[Federal Register Volume 70, Number 168 (Wednesday, August 31, 2005)]
[Rules and Regulations]
[Pages 51862-51863]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-16646]



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Part II





Office of Management and Budget





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2 CFR Part 1, et al.



Grants Policy Streamlining Overview and Guidance on Nonprocurement 
Debarment and Suspension and Cost Principles Guidance; Cost Principles 
for Educational Institutions (OMB Circular A-21), State, Local, and 
Indian Tribal Governments (OMB Circular A-87) and Non-Profit 
Organizations (OMB Circular A-122); Final Rules

Federal Register / Vol. 70, No. 168 / Wednesday, August 31, 2005 / 
Rules and Regulations

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OFFICE OF MANAGEMENT AND BUDGET

2 CFR Part 1


Grants Policy Streamlining Overview on Nonprocurement Debarment 
and Suspension and Cost Principles Guidance

AGENCY: Office of Management and Budget.

ACTION: Publication of policy guidance in 2 CFR subtitle A.

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SUMMARY: This document and the four Federal Register documents 
following it in this issue of the Federal Register are related to a 
broad initiative that established Title 2 of the Code of Federal 
Regulations (CFR) as the single location where the public can find both 
OMB guidance for grants and agreements and the associated Federal 
agency implementing regulations. The Federal Register document that 
established Title 2 CFR (see the SUPPLEMENTARY INFORMATION section) 
describes this broad initiative. The initiative provides a good 
foundation for streamlining and simplifying the policy framework for 
grants and agreements, which is one objective of OMB and the Federal 
agencies in implementing the Federal Financial Assistance Management 
Improvement Act of 1999 (Pub. L. 106-107).
    The Federal Register documents following this one publish four 
additional parts in subtitle A, 2 CFR. These four parts contain 
guidance to Federal agencies that presently is in three separate OMB 
circulars and one other OMB policy document. The four documents 
following this one are discussed further in the SUPPLEMENTARY 
INFORMATION section of this document.
    This first document provides an overview for the sequence of the 
five Federal Register documents published by OMB in this issue of the 
Federal Register. It also makes changes to 2 CFR part 1, the part in 2 
CFR that provides general information about the title. The changes 
conform part 1 with the four parts of OMB guidance added by the 
documents following this one.

DATES: The amendments this document makes to 2 CFR part 1 are effective 
on August 31, 2005.

FOR FURTHER INFORMATION CONTACT: Elizabeth Phillips, Office of Federal 
Financial Management, Office of Management and Budget, telephone (202) 
395-3053 (direct) or (202) 395-3993 (main office) and e-mail: 
ephillip@omb.eop.gov.

SUPPLEMENTARY INFORMATION: On May 11, 2004, OMB established title 2 CFR 
with two subtitles [69 FR 26276]. Subtitle A, ``Government-wide Grants 
and Agreements,'' contains OMB policy guidance to Federal agencies on 
grants and agreements. Subtitle B, ``Federal Agency Regulations for 
Grants and Agreements,'' will contain Federal agencies' regulatory 
implementation of the OMB guidance, as it applies to grants and other 
financial assistance agreements and nonprocurement transactions (for 
portions of the guidance applicable to procurement contracts, 
implementation for procurement will continue to be in the Federal 
Acquisition Regulation in title 48 CFR).
    As stated in the Federal Register notice establishing title 2 CFR, 
OMB plans to publish its guidance in subtitle A of that title in two 
phases. In the first phase, OMB is relocating the circulars in their 
current form into chapter II of subtitle A. In the second phase, OMB 
will publish guidance in chapter I of subtitle A after: (1) Proposing 
for public comment any changes to streamline and simplify the guidance 
based on recommendations from the interagency working groups 
implementing Public Law 106-107; and (2) resolving the comments and 
finalizing the guidance with the help of the working groups.
    The four Federal Register documents following this one publish four 
OMB guidance documents in subtitle A. The first, which is the document 
immediately following this one, publishes the OMB guidance on 
nonprocurement debarment and suspension in subtitle A, chapter I, part 
180. OMB is publishing this guidance in chapter I because the substance 
is up to date, and we therefore do not expect the interagency working 
groups implementing Public Law 106-107 to propose any changes to it in 
the near future. The guidance is up to date because it is substantively 
the same as the common rule that 33 Federal agencies recently updated 
[68 FR 66534, November 26, 2003] after resolving public comments.
    The other three Federal Register documents published today relocate 
OMB Circulars A-21, A-87, and A-122, the OMB circulars with cost 
principles, in their current form, into chapter II of subtitle A. An 
interagency working group under Public Law 106-107 is still considering 
proposals for streamlining these circulars. We will move the circulars 
to chapter I after any streamlining is completed (any proposals for 
substantive change will be published first, with an opportunity for 
public comment).
    Conforming changes to 2 CFR part 1. The publication of the OMB 
guidance on nonprocurement debarment and suspension and OMB Circulars 
A-21, A-87 and A-122 as parts 180, 220, 225, and 230 in 2 CFR warrants 
conforming changes in Sec. Sec.  1.205 and 1.215 of 2 CFR part 1. The 
amendment to Sec.  1.215 adds references to the four new parts to the 
table in that section, to explain the relationship of the parts to 
their previous issuances as OMB circulars.
    The amendments to Sec.  1.205 clarify the statement in that section 
that the types of instruments subject to the guidance in subtitle A of 
2 CFR vary from one part of the guidance to another. With the 
relocation of the cost principles in subtitle A, we are adding a 
statement to clarify that all portions of the guidance in subtitle A of 
2 CFR apply to grants and cooperative agreements, some portions apply 
to other types of financial assistance or nonprocurement instruments, 
and some portions indirectly apply to procurement contracts. We are 
adding new paragraphs Sec.  1.205(b) and (c) that give:
     The guidelines on debarment and suspension as an example 
of guidance that applies to nonprocurement instruments in general, and 
not just financial assistance; and
     The cost principles in 2 CFR parts 220, 225, and 230 as 
specific examples of guidance that applies to procurement, as well as 
financial assistance. Circulars A-21, A-87, and A-122 always have 
provided guidance to Federal agencies on costs that are allowable for 
reimbursement under procurement contracts to educational, governmental, 
and other nonprofit organizations, respectively. It should be noted, 
however, that the regulation formally imposing that requirement on 
Federal agencies' contracts is not in 2 CFR but in subparts 31.3, 31.6, 
and 31.7 of 48 CFR part 31 in the Federal Acquisition Regulation (FAR).

List of Subjects

2 CFR Part 1

    Cooperative agreements, Grant programs, Grants administration.

    Dated: August 8, 2005.
Joshua B. Bolten,
Director.

Authority and Issuance

0
For the reasons set forth above, the Office of Management and Budget 
amends 2 CFR, subtitle A, as follows:

PART 1--[AMENDED]

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

    Authority: 31 U.S.C. 503; 31 U.S.C. 1111; 41 U.S.C. 405; 
Reorganization Plan No. 2 of

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1970; E.O. 11541, 35 FR 10737, 3 CFR, 1966--1970, p. 939.


0
2. Section 1.205 is revised to read as follows:


Sec.  1.205  Applicability to grants and other funding instruments.

    The types of instruments that are subject to the guidance in this 
subtitle vary from one portion of the guidance to another (note that 
each part identifies the types of instruments to which it applies). All 
portions of the guidance apply to grants and cooperative agreements, 
some portions also apply to other types of financial assistance or 
nonprocurement instruments, and some portions also apply to procurement 
contracts. For example, the:
    (a) Guidance on debarment and suspension in part 180 of this 
subtitle applies broadly to all financial assistance and other 
nonprocurement transactions, and not just to grants and cooperative 
agreements.
    (b) Cost principles in parts 220, 225 and 230 of this subtitle 
apply to procurement contracts, as well as to financial assistance, 
although those principles are implemented for procurement contracts 
through the Federal Acquisition Regulation in Title 48 of the CFR, 
rather than through Federal agency regulations on grants and agreements 
in this title.

0
3. Section 1.215 is revised to read as follows:


Sec.  1.215  Relationship to previous issuances.

    Although some of the guidance was organized differently within OMB 
circulars or other documents, much of the guidance in this subtitle 
existed prior to the establishment of title 2 of the CFR. Specifically:

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                                                     Previously was in .
      Guidance in . . .             On . . .                 . .
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(a) Chapter I, part 180.....  Nonprocurement        OMB guidance that
                               debarment and         conforms with the
                               suspension.           government-wide
                                                     common rule (see 60
                                                     FR 33036, June 26,
                                                     1995).
(b) Chapter II, part 215....  Administrative        OMB Circular A-110.
                               requirements for
                               grants and
                               agreements.
(c) Chapter II, part 220....  Cost principles for   OMB Circular A-21.
                               educational
                               institutions.
(d) Chapter II, part 225....  Cost principles for   OMB Circular A-87.
                               State, local, and
                               Indian tribal
                               governments.
(e) Chapter II, part 230....  Cost principles for   OMB Circular A-122.
                               non-profit
                               organizations.
(f) [Reserved].                                     ....................
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[FR Doc. 05-16646 Filed 8-30-05; 8:45 am]
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