[Federal Register Volume 77, Number 7 (Wednesday, January 11, 2012)]
[Proposed Rules]
[Pages 1657-1658]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-241]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
14 CFR Part 1260
RIN 2700-AD79
Profit and Fee Under Federal Financial Assistance Awards
AGENCY: National Aeronautics and Space Administration.
ACTION: Proposed rule.
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SUMMARY: NASA is proposing to revise the NASA Grant & Cooperative
Agreement Handbook to prohibit the payment of profit or fee on Federal
Financial Assistance awards, i. e. grants and cooperative agreements.
This is an extension of the currently existing prohibition on payment
of profit or fee to commercial entities under Federal Financial
Assistance awards.
DATES: Interested parties should submit comments to NASA at the address
identified below on or before March 12, 2012 to be considered in
formulation of the final rule.
ADDRESSES: Interested parties may submit comments, identified by RIN
2700-AD79, via the Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
Comments may also be submitted to R. Todd Lacks (Room 5J75), NASA
Headquarters, Office of Procurement, Contract Management Division,
Washington, DC 20546. Comments may also be submitted by email to:
todd.lacks@nasa.gov.
FOR FURTHER INFORMATION CONTACT: R. Todd Lacks, NASA Headquarters,
Office of Procurement, Contract Management Division, Room 5J75;
telephone: (202) 358-0799; email: todd.lacks@nasa.gov.
SUPPLEMENTARY INFORMATION:
I. Background
Historically, NASA has discouraged the payment of profit or fee
under its Federal Financial Assistance awards because payment in excess
of costs is inconsistent with the intent of grant and cooperative
agreements which provide funding in the form of financial assistance to
recipients for their performance of a public purpose. In the case of
awards to commercial firms, payment of profit or fee is specifically
prohibited. Because the prohibition does not include other recipients
such as educational and non-profit organizations, NASA's policy has
been misinterpreted and inconsistent application has occurred. A recent
review indicates that, in instances where the Agency has accepted such
proposals and paid management fees, the payment of those fees has been
inappropriate for the grant or cooperative agreement effort. While the
payment of fees, historically, has occurred on less than 1 percent of
Agency grants and cooperative agreements, this proposed rule which
extends the prohibition on payment of profit or fees to all recipients
of NASA grants and cooperative agreements, will ensure that the
regulation accurately reflects Agency policy.
II. Executive Orders 12866 and 13563
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). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting
[[Page 1658]]
flexibility. This is not a significant regulatory action and,
therefore, was not subject to review under section 6(b) of E.O. 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
III. Regulatory Flexibility Act
NASA certifies that this proposed rule will not have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
because the rule does not impose any additional requirements on small
entities and currently less than 1 percent of recipients of NASA grants
and cooperative agreements receive profit or management fees.
IV. Paperwork Reduction Act
The Paper Reduction Act (Pub. L. 104-13) is not applicable because
the prohibition on payment of profit and management fees by NASA does
not require the submission of any information by recipients that
requires the approval of the Office of Management and Budget under 44
U.S.C. 3501, et seq.
List of Subjects in 14 CFR Part 1260
Colleges and universities, Business and Industry, Grant programs,
Grants administration, Cooperative agreements, State and local
governments, Non-profit organizations, Commercial firms, Recipients.
William P. McNally,
Assistant Administrator for Procurement.
Accordingly, 14 CFR Part 1260 is proposed to be amended as follows:
1. The authority citation for 14 CFR 1260 continues to read as
follows:
Authority: 42 U.S.C. 2473(c)(1), Pub. L. 97-258, 96 Stat. 1003
(31 U.S.C. 6301, et seq.), and OMB Circular A-110.
PART 1260--GRANTS AND COOPERATIVE AGREEMENTS
2. In Sec. 1260.4, paragraph (b)(2) is revised to read as follows:
Sec. 1260.4 Applicability.
* * * * *
(b) * * *
(1) * * *
(2) NASA does not pay profit or fee under grants or cooperative
agreements.
* * * * *
3. In Sec. 1260.10, paragraph (b)(1)(iv) is added to read as
follows:
Sec. 1260.10 Proposals.
* * * * *
(b) * * *
(1) * * *
(iv) NASA does not pay profit or fee under its grants or
cooperative agreements.
* * * * *
4. In Sec. 1260.14, paragraph (e) is added to read as follows:
Sec. 1260.14 Limitations.
* * * * *
(e) NASA does not pay profit or fee under its grants or cooperative
agreements.
[FR Doc. 2012-241 Filed 1-10-12; 8:45 am]
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