health--are not improperly
diverted to purposes outside of the program's approved scope as
designed by Federal agencies consistent with authorizing law. Again,
the proposal benefits both recipients and the Federal Government by
establishing government-wide consistency through a uniform and
transparent provision. Recipients will receive clear notice that using
Federal award funds for unauthorized purposes related to promoting
gender ideology will constitute a material breach of the Federal award,
and the government's rights to recover misused funds or terminate
awards based on noncompliance will be further strengthened.\95\
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\95\ Additional grounds for terminating awards are also
available under the existing and proposed versions of regulatory
text in part 200.
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c. Protecting Children Provision. The proposed restriction on
funding the so-called ``transition'' of a child under 19 years of age
from one sex to another is also based on ensuring that Federal awards
are only used for authorized public purposes. Within legislative
bounds, Federal agencies must also design their assistance programs and
funding opportunities to align with administration policy priorities.
[[Page 32222]]
This provision is also based on a compelling public welfare
justification. As discussed in Executive Order 14187, ``maiming and
sterilizing a growing number of impressionable children under the
radical and false claim that adults can change a child's sex through a
series of irreversible medical interventions'' is a practice with
``destructive and life-altering'' consequences that ``will be a stain
on our Nation's history.'' The Federal Government has an obligation to
avoid subsidizing what it considers to be unethical and unsafe
practices with profound consequences on the lives and well-being of
American children. Sex-rejecting procedures performed on children with
profound and life-altering consequences fall in this category.
Executive Order 14187 explained that a growing number of minors soon
regret that they have undergone such procedures and begin to recognize
the physical, financial, and psychological consequences that will
follow them for the rest of their lives. The Executive Order labeled
these interventions ``chemical and surgical mutilation'' of children,
which reflects the administration's conclusion that such activities are
not legitimate healthcare warranting government financial support, but
rather harmful experimentation on minors, which must end.
The legal basis for the prohibition is straightforward: there is no
right or entitlement to receive these procedures at the public expense
under Federal law, and the Federal Government will not--and has no
legal obligation to--provide funding for them. The proposed rule does
not deny any person a constitutional or statutory right because there
is no such right under Federal law. For all of the reasons set forth in
Executive Order 14187, the Federal Government has determined that
providing assistance for such sex-rejecting procedures on children is
not in the public interest--and it will not do so.\96\
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\96\ See also HHS Gender Dysphoria Report of November 19, 2025,
``Treatment for Pediatric Gender Dysphoria: Review of Evidence and
Best Practices.''
---------------------------------------------------------------------------
Consistent with the principles outlined in Executive Order 14187,
the proposed provision will provide clear notice to recipients that the
Federal Government will not provide funding for these practices. Once
again, the proposal benefits both recipients and the Federal Government
by establishing government-wide consistency through a uniform and
transparent provision. Recipients will receive clear notice that using
Federal award funds for these purposes will constitute a material
breach of the Federal award, and the government's rights to recover
misused funds or terminate awards based on noncompliance will be
further strengthened.\97\
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\97\ Additional grounds for terminating awards are also
available under the existing and proposed versions of regulatory
text in part 200.
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9. Conclusion. OMB is aware that it is changing existing policy in
Sec. Sec. 200.300 and 200.218, but proposes to find that these changes
are warranted for all of the reasons described in this document. The
existing language in paragraph (a) of Sec. 200.300 already provides
that the Federal awarding agency must manage and administer Federal
awards in full accordance with U.S. law. OMB's proposed revisions
related to unlawful discrimination clarify and emphasize specific
applications of that principle consistent with underlying statutory
authorities and recent policy direction from the Executive Branch
regarding implementation and enforcement of those statutes. OMB's
proposed changes in this section are also designed to ensure that
Federal funds are only used for core public purposes authorized by law
and the terms and conditions of Federal awards, and not for other
extraneous activities that conflict with key Executive Branch policies
and priorities.
OMB recognizes that the factual findings in this document are
inconsistent with certain factual findings and policy positions that it
offered to support revisions of Sec. 200.300 in 2024. OMB has provided
a reasoned explanation above regarding its rationale for the new
policies. OMB invites comments on the rationale provided in this
document in relation to reasons that supported OMB policies in 2024 or
earlier years. OMB will respond to such comments in the final rule.
Section 200.303--Internal Controls
OMB proposes a clarification in Sec. 200.303(e) regarding
confidential business information. Specifically, OMB proposes to
include confidential business information as a type of information that
a recipient or subrecipient must take reasonable cybersecurity and
other measures to safeguard.
In Sec. 200.303(a), OMB also proposes to delete the statement that
internal controls should align with the guidance in ``Standards for
Internal Control in the Federal Government'' issued by the Comptroller
General of the United States or the ``Internal Control-Integrated
Framework'' issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). The U.S. Government Accountability Office
(GAO)--under the Direction of the Comptroller General--is a legislative
branch agency; its views regarding internal controls are not binding on
Executive Branch regulations applicable to recipients and subrecipients
of Federal awards. COSO is a private-sector organization. Directing
recipients and subrecipients to follow dynamic standards issued by
organizations outside of the Executive Branch is inconsistent with
Administration policy and the longstanding notice and comment
procedures used by OMB for updates to 2 CFR. See 2 CFR 1.230. OMB
cannot--and does not desire to--delegate rulemaking authority to GAO or
COSO regarding standards for internal control used by recipients and
subrecipients of Federal financial assistance. This revision will
clarify that the GAO and COSO frameworks do not apply to recipients or
subrecipients as binding or expressly recommended standards. Federal
agencies, auditors, recipients, and subrecipients may continue to
consider these or other widely recognized frameworks as general
reference points when evaluating the adequacy of internal controls.\98\
OMB is only proposing to clarify that recipients and subrecipients have
some degree of reasonable discretion regarding how to establish,
document, and maintain effective internal control in ways that may not
be fully consistent with the GAO or COSO frameworks. Recipients and
subrecipients would not be required to adopt or follow any specific
framework issued by these external organizations.
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\98\ As authorized by the Federal Managers' Financial Integrity
Act (FMFIA) of 1982 (Pub. L. 97-255), as amended and codified at 31
U.S.C. 3512(c) and (d), and the Government Performance Results Act
(GPRA) Modernization Act of 2010 (Pub. L. 111-352), OMB recently
issued a revised framework for internal control applicable to
Federal agencies through a revised version of OMB Circular No. A-123
(Mar. 10, 2026). This framework does not apply directly to the
recipients and subrecipients of Federal awards, but illustrates
internal control principles used across Federal programs by the
Federal Government.
---------------------------------------------------------------------------
OMB proposes to add Sec. 200.303(f) to require all recipients and
subrecipients of Federal financial assistance to participate in the
Department of Homeland Security's E-verify program to confirm the
employment eligibility of employees and contractors hired in or
performing work in the United States under a Federal award. This
additional safeguard would be implemented as part of the internal
control responsibilities of the recipient or subrecipient. The Federal
Government has applied the E-
[[Page 32223]]
verify program to Federal contractors for over 15 years.\99\ OMB is now
proposing to expand the application of the E-verify program to Federal
financial assistance programs based on its government-wide financial
management authorities discussed above. Although OMB is proposing to
expand application of the program, the requirements under the program
would otherwise apply in accordance with applicable Federal law and DHS
program requirements. For entities and activities to which the E-Verify
participation program is applied, OMB does not propose to alter
existing exceptions or limitations recognized in DHS program
requirements based on DHS authorities. OMB also does not propose to
apply the program to activities unrelated to Federal awards. Consistent
with the Immigration and Nationality Act (8 U.S.C. 1324a), which
prohibits employers from knowingly hiring or continuing to employ
unauthorized aliens and requires employers to verify employment
eligibility, this provision is intended to strengthen compliance with
Federal employment eligibility requirements for individuals performing
work under Federal awards.
---------------------------------------------------------------------------
\99\ Compare 48 CFR, Subpart 22.18. See also FAR Case 2007-013,
Employment Eligibility Verification, 73 FR 67651 (Nov. 14, 2008).
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Lastly, OMB proposes to add Sec. 200.303(g) to clarify that States
must conduct pre-payment verification checks prior to disbursing
Federal funds. Specifically, States that are recipients of Federal
financial assistance must review available data sources with relevant
information to verify the eligibility of payees and prevent improper
payments. Such reviews may be conducted through the Department of the
Treasury's Do Not Pay (DNP) system, or through an alternative payment
screening process that provides protection against improper payments.
This proposed revision would not require States to adopt specific
payment systems or technologies. The requirement to conduct eligibility
reviews for payees is not intended to substitute or replace any
required program specific requirements. Consistent with the Payment
Integrity Information Act of 2019 (31 U.S.C. 3351-3356), which
establishes government-wide requirements to prevent and reduce improper
payments, and the Do Not Pay Initiative under 31 U.S.C. 3354, this
provision is intended to strengthen internal controls over Federal
funds by requiring States, as recipients of Federal financial
assistance, to review available data sources prior to disbursing
payments made with Federal funds.
Section 200.305--Federal Payment
OMB proposes to revise Sec. 200.305 to require Federal agencies to
verify recipient eligibility through Treasury's Do Not Pay (DNP) system
before making any disbursement of any Federal payment. Consistent with
the Payment Integrity Information Act of 20194 (PIIA),\100\ this
addition is intended to strengthen oversight and prevent improper
payments.
---------------------------------------------------------------------------
\100\ 31 U.S.C. 3351 et seq.
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Consistent with section 3 of Executive Order 14222, ``Implementing
the President's `Department of Government Efficiency' Cost Efficiency
Initiative,'' OMB also proposes language that requires payment requests
from recipients and subrecipients other than States to include
justifications describing the purpose of the payment and the specific
award-related work it supports. Under the proposed text, agencies must
collect this information once appropriate systems are in place. These
proposed changes would increase accountability for Federal
disbursements while ensuring funds are tied to measurable award
activities and outcomes.
Section 200.306--Cost Sharing
OMB proposes to revise Sec. 200.306 to relocate paragraph (a) on
voluntary committed cost sharing to paragraph (j). This policy fits
better next to paragraph (k), which addresses voluntary uncommitted
cost sharing for institutions of higher education (IHE).
Section 200.318--General Procurement Standards
OMB proposes to revise Sec. 200.318 to strengthen accountability
for time-and-materials type contracts and to streamline other
procurement requirements. The proposed revisions add requirements that
material costs under time-and-materials contracts must be supported by
documentation and priced consistently with market rates. These
additions are intended to ensure recipients apply effective cost
controls and maintain transparency in contract pricing. OMB also
proposes to revise this section by deleting a prior list of examples of
labor and employment practices that do not reflect common procurement
approaches or otherwise do not align with administration policy or
Federal agency priorities. The proposed text continues to recognize
that recipients and subrecipients may use project labor agreements or
other types of pre-hire collective bargaining agreements, but only if
the use of such agreements will advance the interest of the Federal
Government associated with the applicable Federal financial assistance
program, including consideration of practicability and cost
effectiveness. OMB also proposes language to clarify that part 200 does
not prohibit recipients or subrecipients from communicating a
requirement that individuals be authorized to work in the United States
under applicable law. OMB also proposes to clarify that recipients and
subrecipients are also responsible for ensuring consistency with
applicable law, and that employment practices should be consistent with
the foundational principles of recognizing merit and the ability of
employees to fulfill the requirements of the contract. Collectively,
these proposed revisions streamline the requirements by removing
extraneous, unnecessary, or inappropriate examples, while reinforcing
lawful flexibility and cost accountability in procurement practices.
Section 200.320--Procurement Methods
OMB proposes to revise Sec. 200.320 to include language regarding
how cost-reimbursement contracts may be used. The proposed language
strongly discourages recipients from using cost reimbursement
contracts. Under the proposed text, when using cost-reimbursement
contracts, the recipient must notify the awarding Federal agency of its
use of this mechanism and maintain a written justification in its
records. OMB also proposes flexibility for Federal agencies, at their
discretion, to require prior approval of such contracts in the terms
and conditions of the award. These changes are intended to reflect that
cost-reimbursement contracts are inherently higher risk, as they reduce
incentives for contractors to control costs, require more intensive
oversight, and present greater risk of improper or excessive payments
of Federal funds. By discouraging their use while preserving agency
authority to require prior approval, the revision strikes a balance
between limiting risk and allowing flexibility in circumstances where
no other contract type is feasible.
Section 200.321--Contracting With Small Businesses
OMB proposes to streamline Sec. 200.321 to simplify direct
recipients and subrecipients to ensure that small businesses, including
subcategories enumerated in Federal statute, are considered for
contracting opportunities. These proposed changes are intended to
streamline the policy,
[[Page 32224]]
reduce administrative burden, and ensure that contracting preferences
remain consistent with law and other principles discussed in this
document, including merit-based opportunity.
Section 200.322--Domestic Preferences for Procurements
OMB proposes to revise Sec. 200.322 to clarify the policy related
to domestic preferences for procurements under Federal awards. The text
of Sec. 200.322(c) (existing version) refers to mandatory requirements
at 2 CFR part 184 for infrastructure awards. The text of Sec.
200.322(a) and (b) (existing version) provides an aspirational standard
that applies more broadly to all awards. OMB proposes to delete the
existing aspirational standard at paragraphs (a) and (b) and replace it
with a new paragraph (a) (proposed version) directing agencies, to the
greatest extent practicable and consistent with law, to include terms
and conditions in Federal financial assistance awards to maximize the
use of goods, products, and materials produced in the United States. At
paragraph (b) (proposed version), in the case of infrastructure
projects, OMB proposes to preserve the existing requirement at
paragraph (c) for agencies to implement the mandatory Buy America
preferences set forth in 2 CFR part 184.
Based on the Build America, Buy America Act (BABA), which was
included in the Infrastructure Investment and Jobs Act (IIJA), OMB has
broad statutory authority to require inclusion of mandatory Buy America
requirements for all Federal infrastructure assistance programs. OMB
implemented these mandatory standards for infrastructure at 2 CFR part
184 and Sec. 200.322(c) (existing version). BABA is the most relevant
government-wide source of authority to impose mandatory grant
conditions on non-Federal entities specifically related to Buy America
requirements under financial assistance awards. There are also various
agency-specific statutes that do the same.
The authority of Federal agencies to impose domestic purchasing
requirements for non-infrastructure awards will generally depend on
appropriations and authorizing statutes for individual award programs.
OMB, through the Administrator of the Office of Federal Procurement
Policy (OFPP), also has authority under 41 U.S.C. 1125 to ``prescribe
Government-wide policies, regulations, procedures, and forms that the
Administrator considers appropriate and that executive agencies shall
follow in providing for the procurement, to the extent required under
those programs, of property or services referred to in . . . [41
U.S.C.] 1121(c)(1) . . . by recipients of Federal grants or assistance
under the programs.'' That authority must be exercised with ``due
regard to applicable laws and the program activities of the executive
agencies administering Federal programs of grants or assistance.'' Id.
Consistent with the above authorities, proposed paragraph (a) would
only be required ``to the greatest extent practicable and consistent
with law.'' Thus, agencies would be responsible for evaluating both the
practicability and legal availability of imposing such conditions. OMB
is not directly imposing this requirement on award recipients, but
requiring agencies to evaluate its practicability and the legal
authorities that apply to non-infrastructure financial assistance
programs. The agency discretion to evaluate ``practicability'' leaves
considerable flexibility for implementation. In addition to evaluating
practicability, agencies would need to identify statutory authority
prior to imposing such conditions. For example, some authorizing
statutes may broadly authorize an agency to impose any conditions that
the agency head finds warranted, while others may narrowly define the
types of conditions that may be imposed. Generally, to impose
substantive conditions on Federal grants, an agency must identify
statutory authority providing the agency with discretion to impose such
conditions. As such, before imposing Buy America award conditions on
non-infrastructure awards, agencies must evaluate their appropriations
and authorizing statutes on a case-by-case basis to determine whether
they have the legal discretion to impose such conditions. The proposed
language would provide that, if agencies identify the necessary legal
authority, and determine that imposing conditions would be practicable
under the relevant program, they must include grant terms and
conditions to maximize domestic content. Unlike Sec. 200.322(a)-(b)
(existing version), if a requirement is included in the terms and
conditions of an award, it could be made a legal requirement subject to
audit instead of merely an aspirational standard. If such a requirement
is included for a non-infrastructure award, the agency would need to
define the applicable Buy America standard it is imposing, which could
be based on existing standards required by law in other contexts, such
as the BABA standard in part 184 or others.
OMB recognizes that the proposed policy at paragraph (a) (proposed
version) does not exist under the existing version of 2 CFR. OMB
proposes to find that establishing this policy is legally available
based on the discretion left to agencies for implementation. Under the
current 2 CFR regulatory text, agencies only impose mandatory Buy
America requirements for infrastructure grants. If statutory authority
is determined to be available, and the agency determines that imposing
conditions would be practicable for the relevant program, this newly
proposed provision could require agencies to apply domestic
manufacturing requirements for a broader range of grant activities.
Section 200.323--Procurement of Recovered Materials
OMB proposes to remove Sec. 200.323(b) in its entirety. The
Executive order that provided the foundation for this policy was
rescinded. Moreover, the policy was only an encouraged practice and not
a requirement.
Section 200.324--Contract and Cost Price
OMB proposes to streamline Sec. 200.324, including removing an
example related to considering potential workforce impacts if a
procurement transaction will displace public sector employees. The
proposed changes are not intended to prohibit the consideration of such
impacts, only to remove the example. This streamlined text removes a
potential burden on recipients that is not statutorily required.
Section 200.329--Monitoring and Reporting Program Performance
OMB proposes to revise Sec. 200.329 to require recipients to
confirm in their performance reports that all subawards issued during a
reporting period have been reported to SAM.gov. This proposed addition
is intended to strengthen transparency and ensure subaward data is
current and accurate. OMB also proposes a new paragraph (h) to
emphasize the importance of subrecipient reporting. Specially, OMB
emphasizes that Federal agencies are responsible for providing
oversight regarding subrecipient reporting, such as reviewing and
monitoring subrecipient reporting in SAM.gov, and taking corrective
actions when recipients are not in compliance.
In addition, in existing paragraph (g) (proposed paragraph (i)),
OMB proposes to require Federal agencies to justify and maintain
documentation of any decision to waive any performance report. This
proposed revision balances accountability with flexibility,
[[Page 32225]]
reinforcing oversight of performances, including subrecipient
reporting, while allowing agencies to reduce unnecessary reporting
burdens where appropriate.
Lastly, OMB proposes a new paragraph (e) regarding performance
reports for scientific research. For awards categorized by a Federal
agency in accordance with Sec. 200.202(f), the recipient must identify
and include the categorization provided in the terms and conditions of
the award in the performance report.
Section 200.331--Subrecipient and Contractor Determinations
OMB proposes to revise Sec. 200.331 by adding a new paragraph (c).
This paragraph addresses transfers of Federal funds to related
entities. This proposed addition makes clarifies that pass-through
entities cannot treat such transfers as internal allocations exempt
from a determination required by this section. Instead, consistent with
the requirements of this section, related entity transactions must be
reviewed and classified as either a subaward or contract. This would
ensure accountability and transparency in circumstances involving
related parties and prevent circumvention of Federal reporting
requirements.
Section 200.332--Requirements for Pass-Through Entities
OMB proposes to revise Sec. 200.332 to add three new paragraphs to
this section. In proposed paragraph (g), OMB again highlights the
requirement that pass-through entities must report subawards to SAM.gov
in accordance with the requirements of 2 CFR part 170. In proposed
paragraph (h), OMB reiterates the requirement in Sec. 200.331 that
pass-through entities must make subrecipient and contractor
determinations for all downstream entities, including affiliates,
subsidiaries, and related organizations. This proposed change would
clarify that internal organization affiliations do not exempt pass-
through entities from classifying subawards and contracts. Lastly, in
proposed paragraph (i), OMB specifies that pass-through entities must
ensure that subrecipients do not take actions that could significantly
damage the reputation of the pass-through entity, awarding Federal
agency, or the Federal Government. Where such actions occur, the
proposed text indicates that the pass-through entity must consult with
the Federal agency to determine whether termination of the award is
warranted. This proposed addition would ensure accountability for
reputational risk that may undermine public trust in Federal award
programs.
Section 200.333--Fixed Amount Subawards
OMB proposes to revise Sec. 200.333 to remove the policy allowing
recipients to issue fixed amount subawards. Fixed amount subawards have
been implemented inconsistently across programs, agencies, and
recipients, and existing standards for this type of award do not
provide for transparency, accountability, and oversight as compared to
other award types. OMB proposes to eliminate fixed amount subawards
consistent with the changes made to Sec. 200.201.
Section 200.336--Methods for Collection, Transmission, and Storage of
Information
OMB proposes to revise Sec. 200.336 by adding a statement
encouraging recipients and subrecipients to use domestic storage
capabilities for electronic records. This addition is intended to
strengthen data security, reduce exposure to potential foreign data
vulnerabilities, and support greater assurance that Federal award
records remain accessible and protected within U.S. jurisdiction. While
framed as a strong encouragement rather than a mandate, this change
promotes best practices for safeguarding sensitive Federal award
information.
Section 200.338--Restrictions on Public Access to Records
OMB proposes a clarification to Sec. 200.338. Specifically,
confidential business information is included as a type of information
that Federal agencies may not place restrictions on the recipient or
subrecipient from limiting public access to such information.
Section 200.339--Remedies for Noncompliance
OMB proposes to add a new paragraph to Sec. 200.339 to clarify
that, if applicable and consistent with law, a Federal agency may, at
its discretion, cooperate with individuals or organizations in pursuing
their own private cause of action or remedies. This addition would not
impose an affirmative duty on agencies to assist in private litigation.
The proposed revision is only intended to affirm that agencies may, at
their discretion, cooperate with persons in pursuit of private remedies
in circumstances consistent with law.
For the avoidance of doubt, the decision of whether an agency will
cooperate with individuals or organizations in their pursuit of private
causes of action and civil remedies, and decisions regarding the extent
of any cooperation, will be made solely in the discretion of that
agency. The proposed subsection (b) is not intended to, and would not,
create any right or benefit, substantive or procedural, enforceable at
law or in equity by any party against the United States, its
departments, agencies, or entities, its officers, employees, or agents,
or any other person. Nothing in the proposed subsection (b) should be
construed to impair or otherwise affect the authority granted by law to
an executive department or agency, or the head thereof. A Federal
agency should only cooperate with a private cause of action if it
determines that such cooperation is in the interest of the United
States
Section 200.340--Termination and Suspension
1.a. Summary of proposed revisions regarding termination. OMB
proposes to revise Sec. 200.340(a) to provide additional clarity
regarding reasons available to Federal agencies for discretionary
terminations of Federal awards, and also to add new provisions
regarding temporary suspension of Federal awards. These proposals are
similar to parallel procedures for procurement contracts under the FAR.
The proposed revisions regarding discretionary termination are also
consistent with section 5(a) of Executive Order 14332 of Aug. 7, 2025,
``Improving Oversight of Federal Grantmaking,'' which instructs OMB to
revise 2 CFR to further clarify and require all discretionary grants to
permit termination for discretionary reasons, ``including when the
award no longer advances [Federal] agency priorities or the national
interest, but subject to appropriate exceptions,'' including certain
exceptions set forth in the Executive Order.
In developing the proposed rule, OMB considered alternatives to the
discretionary termination provision, such as stricter up-front
screening during the award selection process or enhanced monitoring.
While these are also important tools to ensure oversight of the Federal
grantmaking process, OMB found that they do not remove the need for
mid-award termination mechanism. The discretionary termination
provision is similar to the already existing authority at Sec.
200.340(a)(4) in the 2024 regulatory text and Sec. 200.340(a)(2) in
the 2020 regulatory text.\101\
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\101\ The operable language regarding ``program goals or agency
priorities'' was first established by OMB in 2020 at Sec.
200.340(a)(2) (2020 version).
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[[Page 32226]]
By preserving the policy flexibility provided to agencies from
Congress for discretionary award programs through clear upfront notice
to recipients, agencies can best ensure the responsible management and
safeguarding of taxpayer resources throughout the award lifecycle.
Federal agencies--and ultimately, the American taxpayer--should not
remain obligated to continue funding discretionary awards that do not
best or most effectively serve the authorized public purposes of the
particular program.
The benefits of this proposal include increased flexibility for
agencies to respond to changing circumstances, priorities, or
knowledge. By aligning grant management with well-established contract
management practices, the Federal Government can ensure greater and
more responsible oversight regarding how taxpayer resources are used
and managed.
Like the 2020 version, and as remained permitted under the 2024
version, the proposed version of Sec. 200.340 expressly contemplates
that sometimes Federal agency program goals or priorities may change
after an award is initially made, or that the Federal agency may
reassess whether a particular recipient remains the best available
choice to achieve the public purposes authorized by law on behalf of
the American taxpayer. Like the earlier versions, the proposed text
also recognizes that sometimes program goals or Federal agency
priorities may change in response to new direction from politically
accountable leadership. As is already the case, the proposed version of
200.340 contemplates that an agency may exercise those types of
discretion as a responsible steward of public resources.
Accordingly, OMB proposes to add the updated discretionary
termination provision, which further clarifies the government-wide
authority already available to agencies under Sec. 200.340(a)(4)
(existing 2024 version). OMB proposes the new discretionary termination
provision to provide that the Federal agency or pass-through entity, to
the extent permitted by law, may terminate a Federal award in part or
its entirety if the Federal agency or pass-through entity determines
that a termination is in the interest of the Federal agency or pass-
through entity. The proposed regulation specifies that this includes if
a Federal award no longer effectuates program goals, Federal agency
priorities, or the national interest as they exist at the time of the
termination.
OMB proposes to clarify that the relevant ``agency priorities''
would be those of the Federal agency that is politically accountable at
the national level for implementing the Federal program under which the
award was made. In some situations, pass-through entities may interpret
the term ``agency priorities'' under the existing provision to include
State or local government priorities, which may be inconsistent or even
conflict with Federal priorities or the national interest. To clarify
intent, OMB proposes to add the word ``Federal'' before ``agency
priorities.'' In the final rule, OMB is also considering others
revisions to clarify this point. The interest of a pass-through entity
in implementing a Federal award should remain consistent with the
interest of the Federal agency responsible for implementing the Federal
program on the national level. If this is not adequately clear or
implied under the proposed text, OMB may consider revising the proposed
standard in the final rule from ``in the interest of the Federal agency
or pass-through entity'' to only include ``in the interest of the
Federal agency.'' In any case, terminations by pass-through entities
should remain consistent with the interest of the Federal agency, which
is responsible for setting program goals and priorities for the Federal
program. A termination by a pass-through entity should not conflict
with the Federal interest. In some cases, it may be appropriate for a
pass-through entity to coordinate with a Federal agency before making
such a discretionary termination under this provision.
Like the 2020 provision, the proposal recognizes that Federal
agency priorities may change after an award is initially made. This
proposal creates greater alignment between Federal financial assistance
and the long-standing termination for convenience provision applicable
to Federal procurement contracts. The goals of this proposal include
ensuring that Federal funds are not wasted, projects remain aligned
with Federal agency priorities, and recipients remain accountable for
delivering projects consistent with public purposes authorized by law.
OMB does not intend the proposed list of reasons for discretionary
terminations to necessarily be exhaustive. If the rule is finalized,
Federal agencies must include all of the listed reasons, but may also
include supplemental reasons, as appropriate, based on the authority at
Sec. 200.340(a)(5). For example, agencies may also specify that
discretionary terminations may occur in circumstances in which a
Federal award is no longer in the ``public interest.'' The ``public
interest'' and the ``national interest'' should generally have similar
and broadly overlapping meanings, but agencies may include this or
other additional reasons for discretionary terminations if useful for
clarity or avoidance of doubt.
Other clarifying edits are proposed in paragraph (a) regarding the
other reasons for termination, including for noncompliance, by mutual
agreement, upon notification by the recipient or subrecipient, and
pursuant to additional terms and conditions included in the Federal
award. For readability, sub-headings are added for all authorized
reasons for termination. In the noncompliance paragraph, OMB proposes
to mention that failure of the recipient to report subawards on SAM.gov
pursuant to the award term required by part 170 can constitute grounds
for termination for noncompliance. Under the final paragraph for
``additional terms and conditions,'' OMB also proposes to recognize
that Federal agencies may only include terms and conditions that are
permitted by law. For example, as with termination for discretionary
reasons, certain non-discretionary programs may not permit expanded
termination provisions based on agency discretion.
Paragraph (b)(1) of the proposed text provides that, to the extent
authorized by law, and except as provided in paragraph (b)(2), the
Federal agency and pass-through entity must ensure that all Federal
awards allow termination for the reasons described in paragraphs (a)(1)
through (4) of the section. The proposed paragraph (b)(2) explains
exceptions to this requirement. Specifically, the requirement to
include the discretionary termination provision does not apply to any
Federal award in which inclusion of such a discretionary termination
provision would conflict with a Federal statute. Consistent with the
distinction recognized in Executive Order 14332 between discretionary
awards and statutory entitlements, the proposed text explains that the
discretionary termination ``provision is generally applicable to
discretionary awards, but not to Federal awards made under programs
where legislation establishes an entitlement to the funds on the part
of the recipient, such as block grants, those awarded based on a
statutory formula, or disaster recovery grants.'' Statutory
entitlements are the only categorical exception recognized in the
proposed rule, but certain other statutory requirements imposed on
Federal agencies related to obligation or use of Federal funds may also
impose limits on the application of this provision in some
circumstances. Consistent with Executive Order 14332,
[[Page 32227]]
the discretionary termination provision also ``does not apply to
agreements entered into in furtherance of international trade
agreements or those awarded by the Department of Commerce under title
XCIX of the William M. (Mac) Thornberry National Defense Authorization
Act for Fiscal Year 2021 (Pub. L. 116-283), the CHIPS Act of 2022 (Pub.
L. 117-167), or division F of the Infrastructure Investment and Jobs
Act (Pub. L. 117-58).''
The proposed paragraph (b)(2) also explains that if questions arise
regarding applicability of the discretionary termination provision to
specific programs or awards, Federal agencies are strongly encouraged
to consult with OMB. Federal agencies must seek approval from OMB prior
to allowing any class exceptions not otherwise required by statute or
recognized in paragraph (b)(2).
Thus, with limited exceptions, the proposed text requires inclusion
of four standard reasons for termination, including the discretionary
termination provision, in all Federal awards, rather than a ``pick and
choose'' approach among the available options. The existing provision
has sometimes led to inconsistent termination provisions across the
Federal Government and confusion regarding which termination provisions
actually are or should be included in specific Federal awards. The
proposed revisions emphasize, at paragraph (b)(1), that the Federal
agency is always required to include the four standard termination
provisions unless an exception applies.
In addition to the four standard termination provisions, OMB also
proposes adding a fifth potential reason for termination, allowing a
Federal agency or pass-through to define additional grounds for
termination in the terms and conditions of the Federal award, providing
that doing so is consistent with authorizing law. OMB proposes certain
clarifying edits and to add subsection headers for clarity.
1.b. Summary of proposed revisions regarding temporary suspension.
OMB proposes to add a new paragraph (d) regarding temporary suspension
of awards. Similar to a parallel provision in the FAR applicable to
procurement contracts, this paragraph would provide Federal agencies
and pass-through entities with authority to provide a written order to
stop work. The proposed revisions address the contents of such orders
and how they must be handled by the Federal agency or pass-through
entity. These revisions are intended to ensure that Federal agencies
and pass-through entities have all the necessary resources available to
provide effective monitoring and oversight of Federal awards. Temporary
suspensions of activities are sometimes necessary to protect the
Federal interest, but may also potentially create administrative or
financial challenges for recipients. The proposed policy requires
agencies to account for the potential budgetary and scheduling impacts
and seeks to maintain fairness and transparency in managing such
disruptions. As a result, the proposed revisions would promote
communication and accountability between agencies and recipients in the
event of temporary suspensions. They would also support more effective
program oversight and minimize the risk of extended downtime or
misaligned expectations following a work stoppage.
Proposed paragraph (b)(4) addresses the circumstances in which
temporary suspensions provisions must be included in the terms and
conditions of a Federal award. Similar to the discretionary termination
provision, the Federal agency or pass-through entity must clearly and
unambiguously include the suspension provision in the terms and
conditions of the Federal award unless doing so would conflict with a
Federal statute. The proposed text explains that the suspension
provision is generally applicable to discretionary awards, but not to
Federal awards made under programs where legislation establishes an
entitlement to the funds on the part of the recipient, such as block
grants, those awarded based on a statutory formula, or disaster
recovery grants. If questions arise regarding applicability of the
suspension provision to specific Federal programs or types of Federal
awards, Federal agencies are also strongly encouraged to consult with
OMB.
2. Need for policy flexibility and ongoing stewardship of Federal
funds. Consistent with the first objective of this rulemaking, the
proposed discretionary termination and suspension provisions provide
essential tools for ensuring ongoing stewardship and responsible
management and oversight by Federal agencies of taxpayer resources
throughout the award lifecycle. The discretionary termination provision
preserves policy flexibility, consistent with law, for an agency to
reconsider whether a particular Federal award effectively serves the
Federal Government's interest in carrying out public purposes or
objectives authorized by law. Agency program goals and priorities
related to such public purposes may evolve over time, the agency's best
judgment regarding the national interest may also change and evolve,
and facts and circumstances may change in ways that were not
anticipated by the Federal agency at the time the award was initially
made. Provided that the Federal agency provides clear notice of the
discretionary termination provision to recipients at the time the award
is made, which will allow recipients to appropriately calibrate and
manage reliance interests, it is appropriate for Federal agencies, and
the Executive Branch more broadly, to retain the policy flexibility to
terminate awards that are no longer in the Federal Government's
interest. Federal agencies should not be forced to continue funding
projects that do not best serve program goals, Federal agency
priorities, or the public interest more broadly. The suspension
provides similar flexibility for temporary stoppages.
3. Similar existing authority applicable to Federal contracts. In
the Federal procurement context, executive agencies have long included
termination for convenience clauses in contracts. The Federal
Acquisition Regulation (FAR) permits an agency to terminate a contract
``for convenience'' whenever it determines that termination is in the
government's interest. See, for example, 48 CFR 49.502 and 52.249-2.
This longstanding tool allows Federal agencies to terminate contractual
obligations that have become unnecessary or contrary to new policy
direction, while allowing appropriate cost recovery for work already
performed. Federal courts have upheld these terminations as a
legitimate means of preserving flexibility to protect taxpayer
resources and respond to changing circumstances.
By applying a parallel principle to discretionary assistance
programs, such as discretionary grants and cooperative agreements, the
proposed rule further harmonizes Federal grant management with
longstanding procurement practices, while also tailoring the provision
for use under OMB's requirements in 2 CFR. A 2020 revision of the
Uniform Guidance already introduced a comparable basis for termination
``if an award no longer effectuates program goals or agency
priorities.'' This proposed revision will ensure that Federal agencies
have broad authority for termination for discretionary reasons that is
similar to the authority under the FAR in purpose and general effect,
while also accounting for the unique context of grants.
The proposed provision is necessary to safeguard the ability of
executive agencies to supervise executive branch spending. The Federal
Government's
[[Page 32228]]
responsibility for stewardship of taxpayer funds does not diminish
merely because the award is a grant and not a contract. If a project
funded by a grant is failing to meet underlying public purposes,
program objectives, Federal agency priorities, or the national
interest, the government should have a comparable ability to
discontinue funding as it would for a similarly misaligned contract.
The proposed rule generalizes this best practice across the Federal
Government, ensuring consistency and transparency.
Similarly, executive agencies have also long included clauses in
contracts allowing for temporary work stoppages or suspensions. The FAR
permits an agency to, at any time, by written order to the contractor,
require the contractor to stop all, or any part, of the work called for
by the contract for a period of 90 days after the order is delivered to
the contractor, and for any further period to which the parties may
agree. See, for example, 48 CFR 42.1303 and 52.242-15. This
longstanding tool allows Federal agencies to temporarily suspend
contractual obligations to ensure effective oversight and
accountability and for other purposes.
4. Executive authority applicable to discretionary award programs.
For discretionary award programs, the proposed discretionary
termination and suspension provisions operate within the framework of
Congressional authorization and appropriation. Congress provides
agencies with discretionary authority to make awards for certain
program purposes, leaving agencies with broad discretion as to which
projects to fund. The discretionary termination and suspension
provisions are merely an exercise of that discretionary authority--
allowing agencies, consistent with law, to retain discretion regarding
how Federal funds are expended in service of the program's objectives.
The proposed provisions do not contravene statutory requirements or
otherwise assert any authority for discretionary programs that is not
already provided to agencies in the statutes authorizing those
programs.
To recognize these limits, the text of the discretionary
termination provision recognizes that it may only be exercised ``to the
maximum extent authorized by law.'' If a particular program statute
expressly entitles a recipient to certain funding or expressly
prohibits termination in certain circumstances, those statutory limits
would control. These statutory limits are also recognized in the
proposed exception paragraph, which corresponds with language in
section 5(a) of Executive Order 14332. Similar limitations are provided
for the proposed suspension provision.
Consistent with the termination provisions in 2020 and 2024, the
proposed discretionary termination provision continues to recognize
that Federal agencies cannot terminate grants when doing so would be
inconsistent with a Federal statute. The legality of any particular
grant termination will necessarily turn on the specific Federal
statutes governing the agency program at issue, and various other
award-specific, agency-specific, and other considerations that can only
be decided by a court at a more granular level. The OMB discretionary
termination provision merely creates the legal framework for
terminations when otherwise consistent with law. A framework that only
permits terminations to the extent consistent with law does not
conflict with any statute. To the extent a grant recipient believes
that a particular termination is unlawful, it could raise that concern
in the U.S. Court of Federal Claims.
For discretionary award programs, to which the proposed
discretionary termination and suspension provisions will apply,
Congress has generally provided Federal agencies with broad discretion
to determine how to select recipients and administer awards to serve
public purposes recognized in law. Certain legislative boundaries
frequently apply to agency authority under those programs, such as
statutory requirements related to eligible recipients, projects, or
activities. The authority to make discretionary awards within those
boundaries, however, necessarily includes the ability to revisit
earlier decisions and re-exercise agency judgment in light of changing
circumstances, at least provided that: (i) the particular program
statute does not expressly limit or control the agency's discretion to
reconsider its earlier award determinations; and (ii) the recipient
receives clear and unambiguous notice of the discretionary termination
provision in the award instrument.
The statutory authority provided by Congress allowing executive
agencies to administer discretionary award programs--including deciding
which entities receive awards and the amount of those awards--
necessarily includes the implied or inherent authority for agencies to
reconsider earlier decisions made about awards. Provided that clear and
timely notice of the discretionary termination and suspension
provisions is included by the Federal agency in the award instrument--
either at the time of award or through an amendment made consistent
with law--and that a program statute does not limit or control the
process for terminations or reconsideration of award decisions, these
provisions can be applied by agencies in a manner consistent with their
authority under law. For programs in which an agency has lawful
discretion to make an award, the discretionary termination and
suspension provisions provide clear notice to recipients that the
agency retains the discretion to withdraw, terminate, or temporarily
suspend that award consistent with law.
The proposed discretionary termination and suspension provisions
merely ensure that the government retains appropriate authority to
course correct, consistent with the discretion provided by law, if
circumstances warrant. These provisions are an important safeguard,
providing policy flexibility if an agency determines that a project is
contrary to the Federal interest, or that a work stoppage is necessary
for reasons including evaluating whether a project is aligned with the
Federal interest.
Similar analysis regarding executive authority for discretionary
award programs applies to both the discretionary termination and
temporary suspension provisions. To limit repetition in the preamble
for this proposed rule, OMB does not recite the basis for that
authority separately, but proposes to find that the same general
principles apply.
OMB and the participating agencies rely on this discretionary
authority, where it applies, for the proposed discretionary termination
and suspension provisions, in addition to OMB's authorities for
government-wide grants management. The proposed discretionary
termination and suspension provisions are a legitimate and reasonable
exercise of the authority for discretionary grant programs provided to
executive agencies.
5. Spending clause framework. The Spending Clause framework
discussed above regarding proposed revision to Sec. 200.300 does not
directly apply to the proposed revisions to Sec. 200.340 regrading
termination and suspension. The discretionary termination and
suspension provisions are merely administrative features of the OMB
requirements for grants administration that, where applicable, preserve
discretionary authority provided to agencies by Congress throughout the
award lifecycle. The discretionary termination and suspension
provisions are not substantive conditions imposed on particular awards
in exchange for Federal funds. But even if the Spending Clause
framework were found to apply
[[Page 32229]]
to the proposed revisions to Sec. 200.340, it does not present an
obstacle to including this term. See Dole, 483 U.S., at 207-11.
First, as discussed above, the determination of Congress to provide
agencies with discretionary authority to administer award programs
promotes the general welfare. For example, this discretionary authority
ensures that programs are administered in a way that protects taxpayer
resources, is responsive to the needs Americans within legislative
bounds, and provides ongoing stewardship and oversight of Federal funds
throughout the award lifecycle. The general welfare is served by
allowing the Federal Government to discontinue funding for projects
that prove ineffective or harmful, and to appropriately allocate
resources to projects that would better serve the public good. The
general welfare is also served by allowing temporary suspensions as
appropriate in the discretion of the awarding agency.
Second, the proposed discretionary termination and suspension
provisions are designed to provide clear, unambiguous, and timely
notice of the award condition to applicants and recipients before the
Federal award is made. This will provide up-front transparency
regarding the process for terminating or suspending awards for
discretionary reasons. Applicants and recipients will enter into awards
with full knowledge of the risks and conditions associated with
accepting the Federal award. This clear notice will permit them to make
informed decisions regarding acceptance of Federal awards and
appropriately mitigate reliance concerns. By agreeing to the award
conditions, recipients accept the risk of an early termination or
temporary suspension, which satisfies the clear notice standard under
relevant case law. If a recipient is unaware of the discretionary
termination or suspension provisions included in its award, the only
explanation will be its failure to read the government-wide
regulations, the award instrument, or both.
Third, the exercise of agency discretion in general for
discretionary awards, and the discretionary termination provision in
particular, are inherently related to the ``federal interest'' in
particular assistance programs for discretionary awards. The provision
seeks to ensure that Federal agencies have and retain the ability to
exercise judgment in determining how discretionary funds are best used
to serve the Federal Government's interest in the public purposes
authorized by law for particular programs. It is a procedural term
providing the agency a right to terminate an award that an agency
determines is no longer in the Federal interest as it relates to
underlying program objectives. This right is rooted in the established
legal authority of OMB and agencies to establish conditions related to
grants administration and the efficient use of Federal funds for
authorized purposes. As such, it is also inherently related to the
effective administration of the Federal interest in particular
discretionary award programs. Building on the existing discretionary
termination provision, the revised version would be an important tool
to ensure that Federal awards continue to be used in furtherance of
programs goals, Federal agency priorities, and the national interest as
it relates to the particular program. The condition helps to reinforce
the relatedness of government spending to authorized public purposes
throughout the award lifecycle. If an awarded project, in the agency's
judgment, ceases to be an effective use of government resources in
achieving those purposes, the agency may discontinue funding. Similar
analysis applies to the suspension provision, which further ensures
that the Federal agency retains effective oversight tools throughout
the award lifecycle.
Fourth, the discretionary termination and suspension provisions are
merely extensions of a Federal agency's general authority to exercise
discretion over Federal award programs consistent with law. The
discretionary termination and suspension provisions preserve the right
for agencies to retain and exercise ongoing discretion over how Federal
funds are used to serve statutory purposes. This aligns with discretion
long exercised by Federal agencies in the context of Federal
contracting. Like the parallel FAR provisions, the discretionary
termination and suspension provisions are just a procedural or
mechanical features of the regulation that do not directly signal that
any specific termination or suspension will occur or otherwise induce
unconstitutional conduct.
Finally, the proposed discretionary termination and suspension
provisions are not unduly coercive. Again, these are just procedural or
mechanical features of the regulation corresponding to similar FAR
provisions. The proposal extends the discretionary authority provided
to agencies by Congress further into the award lifecycle. An applicant
or prospective recipient remains free to opt out of particular Federal
award or program if it finds the provisions unacceptable. Such decision
would not affect other awards to which the discretionary termination or
suspension provisions do not apply, and for which the agency does not
have comparable discretionary authority, such as entitlement programs.
6. Termination costs. OMB has carefully considered reliance
interests that may be implicated by the proposed discretionary
termination provision. Three features of the proposed rule are designed
to address these concerns: (1) the clear and unambiguous notice of
discretionary termination provision discussed above; (2) compensation
for work performed consistent with existing termination procedures and
cost principles; and (3) procedures related to notices of a
discretionary termination, an opportunity for recipients to explain
terminations costs, and case-by-case discretion for agencies to
consider additional terminations costs and weigh them against competing
policy concerns.
The proposal generally preserves existing post-termination
procedures and cost principles, but includes additional clarifying text
applicable to discretionary terminations. Generally, when a grant is
terminated, grant recipients are entitled to reimbursement for all
allowable costs incurred up to the effective date of termination. This
ensures that a recipient will not be left uncompensated for legitimate
expenses made in reliance on the award prior to the effective date of
the termination.
The proposed rule also clarifies notice requirements for
terminations and provides agencies with case-by-case discretion to
consider costs associated with a terminated award and weigh them
appropriately against competing policy concerns. While not identical,
this structure has certain similarities to the treatment of termination
costs in Federal contracts, where contractors terminated for
convenience can recover costs for completed work and reasonable
termination expenses. Compare 48 CFR 52.249-2. By ensuring that
recipients can submit information related to termination costs, the
rule provides appropriate discretion to agencies to consider and
respond to these concerns upon award termination. The proposed
provisions balance the need for Federal flexibility with fairness to
recipients. Additional discussion regarding termination costs is
provided in this document under Sec. Sec. 200.341 and 200.343.
Section 200.341--Notification of Termination Requirement
At Sec. 200.341(b), OMB proposes to provide additional information
regarding notifications of terminations for noncompliance.
[[Page 32230]]
At Sec. 200.341(c), OMB proposes to add a paragraph regarding
notifications of discretionary terminations. While the proposed
discretionary termination provision reserves broad authority for
terminations that are in the interest of the Federal Government (or
pass-through entity, as applicable), that authority is not unlimited.
As with all exercise of agency discretion, Federal agencies (or pass-
through entity, as applicable) must provide a reason for individual
termination decisions, which may serve as part of the administrative
record upon judicial review, if applicable. To ensure such reasons will
be provided, at Sec. 200.341(c), OMB proposes to expressly require
termination notices issued under the discretionary termination
provision to include a brief summary of the reason or reasons why an
agency decided to terminate an award or class of awards. That summary
would not be required to provide a detailed or exhaustive analysis, but
only to ensure that the recipient or subrecipient is provided
information regarding the reason for termination. The summary should do
more than merely citing the discretionary termination provision; it
should provide a reason why the termination was found to be interest of
the Federal agency or pass-through entity. Ensuring the adequacy of the
notification will help to ensure that recipients understand why
termination decisions have been made and reduce risk to the Federal
Government.
Thus, the decision to terminate a Federal award for discretionary
reasons under Sec. 200.340(a)(2) (proposed version) would still
require a basic rationale regarding why the Federal award does not
effectuate program goals, Federal agency priorities, or the national
interest as they exist at the time of the termination. As in the
context of parallel terminations for convenience in the context of
Federal procurement, provided that recipient was given upfront notice
of the discretionary termination provision, the requirement to provide
a reason for award termination is not an exceptionally high bar. By
providing a reasoned explanation for the exercise of authority under
the discretionary termination provision based on programmatic or policy
reasons, as they exist at the time of the termination, agencies will
remain accountable for review in the U.S. Court of Federal Claims, as
appropriate and authorized by law, for their termination decisions.
The proposed revisions also specify that the notification must
include instructions to the recipient or subrecipient to stop work,
make no additional financial obligations, and, to the extent authorized
by law, terminate all subawards and contracts related to the terminated
portion of the Federal award. The notification must also provide an
opportunity for the recipient or subrecipient to submit a brief written
statement regarding any termination costs it believes are relevant.
The proposed provision at Sec. 200.341(d)(1), which is cross-
referenced at the discretionary termination provision at Sec.
200.340(a)(2), is intended to ensure that agencies provide a reasoned
explanation, consistent with law, for specific termination decisions.
For example, the Federal agency may explain why it determined that a
particular award or class of awards would no longer effectuate program
goals, Federal agency priorities, or the national interest. Or the
Federal agency may prove an explanation of why an award or class of
awards no longer best serves the authorized public purposes of the
relevant program. Or an agency may explain, more generally, why it
determined that an award or class of awards is no longer in the public
interest, or will no longer best serve the public interest, as it
relates to relevant program objectives in statute. Or an agency may
explain why reallocating funds from an award or class of awards to
other existing or new awards would better serve the public purpose of
the program set forth in statute. Or any agency explanation may include
some combination of the above reasons or other alternative reasons,
consistent with law, for why it decided that terminating the award was
in the government's interest.
The proposed provisions at Sec. 200.341(c)--and additional
proposed revisions at Sec. 200.343(b)--will allow agencies to consider
what terminations are warranted under the circumstances. This will
include weighting circumstances that may warrant allowing the recipient
to incur additional termination costs after the notice against
competing policy concerns such as responsible stewardship of Federal
funds and effective delivery of statutory objectives.
Section 200.342--Opportunities To Object, Hearings, and Appeals
OMB only proposes minor clarifying revisions to Sec. 200.342. Like
the existing version of Sec. 200.342, the proposed version would
continue to require Federal agencies to provide administrative hearing
rights upon initiating a remedy for noncompliance. As under the
existing version, such administrative hearing procedures would not be
required for other types of terminations unless expressly required by
other law. Such administrative procedures--which are generally intended
to allow a Federal agency to make findings of fact and conclusions of
law related to a recipient's alleged misconduct or noncompliance under
a Federal award--would have less purpose or need for terminations based
on the discretionary reasons of the Federal agency. For example,
recipients would not generally be in the best position to present facts
or information related to the agency's priorities as they exist at the
time the termination decision is made. Moreover, unlike compliance-
based terminations, discretionary terminations would not require
reporting in SAM.gov (Sec. 200.340(c) (proposed version)), which is an
important reason for the administrative hearing rights provided to
recipients for compliance-based terminations.
In the case of discretionary terminations or suspensions, Federal
agencies would be required to follow other procedures described in the
regulatory text, including procedures related to notice and allowable
costs. An agency, in its discretion, may elect to engage with
recipients through some form of administrative review process before or
after a discretionary termination or suspension, but would not be
required to except as necessary to provide notice, determine allowable
costs, and implement other sections of the regulatory text. In some
cases, engaging with recipients on discretionary terminations or
suspensions may serve to reduce risk to the Federal Government or
minimize impacts to Federal programs or Federal awards, while in other
cases the agency may decide to limit engagement to only required
procedures, such as providing appropriate notice and making a
determination of allowable costs.
Section 200.343--Effects of Suspension and Termination
At Sec. 200.343(a), OMB proposes to provide further clarity
regarding the allowability of costs during suspension or after
termination. For costs resulting from financial obligations properly
incurred by the recipient or subrecipient before the effective date of
suspension or termination, and not in anticipation of it, the existing
regulation provides that allowability should be evaluated based on
whether the costs would be allowable if the Federal award was not
suspended or expired normally at the end of the period of performance
in which the termination takes effect. OMB proposes to clarify that the
recipient or
[[Page 32231]]
subrecipient must make all reasonable efforts to discontinue, cancel,
mitigate, or otherwise reduce such financial obligations and provides
documentation of those efforts to the Federal agency upon request.
Sometimes it may not be possible to discontinue or cancel properly
incurred financial obligations, but the regulatory text should better
reflect the actual policy on such costs provided in the cost principles
under subpart E. OMB also proposes to include an express cross-
reference to the policy on termination and standard closeout costs
provided in the cost principles at Sec. 200.472(a). The existing
version of OMB's policy in that section already provides that
recipients and subrecipients must make all reasonable efforts to
discontinue costs immediately after the effective termination date.
At Sec. 200.343(c), to ensure that Federal agencies are
appropriately empowered to consider costs resulting from discretionary
terminations, OMB also proposes to add a provision expressly addressing
such costs. The proposed paragraph would expand on the existing
standard for which costs agencies may allow, in their discretion and
consistent with law, following a termination notice. The proposed
notice provision at Sec. 200.341(c) also instructs agencies to provide
the recipient of the terminated award with an opportunity to provide
information related to terminations costs.
Subpart E--Cost Principles
Section 200.400--Policy Guide
OMB proposes to revise Sec. 200.400 to clarify in paragraph (e)
that the restrictions proposed in Sec. Sec. 200.413 through 200.414
must be considered where wide variations exist in the treatment of
costs. In addition, OMB proposes to remove the reference to fixed
amount awards for reasons discussed elsewhere in this document.
Section 200.401--Application
OMB proposes to revise Sec. 200.401 to remove references to fixed
amount awards and Federal awards to hospitals.
OMB also proposes to revise the exemption under Sec. 200.401(c),
which allows operation under the Federal cost principles that apply to
for-profit organizations at 48 CFR 31.2. OMB proposes to apply this
exemption only to nonprofit organizations that receive 90 percent or
more of their Federal funding in the form of contracts or operate a
Federally Funded Research and Development Center (FFRDC). This proposed
revision is further discussed in the section-by-section discussion
covering appendix VIII.
Section 200.421--Advertising and Public Relations
OMB proposes to revise Sec. 200.421 to specify that all
advertising and public relations costs are unallowable with limited
exceptions. The only exception for public relations costs are those
required by statute. Advertising costs are allowable if required by
statute or if they are for the procurement of goods and services for
the Federal award; the disposal of certain scrap or surplus materials;
or program outreach and other specific purposes necessary to meet the
Federal award requirements. These proposed revisions would clarify that
advertising and public relations costs that do not benefit the Federal
award are not allowable.
Section 200.429--Commencement and Convocation Costs
OMB proposes to revise Sec. 200.429 to remove the reference to
IHEs. OMB proposes that the restriction should apply to all entities
and not only IHEs. This proposed change is intended to ensure that the
cost principles are streamlined and apply fairly to all entity types.
Section 200.432--Conferences
OMB proposes to expand Sec. 200.432 to add a requirement that
costs for attending conferences are allowable only if participation in
the conference is expressly approved by the agency and included in the
terms and conditions of the award. The revision would clarify that
recipients are not authorized to attend conferences using Federal funds
that do not serve to advance program outcomes.
Section 200.438--Entertainment and Prizes
OMB proposes to revise Sec. 200.438 to remove reference to an
outdated OMB memorandum.
Section 200.442--Fundraising and Investment Management Costs
OMB proposes to revise Sec. 200.442 to propose that costs for
fundraising and investment activities are only allowable with the prior
written approval of the Federal agency.
Section 200.444--General Costs of Government
OMB proposes to revise Sec. 200.444 to add a new paragraph (b)
clarifying that general costs of government are those costs related to
the general activities of the executive, legislative, or judicial
branches of government, including general activities related to public
safety, public information, citizenship, enrollment, or taxation that
are not related to a specific Federal award. OMB also proposes to
strike Councils of Government (COGs) from the existing paragraph (b)
(proposed paragraph (c)) to align this section with other proposed
policies.
Section 200.450--Lobbying
OMB proposes to revise Sec. 200.450 to consolidate references to
OMB memoranda. OMB also proposes to add three new paragraphs under this
section. Paragraph (c)(1)(iii) would expressly prohibit funding any
voter registration campaigns, drives, or related activities under
Federal awards.
Paragraph (c)(1)(iv) would prohibit using Federal funds to engage
in issue advocacy or public messaging that promotes or opposes a
particular social, political, or public policy position unrelated to
the statutory objectives or performance requirements of the Federal
award, including messaging designed to influence public attitudes on
matters not necessary to accomplish the purpose of the Federal award.
The authority for this change is similar to other provisions discussed
above, which are focused on aligning use of Federal award funds with
core authorized purposes only, not extraneous activities on divisive
policy matters or issue advocacy.
Paragraph (c)(1)(v) would prohibit using Federal funds to influence
the executive branch of any State government on matters unrelated to
the objectives or performance requirements of the Federal award,
including attempts to affect State agency policymaking, rulemaking, or
administrative actions for purposes other than carrying out objectives
of the Federal award.
Section 200.454--Memberships, Subscriptions, and Professional Activity
Costs
OMB proposes to revise Sec. 200.454 to clarify that the only
allowable costs under this section are those necessary to fulfill the
award requirements. OMB also proposes to add a requirement for prior
approval of the Federal agency. Under the proposal, all other costs,
including the costs of subscriptions or memberships in country clubs or
organizations whose primary purpose is lobbying or issue advocacy, are
unallowable.
Section 200.455--Organization Costs
OMB proposes to revise Sec. 200.455 to clarify that data costs
related to integrated data systems should align with the finalized
Federal grants data standards as published on Grants.gov. This effort
is in support of the GREAT Act, Public Law 116-103. Additional
[[Page 32232]]
information on these standards may be found at https://www.grants.gov/data-standards.
Section 200.461--Publication and Printing Costs
OMB proposes to revise Sec. 200.461 related to publication and
printing costs to make plain language revisions, including removing the
word ``promotion,'' which is not the specific subject of this section.
As Sec. 200.421 provides the policy for ``advertising and public
relations'' costs, OMB wants to ensure that the term ``promotion'' does
not create an independent basis for allowing such costs under this
section. To extent that advertising and public relations costs are not
permitted under Sec. 200.421, that section would govern. Furthermore,
OMB is revising the section to make publication costs unallowable
unless such costs are expressly required by statute or approved in
advance by the Federal agency on a case-by-case basis. This change
reflects OMB's objective to strengthen stewardship of Federal funds and
ensure that Federal financial assistance is directed toward achieving
the programmatic objectives of the award. Publication costs are not
inherently necessary to carry out the core programmatic objectives of
most Federal awards. In many cases, such activities are discretionary,
vary widely in scope and costs, and may serve institutional,
professional, or reputational interests rather than the specific
objectives of the Federal program. Absent statutory authority or award-
specific requirement, allowing publication costs as a charge to Federal
awards creates inconsistent charging practices and increases the risk
that Federal funds are used for activities that are ancillary to
program performance. By limiting allowability to circumstances in which
publication is required by statute or explicitly incorporated into the
award, this change would ensure that such costs are incurred only when
they are directly tied to a statutory or programmatic requirement.
Section 200.467--Selling and Marketing Costs
OMB proposes to revise Sec. 200.467 to clarify that the costs of
selling and marketing products or services of the recipient or
subrecipient are unallowable unless expressly included in the Federal
award and necessary to meet the requirements of the Federal award.
Section 200.477--Abortion
OMB proposes adding Sec. 200.477 to provide that costs associated
with elective abortions are unallowable under Federal awards except as
expressly authorized by Federal law. This addition is consistent with
Executive Order 14182, Enforcing the Hyde Amendment (January 24, 2025),
and reflects longstanding appropriations restrictions prohibiting the
use of Federal funds for elective abortion except in limited
circumstances. By incorporating this limitation as a selected item of
cost, this rule promotes uniform application of existing statutory
funding restrictions across Federal financial assistance programs while
maintaining consistency with governing Federal law.
Subpart F--Audit Requirements
Section 200.503--Relation to Other Audit Requirements
OMB proposes to revise Sec. 200.503 to clarify that a Federal
agency, Inspector General, or GAO may only impose additional audits
when authorized by statute. This proposed revision is intended to
reduce audit burden by requiring a statutory foundation and prevent
agencies from layering on additional audit requirements by regulation
if not required by law. This revision balances proper oversight with
limiting administrative burden, ensuring that core audit authority is
preserved while constraining discretionary authority to expand audit
requirements beyond the Single Audit Act requirements addressed in the
part.
For avoidance of doubt, this provision would not preclude Federal
agencies from conducting compliance reviews as necessary to implement
other sections of this part and provide effective oversight of Federal
awards, including to determine whether a recipient or subrecipient is
in compliance with substantive programmatic or other legal
requirements. For example, such compliance reviews may be necessary to
determine whether a recipient of Federal financial assistance is in
compliance with Federal civil rights laws or conscience protection
laws.
Section 200.513--Responsibilities
OMB proposes to revise Sec. 200.513(c)(4) to delete the word
``annual'' before compliance supplement. OMB is in the process of
reevaluating the appropriate frequency for issuing the compliance
supplement. As previously discussed in this document, OMB and the
Office of Inspector General for HHS are currently analyzing the single
audit process. OMB plans to engage stakeholders ahead of any
substantial changes.
Section 200.514--Standards and Scope of Audit
OMB proposes to delete some of the language in Sec. 200.514(c)(1).
Specifically, OMB proposes to delete the reference to guidance in
``Standards for Internal Control in the Federal Government'' issued by
the Comptroller General of the United States or the ``Internal Control-
Integrated Framework'' issued by COSO. The reasons for this proposed
change are discussed in Sec. 200.303 of this document above.
Appendix I to Part 200--Full Text of Notice of Funding Opportunity
OMB proposes limited changes to appendix I. The proposed changes
include changing ``program description'' to ``funding opportunity
description,'' and other conforming changes to align with the proposed
policies in this document. For example, references to paper application
submissions have been removed. Agencies would be required to inform
applicants to submit proposals via Grants.gov and provide instructions
for doing so, unless a program specific exception is expressly
authorized by Federal statute or approved by the Federal agency head
(or designee). OMB also proposes to add references to Statements of
Interests (SOIs) as discussed above in this preamble.
Appendix II to Part 200--Contract Provisions for Non-Federal Entity
Contracts Under Federal Awards
OMB proposes limited changes to appendix II. The proposed changes
include removing the reference to rescinded Executive Orders in
paragraph (C).
Appendix VIII to Part 200--Nonprofit Organizations Exempted From
Subpart E of Part 200
OMB proposes to remove appendix VIII in its entirety. Consistent
with the revisions to Sec. 200.401, only those nonprofit organizations
that receive 90 percent or more of their Federal funding in the form of
contracts, or operate a Federally Funded Research and Development
Center (FFRDC), will continue to operate under the Federal cost
principles that apply to for-profit organizations.
The prior guidance created uncertainty by suggesting that agencies
could expand the list of exemptions, which undermined the uniform
application of cost principles across the Federal Government. The
proposed revisions resolve these issues by
[[Page 32233]]
clarifying that the exemption applies only to the narrow category of
nonprofits receiving 90 percent or more of their Federal funding in
contracts. This threshold reflects that such organizations operate more
like for-profit entities in terms of their funding streams and cost
structures. For all other nonprofit organizations, the cost principles
in subpart E will apply.
This proposed revision promotes consistency across agencies by
ensuring more uniform treatment of nonprofit organizations. In
addition, the revision improves oversight and enhances transparency by
applying a clear, objective standard, and preventing agencies from
unilaterally granting broad exemptions.
Appendix IX to Part 200--Hospital Cost Principles
OMB proposes a technical change to appendix IX to reflect the new
location of the Hospital cost Principles in appendix IX to part 300.
VII. Discussion of Proposed Revisions to Subtitle B of 2 CFR by Federal
Agencies
Through this proposed rulemaking, certain Federal grantmaking
agencies that currently lack an existing chapter in 2 CFR subtitle B
propose to add chapters, which are intended to streamline
implementation and reduce variability across the Federal Government.
Federal agencies that have existing chapters in 2 CFR subtitle B
propose certain targeted and conforming changes to support OMB's
broader rulemaking effort. All participating agencies adopt the common
preamble above. A few agencies have provided supplemental preamble text
that follows.
Health and Human Services (HHS)
OMB has included statutory and national policy requirements in
section 200.300(a), including requirements related to ``religious
liberty, and those prohibiting discrimination.'' All Federal agencies
must comply with RFRA (42 U.S.C. 2000bb, et seq.) and any applicable
statutes prohibiting discrimination on the basis of religion or
protecting the exercise of conscience. Federal agencies, pass-through
entities, recipients, and subrecipients are required under the First
Amendment, RFRA, and applicable statutes prohibiting discrimination
based on religion or protecting the exercise of conscience, to consider
and provide religious or conscience-based exemptions as required by
law, and may not require application of particular provisions or
requirements to specific contexts, procedures, or services where such
protections apply.
Federal agencies, pass-through entities, recipients, and
subrecipients should be aware of their ongoing statutory obligations
regarding religious liberty and conscience irrespective of the removal
of language in 2 CFR 300.300(d) which provided for an assurance process
to ensure the applicability of exemptions based on Federal protections
for religious liberty and conscience. The proposed removal of such
language should not be misconstrued as reduced Federal Government
support for protections based on religion or conscience. The proposed
revision to 2 CFR 200.300 is intended to clarify that conscience and
religious liberty are protected under multiple statutes and the Federal
Government will enforce such statutes as applicable. Further, Sec.
200.300(a), as proposed, contains revised language similar to Sec.
300.300(d), which clarifies that in managing and administering Federal
awards, no person otherwise eligible will be excluded from
participation in, unlawfully denied the benefits of, or otherwise
subjected to unlawful discrimination in the administration of Federal
programs, activities, projects, assistance, and services. Such non-
discrimination language would encompass requirements, as applicable,
not to discriminate on various bases, including race, color, national
origin, disability, sex, religion or conscience.
Department of Homeland Security (DHS)
The Department of Homeland Security (DHS) has included in this
proposed rule a potential change in delegation of authority in 2 CFR
3000.137. That section describes who within DHS may grant an exception
to let an excluded person participate in a covered transaction.
Currently, that section provides that the Secretary of Homeland
Security has delegated the authority to grant such an exception to the
Head of the Contracting Activity for each DHS component.
Because 2 CFR 3000.137 relates to non-procurement debarment and
suspension, the Chief Financial Officer, rather than the Head of the
Contracting Activity, is the more appropriate delegee. DHS intends to
revise the regulatory accordingly. This proposal is consistent with DHS
Instruction 146-01-001, Rev. 02, under which the DHS Chief Financial
Officer grants waivers or limited exceptions to let an excluded party
participate in covered non-procurement transactions including prime and
subcontracts, grants, and direct loans.
Environmental Protection Agency (EPA)
This regulatory action proposes to revise text at 2 CFR
1500.1(a)(2) to remove the term regulation.
This regulatory action also proposes to revise text at 2 CFR
1500.4, Exceptions, to correct the citation from 2 CFR 200.102(b) to 2
CFR 200.102(c) and replace non-Federal entities with recipients.
Finally, this regulatory action proposes to revise text at 2 CFR
1532.1125, 1532.1130(a), 1532.1200, and 1532.1500 to replace references
to an obsolete system (Excluded Parties List System), acronym (EPLS),
and website (http://www.EPLS.gov) with the current system (System for
Award Management), acronym (SAM.gov Exclusions), and website (SAM.gov);
these proposed changes also align with recent changes to 2 CFR part
180, which also reference the System for Award Management.
Additionally, the proposed revisions to 2 CFR 1532.1200 include
specific citations to referenced statutes to provide greater clarity.
Delta Regional Authority (DRA)
The Delta Regional Authority (DRA), established by Congress through
the Delta Regional Authority Act of 2000 (7 U.S.C. 2009aa-1 et seq.),
serves as a Federal-state partnership to address economic development
needs in the Mississippi River Delta and Alabama Black Belt regions.
This regulatory text proposes to formally adopt OMB's uniform
administrative requirements to provide consistency and transparency in
the administration of Federal financial assistance awarded by DRA.
This proposed action would not impose new grantmaking authority but
would codify DRA's participation in the government-wide regulatory
framework for financial assistance. DRA currently operates in
substantial alignment with 2 CFR part 200, and this rulemaking would
ensure ongoing compliance while allowing the agency to clarify or
supplement OMB's guidance in the future if required by statute or
regional conditions.
Federal Permitting Improvement Steering Council (FPISC)
The Federal Permitting Improvement Steering Council does not have
independent authority to issue regulations specific to Federal
financial assistance programs. It has therefore received approval from
OMB to implement 2 CFR part 200 as a policy of the Federal Permitting
Improvement Steering Council applicable to Federal
[[Page 32234]]
awards made by the Federal Permitting Improvement Steering Council,
rather than as a regulation.
Agency for International Development (USAID)
Through this rulemaking, the U.S. Agency for International
Development (USAID) proposes to remove chapter VII from 2 CFR Subtitle
B. This change reflects recent Executive Branch actions to realign
foreign assistance functions and responsibilities.\102\ Therefore, this
document proposes to remove chapter VII to reflect the current
administration of Federal foreign assistance programs.
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\102\ See, e.g., Department of State, Congressional Notification
Transmittal Letter, Mar. 28, 2025.
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VIII. Severability
In 2024, OMB added Sec. 1.231 to the 2 CFR text addressing
severability.\103\ That section--which OMB does not propose to
substantially modify through this rulemaking--explains that the
provisions of OMB's regulatory text are separate and severable from one
another. It further explains that if any provision of the regulatory
text is held to be invalid or unenforceable as applied to a particular
person or circumstance, the provision should be construed so as to
continue to give the maximum effect permitted by law as applied to
other persons not similarly situated or to dissimilar circumstances. If
any provision is determined to be wholly invalid and unenforceable, it
should be severed from the remaining provisions of the 2 CFR regulatory
text, which should remain in effect.
---------------------------------------------------------------------------
\103\ 89 FR 30046 (Apr. 22, 2024).
---------------------------------------------------------------------------
In the revised regulations proposed through this document, OMB
proposes a unified regulatory scheme addressing how Federal agencies
will manage Federal financial assistance to improve transparency,
accountability, and oversight for Federal awards across the Federal
Government. While the revised regulations would best serve OMB's
objectives for this rulemaking if left intact as proposed by OMB, the
benefits of the guidance related to coordination across the Federal
Government and improved transparency, accountability, and oversight do
not hinge on any single provision. Accordingly, OMB considers
individual provisions to be separate and severable from one another.
In the event of a stay or invalidation of any provision, or any
provision as it applies to a particular person or circumstance, OMB's
intent is to otherwise preserve the 2 CFR regulatory text to the
fullest possible extent. The provisions that remain in effect will
continue to provide government-wide policies applicable to Federal
agencies to improve transparency, accountability, and oversight for
Federal awards across the Federal Government. OMB believes that it is
in the interest of Federal agencies, recipients and subrecipients of
Federal awards, contractors, and other stakeholders in the Federal
financial assistance community to leave the final regulatory text in
place to the fullest extent possible and permitted by law.
IX. Indirect Cost Rates
On August 7, 2025, Executive Order 14332, Improving Oversight of
Federal Grantmaking, directed OMB to revise the government-wide
requirements related to indirect cost recovery to appropriately limit
the use of discretionary grant funds for costs related to facilities
and administration. Over the course of decades, reports from Congress,
the oversight community, and various other organizations and commenters
have expressed concerns regarding the Federal Government's spending on
overhead associated with grants and other forms of financial
assistance.\104\ Reports have identified numerous flaws of the existing
system, including its complexity, inefficiency, administrative burden,
lack of public transparency, unfairness for smaller recipients, lack of
oversight and public accountability, and lack of a policy mechanism to
control excessive overhead costs.\105\
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\104\ See GAO Report to the Chairman, Subcommittee on Oversight
and Investigations, Committee on Energy and Commerce, House of
Representatives, ``Federal Research: System for Reimbursing
Universities' Indirect Costs Should Be Reevaluated,'' United States
Government Accountability Office (Aug. 26, 1992) (GAO Report No. 92-
203); Genevieve J. Knezo, Cong. Rsch. Serv., Indirect Costs for R&D
at Higher Education Institutions: Annotated Chronology of Major
Federal Policies (CRS Report No. 94646) (Aug. 2, 1994); GAO Report
to Congressional Committees, ``University Research: Effect of
Indirect Cost Revisions and Options for Future Changes,'' United
States Government Accountability Office (Mar. 6, 1995) (GAO Report
No. 95-74); Genevieve J. Knezo, Cong. Rsch. Serv., Indirect Costs at
Academic Institutions: Background and Controversy (CRS Report No.
91095) (Jan. 3, 1997); Roger G. Noll & William P. Rogerson, The
Economics of University Indirect Cost Reimbursement in Federal
Research Grants (1997). Stanford University Department of Economics
WP 97-039; GAO Report to the Ranking Member, Committee on the
Budget, U.S. Senate, ``Biomedical Research: NIH Should Assess the
Impact of Growth in Indirect Costs on Its Mission,'' United States
Government Accountability Office (Sep. 24, 2013) (GAO Report No.
GAO-13-760); Anthony Cave, ``Taking a Hard Look at University
Research,'' Stanford Social Innovation Review, Oct. 20, 2014; GAO
Report to Congressional Requesters, ``NIH Biomedical Research:
Agencies Involved in the Indirect Cost Rate-Setting Process Need to
Improve Controls,'' GAO-16-616 (Sept. 28, 2016); GAO Report to the
Chairman, Committee on Science, Space, and Technology, House of
Representatives, ``National Science Foundation: Preliminary
Observations on Indirect Costs for Research,'' United States
Government Accountability Office (May 24, 2017) (GAO Report No. GAO-
17-576T); GAO Report to the Chairman, Committee on Science, Space,
and Technology, House of Representatives, ``National Science
Foundation: Actions Needed to Improve Oversight of Indirect Costs
for Research,'' United States Government Accountability Office (Sep.
28, 2017) (GAO Report No. GAO-17-721); Jay P. Greene and John
Schoof, ``Indirect Costs: How Taxpayers Subsidize University
Nonsense,'' Heritage Foundation. Jan. 18, 2022; USAID Office of
Inspector General, ``Negotiated Indirect Cost Rate Agreements:
Opportunities Exist to Improve Processes and Data Management,'' Jan.
26, 2024 (Audit Report No. 3-000-24-001-U); George Calhoun,
``Universities Face a Reckoning Over Federal R&D Funding (Pt 1),''
Forbes, Feb. 26, 2025; Stephen Porter, ``The research racket: How
universities cash in on federal grants,'' The Washington Examiner
(Mar. 11, 2025); Heather Mac Donald, ``Racist--But Underfunded?''
City Journal, Spring 2025; Marcy E. Gallo & Laurie Harris, Cong.
Rsch. Serv., Universities and Indirect Costs for Federally Funded
Research (CRS Report No. R48540) (May 16, 2025); Marcy E. Gallo &
Kavya Sekar, Cong. Rsch. Serv., NIH Indirect Costs Policy for
Research Grants: Recent Developments (CRS Report No. IN12516) (Dec.
9, 2025); Open the Books Oversight Report, ``Transparency Crisis: A
Black Box of Overhead Spending & Academia's Mission Creep from
Rigorous Science,'' Dec. 2025.
\105\ Id.
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In January 2026, legislative language related to indirect costs was
included within appropriations for fiscal year 2026. For example, some
of these provisions: (i) required specified agencies to continue
applying the negotiated indirect cost rates in Sec. 200.414 to the
same extent and in the same manner as such negotiated indirect cost
rates were applied in fiscal year 2024; and (ii) prohibited specified
agencies from using funds appropriated for fiscal year 2026 to develop,
modify, or implement changes to fiscal year 2024 negotiated indirect
cost rates. Report language accompanying these provisions recognized
``room for improvement in the system used to identify and recover
indirect cost rates under the Uniform Guidance, particularly with
respect to the need for greater transparency into these costs.'' The
report language also recognized various models suggested to achieve
improvements to the existing system, including a model proposed by
officials from the Joint Associations Group on Indirect Costs (JAG).
Some have criticized the proposed JAG model for reasons including that
it may increase overhead payments to large organizations and fail to
resolve significant problems of the existing system, including
complexity, inefficiency, and excessive overhead spending by the
Federal Government.\106\ The JAG model appears to focus only on
research awards, which are a subset of
[[Page 32235]]
those awards subject to indirect cost requirements under 2 CFR part
200.
---------------------------------------------------------------------------
\106\ Jeffrey Mervis, ``U.S. research community says new
indirect cost model is still too complicated,'' Science, Jul. 18,
2025.
---------------------------------------------------------------------------
In consideration of this legislative and report language, OMB is
not proposing updates to the indirect cost rate negotiation system
through this document. OMB may consider issuing a request for
information on this topic in the future, but commenters should not
submit comments on the indirect cost rate negotiation system in
response to this document. As no changes are proposed on that topic,
OMB does not intend to consider or respond to any such comments in the
final rule.
X. Request for Comments
OMB and the participating agencies request comments on all aspects
of the proposed regulation in this document, including on any reliance
interests that commenters may have based on the existing text of 2 CFR
that proposed revisions may affect, and that OMB and agencies should
consider in deciding whether or how to finalize this regulation. OMB is
also requesting information from recipients on requirements in 2 CFR
that increase administrative burden--and particularly those that
increase administrative costs. OMB also welcomes comments related to
policies contained in 2 CFR that are not required by statute that OMB
may consider removing.
The Federal agencies participating in this rulemaking also request
comment on all aspects of their proposed regulations in this document,
including on any reliance interests that commenters may have based on
the existing text of 2 CFR subtitle B that the Federal agencies'
respective proposals may affect, and that Federal agencies should
consider in deciding whether or how to finalize this regulation.
XI. Proposed Effective Date and Length of Comment Period
OMB proposes to issue a final rule that is effective by October 1,
2026. The proposed effective date is important to ensure that only a
single set of government-wide requirements apply to Federal awards made
during fiscal year 2027. An effective date of October 1 is useful for
the audit process and other reasons, including ensuring government-wide
uniformity and transparency regarding which requirements apply to
Federal awards made and amended during fiscal year 2027.
OMB is providing a 45-day comment period on the proposed rule.
Before issuing this document, OMB also considered a shorter comment
period of 30 days or a longer period of 60 days. The 45-day comment
period is intended to balance providing a path to issuing a final rule
that is effective by October 1 with providing sufficient time for the
public to comment on the proposed revisions in this document. Late
comments will be considered only to the extent practicable.
Executive Order 12866 (Regulatory Planning and Review) and Executive
Order 13563 (Improving Regulation and Regulatory Review)
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives, and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). The OMB
Regulation for Grants and Agreements published in subtitle A of 2 CFR
is a regulation applicable to Federal agencies. 2 CFR 1.100(b)
(proposed version). The Office of Information and Regulatory Affairs
within OMB has determined that the proposed amendments to 2 CFR are a
significant regulatory action under section 3(f) of E.O. 12866. This
rule is not expected to be considered a regulatory action under
Executive Order 14192 because OMB has determined that it is exempt
under that Executive Order.
Regulatory Impact Assessment
The Regulatory Impact Assessment (RIA) is included as a separate
document.
Regulatory Flexibility Act
The Initial Regulatory Flexibility Analysis (IRFA) is included as a
separate document. OMB also provides the following information related
to the attached IRFA. For a rule subject to the notice-and-comment
provisions of the APA, the Regulatory Flexibility Act 5 U.S.C. 601, et
seq., requires that an agency provide a final regulatory flexibility
analysis or to certify that the rule will not have a significant
economic impact on a substantial number of small entities. Based on the
nature of the revisions proposed in this notice, OMB does not expect
this guidance to have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act.
Courts have explained that the requirement under the RFA to analyze
effects on small entities only applies to direct effects. Small
entities that may be impacted indirectly, but not directly, are not
subject to analysis under the RFA. See Nat'l Women, Infants, & Child.
Grocers Ass'n v. Food & Nutrition Serv., 416 F. Supp. 2d 92, 109-10
(D.D.C. 2006). Certain small entities that could be impacted by OMB's
revised policies will only be impacted indirectly by agency-specific
implementation of the requirements or through their interactions with
recipients of Federal awards.
Unfunded Mandates Reform Act of 1995
The proposed revisions would not impose unfunded mandates as
defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109
Stat. 48). The proposed guidance would not result in the expenditure by
State, local, and Tribal governments, in the aggregate, or by the
private sector, of $168 million or more in any one year (2 U.S.C.
1532). In addition, the definition of ``Federal Mandate'' in the
Unfunded Mandates Reform Act excludes financial assistance of the type
in which State, local, or Tribal governments have authority to adjust
their participation in the program in accordance with changes made in
the program by the Federal Government. Federal financial assistance
programs subject to 2 CFR generally permit this type of flexibility.
Executive Order 13132 (Federalism Assessment)
This proposed regulation has been analyzed in accordance with the
principles and criteria contained in E.O. 13132, ``Federalism,'' 64 FR
43255 (Aug. 10, 1999). OMB has determined that this proposed regulation
would not have sufficient federalism implications to warrant the
preparation of a federalism assessment. The regulation in 2 CFR is
inherently national in scope and significance.
Paperwork Reduction Act
This regulation does not contain a new requirement for information
collection. Rather, it streamlines requirements in specific sections.
Thus, the Paperwork Reduction Act does not apply.
Executive Order 13175 (Tribal Consultation)
OMB has analyzed this revised regulation in accordance with the
principles and criteria contained in E.O. 13175, ``Consultation and
Coordination with Indian Tribal Governments'' 65 FR 67249 (Nov. 9,
2000). During 2025, certain Tribal Nations shared concerns with OMB
regarding potential impacts of 2 CFR revisions on the Federal
Government's trust and treaty obligations to Tribal Nations, and
related to implementation of certain statutes applicable to Tribes,
such as the
[[Page 32236]]
Indian Self-Determination and Education Assistance Act (codified at 25
U.S.C. 5301-5423). OMB considered those concerns in developing this
proposed rule. OMB will initiate formal Tribal consultation before a
final rule is promulgated. Engagement with Tribes will help OMB to
carefully consider Tribal concerns before proposed changes are made
final.
List of Subjects
2 CFR Part 1
Grant programs, Grants administration.
2 CFR Part 25
Accounting, Administrative practice and procedure, Colleges and
universities, Grant programs, Grants administration, Hospitals,
Indians, Loan programs, Nonprofit organizations, Reporting and
recordkeeping requirements, State and local governments.
2 CFR Part 170
Colleges and universities, Grant programs, Hospitals, International
organizations, Loan programs, Reporting and recordkeeping requirements.
2 CFR Part 175
Administrative practice and procedure, Grant programs, Indians--
tribal government, Nonprofit organizations, State and local
governments.
2 CFR Part 176
Grants administration, Grant programs, Loan programs, Wages.
2 CFR Part 180
Administrative practice and procedure, Grant programs, Loan
programs, Reporting and recordkeeping requirements.
2 CFR Part 182
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 183
Foreign aid, Grant programs, Grants administration, International
organizations, Reporting and recordkeeping requirements.
2 CFR Part 200
Accounting, Administrative practice and procedure, Colleges and
universities, Grant programs, Grants administration, Hospitals,
Indians, Loan programs, Nonprofit organizations, Reporting and
recordkeeping requirements, State and local governments.
2 CFR Part 300
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 376
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 382
Administrative practice and procedure, Drug abuse, Grant programs--
health, Reporting and recordkeeping requirements.
2 CFR Part 400
Accounting, Administrative practice and procedure, Agriculture,
Grant programs--agriculture, Loan programs--agriculture.
2 CFR Part 417
Administrative practice and procedure, Grant programs, Loan
programs, Reporting and recordkeeping requirements.
2 CFR Part 421
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 600
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 601
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 700
Accounting, Administrative practice and procedure, Grant programs,
Loan programs.
2 CFR Part 701
Foreign aid, Government contracts, Grant programs--foreign
relations, Loan programs--foreign relations.
2 CFR Part 780
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 782
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 801
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 802
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 901
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 902
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 910
Accounting, Administrative practice and procedure, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 1000
Accounting, Administrative practice and procedure, Grant programs,
Grants administration, Reporting and recordkeeping requirements.
2 CFR Part 1104
Business and industry, Colleges and universities, Grant programs,
Grants administration, Hospitals, Indians, Nonprofit organizations,
Small businesses, State and local governments.
2 CFR Part 1120
Business and industry, Colleges and universities, Grant programs,
Grants administration, Hospitals, Indians, Nonprofit organizations,
Small businesses, State and local governments.
2 CFR Part 1122
Business and industry, Colleges and universities, Grant programs,
Grants administration, Hospitals, Human research subjects, Indians,
Nonprofit organizations, Research, Small businesses, State and local
governments.
2 CFR Part 1125
Administrative practice and procedure, Business and industry,
Colleges and universities, Grant programs, Grants administration,
Hospitals, Indians, Nonprofit organizations, Reporting and
recordkeeping requirements, Small businesses, State and local
governments.
2 CFR Part 1126
Grant programs, Grants administration.
[[Page 32237]]
2 CFR Part 1200
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 1201
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 1326
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 1327
Accounting, Administrative practice and procedure, Government
contracts, Grants administration.
2 CFR Part 1329
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 1400
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 1401
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 1402
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 1500
Accounting, Administrative practice and procedure, Grant programs,
Grant programs--environmental protection, Grants administration, Loan
programs, Reporting and recordkeeping requirements, Waste treatment and
disposal, Water pollution control, Water resources, Water supply,
Watersheds.
2 CFR Part 1532
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 1536
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 1600
Administrative practice and procedure, Reporting and recordkeeping
requirements.
2 CFR Part 1800
Fees, Government property, Government publications, Grant programs,
Grants administration.
2 CFR Part 1880
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 1882
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 1900
Accounting, Administrative practice and procedure, Grant programs,
Grants administration, Loan programs, Nonprofit organizations,
Reporting and recordkeeping requirements.
2 CFR Part 2000
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 2001
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 2200
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 2205
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 2245
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 2300
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 2336
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 2339
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 2400
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 2424
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 2429
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 2500
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 2520
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 2600
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 2700
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 2701
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 2800
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 2867
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 2900
Accounting, Administrative practice and procedure, Government
contracts, Grant programs, Grant programs--labor, Grants
administration, Labor, Reporting and recordkeeping requirements.
2 CFR Part 2998
Administrative practice and procedure, Government procurement,
Grant programs, Grants administration, Reporting and recordkeeping
requirements.
[[Page 32238]]
2 CFR Part 3000
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 3001
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 3002
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 3185
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 3186
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 3187
Administrative practice and procedure, Civil rights, Grant
programs, Museums.
2 CFR Part 3254
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 3255
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 3256
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 3369
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 3373
Administrative practice and procedure, Drug abuse, Grant programs,
Reporting and recordkeeping requirements.
2 CFR Part 3374
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 3474
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 3485
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 3513
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 3603
Accounting, Administrative practice and procedure, Government
contracts, Grants administration, Loan programs, Scholarships and
fellowships.
2 CFR Part 3700
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 3701
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 5800
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements.
2 CFR Part 5801
Accounting, Administrative practice and procedure, Federal
financial assistance, Grant programs, Grants administration,
Intergovernmental relations, State and local governments.
2 CFR Part 5900
Accounting, Administrative practice and procedure, Grant programs,
Grants administration.
2 CFR Part 6000
Accounting, Administrative practice and procedure, Grant programs,
Grants administration, Loan programs, Nonprofit organizations,
Reporting and recordkeeping requirement.
2 CFR Part 6100
Accounting, Administrative practice and procedure, Colleges and
universities, Grant programs, Grants administration, Hospitals,
Indians, Loan programs, Nonprofit organizations, Reporting and
recordkeeping requirements, State and local governments.
2 CFR Part 6200
Accounting, Administrative practice and procedure, Colleges and
universities, Grant programs, Grants administration, Hospitals,
Indians, Loan programs, Nonprofit organizations, Reporting and
recordkeeping requirements, State and local governments.
2 CFR Part 6300
Accounting, Administrative practice and procedure, Colleges and
universities, Grant programs, Grants administration, Hospitals,
Indians, Loan programs, Nonprofit organizations, Reporting and
recordkeeping requirements, State and local governments.
2 CFR Part 6400
Accounting, Administrative practice and procedure, Colleges and
universities, Grant programs, Grants administration, Hospitals,
Indians, Loan programs, Nonprofit organizations, Reporting and
recordkeeping requirements, State and local governments.
2 CFR Part 6500
Accounting, Administrative practice and procedure, Colleges and
universities, Grant programs, Grants administration, Hospitals,
Indians, Loan programs, Nonprofit organizations, Reporting and
recordkeeping requirements, State and local governments.
2 CFR Part 6600
Accounting, Administrative practice and procedure, Colleges and
universities, Grant programs, Grants administration, Hospitals,
Indians, Loan programs, Nonprofit organizations, Reporting and
recordkeeping requirements, State and local governments.
The Secretary of the Department of Health and Human Services,
Robert F. Kennedy, Jr., approves this document, Regulation for
Federal Financial Assistance, and authorizes Russell T. Vought,
Director of the Office of Management and Budget to digitally sign
this document for purposes of publication in the Federal Register.
Robert F. Kennedy, Jr.,
Secretary, Department of Health and Human Services.
The Principal Deputy Chief Financial Officer of the Department
of Agriculture, Candice M. Kinn, approves this document, Regulation
for Federal Financial Assistance, and authorizes Russell T. Vought,
Director of the Office of Management and Budget to digitally sign
this document for purposes of publication in the Federal Register.
Candice M. Kinn,
Principal Deputy Chief Financial Officer.
The Senior Advisor and Deputy Chief Acquisition Officer of the
U.S. Department of State, Kyle Ilgenfritz, approves this document,
Regulation for Federal Financial Assistance, and authorizes Russell
T. Vought, Director of the Office of Management and Budget to
digitally sign this document for
[[Page 32239]]
purposes of publication in the Federal Register.
Kyle Ilgenfritz,
Senior Advisor and Deputy Chief Acquisition Officer.
The Chief Acquisition Officer of the Agency for International
Development, Matthew Dickinson, approves this document, Regulation
for Federal Financial Assistance, and authorizes Russell T. Vought,
Director of the Office of Management and Budget to digitally sign
this document for purposes of publication in the Federal Register.
Matthew Dickinson,
Chief Acquisition Officer.
The Assistant Secretary for Management and Chief Financial
Officer of the Department of Veteran Affairs, Richard Topping,
approves this document, Regulation for Federal Financial Assistance,
and authorizes Russell T. Vought, Director of the Office of
Management and Budget to digitally sign this document for purposes
of publication in the Federal Register.
Richard Topping,
Assistant Secretary for Management and Chief Financial Officer.
The Office of Management Director of the Department of Energy,
Derek Passarelli, approves this document, Regulation for Federal
Financial Assistance, and authorizes Russell T. Vought, Director of
the Office of Management and Budget to digitally sign this document
for purposes of publication in the Federal Register.
Derek Passarelli,
Office of Management Director.
The Assistant Secretary for Management of the Department of the
Treasury, Dr. John W. York, Ph.D., approves this document,
Regulation for Federal Financial Assistance, and authorizes Russell
T. Vought, Director of the Office of Management and Budget to
digitally sign this document for purposes of publication in the
Federal Register.
John W. York,
Assistant Secretary for Management.
The Research Policy Director of the Department of Defense, Jason
Day, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Jason Day,
Research Policy Director.
The Assistant Secretary for Administration of the Department of
Transportation, Anne Byrd, approves this document, Regulation for
Federal Financial Assistance, and authorizes Russell T. Vought,
Director of the Office of Management and Budget to digitally sign
this document for purposes of publication in the Federal Register.
Anne Sanford Byrd,
Assistant Secretary for Administration.
The Director for Acquisition Management of the Department of
Commerce, Olivia Bradley, approves this document, Regulation for
Federal Financial Assistance, and authorizes Russell T. Vought,
Director of the Office of Management and Budget to digitally sign
this document for purposes of publication in the Federal Register.
Olivia Bradley,
Director for Acquisition Management.
Effective immediately, Troy Finnegan, Deputy Assistant
Secretary, Exercising the Delegated Authority of the Assistant
Secretary--Policy, Management and Budget, approves the Regulation
for Federal Financial Assistance. The OMB Director, Russell Vought,
is authorized to digitally sign the aforementioned document for
publication in the Federal Register.
Troy Finnegan,
Deputy Assistant Secretary, Exercising the Delegated Authority of the
Assistant Secretary--Policy, Management and Budget.
The Chief Financial Officer and Chief Administrative Office of
the U.S. Environmental Protection Agency, C. Paige Hanson, approves
this document, Regulation for Federal Financial Assistance, and
authorizes Russell T. Vought, Director of the Office of Management
and Budget to digitally sign this document for purposes of
publication in the Federal Register.
C. Paige Hanson,
Chief Financial Officer and Chief Administrative Officer.
The Administrative Counsel of the U.S. International Development
Finance Corporation, Lisa Wischkaemper, approves this document,
Regulation for Federal Financial Assistance, and authorizes Russell
T. Vought, Director of the Office of Management and Budget to
digitally sign this document for purposes of publication in the
Federal Register.
Lisa Wischkaemper,
Administrative Counsel.
The Acting Senior Procurement Executive, Assistant Administrator
for Procurement of the National Aeronautics and Space
Administration, Marvin L. Horne, approves this document, Regulation
for Federal Financial Assistance, and authorizes Russell T. Vought,
Director of the Office of Management and Budget to digitally sign
this document for purposes of publication in the Federal Register.
Marvin L. Horne,
Assistant Administrator for Procurement.
The Deputy Director of Management Services of the U.S. Agency
for Global Media, Christopher Luer, approves this document,
Regulation for Federal Financial Assistance, and authorizes Russell
T. Vought, Director of the Office of Management and Budget to
digitally sign this document for purposes of publication in the
Federal Register.
Christopher Luer,
Deputy Director of Management Services.
The Acting Director of the Office of Administration of the
Nuclear Regulatory Commission, Eleni Jernell, approves this
document, Regulation for Federal Financial Assistance, and
authorizes Russell T. Vought, Director of the Office of Management
and Budget to digitally sign this document for purposes of
publication in the Federal Register.
Eleni Jernell,
Acting Director, Office of Administration.
The Interim Agency Head of the Corporation for National and
Community Service, Jennifer Bastress, approves this document,
Regulation for Federal Financial Assistance, and authorizes Russell
T. Vought, Director of the Office of Management and Budget to
digitally sign this document for purposes of publication in the
Federal Register.
Jennifer Bastress,
Interim Agency Head.
The General Counsel of the Social Security Administration, Mark
Steffensen, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Mark Steffensen,
General Counsel.
The Deputy Secretary of the Department of Housing and Urban
Development, Andrew Hughes, approves this document, Regulation for
Federal Financial Assistance, and authorizes Russell T. Vought,
Director of the Office of Management and Budget to digitally sign
this document for purposes of publication in the Federal Register.
Andrew Hughes,
Deputy Secretary.
The Senior Official Performing the Duties of the Director of the
National Science Foundation, Brian Stone, approves this document,
Regulation for Federal Financial Assistance, and authorizes Russell
T. Vought, Director of the Office of Management and Budget to
digitally sign this document for purposes of publication in the
Federal Register.
Brian Stone,
Senior Official Performing the Duties of the Director.
The Acting Archivist of the United States of the National
Archives and Records Administration, Edward C. Forst, approves this
document, Regulation for Federal Financial Assistance, and
authorizes Russell T. Vought, Director of the Office of Management
and Budget to digitally sign this document for purposes of
publication in the Federal Register.
Edward C. Forst,
Acting Archivist of the United States.
The Administrator of the Small Business Administration, Kelly
Loeffler, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Kelly Loeffler,
Administrator.
Pursuant to authority delegated from the Acting Attorney
General, the Assistant Attorney General of the Office of Legal
Policy, Department of Justice, Daniel E.
[[Page 32240]]
Burrows, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Daniel E. Burrows,
Assistant Attorney General, Office Of Legal Policy.
The Assistant Secretary for Administration and Management of the
Department of Labor, Dean Heyl, approves this document, Regulation
for Federal Financial Assistance, and authorizes Russell T. Vought,
Director of the Office of Management and Budget to digitally sign
this document for purposes of publication in the Federal Register.
Dean Heyl,
Assistant Secretary for Administration and Management.
The Deputy Secretary of the Department of Homeland Security,
Troy Edgar, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Troy Edgar,
Deputy Secretary.
The Deputy General Counsel and Acting General Counsel of the
Institute of Museum and Library Services, Victoria H. Kauffman,
approves this document, Regulation for Federal Financial Assistance,
and authorizes Russell T. Vought, Director of the Office of
Management and Budget to digitally sign this document for purposes
of publication in the Federal Register.
Victoria H. Kauffman,
Deputy General Counsel and Acting General Counsel.
The Chairman of the National Endowment for the Arts, Mary Anne
Carter, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Mary Anne Carter,
Chairman.
The Acting General Counsel of the National Endowment for the
Humanities, Lisette Voyatzis, approves this document, Regulation for
Federal Financial Assistance, and authorizes Russell T. Vought,
Director of the Office of Management and Budget to digitally sign
this document for purposes of publication in the Federal Register.
Lisette Voyatzis,
Acting General Counsel.
The Assistant Secretary of the Department of Education, Murray
Bessette, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Murray Bessette,
Assistant Secretary for the Office of Planning, Evaluation, and Policy
Development.
The General Counsel of the Export-Import Bank of the United
States, Tony Onorato, approves this document, Regulation for Federal
Financial Assistance, and authorizes Russell T. Vought, Director of
the Office of Management and Budget to digitally sign this document
for purposes of publication in the Federal Register.
Tony Onorato,
General Counsel.
The General Counsel of the Office of National Drug Control
Policy, Dario Camacho, approves this document, Regulation for
Federal Financial Assistance, and authorizes Russell T. Vought,
Director of the Office of Management and Budget to digitally sign
this document for purposes of publication in the Federal Register.
Dario Camacho,
General Counsel.
The General Counsel of the Peace Corps, Alexis Fowler, approves
this document, Regulation for Federal Financial Assistance, and
authorizes Russell T. Vought, Director of the Office of Management
and Budget to digitally sign this document for purposes of
publication in the Federal Register.
Alexis Fowler,
General Counsel.
The Executive Director of the Election Assistance Commission,
Brianna Schletz, approves this document, Regulation for Federal
Financial Assistance, and authorizes Russell T. Vought, Director of
the Office of Management and Budget to digitally sign this document
for purposes of publication in the Federal Register.
Brianna Schletz,
Executive Director.
The Executive Director of the Gulf Coast Ecosystem Restoration
Council, Mary Walker, approves this document, Regulation for Federal
Financial Assistance, and authorizes Russell T. Vought, Director of
the Office of Management and Budget to digitally sign this document
for purposes of publication in the Federal Register.
Mary Walker,
Executive Director.
The Managing Director of the Federal Communications Commission,
Daniel Daly, approves this document, Regulation for Federal
Financial Assistance, and authorizes Russell T. Vought, Director of
the Office of Management and Budget to digitally sign this document
for purposes of publication in the Federal Register.
Daniel Daly,
Managing Director.
The Secretary of the Consumer Product Safety Commission, Alberta
E. Mills, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Alberta E. Mills,
Secretary.
The Federal Co-Chairman of the Delta Regional Authority, Corey
Wiggins, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Corey Wiggins,
Federal Co-Chairman.
The Acting Executive Director of the Appraisal Subcommittee of
the Federal Financial Institutions Examination Council, Frederick
Griefer, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Frederick Griefer,
Acting Executive Director.
The Executive Director of the Marine Mammal Commission, Peter O.
Thomas, approves this document, Regulation for Federal Financial
Assistance, and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Peter O. Thomas,
Executive Director.
The Acting Vice President and Chief Financial Officer of the
Millennium Challenge Corporation, Abdel Maliky, approves this
document, Regulation for Federal Financial Assistance, and
authorizes Russell T. Vought, Director of the Office of Management
and Budget to digitally sign this document for purposes of
publication in the Federal Register.
Abdel Maliky,
Acting Vice President and Chief Financial Officer.
By the National Credit Union Administration Board, this 13th day
of May, 2026, the Secretary of the Board of the National Credit
Union Administration, Melane Conyers-Ausbrooks, approves this Notice
of Proposed Rule, Regulation for Federal Financial Assistance, (RIN
3133-AG07) and authorizes Russell T. Vought, Director of the Office
of Management and Budget to digitally sign this document for
purposes of publication in the Federal Register.
Melane Conyers-Ausbrooks,
Secretary of the Board.
Russell T. Vought,
Director, Office of Management and Budget.
For the reasons stated in the preamble, 2 CFR subtitles A and B are
proposed to be amended as set forth below:
[[Page 32241]]
1. Revise part 1 to read as follows:
PART 1--ABOUT TITLE 2 OF THE CODE OF FEDERAL REGULATIONS AND
SUBTITLE A
Subpart A--Introduction to Title 2 of the CFR
Sec.
100 Content of this title.
1.105 Organization and subtitle content.
1.110 Issuing authorities.
Subpart B--Introduction to Subtitle A
1.200 Purpose of chapters I and II.
1.205 Applicability to Federal financial assistance.
1.210 Applicability to Federal agencies and others.
1.215 Relationship to previous issuances by OMB.
1.220 Federal agency implementation of this subtitle.
1.221 Alternative implementation of this subtitle by certain Federal
agencies.
1.230 Maintenance of this subtitle.
1.231 Severability.
Subpart C--Responsibilities of OMB and Federal Agencies
1.300 OMB responsibilities.
1.305 Federal agency responsibilities.
Authority: 31 U.S.C. 503; 31 U.S.C. 1111; 31 U.S.C. 6307; 41
U.S.C. 1121; E.O. 11541, 35 FR 10737, 3 CFR, 1966-1970 Comp., p.
939; Reorganization Plan No. 2 of 1970.
Subpart A--Introduction to Title 2 of the CFR
Sec. 1.100 Content of this title.
This title contains:
(a) Office of Management and Budget (OMB) regulations applicable to
Federal agencies on Government-wide policies for the award and
administration of Federal financial assistance, including the Uniform
Grants Regulation (UGR) at part 200; and
(b) Federal agency regulations implementing or supplementing the
OMB regulations.
Sec. 1.105 Organization and subtitle content.
(a) This title is organized into two subtitles.
(b) The OMB regulations described in Sec. 1.100(a) are published
in this subtitle.
(c) Each Federal agency that awards Federal financial assistance
has a chapter in subtitle B of this title in which it issues the
regulations described in Sec. 1.100(b). Federal agency regulations in
subtitle B adopt and implement the OMB regulations in this subtitle.
Sec. 1.110 Issuing authorities.
OMB issues this subtitle. Each Federal agency that has a chapter in
subtitle B of this title issues that chapter.
Subpart B--Introduction to Subtitle A
Sec. 1.200 Purpose of chapters I and II.
Chapters I and II of this subtitle provide OMB regulations
applicable to Federal agencies that help to ensure consistent and
uniform Government-wide policies, requirements, and procedures for the
management of the agencies' Federal financial assistance.
Sec. 1.205 Applicability to Federal financial assistance.
The types of instruments that are subject to the regulations in
this subtitle vary from one portion of the regulations to another. All
portions of the regulations apply to grants and cooperative agreements,
and some portions also apply to other types of Federal financial
assistance.
Sec. 1.210 Applicability to Federal agencies and others.
(a) This subtitle contains regulations that directly apply only to
Federal agencies.
(b) The regulations in this subtitle may affect other entities
through each Federal agency's implementation of the regulations,
portions of which may apply to:
(1) The agency's awarding or administering officials;
(2) Recipients and subrecipients that receive or apply for the
agency's Federal financial assistance or receive subawards under grants
or cooperative agreements; or
(3) Any other entities involved in agency transactions subject to
the regulations in this chapter.
Sec. 1.215 Relationship to previous issuances by OMB.
This subtitle superseded previous OMB guidance issued under certain
OMB circulars and other guidance documents related to the same subject
matter.
Sec. 1.220 Federal agency implementation of this subtitle.
A Federal agency that awards Federal financial assistance subject
to the OMB regulations in this subtitle implements or supplements the
OMB regulations in agency regulations in subtitle B of this title and
in guidance documents, policy documents, and procedural issuances, such
as internal instructions to the agency's awarding and administering
officials. An applicant, recipient, or subrecipient would see the
effect of that implementation in the organization and content of the
agency's announcements of funding opportunities and in its award terms
and conditions.
Sec. 1.221 Alternative implementation of this subtitle by certain
Federal agencies.
The Federal agencies listed in this section received approval from
OMB to implement the OMB regulations in this subtitle, including part
200, as policy applicable to their Federal awards without establishing
agency regulations in subtitle B of this title as described at Sec.
1.220. Like all other Federal agencies, the listed Federal agencies
must implement the requirements in this subtitle in their announcements
of funding opportunities and the terms and conditions of their Federal
awards. The listed Federal agencies are:
(a) Denali Commission;
(b) Southwest Border Regional Commission (SBRC);
(c) Southeast Crescent Regional Commission (SCRC);
(d) Appalachian Regional Commission (ARC);
(e) Northern Border Regional Commission (NBRC);
(f) Federal Permitting Improvement Steering Council; and
(g) Export Import Bank of the United States.
Sec. 1.230 Maintenance of this subtitle.
OMB issues regulations in this subtitle after publication in the
Federal Register. Any portion of the regulations that has a potential
impact on the public is published with an opportunity for public
comment.
Sec. 1.231 Severability.
The provisions of this subtitle are separate and severable from one
another. If any provision of this subtitle is held invalid or
unenforceable as applied to a particular person or circumstance, the
provision should be construed so as to continue to give the maximum
effect permitted by law as applied to other persons not similarly
situated or to dissimilar circumstances. If any provision is determined
to be wholly invalid and unenforceable, it should be severed from the
remaining provisions of this subtitle, which should remain in effect.
Subpart C--Responsibilities of OMB and Federal Agencies
Sec. 1.300 OMB responsibilities.
OMB is responsible for:
(a) Issuing and maintaining the regulations in this subtitle, as
described in Sec. 1.230;
(b) Interpreting requirements in this subtitle;
(c) Reviewing Federal agency regulations implementing or
supplementing the requirements of this subtitle, as required by
Executive Order 12866;
[[Page 32242]]
(d) Conducting broad oversight of Government-wide compliance with
the regulations in this subtitle; and
(e) Performing other OMB functions specified in this subtitle.
Sec. 1.305 Federal agency responsibilities.
The head of each Federal agency that awards and administers Federal
financial assistance subject to the OMB regulations in this subtitle is
responsible for:
(a) Implementing the regulations in this subtitle;
(b) Ensuring that the Federal agency complies with its
implementation of the OMB regulations;
(c) Coordinating with the Council on Federal Financial Assistance,
the Grants Quality Service Management Office, and other governance
committees as appropriate; and
(d) Performing other functions specified in this subtitle.
0
2. Revise the heading of chapter I to read as follows:
Chapter I--OFFICE OF MANAGEMENT AND BUDGET GOVERNMENT-WIDE REGULATION
FOR FEDERAL FINANCIAL ASSISTANCE
PART 25--UNIQUE ENTITY IDENTIFIER AND SYSTEM FOR AWARD MANAGEMENT
0
3. The authority citation for part 25 continues to read as follows:
Authority: 31 U.S.C. 503; 31 U.S.C. 6101 note; 31 U.S.C. 6102;
31 U.S.C. 6307; 41 U.S.C. 2313; Pub. L. 109-282; Pub. L. 110-252;
Pub. L. 113-101; Pub. L. 117-40.
0
4. Revise Sec. 25.100 to read as follows:
Sec. 25.100 Purpose of this part.
This part provides policies applicable to Federal agencies
regarding:
(a) The unique entity identifier (UEI), which is the universal
identifier for Federal financial assistance applicants, as well as
recipients and their direct subrecipients (first-tier subrecipients);
and
(b) The System for Award Management (SAM.gov), which is the
repository for standard information about applicants and recipients.
0
5. In Sec. 25.200, revise paragraph (a) to read as follows:
Sec. 25.200 Requirements for notice of funding opportunities,
regulations, and application instructions.
(a) A Federal agency that issues Federal financial assistance (see
Sec. 25.400) must include the requirements of paragraph (b) of this
section in each notice of funding opportunity, regulation, or other
issuance containing instructions for applicants that is issued on or
after the effective date of this regulation. A notice of funding
opportunity is any electronic issuance that a Federal agency uses to
announce a funding opportunity, whether it is called a ``program
announcement,'' ``notice of funding availability,'' ``broad agency
announcement,'' ``research announcement,'' ``solicitation,'' or any
other term.
* * * * *
0
6. In appendix A, in paragraph I.(c), revise the definition of ``System
for Award Management (SAM.gov)'' to read as follows:
Appendix A to Part 25--Award Term
I. * * *
(c) * * *
System for Award Management (SAM.gov) means the Federal
repository into which a recipient must provide the information
required for the conduct of business as a recipient. Additional
information about registration procedures may be found in SAM.gov.
* * * * *
PART 170--REPORTING SUBAWARD AND EXECUTIVE COMPENSATION INFORMATION
0
7. The authority citation for part 170 continues to read as follows:
Authority: 31 U.S.C. 503; 31 U.S.C. 6102; 31 U.S.C. 6307; Pub.
L. 109-282; Pub. L. 110-252, Pub. L. 113-101, Pub. L. 117-40.
0
8. Revise Sec. 170.100 to read as follows:
Sec. 170.100 Purpose of this part.
This part provides policies applicable to Federal agencies on
establishing requirements for recipients of Federal awards to report
information on subawards and executive total compensation, as required
by the Federal Funding Accountability and Transparency Act of 2006
(Pub. L. 109-282), as amended by the Digital Accountability and
Transparency Act of 2014 (Pub. L. 113-101) and other Public Laws,
hereinafter referred to as the ``Transparency Act.''
0
9. In Sec. 170.200, revise paragraph (a) to read as follows:
Sec. 170.200 Federal agency reporting requirements.
(a) Federal agencies must publicly report Federal awards that equal
or exceed the micro-purchase threshold (see 2 CFR 200.1). Federal
agencies must publish the required Federal award information on
USAspending.gov in accordance with the policies provided by OMB and the
U.S. Department of the Treasury's Government-wide Spending Data Model
(GSDM).
* * * * *
0
10. In Sec. 170.210, revise paragraph (a) to read as follows:
Sec. 170.210 Requirements for notices of funding opportunities,
regulations, and application instructions.
(a) A Federal agency that makes Federal awards subject to the
Transparency Act must include the requirements of paragraph (b) of this
section in each notice of funding opportunity, regulation, or other
issuance containing instructions for applicants under which Federal
awards may be made that are subject to Transparency Act reporting
requirements. A notice of funding opportunity is any electronic
issuance that a Federal agency uses to announce a funding opportunity,
whether it is called a ``program announcement,'' ``notice of funding
availability,'' ``broad agency announcement,'' ``research
announcement,'' ``solicitation,'' or any other term.
* * * * *
0
11. In appendix A to part 170, revise paragraphs I.(a)(2)(i),
I.(b)(2)(i), I.(c)(1)(iii), and I.(c)(2) to read as follows:
Appendix A to Part 170--Award Term
I. * * *
(a) * * *
(2) * * *
(i) The recipient must report each subaward described in
paragraph (a)(1) of this award term to the Transparency Act Subaward
Reporting System at SAM.gov.
* * * * *
(b) * * *
(2) * * *
(i) As part of the recipient's registration profile at SAM.gov.
* * * * *
(c) * * *
(1) * * *
(iii) The public does not have access to information about the
compensation of the executives through periodic reports filed under
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code
of 1986 after receiving this subaward. (To determine if the public
has access to the compensation information, see the U.S. Security
and Exchange Commission total compensation filings at https://www.sec.gov/answers/execomp.htm.)
(2) Reporting Requirements. Subrecipients must report to the
recipient their executive total compensation described in paragraph
(c)(1) of this appendix. The recipient is required to submit this
information to the Transparency Act Subaward Reporting System at
SAM.gov no later than the end of the month following the month in
which the subaward was made. (For example, if the subaward was made
on November 7, 2025, the subaward must be reported by no later than
December 31, 2025).
* * * * *
[[Page 32243]]
PART 175--AWARD TERM FOR TRAFFICKING IN PERSONS
0
12. The authority citation for part 175 continues to read as follows:
Authority: 22 U.S.C. 7104(g); 22 U.S.C. 7104a; 22 U.S.C. 7104b;
22 U.S.C. 7104c; 31 U.S.C. 503; 31 U.S.C. 6307; 31 U.S.C. 1111; 41
U.S.C. 1121; Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR
10737.
0
13. In Sec. 175.105, revise paragraph (a) introductory text to read as
follows:
Sec. 175.105 Statutory requirement.
(a) Federal agencies are required to include in each Federal grant
or cooperative agreement a condition that authorizes the Federal agency
to terminate the award or take any remedial actions authorized by 22
U.S.C. 7104b(c), without penalty, if a private entity receiving funds
under the award as a recipient or subrecipient engages in any of the
activities described in 22 U.S.C. 7104(g) related to human trafficking,
including:
* * * * *
PART 176--[Removed]
0
14. Remove part 176.
PART 180--OMB GUIDELINES TO AGENCIES ON GOVERNMENT-WIDE DEBARMENT
AND SUSPENSION (NONPROCUREMENT)
0
15. The authority citation for part 180 continues to read as follows:
Authority: 31 U.S.C. 503; 31 U.S.C. 6102; 31 U.S.C. 6307; Pub.
L. 103-355; Pub. L. 109-282; Pub. L. 110-252; Pub. L. 111-84; Pub.
L. 113-101Pub. L. 115-232; Pub. L. 117-40; E.O. 12549; E.O. 12689.
0
16. Revise Sec. 180.5 to read as follows:
Sec. 180.5 What does this part do?
This part provides regulatory guidelines applicable to Federal
agencies regarding how to implement the Government-wide debarment and
suspension system for nonprocurement programs and activities.
0
17. Revise Sec. 180.15 to read as follows:
Sec. 180.15 To whom does this part apply?
This part provides regulatory guidelines applicable to Federal
agencies. Federal agencies' implementation of this part governs the
rights and responsibilities of other persons affected by the
nonprocurement debarment and suspension system.
0
18. Revise Sec. 180.20 to read as follows:
Sec. 180.20 What must a Federal agency do to implement these
guidelines?
As section 3 of Executive Order 12549 requires, each Federal agency
with nonprocurement programs and activities covered by subparts A
through I of this part must issue regulations consistent with those
subparts.
0
19. In Sec. 180.25, revise paragraph (a) and paragraph (b)
introductory text to read as follows:
Sec. 180.25 What must a Federal agency address in its implementation
of this part?
* * * * *
(a) Must establish policies and procedures for that Federal
agency's nonprocurement debarment and suspension programs and
activities consistent with this part. When adopted by a Federal agency,
this part has a regulatory effect on that Federal agency's programs and
activities. Federal agencies must not deviate from the requirements of
this part on matters for which discretion is not provided.
(b) Must address some matters for which this part gives each
Federal agency some discretion. Specifically, the regulation must:
* * * * *
0
20. Revise Sec. 180.150 to read as follows:
Sec. 180.150 Against whom may a Federal agency take an exclusion
action?
Given a cause that justifies an exclusion under this part, a
Federal agency may exclude any person who has been, is, or may
reasonably be expected to be, a participant or principal in a covered
transaction.
0
21. In Sec. 180.215, revise paragraph (h) to read as follows:
Sec. 180.215 Which nonprocurement transactions are not covered
transactions?
* * * * *
(h) Notwithstanding paragraph (a) of this section, covered
transactions must include non-procurement and procurement transactions
involving entities engaged in activity that contributed to or is a
significant factor in a country's non-compliance with its obligations
under arms control, nonproliferation or disarmament agreements, or
commitments with the United States. Federal agencies and primary tier
non-procurement recipients must not award, renew, or extend a non-
procurement transaction or procurement transaction, regardless of
amount or tier, with any entity listed in SAM.gov Exclusions on the
basis of involvement in activities that violate arms control,
nonproliferation or disarmament agreements, or commitments with the
United States (see section 1290 of the National Defense Authorization
Act for Fiscal Year 2017). The head of a Federal agency may grant an
exception to the requirement under this section only if the exception
is:
(1) Made in accordance with Sec. 180.135; and
(2) The OMB Director provides concurrence.
0
22. Revise Sec. 180.530 to read as follows:
Sec. 180.530 Where can I find SAM.gov Exclusions?
You may access SAM.gov Exclusions through the internet, currently
at SAM.gov.
0
23. Revise Sec. 180.620 to read as follows:
Sec. 180.620 Do Federal agencies coordinate suspension and debarment
actions?
Yes. When more than one Federal agency has an interest in a
suspension or debarment, the agencies may consider designating one
Federal agency as the lead agency for making the decision. Agencies are
encouraged to establish methods and procedures for coordinating their
suspension and debarment actions.
0
24. In Sec. 180.745, revise paragraph (b) to read as follows:
Sec. 180.745 How is fact-finding conducted?
* * * * *
(b) A transcribed record of fact-finding proceedings must be made,
unless you, as a respondent, and the Federal agency agree to waive it
in advance. If you want a copy of the transcribed record, you may
purchase it and the Federal agency must provide it to you within five
business days.
0
25. In Sec. 180.840, revise paragraph (b) to read as follows:
Sec. 180.840 How is fact-finding conducted?
* * * * *
(b) A transcribed record of fact-finding proceedings must be made
unless you, as a respondent, and the Federal agency agree to waive it
in advance. If you want a copy of the transcribed record, you may
purchase it and the Federal agency must provide it to you within five
business days.
0
26. Revise Sec. 180.915 to read as follows:
Sec. 180.915 Civil judgment.
Civil judgment means the disposition of a civil action by any court
of competent jurisdiction, whether by verdict, decision, settlement,
stipulation, or other disposition which creates a civil liability for
the complained of wrongful acts or a final determination of liability
under the Administrative False Claims Act of 2023 (31 U.S.C. 3801-
3812).
0
27. Revise Sec. 180.965 to read as follows:
[[Page 32244]]
Sec. 180.965 Legal proceedings.
Legal proceeding means any criminal proceeding or any civil
judicial proceeding, including a proceeding under the Administrative
False Claims Act of 2023 (31 U.S.C. 3801-3812), to which the Federal
Government or a State or local government or quasi-governmental
authority is a party. The term also includes appeals from those
proceedings.
PART 182--GOVERNMENT-WIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE
(FINANCIAL ASSISTANCE)
0
28. The authority citation for part 182 continues to read as follows:
Authority: 41 U.S.C. 8101-8106; 31 U.S.C. 503; 31 U.S.C. 6307.
0
29. Revise Sec. 182.5 to read as follows:
Sec. 182.5 What does this part do?
This part provides regulations applicable to Federal agencies on
the portion of the Drug-Free Workplace Act of 1988 (41 U.S.C. 8101-
8106, as amended) that applies to grants. It also applies the
provisions of the Act to cooperative agreements and other financial
assistance awards, as a matter of Federal Government policy.
0
30. Revise Sec. 182.15 to read as follows:
Sec. 182.15 To whom does this part apply?
This part provides regulations applicable to Federal agencies.
Federal agencies' implementation of this part governs the rights and
responsibilities of other persons affected by the drug-free workplace
requirements.
0
31. Revise Sec. 182.20 to read as follows:
Sec. 182.20 What must a Federal agency do to implement this part?
To comply with the requirement in 41 U.S.C. 8106 for Government-
wide regulations, each Federal agency that awards grants or cooperative
agreements or makes other financial assistance awards that are subject
to the drug-free workplace requirements in subparts A through F of this
part must issue a regulation consistent with those subparts.
0
32. In Sec. 182.25, revise paragraphs (a), (b) introductory text, and
(c) to read as follows:
Sec. 182.25 What must a Federal agency address in its implementation
of this part?
* * * * *
(a) Must establish drug-free workplace policies and procedures for
that Federal agency's Federal awards consistent with this part. When
adopted by a Federal agency, this part has a regulatory effect on that
Federal agency's awards. Federal agencies must not deviate from the
requirements of this part on matters for which discretion is not
provided.
(b) Must address some matters for which this part gives the Federal
agency discretion. Specifically, the regulation must:
* * * * *
(c) May also, at the Federal agency's option, identify any specific
types of financial assistance awards, in addition to grants and
cooperative agreements, to which the Federal agency makes this part
applicable.
0
33. Revise Sec. 182.30 to read as follows:
Sec. 182.30 Where does a Federal agency implement this part?
Each Federal agency that awards grants or cooperative agreements or
makes other financial assistance awards that are subject to the drug-
free workplace regulation in this part must issue a regulation
implementing the policy within its chapter in subtitle B of this title.
0
34. Revise Sec. 182.40 to read as follows:
Sec. 182.40 How is this part maintained?
The OMB publishes proposed changes to this part in the Federal
Register for public comment, considers comments with the help of
appropriate interagency working groups, and then issues any changes to
this part in final form.
0
35. In Sec. 182.300, revise paragraph (b)(3) to read as follows:
Sec. 182.300 What must I do to comply with this part if I am an
individual recipient?
* * * * *
(b) * * *
(3) To the Federal agency awarding official or their designee for
each Federal award that you currently have, unless the agency
designates a central point for the receipt of the notices, either in
the award document or its regulation implementing the regulation in
this part. When notice is made to a central point, it must include the
identification number(s) of each affected Federal award.
0
36. In Sec. 182.510, revise paragraph (c) to read as follows:
Sec. 182.510 What actions will the Federal Government take against a
recipient determined to have violated this part?
* * * * *
(c) Suspension or debarment of the recipient under the Federal
agency's regulation implementing the OMB regulation on nonprocurement
debarment and suspension (2 CFR part 180) for a period not to exceed
five years.
0
37. In Sec. 182.630, revise the section to read as follows:
Sec. 182.630 Debarment.
Debarment means an action taken by a Federal agency to prohibit a
recipient from participating in Federal Government procurement
contracts and covered nonprocurement transactions. A recipient so
prohibited is debarred, in accordance with the Federal Acquisition
Regulation for procurement contracts (48 CFR part 9, subpart 9.4) and
Federal agency regulations implementing the OMB regulation on
nonprocurement debarment and suspension (2 CFR part 180, which
implements Executive Orders 12549 and 12689).
0
38. Revise Sec. 182.670 to read as follows:
Sec. 182.670 Suspension.
Suspension means an action taken by a Federal agency that
immediately prohibits a recipient from participating in Federal
Government procurement contracts and covered nonprocurement
transactions for a temporary period, pending completion of an
investigation and any judicial or administrative proceedings that may
ensue. A recipient so prohibited is suspended in accordance with the
Federal Acquisition Regulation for procurement contracts (48 CFR part
9, subpart 9.4) and Federal agency regulations implementing the OMB
regulation on nonprocurement debarment and suspension (2 CFR part 180,
which implements Executive Orders 12549 and 12689). Suspension of a
recipient is a distinct and separate action from suspension of an award
or suspension of payments under an award.
PART 183--NEVER CONTRACT WITH THE ENEMY
0
39. The authority citation for part 183 continues to read as follows:
Authority: Pub. L. 113-291, as amended by Pub. L. 115-232, Pub.
L. 116-92, Pub. L. 116-283, Pub. L. 117-263; 31 U.S.C. 503; 31
U.S.C. 6307.
0
40. Revise Sec. 183.5 to read as follows:
Sec. 183.5 Purpose of this part.
This part provides regulations applicable to Federal agencies on
the implementation of the Never Contract with the Enemy requirements
applicable to certain grants and cooperative agreements, as specified
in subtitle E, title VIII of the National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2015 (Pub. L. 113-291), as amended by sec.
820 of the National Defense Authorization Act for Fiscal Year 2023
(Pub. L. 117-263), hereinafter cited as ``Never Contract with the
Enemy''.
[[Page 32245]]
0
41. In Sec. 183.35, revise the definition of ``Covered combatant
command'' to read as follows:
Sec. 183.35 Definitions.
* * * * *
Covered combatant command is defined in Pub. L. 113-291.
* * * * *
PART 200--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
42. The authority citation for part 200 continues to read as follows:
Authority: 31 U.S.C. 503; 31 U.S.C. 6101-6106; 31 U.S.C. 6307;
31 U.S.C. 7501-7507.
0
43. In Sec. 200.1:
0
a. Revise the definitions for ``Compliance supplement'' and ``Federal
award date'';
0
b. Remove the definition for ``Fixed amount award'';
0
c. Revise the definitions of ``Improper payment'', ``Notice of funding
opportunity'', and ``Personally Identifiable Information (PII)'';
0
d. Remove the definition for ``Protected Personally Identifiable
Information (Protected PII)''; and
0
e. Revise the definition of ``Unobligated balance''.
The revisions read as follows:
Sec. 200.1 Definitions.
* * * * *
Compliance supplement means an authoritative source of information
for auditors that identifies existing important compliance requirements
that the Federal Government expects to be considered as part of an
audit. Auditors use it to understand the Federal program's objectives,
procedures, and compliance requirements, as well as audit objectives
and suggested audit procedures for determining compliance with the
relevant Federal program.
* * * * *
Federal award date means the date when the authorized official of
the Federal agency:
(1) Signed (physically or digitally) the Federal award; or
(2) Obligated the Federal award by alternative means consistent
with the requirements of 31 U.S.C. 1501.
* * * * *
Improper payment means a payment that should not have been made or
that was made in an incorrect amount under statutory, contractual,
administrative, or other legally applicable requirements. The term
improper payment includes: any payment to an ineligible recipient; any
payment for an ineligible good or service; any duplicate payment; any
payment for a good or service not received, except for those payments
where authorized by law; any payment that is not authorized by law; and
any payment that does not account for credit for applicable discounts.
See OMB Circular A-123 Appendix C, Requirements for Payment Integrity
Improvement, for additional definitions and guidance on the
requirements for payment integrity.
* * * * *
Notice of funding opportunity (NOFO) means a formal announcement of
the availability of Federal funding through a financial assistance
program from a Federal agency. The notice of funding opportunity
provides information on the award, such as who is eligible to apply,
the evaluation criteria for selecting a recipient or subrecipient, the
required components of an application, and how to submit the
application. The notice of funding opportunity is any electronic
issuance that an agency uses to announce a funding opportunity, whether
it is called a ``program announcement,'' ``notice of funding
availability,'' ``broad agency announcement,'' ``research
announcement,'' ``solicitation,'' or some other term.
* * * * *
Personally Identifiable Information (PII) means information that
can be used to distinguish or trace an individual's identity, either
alone or when combined with other personal or identifying information
that is linked or linkable to a specific individual.
* * * * *
Unobligated balance means the amount of funds under a Federal award
that the recipient or subrecipient has not obligated. For purposes of
this definition, ``obligated'' means funds that the recipient or
subrecipient has legally committed through actions such as placing an
order, awarding a contract or subaward, or otherwise incurring a
liability for which payment will be due. The amount of an unobligated
balance is computed by subtracting the cumulative amount of the
recipient's or subrecipient's unliquidated financial obligations and
expenditures under the Federal award from the cumulative amount of
funds the Federal agency or pass-through entity authorized the
recipient or subrecipient to obligate.
* * * * *
0
44. In Sec. 200.101, revise paragraphs (b)(3)(ii), (b)(4), (b)(5)(i),
(c)(2), (d), and (f) introductory text to read as follows:
Sec. 200.101 Applicability.
* * * * *
(b) * * *
(3) * * *
(ii) Section 200.216 (Prohibition of certain equipment, services,
and systems) applies to loans and grants (see Pub. L. 115-232, Div. A,
Title VIII, sec. 889, as amended); and
* * * * *
(4) Subpart E (Cost Principles) applies to grants and cooperative
agreements, but does not apply to the following:
(i) Food commodities provided through grants and cooperative
agreements;
(ii) Agreements for loans, loan guarantees, interest subsidies, and
insurance; and
(iii) Federal awards to hospitals (see Appendix IX--Hospital Cost
Principles).
(5) * * *
(i) Grants and cooperative agreements;
* * * * *
(c) * * *
(2) Cost-reimbursement contract under the FAR awarded to a non-
Federal entity. When a non-Federal entity is awarded a cost-
reimbursement contract under the FAR, only subpart D, Sec. Sec.
200.331 through 200.333, and subparts E and F are applicable. See 48
CFR 16.301-2.
* * * * *
(d) Governing provisions in cases of conflict--(1) Statutory
conflicts. With the exception of subpart F, which is required by the
Single Audit Act, Federal statutes govern in any circumstances where
they conflict with the provisions of this part. For agreements with
Indian Tribes, this includes the provisions of the Indian Self-
Determination and Education and Assistance Act (ISDEAA), as amended
(see 25 U.S.C. 5301-5423).
(2) Regulatory conflicts. In the case of a Federal regulation that
conflicts with the provisions of this part but that is not required by
a Federal statute, once a Federal agency has issued regulations
adopting the OMB regulations in this part, the following provisions of
this part will govern in any circumstances where they conflict with the
other regulatory provision: all sections in subpart F and Sec. 200.340
in subpart D. See also Sec. 200.106(a) regarding the process for
issuing codified exceptions under this title. For other non-statutory
conflicts involving a policy in a Federal regulation, once a Federal
agency has issued regulations adopting the OMB regulations in this
part, the Federal agency should apply the Government-wide policies in
this part to the greatest extent permitted by law. If a Federal agency
is aware of regulatory conflicts
[[Page 32246]]
that could potentially affect activities under a Federal program or
Federal award, the agency should clarify which provisions govern in
funding opportunities and Federal award documents. Unless prohibited by
statute, as a default presumption, a Federal agency should generally
apply the government-wide policies in this part if it can do so
consistent with law. Federal agencies should work to resolve any such
regulatory conflicts consistent with their rulemaking authorities;
applicable provisions of this part, such as Sec. Sec. 200.102,
200.106, and 200.110; or both.
* * * * *
(f) Additional program applicability. Except for Sec. Sec. 200.203
and 200.216, the regulation in subpart C does not apply to the
following programs:
* * * * *
0
45. In Sec. 200.102, revise paragraphs (b) and (c) to read as follows:
Sec. 200.102 Exceptions.
* * * * *
(b) Statutory and regulatory exceptions. Except for subpart F of
this part, and subject to Sec. 200.101(d), a Federal agency may adjust
requirements applicable to a class of Federal awards, recipients, or
subrecipients when required by Federal statutes or regulations. Except
for provisions in subpart F, when a Federal statute requires exceptions
to requirements of this part for a class of Federal awards, recipients,
or subrecipients, a Federal agency does not need OMB approval to allow
those exceptions. See also Sec. 200.106.
(c) Federal agency exceptions. Federal agencies may allow
exceptions to requirements of this part on a case-by-case basis for
individual Federal awards, recipients, or subrecipients, except when
the exceptions are prohibited by law or other approval is expressly
required by this part. See, for example, Sec. 200.340. Only the
cognizant agency for indirect costs may authorize exceptions related to
cost allocation plans or indirect cost rate proposals.
0
46. Revise Sec. 200.106 to read as follows:
Sec. 200.106 Agency implementation and responsibilities.
(a) Agency implementation of this part. The specific requirements
and responsibilities of Federal agencies, non-Federal entities,
recipients, and subrecipients are set forth in this part. Federal
agencies making Federal awards to non-Federal entities must implement
the language in subparts A through F of this part in codified
regulations unless different provisions are required by Federal statute
or are approved by OMB.
(b) Agency responsibilities. Through adoption of this part in
codified regulations, unless different provisions are required by
Federal statute or are approved by OMB, Federal agencies are
responsible for implementing:
(1) The language in subparts A through F of this part; and
(2) Other applicable requirements for Federal awards in parts 25,
170, 175, 180, 182, 183, and 184 of chapter I of this subtitle.
0
47. Revise Sec. 200.108 to read as follows:
Sec. 200.108 Inquiries.
Inquiries from Federal agencies concerning this part may be
directed to OMB. Inquiries from recipients or subrecipients should be
addressed to the Federal agency, the cognizant agency for indirect
costs, the cognizant agency for audit, or the pass-through entity, as
appropriate.
0
48. In Sec. 200.110, revise paragraph (a) to read as follows:
Sec. 200.110 Effective date.
(a) The Government-wide standards set forth in this part affecting
the administration of Federal awards by Federal agencies become
effective once implemented by Federal agencies or when any future
amendment to this part becomes final. Thus, once Federal agencies have
issued regulations in subtitle B of this title adopting the OMB
regulations in this part, the process for future updates of regulations
in subtitle B will be complete each time OMB issues a final rule
amending this part. If required by Federal statute or otherwise
approved by OMB, Federal agencies remain permitted to amend their
regulations in subtitle B to make agency-specific additions,
clarifications, or exceptions to the Government-wide policies and
procedures in this part. See Sec. 200.106(a).
* * * * *
0
49. Revise Sec. 200.111 to read as follows:
Sec. 200.111 English language.
All Federal financial assistance announcements, applications, and
Federal award information must be in the English language and must be
in terms of U.S. dollars.
0
50. Revise Sec. 200.112 to read as follows:
Sec. 200.112 Conflict of interest.
Federal agencies must establish conflict of interest policies for
Federal awards. A recipient or subrecipient must disclose in writing
any potential conflict of interest to the Federal agency or pass-
through entity in accordance with the established Federal agency
policies. A recipient or subrecipient must also disclose whether any
employees who worked on an application for, or proposal in support of,
a resulting Federal award, or are anticipated to work on activities
under the Federal award, were employed by the awarding Federal agency
during the preceding two years prior to application submission. This
disclosure must be provided to agencies for informational purposes.
0
51. Revise Sec. 200.113 to read as follows:
Sec. 200.113 Mandatory disclosures.
An applicant, recipient, or subrecipient of a Federal award must
promptly disclose whenever, in connection with the Federal award
(including any activities or subawards thereunder), it has credible
evidence of the commission of a violation of Federal criminal law
involving fraud, conflict of interest, bribery, or gratuity violations
found in title 18 of the United States Code or a violation of the
Federal civil False Claims Act (31 U.S.C. 3729-3733). The disclosure
must be made in writing to the Federal agency, the agency's Office of
Inspector General, and pass-through entity (if applicable). Recipients
and subrecipients are also required to report matters related to
recipient integrity and performance in accordance with appendix XII to
this part. Failure to make required disclosures can result in any of
the administrative actions described in Sec. 200.339. (See also 2 CFR
part 180, 31 U.S.C. 3354, and 41 U.S.C. 2313.) Any such disclosures
made to the agency's office of Inspector General must be transmitted to
the United States Attorney's Office for the District of Columbia within
ten days of receipt.
0
52. Revise Sec. 200.201 to read as follows:
Sec. 200.201 Use of grants, cooperative agreements, and contracts.
(a) Federal awards. The Federal agency must decide on the
appropriate type of agreement for a Federal award (for example, a
grant, cooperative agreement, or contract) in accordance with this
regulation. See the Federal Grant and Cooperative Agreement Act (31
U.S.C. 6301-6309). See Sec. 200.332 for information applicable to
pass-through entities.
(b) Fixed amount awards. Fixed amount awards are not permitted
unless otherwise authorized by Federal statute. The term fixed amount
award means a type of grant or cooperative agreement in which the
Federal agency or pass-
[[Page 32247]]
through entity provides a specific amount of funding without regard to
actual costs incurred under the Federal award. See also Sec. 200.333
regarding fixed amount subawards, which also are not permitted.
0
53. In Sec. 200.202:
0
a. Revise paragraphs (a) introductory text, (a)(1), and (b); and
0
b. Add paragraphs (c) through (g).
The revisions and additions read as follows:
Sec. 200.202 Program planning and design.
(a) Elements of program design. The Federal agency must design a
Federal program and create an Assistance Listing before announcing the
Notice of Funding Opportunity. A Federal program must be designed:
(1) With clear goals and objectives that:
(i) Aim to achieve meaningful results;
(ii) Are consistent with the public purpose of the program as
authorized by law; and
(iii) Align with administration policies and priorities;
* * * * *
(b) Other considerations. Federal agencies should develop Federal
programs in consultation with communities benefiting from or impacted
by the program. In addition, Federal agencies should consider available
data, evidence, and evaluation results from past programs and make
every effort to extend eligibility requirements to all potential
applicants. Federal agencies are encouraged to coordinate with other
agencies during program planning and design, particularly when the
goals and objectives of a program or project align with those of other
agencies.
(c) Limitations on authorized use of Federal program funds. Federal
agencies must develop Federal programs and implement activities under
those programs in a manner that ensures compliance with all applicable
restrictions on the use of Federal funds, including ensuring that
Federal program funds are only used for public purposes of support
authorized by law. For example, Federal agencies must ensure that
Federal program funds are not used to promote, subsidize, or support
political activities or initiatives unrelated to authorized public
purposes, such as political advocacy, lobbying, or any attempt to
influence legislation, elections, or government officials. Federal
programs should be developed to avoid even the appearance of supporting
such prohibited activities to ensure that all activities performed
under Federal awards are authorized by law.
(d) Eligibility of nonprofit organizations. To the extent permitted
by law, when a Federal agency determines it is necessary to restrict
eligibility among different types of nonprofit organizations, the
notice of funding opportunity must specify the applicable Internal
Revenue Code designation for eligible nonprofit organizations (for
example, 501(c)(3) organizations) and expressly state that other types
of nonprofit organizations not specifically identified are ineligible
(for example, 501(c)(4) organizations). When eligibility is restricted
among different types of nonprofit organizations, the Federal agency is
not required to list every type of ineligible organization, but should
ensure that eligibility information is sufficiently clear for
prospective applicants. Federal agencies should consider exercising
such discretion when warranted by statute, program objectives, or risk
considerations.
(e) Eligibility of entities for research and development awards.
(1) To the extent permitted by law, Federal awards for research and
development must be made to entities that are organized under the laws
of the United States, a State, or Tribal government. Federal agencies
may not issue Federal awards for research and development to foreign
entities except where expressly authorized by statute or where a
compelling interest exists for the agency's mission, the
administration's priorities, and for the United States, as determined
by the agency's senior appointee.
(2) When designing research and development programs, and
evaluating applications, Federal agencies must apply a domestic-first
framework, under which international elements may be included only if
the Federal agency determines that such elements are justified,
consistent with program objectives, and in the national interest of the
United States.
(3) Federal agencies should consider, as applicable, the following
factors when determining whether an international element is warranted:
(i) The extent to which the proposed international element is
necessary to achieve the scientific or technical objectives of the
project and is integral to the scientific rationale of the program.
(ii) The extent to which the international element provides access
to unique expertise, facilities, data, study populations, environmental
conditions, or other resources that are not reasonably available within
the United States.
(iii) The likelihood that the proposed international element will
enhance the scientific enterprise of the United States, including
through the development of new knowledge, methodologies, technologies,
or collaborative networks that can be applied domestically.
(iv) The adequacy of the facilities, equipment, personnel, and
administrative capacity at the international site, or of any foreign
entities that would perform work, to carry out the proposed scope of
work under the Federal award at a level comparable to that of a
domestic recipient performing similar activities.
(4) Nothing in this paragraph (e) prohibits the participation of
foreign entities as subrecipients or contractors under a research and
development award made to an eligible U.S. entity.
(5) For the purposes of this section, international elements may
include performance of activities under the Federal award outside of
the United States or by a foreign entity.
(f) Multi-year awards. When consistent with program objectives, and
subject to restrictions in law, Federal agencies are encouraged to
design Federal programs to allow for multi-year awards with budget
periods longer than one year, rather than issuing separate notices of
funding opportunities on an annual basis. Such Federal awards must be
designed to comply with all applicable funding limitations and must not
be administered in a manner that would result in a violation of the
Antideficiency Act.
(g) Awards for scientific research. Federal agencies that issue
Federal financial assistance for scientific research must categorize
those awards as basic research, applied research, and experimental
development consistent with the definitions in OMB Circular A-11. This
categorization must be communicated to the recipient and included in
the terms and conditions of the Federal award. See Sec. 200.211(d).
0
54. Revise Sec. 200.204 to read as follows:
Sec. 200.204 Notices of funding opportunities.
(a) In general. The Federal agency must publicly announce funding
opportunities for all discretionary awards. As appropriate and
consistent with authorizing law, funding opportunities may allow for
open competition, limited competition, or selection on a non-
competitive basis. See the definition of discretionary award in Sec.
200.1. In developing notices of funding opportunities (NOFOs) for
[[Page 32248]]
discretionary awards, Federal agencies must:
(1) Post the NOFO on Grants.gov. A Federal agency head (or
designee) may approve exceptions to this requirement when the agency
determines that publicly announcing an opportunity would pose a risk to
national security or is in the national interest of the United States.
The Federal agency may either post the entire notice or a link to the
entire notice;
(2) Require applicants to apply using Grants.gov, unless a program
specific exception is expressly authorized by Federal statute or
approved by the Federal agency head (or designee);
(3) Write the NOFO in plain language. The Federal agency must make
efforts to limit the length and complexity of the NOFO and only include
the information necessary for the effective communication of the
program objectives. The Federal agency must not require the applicant
to employ technical or legal consultants to complete an application in
response to the NOFO. A NOFO should be drafted to reasonably allow for
all applicants to compete and succeed against institutions that have
historically received consecutive awards in prior years;
(4) Follow the policy in Sec. 200.111; and
(5) Make every effort to identify all eligible applicants in the
notice.
(b) Pre-application technical assistance. Federal agencies may
offer pre-application technical assistance or provide clarifying
information for funding opportunities. However, Federal agencies must
ensure these resources are made accessible and widely available to all
potential applicants (for example, by posting answers to questions and
requests on Grants.gov).
(c) Statement of Interest (SOI). When a Federal agency anticipates
receiving a large volume of applications, or where proposals are
expected to be long and complex, the agency is strongly encouraged to
request a Statement of Interest (SOI) as part of the notice of funding
opportunity. A SOI is a short pre-application submission, typically no
more than a few pages, that allows applicants to summarize their
project concept, objectives, and anticipated approach. Following
submission of SOIs, the Federal agency must review SOI proposals in
accordance with Sec. 200.205 to determine which applicants will be
invited to submit full proposals. When utilizing a SOI process, Federal
agencies must not compare any SOI submission against a full proposal,
and may only review full proposals from applicants that are invited to
submit a full proposal based on their SOI. The purpose of an SOI is to
reduce burden on applicants by avoiding the preparation of lengthy
proposals while also assisting Federal agencies in identifying the most
competitive applicants early in the process.
(d) Summary information in notices of funding opportunities. The
Federal agency must display the following information on Grants.gov or
other system authorized by Federal statute or approved by the Federal
agency head (or designee), in a location preceding the full text of the
announcement:
(1) Federal Agency Name;
(2) Funding Opportunity Title;
(3) Announcement Type (whether the funding opportunity is the
initial announcement or a modification of a previously announced
opportunity);
(4) Funding Opportunity Number (required, if the Federal agency has
assigned a number to the funding opportunity announcement);
(5) Assistance Listing Number(s);
(6) Funding Details. To the extent appropriate, the total amount of
funding that the Federal agency expects to award, the anticipated
number of awards, and the expected dollar values of individual awards,
which may be a range or average;
(7) Key Dates. Key dates include due dates for submitting
applications or Executive Order 12372 submissions, as well as for any
letters of intent or SOI submissions. For any announcement issued
before a program's application materials are available, key dates also
include the date on which those materials will be released; and any
other additional information, as deemed applicable by the Federal
agency. For opportunities that require the submission of a SOI, the
Federal agency must provide a date by which it will inform selected
applicants to submit a full proposal. For all opportunities, if
possible, the Federal agency should provide an anticipated award date.
If the notice of funding opportunity states that applications will be
evaluated on a ``rolling'' basis (that is, at different points during a
specified period of time), the Federal agency should provide an
estimate of the time needed to process an application and notify the
applicant of the Federal agency's decision;
(8) Executive Summary. A brief description that is written in plain
language and summarizes the goals and objectives of the program, the
target audience, and eligible applicants. The text of the executive
summary must not exceed 500 words, unless authorized by the head of the
Federal agency (or their designee); and
(9) Agency contact information.
(e) Availability period. The Federal agency should make all funding
opportunities available for application for at least 60 calendar days.
However, the Federal agency may modify the availability period of an
opportunity if needed. For example, extending the period may be
necessary to provide technical assistance to an applicant pool that was
not anticipated when the announcement was made or has less experience
with applying for Federal financial assistance. The Federal agency may
also determine that an availability period of less than 60 days is
sufficient for a particular funding opportunity. However, no funding
opportunity will be available for less than 30 calendar days unless the
Federal agency determines that exigent circumstances justify this and
includes this justification in the funding opportunity.
(f) Full text of notices of funding opportunities. (1) The Federal
agency must include the information in appendix I for every NOFO. (2)
Federal agencies must write NOFOs in plain language. To the extent
possible Federal agencies must streamline opportunities to make them
accessible, particularly for funding opportunities that are new, or
intended to reach inexperienced applicants. Federal agencies, when
feasible, should strive to ensure that NOFOs are accessible to a broad
range of applicants, including those that have not previously received
Federal awards. OMB will periodically analyze recipients of Federal
awards. Federal agencies may be required to submit a report to OMB
detailing the specific recipients or types of recipients that received
Federal awards from the Federal agency over a specific time period.
(3) To reduce application burden, Federal agencies should consider
whether programmatic or administrative requirements specific to the
agency, program, or funding opportunity must be met at the time of
application or as a requirement of receiving a Federal award.
0
55. Revise Sec. 200.205 to read as follows:
Sec. 200.205 Federal agency merit review of proposals.
(a) In general. Unless prohibited by Federal statute, the Federal
agency must design and execute a merit review process of applications
for all discretionary awards. See the definition of discretionary award
in Sec. 200.1. The objective of a merit review process is to select
recipients most likely to be
[[Page 32249]]
successful in delivering results based on the program objectives as
outlined in Sec. 200.202. A merit review is an objective process of
evaluating Federal award applications in accordance with the written
standards of the Federal agency. These standards should identify the
number of people the agency requires to participate in the merit review
process. The merit review process explained in this section, including
the pre-issuance review described in paragraph (b) of this section,
must be described or incorporated by reference in the applicable NOFO.
The pre-issuance review described in paragraph (b) may form the basis
of a decision not to select an applicant to receive a Federal award.
See Sec. 200.204 and appendix I to this part. The Federal agency must
also periodically review its merit review process.
(b) Pre-issuance review. As part of the merit review process,
Federal agencies must perform pre-issuance reviews to ensure that
Federal award proposals selected for funding are consistent with
applicable law, Federal agency priorities, and the national interest.
In doing so, Federal agencies heads must designate one or more senior
appointees to conduct a pre-issuance review of all discretionary
awards. As part of this pre-issuance review for discretionary awards,
senior appointees (or their designee) must, as relevant and to the
extent consistent with applicable law, apply the following principles
when reviewing Federal award proposals:
(1) Discretionary awards must, where applicable, demonstrably
advance the President's policy priorities.
(2) Discretionary awards must not be used to fund, promote,
encourage, subsidize, or facilitate:
(i) Racial preferences or other forms of racial discrimination by
the recipient, including activities where race or intentional proxies
for race will be used as a selection criterion for employment or
program participation;
(ii) Denial by the recipient of the sex binary in humans or the
notion that sex is a chosen or mutable characteristic;
(iii) Illegal immigration; or
(iv) Any other initiatives that compromise public safety or promote
anti-American values.
(3) All else being equal, preference for discretionary awards
should be given to institutions with lower indirect cost rates.
(4) Discretionary awards should be given to a broad range of
recipients. Research grants should be awarded to a mix of recipients
likely to produce immediately demonstrable results and recipients with
the potential for potentially longer-term, breakthrough results, in a
manner consistent with the notice of funding opportunity.
(5) In performing activities under Federal awards, applicants
should commit to complying with administration policies, procedures,
and guidance respecting Gold Standard Science.
(6) Discretionary awards should include benchmarks for measuring
success and progress towards relevant goals and, as relevant for awards
pertaining to scientific research, a commitment to achieving Gold
Standard Science. See also Sec. 200.202(a).
(7) To the extent institutional affiliation is considered in making
discretionary awards, agencies should prioritize an institution's
commitment to rigorous, reproducible scholarship over its historical
reputation or perceived prestige. For science grants, agencies should
prioritize institutions that have demonstrated success in implementing
Gold Standard Science.
(8) See also Sec. Sec. 200.202(c) and 200.300.
(c) Procedure for pre-issuance review. When conducting a pre-
issuance review, senior appointees (or their designee) must not
ministerially ratify or routinely defer to the recommendations of
others, but must instead use their independent judgment when evaluating
Federal award proposals.
(d) Use of peer review. Nothing in this part must be construed to
discourage or prevent the use of peer review methods to evaluate
proposals for discretionary awards or otherwise inform agency decision
making, provided that peer review recommendations remain advisory and
are not ministerially ratified, routinely deferred to, or otherwise
treated as de facto binding by senior appointees or their designees.
Further, nothing in this part must be construed to create any rights to
any particular level of review or consideration for any funding
applicant except as consistent with applicable law.
(e) Agency discretion to reissue funding opportunities. A Federal
agency is not required to issue a discretionary award as a result of a
NOFO if doing so would fund low-quality proposals or be inconsistent
with the principles of this part. The agency may, at its discretion,
repost a funding opportunity.
0
56. In Sec. 200.206, revise paragraphs (b) and (d) to read as follows:
Sec. 200.206 Federal agency review of risk posed by applicants.
* * * * *
(b) Risk assessment--(1) In general. The Federal agency must
establish and maintain policies and procedures for conducting a risk
assessment to evaluate the risks posed by applicants before issuing
Federal awards. This assessment helps identify risks that may affect
the advancement toward or the achievement of a project's goals and
objectives. Risk assessments assist Federal managers in determining
appropriate resources and time to devote to project oversight and
monitor recipient progress. This assessment should be conducted no
earlier than 30 days before the award decision and may incorporate
elements such as the quality of the application, award amount, risk
associated with the program, cybersecurity, and fraud risks. If the
Federal agency determines that the Federal award will be made, specific
conditions that address the assessed risk may be implemented in the
Federal award. The risk criteria to be evaluated must be described in
the announcement of the funding opportunity described in Sec. 200.204.
(2) Items for consideration. In evaluating risks posed by
applicants, the Federal agency should consider the following items:
(i) Financial stability. The applicant's record of effectively
managing financial risks, assets, and resources;
(ii) Financial capacity. The applicant's ability to manage and
oversee high-dollar awards, especially those that are in excess of
awards the applicant typically implements, as determined by the Federal
agency;
(iii) Management systems and standards. Quality of management
systems and ability to meet the management standards prescribed in this
part;
(iv) History of performance. The applicant's record of managing
previous and current Federal awards, including compliance with
reporting requirements and conformance to the terms and conditions of
Federal awards. If prior performance is considered, it should be
evaluated solely on the outcomes of prior work, with both positive and
negative outcomes measured against the goals of the funding opportunity
and given equal weight, if applicable;
(v) Audit reports and findings. Reports and findings from audits
performed under subpart F of this part or the reports and findings of
any other available audits, if applicable;
(vi) Ability to effectively implement requirements. The applicant's
ability to effectively implement statutory, regulatory, or other
requirements imposed on recipients of Federal awards;
(vii) History of questionable practices. Based on publicly
available and verifiable information, the applicant's record of:
[[Page 32250]]
(A) Plagiarism in studies or papers published by the applicant or
its staff;
(B) Discredited or non-replicable studies published by the
applicant or its staff;
(C) Engaging in activities or initiatives that are inconsistent
with Federal civil rights laws, including the equal protection
principles of the U.S. Constitution and prohibitions against unlawful
discrimination; or
(D) Engaging in activities or initiatives that are inconsistent
with religious liberty laws.
(viii) Memberships and affiliations. Based on publicly available
and verifiable information, the applicant's membership in or
affiliation with organizations engaged in activities that violate
Federal law, undermine public safety or national security, or advocate
for the overthrow of the United States Government; and
(ix) Foreign gift and contract reporting. As applicable, the
applicant's compliance with foreign gift and contract disclosure
requirements under section 117 of the Higher Education Act of 1965
(Pub. L. 89-329, as amended, codified at 20 U.S.C. 1011f).
* * * * *
(d) Suspension and debarment compliance. The Federal agency must
comply with the Government-wide suspension and debarment regulation in
2 CFR part 180 and individual Federal agency suspension and debarment
requirements in title 2 of the Code of Federal Regulations. Federal
agencies must also require recipients to comply with these
requirements. These requirements restrict making Federal awards,
subawards, and contracts with certain parties that are debarred,
suspended, or otherwise excluded from receiving Federal awards or
participating in Federal awards.
0
57. In Sec. 200.207, add paragraph (c) to read as follows:
Sec. 200.207 Standard application requirements.
* * * * *
(c) Reducing administrative and regulatory burden. Federal agencies
that issue Federal financial assistance must periodically review
programmatic and administrative requirements specific to the agency,
program, or award(s) to determine whether such requirements are
unnecessary and not required by this part or applicable law. Federal
agencies should update OMB annually on any such requirements that have
been removed.
0
58. Revise Sec. 200.208 to read as follows:
Sec. 200.208 Specific conditions.
(a) In general. Federal agencies are responsible for ensuring that
specific Federal award conditions and performance expectations for
Federal awards are consistent with the program design (see Sec. Sec.
200.202 and 200.301).
(b) Adjustment of specific conditions. (1) To the extent permitted
by law, based on consideration of the factors listed in paragraph (c)
of this section, the Federal agency may:
(i) Add specific conditions when a Federal award is made; and,
(ii) Add or remove specific conditions throughout the period of
performance.
(2) The addition or removal of specific conditions for existing
Federal awards based on consideration of the factors listed in
paragraph (c) of this section must occur within 15 calendar days after
the Federal agency's determination to adjust the conditions. Specific
conditions not based on factors in paragraph (c) may be added or
removed during the period of performance only with the agreement of the
recipient.
(c) Factors for consideration. The Federal agency or pass-through
entity may adjust specific conditions in the Federal award based on an
analysis of the following factors:
(1) Review of OMB-designated repositories of Government-wide data
(for example, SAM.gov) or review of its risk assessment (see Sec.
200.206);
(2) The recipient's or subrecipient's history of compliance with
the terms and conditions of Federal awards, including the Federal award
the Federal agency is adjusting (see also Sec. 200.339);
(3) The recipient's or subrecipient's ability to meet expected
performance goals as described in Sec. 200.211; or
(4) A determination of whether a recipient or subrecipient has
inadequate financial capability to perform the Federal award.
(d) Examples of specific conditions. Specific conditions may
include the following:
(1) Requiring payments as reimbursements rather than advance
payments;
(2) Withholding authority to proceed to the next phase until
receipt of evidence of acceptable performance;
(3) Requiring additional or more detailed financial reports, which
may include requiring information on payments to subrecipients,
contractors and vendors;
(4) Requiring additional project monitoring, which may include
financial integrity-related site visits with the goal of improving the
financial integrity of the program or recipient organization;
(5) Requiring the recipient or subrecipient to obtain technical or
management assistance; or
(6) Establishing additional prior approvals.
(e) Notification. Prior to imposing specific conditions, the
Federal agency or pass-through entity must notify the recipient or
subrecipient as to:
(1) The nature of the specific condition(s);
(2) The reason why the specific condition(s) is being imposed;
(3) The nature of the action needed to remove the specific
condition(s);
(4) The time allowed for completing the actions; and
(5) The method for requesting the Federal agency or pass-through
entity to reconsider imposing a specific condition.
(f) Program-level specific conditions. Notwithstanding any other
provision of this section, the Federal agency may include program-level
specific Federal award conditions, including any of the specific
conditions described in paragraph (d) of this section, in any Federal
award made under a Federal program that the Federal agency determines
presents elevated programmatic risk related to program administration,
program oversight, or effective monitoring of the use or expenditure of
Federal funds by recipients or subrecipients. Federal agencies are
responsible for ensuring that program-level specific Federal award
conditions and performance expectations are consistent with the program
design (see Sec. Sec. 200.202 and 200.301) and applicable law. The
Federal agency may remove program-level specific conditions if it
determines that the Federal program no longer presents elevated
programmatic risk.
0
59. In Sec. 200.211:
0
a. Revise paragraphs (b)(15) and (16) and (c)(1)(v);
0
b. Remove paragraph (c)(3); and
0
c. Redesignate paragraph (c)(4) as paragraph (c)(3).
The revisions read as follows:
Sec. 200.211 Information contained in a Federal award.
* * * * *
(b) * * *
(15) Identification of whether the Award is Research and
Development (R&D) (see also Sec. 200.202(g)); and
(16) Indirect cost rate for the Federal award (including if the de
minimis rate is charged per Sec. 200.414).
(c) * * *
(1) * * *
(v) Termination provisions. Federal agencies must inform recipients
of the termination provisions in Sec. 200.340.
[[Page 32251]]
Except as provided in Sec. 200.340(b), the Federal agency must always
include the termination provisions set forth in Sec. 200.340(a)(1)
through (4) in each Federal award or expressly incorporate them by
reference. Pursuant to Sec. 200.340(a)(5), if applicable, the Federal
agency must also inform recipients of any additional termination
provisions that apply to a Federal award, including any applicable
termination provisions in the Federal agency's regulations. Subject to
the limitations in Sec. 200.340(b), such additional provisions must
not limit the right of the Federal agency to terminate for any of the
reasons in Sec. 200.340(a)(1) through (4).
* * * * *
0
60. In Sec. 200.213, revise paragraph (e) to read as follows:
Sec. 200.213 Reporting a determination that an applicant is not
qualified for a Federal award.
* * * * *
(e) Federal agencies must not post any information that will be
made publicly available in the non-public segment of the responsibility
and qualification records that is covered by a disclosure exemption
under the Freedom of Information Act. If a recipient asserts within
seven calendar days to a Federal agency that some or all of the
publicly available information is covered by a disclosure exemption
under the Freedom of Information Act (5 U.S.C. 552), the Federal agency
that posted the information must remove the posting within seven
calendar days of receiving the assertion. Prior to reposting the
releasable information, the Federal agency must resolve the issue in
accordance with the agency's Freedom of Information Act procedures.
0
61. Revise Sec. 200.215 to read as follows:
Sec. 200.215 Never contract with the enemy.
Federal agencies, recipients, and subrecipients are subject to the
regulation implementing Never Contract with the Enemy in 2 CFR part
183. The regulation in 2 CFR part 183 affects covered contracts,
grants, and cooperative agreements that are expected to exceed $50,000
during the period of performance, are performed outside the United
States and its territories, and are in support of a contingency
operation in which members of the Armed Forces are actively engaged in
hostilities.
0
62. Revise Sec. 200.216 to read as follows:
Sec. 200.216 Prohibition of certain equipment, services, and systems.
(a) Prohibition of certain telecommunications and video
surveillance equipment or services. Pursuant to section 889 of Public
Law 115-232, the following prohibition applies to certain
telecommunications and video surveillance equipment or services.
(1) General prohibition. Recipients and subrecipients are
prohibited from obligating or expending loan or grant funds to:
(i) Procure or obtain prohibited telecommunications equipment or
services;
(ii) Extend or renew a contract to procure or obtain prohibited
telecommunications equipment or services; or
(iii) Enter into a contract (or extend or renew a contract) to
procure or obtain prohibited telecommunications equipment or services.
(2) Definition of prohibited telecommunications equipment or
services. As described in section 889 of Public Law 115-232, prohibited
telecommunications equipment or services (referred to in the statute as
``covered telecommunications equipment or services'') means any of the
following:
(i) Telecommunications equipment produced by Huawei Technologies
Company or ZTE Corporation (or any subsidiary or affiliate of such
entities);
(ii) For the purpose of public safety, security of Government
facilities, physical security surveillance of critical infrastructure,
and other national security purposes, video surveillance and
telecommunications equipment produced by Hytera Communications
Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua
Technology Company (or any subsidiary or affiliate of such entities);
(iii) Telecommunications or video surveillance services provided by
such entities or using such equipment; and
(iv) Telecommunications or video surveillance equipment or services
produced or provided by an entity that the Secretary of Defense, in
consultation with the Director of the National Intelligence or the
Director of the Federal Bureau of Investigation, reasonably believes to
be an entity owned or controlled by, or otherwise connected to, the
government of a covered foreign country, as defined in section 889 of
Public Law 115-232.
(3) Inclusion in definition of prohibited telecommunications
equipment or services. For the purposes of this section, ``covered
telecommunications equipment or services'' also include systems that
use covered telecommunications equipment or services as a substantial
or essential component of any system, or as critical technology as part
of any system.
(4) Certification. When the recipient or subrecipient accepts a
loan or grant, it is certifying that it will comply with the
prohibition on prohibited telecommunications equipment and services in
this section. The recipient or subrecipient is not required to certify
that funds will not be expended on prohibited telecommunications
equipment or services beyond the certification provided upon accepting
the loan or grant and those provided upon submitting payment requests
and financial reports.
(5) Additional information. For additional information, see section
889 of Public Law 115-232 and Sec. 200.471.
(b) Prohibition of procurement and operation of prohibited unmanned
aircraft systems. Pursuant to section 1825 of the American Security
Drone Act of 2023 (Pub. L. 118-31), on or after December 22, 2025, the
following prohibition restricts the extent to which funds provided
through a Federal grant or cooperative agreement, or otherwise made
available, may be used by a recipient or subrecipient for procurement
and operation of Federal Acquisition Security Council (FASC)-prohibited
unmanned aircraft systems. This prohibition applies to all Federal
awards, regardless of whether the FASC-prohibited unmanned aircraft
system to be acquired or operated will process, store, or transmit
Federal information.
(1) Definitions. The terms ``FASC-prohibited unmanned aircraft
system'' and ``unmanned aircraft system'' have the definitions provided
in 48 CFR 40.201.
(2) General prohibition. On or after December 22, 2025, except as
provided in paragraphs (b)(3) through (6) of this section, no Federal
funds awarded through a grant or cooperative agreement, or otherwise
made available, may be used by a recipient or subrecipient:
(i) To procure a FASC-prohibited unmanned aircraft system; or
(ii) In connection with the operation of such a FASC-prohibited
unmanned aircraft system.
(3) Department of Homeland Security, Department of Defense,
Department of State, and the Department of Justice exemptions. (i) The
Secretary of Homeland Security, the Secretary of Defense, the Secretary
of State, and the Attorney General are exempt from the restriction
under paragraph (b)(2) of this section if the procurement or operation
[[Page 32252]]
is required in the national interest of the United States and:
(A) Is for the sole purposes of research, evaluation, training,
testing, or analysis for electronic warfare, information warfare
operations, cybersecurity, or development of unmanned aircraft system
or counter-unmanned aircraft system technology;
(B) Is for the sole purposes of conducting counterterrorism or
counterintelligence activities, protective missions, or Federal
criminal or national security investigations, including forensic
examinations, or for electronic warfare, information warfare
operations, cybersecurity, or development of an unmanned aircraft
system or counter-unmanned aircraft system technology; or
(C) Is an unmanned aircraft system that, as procured or as modified
after procurement but before operational use, can no longer transfer
to, or download data from, a covered foreign entity and otherwise poses
no national security cybersecurity risks as determined by the exempting
official.
(ii) The Secretary of Homeland Security, the Secretary of Defense,
the Secretary of State, and the Attorney General must notify OMB within
five calendar days of issuing an award with exemptions to paragraph
(b)(3)(i) of this section).
(4) Department of Transportation exemption. The Secretary of
Transportation is exempt from the restriction under paragraph (b)(2) of
this section if the operation or procurement is deemed to support the
safe, secure, or efficient operation of the National Airspace System or
maintenance of public safety, including activities carried out under
the Federal Aviation Administration's Alliance for System Safety of UAS
through Research Excellence (ASSURE) Center of Excellence (COE) and any
other activity deemed to support the safe, secure, or efficient
operation of the National Airspace System or maintenance of public
safety, as determined by the Secretary or the Secretary's designee.
(5) National Oceanic and Atmospheric Administration (NOAA)
exemption. The Administrator of the National Oceanic and Atmospheric
Administration (NOAA), in consultation with the Secretary of Homeland
Security, is exempt from the restriction under paragraph (b)(2) of this
section if the operation or procurement is necessary for the purpose of
meeting NOAA's science or management objectives or operational mission.
(6) Waivers. The head of a Federal agency may waive the prohibition
under paragraph (b)(2) of this section on a case-by-case basis:
(i) With the approval of the Director of the Office of Management
and Budget, after consultation with the Federal Acquisition Security
Council; and
(ii) Upon notification to:
(A) The Committee on Homeland Security and Governmental Affairs of
the Senate;
(B) The Committee on Oversight and Accountability in the House of
Representatives; and
(C) Other appropriate congressional committees of jurisdiction.
0
63. Add Sec. 200.218 to read as follows:
Sec. 200.218 Prohibition of using Federal awards to promote or
support theories of disparate-impact liability.
(a) General prohibition. To the maximum extent permitted by law,
Federal agencies must eliminate the use of disparate-impact liability
in all contexts relevant to Federal awards. Disparate-impact liability
imperils the effectiveness of civil rights laws by mandating, rather
than proscribing, discrimination.
(b) Federal agency and pass-through entity responsibilities. To the
maximum extent permitted by law, to avoid violating the Constitution
and Federal civil rights laws, the Federal agency or pass-through
entity must:
(1) Ensure that Federal awards are administered in a way that does
not promote or support the use of disparate-impact liability. This
includes ensuring, unless expressly required by law, that Federal
awards are not used in support of disparate-impact studies, disparate-
impact litigation, or other related activities; and that Federal award
activities based on the assumed risk of disparate-impact liability are
not allowed;
(2) Not adopt, issue, or enforce terms and conditions, guidance, or
other policies and procedures related to Federal financial assistance
that promote, support, or otherwise include the use of disparate-impact
liability; and
(3) Review terms and conditions, guidance, and other policies and
procedures related to Federal financial assistance to ensure alignment
with this paragraph (b).
(c) Recipient and subrecipient responsibilities. To the maximum
extent permitted by law, to avoid violating the Constitution and
Federal civil rights laws, recipients and subrecipients must:
(1) Not adopt, issue, or enforce disparate-impact liability
standards in administering programs or activities supported by a
Federal award; and
(2) Review their policies and procedures related to Federal
financial assistance to ensure alignment with this paragraph (c).
(d) Exception for analysis for internal use. Nothing in this
section prohibits a recipient or subrecipient from conducting
statistical or demographic analysis for internal program evaluation,
research, or other purposes, provided that Federal award funds are not
used for conducting such analysis, and the results of such analysis are
not used in connection with or applied to activities under the Federal
award, such as:
(1) Treating individuals unequally based on federally protected
characteristics, such as race or sex, regardless of individual
strengths, effort, or achievement; or
(2) Adjusting activities or performance under the Federal award
based on theories, or the assumed risk of, disparate-impact liability.
(e) Definition of disparate-impact liability. For the purposes of
this section, disparate-impact liability means a theory under which a
facially neutral policy or practice (for example, a merit-based
employment policy or practice) gives rise to an automatic or near-
insurmountable presumption of the existence of unlawful discrimination
on the basis of federally protected characteristics (such as race or
sex) where there are any differences or disparities in outcomes (for
example, disproportionate effects) among different races, sexes, or
similar groups. Under a theory of disparate-impact liability, this
presumption would apply even if there is no facially discriminatory
policy or practice, there is no discriminatory intent involved, and
equal opportunity is provided. Discriminatory intent is irrelevant in a
disparate-impact claim. Disparate-impact liability effectively mandates
consideration of federally protected characteristics, such as race or
sex, and incentivizes racial balancing, contrary to principles of equal
treatment and merit-based opportunity.
0
64. Add Sec. 200.219 to read as follows:
Sec. 200.219 Prohibition of discriminatory event services.
(a) Public entities. Public entities that are a recipient or
subrecipient of Federal financial assistance must not discriminate on
the basis of the viewpoint, content, or subject matter of speech--
including on the basis of political, ideological, or religious
affiliation or perspective--in providing services for events, meetings,
or other expressive activities. This paragraph (a) includes ensuring
that, on the basis of the viewpoint, content, or subject matter of
speech, the recipient or subrecipient does not:
[[Page 32253]]
(1) Deny, reduce, or otherwise modify services for events,
meetings, or other expressive activities in a manner that is
inconsistent with the level services or access ordinarily provided for
events, meetings, or expressive activities of a similar type and size;
(2) Impose additional, inconsistent, or unreasonable fees, security
costs, insurance requirements, related charges, or other administrative
burdens; or
(3) Otherwise apply event or facility-use policies in a manner that
has the purpose or effect of suppressing lawful expression of speech
protected by the First Amendment.
(b) Non-public entities. To ensure that Federal funds are not used
in a manner inconsistent with the First Amendment, the requirements of
paragraph (a) of this section also apply to non-public entities to the
extent that the relevant activities are within the scope of activities
funded by a Federal award.
(c) Scope. (1) The prohibition in paragraph (a) of this section
applies to events sponsored, hosted, or permitted by a recipient or
subrecipient of Federal financial assistance on property or facilities
it owns, leases, or otherwise controls.
(2) For purposes of this section, the term ``services'' includes
security, crowd management, access to facilities, and other logistical
or safety support ordinarily provided by the recipient or subrecipient
for events of a similar type and size.
0
65. Add Sec. 200.220 to read as follows:
Sec. 200.220 Prohibition of using Federal funds for covered foreign
collaborations.
(a) General prohibition. Except as provided in paragraph (c) of
this section, Federal funds may not be obligated or expended by a
recipient or subrecipient to support a bilateral or multilateral
collaboration, agreement, program, or activity with a covered foreign
country or covered foreign entity.
(b) Scope. The prohibition in paragraph (a) of this section applies
regardless of whether Federal funds are used for direct programmatic
activities, research, technical assistance, travel, or indirect costs
allocable to such collaborations.
(c) Exceptions. A Federal agency may authorize an exception to this
section when expressly authorized by Federal statute or the Federal
agency head (or designee) determines that the activity does not pose a
risk to national security and is in the national interest of the United
States.
(d) Definitions. For purposes of this section:
(1) Covered foreign country means any country designated by
statute, Executive order, or other Federal law as:
(i) A foreign adversary;
(ii) A country of particular concern; or
(iii) A country subject to sanctions or restrictions relating to
national security, defense, or intelligence activities.
(2) Covered foreign entity means:
(i) An entity owned or controlled by, or acting on behalf of, a
covered foreign country;
(ii) An entity identified as an ``entity of particular concern'' on
a list maintained by a Federal agency pursuant to statute (including
lists maintained under a National Defense Authorization Act or the
International Emergency Economic Powers Act); or
(iii) An entity affiliated with the military, intelligence, or
security services of a covered foreign country.
0
66. Revise Sec. 200.300 to read as follows:
Sec. 200.300 Statutory and national policy requirements.
(a) In general. The Federal agency or pass-through entity must
manage and administer the Federal award to ensure that Federal funding
is expended and associated programs are implemented in full accordance
with the U.S. Constitution and applicable Federal statutes and
regulations--including provisions protecting free speech and religious
liberty, and those prohibiting discrimination--and the requirements of
this part. Consistent with Federal law, this includes managing and
administering the Federal award to ensure that no person otherwise
eligible will be unlawfully excluded from participation in, unlawfully
denied the benefits of, or otherwise subjected to unlawful
discrimination in the administration of Federal programs, activities,
projects, assistance, and services. The Federal agency or pass-through
entity must communicate to a recipient or subrecipient all relevant
requirements, including those contained in general appropriations
provisions, and incorporate them directly or by reference in the terms
and conditions of the Federal award and all subawards.
(b) Limitations on authorized use of Federal award funds. In
administering Federal awards, to the maximum extent permitted by law,
the Federal agency or pass-through entity must ensure that Federal
awards and subawards are not used to fund, promote, encourage,
subsidize, or facilitate:
(1) ``Diversity, equity, and inclusion'' (DEI) or ``diversity,
equity, inclusion, and accessibility'' (DEIA) policies, principles, or
practices that violate any applicable Federal anti-discrimination laws.
This includes racial preferences or other forms of racial
discrimination used by the recipient or subrecipient that violate any
applicable Federal anti-discrimination laws, including activities where
race or intentional proxies for race will be used as a selection
criterion for employment or program participation. See also Sec.
200.218;
(2) Gender ideology as defined in Executive Order 14168. Gender
ideology includes theories or ideologies that deny the biological
reality of sex or the sex binary in humans, or endorse or advocate for
the notion that sex is a chosen or mutable characteristic; or
(3) The so-called ``transition'' of a child under 19 years of age
from one sex to another, including the chemical and surgical mutilation
of children. The term ``chemical and surgical mutilation'' has the
meaning provided in Executive Order 14187.
(c) Non-discrimination against faith-based organizations. Federal
agencies and pass-through entities may not discriminate against or in
favor of an applicant on the basis of the organization's religious
character, affiliation, exercise, or lack thereof, nor on the basis of
conduct that would not be considered ground to favor or disfavor a
similarly situated secular organization. Faith-based organizations are
eligible to apply for Federal financial assistance on the same basis as
any other eligible organization. Applicants that meet all eligibility
requirements may be considered for a Federal award under a notice of
funding opportunity.
0
67. In Sec. 200.303, revise paragraphs (a) and (e) and add paragraphs
(f) and (g) to read as follows:
Sec. 200.303 Internal controls.
* * * * *
(a) Establish, document, and maintain effective internal control
over the Federal award that provides reasonable assurance that the
recipient or subrecipient is managing the Federal award in compliance
with Federal statutes, regulations, and the terms and conditions of the
Federal award.
* * * * *
(e) Take reasonable cybersecurity and other measures to safeguard
information including personally identifiable information (PII),
confidential business information, and other types of information
subject to protections against disclosure under applicable law. This
also includes information the Federal agency or pass-through entity
designates as sensitive or other information the recipient or
subrecipient considers sensitive and is consistent with applicable
Federal,
[[Page 32254]]
State, local, and tribal laws regarding privacy and responsibility over
confidentiality.
(f) Participate in the Department of Homeland Security's E-verify
program to confirm the employment eligibility of all employees and
contractors hired in or performing work in the United States under a
Federal award.
(1) Recipients and subrecipients must comply with all requirements
of the E-verify program and applicable Federal law.
(2) If a recipient or subrecipient receives a Final Nonconfirmation
(FNC) notice through E-verify, the recipient or subrecipient must
submit this information to the Federal agency or pass-through entity.
The recipient or subrecipient must also provide the Federal agency or
pass-through entity with the FNC case verification number and confirm
that the recipient or subrecipient has taken appropriate actions
consistent with E-Verify program requirements. Failure to provide
notice or take appropriate action may result in the termination of the
Federal award.
(g) In carrying out the internal control requirements of this
section, a non-Federal entity that is a State must, prior to the
disbursement of payments made using Federal award funds subject to this
part, review available data sources with relevant information to verify
the eligibility of payees and prevent improper payments. Such reviews
may be conducted through the Department of the Treasury's Do Not Pay
(DNP) system, or through an alternative payment screening process that
provides protection against improper payments. This requirement is in
addition to, and does not replace, any program-specific eligibility
verification or payment screening requirements applicable to a Federal
award.
0
68. In Sec. 200.305:
0
a. Redesignate paragraphs (a) and (b) as paragraphs (b) and (d),
respectively;
0
b. Add new paragraph (a) and paragraph (c); and
0
c. Revise newly redesignated (d) introductory text.
The additions and revision read as follows:
Sec. 200.305 Federal payment.
(a) Treasury Do Not Pay (DNP) System Review and Verification. Prior
to the disbursement of any Federal payment under this part, the Federal
agency must review available data sources with relevant information on
the eligibility of the recipient included in the Department of the
Treasury's Do Not Pay (DNP) System to verify eligibility and prevent
improper payments.
* * * * *
(c) Payment justifications for recipients and subrecipients other
than States. (1) In coordination with OMB and the Department of the
Treasury, each Federal agency must use an information system for
payments capable of recording a brief, written justification for each
payment request. Federal agencies must require payment justifications
as described in this paragraph (c) as soon as information systems with
this capability become available.
(2) Payment requests under paragraph (d) of this section from a
recipient to the Federal agency or a subrecipient to the pass-through
entity must include a brief, written justification regardless of
whether the payment is made in advance or to reimburse the recipient or
subrecipient. The brief, written justification must include information
on the activities or aspects of the Federal award that correspond to
the payment request. For example, this may include project milestones,
project activities, administrative activities, or other requirements
that must be completed under the Federal award.
(d) Payments for recipients and subrecipients other than States.
For recipients and subrecipients other than States, payment methods
must minimize the time elapsing between the transfer of funds from the
Federal agency or the pass-through entity and the disbursement of funds
by the recipient or subrecipient regardless of whether the payment is
made by electronic funds transfer or by other means. See Sec.
200.302(b)(6). Except as noted in this part, the Federal agency must
require recipients to use only OMB-approved, Government-wide
information collections to request payment.
* * * * *
0
69. Revise Sec. 200.306 to read as follows:
Sec. 200.306 Cost sharing.
(a) Criteria for cost sharing funds. For all Federal awards, the
Federal agency or pass-through entity must accept any cost sharing
funds (including cash and third-party in-kind contributions, and also
including funds committed by the recipient, subrecipient, or third
parties) as part of the recipient's or subrecipient's contributions to
a program when the funds:
(1) Are verifiable in the recipient's or subrecipient's records;
(2) Are not included as contributions for any other Federal award;
(3) Are necessary and reasonable for achieving the objectives of
the Federal award;
(4) Are allowable under subpart E of this part;
(5) Are not paid by the Federal Government under another Federal
award, except where the program's Federal authorizing statute
specifically provides that Federal funds made available for the program
can be applied to cost sharing requirements of other Federal programs;
(6) Are provided for in the approved budget when required by the
Federal agency; and
(7) Conform to other applicable provisions of this part.
(b) Inclusion of unrecovered indirect costs. Unrecovered indirect
costs, including indirect costs on cost sharing, may be included as
part of cost sharing with the prior approval of the Federal agency or
pass-through entity. Unrecovered indirect costs means the difference
between the amount charged to the Federal award and the amount which
could have been charged to the Federal award under the recipient's or
subrecipient's approved indirect cost rate.
(c) Valuation for contribution of services. Values for recipient or
subrecipient contributions of services and property must be established
in accordance with the cost principles in subpart E of this part. When
a Federal agency or pass-through entity authorizes the recipient or
subrecipient to donate buildings or land for construction/facilities
acquisition projects or long-term use, the value of the donated
property for cost sharing must be the lesser of paragraph (c)(1) or (2)
of this section.
(1) The value of the remaining life of the property recorded in the
recipient's or subrecipient's accounting records at the time of
donation.
(2) The current fair market value. However, when there is
sufficient justification, the Federal agency or pass-through may
approve using the current fair market value of the donated property,
even if it exceeds the value described in paragraph (c)(1) of this
section at the time of donation.
(d) Volunteer services by third-parties. Volunteer services
furnished by third-party professional and technical personnel,
consultants, and other labor may be counted as cost sharing if the
service is necessary for the program. Rates for third-party volunteer
services must be consistent with those paid for similar work by the
recipient or subrecipient. When the required skills are not found in
the recipient's or subrecipient's workforce, rates must be
[[Page 32255]]
consistent with those paid for similar work in the labor market where
the recipient or subrecipient competes for the services involved. In
either case, fringe benefits that are allowable, allocable, and
reasonable may be included in the valuation.
(e) Valuation for services of third-party employees. When a third-
party organization furnishes the services of an employee, these
services must be valued at the employee's regular rate of pay plus an
amount of fringe benefits that is reasonable, necessary, allocable, and
otherwise allowable, and indirect costs at either the third-party
organization's approved federally-negotiated indirect cost rate or, a
rate in accordance with Sec. 200.414 provided these services employ
the same skill(s) for which the employee is normally paid. Where
donated services are treated as indirect costs, indirect cost rates
will separate the value of the donated services so that reimbursement
for the donated services will not be made.
(f) Donated property from third parties. Donated property from
third parties may include items such as equipment, office supplies,
laboratory supplies, or workshop and classroom supplies. The assessed
value of donated property included as cost sharing must not exceed the
property's fair market value at the time of the donation.
(g) Valuation of donated equipment, buildings, and land. The method
used for determining the value of donated equipment, buildings, and
land for which title passes to the recipient or subrecipient may differ
according to the following:
(1) If the purpose of the Federal award is to assist the recipient
or subrecipient in acquiring equipment, buildings, or land, the
aggregate value of the donated property may be claimed as cost sharing.
(2) If the purpose of the Federal award is to support activities
that require the use of equipment, buildings, or land, only
depreciation charges for equipment and buildings may be made. However,
the fair market value of equipment or other capital assets and fair
rental charges for land may be allowed if provided in the terms and
conditions of the Federal award. See Sec. 200.420.
(h) Accounting policies for donated property. The value of donated
property must be determined in accordance with the accounting policies
of the recipient or subrecipient with the following qualifications:
(1) The value of donated land and buildings must not exceed its
fair market value at the time of donation to the recipient or
subrecipient as established by an independent appraiser (for example,
certified real property appraiser or General Services Administration
representative) and certified by a responsible official of the
recipient or subrecipient as required by the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970, as
amended (42 U.S.C. 4601-4655), except as provided in the implementing
regulations at 49 CFR part 24.
(2) The value of donated equipment must not exceed the fair market
value at the time of donation.
(3) The value of donated space must not exceed the fair rental
value of comparable space as established by an independent appraisal of
comparable space and facilities in a privately-owned building in the
same locality.
(4) The value of loaned equipment must not exceed its fair rental
value.
(i) Documentation and support for fair market value. The fair
market value of third-party in-kind contributions must be documented
and, to the extent feasible, supported by the same methods used
internally by the recipient or subrecipient.
(j) Voluntary committed cost sharing for research grants. Voluntary
committed cost sharing is not expected under Federal research grants.
The Federal agency may not use voluntary committed cost sharing as a
factor during the merit review of applications or proposals for Federal
research grants unless authorized by Federal statutes or agency
regulations and specified in the notice of funding opportunity. Federal
agencies are also discouraged from using voluntary committed cost
sharing as a factor during the merit review of applications for other
Federal financial assistance programs. If voluntary committed cost
sharing is used for this purpose for other programs, the notice of
funding opportunity must specify how an applicant's proposed cost
sharing will be considered. See Sec. Sec. 200.414 and 200.204 and
appendix I to this part.
(k) Voluntary uncommitted cost sharing for institutions of higher
education. For institutions of higher education (IHE), voluntary
uncommitted cost sharing should be treated differently from mandatory
or voluntary committed cost sharing. Voluntary uncommitted cost sharing
should not be included in the organized research base for computing the
indirect cost rate or reflected in any allocation of indirect costs.
Voluntary uncommitted cost sharing includes faculty-donated additional
time above that agreed to as part of the award.
0
70. In Sec. 200.307, revise paragraph (a) to read as follows:
Sec. 200.307 Program income.
(a) In general. The recipient or subrecipient is encouraged to earn
income to defray program costs when appropriate. Program income must be
used for the original purpose of the Federal award. Program income
earned during the period of performance may only be used for costs
incurred during the period of performance or allowable closeout costs.
See Sec. 200.472(b). Program income must be expended prior to
requesting additional Federal funds. Program income exceeding amounts
specified in the Federal award may be added to or deducted from the
total allowable costs in accordance with the terms and conditions of
the Federal award.
* * * * *
0
71. In Sec. 200.308, revise paragraph (e) to read as follows:
Sec. 200.308 Revision of budget and program plans.
* * * * *
(e) Limitation on other prior approval requirements. Unless
specified in this part, the Federal agency must not impose additional
prior approval requirements without OMB approval. See also Sec. Sec.
200.102 and 200.407.
* * * * *
0
72. In Sec. 200.313, revise paragraph (b) to read as follows:
Sec. 200.313 Equipment.
* * * * *
(b) In general. A State must use, manage and dispose of equipment
acquired under a Federal award in accordance with State laws and
procedures. Indian Tribes must use, manage, and dispose of equipment
acquired under a Federal award in accordance with tribal laws and
procedures. If such laws and procedures do not exist, Indian Tribes
must follow the regulation in this section. Other recipients and
subrecipients, including subrecipients of a State or Indian Tribe, must
follow paragraphs (c) through (e) of this section.
* * * * *
0
73. In Sec. 200.318, revise paragraph (l) to read as follows:
Sec. 200.318 General procurement standards.
* * * * *
(l) Additional employment practices. (1) The procurement standards
in this subpart do not prohibit recipients or subrecipients from:
(i) Communicating a requirement that individuals hired or employed
under the Federal award must be authorized to work in the United States
under applicable Federal law; or
[[Page 32256]]
(ii) Using Project Labor Agreements (PLAs) or other types of pre-
hire collective bargaining agreements if the use of such agreements
will advance the interest of the Federal Government associated with the
applicable Federal financial assistance program, including
consideration of practicability and cost effectiveness.
(2) Federal agencies may allow recipients to use such practices if
consistent with the U.S. Constitution, applicable Federal statutes and
regulations, the objectives and purposes of the applicable Federal
financial assistance program, and other requirements of this part.
Recipients and subrecipients are also responsible for ensuring
consistency with applicable law. Employment practices should be
consistent with the foundational principles of recognizing merit and
the ability of employees to fulfill the requirements of the contract.
0
74. In Sec. 200.320, revise the introductory text to read as follows:
Sec. 200.320 Procurement methods.
There are three types of procurement methods described in this
section: informal procurement methods (for micro-purchases and
simplified acquisitions); formal procurement methods (through sealed
bids or proposals); and noncompetitive procurement methods. For any of
these methods, the recipient or subrecipient must maintain and use
documented procurement procedures, consistent with the standards of
this section and Sec. Sec. 200.317, 200.318, and 200.319. Recipients
are strongly discouraged from issuing cost-reimbursement contracts.
When using cost-reimbursement contracts, the recipient must notify the
awarding Federal agency of its use of this mechanism and maintain a
written justification in its records. A Federal agency may, at its
discretion, require prior approval of cost-reimbursement contracts in
the terms and conditions of the Federal award, which may include review
of the recipient's written justification.
* * * * *
0
75. Revise Sec. 200.321 to read as follows:
Sec. 200.321 Contracting with small businesses.
When possible, the recipient or subrecipient should ensure that
small businesses, including subcategories of small businesses
enumerated in Federal statute, are considered when issuing contracts
under Federal financial assistance awards.
0
76. Revise Sec. 200.322 to read as follows:
Sec. 200.322 Domestic preferences for procurements.
(a) To the greatest extent practicable and consistent with law,
Federal agencies must include terms and conditions in Federal awards to
maximize the use of goods, products, and materials produced in the
United States. If included in a Federal award, these requirements must
also be included in all subawards, contracts, and purchase orders under
Federal awards.
(b) Federal agencies providing Federal financial assistance for
infrastructure projects must implement the Buy America preferences set
forth in 2 CFR part 184.
0
77. Revise Sec. 200.323 to read as follows:
Sec. 200.323 Procurement of recovered materials.
A recipient or subrecipient that is a State agency, an agency of a
political subdivision of a State, or a contractor to such entity, must
comply with section 6002 of the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act of 1976 as amended, 42
U.S.C. 6962. The requirements of section 6002 include procuring only
items designated in the guidelines of the Environmental Protection
Agency (EPA) at 40 CFR part 247 that contain the highest percentage of
recovered materials practicable, consistent with maintaining a
satisfactory level of competition, where the purchase price of the item
exceeds $10,000 or the value of the quantity acquired during the
preceding fiscal year exceeded $10,000; procuring solid waste
management services in a manner that maximizes energy and resource
recovery; and establishing an affirmative procurement program for
procurement of recovered materials identified in the EPA guidelines.
0
78. In Sec. 200.324, revise paragraph (a) to read as follows:
Sec. 200.324 Contract cost and price.
(a) The recipient or subrecipient must perform a cost or price
analysis for every procurement transaction, including contract
modifications, in excess of the simplified acquisition threshold. The
method and degree of analysis conducted depend on the facts surrounding
the particular procurement transaction. However, as a starting point,
the recipient or subrecipient must make independent estimates before
receiving bids or proposals.
* * * * *
0
79. In Sec. 200.329:
0
a. Revise paragraphs (b) and (e) through (g); and
0
b. Add paragraphs (h) and (i).
The revisions and additions read as follows:
Sec. 200.329 Monitoring and reporting program performance.
* * * * *
(b) Reporting program performance. The Federal agency must use OMB-
approved common information collections (for example, Research
Performance Progress Reports) when requesting performance reporting
information. The Federal agency or pass-through entity may not collect
performance reports more frequently than quarterly unless a specific
condition has been implemented in accordance with Sec. 200.208. To the
extent practicable, the Federal agency or pass-through entity should
align the due dates of performance reports and financial reports. When
reporting program performance, the recipient or subrecipient must
relate financial data and project or program accomplishments to the
performance goals and objectives of the Federal award. Consistent with
appendix A to 2 CFR part 170, the recipient must confirm that it has
reported any subawards issued during the reporting period on SAM.gov.
Also, the recipient or subrecipient must provide cost information to
demonstrate cost-effective practices (for example, through unit cost
data) when required by the terms and conditions of the Federal award.
In some instances (for example, discretionary research awards), this
may be limited to the requirement to submit technical performance
reports. Reporting requirements must clearly indicate a standard
against which the recipient's or subrecipient's performance can be
measured. Reporting requirements should not solicit information from
the recipient or subrecipient that is not necessary for the effective
monitoring or evaluation of the Federal award. Federal agencies should
consult monitoring framework documents such as the agency's Evaluation
Plan to make that determination. As noted in OMB Circular A-11, Part 6,
Section 280, measures of customer experience are of co-equal importance
as traditional measures of financial and operational performance.
* * * * *
(e) Scientific research performance reports. When submitting a
performance report for scientific research, the recipient must identify
and include the categorization provided in the terms and conditions of
the award. See Sec. 200.202(g).
[[Page 32257]]
(f) Significant developments. When a significant development that
could impact the Federal award occurs between performance reporting due
dates, the recipient or subrecipient must notify the Federal agency or
pass-through entity. Significant developments include events that
enable meeting milestones and objectives sooner or at less cost than
anticipated or that produce different beneficial results than
originally planned. Significant developments also include problems,
delays, or adverse conditions which will impact the recipient's or
subrecipient's ability to meet milestones or the objectives of the
Federal award. When significant developments occur that negatively
impact the Federal award, the recipient or subrecipient must include
information on their plan for corrective action and any assistance
needed to resolve the situation.
(g) Site visits. The Federal agency or pass-through entity may
conduct in-person or virtual site visits as warranted.
(h) Reviewing subrecipient reporting in SAM.gov. The Federal agency
is responsible for providing oversight to ensure that recipients comply
with their requirement to report subawards on SAM.gov and taking
corrective action if recipients are not in compliance. See also Sec.
200.332.
(i) Performance report requirement waiver. The Federal agency may
waive any performance report that is not necessary to ensure the goals
and objectives of the Federal award are being achieved. The Federal
agency must justify this waiver, maintain the justification in the
Federal agency's records, and incorporate in the agency's risk
assessment the decision to waive the requirement.
0
80. In Sec. 200.331, add paragraph (c) to read as follows:
Sec. 200.331 Subrecipient and contractor determinations.
* * * * *
(c) Transfers to related entities. Pass-through entities may not
circumvent the requirements of this section by treating payments of
Federal funds to affiliates, subsidiaries, or other related entities
that are separate legal persons as internal transfers not requiring a
determination under this section. Such transfers of Federal funds must
be evaluated under this section and treated as either subawards or
contracts, as appropriate. For example, if a related entity receives
payment to perform activities under the Federal award, such as carrying
out a portion of the Federal award or providing goods and services, a
determination is required. See also Sec. 200.332(h).
0
81. In Sec. 200.332:
0
a. Revise paragraphs (g) through (i); and
0
b. Add paragraphs (j) through (l).
The revisions and additions read as follows:
Sec. 200.332 Requirements for pass-through entities.
* * * * *
(g) Comply with applicable requirements in 2 CFR part 170 to report
subawards on SAM.gov no later than the end of the month following the
month in which the subaward was issued.
(h) Make subrecipient or contractor determinations under Sec.
200.331 for all downstream entities receiving payments from the pass-
through entity, including affiliates, subsidiaries, or other related
organizations. Internal organizational affiliations do not exempt pass-
through entities from subaward or contract classification and related
compliance and reporting requirements.
(i) Ensure that each subrecipient is in compliance with the terms
and conditions of the subaward and does not take actions that could
significantly damage the reputation of the pass-through entity, the
Federal agency making the award, or the Federal Government. If a pass-
through entity determines that a subrecipient has taken such actions,
it must consult with the Federal agency to determine whether the
subaward should be terminated under Sec. 200.340. If the Federal
agency determines that such significant reputational harm has occurred,
it may either direct the pass-through entity to terminate the subaward
or terminate the Federal award to the pass-through entity.
(j) Verify that a subrecipient is audited as required by subpart F
of this part.
(k) Consider whether the results of a subrecipient's audit, site
visits, or other monitoring necessitate adjustments to the pass-through
entity's records.
(l) Consider taking enforcement action against noncompliant
subrecipients as described in Sec. 200.339 and in program regulations.
0
82. Revise Sec. 200.333 to read as follows:
Sec. 200.333 Fixed amount subawards.
Fixed amount subawards are not permitted.
0
83. In Sec. 200.334, revise the introductory text to read as follows:
Sec. 200.334 Record retention requirements.
The recipient and subrecipient must retain all Federal award
records for three years from the date of submission of their final
financial report. For awards that are renewed quarterly or annually,
the recipient and subrecipient must retain records for three years from
the date of submission of their quarterly or annual financial report,
respectively. Records to be retained include, but are not limited to,
financial records, supporting documentation, and statistical records.
Federal agencies or pass-through entities may not impose any other
record retention requirements except for the following:
* * * * *
0
84. Revise Sec. 200.336 to read as follows:
Sec. 200.336 Methods for collection, transmission, and storage of
information.
When practicable, the Federal agency or pass-through entity and the
recipient or subrecipient must collect, transmit, and store Federal
award information in open and machine-readable formats. A machine-
readable format is a format in a standard computer language (not
English text) that can be read automatically by a computer system. Upon
request, the Federal agency or pass-through entity must always provide
paper versions of Federal award information to and from the recipient
or subrecipient. The Federal agency or pass-through entity must not
require additional copies of Federal award information submitted in
paper versions. The recipient or subrecipient is not required to create
and retain paper copies when original records are electronic and cannot
be altered. In addition, the recipient or subrecipient may substitute
electronic versions of original paper records through duplication or
other forms of electronic conversion, provided that the procedures are
subject to periodic quality control reviews. Quality control reviews
must ensure that electronic conversion procedures provide safeguards
against the alteration of records and assurance that records remain in
a format that is readable by a computer system. Recipients and
subrecipients are strongly encouraged to utilize domestic storage
capabilities for electronic records.
0
85. Revise Sec. 200.338 to read as follows:
Sec. 200.338 Restrictions on public access to records.
Federal agencies may not place restrictions on the recipient or
subrecipient that limit public access to the records of the recipient
or subrecipient pertaining to a Federal award, except for personally
identifiable information (PII), confidential business
[[Page 32258]]
information, or other sensitive information subject to protections
against disclosure under applicable law. Federal agencies may only
place such restrictions when the Federal agency can demonstrate that
such records will be kept confidential and would have been exempted
from disclosure pursuant to the Freedom of Information Act (FOIA) (5
U.S.C. 552) or controlled unclassified information pursuant to
Executive Order 13556 if the records had belonged to the Federal
agency. The Freedom of Information Act does not apply to records that
remain under the recipient's or subrecipient's control except as
required by Sec. 200.315. Unless required by Federal, State, local, or
tribal law, recipients and subrecipients are not required to permit
public access to their records. The recipient's or subrecipient's
records provided to a Federal agency generally will be subject to FOIA
and applicable exemptions.
0
86. Revise Sec. 200.339 to read as follows:
Sec. 200.339 Remedies for noncompliance.
(a) Remedies for noncompliance. The Federal agency or pass-through
entity may implement specific conditions if the recipient or
subrecipient fails to comply with the U.S. Constitution, Federal
statutes, regulations, or terms and conditions of the Federal award.
See Sec. 200.208 for additional information on specific conditions.
When the Federal agency or pass-through entity determines that
noncompliance cannot be remedied by imposing specific conditions, the
Federal agency or pass-through entity may take one or more of the
following actions:
(1) Temporarily withhold payments until the recipient or
subrecipient takes corrective action.
(2) Disallow costs for all or part of the activity associated with
the noncompliance of the recipient or subrecipient.
(3) Suspend or terminate the Federal award in part or in its
entirety.
(4) Initiate suspension or debarment proceedings as authorized in 2
CFR part 180 and the Federal agency's regulations, or for pass-through
entities, recommend suspension or debarment proceedings be initiated by
the Federal agency.
(5) Withhold further Federal funds (new awards or continuation
funding) for the project or program.
(6) Pursue other legally available remedies.
(b) Private causes of action. If applicable and consistent with law
and regulation, a Federal agency, may, at its discretion, cooperate
with individuals or organizations in their pursuit of private causes of
action and civil remedies based on the failure of a recipient or
subrecipient to comply with the U.S. Constitution, Federal statutes,
regulations, or the terms and conditions of a Federal award. Consistent
with Sec. 200.318(k), this generally would not include cases related
to the settlement of contractual or administrative issues arising out
of a recipient's or subrecipient's procurement transactions, except as
necessary to comply with law or if the matter is primarily a Federal
concern. A Federal agency should only cooperate with a private cause of
action if it determines that such cooperation is in the interest of the
United States.
0
87. Revise Sec. 200.340 to read as follows:
Sec. 200.340 Termination and suspension.
(a) Termination provisions. The Federal award may be terminated in
part or its entirety as follows:
(1) For noncompliance by the recipient or subrecipient. The Federal
agency or pass-through entity may terminate a Federal award in part or
its entirety if the recipient or subrecipient fails to comply with the
terms and conditions of the Federal award, including a failure of the
recipient to report subawards on SAM.gov pursuant to the award term
required by 2 CFR part 170. See also Sec. Sec. 200.341 and 200.342;
(2) At the discretion of the Federal agency or pass-through entity.
The Federal agency or pass-through entity, to the extent permitted by
law, may terminate a Federal award in part or its entirety if the
Federal agency or pass-through entity determines that a termination is
in the interest of the Federal agency or pass-through entity, including
if a Federal award does not effectuate program goals, Federal agency
priorities, or the national interest as they exist at the time of the
termination. See also Sec. 200.341;
(3) By mutual agreement of the parties. The Federal agency or pass-
through entity may terminate a Federal award in part or its entirety
with the consent of the recipient or subrecipient, in which case the
two parties must agree upon the termination conditions. These
conditions include the effective date of the termination and, in the
case of partial termination, the portion to be terminated; or
(4) Upon notification by the recipient or subrecipient. The
recipient or subrecipient may terminate a Federal award in part or its
entirety upon sending the Federal agency or pass-through entity a
written notification of the reasons for such termination, the effective
date, and, in the case of partial termination, the portion to be
terminated. However, if the Federal agency or pass-through entity
determines that the remaining portion of the Federal award will not
accomplish the purposes for which the Federal award was made, the
Federal agency or pass-through entity may terminate the Federal award
in its entirety; or
(5) Pursuant to additional terms and conditions. The Federal agency
or pass-through entity, to the extent permitted by law, may terminate a
Federal award in part or its entirety pursuant to any additional
termination provisions included in the terms and conditions of the
Federal award.
(b) Requirements for termination provisions--(1) General
requirements. The Federal agency or pass-through entity must clearly
and unambiguously specify all termination provisions in the terms and
conditions of the Federal award. To the extent permitted by law, and
except as provided in paragraph (b)(2) of this section, the Federal
agency and pass-through entity must ensure that all Federal awards
allow termination for the reasons described in paragraphs (a)(1)
through (4) of this section. For example, the Federal agency or pass-
through entity may include a termination provision incorporating this
section of the regulation by reference or including all of the reasons
for termination in paragraphs (a)(1) through (4). In accordance with
paragraph (a)(5) of this section, to the extent authorized by law, the
Federal agency or pass-through entity may also include additional
termination provisions not specified in this section. See also Sec.
200.211(c)(1)(v).
(2) Exceptions. Paragraph (a)(2) of this section does not apply to
any Federal award in which inclusion of such a discretionary
termination provision would conflict with a Federal statute. See
Sec. Sec. 200.101(d) and 200.102(b) regarding statutory conflicts and
exceptions. The discretionary termination provision is generally
applicable to discretionary awards, but not to Federal awards made
under programs where legislation establishes an entitlement to the
funds on the part of the recipient, such as block grants, those awarded
based on a statutory formula, or disaster recovery grants. Consistent
with Executive Order 14332, paragraph (a)(2) also does not apply to
agreements entered into in furtherance of international trade
agreements or those awarded by the Department of Commerce under title
XCIX of the William M. (Mac) Thornberry National Defense Authorization
Act for Fiscal Year 2021 (Pub. L. 116-283), the CHIPS
[[Page 32259]]
Act of 2022 (Pub. L. 117-167), or division F of the Infrastructure
Investment and Jobs Act (Pub. L. 117-58). If questions arise regarding
applicability of paragraph (a)(2) to specific Federal programs or types
of Federal awards, Federal agencies are strongly encouraged to consult
with OMB. Federal agencies must seek approval from OMB prior to
allowing any class exceptions for paragraph (a)(2) related to a Federal
program or type of Federal award not set forth in this paragraph
(b)(2).
(c) Reporting requirements related to terminations for
noncompliance. When the Federal agency terminates the Federal award
prior to the end of the period of performance due to the recipient's
material failure to comply with the terms and conditions of the Federal
award, the Federal agency must report the termination in SAM.gov. A
Federal agency must use the Contractor Performance Assessment Reporting
System (CPARS) to enter information in SAM.gov.
(1) The information required under this paragraph (c) is not to be
reported in SAM.gov until the recipient has either:
(i) Exhausted its opportunities to object or challenge the decision
(see Sec. 200.342); or
(ii) Has not, within 30 calendar days after being notified of the
termination, informed the Federal agency that it intends to appeal the
decision to terminate.
(2) If a Federal agency, after entering information about a
termination in SAM.gov, subsequently:
(i) Learns that any of that information is erroneous, the Federal
agency must correct the information in the system within three business
days; and
(ii) Obtains an update to that information that could be helpful to
other Federal agencies, the Federal agency is strongly encouraged to
amend the information in the system to incorporate the update in a
timely way.
(3) The Federal agency must not post any information that will be
made publicly available in the non-public segment of SAM.gov that is
covered by a disclosure exemption under the Freedom of Information Act
(FOIA). When the recipient asserts within seven calendar days to the
Federal agency which posted the information that a disclosure exemption
under FOIA covers some of the information made publicly available, the
Federal agency that posted the information must remove the posting
within seven calendar days of receiving the assertion. Before reposting
the releasable information, the Federal agency must resolve the issue
in accordance with the agency's FOIA procedures.
(d) Closeout requirements following termination. When the Federal
award is terminated in part or its entirety, the Federal agency or
pass-through entity and recipient or subrecipient remain responsible
for compliance with the closeout requirements in Sec. Sec. 200.344 and
200.345.
(e) Temporary suspension--(1) In general. The Federal agency or
pass-through entity, to the extent permitted by law, may at any time
issue a written order temporarily suspending a Federal award in part or
its entirety if the Federal agency or pass-through entity determines
that a suspension is in the interest of the Federal agency or pass-
through entity. A suspension order under this provision must not exceed
a period of 90 days unless the parties mutually agree to an extended
period. The period of suspension will begin to run after a written
order of suspension is delivered to the recipient or subrecipient. The
suspension order must:
(i) Direct the recipient or subrecipient to temporarily stop all or
part of the activities under the Federal award;
(ii) Specify the effective date, scope, and expected duration of
the suspension, which may not exceed a period of 90 days unless
extended by mutual agreement; and
(iii) Consistent with paragraph (e)(2) of this section, direct the
recipient or subrecipient to take all reasonable steps to minimize the
incurrence of costs allocable to activities covered by the order during
the suspension period.
(2) Activities during suspension period. During the suspension
period, the recipient or subrecipient must take reasonable steps to
minimize the incurrence of costs allocable to activities covered by the
order. See Sec. 200.343. The Federal agency or pass-through entity may
determine to cancel the suspension order before its expiration if
warranted under the circumstances. The Federal agency may also proceed
to terminate the Federal award in whole or in part under paragraph (a)
of this section.
(3) Resumption of activities following suspension period. If the
suspension order is cancelled, or after the period covered by the order
or any extension of the order expires, the Federal agency or pass-
through entity should consider and seek to resolve any budgetary or
schedule impacts resulting from the order. Consistent with law, and as
appropriate and warranted under the circumstances, the Federal agency
should consider making adjustments to the project schedule, project
budget, or both. The recipient or subrecipient must promptly resume
activities under the Federal award at the conclusion of the suspension
period.
(4) Inclusion of suspension provision in Federal award. The Federal
agency or pass-through entity must clearly and unambiguously include
the suspension provision described in this section in the terms and
conditions of the Federal award. The suspension provision described in
this section does not apply to any Federal award in which inclusion of
such a suspension provision would conflict with a Federal statute. See
Sec. Sec. 200.101(d) and 200.102(b) regarding statutory conflicts and
exceptions. The suspension provision is generally applicable to
discretionary awards, but not to Federal awards made under programs
where legislation establishes an entitlement to the funds on the part
of the recipient, such as block grants, those awarded based on a
statutory formula, or disaster recovery grants. If questions arise
regarding applicability of the suspension provision to specific Federal
programs or types of Federal awards, Federal agencies are strongly
encouraged to consult with OMB.
(5) Suspension for non-compliance. The suspension provision in this
section does not limit the authority in Sec. 200.339 related to a
suspension for noncompliance. Consistent with law, the suspension
authority in Sec. 200.339 may apply more broadly, including under
Federal programs in which the Federal agency or pass-through entity
finds that the suspension provision in this section does not apply.
Federal agencies must follow procedures described in Sec. 200.342 upon
initiating a remedy for noncompliance.
0
88. Revise Sec. 200.341 to read as follows:
Sec. 200.341 Notification of termination requirement.
(a) In general. The Federal agency or pass-through entity must
provide written notice of termination to the recipient or subrecipient.
The written notice of termination should include the reasons for
termination, the effective date, and the portion of the Federal award
to be terminated, if applicable.
(b) Notifications of termination for noncompliance. If the Federal
award is terminated for the recipient's material failure to comply with
a Federal award, for the portion of the Federal award to be terminated,
which may encompass up to the entirety of the Federal award, the
notification must instruct the recipient or subrecipient to stop work,
make no additional financial obligations, and, to the extent authorized
by law, terminate all subawards and contracts related to the
[[Page 32260]]
terminated portion of the Federal award. Consistent with Sec. 200.342,
the notification for a termination for noncompliance must also provide
the recipient with an opportunity to object and provide information
challenging the action. The notification must also state the following:
(1) The termination decision will be reported in SAM.gov;
(2) The information will be available in SAM.gov for five years
from the date of the termination and then archived;
(3) Federal agencies that consider making a Federal award to the
recipient during the five year period must consider this information in
judging whether the recipient is qualified to receive the Federal award
when the Federal share of the Federal award is expected to exceed the
simplified acquisition threshold over the period of performance; and
(4) The recipient may comment on any information in SAM.gov about
the recipient for future consideration by Federal agencies. The
recipient may submit comments in SAM.gov.
(5) Federal agencies should consider the recipient's comments when
determining whether the recipient is qualified for a Federal award.
(c) Notifications of discretionary termination. In the case of a
discretionary termination under Sec. 200.340(a)(2), the notice must
provide:
(1) A brief summary of the reason or reasons for finding that
termination is in the interest of the Federal agency or pass-through
entity. The reason or reasons may apply to an individual award or class
of awards. The Federal agency or pass-through entity is not required to
provide a detailed or exhaustive analysis;
(2) For the portion of the Federal award to be terminated, which
may encompass up to the entirety of the Federal award, instructions to
the recipient or subrecipient to stop work, make no additional
financial obligations, and, to the extent authorized by law, terminate
all subawards and contracts related to the terminated portion of the
Federal award; and
(3) An opportunity for the recipient or subrecipient to submit a
written statement of termination costs, which shall constitute a
complete and accurate statement of all costs, financial obligations,
expenditures, claims, and other commitments the recipient or
subrecipient believes are relevant to the termination. Under this
paragraph (c)(3), termination costs means those costs that are
reasonably related to winding down activities undertaken as a result of
the Federal award. See also Sec. 200.472(a) for cost principles
applicable to termination and standard closeout costs. The notice from
the Federal agency or pass-through entity must provide a reasonable
time for submission of the written statement (such as 30 or 60 days, as
appropriate) and explain that the Federal agency or pass-through entity
will consider the written statement in reaching a final decision
regarding allowable costs under Sec. Sec. 200.343 and 200.344.
(4) The written statement of termination costs must be sufficiently
detailed to permit the Federal agency or pass-through entity to
evaluate the allowability, allocability, and reasonableness of the
claimed costs. The written statement must represent the recipient's or
subrecipient's complete presentation of termination-related costs and
claims, subject to review and resolution under Sec. Sec. 200.343 and
200.344. The statement of termination costs from the recipient or
subrecipient must include:
(i) A written statement regarding any termination costs it believes
are relevant, including costs, financial obligations, expenditures,
claims, and other commitments the recipient or subrecipient made in
reasonable expectation of continued funding under the Federal award;
the financial or programmatic impact of terminating those commitments;
and any steps the recipient or subrecipient has taken, or proposes to
take, to avoid, minimize, mitigate, or otherwise reduce those impacts;
(ii) Documentation in support of any termination costs the
recipient or subrecipient believes are relevant; and
(iii) Information regarding whether commitments are cancelable, the
terms for cancelling those commitments, and any penalties or costs of
cancellation. If commitments are not cancellable, the written statement
should explain why the commitments were not structured to allow
cancellation, and whether they could have been.
(iv) A certification, signed by an authorized official of the
recipient or subrecipient, stating that the written statement of
termination costs is true, complete, and accurate to the best of the
official's knowledge and belief, and that the costs claimed:
(A) Are based on records maintained in the ordinary course of
business;
(B) Reflect the recipient's or subrecipient's good-faith assessment
of costs reasonably incurred or committed as a result of the Federal
award; and
(C) Do not include costs that are unallowable, speculative, or
unrelated to the termination.
(d) Reporting for all terminations. Upon termination of the Federal
award, the Federal agency must provide the information required by the
Federal Funding Accountability and Transparency Act (FFATA) to
USAspending.gov. In addition, the Federal agency must update or notify
any other relevant Government-wide systems or entities of any
indications of poor performance as required by 41 U.S.C. 2313 and 31
U.S.C. 3354.
0
89. Revise Sec. 200.342 to read as follows:
Sec. 200.342 Opportunities to object, hearings, and appeals.
The Federal agency must maintain written procedures for processing
objections, hearings, and appeals related to remedies for
noncompliance. Upon initiating a remedy for noncompliance (for example,
disallowed costs, a corrective action plan, or termination for
noncompliance), the Federal agency must provide the recipient with an
opportunity to object and provide information challenging the action.
The Federal agency or pass-through entity must comply with any
requirements for hearings, appeals, or other administrative proceedings
to which the recipient or subrecipient is entitled under any statute or
regulation applicable to the action involved. The Federal agency is not
required to allow for objections, hearings, and appeals related to any
reasons for termination except termination for noncompliance.
0
90. Revise Sec. 200.343 to read as follows:
Sec. 200.343 Effects of suspension and termination.
(a) In general. Costs to the recipient or subrecipient resulting
from financial obligations incurred by the recipient or subrecipient
during a suspension or after the termination of a Federal award are not
allowable unless the Federal agency or pass-through entity expressly
authorizes them in the notice of suspension or termination or
subsequently. However, costs during suspension or after termination are
allowable if:
(1) The costs result from financial obligations which were properly
incurred by the recipient or subrecipient before the effective date of
suspension or termination, and not in anticipation of it; and
(2) The costs would be allowable if the Federal award was not
suspended or expired normally at the end of the period of performance
in which the termination takes effect, provided that the recipient or
subrecipient takes all reasonable steps to cancel, mitigate, or
otherwise reduce such financial obligations and provides documentation
[[Page 32261]]
of those efforts to the Federal agency upon request.
(b) Costs resulting from discretionary terminations. (1) This
section does not expressly require the Federal agency to authorize any
additional costs to the recipient or subrecipient resulting from
financial obligations incurred after the termination of a Federal
award. However, as appropriate and consistent with law, upon making a
discretionary termination under Sec. 200.340(a)(2), the Federal agency
may consider allowing the Federal share of necessary and reasonable
costs resulting from financial obligations incurred by the recipient or
subrecipient after the termination of a Federal award based on
information provided by the recipient in response to the notice under
Sec. 200.341(c).
(2) The decision regarding whether to allow additional costs under
paragraph (b)(1) of this section is left to the reasonable discretion
of the Federal agency. The Federal agency may weigh payment of
additional termination costs against competing policy concerns such as
responsible stewardship of Federal funds, program goals, Federal agency
priorities, or the national interest.
0
91. In Sec. 200.400, revise paragraph (g) to read as follows:
Sec. 200.400 Policy guide.
* * * * *
(g) The recipient or subrecipient must not earn or keep any profit
resulting from Federal financial assistance unless explicitly
authorized by the terms and conditions of the Federal award. See also
Sec. 200.307.
0
92. In Sec. 200.401:
0
a. Remove paragraph (a)(3);
0
b. Redesignate paragraphs (a)(4) through (6) as paragraphs (a)(3)
through (5), respectively; and
0
c. Revise paragraph (c).
The revision reads as follows:
Sec. 200.401 Application.
* * * * *
(c) Exemptions. Some nonprofit organizations, because of their size
and nature of operations, can be considered to be similar to for-profit
organizations in terms of the applicability of cost principles. These
nonprofit organizations must operate under Federal cost principles that
apply to for-profit organizations located at 48 CFR 31.2. This
exemption only applies to nonprofit organizations that receive 90
percent or more of their Federal funding in the form of contracts or
operate a Federally Funded Research and Development Center (FFRDC).
Federal agencies and pass-through entities may not allow any exceptions
to this policy under Sec. 200.102(c) unless expressly required by
Federal statute or approved by the cognizant agency for indirect costs
in coordination with OMB in extraordinary circumstances.
0
93. Revise Sec. 200.402 to read as follows:
Sec. 200.402 Composition of costs.
The total cost of a Federal award is the sum of the allowable
direct and indirect costs minus any applicable credits.
0
94. In Sec. 200.403, revise paragraph (g) to read as follows:
Sec. 200.403 Factors affecting allowability of costs.
* * * * *
(g) Be adequately documented. See Sec. Sec. 200.300 through
200.309 and 200.334 through 200.338.
* * * * *
0
95. In Sec. 200.405, revise paragraph (d) to read as follows:
Sec. 200.405 Allocable costs.
* * * * *
(d) Direct cost allocation principles. If a cost benefits two or
more projects or activities in proportions that can be determined
without undue effort or cost, the cost must be allocated to the
projects based on the proportional benefit. However, when those
proportions cannot be determined because of the interrelationship of
the work involved, then, notwithstanding paragraph (c) of this section,
the costs may be allocated or transferred to benefited projects on any
reasonable documented basis. Where the purchase of equipment or other
capital asset is specifically authorized under a Federal award, the
costs are assignable to the Federal award regardless of the use that
may be made of the equipment or other capital asset involved, when no
longer needed for the purpose for which it was originally required. See
also Sec. Sec. 200.310 through 200.316 and 200.439.
* * * * *
0
96. In Sec. 200.407:
0
a. Remove paragraph (d);
0
b. Redesignate paragraphs (e) through (l) as paragraphs (d) through
(k), respectively; and
0
c. Insert a new paragraph (l).
The revision reads as follows:
Sec. 200.407 Prior written approval (prior approval).
* * * * *
(l) Section 200.454 Memberships, subscriptions, and professional
activity costs;
* * * * *
0
97. Revise Sec. 200.421 to read as follows:
Sec. 200.421 Advertising and public relations.
(a) In general. Except as provided in paragraph (b) of this
section, advertising and public relations costs (including those
related to magazines, newspapers, radio and television, direct mail,
exhibits, and electronic or computer transmittals) are unallowable
under Federal awards and may not be charged directly, indirectly, or
through another cost allocation methodology.
(b) Exceptions. The only exceptions to paragraph (a) of this
section are for advertising and public relation costs specifically
required by Federal statute or advertising costs which are solely for:
(1) The procurement of goods and services for the performance of a
Federal award;
(2) The disposal of scrap or surplus materials acquired in the
performance of a Federal award except when the recipient or
subrecipient is reimbursed for disposal costs at a predetermined
amount; or
(3) Program advertising and outreach (for example, recruiting
project participants) and other specific purposes necessary to meet the
Federal award requirements.
0
98. Revise Sec. 200.429 to read as follows:
Sec. 200.429 Commencement and convocation costs.
Costs incurred for commencements and convocations are unallowable.
0
99. In Sec. 200.430, revise paragraph (h) and paragraph (i)
introductory text to read as follows:
Sec. 200.430 Compensation--personal services.
* * * * *
(h) Nonprofit organizations. This paragraph (h) provides policy
applicable only to nonprofit organizations. For compensation to members
of nonprofit organizations, trustees, directors, associates, officers,
or the immediate families thereof, a determination must be made that
the compensation is reasonable for the actual personal services
rendered rather than a distribution of earnings above actual costs.
Compensation may include director's and executive committee member's
fees, incentive awards, off-site or incentive pay, location allowances,
hardship pay, and cost-of-living differentials.
(i) Institutions of Higher Education (IHEs). This paragraph (h)
provides policy only applicable to IHEs.
* * * * *
0
100. In Sec. 200.432:
0
a. Designate the undesignated paragraph as paragraph (a); and
0
b. Add paragraph (b).
[[Page 32262]]
The addition reads as follows:
Sec. 200.432 Conferences.
* * * * *
(b) The costs for attending conferences are allowable only if
participation in the conference is expressly approved by the Federal
agency and included in the terms and conditions of the Federal award.
See Sec. 200.475.
0
101. In Sec. 200.438, revise paragraph (b) to read as follows:
Sec. 200.438 Entertainment and prizes.
* * * * *
(b) Prizes. Costs of prizes or challenges are allowable if they
have a specific and direct programmatic purpose and are included in the
Federal award.
0
102. In Sec. 200.442, revise paragraphs (b) and (c) to read as
follows:
Sec. 200.442 Fundraising and investment management costs.
* * * * *
(b) Costs of investment counsel and staff and similar expenses
incurred to enhance income from investments are unallowable except when
associated with investments covering pension, self-insurance, or other
funds, which include Federal participation allowed by this part. Such
costs are only allowable with the prior written approval of the Federal
agency.
(c) Costs related to the physical custody and control of monies and
securities are allowable. Such costs are only allowable with the prior
written approval of the Federal agency.
* * * * *
0
103. Revise Sec. 200.444 to read as follows:
Sec. 200.444 General costs of government.
(a) For States, local governments, and Indian Tribes, the general
costs of government are unallowable except as provided in Sec.
200.475.
(b) General costs of government are those costs related to the
general activities of the executive, legislative, or judicial branches
of government, including general activities related to public safety,
public information, citizenship, enrollment, or taxation that are not
related to a specific Federal award. Unallowable costs may include:
(1) Salaries and expenses of the Office of the Governor of a State
or the chief executive of a local government or the chief executive of
an Indian Tribe;
(2) Salaries and other expenses of a State legislature, tribal
council, or similar local governmental body, such as a county
supervisor, city council, or school board, whether incurred for
purposes of legislation or executive direction;
(3) Costs of the judicial branch of a government;
(4) Costs of prosecutorial activities unless treated as a direct
cost to a specific program if authorized by statute or regulation.
However, this does not preclude the allowability of other legal
activities of the Attorney General as described in Sec. 200.435; and
(5) Costs of other general types of government services normally
provided to the general public, such as fire and police, unless
provided as a direct cost under a program statute or regulation.
0
104. In Sec. 200.450:
0
a. Revise paragraph (a);
0
b. Redesignate paragraphs (c)(1)(iii) and (iv) as paragraphs (c)(1)(vi)
and (vii), respectively; and
0
c. Add new paragraphs (c)(1)(iii) and (iv) and paragraph (c)(1)(v).
The revision and additions read as follows:
Sec. 200.450 Lobbying.
(a) Lobbying costs associated with obtaining Federal assistance
awards. The costs of certain influencing activities associated with
obtaining grants, cooperative agreements, contracts, or loans are
unallowable. Lobbying with respect to certain grants, cooperative
agreements, contracts, and loans is governed by:
(1) Relevant statutes, including the provisions of 31 U.S.C. 1352;
(2) Regulations, for example ``New Restrictions on Lobbying,'' (55
FR 6739, February 26, 1990), including the definitions; and
(3) Other applicable OMB guidance.
* * * * *
(c) * * *
(1) * * *
(iii) Establishing, administering, contributing to, or paying the
expenses of a voter registration campaign, voter registration drive, or
any similar activity, or paying the expenses of another entity engaged
in such activities;
(iv) Engaging in issue advocacy or public messaging that promotes
or opposes a particular social, political, or public policy position
unrelated to the statutory objectives or performance requirements of
the Federal award, including messaging designed to influence public
attitudes on matters not necessary to accomplish the purpose of the
Federal award;
(v) Attempting to influence the executive branch of any State
government on matters unrelated to the objectives or performance
requirements of the Federal award, including attempts to affect State
agency policymaking, rulemaking, or administrative actions for purposes
other than carrying out objectives of the Federal award;
* * * * *
0
105. Revise Sec. 200.454 to read as follows:
Sec. 200.454 Memberships, subscriptions, and professional activity
costs.
(a) Costs of the recipient's or subrecipient's membership in
professional, civic, business, and technical organizations are
allowable if necessary to fulfill the award requirements. Such costs
must receive prior written approval of the Federal agency.
(b) Costs of the recipient's or subrecipient's subscriptions to
business, professional, academic, and technical periodicals are
unallowable.
(c) Costs of membership in any country club or social or dining
club or organization are unallowable.
(d) Costs of membership in organizations whose primary purpose is
lobbying or issue advocacy are unallowable. See Sec. 200.450.
0
106. In Sec. 200.455, revise paragraph (c) to read as follows:
Sec. 200.455 Organization costs.
* * * * *
(c) The costs related to data and evaluation are allowable. Data
costs include (but are not limited to) the expenditures needed to
gather, acquire, store, track, manage, analyze, disaggregate, secure,
share, publish, or otherwise use data to administer or improve the
program, such as data systems, personnel, data dashboards,
cybersecurity, and related items. Data costs may also include direct or
indirect costs associated with building integrated data systems--data
systems that link individual-level data from multiple State and local
government agencies for purposes of management, research, and
evaluation. Data costs related to integrated data systems should align
with the finalized Federal grants data standards as published on
Grants.gov. Evaluation costs include (but are not limited to) evidence
reviews, evaluation planning and feasibility assessment, conducting
evaluations, sharing evaluation results, and other personnel or
materials costs related to the effective building and use of evidence
and evaluation for program design, administration, or improvement.
0
107. Revise Sec. 200.461 to read as follows:
Sec. 200.461 Publication and printing costs.
(a) In general. Except as provided in paragraph (b) of this
section, publication costs (including page charges, article
[[Page 32263]]
processing charges (APCs), or similar fees such as open access fees for
professional journal publications and other peer-reviewed publications)
are unallowable under Federal awards. Printing costs (including
distribution and general handling) are allowable.
(b) Exceptions. The only exceptions to paragraph (a) of this
section are for publication costs that are specifically required by
Federal statute or approved in advance by the Federal agency on a case-
by-case basis. A general requirement to make results publicly available
must not be construed as authorizing publication costs.
(c) Requirements. (1) Allowable publication costs included in the
terms and conditions of a Federal award must meet the following
requirements:
(i) The publications report work supported by the Federal
Government; and
(ii) The charges are levied impartially on all items published by
the journal, whether or not under a Federal award.
(2) The recipient or subrecipient may charge the Federal award
during closeout for the costs of publication or sharing of research
results if the costs were not incurred during the period of performance
of the Federal award. These costs must be charged to the final budget
period of the award unless otherwise specified by the Federal agency.
0
108. Revise Sec. 200.467 to read as follows:
Sec. 200.467 Selling and marketing costs.
Costs of selling and marketing any products or services of the
recipient or subrecipient are unallowable unless they are expressly
included in the Federal award and necessary to meet the requirements of
the Federal award.
0
109. In Sec. 200.472, revise paragraph (a)(5) introductory text to
read as follows:
Sec. 200.472 Termination and standard closeout costs.
(a) * * *
(5) The following settlement expenses are generally allowable:
* * * * *
0
110. In Sec. 200.475, revise paragraph (d) to read as follows:
Sec. 200.475 Travel costs.
* * * * *
(d) Establishing rates and amounts. In the absence of an
established written policy regarding travel costs, the rates and
amounts established under 5 U.S.C. 5701-11, by the Administrator of
General Services, or by the President (or designee) pursuant to any
provisions of such subchapter must apply to travel under Federal awards
(48 CFR 31.205-46(a)).
* * * * *
0
111. Add Sec. 200.477 to read as follows:
Sec. 200.477 Abortion.
Costs associated with elective abortions are unallowable, except as
expressly authorized by Federal law.
0
112. In Sec. 200.503, revise paragraph (b) to read as follows:
Sec. 200.503 Relation to other audit requirements.
* * * * *
(b) Conducting additional audits. Notwithstanding paragraph (a) of
this section, a Federal agency, Inspector General, or GAO may conduct
or arrange additional audits to carry out its responsibilities only
under applicable Federal statutes. The provisions of this part do not
authorize any non-Federal entity to constrain, in any manner, such
Federal agency from carrying out or arranging for such additional
audits, except that the Federal agency must plan such audits not to be
duplicative of other audits of Federal awards. Prior to commencing such
an audit, the Federal agency or pass-through entity must review the FAC
for recent audits submitted by the non-Federal entity, and to the
extent such audits meet a Federal agency or pass-through entity's
needs, the Federal agency or pass-through entity must rely upon and use
such audits. Any additional audits must be planned and performed in
such a way as to build upon work performed, including the audit
documentation, sampling, and testing already performed by other
auditors.
* * * * *
0
113. In Sec. 200.507, revise paragraph (c)(1) to read as follows:
Sec. 200.507 Program-specific audits.
* * * * *
(c) * * *
(1) Submission deadline and public availability. The audit must be
completed and submitted in accordance with paragraph (c)(2) or (3) of
this section. Unless a different period is specified in the program-
specific audit guide, the audit must be submitted within 30 calendar
days after the auditee receives the auditor's report(s) or nine months
after the end of the audit period (whichever is earlier). The
submission is due the next business day when the due date falls on a
Saturday, Sunday, or Federal holiday. Unless restricted by Federal law
or regulation, the auditee must make copies of the reporting package
available for public inspection. Auditees and auditors must ensure that
their respective parts of the reporting package do not include
personally identifiable information (PII) and other information subject
to protections against disclosure under applicable law.
* * * * *
0
114. In Sec. 200.512, revise paragraphs (a)(2) and (b)(2)(ii) to read
as follows:
Sec. 200.512 Report submission.
(a) * * *
(2) The auditee must make copies available for public inspection
unless restricted by Federal statute or regulation. Auditees and
auditors must ensure that their respective parts of the reporting
package do not include personally identifiable information (PII) and
other information subject to protections against disclosure under
applicable law.
(b) * * *
(2) * * *
(ii) The reporting package does not include personally identifiable
information (PII) and other information subject to protections against
disclosure under applicable law;
* * * * *
0
115. In Sec. 200.513, revise paragraphs (c)(4) and (c)(6)(vii) to read
as follows:
Sec. 200.513 Responsibilities.
* * * * *
(c) * * *
(4) Provide OMB with updates to the compliance supplement. These
updates include working with OMB to ensure that the compliance
supplement focuses the auditor on testing the compliance requirements
most likely to cause improper payments, fraud, waste, abuse, or
generate audit findings for which the Federal agency will take action
in accordance with Sec. 200.505. Prior to submitting compliance
supplement drafts to OMB, Federal agencies should engage with external
audit stakeholders, the Federal agency's Office of Inspector General,
and the National Single Audit Coordinator (NSAC).
* * * * *
(6) * * *
(vii) Ensure the Federal agency provides OMB with updates to the
compliance supplement consistent with the compliance supplement
preparation guide.
* * * * *
0
116. In Sec. 200.514, revise paragraph (c)(1) to read as follows:
Sec. 200.514 Standards and scope of audit.
* * * * *
(c) * * *
(1) The compliance supplement provides guidance on internal
controls over Federal programs.
* * * * *
[[Page 32264]]
0
117. In appendix I to part 200:
0
a. Revise paragraphs (a)(3)(i) through (viii), (b)(1)(i)(H), (b)(3),
and (b)(4)(ii)(A) and (B);
0
b. Remove paragraph (b)(4)(ii)(D);
0
c. Redesignate paragraphs (b)(4)(ii)(E) through (J) as paragraphs
(b)(4)(ii)(D) through (I), respectively; and
0
d. Revise paragraphs (b)(5)(iii) and (iv), (b)(6)(iii)(A)(2), and
(b)(8)(ii)(C).
The revisions read as follows:
Appendix I to Part 200--Full Text of Notice of Funding Opportunity
(a) * * *
(3) * * *
(i) Basic Information.
(ii) Eligibility.
(iii) Funding Opportunity Description.
(iv) Application Contents and Format.
(v) Submission Requirements and Deadlines.
(vi) Application Review Information.
(vii) Award Notices.
(viii) Post-Award Requirements and Administration.
* * * * *
(b) * * *
(1) * * *
(i) * * *
(H) Executive Summary. A brief description that is written in
plain language and summarizes the goals and objectives of the
program, the target audience, and eligible recipients. The text of
the executive summary must not exceed 500 words, unless authorized
by the head of the Federal agency (or designee).
* * * * *
(3) Funding Opportunity Description. This section contains the
full description of the funding opportunity.
(4) * * *
(ii) * * *
(A) Limitations on page numbers or words.
(B) Formatting requirements, including font and font size,
margins, page size, and color limitations.
* * * * *
(5) * * *
(iii) Submission Instructions. This section addresses how the
applicant will submit the application. It must include the
following:
(A) Actions needed prior to applying: Instructions on any
registrations required to access electronic submission systems or
links to them. Where possible, provide the expected time frames
needed to complete the registration process.
(B) The methods for submitting the application:
(1) The Federal agency must inform applicants that applications
must be submitted via Grants.gov, unless a program specific
exception is expressly authorized by Federal statute or approved by
the Federal agency head (or designee).
(2) The Federal agency must provide a link to the instructions
on how to submit an application.
(C) If applicable, this section also must say how applicants
must submit pre-applications, letters of intent, Statements of
Interest (SOI), third-party information, or other information
required before the award.
(D) This section must also include what to do in the event of
system problems and a point of contact who will be available if the
applicant experiences technical difficulties.
(iv) Submission Dates and Times. This section must include due
dates and times for all submissions. This includes the following:
(A) Full applications.
(B) Any preliminary submissions, such as letters of intent,
Statements of Interest (SOI), white papers, or pre-applications.
(C) Any other submissions required before Federal award separate
from the full application.
(D) If the funding opportunity is a general announcement that is
open for a period of time with no specific due dates for
applications, this section should say so.
* * * * *
(6) * * *
(iii) * * *
(A) * * *
(2) A brief description of the merit review process, including
how the Federal agency uses merit review (including pre-issuance
review) outcomes in final decision-making. For example, whether they
are advisory only.
* * * * *
(8) * * *
(ii) * * *
(C) The means of submission.
* * * * *
0
118. In appendix II to part 200, revise paragraph (C) to read as
follows:
Appendix II to Part 200--Contract Provisions for Non-Federal Entity
Contracts Under Federal Awards
* * * * *
(C) Equal Employment Opportunity. Except as otherwise provided
under 41 CFR part 60, all contracts that meet the definition of
``federally assisted construction contract'' in 41 CFR 60-1.3 must
include the equal opportunity clause provided under 41 CFR 60-
1.4(b).
* * * * *
Appendix VIII to Part 200 [Removed and Reserved]
0
119. Remove and reserve appendix VIII to part 200.
0
120. Revise appendix IX to part 200 to read as follows:
Appendix IX to Part 200--Hospital Cost Principles
Until such time as revised guidance is proposed and implemented
for hospitals, the existing principles located at appendix IX to
part 300 of this title remain in effect.
SUBTITLE B--FEDERAL AGENCY REGULATIONS FOR GRANTS AND AGREEMENTS
CHAPTER III--DEPARTMENT OF HEALTH AND HUMAN SERVICES
PART 300--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
121. The authority citation for part 300 continues to read as follows:
Authority: 5 U.S.C. 301, 2 CFR part 200.
0
122. Revise Sec. 300.106 to read as follows:
Sec. 300.106 Adoption of 2 CFR part 200.
The Department of Health and Human Services adopts the Office of
Management and Budget (OMB) regulation in 2 CFR part 200, with the
additions included in this part and part 376 of this chapter. This part
gives regulatory effect to the OMB regulation for Federal awards issued
by the Department of Health and Human Services. See 2 CFR 200.110(a)
regarding the process for amending 2 CFR part 200.
Sec. 300.300 [Removed and Reserved]
0
123. Remove and reserve Sec. 300.300.
0
124. Revise Sec. 300.414 to read as follows:
Sec. 300.414 Indirect costs.
In addition to 2 CFR 200.414(c), the following specific indirect
cost provisions apply:
(a) Indirect costs on training grants are limited to a fixed rate
of eight percent of MTDC exclusive of tuition and related fees, direct
expenditures for equipment, and subawards in excess of $25,000; and
(b) Indirect costs on grants awarded to foreign organizations and
foreign public entities and performed fully outside of the territorial
limits of the U.S. may be paid to support the costs of compliance with
Federal requirements at a fixed rate of eight percent of MTDC exclusive
of tuition and related fees, direct expenditures for equipment, and
subawards in excess of $25,000.
PART 376--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
125. The authority citation for part 376 continues to read as follows:
Authority: 5 U.S.C. 301; 31 U.S.C. 6101 (note); E.O. 12689 (3
CFR, 1989 Comp., p. 235); E.O. 12549 (3 CFR, 1986 Comp., p. 189);
E.O. 11738 (3 CFR, 1973 Comp., p. 799).
[[Page 32265]]
Sec. Sec. 376.10 and 376.30 [Redesignated as Sec. Sec. 376.5 and
376.10]
0
126. Redesignate Sec. Sec. 376.10 and 376.30 as Sec. Sec. 376.5 and
376.10, respectively.
0
127. Revise newly redesignated Sec. Sec. 376.5 and 376.10 to read as
follows:
Sec. 376.5 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Department of Health and Human Services (HHS or
Department) policies and procedures for nonprocurement debarment and
suspension. This part gives regulatory effect to the OMB regulation for
Federal awards issued by HHS as supplemented by this part. This part
satisfies the requirements in 2 CFR 180.20, section 3 of Executive
Order 12549, ``Debarment and Suspension'', Executive Order 12689,
``Debarment and Suspension'', and 31 U.S.C. 6101 note (section 2455,
Pub. L. 103-355, 108 Stat. 3327).
Sec. 376.10 What policies and procedures must I follow?
The policies and procedures that you must follow are the policies
and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, including the
corresponding sections that HHS published in this part identified by
the same section number. The contracts under a nonprocurement
transaction, that are covered transactions, for example, are specified
by 2 CFR 180.220 as supplemented by Sec. 376.220. For any section of
OMB regulation in subparts A through I of 2 CFR part 180 that has no
corresponding section in this part, HHS policies and procedures are
those in the OMB regulation at 2 CFR part 180.
Sec. 376.20 [Redesignated as Sec. 376.120 and Transferred to Subpart
A]
0
128. Redesignate Sec. 376.20 as Sec. 376.120 and transfer newly
redesignated Sec. 376.120 to subpart A.
0
129. Revise newly redesignated Sec. 376.120 to read as follows:
Sec. 376.120 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)), apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' under
subpart B of 2 CFR part 180, as supplemented by this part, and the
definition of nonprocurement transaction'' at 2 CFR 180.970.
(b) Respondent in HHS suspension or debarment action.
(c) HHS debarment or suspension official.
(d) HHS grants officer, agreements officer, or other HHS official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
0
130. Revise Sec. 376.220 to read as follows:
Sec. 376.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
In addition to the contracts covered under 2 CFR 180.220(b), this
part also applies to all lower tiers of subcontracts under covered
nonprocurement transactions, as permitted under the OMB regulation at 2
CFR 180.220(c). (See optional lower tier coverage in the diagram in
appendix A to 2 CFR part 180.)
0
131. Revise Sec. 376.437 to read as follows:
Sec. 376.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and require the participant
to include a similar term or condition in lower-tier covered
transactions.
PART 382--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
132. The authority citation for part 382 is revised to read as follows:
Authority: 41 U.S.C. 8101-8106.
0
133. Revise Sec. Sec. 382.10 through 382.30 to read as follows:
Sec. 382.10 What does this part do?
This part requires that the award and administration of Department
of Health and Human Services (HHS) grants and cooperative agreements
comply with Office of Management and Budget (OMB) regulation
implementing the portion of the Drug-Free Workplace Act of 1988 (41
U.S.C. 8101-8106, as amended, hereinafter referred to as ``the Act'')
that applies to grants. This part--
(a) Adopts the OMB regulation (subparts A through F of 2 CFR part
182) for the HHS grants and cooperative agreements; and
(b) Establishes HHS policies and procedures for compliance with the
Act that are the same as those of other Federal agencies, in
conformance with the requirement in 41 U.S.C. 8106 for Governmentwide
implementing regulations.
Sec. 382.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a--
(a) Recipient of an HHS grant or cooperative agreement; or
(b) HHS awarding official.
Sec. 382.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 182, this part
supplements four sections of the OMB regulation, as shown in the
following table. For each of those sections, you must follow the
policies and procedures in the OMB regulation, as supplemented by this
part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............... Sec. 382.225............. Whom in HHS a recipient other than an
individual must notify if an employee is
convicted for a violation of a criminal drug
statute in the workplace.
(2) 2 CFR 182.300(b)............... Sec. 382.300............. Whom in HHS a recipient who is an individual
must notify if he or she is convicted of a
criminal drug offense resulting from a
violation occurring during the conduct of any
award activity.
(3) 2 CFR 182.500.................. Sec. 382.500............. Who in HHS is authorized to determine that a
recipient other than an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
[[Page 32266]]
(4) 2 CFR 182.505.................. Sec. 382.505............. Who in HHS is authorized to determine that a
recipient who is an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
HHS policies and procedures are the same as those in the OMB
regulation.
0
134. Revise Sec. 382.400 to read as follows:
Sec. 382.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You as the recipient must comply with drug-
free workplace requirements in subpart B (or subpart C, if the
recipient is an individual) of part 382, which adopts the
Governmentwide implementation (2 CFR part 182) of sec. 5152-5158 of the
Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D;
41 U.S.C. 8101-8106).
CHAPTER IV--DEPARTMENT OF AGRICULTURE
PART 400--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
135. The authority citation for part 400 continues to read as follows:
Authority: 5 U.S.C. 301; 2 CFR part 200.
Sec. Sec. 400.0, 400.1, and 400.2 [Redesignated as Sec. Sec. 400.1,
400.106, and 400.112]
0
136. Redesignate Sec. Sec. 400.0, 400.1, and 400.2 as Sec. Sec.
400.1, 400.106, and 400.112, respectively.
0
137. Revise newly redesignated Sec. 400.106 to read as follows:
Sec. 400.106 Agency implementation.
This part adopts the OMB regulation in subparts A through F of 2
CFR part 200, as supplemented by this chapter, as USDA policies and
procedures for uniform administrative requirements, cost principles,
and audit requirements for Federal awards. This part gives regulatory
effect to the OMB regulation, as supplemented by this chapter, for
Federal awards issued by USDA. See 2 CFR 200.110(a) regarding the
process for amending 2 CFR part 200.
PART 417--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
138. The authority citation for part 417 continues to read as follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 2209j; Sec. 2455, Pub. L.
103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); Pub. L. 101-576, 104
Stat. 2838; E.O. 12549 (51 FR 6370, 3 CFR, 1986 Comp., p. 189); E.O.
12689 (54 FR 34131, 3 CFR, 1989 Comp., p. 235); 2 CFR part 180; 7
CFR 2.28.
0
139. Revise Sec. Sec. 417.10 through 471.30 to read as follows:
Sec. 417.10 What does this part do?
This part adopts the OMB regulation in subparts A through I of 2
CFR part 180, as supplemented by this part, as the USDA policies and
procedures for nonprocurement debarment and suspension. This part gives
regulatory effect for the USDA to the OMB regulation, as supplemented
by this part. For any section of OMB regulation in subparts A through I
of 2 CFR part 180 that has no corresponding section in this part, USDA
policies and procedures are those in the OMB regulation. This part
satisfies the requirements in section 3 of Executive Order 12549,
``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189), Executive
Order 12689, ``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235),
and 31 U.S.C. 6101 note (section 2455, Pub. L. 103-355, 108 Stat.
3327).
Sec. 417.20 Does this part apply to me?
Through this part, pertinent portions of the OMB regulation in
subparts A through I of 2 CFR part 180 (see table 2 to 2 CFR
180.100(b)) apply to you if you are a:
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970, as supplemented by Sec. Sec. 417.215
and 417.220);
(b) Respondent in a USDA debarment and suspension action;
(c) USDA debarment or suspension official; or
(d) USDA grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 417.30 What policies and procedures must I follow?
The USDA policies and procedures that you must follow are the
policies and procedures specified in this part and each applicable
section of the OMB regulation in subparts A through I of 2 CFR part
180, as that section is supplemented by the section in this part with
the same section number. The contracts that are covered transactions,
for example, are specified by 2 CFR 180.220 as supplemented by Sec.
417.220. For any section of OMB regulation in subparts A through I of 2
CFR part 180 that has no corresponding section in this part, USDA
policies and procedures are those in the OMB regulation.
0
140. Revise subparts C and D to read as follows:
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 417.332 What methods must I use to pass down requirements to
participants in lower tier covered transactions with whom I intend to
do business?
You as a participant must include a term or condition in lower tier
covered transactions requiring lower tier participants to comply with
subpart C of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Department of Agriculture Officials
Regarding Transactions
Sec. 417.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower tier covered
transactions.
PART 421--REQUIREMENTS FOR DRUG--FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
141. The authority citation for part 421 is revised to read as follows:
Authority: 41 U.S.C. 8101-8106.
[[Page 32267]]
0
142. Revise Sec. Sec. 421.10 through 421.30 to read as follows:
Sec. 421.10 What does this part do?
This part requires that the award and administration of U.S.
Department of Agriculture (USDA) grants and cooperative agreements
comply with the Office of Management and Budget (OMB) regulation
implementing the portion of the Drug-Free Workplace Act of 1988 (41
U.S.C. 8101-8106, as amended, hereinafter referred to as ``the Act'')
that applies to grants. This part--
(a) Adopts the OMB regulation (subparts A through F of 2 CFR part
182) for USDA's grants and cooperative agreements; and
(b) Establishes USDA policies and procedures for compliance with
the Act that are the same as those of other Federal agencies, in
conformance with the requirement in 41 U.S.C. 8106 for Governmentwide
implementing regulations.
Sec. 421.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a--
(a) Recipient of a USDA grant or cooperative agreement; or
(b) USDA awarding official.
Sec. 421.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 182, this part
supplements four sections of the OMB regulation, as shown in the
following table. For each of those sections, you must follow the
policies and procedures in the OMB regulation, as supplemented by this
part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............... Sec. 421.225............. Whom in the USDA a recipient other than an
individual must notify if an employee is
convicted for a violation of a criminal drug
statute in the workplace.
(2) 2 CFR 182.300(b)............... Sec. 421.300............. Whom in the USDA a recipient who is an
individual must notify if he or she is
convicted of a criminal drug offense
resulting from a violation occurring during
the conduct of any award activity.
(3) 2 CFR 182.500.................. Sec. 421.500............. Who in the USDA is authorized to determine
that a recipient other than an individual is
in violation of the requirements of 2 CFR
part 182, as implemented by this part.
(4) 2 CFR 182.505.................. Sec. 421.505............. Who in the USDA is authorized to determine
that a recipient who is an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
USDA policies and procedures are the same as those in the OMB
regulation.
0
143. Revise Sec. 421.400 to read as follows:
Sec. 421.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You as the recipient must comply with drug-
free workplace requirements in subpart B (or subpart C, if the
recipient is an individual) of 2 CFR part 421, which adopts the
Governmentwide implementation (2 CFR part 182) of sec. 5152-5158 of the
Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D;
41 U.S.C. 8101-8106).
CHAPTER VI--DEPARTMENT OF STATE
PART 600--THE UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
144. The authority citation for part 600 continues to read as follows:
Authority: 5 U.S.C. 301; 22 U.S.C 2651a, 22 U.S.C. 2151, 22
U.S.C. 2451, 22 U.S.C. 1461, 2 CFR part 200.
0
145. Revise Sec. 600.101 to read as follows:
Sec. 600.101 Applicability.
(a) The Department of State adopts the Office of Management and
Budget (OMB) regulation in 2 CFR part 200, as follows:
(1) The Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards set forth in 2 CFR part 200
(subparts A through F) shall apply to all non-Federal entities, except
as noted in paragraph (a)(2) of this section.
(2) Subparts A through E of 2 CFR part 200 shall apply to all
foreign organizations not recognized as Foreign Public Entities and
subparts A through D of 2 CFR part 200 shall apply to all U.S. and
foreign for-profit entities, except where the Federal awarding agency
determines that the application of these subparts would be inconsistent
with the international obligations of the United States or the statute
or regulations of a foreign government. The Federal Acquisition
Regulation (FAR) at 48 CFR parts 30 and 31 takes precedence over the
cost principles in subpart E of 2 CFR part 200 for Federal awards to
U.S. and foreign for-profit entities.
(b) This part gives regulatory effect to the OMB regulation for
Federal awards issued by the Department of State. See 2 CFR 200.110(a)
regarding the process for amending 2 CFR part 200.
0
146. Add Sec. 600.201 to read as follows:
Sec. 600.201 Use of grants and cooperative agreements.
Notwithstanding 2 CFR 200.201(b), the DOS is permitted to issue
fixed amount awards for Foreign Assistance and Public Diplomacy
programs according to DOS internal policies and procedures that support
the effective oversight and financial management of such awards.
Sec. 600.205 [Redesignated as Sec. 600.206]
0
147. Redesignate Sec. 600.205 as Sec. 600.206.
PART 601--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
148. The authority citation for part 601 continues to read as follows:
[[Page 32268]]
Authority: Sec. 2455, Pub. L. 103-355, 108; Stat. 3327 (31
U.S.C. 6101 note); E.O. 12549; (3 CFR, 1986 Comp., p. 189); E.O.
12689 (3); CFR, 1989 Comp., p. 235).
0
149. Revise Sec. Sec. 601.10 through 601.30 to read as follows:
Sec. 601.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Department of State (DOS) policies and procedures
for nonprocurement debarment and suspension. This part gives regulatory
effect for DOS to the OMB regulation as supplemented by this part. This
part satisfies the requirements in section 3 of Executive Order 12549,
``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189); Executive
Order 12689, ``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235);
and section 2455 of the Federal Acquisition Streamlining Act of 1994,
Public Law 103-355 (31 U.S.C. 6101 note).
Sec. 601.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in a DOS suspension or debarment action;
(c) DOS debarment or suspension official; and
(d) DOS grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 601.30 What policies and procedures must I follow?
The DOS policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180 and any
supplemental policies and procedures set forth in this part.
0
150. Revise subparts B through D to read as follows:
Subpart B--Covered Transactions
Sec. 601.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
In addition to the contracts covered under 2 CFR 180.220(b), this
part applies to any contract, regardless of tier, that is awarded by a
contractor, subcontractor, supplier, consultant, or its agent or
representative in any transaction, if the contract is to be funded or
provided by the DOS under a covered nonprocurement transaction and the
amount of the contract is expected to equal or exceed $25,000. This
extends the coverage of the DOS nonprocurement suspension and debarment
requirements to all lower tiers of subcontracts under covered
nonprocurement transactions, as permitted under the OMB regulation at 2
CFR 180.220(c) (see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180).
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 601.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You, as a participant, must include a term or condition in lower-
tier transactions requiring lower-tier participants to comply with
subpart C of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 601.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
CHAPTER VII--AGENCY FOR INTERNATIONAL DEVELOPMENT [REMOVED]
0
151. Under the authority of 5 U.S.C. 301; Sec. 621, Public Law 87-195,
75 Stat 445, (22 U.S.C. 2381) as amended, E.O. 12163, Sept 29, 1979, 44
FR 56673; 2 CFR 1979 Comp., p. 435, remove chapter VII.
CHAPTER VIII--DEPARTMENT OF VETERANS AFFAIRS
PART 801--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
152. The authority citation for part 801 continues to read as follows:
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O.
12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p.
235; 38 U.S.C. 501(a) and 3703(c).
0
153. Revise Sec. Sec. 801.10 through 801.30 to read as follows:
Sec. 801.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Department of Veterans Affairs (VA) policies and
procedures for nonprocurement debarment and suspension. This part gives
regulatory effect to the OMB regulation, as supplemented by this part,
for the Department of Veteran Affairs. This part satisfies the
requirements in section 3 of Executive Order 12549, ``Debarment and
Suspension'' (3 CFR, 1986 Comp., p. 189), Executive Order 12689,
``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235), and 31 U.S.C.
6101 note (section 2455, Pub. L. 103-355, 108 Stat. 3327).
Sec. 801.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970, as supplemented by subpart B of this
part);
(b) Respondent in a Department of Veterans Affairs debarment or
suspension action;
(c) Department of Veterans Affairs debarment or suspension
official; or
(d) Department of Veterans affairs grants officer, agreements
officer, or other official authorized to enter into any type of
nonprocurement transaction that is a covered transaction.
Sec. 801.30 What policies and procedures must I follow?
For any section of OMB regulation in subparts A through I of 2 CFR
part 180 that has no corresponding section in this part, Department of
Veterans Affairs policies and procedures are those in the OMB
regulation. For any such section where there is a corresponding section
in this part, the Department of Veterans Affairs policies and
procedures that you must follow are the policies and procedures
specified in each applicable section of the OMB regulation in subparts
A through I of 2 CFR part 180, and as supplemented by the section in
this part with the same section number. The contracts that are covered
transactions, for example, are specified by 2 CFR 180.220 as
supplemented by Sec. 801.220.
0
154. Revise subparts A through D to read as follows:
[[Page 32269]]
Subpart A--General
Sec. 801.137 Who in the Department of Veterans Affairs may grant an
exception to allow an excluded person to participate in a covered
transaction?
Within the Department of Veterans Affairs, the Secretary of
Veterans Affairs, the Under Secretary for Health, the Under Secretary
for Benefits, the Under Secretary for Memorial Affairs, or other
Designee of the Secretary each has the authority to grant an exception
to allow an excluded person to participate in a covered transaction, as
provided in the OMB regulation at 2 CFR 180.135.
Subpart B--Covered Transactions
Sec. 801.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
VA does not extend coverage of nonprocurement suspension and
debarment requirements beyond first-tier procurement contracts under a
covered nonprocurement transaction, although the OMB regulation at 2
CFR 180.220(c) allows a Federal agency to do so (also see optional
lower tier coverage in the figure in appendix A to 2 CFR part 180).
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 801.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 801.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180
(as supplemented by subpart C of this part) and requires the
participant to include a similar term or condition in lower-tier
covered transactions.
0
155. Revise the heading of subpart J to read as follows:
Subpart J--Limited Denial of Participation (Optional Regulations
for OMB Regulations at 2 CFR Part 180)
PART 802--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
156. The authority citation for part 802 continues to read as follows:
Authority: 5 U.S.C. 301; 38 U.S.C. 501, 2 CFR part 200, and as
noted in specific sections.
0
157. Revise Sec. 802.101 to read as follows:
Sec. 802.101 Applicability.
The Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards set forth in 2 CFR part 200 shall apply
to the Department of Veterans Affairs. This part gives regulatory
effect to the OMB regulation for Federal awards issued by the
Department of Veterans Affairs. See 2 CFR 200.110(a) regarding the
process for amending 2 CFR part 200.
CHAPTER IX--DEPARTMENT OF ENERGY
PART 901--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
158. The authority citation for part 901 continues to read as follows:
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O.
12689 (3 CFR, 1989 Comp., p. 235); 42 U.S.C. 7101 et seq.; 50 U.S.C.
2401 et seq.
0
159. Revise Sec. Sec. 901.10 through 901.30 to read as follows:
Sec. 901.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Department of Energy (DOE) policies and procedures
for nonprocurement debarment and suspension. This part gives regulatory
effect to the OMB regulation for Federal awards issued by DOE as
supplemented by this part. This part satisfies the requirements in
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3
CFR, 1986 Comp., p. 189); Executive Order 12689, ``Debarment and
Suspension'' (3 CFR, 1989 Comp., p. 235); and section 2455 of the
Federal Acquisition Streamlining Act of 1994, Public Law 103-355 (31
U.S.C. 6101 note).
Sec. 901.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in a DOE suspension or debarment action;
(c) DOE debarment or suspension official; and
(d) DOE grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 901.30 What policies and procedures must I follow?
The DOE policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180 and any
supplemental policies and procedures set forth in this part.
0
160. Revise subparts B through D to read as follows:
Subpart B--Covered Transactions
Sec. 901.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR180.220(c) allows a Federal
agency to do so (also see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180), DOE does not extend coverage of
nonprocurement suspension and debarment requirements beyond first-tier
procurement contracts under a covered nonprocurement transaction.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 901.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You, as a participant, must include a term or condition in lower-
tier transactions requiring lower-tier participants to comply with
subpart C of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 901.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
[[Page 32270]]
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
PART 902--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
161. The authority citation for part 902 continues to read as follows:
Authority: 41 U.S.C. 701; 42 U.S.C. 7101 et seq.; 50 U.S.C.
2401 et seq.
0
162. Revise Sec. Sec. 902.10 through 902.30 to read as follows:
Sec. 902.10 What does this part do?
This part requires that the award and administration of Department
of Energy (DOE) grants and cooperative agreements comply with Office of
Management and Budget (OMB) regulation implementing the portion of the
Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as amended,
hereinafter referred to as ``the Act'') that applies to grants. This
part--
(a) Gives regulatory effect to the OMB regulation (subparts A
through F of 2 CFR part 182) for the DOE's grants and cooperative
agreements; and
(b) Establishes DOE policies and procedures for compliance with the
Act that are the same as those of other Federal agencies, in
conformance with the requirement in 41 U.S.C. 705 for Governmentwide
implementing regulations.
Sec. 902.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a--
(a) Recipient of a DOE grant or cooperative agreement; or
(b) DOE awarding official.
Sec. 902.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 182, this part
supplements four sections of the OMB regulation, as shown in the
following table. For each of those sections, you must follow the
policies and procedures in the OMB regulation, as supplemented by this
part.
------------------------------------------------------------------------
What the
Section of OMB regulation Section in this part supplementation
where supplemented clarifies
------------------------------------------------------------------------
(1) 2 CFR 182.225(a)...... Sec. 902.225....... Whom in the DOE a
recipient other than
an individual must
notify if an
employee is
convicted for a
violation of a
criminal drug
statute in the
workplace.
(2) 2 CFR 182.300(b)...... Sec. 902.300....... Whom in the DOE a
recipient who is an
individual must
notify if he or she
is convicted of a
criminal drug
offense resulting
from a violation
occurring during the
conduct of any award
activity.
(3) 2 CFR 182.500......... Sec. 902.500....... Who in the DOE is
authorized to
determine that a
recipient other than
an individual is in
violation of the
requirements of 2
CFR part 182, as
implemented by this
part.
(4) 2 CFR 182.505......... Sec. 902.505....... Who in the DOE is
authorized to
determine that a
recipient who is an
individual is in
violation of the
requirements of 2
CFR part 182, as
implemented by this
part.
(5) 2 CFR 182.605......... Sec. 902.605....... Definition of
``Award''.
(6) 2 CFR 182.645......... Sec. 902.645....... Definition of
``Federal agency or
agency''.
------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
DOE policies and procedures are the same as those in the OMB
regulation.
0
163. Revise Sec. 902.400 to read as follows:
Sec. 902.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You as the recipient must comply with drug-
free workplace requirements in subpart B (or subpart C, if the
recipient is an individual) of Part 902, which adopts the
Governmentwide implementation (2 CFR part 182) of sec. 5152-5158 of the
Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D;
41 U.S.C. 701-707).
PART 910--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
164. The authority citation for part 910 continues to read as follows:
Authority: 42 U.S.C. 7101, et seq.; 31 U.S.C. 6301-6308; 50
U.S.C. 2401 et seq.; 2 CFR part 200.
Sec. Sec. 910.120 and 910.122 [Redesignated as Sec. Sec. 910.100
and 910.101]
0
165. Redesignate Sec. Sec. 910.120 and 910.122 as Sec. Sec. 910.100
and 910.101.
0
166. Revise newly redesignated Sec. 910.101 to read as follows:
Sec. 910.101 Purpose.
The Department of Energy adopts the Office of Management and Budget
(OMB) regulation in 2 CFR part 200, with the additions included in
subparts B through F of this part. This part gives regulatory effect to
the OMB regulation for Federal awards issued by the Department of
Energy. See 2 CFR 200.110(a) regarding the process for amending 2 CFR
part 200.
0
167. Revise Sec. 910.350 to read as follows:
Sec. 910.350 Applicability of 2 CFR part 200.
(a) As stated in Sec. 910.122, unless otherwise noted in this
part, the definition of Non-Federal entity found in 2 CFR 200.1 is
expanded for DOE to include for-profit organizations in addition to
States, local governments, Indian tribes, institutions of higher
education (IHE), and nonprofit organizations.
(b) A for-profit organization is defined as one that distributes
any profit not reinvested into the business as profit or dividends to
its employees or shareholders.
(c) This subpart contains specific changes to 2 CFR part 200 that
apply only to For-Profit Recipients and, unless otherwise specified,
subrecipients. In some cases, the coverage in this subpart will replace
the language in a specific section of 2 CFR part 200.
[[Page 32271]]
CHAPTER X--DEPARTMENT OF THE TREASURY
PART 1000--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
168. The authority citation for part 1000 continues to read as follows:
Authority: 5 U.S.C. 301; 31 U.S.C. 301; 2 CFR part 200.
0
169. Revise Sec. 1000.10 to read as follows:
Sec. 1000.10 Applicable regulations.
Except for the deviations set forth elsewhere in this part, the
Department of the Treasury adopts the Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal
Awards, set forth at 2 CFR part 200, for Federal awards issued by the
Department. This part gives regulatory effect to the Office of
Management and Budget (OMB) regulation for Federal awards issued by the
Department of the Treasury. See 2 CFR 200.110(a) regarding the process
for amending 2 CFR part 200.
CHAPTER XI--DEPARTMENT OF DEFENSE
0
170. Revise part 1104 to read as follows:
PART 1104--IMPLEMENTATION OF GOVERNMENTWIDE REGULATION FOR FEDERAL
FINANCIAL ASSISTANCE
Sec.
1104.2 Purpose of this part.
1104.3 Award format for DoD Components' grants and cooperative
agreements.
1104.5 Regulations governing DoD Components' general terms and
conditions.
1104.10 Regulations governing DoD Components' award-specific terms
and conditions.
1104.15 Regulations governing DoD Components' internal procedures.
1104.20 Definitions.
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Sec. 1104.2 Purpose of this part.
Except as otherwise provided in this part, the Department of
Defense (DoD) adopts the Office of Management and Budget (OMB)
regulation in 2 CFR part 200. Subject to certain exceptions, this part
gives regulatory effect to the OMB regulation for Federal awards issued
by DoD. See 2 CFR 200.110(a) regarding the process for amending 2 CFR
part 200.
Sec. 1104.3 Award format for DoD Components' grants and cooperative
agreements.
DoD Components must conform the format of new grants and
cooperative agreements to the standard award format specified in part
1120 of the DoD Grant and Agreement Regulations (DoDGARS) (2 CFR part
1120). The standard format provides locations within the award for:
(a) General terms and conditions, including the administrative and
national policy requirements discussed in Sec. 1104.5(a) and (b),
respectively.
(b) Any award-specific terms and conditions discussed in Sec.
1104.10.
Sec. 1104.5 Regulations governing DoD Components' general terms and
conditions.
(a) Administrative requirements. On an interim basis pending
completion of the update of the DoDGARs to implement OMB regulation
published in 2 CFR part 200, the following regulatory provisions govern
the administrative requirements to be included in general terms and
conditions of DoD Components' new grants and cooperative agreements:
(1) The provisions of parts 1126 through 1138 of the DoDGARs (2 CFR
parts 1126 through 1138, which comprise subchapter D of this chapter)
govern the administrative requirements to be included in the general
terms and conditions of DoD Components' new grants and cooperative
agreements awarded to institutions of higher education, nonprofit
organizations, States, local governments, and Indian tribes.
(2) Part 34 of the DoDGARs (32 CFR part 34) governs the
administrative requirements to be included in general terms and
conditions of DoD Components' grants and cooperative agreements awarded
to for-profit entities.
(b) National policy requirements. Part 1122 of the DoDGARs (2 CFR
part 1122) governs the national policy requirements to be included in
DoD Components' new grants and cooperative agreements awarded to all
types of entities.
Sec. 1104.10 Regulations governing DoD Components' award-specific
terms and conditions.
On an interim basis pending completion of the update of the DoDGARs
to implement OMB regulation published in 2 CFR part 200:
(a) The regulation in 2 CFR part 200 governs administrative
requirements to be included in any award-specific terms and conditions
used to supplement the general terms and conditions of a new grant or
cooperative agreement awarded to an institution of higher education,
nonprofit organization, State, local government, or Indian tribe.
(b) Part 34 of the DoDGARs (32 CFR part 34) governs the
administrative requirements to be included in any award-specific terms
and conditions of DoD Components' grants and cooperative agreements
awarded to for-profit entities.
Sec. 1104.15 Regulations governing DoD Components' internal
procedures.
On an interim basis pending completion of the update of the DoDGARs
to implement OMB regulation published in 2 CFR part 200, DoD
Components' internal pre-award, time-of-award, and post-award
procedures will continue to comply with requirements in parts 21 and 22
of the DoDGARs (32 CFR parts 21 and 22) and other applicable Defense
Grant and Agreement Regulatory System (DGARS) policies.
Sec. 1104.20 Definitions.
(a) DoD Grant and Agreement Regulations. The term DoD Grant and
Agreement Regulations (DoDGARs) means the regulations in 32 CFR
subtitle A, chapter I, subchapter C, and this chapter.
(b) Other terms. See part 1108 of the DoDGARs (2 CFR part 1108) for
definitions of other terms used in this part.
PART 1120--AWARD FORMAT FOR DOD GRANTS AND COOPERATIVE AGREEMENTS
0
171. The authority citation for part 1120 continues to read as follows:
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
0
172. Revise Sec. 1120.405 to read as follows:
Sec. 1120.405 Content of the preamble.
The preamble for each set of general terms and conditions must
include at least the following information elements, organized in the
order shown:
(a) Table of contents. This should show the articles within each
other subdivision of the general terms and conditions (Subdivisions B
and C for administrative and national policy requirements and, if
needed, Subdivision D for programmatic requirements).
(b) Scope. This element identifies the programs, types of awards,
and types of recipient entities that are subject to the set of general
terms and conditions.
(c) Effective date. This is the date on which the particular
version of the set of general terms and conditions became effective,
which enables a recipient to easily distinguish it from any earlier or
subsequent versions. The version date of each article within the
general terms and conditions must be indicated in parentheses following
the title of the
[[Page 32272]]
article, to help a recipient identify the articles that changed from
previous versions of the general terms and conditions.
(d) English language. The purpose of this element of the preamble
is to implement Office of Management and Budget (OMB) regulation in 2
CFR 200.111(b) by informing each recipient that all Federal financial
assistance announcements, applications, and Federal award information
must be in the English language and must be in terms of U.S. dollars.
(e) Plain language. This section of the preamble is required when
the general terms and conditions use personal pronouns, in accordance
with Sec. 1120.310. Its purpose is to inform recipients about the
meanings of those personal pronouns.
(f) Definitions. Providing the definitions of words and phrases
that are used in the general terms and conditions and defined in the
DoDGARs is more helpful to recipients than referring them to the
DoDGARs to find the definitions.
PART 1122--NATIONAL POLICY REQUIREMENTS: GENERAL AWARD TERMS AND
CONDITIONS
0
173. The authority citation for part 1122 continues to read as follows:
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
0
174. Revise Sec. 1122.1 to read as follows:
Sec. 1122.1 Purpose of this part.
(a) This part specifies a standard format and standard wording of
general terms and conditions for Subdivision B of the general terms and
conditions of Department of Defense (DoD) grants and cooperative
agreements, which concerns national policy requirements.
(b) This part implements:
(1) Office of Management and Budget (OMB) regulation in 2 CFR
200.210 and 200.300, as those sections of 2 CFR part 200 relate to
national policy requirements for general terms and conditions of DoD
grants and cooperative agreements to institutions of higher education
and other nonprofit organizations, States, local governments, and
Indian tribes.
(2) National policy requirements, to the extent they apply, for
general terms and conditions of DoD awards to for-profit firms, foreign
organizations, and foreign public entities.
PART 1125--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
175. The authority citation for part 1125 continues to read as follows:
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O.
12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p.
235; 5 U.S.C. 301 and 10 U.S.C. 113.
0
176. Revise Sec. Sec. 1125.10 through 1125.40 to read as follows:
Sec. 1125.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Department of Defense (DoD) policies and
procedures for nonprocurement debarment and suspension. This part
implements, for the Department of Defense, the OMB regulation as
supplemented by this part. This part satisfies the requirements in
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3
CFR, 1986 Comp., p. 189), Executive Order 12689, ``Debarment and
Suspension'' (3 CFR, 1989 Comp., p. 235), and 31 U.S.C. 6101 note
(section 2455, Pub. L. 103-355, 108 Stat. 3327).
Sec. 1125.20 Does this part implement the OMB regulation in 2 CFR
part 180 for all DoD nonprocurement transactions?
This part implements the OMB guidelines in 2 CFR part 180 for most
DoD nonprocurement transactions. However, it does not implement the
guidelines as they apply to prototype projects under the authority of
section 845 of the National Defense Authorization Act for Fiscal Year
1994 (Pub. L. 103-160), as amended. The Director of Defense Procurement
and Acquisition Policy maintains a DoD issuance separate from this part
that addresses section 845 transactions.
Sec. 1125.30 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970, as supplemented by subpart B of this
part), other than a section 845 transaction described in Sec. 1125.20;
(b) Respondent in a DoD Component's nonprocurement suspension or
debarment action;
(c) DoD Component's debarment or suspension official; or
(d) DoD Component's grants officer, agreements officer, or other
official authorized to enter into a nonprocurement transaction that is
a covered transaction.
Sec. 1125.40 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through I of
2 CFR part 180, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 180, this part
supplements eight sections of the OMB regulation, as shown in the
following table. For each of those sections, you must follow the
policies and procedures in the OMB regulation, as supplemented by this
part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 180.135............... Sec. 1125.137............. Who in DoD may grant an exception for an
excluded person to participate in a covered
transaction.
(2) 2 CFR 180.220............... Sec. 1125.220............. Which lower-tier contracts under a
nonprocurement transaction are covered
transactions.
(3) 2 CFR 180.330............... Sec. 1125.332............. What method a participant must use to
communicate requirements to a lower-tier
participant.
(4) 2 CFR 180.425............... Sec. 1125.425............. When a DoD awarding official must check to see
if a person is excluded or disqualified.
(5) 2 CFR 180.435............... Sec. 1125.437............. What method a DoD official must use to
communicate requirements to a participant.
(6) 2 CFR 180.930............... Sec. 1125.930............. Which DoD officials are debarring officials.
(7) 2 CFR 180.1010.............. Sec. 1125.1010............ Which DoD officials are suspending officials.
----------------------------------------------------------------------------------------------------------------
[[Page 32273]]
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through I
of 2 CFR part 180 that is not listed in paragraph (b) of this section,
DoD policies and procedures are the same as those in the OMB
regulation.
177. Revise subparts A through D to read as follows:
Subpart A--General
Sec. 1125.137 Who in the Department of Defense may grant an exception
to let an excluded person participate in a covered transaction?
Within the Department of Defense, the Secretary of Defense,
Secretary of a Military Department, Head of a Defense Agency, Head of
the Office of Economic Adjustment, and Head of the Special Operations
Command have the authority to grant an exception to let an excluded
person participate in a covered transaction, as provided in the OMB
regulation at 2 CFR 180.135.
Subpart B--Covered Transactions
Sec. 1125.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180), the Department of Defense does not
extend coverage of nonprocurement suspension and debarment requirements
beyond first-tier procurement contracts under a covered nonprocurement
transaction.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 1125.332 What method must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant in a covered transaction must include a term
or condition in any lower-tier covered transaction into which you
enter, to require the participant of that transaction to--
(a) Comply with subpart C of 2 CFR part 180; and
(b) Include a similar term or condition in any covered transaction
into which it enters at the next lower tier.
Subpart D--Responsibilities of DoD Officials Regarding Transactions
Sec.
1125.425 When do I check to see if a person is excluded or
disqualified?
1125.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Sec. 1125.425 When do I check to see if a person is excluded or
disqualified?
In addition to the four instances identified in the OMB regulation
at 2 CFR 180.425, you as a DoD Component official must check to see if
a person is excluded or disqualified before you obligate additional
funding (e.g., through an incremental funding action) for a pre-
existing grant or cooperative agreement with an institution of higher
education, as provided in 32 CFR 22.520(e)(5).
Sec. 1125.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
You as a DoD Component official must include a term or condition in
each covered transaction into which you enter, to communicate to the
participant the requirements to--
(a) Comply with subpart C of 2 CFR part 180, as supplemented by
subpart C of this part; and
(b) Include a similar term or condition in any lower-tier covered
transactions into which the participant enters.
PART 1126--SUBCHAPTER D OVERVIEW
0
178. The authority citation for part 1126 continues to read as follows:
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
0
179. Revise Sec. 1126.1 to read as follows:
Sec. 1126.1 Purposes of this subchapter.
This subchapter:
(a) Addresses general terms and conditions governing administrative
requirements for use by Department of Defense (DoD) Components when
awarding cost-type grants and cooperative agreements to institutions of
higher education, nonprofit organizations, States, local governments,
and Indian tribes. It does so by providing:
(1) A standard organization of the administrative requirements into
articles of general terms and conditions, each of which is in a
specific subject area.
(2) Standard wording for those articles; and
(3) Associated prescriptions for DoD Component's use of the
standard wording to construct their general terms and conditions, which
allow for adding, omitting, or varying in other ways from the standard
wording in certain situations.
(b) Thereby implements Office of Management and Budget (OMB)
regulation in 2 CFR part 200 as it relates to general terms and
conditions of grants and cooperative agreements to institutions of
higher education, nonprofit organizations, States, local governments,
and Indian tribes.
0
180. Revise Sec. 1126.3 to read as follows:
Sec. 1126.3 Exceptions from requirements in this subchapter.
(a) Exceptions that are not permitted. A DoD Component may not
grant any exception to the requirements in this subchapter if the
exception is:
(1) Prohibited by statute, Executive order, or regulation;
(2) Inconsistent with the OMB implementation of the Single Audit
Act in subpart F of 2 CFR part 200.
(b) Other exceptions. Other exceptions are permitted from
requirements in this subchapter for institutions of higher education,
nonprofit organizations, States, local governments, and Indian tribes
as follows:
(1) Statutory or regulatory exceptions. A DoD Component's general
terms and conditions may incorporate a requirement that is inconsistent
with the requirements in this subchapter if that requirement is
specifically authorized or required by a statute or regulation adopted
in the Code of Federal Regulations after opportunity for public
comment.
(2) Individual exceptions. The Head of the DoD Component or his or
her designee may approve an individual exception affecting only one
award in accordance with procedures stated in 32 CFR 21.340.
(3) Small awards. A DoD Component's terms and conditions for small
awards may apply less restrictive requirements than those specified in
this subchapter (a small award is an award for which the total value of
obligated funding through the life of the award is not expected to
exceed the simplified acquisition threshold).
(4) Other class exceptions. The Undersecretary of Defense for
Research and Engineering has designated the Deputy Assistant Secretary
of Defense for Science and Technology Foundations with the authority to
approve any class exception affecting multiple awards other than small
awards, with OMB concurrence if the class exception is for a
requirement that is inconsistent with OMB regulation in 2 CFR part 200.
Procedures for DoD Components' requests for class exceptions are stated
in 32 CFR 21.340.
[[Page 32274]]
CHAPTER XII--DEPARTMENT OF TRANSPORTATION
PART 1200--NONPROCUREMENT SUSPENSION AND DEBARMENT
0
181. The authority citation for part 1200 continues to read as follows:
Authority: 49 U.S.C. 322; Sec. 2455, Public Law 103-355, 108
Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549 (3 CFR, 1986 Comp., p.
189); E.O. 12689 (3 CFR, 1989 Comp., p. 235).
0
182. Revise Sec. Sec. 1200.10 through 1200.30 to read as follows:
Sec. 1200.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Department of Transportation policies and
procedures for nonprocurement suspension and debarment. This part gives
regulatory effect for the Department of Transportation to the OMB
regulation for Federal awards issued by the Department as supplemented
by this part. This part satisfies the requirements in section 3 of
Executive Order 12549, ``Suspension and Debarment'' (3 CFR, 1986 Comp.,
p. 189), Executive Order 12689, ``Suspension and Debarment'' (3 CFR,
1989 Comp., p. 235), and 31 U.S.C. 6101 note (section 2455, Pub. L.
103-355, 108 Stat. 3327).
Sec. 1200.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in a Department of Transportation suspension or
debarment action;
(c) Department of Transportation debarment or suspension official;
or
(d) Department of Transportation grants officer, agreements
officer, or other official authorized to enter into any type of
nonprocurement transaction that is a covered transaction.
Sec. 1200.30 What policies and procedures must I follow?
The Department of Transportation policies and procedures that you
must follow are the policies and procedures specified in each
applicable section of the OMB regulation in subparts A through I of 2
CFR part 180, as that section is supplemented by the section in this
part with the same section number. The contracts that are covered
transactions, for example, are specified by 2 CFR 180.220, as
supplemented by Sec. 1200.220. For any section of OMB regulation in
subparts A through I of 2 CFR part 180 that has no corresponding
section in this part, Department of Transportation policies and
procedures are those in the OMB regulation.
0
183. Revise subparts B through D to read as follows:
Subpart B--Covered Transactions
Sec. 1200.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
In addition to the contracts covered under 2 CFR 180.220(b), this
part applies to any contract, regardless of tier, that is awarded by a
contractor, subcontractor, supplier, consultant, or its agent or
representative in any transaction, if the contract is to be funded or
provided by the Department of Transportation under a covered
nonprocurement transaction and the amount of the contract is expected
to equal or exceed $25,000. This extends the coverage of the Department
of Transportation nonprocurement suspension and debarment requirements
to all lower tiers of subcontracts under covered nonprocurement
transactions, as permitted under the OMB regulation at 2 CFR 180.220(c)
(see optional lower-tier coverage in the figure in appendix A to 2 CFR
part 180).
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 1200.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 1200.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180
and requires the participant to include a similar term or condition in
lower-tier covered transactions.
PART 1201--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
184. The authority citation for part 1201 continues to read as follows:
Authority: 49 U.S.C. 322(a); 2 CFR 200.106.
Sec. 1201.1 [Redesignated as Sec. 1201.5]
0
185. Redesignate Sec. 1201.1 as Sec. 1201.5.
0
186. Revise newly redesignated Sec. 1201.5 to read as follows:
Sec. 1201.5 What does this part do?
Except as otherwise provided in this part, the Department of
Transportation adopts the Office of Management and Budget (OMB) Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards (2 CFR part 200). This part gives regulatory effect
to the OMB regulation for Federal awards issued by the Department of
Transportation (DOT). See 2 CFR 200.110(a) regarding the process for
amending 2 CFR part 200. This part superseded and repealed the
requirements of the Department of Transportation Common Rules (49 CFR
parts 18 and 19), except that grants and cooperative agreements
executed prior to December 26, 2014, continue to be subject to 49 CFR
parts 18 and 19 as in effect on the date of such grants or agreements.
0
187. Revise Sec. 1201.106 to read as follows:
Sec. 1201.106 DOT Component implementation.
The specific requirements and responsibilities for grant-making DOT
Components are set forth in this part. DOT Components must implement
the language in this part unless different provisions are required by
Federal statute or are approved by DOT Headquarters. DOT Components
making Federal awards to non-Federal entities must implement the
language in subparts C through F of 2 CFR part 200 in codified
regulations unless different provisions are required by Federal statute
or are approved by DOT Headquarters.
CHAPTER XIII--DEPARTMENT OF COMMERCE
0
188. Revise part 1326 to read as follows:
PART 1326--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
1326.10 What does this part do?
1326.20 Does this part apply to me?
[[Page 32275]]
1326.30 What policies and procedures must I follow?
Subpart A--General
1326.137 Who in the Department of Commerce may grant an exception to
let an excluded person participate in a covered transaction?
Subpart B--Covered Transactions
1326.216 Which nonprocurement transactions, in addition to those
listed in 2 CFR 180.215, are not covered transactions?
1326.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
1326.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
1326.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Subparts E-H [Reserved]
Subpart I--Definitions
1326.970 Nonprocurement transaction.
Subpart J [Reserved]
Authority: 5 U.S.C. 301; sec. 2455, Pub. L. 103-355, 108 Stat.
3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR, 1986
Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p. 235.
Sec. 1326.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Department of Commerce policies and procedures for
nonprocurement debarment and suspension. This part gives regulatory
effect to the OMB regulation for Federal awards issued by the
Department of Commerce, as supplemented by this part. This part
satisfies the requirements in section 3 of Executive Order 12549,
``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189), Executive
Order 12689, ``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235),
and 31 U.S.C. 6101 note (section 2455, Pub. L. 103-355, 108 Stat.
3327).
Sec. 1326.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970, as supplemented by subpart B of this
part and Sec. 1326.970);
(b) Respondent in a Department of Commerce suspension or debarment
action;
(c) Department of Commerce debarment or suspension official; or
(d) Department of Commerce grants officer, agreements officer, or
other official authorized to enter into any type of nonprocurement
transaction that is a covered transaction.
Sec. 1326.30 What policies and procedures must I follow?
The Department of Commerce policies and procedures that you must
follow are the policies and procedures specified in each applicable
section of the OMB regulation in subparts A through I of 2 CFR part
180, as that section is supplemented by the section in this part with
the same section number. The contracts that are covered transactions,
for example, are specified by 2 CFR 180.220 as supplemented by Sec.
1326.220. For any section of OMB regulation in subparts A through I of
2 CFR part 180 that has no corresponding section in this part,
Department of Commerce policies and procedures are those in the OMB
regulation.
Subpart A--General
Sec. 1326.137 Who in the Department of Commerce may grant an
exception to let an excluded person participate in a covered
transaction?
Within the Department of Commerce, the Secretary of Commerce or
designee has the authority to grant an exception to let an excluded
person participate in a covered transaction, as provided in the OMB
regulation at 2 CFR 180.135.
Subpart B--Covered Transactions
Sec. 1326.216 Which nonprocurement transactions, in addition to those
listed in 2 CFR 180.215, are not covered transactions?
(a) For purposes of the Department of Commerce, a transaction that
the Department needs to respond to a national or agency-recognized
emergency or disaster includes the Fisherman's Contingency Fund.
(b) For purposes of the Department of Commerce, an incidental
benefit that results from ordinary governmental operations includes:
(1) Export Promotion, Trade Information and Counseling, and Trade
policy.
(2) Geodetic Surveys and Services (Specialized Services).
(3) Fishery Products Inspection Certification.
(4) Standard Reference Materials.
(5) Calibration, Measurement, and Testing.
(6) Critically Evaluated Data (Standard Reference Data).
(7) Phoenix Data System.
(8) The sale or provision of products, information, and services to
the general public.
(c) For purposes of the Department of Commerce, any other
transaction if the application of an exclusion to the transaction is
prohibited by law includes:
(1) The Administration of the Anti-dumping and Countervailing Duty
Statutes.
(2) The export Trading Company Act Certification of Review Program.
(3) Trade Adjustment Assistance Program Certification.
(4) Foreign Trade Zones Act of 1934, as amended.
(5) Statutory Import Program.
Sec. 1326.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
In addition to the contracts covered under 2 CFR 180.220(b), this
part applies to a subcontract that is awarded by a participant in a
procurement transaction covered under 2 CFR 180.220(a), if the amount
of the subcontract exceeds or is expected to exceed $25,000. This
extends the coverage of the Department of Commerce nonprocurement
suspension and debarment requirements to one additional tier of
contracts under covered nonprocurement transactions, as permitted under
the OMB regulation at 2 CFR 180.220(c) (see optional lower tier
coverage in the figure in appendix A to 2 CFR part 180).
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 1326.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 1326.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
[[Page 32276]]
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
Subparts E-H [Reserved]
Subpart I--Definitions
Sec. 1326.970 Nonprocurement transaction.
For purposes of the Department of Commerce, nonprocurement
transaction includes the following:
(a) Joint project Agreements under 15 U.S.C. 1525.
(b) Cooperative research and development agreements.
(c) Joint statistical agreements.
(d) Patent licenses under 35 U.S.C. 207.
(e) NTIS joint ventures, 15 U.S.C. 3704b.
Subpart J [Reserved]
0
189. Revise part 1327 to read as follows:
PART 1327--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
1327.10 Adoption of 2 CFR part 200.
1327.11 [Reserved]
Authority: 5 U.S.C. 301; 38 U.S.C. 501; 2 CFR part 200.
Sec. 1327.10 Adoption of 2 CFR part 200.
The Department of Commerce adopts the Office of Management and
Budget (OMB) regulation in 2 CFR part 200. This part gives regulatory
effect to the OMB regulation for Federal awards issued by the
Department of Commerce. See 2 CFR 200.110(a) regarding the process for
amending 2 CFR part 200.
Sec. 1327.11 [Reserved]
PART 1329--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
190. The authority citation for part 1329 continues to read as follows:
Authority: 5 U.S.C. 301; 41 U.S.C. 701-707.
0
191. Revise Sec. Sec. 1329.10 through 1329.30 to read as follows:
1329.10 What does this part do?
This part requires that the award and administration of Department
of Commerce grants and cooperative agreements comply with Office of
Management and Budget (OMB) regulation implementing the portion of the
Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as amended,
hereinafter referred to as ``the Act'') that applies to grants. This
part--
(a) Gives regulatory effect to the OMB regulation (subparts A
through F of 2 CFR part 182) for the Department of Commerce's grants
and cooperative agreements; and
(b) Establishes Department of Commerce policies and procedures for
compliance with the Act that are the same as those of other Federal
agencies, in conformance with the requirement in 41 U.S.C. 705 for
Governmentwide implementing regulations.
1329.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a--
(a) Recipient of a Department of Commerce grant or cooperative
agreement; or
(b) Department of Commerce awarding official.
1329.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 182, this part
supplements four sections of the OMB regulation, as shown in the
following table. For each of those sections, you must follow the
policies and procedures in the OMB regulation, as supplemented by this
part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............ Sec. 1329.225............. Whom in the Department of Commerce a recipient
other than an individual must notify if an
employee is convicted for a violation of a
criminal drug statute in the workplace.
(2) 2 CFR 182.300(b)............ Sec. 1329.300............. Whom in the Department of Commerce a recipient
who is an individual must notify if he or she
is convicted of a criminal drug offense
resulting from a violation occurring during the
conduct of any award activity.
(3) 2 CFR 182.500............... Sec. 1329.500............. Who in the Department of Commerce is authorized
to determine that a recipient other than an
individual is in violation of the requirements
of 2 CFR part 182, as implemented by this part.
(4) 2 CFR 182.505............... Sec. 1329.505............. Who in the Department of Commerce is authorized
to determine that a recipient who is an
individual is in violation of the requirements
of 2 CFR part 182, as implemented by this part.
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
Department of Commerce policies and procedures are the same as those in
the OMB regulation.
0
192. Revise Sec. 1329.400 to read as follows:
1329.400 What method do I use as an agency awarding official to obtain
a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You as the recipient must comply with drug-
free workplace requirements in subpart B (or subpart C, if the
recipient is an individual) of 2 CFR part 1329, which adopts the
Governmentwide implementation (2 CFR part 182) of sec. 5152-5158 of the
Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D;
41 U.S.C. 701-707).
CHAPTER XIV--DEPARTMENT OF THE INTERIOR
PART 1400--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
193. The authority citation for part 1400 continues to read as follows:
[[Page 32277]]
Authority: Section 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 5 U.S.C. 301; E.O. 12549 (3 CFR, 1986 Comp., p.
189); and E.O. 12689 (3 CFR, 1989 Comp., p. 235).
0
194. Revise Sec. Sec. 1400.20 and 1400.30 to read as follows:
1400.20 When does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970, as supplemented by subpart B of this
part and Sec. 1400.970);
(b) Respondent in a Department of the Interior suspension or
debarment action;
(c) Department of the Interior debarment or suspension official,
i.e., the Director, Office of Acquisition and Property Management; or
(d) Department of the Interior grants officer, agreements officer,
or other official authorized to enter into any type of nonprocurement
transaction that is a covered transaction.
1400.30 What policies and procedures must I follow?
(a) The Department of the Interior policies and procedures that you
must follow are specified in:
(1) Each applicable section of the OMB regulation in subparts A
through I of 2 CFR part 180; and
(2) The supplement to each section of the OMB regulation that is
found in this part under the same section number. (The contracts that
are covered transactions, for example, are specified by 2 CFR 180.220
as supplemented by Sec. 1400.220.)
(b) For any section of OMB regulation in subparts A through I of 2
CFR part 180 that has no corresponding section in this part, Department
of the Interior policies and procedures are those in the OMB
regulation.
0
195. Revise Sec. 1400.137 to read as follows:
1400.137 Who in the Department of the Interior may grant an exception
to let an excluded person participate in a covered transaction?
Within the Department of the Interior, the Director, Office of
Acquisition and Property Management has the authority to grant an
exception to let an excluded person participate in a covered
transaction, as provided in the OMB regulation at 2 CFR 180.135.
0
196. Revise Sec. 1400.220 to read as follows:
1400.220 What contracts and subcontracts, in addition to those listed
in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180), the Department of the Interior does not
extend coverage of nonprocurement suspension and debarment requirements
beyond first-tier procurement contracts under a covered nonprocurement
transaction.
0
197. Revise Sec. 1400.332 read as follows:
1400.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180.
0
198. Revise Sec. 1400.437 to read as follows:
1400.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
PART 1401--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
199. The authority citation for part 1401 continues to read as follows:
Authority: 5 U.S.C. 301; 31 U.S.C. 6101 note, 7501; 41 U.S.C.
252a; 41 U.S.C. 701-707.
0
200. Revise Sec. Sec. 1401.100 through 1401.110 to read as follows:
1401.100 What does this part do?
This part requires that the award and administration of the
Department of the Interior (DOI) grants and cooperative agreements
comply with Office of Management and Budget (OMB) regulation
implementing the portion of the Drug-Free Workplace Act of 1988, 41
U.S.C. 701-707, as amended (hereinafter, ``the Act'') that applies to
grants. This part--
(a) Gives regulatory effect to the OMB regulation (subparts A
through F of 2 CFR part 182) for DOI's grants and cooperative
agreements; and
(b) Establishes DOI policies and procedures for compliance with the
Act that are the same as those of other Federal agencies, in
conformance with the requirement in 41 U.S.C. 705 for Government-wide
implementing regulations.
1401.105 Does this part apply to me?
(a) This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 apply if you are--
(1) A recipient of an assistance award from the Department of the
Interior; or
(2) The Department of the Interior awarding official.
(b) Paragraphs (b)(1) through (3) of this section show the subparts
that apply to you (in lieu of 2 CFR 182.115(b)):
------------------------------------------------------------------------
If you are . . . See subparts
------------------------------------------------------------------------
(1) A recipient who is not an individual........ A, C, and F.
(2) A recipient who is an individual............ A, D, and F.
(3) A Department of the Interior awarding A, E, and F.
official.
------------------------------------------------------------------------
1401.110 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing OMB regulation in 2 CFR part 182, this part supplements
four sections of the OMB regulation, as shown in the following table.
For each of those sections, you must follow the policies and procedures
set forth in the OMB regulation, as supplemented by this part.
[[Page 32278]]
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............ Sec. 1401.335............. Whom in the DOI a recipient other than an
individual must notify if an employee is
convicted for a violation of a criminal drug
statute in the workplace.
(2) 2 CFR 182.300(b)............ Sec. 1401.401............. Whom in the DOI a recipient who is an individual
must notify if he or she is convicted of a
criminal drug offense resulting from a
violation occurring during the conduct of any
award activity.
(3) 2 CFR 182.500............... Sec. 1401.600............. Who in the DOI is authorized to determine that a
recipient other than an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
(4) 2 CFR 182.505............... Sec. 1401.605............. Who in the DOI is authorized to determine that a
recipient who is an individual is in violation
of the requirements of 2 CFR part 182, as
implemented by this part.
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
DOI policies and procedures are the same as those in the OMB
regulation.
0
201. Revise Sec. 1401.500 to read as follows:
Sec. 1401.500 What are my responsibilities as a DOI awarding
official?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You, as the recipient, must comply with drug-
free workplace requirements in subpart B (or subpart C, if the
recipient is an individual) of part 1401, which adopts the government-
wide implementation of 2 CFR part 182; sections 5152-5158 of the Drug-
Free Workplace Act of 1988, Public Law 100-690, Title V, Subtitle D; 41
U.S.C. 701-707.
PART 1402--FINANCIAL ASSISTANCE INTERIOR REGULATION, SUPPLEMENTING
THE UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT
REQUIREMENTS FOR FEDERAL AWARDS
0
202. The authority citation for part 1402 continues to read as follows:
Authority: 5 U.S.C. 301 and 2 CFR part 200.
0
203. Revise Sec. 1402.100 to read as follows:
Sec. 1402.100 Purpose.
(a) The Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards set forth in 2 CFR part 200 apply
to the Department of the Interior. This part adopts, as the Department
of the Interior (DOI) policies and procedures, the Office of Management
and Budget's (OMB) Uniform Administrative Requirements, Cost
Principles, and Audit Requirements set forth in 2 CFR part 200 and
gives regulatory effect to the OMB regulation for Federal awards issued
by the Department of the Interior. The regulation applies in full
except as stated in this part. See 2 CFR 200.110(a) regarding the
process for amending 2 CFR part 200.
(b) This part establishes DOI financial assistance regulations that
implement or supplement the OMB regulation in 2 CFR part 200. It is
designed to ensure that financial assistance is administered in full
compliance with applicable law, regulation, policy, and best practices
to ensure the American people get the most value from the funds DOI
awards on financial assistance. For supplemental regulation, DOI has
adopted section numbering that corresponds to related OMB regulation in
2 CFR part 200.
(c) This part extends 2 CFR part 200, subparts A through E,
policies and procedures to foreign public entities and foreign
organizations as allowed by 2 CFR 200.101, except as indicated
throughout this part.
CHAPTER XV--ENVIRONMENTAL PROTECTION AGENCY
PART 1500--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
204. The authority citation for part 1500 continues to read as follows:
Authority: 5 U.S.C. 301, 7 U.S.C. 136 et seq., 15 U.S.C. 2601
et seq., 20 U.S.C. 4011 et seq., 33 U.S.C. 1251 et seq., and 1401 et
seq., 42 U.S.C. 241, 242b, 243, 246, 300f et seq., 1857 et seq.,
6901 et seq., 7401 et seq., and 9601 et seq.; 2 CFR part 200.
0
205. Revise subpart A to read as follows:
Subpart A--Acronyms and Definitions
Sec. 1500.1 Definitions.
In addition to the definitions in 2 CFR 200.1, the following terms
apply to this part:
Participant support costs, to provide that allowable participant
support costs under Environmental Protection Agency (EPA) assistance
agreements include:
(1) Rebates or other subsidies provided to program participants for
purchases and installations of commercially available, standard (``off
the shelf'') pollution control equipment or low emission vehicles under
the Diesel Emission Reduction Act program or programs authorized by EPA
appropriation acts and permitted by terms specified in EPA assistance
agreements or regulation, when the program participant rather than the
recipient owns the equipment.
(2) Subsidies, rebates, and other payments provided to program
beneficiaries to encourage participation in statutorily authorized
programs to encourage environmental stewardship and enable the public
to participate in EPA funded research, pollution abatement, and other
projects or programs to the extent permitted by statutes and terms
specified in EPA assistance agreements or guidance.
0
206. Revise Sec. 1500.2 to read as follows:
Sec. 1500.2 Adoption of 2 CFR part 200.
Under the authority listed in the authority citation for this part,
the Environmental Protection Agency adopts the Office of Management and
Budget (OMB) regulation ``Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards to Non-Federal
Entities'' (subparts A through F of 2 CFR part 200), as supplemented by
this part, as the Environmental Protection Agency (EPA) policies and
procedures for financial assistance administration. This part satisfies
the requirements of 2 CFR 200.110(a) and gives regulatory effect to the
OMB regulation for Federal awards issued by EPA, as supplemented by
this part. EPA also has programmatic regulations located in 40 CFR
chapter I, subchapter B. See 2 CFR 200.110(a) regarding the process for
amending 2 CFR part 200.
0
207. Revise Sec. 1500.4 to read as follows:
[[Page 32279]]
Sec. 1500.4 Exceptions.
Consistent with 2 CFR 200.102(c):
(a) In the EPA, the Director, Office of the Chief Grants Officer or
designee, is authorized to grant exceptions on a case-by-case basis for
recipients.
(b) The EPA Director or designee is also authorized to approve
exceptions, on a class or an individual case basis, to EPA program
specific assistance regulations other than those which implement
statutory and Executive order requirements.
Subpart C--[Removed and Reserved]
0
208. Remove and reserve subpart C, consisting of Sec. 1500.6.
PART 1532--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
209. The authority citation for part 1532 continues to read as follows:
Authority: 33 U.S.C. 1251 et seq.; 42 U.S.C. 7401 et seq.; Sec.
2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E.O.
11738 (3 CFR, 1973 Comp., p. 799); E.O. 12549 (3 CFR, 1986 Comp., p.
189); E.O. 12689 (3 CFR, 1989 Comp., p. 235).
0
210. Revise Sec. Sec. 1532.10 through 1532.30 to read as follows:
Sec. 1532.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Environmental Protection Agency (EPA) policies and
procedures for nonprocurement debarment and suspension. This part gives
regulatory effect for the EPA to the OMB regulation as supplemented by
this part. This part satisfies the requirements in section 3 of
Executive Order 12549, ``Debarment and Suspension'' (3 CFR, 1986 Comp.,
p. 189), Executive Order 12689, ``Debarment and Suspension'' (3 CFR,
1989 Comp., p. 235), and 31 U.S.C. 6101 note (section 2455, Pub. L.
103-355, 108 Stat. 3327).
Sec. 1532.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in an EPA suspension or debarment action;
(c) EPA debarment or suspension official; or
(d) EPA grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 1532.30 What policies and procedures must I follow?
The EPA policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as that section
is supplemented by the section in this part with the same section
number. The contracts that are covered transactions, for example, are
specified by 2 CFR 180.220 as supplemented by Sec. 1532.220. For any
section of OMB regulation in subparts A through I of 2 CFR part 180
that has no corresponding section in this part, EPA policies and
procedures are those in the OMB regulation.
0
211. Revise subparts A through D to read as follows:
Subpart A--General
Sec. 1532.137 Who in the EPA may grant an exception to let an
excluded person participate in a covered transaction?
The EPA debarring official has the authority to grant an exception
to let an excluded person participate in a covered transaction, as
provided in the OMB regulation at 2 CFR 180.135. If the EPA debarring
official grants an exception, the exception must be in writing and
state the reason(s) for deviating from the Governmentwide policy in
Executive Order 12549.
Subpart B--Covered Transactions
Sec. 1532.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
In addition to the contracts covered under 2 CFR 180.220(b), this
part applies to any contract, regardless of tier, that is awarded by a
contractor, subcontractor, supplier, consultant, or its agent or
representative in any transaction, if the contract is to be funded or
provided by the EPA under a covered nonprocurement transaction and the
amount of the contract is expected to equal or exceed $25,000. This
extends the coverage of the EPA nonprocurement suspension and debarment
requirements to all lower tiers of subcontracts under covered
nonprocurement transactions, as permitted under the OMB regulation at 2
CFR 180.220(c) (see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180).
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 1532.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 1532.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
0
212. Revise Sec. 1532.1125 to read as follows:
Sec. 1532.1125 How do award officials and others know if I am
disqualified?
If you are convicted under the statutes in Sec. Sec. 1532.1100 and
1532.1105, the EPA enters your name and address and that of the
violating facility into the System for Award Management (SAM.gov)
Exclusions as soon as possible after the EPA learns of your conviction.
In addition, the EPA enters other information describing the nature of
your disqualification. Federal award officials and others who
administer Federal programs consult SAM.gov Exclusions before entering
into or approving procurement and nonprocurement transactions. Anyone
may access SAM.gov Exclusions through the internet, currently at
https://www.sam.gov.
0
213. In Sec. 1532.1130, revise paragraph (a) to read as follows:
Sec. 1532.1130 How does disqualification under the CAA or CWA differ
from a Federal discretionary suspension or debarment action?
(a) CAA and CWA disqualifications are exclusions mandated by
statute. In contrast, suspensions and debarments imposed under subparts
A through I of 2 CFR part 180 or under 48 CFR part 9, subpart 9.4, are
exclusions imposed at the discretion of Federal suspending or debarring
officials. This means that if you are convicted of violating the CAA
[[Page 32280]]
or CWA provisions described under Sec. 1532.1105, ordinarily your name
and that of the violating facility is placed into SAM.gov Exclusions
before you receive a confirmation notice of the listing, or have the
opportunity to discuss the disqualification with, or seek reinstatement
from, the EPA.
* * * * *
0
214. Revise Sec. 1532.1200 to read as follows:
Sec. 1532.1200 How will I know if I am disqualified under the CAA or
CWA?
There may be several ways that you learn about your
disqualification. You are legally on notice by the CAA at 42 U.S.C.
4606 and CWA at 33 U.S.C. 1368 that a criminal conviction of any
offense listed under 42 U.S.C. 7413(c) of the CAA or 33 U.S.C. 1319(c)
of the CWA automatically disqualifies you. As a practical matter, you
may learn about your disqualification from your defense counsel, a
Federal contract or award official, or from someone else who sees your
name on SAM.gov Exclusions. As a courtesy, the EPA will attempt to
notify you that your name has been entered into SAM.gov Exclusions. The
EPA will inform you of the procedures for seeking reinstatement and
give you the name of a person you can contact to discuss your
reinstatement request.
0
215. Revise Sec. 1532.1500 to read as follows:
Sec. 1532.1500 If I am reinstated, when will my name be removed from
SAM.gov Exclusions?
If your eligibility for procurement and nonprocurement
participation is restored under the CAA or CWA, whether by decision,
appeal, or by administrative agreement, the EPA will remove your name
and that of the violating facility from SAM.gov Exclusions, generally
within 5 working days of your reinstatement.
PART 1536--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
216. The authority citation for part 1536 continues to read as follows:
Authority: 41 U.S.C. 701-707.
0
217. Revise Sec. Sec. 1536.10 through 1536.30 to read as follows:
Sec. 1536.10 What does this part do?
This part requires that the award and administration of
Environmental Protection Agency grants and cooperative agreements
comply with Office of Management and Budget (OMB) regulation
implementing the portion of the Drug-Free Workplace Act of 1988 (41
U.S.C. 701-707, as amended, hereinafter referred to as ``the Act'')
that applies to grants. This part--
(a) Gives regulatory effect to the OMB regulation (subparts A
through F of 2 CFR part 182) for the Environmental Protection Agency's
grants and cooperative agreements; and
(b) Establishes Environmental Protection Agency policies and
procedures for compliance with the Act that are the same as those of
other Federal agencies, in conformance with the requirement in 41
U.S.C. 705 for Governmentwide implementing regulations.
Sec. 1536.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a--
(a) Recipient of an Environmental Protection Agency grant or
cooperative agreement; or
(b) Environmental Protection Agency awarding official.
Sec. 1536.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 182, this part
supplements four sections of the OMB regulation, as shown in the
following table. For each of those sections, you must follow the
policies and procedures in the OMB regulation, as supplemented by this
part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............ Sec. 1536.225............. Whom in the Environmental Protection Agency a
recipient other than an individual must notify
if an employee is convicted for a violation of
a criminal drug statute in the workplace.
(2) 2 CFR 182.300(b)............ Sec. 1536.300............. Whom in the Environmental Protection Agency a
recipient who is an individual must notify if
he or she is convicted of a criminal drug
offense resulting from a violation occurring
during the conduct of any award activity.
(3) 2 CFR 182.500............... Sec. 1536.500............. Who in the Environmental Protection Agency is
authorized to determine that a recipient other
than an individual is in violation of the
requirements of 2 CFR part 182, as implemented
by this part.
(4) 2 CFR 182.505............... Sec. 1536.505............. Who in the Environmental Protection Agency is
authorized to determine that a recipient who is
an individual is in violation of the
requirements of 2 CFR part 182, as implemented
by this part.
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
Environmental Protection Agency policies and procedures are the same as
those in the OMB regulation.
0
218. Revise Sec. 1536.400 to read as follows:
Sec. 1536.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You as the recipient must comply with drug-
free workplace requirements in subpart B (or subpart C, if the
recipient is an individual) of 2 CFR Subtitle B, Chapter XV, Part 1536,
which adopts the Governmentwide implementation (2 CFR part 182) of sec.
5152-5158 of the Drug-Free Workplace Act of 1988 (Pub. L. 100-690,
Title V, Subtitle D; 41 U.S.C. 701-707).
CHAPTER XVI--US INTERNATIONAL DEVELOPMENT FINANCE CORPORATION
PART 1600--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
219. The authority citation for part 1600 continues to read as follows:
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); E.O. 12549,
[[Page 32281]]
51 FR 6370, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3
CFR, 1989 Comp., p. 235.
0
220. Revise Sec. Sec. 1600.10 through 1600.30 to read as follows:
Sec. 1600.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the U.S. International Development Finance Corporation
(DFC) regulations for non-procurement debarment and suspension. This
part gives regulatory effect for DFC to the OMB regulation as
supplemented by this part. This part satisfies the requirements in
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3
CFR, 1986 Comp., p. 189); Executive Order 12689, ``Debarment and
Suspension'' (3 CFR, 1989 Comp., p. 235); and section 2455 of the
Federal Acquisition Streamlining Act of 1994, Public Law 103-355 (31
U.S.C. 6101 note).
Sec. 1600.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see 2
CFR part 180, subpart B, and the definition of ``non-procurement
transaction'' at 2 CFR 180.970);
(b) Respondent in a DFC suspension or debarment action;
(c) DFC suspending or debarring official; and
(d) DFC investment, guarantee, insurance or grant official
authorized to enter into any type of non-procurement transaction that
is a covered transaction.
Sec. 1600.30 What regulations must I follow?
The DFC regulations that you must follow are the regulations
specified in each applicable section of the OMB regulation in subparts
A through I of 2 CFR part 180 as that section is supplemented by the
section in this part with the same section number or by additional
provisions with no corresponding section number. For any section of OMB
regulation in subparts A through I of 2 CFR part 180 that has no
corresponding section in this part, DFC regulations are those in the
OMB regulation.
0
221. Revise Sec. 1600.220 to read as follows:
Sec. 1600.220 What contracts and subcontracts are covered
transactions?
First-tier procurements (i.e., primary contracts) under a covered
nonprocurement transaction are covered transactions. Although the OMB
regulation at 2 CFR 180.220(c) allows a Federal agency to do so (see
also optional lower tier coverage in the figure in appendix A to 2 CFR
part 180), DFC does not extend coverage of nonprocurement suspension
and debarment requirements beyond first-tier procurement under a
covered nonprocurement transaction. Moreover, for purposes of
determining whether a procurement contract is included as a covered
transaction, the threshold in 2 CFR 180.220(b) is increased from
$25,000 to the ``simplified acquisition threshold'' as defined in 48
CFR 2.101.
0
222. Revise Sec. 1600.332 to read as follows:
Sec. 1600.332 What requirements must I pass down to persons at lower
tiers with whom I intend to do business?
You, as a participant, must include a term or condition in lower-
tier transactions that are covered transactions, requiring lower-tier
participants to comply with the OMB regulation in 2 CFR part 180,
subpart C, as supplemented by this subpart.
CHAPTER XVIII--NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
PART 1800--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
223. The authority citation for part 1800 continues to read as follows:
Authority: 51 U.S.C. 20113 (e), Pub. L. 97-258, 96 Stat. 1003
(31 U.S.C. 6301 et seq.), and 2 CFR part 200.
Subparts B and C [Redesignated as Subparts C and D]
0
224. Redesignate subparts B and C as subparts C and D.
0
225. Add a new subpart B to read as follows:
Subpart B--General Provisions
Sec. Sec. 1800.2 and 1800.3 [Redesignated as Sec. Sec. 1800.100 and
1800.101 and Transferred to Subpart B]
0
226. Redesignate Sec. Sec. 1800.2 and 1800.3 as Sec. Sec. 1800.100
and 1800.101 and transfer newly redesignated Sec. Sec. 1800.100 and
1800.101 to subpart B.
0
227. Revise newly redesignated Sec. Sec. 1800.100 and 1800.101 to read
as follows:
Sec. 1800.100 Purpose.
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through F and applicable appendices of 2 CFR
part 200, as supplemented by this part, as the NASA policies and
procedures for uniform administrative requirements, cost principles,
and audit requirements for Federal awards. This part gives regulatory
effect to the OMB regulation for Federal awards issued by NASA as
supplemented by this part. See 2 CFR 200.110(a) regarding the process
for amending 2 CFR part 200.
Sec. 1800.101 Applicability.
(a) This part establishes policies and procedures for grants and
cooperative agreements awarded by NASA to non-Federal entities, for-
profit organization, foreign organizations, and foreign public entities
as allowed by 2 CFR 200.101. For supplemental regulation, NASA has
adopted section numbers that correspond to those in the OMB regulation
in 2 CFR part 200.
(1) Non-Federal entities must follow the policies and procedures
appearing in subparts A through F and applicable appendices of 2 CFR
part 200 and as supplemented by this part.
(2) Foreign organizations and foreign public entities must follow
the policies and procedures appearing in subparts A through E and
applicable appendices of 2 CFR part 200 and as supplemented by this
part.
(3) U.S. and foreign for-profit organizations must follow the
policies and procedures appearing in subparts A through D and
applicable appendices of 2 CFR part 200 and as supplemented by this
part. The Federal Acquisition Regulation (FAR) at 48 CFR parts 30 and
31, takes precedence over the cost principles in 2 CFR part 200,
subpart E, for Federal awards to U.S. and foreign for-profit
organizations.
(b) Throughout this part, the term ``award'' refers to both
``grant'' and ``cooperative agreement'' unless otherwise indicated.
(c)(1) In general, research with foreign organizations and foreign
public entities will not be conducted through grants or cooperative
agreements, but instead will be accomplished on a no-exchange-of-funds
basis. In these cases, NASA enters into agreements undertaking projects
of international scientific collaboration. NASA's policy on performing
research with foreign organizations and foreign public entities on a
no-exchange-of-funds basis is set forth at NASA FAR Supplement (NFS) at
48 CFR 1835.016-70 and 1835.016-72. In rare instances, NASA may enter
into an international agreement under which funds will be transferred
to a foreign recipient.
(2) Grants or cooperative agreements awarded to foreign
organizations and foreign public entities are made on an
[[Page 32282]]
exceptional basis only. Awards require the prior approval of the
Headquarters Office of International and Interagency Relations and the
Headquarters Office of the General Counsel. Requests to issue awards to
foreign organizations are to be coordinated through the Office of
Procurement, Procurement and Grants Policy Division.
0
228. Revise part 1880 to read as follows:
PART 1880--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
1880.10 What does this part do?
1880.20 Does this part apply to me?
1880.30 What policies and procedures must I follow?
Subpart A--General
1880.137 Who in NASA may grant an exception to let an excluded
person participate in a covered transaction?
Subpart B--Covered Transactions
1880.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
1880.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
1880.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Subparts E-J [Reserved]
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 42 U.S.C. 2473(c)(1); E.O. 12549, 51 FR 6370, 3
CFR, 1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp.,
p. 235.
Sec. 1880.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the National Aeronautics and Space Administration
(NASA) policies and procedures for nonprocurement debarment and
suspension. This part gives regulatory effect to the OMB regulation for
Federal awards issued by NASA, as supplemented by this part. This part
satisfies the requirements in section 3 of Executive Order 12549,
``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189), Executive
Order 12689, ``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235),
and 31 U.S.C. 6101 note (section 2455, Pub. L. 103-355, 108 Stat.
3327).
Sec. 1880.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in a NASA suspension or debarment action;
(c) NASA debarment or suspension official; or
(d) NASA grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 1880.30 What policies and procedures must I follow?
The NASA policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as that section
is supplemented by the section in this part with the same section
number. The contracts that are covered transactions, for example, are
specified by 2 CFR 180.220 as supplemented by Sec. 1880.220. For any
section of OMB regulation in subparts A through I of 2 CFR part 180
that has no corresponding section in this part, NASA policies and
procedures are those in the OMB regulation.
Subpart A--General
Sec. 1880.137 Who in NASA may grant an exception to let an excluded
person participate in a covered transaction?
The Chief Acquisition Officer has the authority to grant an
exception to let an excluded person participate in a covered
transaction, as provided in the OMB regulation at 2 CFR 180.135.
Subpart B--Covered Transactions
Sec. 1880.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
NASA extends coverage of nonprocurement suspension and debarment
requirements beyond first-tier procurement contracts under a covered
nonprocurement action, to all lower tier subcontracts, at all dollar
values, consistent with OMB regulation at 2 CFR 180.220(c) and the
figure in the appendix at 2 CFR part 180. NASA does not permit
subcontracting to suspended or debarred entities at any tier, at any
dollar amount.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 1880.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 1880.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
Subparts E-J [Reserved]
PART 1882--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
229. The authority citation for part 1882 continues to read as follows:
Authority: 41 U.S.C. 701 et seq.; 51 U.S.C. 20113(e).
0
230. Revise Sec. 1882.5 to read as follows:
Sec. 1882.5 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through F of 2 CFR part 182, as supplemented
by this part, as the National Aeronautics and Space Administration
(NASA) policies and procedures for implementing the portion of the
Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as amended,
hereinafter referred to as ``the Act'') that applies to grants and
cooperative agreements. This part gives regulatory effect to the OMB
regulation for Federal awards issued by NASA. Further, it supplements
the OMB regulation with NASA-specific regulation.
CHAPTER XIX--U.S. AGENCY FOR GLOBAL MEDIA
0
231. Revise part 1900 to read as follows:
[[Page 32283]]
PART 1900--THE UNIFORM ADMINISTRATIVE REQUIREMENTS, COST
PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
1900.1 Adoption of 2 CFR part 200.
1900.2 [Reserved]
Authority: 5 U.S.C. 301; 2 CFR part 200.
Sec. 1900.1 Adoption of 2 CFR part 200.
The U.S. Agency for Global Media adopts the Office of Management
and Budget's (OMB) regulation in 2 CFR part 200. This part gives
regulatory effect to the OMB regulation for Federal awards made by the
U.S. Agency for Global Media. See 2 CFR 200.110(a) regarding the
process for amending 2 CFR part 200. The U.S. Agency for Global Media
may amend its adoption of 2 CFR part 200 if agency-specific additions,
clarifications, or exceptions to the Government-wide policies and
procedures are required by Federal statute or are approved by OMB. See
2 CFR 200.106. Any supplements to the OMB regulation as needed for the
U.S. Agency for Global Media, including additions or clarifications,
are set forth in this chapter.
Sec. 1900.2 [Reserved]
CHAPTER XX--UNITED STATES NUCLEAR REGULATORY COMMISSION
0
232. Revise part 2000 to read as follows:
PART 2000--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
Subpart A--General
2000.10 What does this part do?
2000.20 Does this part apply to me?
2000.30 What policies and procedures must I follow?
2000.135 Who in the Nuclear Regulatory Commission may grant an
exception to let an excluded person participate in a covered
transaction?
Subpart B--Covered Transactions
2000.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
2000.330 What method must be used to pass requirements down to
participants at lower tiers?
Subparts D through H [Reserved]
Subpart I--Definitions
2000.930 Debarring official.
2000.1010 Suspending official.
Authority: 5 U.S.C. 301; sec. 2455, Pub. L. 103-355, 108 Stat.
3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR, 1986
Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p. 235.
Subpart A--General
Sec. 2000.10 What does this part do?
This part promulgates a regulation adopting the Office of
Management and Budget (OMB) regulation in subparts A through I of 2 CFR
part 180, establishing the United States Nuclear Regulatory Commission
(NRC) policies and procedures for nonprocurement debarment and
suspension. NRC thereby gives regulatory effect to the OMB regulation.
It also supplements the OMB regulation by identifying NRC implementing
officials and identifying how to pass these requirements through to
other entities.
Sec. 2000.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to:
(a) Participant or principal in a ``covered transaction'';
(b) Respondent in an NRC nonprocurement suspension or debarment
action;
(c) NRC debarment or suspension official; or
(d) NRC grants officer, agreements officer, or other official
authorized to enter into a covered nonprocurement transaction.
Sec. 2000.30 What policies and procedures must I follow?
(a) The NRC policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, and those in this
part. The NRC has closely tracked OMB's numbering scheme. For example,
the contracts under a nonprocurement transaction that are covered
transactions that are in 2 CFR 180.220 are supplemented by Sec.
2000.220.
(b) For any section of OMB regulation in subparts A through I of 2
CFR part 180 that has no corresponding section in this part, NRC
requirements are those in the OMB regulation at 2 CFR part 180.
Sec. 2000.135 Who in the Nuclear Regulatory Commission may grant an
exception to let an excluded person participate in a covered
transaction?
The Director, Office of Administration or another official
designated by the Director, has the authority to grant a written
exception to let an excluded person participate in a covered
transaction, as provided in regulation at 2 CFR 180.135. The Director
or other official designated by the Director shall explain the
reason(s) for deviating from the Governmentwide policy.
Subpart B--Covered Transactions
Sec. 2000.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
The NRC nonprocurement suspension and debarment requirements apply
only to first-tier procurement contracts under a covered nonprocurement
transaction.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 2000.330 What method must be used to pass requirements down to
participants at lower tiers?
A participant in a covered transaction must include a term or
condition in any lower-tier covered transaction to require the
participant of that transaction to--
(a) Comply with subpart C of 2 CFR part 180; and
(b) Include a similar term or condition in any covered transaction
into which it enters at the next lower tier.
Subparts D through H [Reserved]
Subpart I--Definitions
Sec. 2000.930 Debarring official.
The debarring official for the United States Nuclear Regulatory
Commission is the Director, Office of Administration.
Sec. 2000.1010 Suspending official.
The suspending official for the United States Nuclear Regulatory
Commission is the Director, Office of Administration.
0
233. Add part 2001 to read as follows:
PART 2001--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
2001.5 Adoption of 2 CFR part 200.
2001.6 [Reserved]
Authority: 5 U.S.C. 301; sec. 2455, Pub. L. 103-355, 108 Stat.
3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR, 1986
Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p. 235.
Sec. 2001.5 Adoption of 2 CFR part 200.
The United States Nuclear Regulatory Commission adopts the Office
of Management and Budget's (OMB) regulation in 2 CFR part 200. This
part gives regulatory effect to the OMB regulation for Federal awards
made by the United States Nuclear Regulatory Commission. See 2 CFR
200.110(a) regarding the process for amending 2 CFR part 200. The
United States Nuclear Regulatory Commission may amend its
[[Page 32284]]
adoption of 2 CFR part 200 if agency-specific additions,
clarifications, or exceptions to the Government-wide policies and
procedures are required by Federal statute or are approved by OMB. See
2 CFR 200.106. Any supplements to the OMB regulation as needed for the
United States Nuclear Regulatory Commission, including additions or
clarifications, are set forth in this chapter.
Sec. 2001.6 [Reserved]
CHAPTER XXII--CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
0
234. Revise part 2200 to read as follows:
PART 2200--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
2200.10 What does this part do?
2200.20 Does this part apply to me?
2200.30 What policies and procedures must I follow?
2200.137 Who in the Corporation for National and Community Service
may grant an exception to let an excluded person participate in a
covered transaction?
2200.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
2200.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
2200.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Authority: 31 U.S.C. 6101 note; 42 U.S.C. 12651c(c); E.O.
12549, 51 FR 6370, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 54 FR
34131, 3 CFR, 1989 Comp., p. 235.
Sec. 2200.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Corporation for National and Community Service
policies and procedures for nonprocurement debarment and suspension.
This part gives regulatory effect for the Corporation for National and
Community Service to the OMB regulation for Federal awards issued by
the Corporation for National Community Service, as supplemented by this
part. This part satisfies the requirements in section 3 of Executive
Order 12549, ``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189),
Executive Order 12689, ``Debarment and Suspension'' (3 CFR, 1989 Comp.,
p. 235), and 31 U.S.C. 6101 note (section 2455, Pub. L. 103-355, 108
Stat. 3327).
Sec. 2200.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in a Corporation for National and Community Service
suspension or debarment action;
(c) Corporation for National and Community Service debarment or
suspension official; or
(d) Corporation for National and Community Service grants officer,
agreements officer, or other official authorized to enter into any type
of nonprocurement transaction that is a covered transaction.
Sec. 2200.30 What policies and procedures must I follow?
The Corporation for National and Community Service policies and
procedures that you must follow are the policies and procedures
specified in each applicable section of the OMB regulation in subparts
A through I of 2 CFR part 180, as that section is supplemented by the
section in this part with the same section number. The contracts that
are covered transactions, for example, are specified by 2 CFR 180.220
as supplemented by Sec. 2200.220. For any section of OMB regulation in
subparts A through I of 2 CFR part 180 that has no corresponding
section in this part, Corporation for National and Community Service
policies and procedures are those in the OMB regulation.
Sec. 2200.137 Who in the Corporation for National and Community
Service may grant an exception to let an excluded person participate in
a covered transaction?
The Chief Executive Officer (or another official designated by the
Chief Executive Officer) has the authority to grant an exception to let
an excluded person participate in a covered transaction, as provided in
the OMB regulation at 2 CFR 180.135.
Sec. 2200.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180), Corporation for National and Community
Service does not extend coverage of nonprocurement suspension and
debarment requirements beyond first-tier procurement contracts under a
covered nonprocurement transaction.
Sec. 2200.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180.
Sec. 2200.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you as an agency official must include a term or condition in
the transaction that requires the participant's compliance with subpart
C of 2 CFR part 180, and requires the participant to include a similar
term or condition in lower-tier covered transactions.
PART 2205--IMPLEMENTATION OF AND EXEMPTIONS TO 2 CFR
0
235. The authority citation for part 2205 continues to read as follows:
Authority: 42 U.S.C. 12571(d), 12571(e)(2)(B), 12581(l),
12581a(a), 12616(c)(2), 12651c(c), 12651d(h), 12651g(b), 12653(a),
12653(h), 12653o(a), and 12657(a); 2 CFR part 200; 45 CFR 2521.95,
and 2540.110.
0
236. Revise Sec. 2205.100 to read as follows:
Sec. 2205.100 Purpose.
The Corporation for National and Community Service adopts the
Office of Management and Budget's (OMB) regulation in 2 CFR part 200,
except as specified in this part. This part gives regulatory effect to
the OMB regulation for Federal awards issued by the Corporation for
National and Community Service and supplements the regulation for
recipients of awards from the Corporation. See 2 CFR 200.110(a)
regarding the process for amending 2 CFR part 200.
Sec. 2205.332 [Redesignated as Sec. 2205.333]
0
237. Redesignate Sec. 2205.332 as Sec. 2205.333.
PART 2245--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
238. The authority citation for part 2245 continues to read as follows:
Authority: 41 U.S.C. 701-707; 42 U.S.C. 12644, 12651c(c).
0
239. Revise Sec. Sec. 2245.10 through 2245.30 to read as follows:
[[Page 32285]]
Sec. 2245.10 What does this part do?
This part requires that the award and administration of the
Corporation for National and Community Service's (Corporation) grants
and cooperative agreements comply with Office of Management and Budget
(OMB) regulation implementing the portion of the Drug-Free Workplace
Act of 1988 (41 U.S.C. 701-707, as amended, hereinafter referred to as
``the Act'') that applies to grants. This part--
(a) Gives regulatory effect to the OMB regulation (subparts A
through F of 2 CFR part 182) for the Corporation's grants and
cooperative agreements; and
(b) Establishes the Corporation's policies and procedures for
compliance with the Act that are the same as those of other Federal
agencies, in conformance with the requirement in 41 U.S.C. 705 for
Government-wide implementing regulations.
Sec. 2245.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a--
(a) Recipient of a Corporation grant or cooperative agreement; or
(b) A Corporation awarding official.
Sec. 2245.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 182, this part
supplements four sections of the OMB regulation, as shown in the
following table. For each of those sections, you must follow the
policies and procedures in the OMB regulation, as supplemented by this
part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............... Sec. 2245.225............ Whom in the Corporation a recipient other than
an individual must notify if an employee is
convicted for a violation of a criminal drug
statute in the workplace.
(2) 2 CFR 182.300(b)............... Sec. 2245.300............ Whom in the Corporation a recipient who is an
individual must notify if he or she is
convicted of a criminal drug offense
resulting from a violation occurring during
the conduct of any award activity.
(3) 2 CFR 182.500.................. Sec. 2245.500............ Who in the Corporation is authorized to
determine that a recipient other than an
individual is in violation of the
requirements of 2 CFR part 182, as
implemented by this part.
(4) 2 CFR 182.505.................. Sec. 2245.505............ Who in the Corporation is authorized to
determine that a recipient who is an
individual is in violation of the
requirements of 2 CFR part 182, as
implemented by this part.
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
the Corporation's policies and procedures are the same as those in the
OMB regulation.
0
240. Revise Sec. 2245.400 to read as follows:
Sec. 2245.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must obtain
each recipient's agreement, as a condition of the award, to comply with
the requirements in subpart B (or subpart C, if the recipient is an
individual) of this part, which adopts the Government-wide
implementation (2 CFR part 182) of sec. 5152-5158 of the Drug-Free
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C.
701-707).
CHAPTER XXIII--SOCIAL SECURITY ADMINISTRATION
0
241. Revise part 2300 to read as follows:
PART 2300--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
2300.10 Applicable regulations.
2300.11 [Reserved]
Authority: 5 U.S.C. 301; 2 CFR part 200.
Sec. 2300.10 Applicable regulations.
The Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards set forth in 2 CFR part 200 shall apply
to the Social Security Administration. This part gives regulatory
effect to the Office of Management and Budget regulation for Federal
awards issued by the Social Security Administration. See 2 CFR
200.110(a) regarding the process for amending 2 CFR part 200.
Sec. 2300.11 [Reserved]
0
242. Revise part 2336 to read as follows:
PART 2336--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
2336.10 What does this part do?
2336.20 Does this part apply to me?
2336.30 What policies and procedures must I follow?
Subpart A--General
2336.137 Who in the SSA may grant an exception to let an excluded
person participate in a covered transaction?
Subpart B--Covered Transactions
2336.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
2336.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
2336.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Subparts E-J [Reserved]
Authority: 42 U.S.C. 902(a)(5); sec. 2455, Pub. L. 103-355, 108
Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR,
1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p.
235.
Sec. 2336.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Social Security Administration (SSA) policies and
[[Page 32286]]
procedures for nonprocurement debarment and suspension. This part
satisfies the requirements in section 3 of Executive Order 12549,
``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189), Executive
Order 12689, ``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235),
and 31 U.S.C. 6101 note (section 2455, Pub. L. 103-355, 108 Stat.
3327).
Sec. 2336.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in an SSA suspension or debarment action;
(c) SSA debarment or suspension official; or
(d) SSA grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 2336.30 What policies and procedures must I follow?
The SSA policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as supplemented
by the section in this part with the same section number. The contracts
that are covered transactions, for example, are specified by 2 CFR
180.220, as supplemented by Sec. 2336.220. For any section of OMB
regulation in subparts A through I of 2 CFR part 180 that has no
corresponding section in this part, SSA policies and procedures are
those in the OMB regulation.
Subpart A--General
Sec. 2336.137 Who in the SSA may grant an exception to let an
excluded person participate in a covered transaction?
(a) Within the Social Security Administration, the Commissioner or
the designated agency debarment official may grant an exception
permitting an excluded person to participate in a particular covered
transaction. If the Commissioner or the designated agency debarment
official grants an exception, the exception must be in writing and
state the reason(s) for deviating from the OMB regulation at 2 CFR
180.135.
(b) An exception granted by one agency for an excluded person does
not extend to the covered transactions of another agency.
Subpart B--Covered Transactions
Sec. 2336.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see option lower tier coverage in the figure in
appendix A to 2 CFR part 180), SSA does not extend coverage of
nonprocurement suspension and debarment requirements beyond first-tier
procurement contracts under a covered nonprocurement transaction.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 2336.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 2336.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
Subparts E-J [Reserved]
PART 2339--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
243. The authority citation for part 2339 continues to read as follows:
Authority: 41 U.S.C. 701-707.
0
244. Revise Sec. Sec. 2339.10 through 2339.30 to read as follows:
Sec. 2339.10 What does this part do?
This part requires that the award and administration of Social
Security Administration (SSA) grants and cooperative agreements comply
with Office of Management and Budget (OMB) regulation implementing the
portion of the Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as
amended, hereinafter referred to as ``the Act'') that applies to
grants. This part--
(a) Gives regulatory effect to the OMB regulation (subparts A
through F of 2 CFR part 182) for SSA's grants and cooperative
agreements; and
(b) Establishes SSA's policies and procedures for compliance with
the Act that are the same as those of other Federal agencies, in
conformance with the requirement in 41 U.S.C. 705 for Government-wide
implementing regulations.
Sec. 2339.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are--
(a) A recipient of an SSA grant or cooperative agreement; or
(b) An SSA awarding official.
Sec. 2339.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 182, this part
supplements four sections of the OMB regulation, as shown in the
following table.
----------------------------------------------------------------------------------------------------------------
Section of OMB regulation in 2 Section in this part where
CFR supplemented, 2 CFR What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 182.225(a).................. Sec. 2339.225............. Who in SSA a recipient other than an individual
must notify if an employee is convicted for a
violation of a criminal drug statute in the
workplace.
(2) 182.300(b).................. Sec. 2339.300............. Who in SSA a recipient who is an individual must
notify if he or she is convicted of a criminal
drug offense resulting from a violation
occurring during the conduct of any award
activity.
[[Page 32287]]
(3) 182.500..................... Sec. 2339.500............. Who in SSA is authorized to determine that a
recipient other than an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
(4) 182.505..................... Sec. 2339.505............. Who in SSA is authorized to determine that a
recipient who is an individual is in violation
of the requirements of 2 CFR part 182, as
implemented by this part.
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. Our policies and procedures are the same as those in the
OMB regulation for any section not included in the table in paragraph
(b) of this section.
0
245. Revise Sec. 2339.400 to read as follows:
Sec. 2339.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
You must include the following term or condition in the award:
Drug-free workplace. You, as the recipient, must comply with drug-
free workplace requirements in subpart B, which adopts the Government-
wide implementation (2 CFR part 182) of sec. 5152-5158 of the Drug-Free
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C.
701-707).
CHAPTER XXIV--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
0
246. Revise part 2400 to read as follows:
PART 2400--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
2400.10 Applicable regulations.
2400.11 [Reserved]
Authority: 42 U.S.C. 3535(d); 2 CFR part 200.
Sec. 2400.10 Applicable regulations.
Unless excepted under 24 CFR subtitle B, chapters I through IX, the
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards, set forth in 2 CFR part 200, shall
apply to Federal awards made by the Department of Housing and Urban
Development to non-Federal entities. This part gives regulatory effect
to the Office of Management and Budget (OMB) regulation for Federal
awards issued by the Department of Housing and Urban Development. See 2
CFR 200.110(a) regarding the process for amending 2 CFR part 200.
Sec. 2400.11 [Reserved]
PART 2424--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
247. The authority citation for part 2424 continues to read as follows:
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O.
12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p.
235.
0
248. Revise Sec. 2424.10 to read as follows:
Sec. 2424.10 What does this part do?
In this part, the Department of Housing and Urban Development (HUD)
implements, as HUD policies, procedures, and requirements for
nonprocurement debarment and suspension, the Office of Management and
Budget (OMB) regulation in subparts A through I of 2 CFR part 180, as
supplemented by this part. This adoption thereby gives regulatory
effect for HUD to the OMB regulation for Federal awards issued by HUD,
as supplemented by this part. This part satisfies the requirements in
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3
CFR, 1986 Comp., p. 189), Executive Order 12689, ``Debarment and
Suspension'' (3 CFR, 1989 Comp., p. 235), and 31 U.S.C. 6101 note
(section 2455, Pub. L. 103-355, 108 Stat. 3327).
0
249. Revise Sec. 2424.30 to read as follows:
Sec. 2424.30 What policies and procedures must I follow?
The HUD policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as that section
is supplemented by the section in this part with the same section
number. The contracts that are covered transactions, for example, are
specified by 2 CFR 180.220, as supplemented by Sec. 2424.220. For any
section of OMB regulation in subparts A through I of 2 CFR part 180
that has no corresponding section in this part, HUD policies and
procedures are those in the OMB regulation.
0
250. Revise Sec. 2424.220 to read as follows:
Sec. 2424.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
In addition to the contracts covered under 2 CFR 180.220(b), this
part applies to any contract, regardless of tier, that is awarded by a
contractor, subcontractor, supplier, consultant, or its agent or
representative in any transaction, if the contract is to be funded or
provided by HUD under a covered nonprocurement transaction and the
amount of the contract is expected to equal or exceed $25,000. This
extends the coverage of the HUD nonprocurement suspension and debarment
requirements to all lower tiers of subcontracts under covered
nonprocurement transactions, as permitted under the OMB regulation at 2
CFR 180.220(c) (see optional lower-tier coverage in the figure in
appendix A to 2 CFR part 180).
0
251. Revise Sec. 2424.332 to read as follows:
Sec. 2424.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
To communicate the requirements to lower-tier participants, you
must include a term or condition in the transaction requiring
compliance with subpart C of 2 CFR part 180, as supplemented by this
subpart.
0
252. Revise Sec. 2424.437 to read as follows:
Sec. 2424.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant to: comply with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and include a similar term
or condition in lower-tier covered transactions.
PART 2429--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
253. The authority citation for part 2429 continues to read as follows:
[[Page 32288]]
Authority: 41 U.S.C. 701-707; 42 U.S.C. 3535(d).
0
254. Revise Sec. Sec. 2429.10 through 2429.30 to read as follows:
Sec. 2429.10 What does this part do?
This part requires that the award and administration of Department
of Housing and Urban Development (HUD) grants and cooperative
agreements comply with Office of Management and Budget (OMB) regulation
implementing the portion of the Drug-Free Workplace Act of 1988 (41
U.S.C. 701-707) (referred to as the Act in this part) that applies to
grants. This part:
(a) Gives regulatory effect to the OMB regulation (subparts A
through F of 2 CFR part 182) for HUD grants and cooperative agreements;
and
(b) Establishes HUD policies and procedures for compliance with the
Act that are the same as those of other Federal agencies, in
conformance with the requirement in 41 U.S.C. 705 for Governmentwide
implementing regulations.
Sec. 2429.20 Does this part apply to me?
This part, and through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a:
(a) Recipient of a HUD grant or cooperative agreement; or
(b) HUD awarding official.
Sec. 2429.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 182, this part
supplements four sections of the OMB regulation, as shown in the
following table. For each of those sections, you must follow the
policies and procedures of the OMB regulation, as supplemented by this
part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............ Sec. 2429.225............. Whom in HUD must a recipient other than an
individual notify if an employee is convicted
for a violation of a criminal drug statute in
the workplace?
(2) 2 CFR 182.300(b)............ Sec. 2429.300............. Whom in HUD must a recipient who is an
individual notify if he or she is convicted of
a criminal drug offense resulting from a
violation occurring during the conduct of any
award activity?
(3) 2 CFR 182.500............... Sec. 2429.500............. Who in HUD is authorized to determine that a
recipient other than an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part?
(4) 2 CFR 182.505............... Sec. 2429.505............. Who in HUD is authorized to determine that a
recipient who is an individual is in violation
of the requirements of 2 CFR part 182, as
implemented by this part?
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
HUD policies and procedures are the same as those in the OMB
regulation.
0
255. Revise Sec. 2429.400 to read as follows:
Sec. 2429.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You as the recipient must comply with drug-
free workplace requirements in subpart B (or subpart C, if the
recipient is an individual) of part 2429, which implements the
governmentwide implementation (2 CFR part 182) of sections 5152-5158 of
the Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle
D; 41 U.S.C. 701-707).
CHAPTER XXV--NATIONAL SCIENCE FOUNDATION
0
256. Revise part 2500 to read as follows:
PART 2500--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
2500.10 Adoption of 2 CFR part 200.
2500.11 [Reserved]
Authority: 42 U.S.C. 1861, et seq.; 2 CFR part 200.
Sec. 2500.10 Adoption of 2 CFR part 200.
(a) Under the authority cited for this part, the National Science
Foundation (NSF) has formally adopted 2 CFR part 200. This part adopts
the Office of Management and Budget (OMB) regulation for Federal awards
issued by the NSF. See 2 CFR 200.110(a) regarding the process for
amending 2 CFR part 200.The Foundation's implementation document, the
NSF Proposal & Award Policies & Procedures Guide, may be found at:
www.nsf.gov/publications/pub_summ.jsp?ods_key=papp.
(b) NSF's implementation includes the following deviation from the
Uniform Grants Regulation:
(1) Award Cash Management System. NSF is continuing collection of
award financial information through the implementation of the Award
Cash Management Service (ACM$) and the Program Income Worksheet. ACM$
replaced the NSF Federal Financial Report (FFR) and the NSF FastLane
Cash Request process with a single web-based user interface. ACM$ is
used to collect award level detail financial information at the time of
each payment request submitted by the awardee institution. The Program
Income Worksheet is used to collect program income financial
information from awardee institutions on an annual basis. ACM$ and the
Program Income Worksheet utilize approved Government-wide data elements
from the FFR for the collection of financial information as prescribed
in 2 CFR 200.328. The requirement for Federal agencies to use the FFR
data elements for cash management and financial reporting was publicly
announced in Federal Register on August 13, 2008.
(2) [Reserved]
Sec. 2500.11 [Reserved]
0
257. Revise and republish part 2520 to read as follows:
PART 2520--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
2520.10 What does this part do?
2520.20 Does this part apply to me?
2520.30 What policies and procedures must I follow?
[[Page 32289]]
Subpart A--General
2520.137 Who in NSF may grant an exception to let an excluded person
participate in a covered transaction?
Subpart B--Covered Transactions
2520.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
2520.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
2520.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Subparts E-I [Reserved]
Authority: 42 U.S.C. 1870(a); sec. 2455, Pub. L. 103-355, 108
Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR,
1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p.
235.
Sec. 2520.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the National Science Foundation (NSF) policies and
procedures for nonprocurement debarment and suspension. This part gives
regulatory effect for NSF to the OMB regulation as supplemented by this
part. This part satisfies the requirements in section 3 of Executive
Order 12549, ``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189),
Executive Order 12689, ``Debarment and Suspension'' (3 CFR, 1989 Comp.,
p. 235), and 31 U.S.C. 6101 note (section 2455, Pub. L. 103-355, 108
Stat. 3327).
Sec. 2520.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970).
(b) Respondent in an NSF suspension or debarment action.
(c) NSF debarment or suspension official.
(d) NSF grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 2520.30 What policies and procedures must I follow?
The NSF policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as that section
is supplemented by the section in this part with the same section
number. The contracts that are covered transactions, for example, are
specified by 2 CFR 180.220 as supplemented by Sec. 2520.220. For any
section of OMB regulation in subparts A through I of 2 CFR part 180
that has no corresponding section in this part, NSF policies and
procedures are those in the OMB regulation.
Subpart A--General
Sec. 2520.137 Who in NSF may grant an exception to let an excluded
person participate in a covered transaction?
The NSF Director and the Deputy Director have the authority to
grant an exception to let an excluded person participate in a covered
transaction.
Subpart B--Covered Transactions
Sec. 2520.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180), NSF does not extend coverage of
nonprocurement suspension and debarment requirements beyond first-tier
procurement contracts under a covered nonprocurement transaction.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 2520.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 2520.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
Subparts E-I [Reserved]
CHAPTER XXVI--NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
0
258. Revise part 2600 to read as follows:
PART 2600--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
2600.100 Adoption of 2 CFR part 200.
2600.101 Indirect costs exception to 2 CFR 200.414.
2600.102 Additional NARA grant administration policies.
Authority: 5 U.S.C. 301; 44 U.S.C. 2103-04; 44 U.S.C. 2501-
2506; 2 CFR part 200.
Sec. 2600.100 Adoption of 2 CFR part 200.
The National Archives and Records Administration (NARA), through
its National Historical Publications and Records Commission (NHPRC),
adopts the Office of Management and Budget (OMB) regulation in 2 CFR
part 200, with the additions and exceptions included in this part. This
part gives regulatory effect to the OMB regulation for Federal awards
issued by NARA. See 2 CFR 200.110(a) regarding the process for amending
2 CFR part 200.
Sec. 2600.101 Indirect costs exception to 2 CFR 200.414.
As approved by the Archivist of the United States, the National
Archives does not permit grant recipients to use allocated funds from
NARA or NHPRC for indirect costs. Grant recipients may use cost sharing
to cover indirect costs instead. NARA's policies on indirect costs are
located at www.archives.gov/nhprc, and are included in grant
opportunity announcements.
Sec. 2600.102 Additional NARA grant administration policies.
Grant recipients must also follow NARA grant administration
policies and procedures set out in 36 CFR parts 1202, 1206, 1208, 1211,
and 1212.
CHAPTER XXVII--SMALL BUSINESS ADMINISTRATION
PART 2700--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
259. The authority citation for part 2700 continues to read as follows:
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); E.O. 12549
[[Page 32290]]
(3 CFR, 1986 Comp., p. 189); E.O. 12689 (3 CFR, 1989, 1986 Comp., p.
235); 15 U.S.C. 634(b)(6).
0
260. Revise Sec. Sec. 2700.10 through 2700.30 to read as follows:
Sec. 2700.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Small Business Administration (SBA) policies and
procedures for nonprocurement debarment and suspension. This part gives
regulatory effect for SBA to the OMB regulation as supplemented by this
part. This part satisfies the requirements in section 3 of Executive
Order 12549, ``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189);
Executive Order 12689, ``Debarment and Suspension'' (3 CFR, 1989 Comp.,
p. 235); and section 2455 of the Federal Acquisition Streamlining Act
of 1994, Public Law 103-355 (31 U.S.C. 6101 note).
Sec. 2700.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in an SBA suspension or debarment action;
(c) SBA debarment or suspension official; or
(d) SBA grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 2700.30 What policies and procedures must I follow?
The SBA policies and procedures you must follow are the policies
and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as that section
is supplemented by the section in this part with the same section
number. The contracts that are covered transactions, for example, are
specified by 2 CFR 180.220 as supplemented by Sec. 2700.220. For any
section of OMB regulation in subparts A through I of 2 CFR part 180
that has no corresponding section in this part, SBA policies and
procedures are those in the OMB regulation.
0
261. Revise subparts B through D to read as follows:
Subpart B--Covered Transactions
Sec. 2700.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
In addition to the contracts covered under 2 CFR 180.22(b), this
part applies to any contract, regardless of tier, that is awarded by a
contractor, subcontractor, supplier, consultant, or its agent or
representative in any transaction, if the contract is to be funded or
provided by the SBA under a covered nonprocurement transaction and the
amount of the contract is expected to equal or exceed $25,000. This
extends the coverage of the SBA nonprocurement suspension and debarment
requirements to all lower tiers of subcontracts under covered
nonprocurement transactions, as permitted under the OMB regulation at 2
CFR 180.200(c) (see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180).
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 2700.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You, as a participant, must include a term or condition in lower-
tier transactions requiring lower-tier participants to comply with
subpart C of 2 CFR part 180, as supplemented by this part.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 2700.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
PART 2701--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
262. The authority citation for part 2701 continues to read as follows:
Authority: 15 U.S.C. 634(b)(6), 2 CFR part 200.
0
263. Revise Sec. 2701.1 to read as follows:
Sec. 2701.1 Adoption of 2 CFR part 200.
The U.S. Small Business Administration (SBA) adopts the Office of
Management and Budget (OMB) regulation in 2 CFR part 200, with the
additions and exceptions included in this part. This part gives
regulatory effect to the OMB regulation for Federal awards issued by
the Small Business Administration. See 2 CFR 200.110(a) regarding the
process for amending 2 CFR part 200.
0
264. Revise the heading for Sec. 2701.600 to read as follows:
Sec. 2701.600 Other program-specific regulations.
CHAPTER XXVIII--DEPARTMENT OF JUSTICE
PART 2800--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS BY THE DEPARTMENT OF
JUSTICE
0
265. The authority citation for part 2800 continues to read as follows:
Authority: 5 U.S.C. 301; 28 U.S.C. 509; 28 U.S.C. 530C(a)(4);
42 U.S.C. 3789; 2 CFR part 200.
Sec. 2800.101 [Redesignated as Sec. 2800.10]
0
266. Redesignate Sec. 2800.101 as Sec. 2800.10.
0
267. Revise newly redesignated Sec. 2800.10 to read as follows:
Sec. 2800.10 Adoption of 2 CFR part 200.
The Department of Justice adopts the Office of Management and
Budget (OMB) regulation in 2 CFR part 200, except as otherwise may be
provided by this part. This part gives regulatory effect to the OMB
regulation for Federal awards issued by the Department of Justice. See
2 CFR 200.110(a) regarding the process for amending 2 CFR part 200.
Except for the Department of Justice's adoption of 2 CFR part 200, and
unless expressly provided otherwise, any reference in this part to any
provision of law not in this part shall be understood to constitute a
general reference and thus to include any subsequent changes to the
provision.
0
268. Revise part 2867 to read as follows:
PART 2867--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
2867.10 What does this part do?
2867.20 To whom does this part apply?
[[Page 32291]]
2867.30 What policies and procedures must be followed?
Subpart A--General
2867.137 Who in the Department of Justice may grant an exception to
let an excluded person participate in a covered transaction?
Subpart B--Covered Transactions
2867.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
2867.332 What method must a participant use to pass requirements
down to participants at lower tiers with whom the participant
intends to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
2867.437 What method must be used to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
Subparts E-J [Reserved]
Authority: 5 U.S.C. 301; 28 U.S.C. 509, 510, 515-519; sec.
2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E.O.
12549, 51 FR 6370, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 54 FR
34131, 3 CFR, 1989 Comp., p. 235.
Sec. 2867.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Department of Justice policies and procedures for
nonprocurement debarment and suspension. This part gives regulatory
effect for the Department of Justice to the OMB regulation for the
Department of Justice, as supplemented by this part. This part
satisfies the requirements in section 3 of Executive Order 12549,
``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189), Executive
Order 12689, ``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235),
and 31 U.S.C. 6101 note (section 2455, Pub. L. 103-355, 108 Stat.
3327).
Sec. 2867.20 To whom does this part apply?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to any--
(a) Participant or principal in a ``covered transaction'' (sees
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970 (as supplemented by subpart B of this
part));
(b) Respondent in a Department of Justice suspension or debarment
action;
(c) Department of Justice debarment or suspension official; or
(d) Department of Justice grants officer, agreements officer, or
other official authorized to enter into any type of nonprocurement
transaction that is a covered transaction.
Sec. 2867.30 What policies and procedures must be followed?
The Department of Justice policies and procedures that must be
followed are the policies and procedures specified in each applicable
section of the OMB regulation in subparts A through I of 2 CFR part
180, as that section is supplemented by the section in this part with
the same section number. The contracts that are covered transactions,
for example, are specified by 2 CFR 180.220 as supplemented by Sec.
2867.220. For any section of OMB regulation in subparts A through I of
2 CFR part 180 that has no corresponding section in this part,
Department of Justice policies and procedures are those in the OMB
regulation.
Subpart A--General
Sec. 2867.137 Who in the Department of Justice may grant an exception
to let an excluded person participate in a covered transaction?
Within the Department of Justice, the Attorney General or designee
has the authority to grant an exception to let an excluded person
participate in a covered transaction, as provided in the OMB regulation
at 2 CFR 180.135.
Subpart B--Covered Transactions
Sec. 2867.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180), the Department of Justice does not
extend coverage of nonprocurement suspension and debarment requirements
beyond first-tier procurement contracts under a covered nonprocurement
transaction.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 2867.332 What method must a participant use to pass requirements
down to participants at lower tiers with whom the participant intends
to do business?
A participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 2867.437 What method must be used to communicate to a
participant the requirements described in the OMB regulation at 2 CFR
180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, the communication must include a term or condition in the
transaction that requires the participant's compliance with subpart C
of 2 CFR part 180, as supplemented by subpart C of this part, and
requires the participant to include a similar term or condition in
lower-tier covered transactions.
Subparts E-J [Reserved]
CHAPTER XXIX--DEPARTMENT OF LABOR
PART 2900--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
269. The authority citation for part 2900 continues to read as follows:
Authority: 5 U.S.C. 301; 2 CFR 200.
0
270. Revise Sec. 2900.3 to read as follows:
Sec. 2900.3 Questioned cost.
In the Department of Labor, in addition to the regulation contained
in 2 CFR 200.1, a questioned cost means a cost that is questioned by an
auditor, Federal Project Officer, Grant Officer, or other authorized
Awarding agency representative because of an audit or monitoring
finding:
(a) Which resulted from a violation or possible violation of a
statute, regulation, or the terms and conditions of a Federal award,
including for funds used to match Federal funds;
(b) Where the costs, at the time of the audit, are not supported by
adequate documentation; or
(c) Where the costs incurred appear unreasonable and do not reflect
the actions a prudent person would take in the circumstances.
(d) Questioned costs are not an improper payment until reviewed and
confirmed to be improper as defined in Office of Management and Budget
(OMB) Circular A-123, Appendix C (see also the definition of improper
payment in 2 CFR 200.1).
0
271. Revise subparts B and C to read as follows:
[[Page 32292]]
Subpart B--General Provisions
Sec. 2900.4 Adoption of 2 CFR part 200.
The Department of Labor adopts the OMB regulation ``Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards to Non-Federal Entities'' (subparts A through F of 2
CFR part 200), as supplemented by this part, as Department of Labor
policies and procedures for financial assistance administration. This
part gives regulatory effect to the OMB regulation for Federal awards
issued by the Department of Labor (DOL). The DOL also has programmatic
and administrative regulations located in titles 20 and 29 of the CFR.
See 2 CFR 200.110(a) regarding the process for amending 2 CFR part 200.
Subpart C--Pre-Federal Award Requirements and Contents of Federal
Awards
Sec. 2900.5 Federal awarding agency review of risk posed by
applicants.
In addition to the regulation set forth in 2 CFR 200.206(b), in
evaluating risks of applicants, DOL also considers audits and
monitoring reports containing findings and issues of noncompliance or
questioned costs, in addition to reports and findings from audits
performed under subpart F of 2 CFR part 200 or the reports and findings
of any other available audits (see 2 CFR 200.206(b)).
0
272. Revise Sec. Sec. 2900.7 and 2900.8 to read as follows:
Sec. 2900.7 Federal payment.
In addition to the regulation set forth in 2 CFR 200.305(b), for
Federal awards from the Department of Labor, the non-Federal entity
should liquidate existing advances before it requests additional
advances.
Sec. 2900.8 Cost sharing or matching.
In addition to the regulation set forth in 2 CFR 200.306(b), for
Federal awards from the Department of Labor, the non-Federal entity
accounts for funds used for cost sharing or match within their
accounting systems as the funds are expended.
0
273. Revise Sec. Sec. 2900.10 and 2900.11 to read as follows:
Sec. 2900.10 Prior approval requests.
In addition to the regulation set forth in 2 CFR 200.308(c), for
Federal awards from the Department of Labor, the non-Federal entity
must request prior approval actions at least 30 days prior to the
effective date of the requested action (see 2 CFR 200.407).
Sec. 2900.11 Revision of budget and program plans including extension
of the period of performance.
In addition to the regulation set forth in 2 CFR 200.308(b), for
Federal awards from the Department of Labor, the non-Federal entity
must request prior approval for an extension to the period of
performance.
0
274. Revise Sec. Sec. 2900.13 through 2900.15 to read as follows:
Sec. 2900.13 Intangible property.
In addition to the regulation set forth in 2 CFR 200.315(d), the
Department of Labor requires intellectual property developed under a
discretionary Federal award process to be in a format readily
accessible and available for open licensing to the public. An open
license allows subsequent users to copy, distribute, transmit and adapt
the copyrighted work and requires such users to attribute the work in
the manner specified by the recipient.
Sec. 2900.14 Financial reporting.
In addition to the regulation set forth in 2 CFR 200.328, for
Federal awards from the Department of Labor, the DOL awarding agency
will prescribe whether the report will be on a cash or an accrual
basis. If the DOL awarding agency requires reporting on an accrual
basis and the recipient's accounting system is not on the accrual
basis, the recipient will not be required to convert its accounting
system, but must develop and report such accrual information through
best estimates based on an analysis of the documentation on hand.
Sec. 2900.15 Closeout.
In addition to the regulation set forth in 2 CFR 200.344(b), for
Federal awards from the Department of Labor, the non-Federal entity
must liquidate all financial obligations and/or accrued expenditures
incurred under the Federal award. For non-Federal entities reporting on
an accrual basis and operating on an expenditure period, unless
otherwise noted in the grant agreement or cooperative agreement, the
only liquidation that can occur during closeout is the liquidation of
accrued expenditures (NOT financial obligations) for goods and/or
services received during the grant period.
0
275. Revise Sec. 2900.16 to read as follows:
Sec. 2900.16 Prior written approval (prior approval).
In addition to the regulation set forth in 2 CFR 200.407, for
Federal awards from the Department of Labor, the non-Federal entity
must request prior written approval which should include the timeframe
or scope of the agreement and be submitted not less than 30 days before
the requested action is to occur. Unless otherwise noted in the grant
agreement or cooperative agreement, the Grant Officer is the only
official with the authority to provide prior written approval (prior
approval). Items included in the statement of work or budget as awarded
does not constitute prior approval.
0
276. Revise Sec. 2900.18 to read as follows:
Sec. 2900.18 Contingency provisions.
In addition to the regulation set forth in 2 CFR 200.433(c), for
Federal awards from the Department of Labor, excepted citations include
2 CFR 200.334 (retention requirements) and 200.335 (requests for
records transfers).
0
277. Revise part 2998 to read as follows:
PART 2998--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
2998.10 What does this part do?
2998.20 Does this part apply to me?
2998.30 What policies and procedures must I follow?
Subpart A--General
2998.137 Who in DOL may grant an exception to let an excluded person
participate in a covered transaction?
Subpart B--Covered Transactions
2998.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
2998.332 What requirements must I pass down to persons at lower
tiers with whom I intend to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
2998.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Subparts E-J [Reserved]
Authority: 5 U.S.C. 301; sec. 2455, Pub. L. 103-355, 108 Stat.
3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR, 1986
Comp., p.189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p.235.
Sec. 2998.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Department of Labor (DOL) policies and procedures
for non-procurement debarment and suspension. This part gives
regulatory effect to the OMB regulation for Federal awards issued by
DOL as supplemented
[[Page 32293]]
by this part. This part satisfies the requirements in section 3 of
Executive Order 12549, ``Debarment and Suspension'' (3 CFR, 1986 Comp.,
p. 189); Executive Order 12689, ``Debarment and Suspension'' (3 CFR,
1989 Comp., p. 235); and section 2455 of the Federal Acquisition
Streamlining Act of 1994, 103 (31 U.S.C. 6101 note).
Sec. 2998.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``non-procurement
transaction'' at 2 CFR 180.970);
(b) Respondent in a Department of Labor suspension or debarment
action;
(c) Department of Labor debarment or suspension official; or
(d) Department of Labor grants officer, agreements officer, or
other official authorized to enter into any type of non-procurement
transaction that is a covered transaction.
Sec. 2998.30 What policies and procedures must I follow?
(a) The Department of Labor's policies and procedures that you must
follow are specified in:
(1) Each applicable section of the OMB regulation in subparts A
through I of 2 CFR part 180; and
(2) The supplement to each section of the OMB regulation that is
found in this part under the same section number. (The contracts that
are covered transactions, for example, are specified by 2 CFR 180.220
as supplemented by Sec. 2998.220.)
(b) For any section of OMB regulation in subparts A through I of 2
CFR part 180 that has no corresponding section in this part, the
Department of Labor's policies and procedures are those in the OMB
regulation.
Subpart A--General
Sec. 2998.137 Who in DOL may grant an exception to let an excluded
person participate in a covered transaction?
Within the Department of Labor, the Secretary of Labor or designee
has the authority to grant an exception to let an excluded person
participate in a covered transaction, as provided in the OMB regulation
at 2 CFR 180.135. If any designated official grants an exception, the
exception must be in writing and state the reason(s) for deviating from
the Government-wide policy in Executive Order 12549.
Subpart B--Covered Transactions
Sec. 2998.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
In addition to the contracts covered under 2 CFR 180.220(b), this
part applies to any contract, regardless of tier, that is awarded by a
contractor, subcontractor, supplier, consultant, or its agent or
representative in any transaction, if the contract is to be funded or
provided by the Department of Labor under a covered non-procurement
transaction. This extends the coverage of the Department of Labor non-
procurement suspension and debarment requirements to all lower tiers of
subcontracts under covered non-procurement transactions, as permitted
under the OMB regulation at 2 CFR 180.220(c) (see optional lower tier
coverage in the figure in appendix A to 2 CFR part 180).
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 2998.332 What requirements must I pass down to persons at lower
tiers with whom I intend to do business?
You, as a participant, must include a term or condition in lower-
tier transactions requiring lower-tier participants to comply with
subpart C of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 2998.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
and supplemented by subpart C of this part, and requires the
participant to include a similar term or condition in lower-tier
covered transactions.
Subparts E-J [Reserved]
CHAPTER XXX--DEPARTMENT OF HOMELAND SECURITY
0
278. Revise and republish part 3000 to read as follows:
PART 3000--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
3000.10 What does this part do?
3000.20 Does this part apply to me?
3000.30 What policies and procedures must I follow?
Subpart A--General
3000.137 Who in the Department of Homeland Security may grant an
exception to let an excluded person participate in a covered
transaction?
Subpart B--Covered Transactions
3000.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
3000.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of Department of Homeland Security
Officials Regarding Transactions
3000.437 What method do I use to communicate to a participant the
requirements described in the Office of Management and Budget
regulation at 2 CFR 180.435?
Subparts E-I [Reserved]
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C.
6101 note); 6 U.S.C. 101 et seq.; E.O. 12549, 51 FR 6370, 3 CFR,
1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p.
235.
Sec. 3000.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Department of Homeland Security policies and
procedures for nonprocurement debarment and suspension. This part gives
regulatory effect to the OMB regulation for the Department of Homeland
Security as supplemented by this part. This part satisfies the
requirements in section 3 of Executive Order 12549, ``Debarment and
Suspension'' (3 CFR, 1986 Comp., p. 189), Executive Order 12689,
``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235), and 31 U.S.C.
6101 note (section 2455, Pub. L. 103-355, 108 Stat. 3327).
Sec. 3000.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in a Department of Homeland Security suspension or
debarment action;
(c) Department of Homeland Security debarment or suspension
official; or
[[Page 32294]]
(d) Department of Homeland Security grants officer, agreements
officer, or other official authorized to enter into any type of
nonprocurement transaction that is a covered transaction.
Sec. 3000.30 What policies and procedures must I follow?
The Department of Homeland Security policies and procedures that
you must follow are the policies and procedures specified in each
applicable section of the OMB regulation in subparts A through I of 2
CFR part 180, as that section is supplemented by the section in this
part with the same section number. The contracts that are covered
transactions, for example, are specified by 2 CFR 180.220) as
supplemented by Sec. 3000.220. For any section of OMB regulation in
subparts A through I of 2 CFR part 180 that has no corresponding
section in this part, Department of Homeland Security policies and
procedures are those in the OMB regulation.
Subpart A--General
Sec. 3000.137 Who in the Department of Homeland Security may grant an
exception to let an excluded person participate in a covered
transaction?
Within the Department of Homeland Security (DHS), the Secretary of
Homeland Security has delegated the authority to grant an exception to
let an excluded person participate in a covered transaction to the
Chief Financial Officer for each DHS component as provided in the OMB
regulation at 2 CFR 180.135.
Subpart B--Covered Transactions
Sec. 3000.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Department of Homeland Security extends coverage of nonprocurement
suspension and debarment requirements beyond first-tier procurement
contracts under a covered nonprocurement transaction.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 3000.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant in a covered transaction must include a term
or condition in any lower-tier covered transaction into which you
enter, to require the participant of that transaction to--
(a) Comply with subpart C of 2 CFR part 180; and
(b) Include a similar term or condition in any covered transaction
into which it enters at the next lower tier.
Subpart D--Responsibilities of Department of Homeland Security
Officials Regarding Transactions
Sec. 3000.437 What method do I use to communicate to a participant
the requirements described in the Office of Management and Budget
regulation at 2 CFR 180.435?
You as a DHS component official must include a term or condition in
each covered transaction into which you enter, to communicate to the
participant the requirements to--
(a) Comply with subpart C of 2 CFR part 180; and
(b) Include a similar term or condition in any lower-tier covered
transactions into which the participant enters.
Subparts E-I [Reserved]
PART 3001--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
279. The authority citation for part 3001 is revised to read as
follows:
Authority: 5 U.S.C. 301; 41 U.S.C. 701-707; 6 U.S.C. 101 et
seq.; 2 CFR part 182.
0
280. Revise Sec. Sec. 3001.10 through 3001.30 to read as follows:
Sec. 3001.10 What does this part do?
This part requires that the award and administration of Department
of Homeland Security (DHS) grants and cooperative agreements comply
with Office of Management and Budget (OMB) regulation implementing the
portion of the Drug-Free Workplace Act of 1988 (41 U.S.C. 701-707, as
amended, hereinafter referred to as ``the Act'') that applies to
grants. This part--
(a) Adopts the OMB regulation (subparts A through F of 2 CFR part
182), as supplemented by this part, for DHS's grants and cooperative
agreements; and
(b) Establishes DHS policies and procedures, as supplemented by
this part, for compliance with the Act that are the same as those of
other Federal agencies, in conformance with the requirement in 41
U.S.C. 705 for Government-wide implementing regulations.
Sec. 3001.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a--
(a) Recipient of a DHS grant or cooperative agreement; or
(b) DHS awarding official.
Sec. 3001.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
This part supplements the OMB regulation in 2 CFR part 182 as shown in
the following table. For each of those sections, you must follow the
policies and procedures in the OMB regulation, as supplemented by this
part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............... Sec. 3001.225............ Who in DHS a recipient other than an
individual must notify if an employee is
convicted for a violation of a criminal drug
statute in the workplace.
(2) 2 CFR 182.300(b)............... Sec. 3001.300............ Who in DHS a recipient who is an individual
must notify if he or she is convicted of a
criminal drug offense resulting from a
violation occurring during the conduct of any
award activity.
(3) 2 CFR 182.400.................. Sec. 3001.400............ What method do I use as an agency awarding
official to obtain a recipient's agreement to
comply with the OMB regulation.
(4) 2 CFR 182.500.................. Sec. 3001.500............ Who in DHS is authorized to determine that a
recipient other than an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
(5) 2 CFR 182.505.................. Sec. 3001.505............ Who in DHS is authorized to determine that a
recipient who is an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
(6) 2 CFR 182.510.................. Sec. 3001.510............ What actions the Federal Government will take
against a recipient determined to have
violated 2 CFR part 182, as implemented by
this part.
(7) 2 CFR 182.605.................. Sec. 3001.605............ What types of assistance are included in the
definition of ``award.''
[[Page 32295]]
(8) None........................... Sec. 3001.661............ What types of assistance are included in the
definition of ``reimbursable agreement.''
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
DHS policies and procedures are the same as those in the OMB
regulation.
0
281. Revise Sec. 3001.400 to read as follows:
Sec. 3001.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You as the recipient must comply with drug-
free workplace requirements in subpart B (or subpart C, if the
recipient is an individual) of 2 CFR part 3001, which adopts the
Government-wide implementation (2 CFR part 182) of sec. 5152-5158 of
the Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle
D; 41 U.S.C. 701-707).
PART 3002--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
282. The authority citation for part 3002 is revised to read as
follows:
Authority: 31 U.S.C. 503; 6 U.S.C. 101 et seq.; 2 CFR part 200.
0
283. Revise Sec. 3002.10 to read as follows:
Sec. 3002.10 Adoption of 2 CFR part 200.
The Department of Homeland Security adopts the Office of Management
and Budget (OMB) regulation in 2 CFR part 200. This part gives
regulatory effect to the OMB regulation for Federal awards issued by
the Department of Homeland Security. See 2 CFR 200.110(a) regarding the
process for amending 2 CFR part 200.
CHAPTER XXXI--INSTITUTE OF MUSEUM AND LIBRARY SERVICES
0
284. Revise part 3185 to read as follows:
PART 3185--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
3185.10 What does this part do?
3185.20 Does this part apply to me?
3185.30 What policies and procedures must I follow?
Subpart A--General
3185.137 Who in the IMLS may grant an exception to let an excluded
person participate in a covered transaction?
Subpart B--Covered Transactions
3185.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
3185.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
3185.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Subparts E-I [Reserved]
Authority: 20 U.S.C. 9103(f); sec. 2455, Pub. L. 103-355, 108
Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR,
1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p.
235.
Sec. 3185.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Institute of Museum and Library Services (IMLS)
policies and procedures for nonprocurement debarment and suspension.
This part gives regulatory effect for IMLS to the OMB regulation for
Federal awards issued by IMLS as supplemented by this part. This part
satisfies the requirements in section 3 of Executive Order 12549,
``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189), Executive
Order 12689, ``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235),
and 31 U.S.C. 6101 note (section 2455, Pub. L. 103-355, 108 Stat.
3327).
Sec. 3185.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970).
(b) Respondent in an IMLS suspension or debarment action.
(c) IMLS debarment or suspension official.
(d) IMLS grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 3185.30 What policies and procedures must I follow?
The IMLS policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as that section
is supplemented by the section in this part with the same section
number. The contracts that are covered transactions, for example, are
specified by 2 CFR 180.220 as supplemented by Sec. 3185.220. For any
section of OMB regulation in subparts A through I of 2 CFR part 180
that has no corresponding section in this part, IMLS policies and
procedures are those in the OMB regulation.
Subpart A--General
Sec. 3185.137 Who in the IMLS may grant an exception to let an
excluded person participate in a covered transaction?
The IMLS Director has the authority to grant an exception to let an
excluded person participate in a covered transaction, as provided in
the OMB regulation at 2 CFR 180.135.
Subpart B--Covered Transactions
Sec. 3185.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see optional lower-tier coverage in the figure in
appendix A to 2 CFR part 180), IMLS does not extend coverage of
nonprocurement suspension and debarment requirements beyond first-tier
procurement contracts under a covered nonprocurement transaction.
[[Page 32296]]
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 3185.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 3185.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
Subparts E-I [Reserved]
PART 3186--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
285. The authority citation for part 3186 continues to read as follows:
Authority: 41 U.S.C. 701-707.
0
286. Revise Sec. Sec. 3186.10 through 3186.30 to read as follows:
Sec. 3186.10 What does this part do?
This part requires that the award and administration of Institute
of Museum and Library Services (IMLS) grants and cooperative agreements
comply with Office of Management and Budget (OMB) regulation
implementing the portion of the Drug-Free Workplace Act of 1988 (41
U.S.C. 701-707, as amended, hereinafter referred to as ``the Act'')
that applies to grants. This part--
(a) Gives regulatory effect to the OMB regulation (subparts A
through F of 2 CFR part 182) for Federal awards issued by IMLS for the
IMLS's grants and cooperative agreements; and
(b) Establishes IMLS policies and procedures for compliance with
the Act that are the same as those of other Federal agencies, in
conformance with the requirement in 41 U.S.C. 705 for Governmentwide
implementing regulations.
Sec. 3186.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a--
(a) Recipient of an IMLS grant or cooperative agreement; or
(b) IMLS awarding official.
Sec. 3186.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 182, this part
supplements four sections of the OMB regulation, as shown in the
following table. For each of those sections, you must follow the
policies and procedures in the OMB regulation, as supplemented by this
part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............... Sec. 3186.225............ Whom in the IMLS a recipient other than an
individual must notify if an employee is
convicted for a violation of a criminal drug
statute in the workplace.
(2) 2 CFR 182.300(b)............... Sec. 3186.300............ Whom in the IMLS a recipient who is an
individual must notify if he or she is
convicted of a criminal drug offense
resulting from a violation occurring during
the conduct of any award activity.
(3) 2 CFR 182.500.................. Sec. 3186.500............ Who in the IMLS is authorized to determine
that a recipient other than an individual is
in violation of the requirements of 2 CFR
part 182, as implemented by this part.
(4) 2 CFR 182.505.................. Sec. 3186.505............ Who in the IMLS is authorized to determine
that a recipient who is an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
IMLS policies and procedures are the same as those in the OMB
regulation.
0
287. Revise Sec. 3186.400 to read as follows:
Sec. 3186.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You as the recipient must comply with drug-
free workplace requirements in Subpart B (or Subpart C, if the
recipient is an individual) of 2 CFR part 3186, which adopts the
Governmentwide implementation (2 CFR part 182) of sec. 5152-5158 of the
Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D;
41 U.S.C. 701-707).
PART 3187--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
288. The authority citation for part 3187 continues to read as follows:
Authority: 20 U.S.C. 9101-9176, 9103(h); 20 U.S.C. 80r-5; 2 CFR
part 200.
0
289. Revise Sec. 3187.1 to read as follows:
Sec. 3187.1 Adoption of 2 CFR part 200.
The Institute of Museum and Library Services (IMLS) adopts the
Office of Management and Budget (OMB) regulation in 2 CFR part 200,
with the additions that are provided in this part. This part gives
regulatory effect to the OMB regulations and supplements the
regulations as needed for IMLS. See 2 CFR 200.110(a) regarding the
process for amending 2 CFR part 200.
CHAPTER XXXII--NATIONAL ENDOWMENT FOR THE ARTS
0
290. Revise part 3254 to read as follows:
PART 3254--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
3254.10 What does this part do?
3254.20 Does this part apply to me?
[[Page 32297]]
3254.30 What policies and procedures must I follow?
Subpart A--General
3254.137 Who in the NEA may grant an exception to let an excluded
person participate in a covered transaction?
Subpart B--Covered Transactions
3254.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
3254.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
3254.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Subparts E-I [Reserved]
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C.
6101 note); E.O. 12549, 51 FR 6370, 3 CFR, 1986 Comp., p. 189; E.O.
12689, 54 FR 34131, 3 CFR, 1989 Comp., p. 235.
Sec. 3254.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the National Endowment for the Arts (NEA) policies and
procedures for nonprocurement debarment and suspension. This part gives
regulatory effect to the OMB regulation for Federal awards issued by
the Department as supplemented by this part. This part satisfies the
requirements in section 3 of Executive Order 12549, ``Debarment and
Suspension'' (3 CFR, 1986 Comp., p. 189), Executive Order 12689,
``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235), and 31 U.S.C.
6101 note (section 2455, Pub. L. 103-355, 108 Stat. 3327).
Sec. 3254.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970).
(b) Respondent in a NEA suspension or debarment action.
(c) NEA debarment or suspension official.
(d) NEA grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 3254.30 What policies and procedures must I follow?
The NEA policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as that section
is supplemented by the section in this part with the same section
number. The contracts that are covered transactions, for example, are
specified by 2 CFR 180.220 as supplemented by Sec. 3254.220. For any
section of OMB regulation in subparts A through I of 2 CFR part 180
that has no corresponding section in this part, NEA policies and
procedures are those in the OMB regulation.
Subpart A--General
Sec. 3254.137 Who in the NEA may grant an exception to let an
excluded person participate in a covered transaction?
The NEA Chairman has the authority to grant an exception to let an
excluded person participate in a covered transaction, as provided in
the OMB regulation at 2 CFR 180.135.
Subpart B--Covered Transactions
Sec. 3254.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see options lower tier coverage in the figure in
appendix A to 2 CFR part 180), NEA does not extend coverage of
nonprocurement suspension and debarment requirements beyond first-tier
procurement contracts under a covered nonprocurement transaction.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 3254.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 3254.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
Subparts E-I [Reserved]
0
291. Revise part 3255 to read as follows:
PART 3255--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
3255.1 Adoption of 2 CFR part 200.
3255.2 [Reserved]
Authority: 5 U.S.C. 301; 20 U.S.C. 954; 2 CFR part 200.
Sec. 3255.1 Adoption of 2 CFR part 200.
The National Endowment for the Arts (NEA) adopts the Office of
Management and Budget (OMB) regulation in 2 CFR part 200. This part
gives regulatory effect to the OMB regulation for Federal awards issued
by the NEA. See 2 CFR 200.110(a) regarding the process for amending 2
CFR part 200.
Sec. 3255.2 [Reserved]
PART 3256--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
292. The authority citation for part 3256 is revised to read as
follows:
Authority: 41 U.S.C. 8101 et seq.
0
293. Revise Sec. Sec. 3256.100 through 3256.110 to read as follows:
Sec. 3256.100 What does this part do?
This part requires that the award and administration of National
Endowment for the Arts (NEA) grants and cooperative agreements comply
with Office of Management and Budget (OMB) regulation implementing the
portion of the Drug-Free Workplace Act of 1988 (41 U.S.C. 8101-8106, as
amended, hereinafter referred to as ``the Act'') that applies to
grants. This part--
(a) Gives regulatory effect to the OMB regulation (subparts A
through F of 2 CFR part 182) for the NEA's grants and cooperative
agreements; and
(b) Establishes NEA policies and procedures for compliance with the
Act that are the same as those of other Federal agencies, in
conformance with the requirement in 41 U.S.C. 8106 for Governmentwide
implementing regulations.
[[Page 32298]]
Sec. 3256.105 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a--
(a) Recipient of an NEA grant or cooperative agreement; or
(b) NEA awarding official.
Sec. 3256.110 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in the applicable sections of the OMB regulation in subparts A through
F of 2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the regulation in 2 CFR part 182, this part supplements
four sections of the OMB regulation, as shown in the following table.
For each of those sections, you must follow the policies and procedures
in the OMB regulation, as supplemented by this part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............... Sec. 3256.200............ Whom in the NEA a recipient other than an
individual must notify if an employee is
convicted for a violation of a criminal drug
statute in the workplace.
(2) 2 CFR 182.300(b)............... Sec. 3256.300............ Whom in the NEA a recipient who is an
individual must notify if he or she is
convicted of a criminal drug offense
resulting from a violation occurring during
the conduct of any award activity.
(3) 2 CFR 182.500.................. Sec. 3256.500............ Who in the NEA is authorized to determine that
a recipient other than an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
(4) 2 CFR 182.505.................. Sec. 3256.505............ Who in the NEA is authorized to determine that
a recipient who is an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
the NEA's policies and procedures are the same as those in the OMB
regulation.
0
294. Revise Sec. 3256.400 to read as follows:
Sec. 3256.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You as the recipient must comply with drug-
free workplace requirements in subpart B (or subpart C, if the
recipient is an individual) of this part, which adopts the
Governmentwide implementation (2 CFR part 182) of sec. 5152-5158 of the
Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D;
41 U.S.C. 8101-8106).
CHAPTER XXXIII--NATIONAL ENDOWMENT FOR THE HUMANITIES
0
295. Revise part 3369 to read as follows:
PART 3369--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
3369.10 What does this part do?
3369.20 Does this part apply to me?
3369.30 What policies and procedures must I follow?
Subpart A--General
3369.137 Who in the NEH may grant an exception to let an excluded
person participate in a covered transaction?
Subpart B--Covered Transactions
3369.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
3369.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
3369.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Subparts E-I [Reserved]
Authority: 20 U.S.C. 959(a)(1); Sec. 2455, Pub. L. 103-355, 108
Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR,
1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p.
235.
Sec. 3369.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the National Endowment for the Humanities (NEH)
policies and procedures for nonprocurement debarment and suspension.
This part gives regulatory effect for Federal awards issued by the NEH
to the OMB regulation as supplemented by this part. This part satisfies
the requirements in section 3 of Executive Order 12549, ``Debarment and
Suspension'' (3 CFR, 1986 Comp., p. 189), Executive Order 12689,
``Debarment and Suspension'' (3 CFR, 1989 Comp., p. 235), and 31 U.S.C.
6101 note (section 2455, Pub. L. 103-355, 108 Stat. 3327).
Sec. 3369.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970).
(b) Respondent in a NEH suspension or debarment action.
(c) NEH debarment or suspension official.
(d) NEH grants officer, agreements officer, or other official
authorized to enter into any type of nonprocurement transaction that is
a covered transaction.
Sec. 3369.30 What policies and procedures must I follow?
The NEH policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as that section
is supplemented by the section in this part with the same section
number. The contracts that are covered transactions, for example, are
specified by 2 CFR 180.220 as supplemented by Sec. 3369.220. For any
section of OMB regulation in subparts A through I of 2 CFR part 180
that has no corresponding section in this part, NEH policies and
procedures are those in the OMB regulation.
[[Page 32299]]
Subpart A--General
Sec. 3369.137 Who in the NEH may grant an exception to let an
excluded person participate in a covered transaction?
The NEH Chairman has the authority to grant an exception to let an
excluded person participate in a covered transaction, as provided in
the OMB regulation at 2 CFR 180.135.
Subpart B--Covered Transactions
Sec. 3369.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180), NEH does not extend coverage of
nonprocurement suspension and debarment requirements beyond first-tier
procurement contracts under a covered nonprocurement transaction.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 3369.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180, as supplemented by this subpart.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 3369.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
Subparts E-I [Reserved]
PART 3373--REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)
0
296. The authority citation for part 3373 continues to read as follows:
Authority: 41 U.S.C. 701-707.
0
297. Revise Sec. Sec. 3373.10 through 3373.30 to read as follows:
Sec. 3373.10 What does this part do?
This part requires that the award and administration of National
Endowment for the Humanities (NEH) grants and cooperative agreements
comply with Office of Management and Budget (OMB) regulation
implementing the portion of the Drug-Free Workplace Act of 1988 (41
U.S.C. 701-707, as amended, hereinafter referred to as ``the Act'')
that applies to grants. This part--
(a) Gives regulatory effect to the OMB regulation (subparts A
through F of 2 CFR part 182) for the NEH's grants and cooperative
agreements; and
(b) Establishes NEH policies and procedures for compliance with the
Act that are the same as those of other Federal agencies, in
conformance with the requirement in 41 U.S.C. 705 for Governmentwide
implementing regulations.
Sec. 3373.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through F of 2 CFR part 182 (see 2 CFR
182.115(b)) apply to you if you are a--
(a) Recipient of a NEH grant or cooperative agreement; or
(b) NEH awarding official.
Sec. 3373.30 What policies and procedures must I follow?
(a) General. You must follow the policies and procedures specified
in applicable sections of the OMB regulation in subparts A through F of
2 CFR part 182, as implemented by this part.
(b) Specific sections of OMB regulation that this part supplements.
In implementing the OMB regulation in 2 CFR part 182, this part
supplements four sections of the OMB regulation, as shown in the
following table. For each of those sections, you must follow the
policies and procedures in the OMB regulation, as supplemented by this
part.
----------------------------------------------------------------------------------------------------------------
Section in this part where
Section of OMB regulation supplemented What the supplementation clarifies
----------------------------------------------------------------------------------------------------------------
(1) 2 CFR 182.225(a)............... Sec. 3373.225............ Whom in the NEH a recipient other than an
individual must notify if an employee is
convicted for a violation of a criminal drug
statute in the workplace.
(2) 2 CFR 182.300(b)............... Sec. 3373.300............ Whom in the NEH a recipient who is an
individual must notify if he or she is
convicted of a criminal drug offense
resulting from a violation occurring during
the conduct of any award activity.
(3) 2 CFR 182.500.................. Sec. 3373.500............ Who in the NEH is authorized to determine that
a recipient other than an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
(4) 2 CFR 182.505.................. Sec. 3373.505............ Who in the NEH is authorized to determine that
a recipient who is an individual is in
violation of the requirements of 2 CFR part
182, as implemented by this part.
----------------------------------------------------------------------------------------------------------------
(c) Sections of the OMB regulation that this part does not
supplement. For any section of OMB regulation in subparts A through F
of 2 CFR part 182 that is not listed in paragraph (b) of this section,
NEH policies and procedures are the same as those in the OMB
regulation.
0
298. Revise Sec. 3373.400 to read as follows:
Sec. 3373.400 What method do I use as an agency awarding official to
obtain a recipient's agreement to comply with the OMB regulation?
To obtain a recipient's agreement to comply with applicable
requirements in the OMB regulation at 2 CFR part 182, you must include
the following term or condition in the award:
Drug-free workplace. You as the recipient must comply with drug-
free workplace requirements in subpart B (or subpart C, if the
recipient is an individual) of 2 CFR part 3373, which adopts the
Governmentwide implementation (2 CFR part 182) of sec. 5152-5158 of the
Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D;
41 U.S.C. 701-707).
0
299. Revise part 3374 to read as follows:
[[Page 32300]]
PART 3374--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
3374.1 Adoption of 2 CFR part 200.
3374.2 [Reserved]
Authority: 5 U.S.C. 301, 20 U.S.C. 956, 2 CFR part 200.
Sec. 3374.1 Adoption of 2 CFR part 200.
The National Endowment for the Humanities (NEH) adopts the Office
of Management and Budget (OMB) regulation in 2 CFR part 200. This part
gives regulatory effect to the OMB regulation for Federal awards issued
by NEH. See 2 CFR 200.110(a) regarding the process for amending 2 CFR
part 200.
Sec. 3374.2 [Reserved]
CHAPTER XXXIV--DEPARTMENT OF EDUCATION
PART 3474--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
300. The authority citation for part 3474 continues to read as follows:
Authority: 20 U.S.C. 1221e-3, 3474; 42 U.S.C. 2000bb et seq.;
E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13559, 75
FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 13831, 83 FR 20715, 3 CFR,
2018 Comp., p. 806; and 2 CFR part 200, unless otherwise noted.
Sec. 3474.1 [Redesignated as Sec. 3474.3]
0
301. Redesignate Sec. 3474.1 as Sec. 3474.3.
0
302. Revise newly redesignated Sec. 3474.3 to read as follows:
Sec. 3474.3 Adoption of 2 CFR part 200.
The Department of Education adopts the Office of Management and
Budget (OMB) regulation in 2 CFR part 200, except for 2 CFR 200.102(a)
and 200.208. This part gives regulatory effect to the OMB regulation
for Federal awards issued by the Department of Education. See 2 CFR
200.110(a) regarding the process for amending 2 CFR part 200.
PART 3485--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
303. The authority citation for part 3485 continues to read as follows:
Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3
CFR 1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327
(31 U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474,
unless otherwise noted.
0
304. Revise Sec. 3485.12 to read as follows:
Sec. 3485.12 What does this part do?
(a)(1) The Department of Education (the ``Department'' or ``ED'')
adopts subparts A through I of the Office of Management and Budget
(OMB) regulation in 2 CFR part 180. This part gives regulatory effect
to the OMB regulation for Federal awards issued by the Department of
Education and supplements the regulation as needed for the Department.
This part satisfies the requirements in section 3 of Executive Order
12549, ``Debarment and Suspension'' (3 CFR, part 1986 Comp., p. 189),
Executive Order 12689, ``Debarment and Suspension'' (3 CFR, part 1989
Comp., p. 235), and 31 U.S.C. 6101 note (section 2455, Pub. L. 103-355,
108 Stat. 3327).
(2) This part contains only those sections that include supplements
to the regulation in part 180 of this title and new sections needed to
implement the OMB regulation for the Department's programs. In those
sections of the OMB regulation that are supplemented, the section in
this part includes both the text of the OMB regulation that is not
affected by the change and any additional paragraphs that need to be
added to the OMB regulation. For example, Sec. 180.220 of this title
contains only paragraphs (a) and (b). The text of Sec. 3485.220, which
supplements Sec. 180.220, includes both the text of paragraph (a) and
(b) of Sec. 180.220 and the text of added paragraph (c).
(3) In those sections in part 180 of this title that do not have
paragraph designations and that the Department supplements, the section
in this part implementing the OMB regulation designates the
undesignated paragraph from part 180 as paragraph (a) and the first
supplemental paragraph as paragraph (b). For example, Sec. 180.330 of
this title includes an undesignated lead in paragraph and paragraphs
(a) and (b). In Sec. 3485.330, the undesignated paragraph in Sec.
180.330 is designated paragraph (a) and paragraphs (a) and (b) are
designated paragraphs (1) and (2). The added paragraphs are designated
paragraphs (b) and (c).
(b) The authority for all the provisions in part 180 of this title
as adopted in this part are listed in the authority for this part.
0
305. Revise subpart B to read as follows:
Subpart B--Covered Transactions
Sec. 3485.220 Are any procurement contracts included as covered
transactions?
(a) Covered transactions under this part--
(1) Do not include any procurement contracts awarded directly by a
Federal agency; but
(2) Do include some procurement contracts awarded by non-Federal
participants in nonprocurement covered transactions.
(b) Specifically, a contract for goods or services is a covered
transaction if any of the following applies:
(1) The contract is awarded by a participant in a nonprocurement
transaction that is covered under Sec. 180.210 of this title, and the
amount of the contract is expected to equal or exceed $25,000.
(2) The contract requires the consent of an official of a Federal
agency. In that case, the contract, regardless of the amount, always is
a covered transaction, and it does not matter who awarded it. For
example, it could be a subcontract awarded by a contractor at a tier
below a nonprocurement transaction, as shown in appendix A to this
part.
(3) The contract is for federally-required audit services.
(4) The contract is to perform services as a third party servicer
in connection with a title IV, HEA program.
(c) In addition to the contracts covered under Sec. 180.220(b) of
this title, this part applies to any contract, regardless of tier, that
is awarded by a contractor, subcontractor, supplier, consultant, or its
agent or representative in any transaction, if the contract is to be
funded or provided by ED under a covered nonprocurement transaction and
the amount of the contract is expected to equal or exceed $25,000. This
extends the coverage of the ED nonprocurement suspension and debarment
requirements to all lower tiers of subcontracts under covered
nonprocurement transactions, as permitted under the OMB regulation at
Sec. 180.220(c) of this title (see optional lower tier coverage in the
figure in appendix A to this part).
[[Page 32301]]
CHAPTER XXXV--EXPORT-IMPORT BANK OF THE UNITED STATES
PART 3513--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
306. The authority citation for part 3513 continues to read as follows:
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O.
12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p.
235.
0
307. Revise Sec. Sec. 3513.10 through 3513.30 to read as follows:
Sec. 3513.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Export Import Bank of the United States (Ex-Im
Bank) policies and procedures for nonprocurement debarment and
suspension. This part gives regulatory effect to the OMB regulation as
supplemented by this part. This part satisfies the requirements in
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3
CFR, 1986 Comp., p. 189), Executive Order 12689, ``Debarment and
Suspension'' (3 CFR, 1989 Comp., p. 235), and 31 U.S.C. 6101 note
(section 2455, Pub. L. 103-355, 108 Stat. 3327).
Sec. 3513.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part 180 (see table 2 to 2
CFR 180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970, as supplemented by subpart B of this
part).
(b) Respondent in an Ex-Im Bank suspension or debarment action.
(c) Ex-Im Bank debarment or suspension official.
(d) Ex-Im Bank grants officer, agreements officer, or other
official authorized to enter into any type of nonprocurement
transaction that is a covered transaction.
Sec. 3513.30 What policies and procedures must I follow?
Ex-Im Bank policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as that section
is supplemented by the section in this part with the same section
number. The contracts that are covered transactions, for example, are
specified by 2 CFR 180.220 as supplemented by Sec. 3513.220. For any
section of OMB regulation in subparts A through I of 2 CFR part 180
that has no corresponding section in this part, Ex-Im Bank policies and
procedures are those in the OMB regulation.
0
308. Revise Sec. 3513.220 to read as follows:
Sec. 3513.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180), Ex-Im Bank does not extend coverage of
nonprocurement suspension and debarment requirements beyond first-tier
procurement under a covered nonprocurement transaction.
0
309. Revise Sec. 3513.437 to read as follows:
Sec. 3513.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you must include a term or condition in the transaction that
requires the participant's compliance with subpart C of 2 CFR part 180,
as supplemented by subpart C of this part, and requires the participant
to include a similar term or condition in lower-tier covered
transactions.
CHAPTER XXXVI--OFFICE OF NATIONAL DRUG CONTROL POLICY, EXECUTIVE OFFICE
OF THE PRESIDENT
0
310. Revise part 3603 to read as follows:
PART 3603--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
3603.10 Adoption of 2 CFR part 200.
3603.11 [Reserved]
Authority: 21 U.S.C. 1706; 21 U.S.C. 1521-1548, 1701, 1703(d),
1703(f), and 2001-2003; 2 CFR part 200.
Sec. 3603.10 Adoption of 2 CFR part 200.
The Executive Office of the President, Office of National Drug
Control Policy (ONDCP) adopts the Office of Management and Budget (OMB)
regulation in 2 CFR part 200. This part gives regulatory effect to the
OMB regulation for Federal awards issued by the ONDCP. See 2 CFR
200.110(a) regarding the process for amending 2 CFR part 200.
Sec. 3603.11 [Reserved]
CHAPTER XXXVII--PEACE CORPS
0
311. Revise part 3700 to read as follows:
PART 3700--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
3700.10 What does this part do?
3700.20 Does this part apply to me?
3700.30 What policies and procedures must I follow?
3700.137 Who in the Peace Corps may grant an exception to let an
excluded person participate in a covered transaction?
3700.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
3700.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
3700.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Authority: 22 U.S.C. 2503(b); sec. 2455, Pub. L. 103-355, 108
Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR,
1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p.
235.
Sec. 3700.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the Peace Corps policies and procedures for
nonprocurement debarment and suspension. This part gives regulatory
effect for the Peace Corps to the OMB regulation as supplemented by
this part. This part satisfies the requirements in section 3 of
Executive Order 12549, ``Debarment and Suspension'' (3 CFR, 1986 Comp.,
p. 189), Executive Order 12689, ``Debarment and Suspension'' (3 CFR,
1989 Comp., p. 235), and 31 U.S.C. 6101 note (section 2455, Pub. L.
103-355, 108 Stat. 3327).
Sec. 3700.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part (see table 2 to 2 CFR
180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in a Peace Corps suspension or debarment action;
(c) Peace Corps debarment or suspension official; or
(d) Peace Corps grants officer, agreements officer, or other
official authorized to enter into any type of
[[Page 32302]]
nonprocurement transaction that is a covered transaction.
Sec. 3700.30 What policies and procedures must I follow?
The Peace Corps policies and procedures that you must follow are
the policies and procedures specified in each applicable section of the
OMB regulation in subparts A through I of 2 CFR part 180, as that
section is supplemented by the section in this part with the same
section number. The contracts that are covered transactions, for
example, are specified by 2 CFR 180.220 as supplemented by Sec.
3700.220). For any section of OMB regulation in subparts A through I of
2 CFR part 180 that has no corresponding section in this part, Peace
Corps policies and procedures are those in the OMB regulation.
Sec. 3700.137 Who in the Peace Corps may grant an exception to let an
excluded person participate in a covered transaction?
The Director of the Peace Corps has the authority to grant an
exception to let an excluded person participate in a covered
transaction, as provided in the OMB regulation at 2 CFR 180.135.
Sec. 3700.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Although the OMB regulation at 2 CFR 180.220(c) allows a Federal
agency to do so (also see optional lower tier coverage in the figure in
appendix A to 2 CFR part 180), Peace Corps does not extend coverage of
nonprocurement suspension and debarment requirements beyond first-tier
procurement contracts under a covered nonprocurement transaction.
Sec. 3700.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
You as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180.
Sec. 3700.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you as an agency official must include a term or condition in
the transaction that requires the participant's compliance with subpart
C of 2 CFR part 180, and requires the participant to include a similar
term or condition in lower-tier covered transactions.
0
312. Add part 3701 to read as follows:
PART 3701--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
3701.10 Adoption of 2 CFR part 200.
3701.11 [Reserved]
Authority: 22 U.S.C. 2503(b); sec. 2455, Pub. L. 103-355, 108
Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR,
1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p.
235.
Sec. 3701.10 Adoption of 2 CFR part 200.
The Peace Corps adopts the Office of Management and Budget's (OMB)
regulation in 2 CFR part 200. This part gives regulatory effect to the
OMB regulation for Federal awards made by the Peace Corps. See 2 CFR
200.110(a) regarding the process for amending 2 CFR part 200. Peace
Corps may amend its adoption of 2 CFR part 200 if agency-specific
additions, clarifications, or exceptions to the Government-wide
policies and procedures are required by Federal statute or are approved
by OMB. See 2 CFR 200.106. Any supplements to the OMB regulation as
needed for the Peace Corps, including additions or clarifications, are
set forth in this chapter.
Sec. 3701.11 [Reserved]
CHAPTER LVIII--ELECTION ASSISTANCE COMMISSION
0
313. Revise part 5800 to read as follows:
PART 5800--NONPROCUREMENT DEBARMENT AND SUSPENSION
Sec.
5800.10 What does this part do?
5800.20 Does this part apply to me?
5800.30 What policies and procedures must I follow?
Subpart A--General
5800.137 Who at the Commission may grant an exception to let an
excluded person participate in a covered transaction?
Subpart B--Covered Transactions
5800.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
5800.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
5800.437 What method do I use to communicate to a participant the
requirements described in the OMB regulation at 2 CFR 180.435?
Subparts E-H [Reserved]
Subpart I--Definitions
5800.930 Debarring official.
5800.970 Nonprocurement transaction.
5800.1010 Suspending official.
Subpart J [Reserved]
Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR, 1986 Comp., p.
189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p. 235.
Sec. 5800.10 What does this part do?
This part adopts the Office of Management and Budget (OMB)
regulation in subparts A through I of 2 CFR part 180, as supplemented
by this part, as the U.S. Election Assistance Commission (``the
Commission'' or ``EAC'') policies and procedures for nonprocurement
debarment and suspension. This part gives regulatory effect for the
Commission to the OMB regulation as supplemented by this part. This
part satisfies the requirements in section 3 of Executive Order 12549,
``Debarment and Suspension'', and 31 U.S.C. 6101 note.
Sec. 5800.20 Does this part apply to me?
This part and, through this part, pertinent portions of the OMB
regulation in subparts A through I of 2 CFR part (see table 2 to 2 CFR
180.100(b)) apply to you if you are a--
(a) Participant or principal in a ``covered transaction'' (see
subpart B of 2 CFR part 180 and the definition of ``nonprocurement
transaction'' at 2 CFR 180.970);
(b) Respondent in a Commission suspension or debarment action;
(c) Commission debarment or suspension official; or
(d) Commission grants officer, agreements officer, or other
official authorized to enter into any type of nonprocurement
transaction that is a covered transaction.
Sec. 5800.30 What policies and procedures must I follow?
The Commission policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the OMB
regulation in subparts A through I of 2 CFR part 180, as that section
is supplemented by the section in this part with the same section
number. The contracts that are covered transactions, for example, are
specified by 2 CFR 180.220 as supplemented by Sec. 5800.220. For any
section of OMB regulation in subparts A through I of 2 CFR part 180
that has no corresponding section in
[[Page 32303]]
this part, Commission policies and procedures are those in the OMB
regulation.
Subpart A--General
Sec. 5800.137 Who at the Commission may grant an exception to let an
excluded person participate in a covered transaction?
The Commission's Contracting Officer has the authority to grant an
exception to let an excluded person participate in a covered
transaction, as provided in the OMB regulation at 2 CFR 180.135.
Subpart B--Covered Transactions
Sec. 5800.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
Pursuant to 2 CFR 180.220(c), the Commission extends coverage of
nonprocurement suspension and debarment requirements beyond first-tier
procurement contracts to include any subcontract.
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 5800.332 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
If a lower-tier transaction is covered pursuant to Sec. 5800.220,
you as a participant must include a term or condition in lower-tier
transactions requiring lower-tier participants to comply with subpart C
of 2 CFR part 180.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 5800.437 What method do I use to communicate to a participant
the requirements described in the OMB regulation at 2 CFR 180.435?
To communicate to a participant the requirements described in 2 CFR
180.435, you as an agency official must include a term or condition in
the transaction that requires the participant's compliance with subpart
C of 2 CFR part 180, and requires the participant to include a similar
term or condition in lower-tier covered transactions.
Subparts E-H [Reserved]
Subpart I--Definitions
Sec. 5800.930 Debarring official.
For the Commission, the debarring official for all nonprocurement
transactions is the Commission's Contracting Officer. In the case of a
vacancy in the position of the Contracting Officer, the alternate
debarring official is the Chief Financial Officer.
Sec. 5800.970 Nonprocurement transaction.
While the Commission treats all payments made to States under 42
U.S.C. 15301, 15302 and 15401 as grants, this part does not apply to
grants made to States and political subdivisions therein.
Sec. 5800.1010 Suspending official.
For the Commission, the debarring official for all nonprocurement
transactions is the Commission's Contracting Officer. In the case of a
vacancy in the position of the Contracting Officer, the alternate
debarring official is the Chief Financial Officer.
Subpart J [Reserved]
PART 5801--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
314. The authority citation for part 5801 continues to read as follows:
Authority: 2 CFR part 200.
0
315. Revise Sec. 5801.10 to read as follows:
Sec. 5801.10 Adoption of 2 CFR part 200.
The U.S. Election Assistance Commission adopts the Office of
Management and Budget (OMB) regulation in 2 CFR part 200. This part
gives regulatory effect to the OMB regulation for Federal awards issued
by the U.S. Election Assistance Commission. See 2 CFR 200.110(a)
regarding the process for amending 2 CFR part 200.
CHAPTER LIX--GULF COAST ECOSYSTEM RESTORATION COUNCIL
0
316. Revise part 5900 to read as follows
PART 5900--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
5900.10 Adoption of 2 CFR part 200.
5900.11 [Reserved]
Authority: 5 U.S.C. 301; 33 U.S.C. 1321(t)(2); 2 CFR part 200.
Sec. 5900.10 Adoption of 2 CFR part 200.
The Gulf Coast Ecosystem Restoration Council adopts the Office of
Management and Budget (OMB) regulation in 2 CFR part 200. This part
gives regulatory effect to the OMB regulation for Federal awards issued
by the Gulf Coast Ecosystem Restoration Council. See 2 CFR 200.110(a)
regarding the process for amending 2 CFR part 200.
Sec. 5900.11 [Reserved]
CHAPTER LX--FEDERAL COMMUNICATIONS COMMISSION
0
317. Revise part 6000 to read as follows
PART 6000--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
6000.1 Adoption of 2 CFR part 200.
6000.2 [Reserved]
Authority: 47 U.S.C. 154(i), 1752(b)(10)(C); 2 CFR part 200.
Sec. 6000.1 Adoption of 2 CFR part 200.
Except as otherwise may be provided by this part, the Federal
Communications Commission adopts the Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal
Awards set forth at 2 CFR part 200. This part gives regulatory effect
to the OMB regulation for Federal awards issued by the Federal
Communications Commission. See 2 CFR 200.110(a) regarding the process
for amending 2 CFR part 200.
[[Page 32304]]
Sec. 6000.2 [Reserved]
0
318. Add chapter LXI (consisting of parts 6100 through 6199) to
subtitle B to read as follows:
CHAPTER LXI--CONSUMER PRODUCT SAFETY COMMISSION
PART 6100--THE UNIFORM ADMINISTRATIVE REQUIREMENTS, COST
PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
PARTS 6101-6199 [RESERVED]
PART 6100--THE UNIFORM ADMINISTRATIVE REQUIREMENTS, COST
PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
6100.10 Adoption of 2 CFR part 200.
6100.11 [Reserved]
Authority: 15 U.S.C. 2054(c), 2090(a), and 8004(b)(2).
Sec. 6100.10 Adoption of 2 CFR part 200.
The Consumer Product Safety Commission adopts the Office of
Management and Budget's (OMB) regulation in 2 CFR part 200. This part
gives regulatory effect to the OMB regulation for Federal awards made
by the Consumer Product Safety Commission. See 2 CFR 200.110(a)
regarding the process for amending 2 CFR part 200. The Consumer Product
Safety Commission may amend its adoption of 2 CFR part 200 if agency-
specific additions, clarifications, or exceptions to the Government-
wide policies and procedures are required by Federal statute or are
approved by OMB. See 2 CFR 200.106. Any supplements to the OMB
regulation as needed for the Consumer Product Safety Commission,
including additions or clarifications, are set forth in this chapter.
Sec. 6100.11 [Reserved]
PARTS 6101-6199 [RESERVED]
0
319. Add chapter LXII (consisting of parts 6200 through 6299) to
subtitle B to read as follows:
CHAPTER LXII--DELTA REGIONAL AUTHORITY
PART 6200--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
PARTS 6201-6299 [RESERVED]
PART 6200--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
6200.10 Adoption of 2 CFR part 200.
6200.11 [Reserved]
Authority: 7 U.S.C. 2009aa-1 et seq.; Pub. L. 106-554, 114
Stat. 2763.
Sec. 6200.10 Adoption of 2 CFR part 200.
(a) The Delta Regional Authority adopts the Office of Management
and Budget's (OMB) regulation in 2 CFR part 200. This part gives
regulatory effect to the OMB regulation for Federal awards made by the
Delta Regional Authority.
(b) See 2 CFR 200.110(a) regarding the process for amending 2 CFR
part 200. The Delta Regional Authority may amend its adoption of 2 CFR
part 200 if agency-specific additions, clarifications, or exceptions to
the Government-wide policies and procedures are required by Federal
statute or are approved by OMB. See 2 CFR 200.106. Any supplements to
the OMB regulation as needed for the Delta Regional Authority,
including additions or clarifications, are set forth in this chapter.
Sec. 6200.11 [Reserved]
PARTS 6201-6299 [RESERVED]
0
320. Add chapter LXIII (consisting of parts 6300 through 6399) to
subtitle B to read as follows:
CHAPTER LXIII--APPRAISAL SUBCOMMITTEE OF THE FEDERAL FINANCIAL
INSTITUTIONS EXAMINATION COUNCIL
PART 6300--THE UNIFORM ADMINISTRATIVE REQUIREMENTS, COST
PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
PARTS 6301-6399 [RESERVED]
PART 6300--THE UNIFORM ADMINISTRATIVE REQUIREMENTS, COST
PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
6300.10 Adoption of 2 CFR part 200.
6300.11 [Reserved]
Authority: 12 U.S.C. 3335, 12 U.S.C. 3338(b)(4) and (5), 2 CFR
part 200.
Sec. 6300.10 Adoption of 2 CFR part 200.
The Appraisal Subcommittee of the Federal Financial Institutions
Examination Council (the Appraisal Subcommittee) adopts the Office of
Management and Budget's (OMB) regulation in 2 CFR part 200. This part
gives regulatory effect to the OMB regulation for Federal awards made
by the Appraisal Subcommittee. See 2 CFR 200.110(a) regarding the
process for amending 2 CFR part 200. The Appraisal Subcommittee may
amend its adoption of 2 CFR part 200 if agency-specific additions,
clarifications, or exceptions to the Government-wide policies and
procedures are required by Federal statute or are approved by OMB. See
2 CFR 200.106. Any supplements to the OMB regulation as needed for the
Appraisal Subcommittee, including additions or clarifications, are set
forth in this chapter.
Sec. 6300.11 [Reserved]
PARTS 6301-6399 [RESERVED]
0
321. Add chapter LXIV (consisting of parts 6400 through 6499) to
subtitle B to read as follows:
CHAPTER LXIV--MARINE MAMMAL COMMISSION
PART 6400--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
PARTS 6401-6499 [RESERVED]
[[Page 32305]]
PART 6400--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
6400.10 Adoption of 2 CFR part 200.
6400.11 [Reserved]
Authority: 16 U.S.C. 1401 et seq.; 2 CFR part 200.
Sec. 6400.10 Adoption of 2 CFR part 200.
The Marine Mammal Commission adopts the Office of Management and
Budget's (OMB) regulation in 2 CFR part 200. This part gives regulatory
effect to the OMB regulation for Federal awards made by the Marine
Mammal Commission. See 2 CFR 200.110(a) regarding the process for
amending 2 CFR part 200. The Marine Mammal Commission may amend its
adoption of 2 CFR part 200 if agency-specific additions,
clarifications, or exceptions to the Government-wide policies and
procedures are required by Federal statute or are approved by OMB. See
2 CFR 200.106. Any supplements to the OMB regulation as needed for the
Marine Mammal Commission, including additions or clarifications, will
be set forth in this chapter.
Sec. 6400.11 [Reserved]
PARTS 6401-6499 [Reserved]
0
322. Add chapter LXV (consisting of parts 6500 through 6599) to
subtitle B to read as follows:
CHAPTER LXV--MILLENNIUM CHALLENGE CORPORATION
PART 6500--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
PARTS 6501-6599 [Reserved]
PART 6500--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
6500.10 Adoption of 2 CFR part 200.
6500.11 [Reserved]
Authority: 22 U.S.C. 84.
Sec. 6500.10 Adoption of 2 CFR part 200.
The Millennium Challenge Corporation (MCC) adopts the Office of
Management and Budget's (OMB) regulation in 2 CFR part 200, except for
issuance of funding to or in support of candidate and eligible
countries as determined by MCC under the authority of its authorizing
statute, as amended. This part gives regulatory effect to the OMB
regulation for Federal awards made by the Millennium Challenge
Corporation, excepting those awards to or in support of candidate and
eligible countries as determined by MCC under the authority of its
authorizing statute, as amended. See 2 CFR 200.110(a) regarding the
process for amending 2 CFR part 200. The Millennium Challenge
Corporation may amend its adoption of 2 CFR part 200 if agency-specific
additions, clarifications, exceptions to the Government-wide policies
and procedures are required by Federal statute or are approved by OMB.
See 2 CFR 200.106. Any supplements to the OMB regulation as needed for
the Millennium Challenge Corporation, including additions or
clarifications, are set forth in this chapter. Publicly available
policies, processes, and rule for administrative requirements, cost
principles, and audit requirements for awards to or in support of
candidate and eligible countries can be found at https://www.mcc.gov/resources.
Sec. 6500.11 [Reserved]
PARTS 6501-6599 [Reserved]
0
323. Add chapter LXVI (consisting of parts 6600 through 6699) to
subtitle B to read as follows:
CHAPTER LXVI--NATIONAL CREDIT UNION ADMINISTRATION
PART 6600--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
PARTS 6601-6699 [Reserved]
PART 6600--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
Sec.
6600.10 Adoption of 2 CFR part 200.
6600.15 Other statutory and regulatory requirements.
6600.102 Exceptions.
Authority: 12 U.S.C. 1756, 1757, 1766, 1772c-1, 1782, 1784,
1785, 1786, 2 CFR part 200.
Sec. 6600.10 Adoption of 2 CFR part 200.
Except as otherwise may be provided by this chapter, the National
Credit Union Administration (NCUA) adopts the Office of Management and
Budget's (OMB) Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards set forth at 2 CFR part 200.
This part gives regulatory effect to the OMB regulation for Federal
awards administered by the NCUA. See 2 CFR 200.110(a) regarding the
process for amending 2 CFR part 200. The NCUA may amend its adoption of
2 CFR part 200 if agency-specific additions, clarifications, or
exceptions to the Government-wide policies and procedures are required
by Federal statute or are approved by OMB. See 2 CFR 200.106. Any
supplements to the OMB regulation as needed for the NCUA, including
additions or clarifications, are set forth in this chapter.
Sec. 6600.15 Other statutory and regulatory requirements.
Pursuant to 12 U.S.C. 1772c-1, program-specific regulations
governing the Community Development Revolving Loan Fund for Credit
Unions (CDRLF) may be found in 12 CFR part 705. These program-specific
regulations supplement 2 CFR part 200. NCUA policies concerning CDRLF
awards, including notices, award terms and conditions, and regulations,
are available on-line at www.ncua.gov. See 2 CFR 200.101(d).
Sec. 6600.102 Exceptions.
(a) Statutory or regulatory exceptions. The NCUA may adjust
requirements to a class of Federal awards if that requirement is
specifically authorized or required by a Federal statute or regulation
adopted in the Code of Federal Regulations after opportunity for public
comment, except for the requirements in 2 CFR part 200, subpart F.
Consistent with 2 CFR 200.101(d) and 200.102, such adjustments may be
set forth in funding opportunities and NCUA award documents.
(b) Urgent awards. Except for those requirements imposed by statute
or 2 CFR part 200, subpart F, the NCUA may adjust requirements when
making Federal awards on an urgent or emergency basis under 12 CFR
705.8.
(c) Federal payment. Notwithstanding 2 CFR 200.305(d), the Federal
Credit Union Act and the NCUA regulations at 12 CFR 705.7(g) govern the
disbursement and deposit of CDRLF awards.
(d) Appeals. Notwithstanding 2 CFR 200.342, the Federal Credit
Union Act and the NCUA regulations at 12 CFR 705.10 govern appeals for
non-qualification and appeals of technical assistance grant
reimbursement denials.
PARTS 6601-6699 [Reserved]
[FR Doc. 2026-10817 Filed 5-28-26; 12:00 pm]
BILLING CODE 3110-01-P