[Federal Register Volume 79, Number 94 (Thursday, May 15, 2014)]
[Proposed Rules]
[Pages 27795-27801]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-11117]


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DEPARTMENT OF ENERGY

10 CFR Part 600

RIN 1991-AC02


Administrative Requirements for Grants and Cooperative Agreements

AGENCY: Department of Energy.

ACTION: Notice of proposed rulemaking and opportunity for public 
comment.

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SUMMARY: The Department of Energy (DOE) is proposing to revise existing 
regulations covering the administrative requirements for grants and 
cooperative agreements with for-profit organizations. The proposed 
regulations would modify title provisions, and requirements related to 
the handling of real property and equipment acquired with federal 
funds. They would also add provisions related to export control 
requirements and supporting U.S. manufacturing, reporting on 
utilization of subject inventions, novation of financial assistance 
agreements, and changes of control of recipients.

DATES: DOE will accept comments, data, and information regarding this 
notice of proposed rulemaking (NOPR) no later than July 14, 2014.

ADDRESSES: Any comments submitted must identify this NOPR on 
Administrative Requirements for Grants and Cooperative Agreements, and 
provide regulatory information number (RIN) 1991-AC02. Comments may be 
submitted using any of the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: DEARrulemaking@hq.doe.gov. Include RIN 1991-AC02 in the 
subject line of the message.
    3. Mail: U.S. Department of Energy, Office of Acquisition and 
Program Management, MA-611, 1000 Independence Avenue SW., Washington, 
DC 20585. Comments by email are encouraged.
    No faxes will be accepted.

FOR FURTHER INFORMATION CONTACT: Ellen Colligan, Procurement Analyst, 
U.S. Department of Energy, Office of Acquisition and Project 
Management, Contract and Financial Assistance Policy Division MA-611, 
Telephone: (202) 287-1776. Email: ellen.colligan@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Summary of Proposed Rule
III. Procedural Requirements
    A. Review Under Executive Order 12866 and 13563
    B. Review Under Executive Order 12988
    C. Review Under the Regulatory Flexibility Act
    D. Review Under the Paperwork Reduction Act
    E. Review Under the National Environmental Policy Act
    F. Review Under Executive Order 13132
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 13211
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001

I. Background

    The Department makes substantial use of financial assistance awards 
(grants and cooperative agreements) to for-profit organizations to meet 
its mission goals. To manage these awards, the Department issued a rule 
adding subpart D, Administrative Requirements for Grants and 
Cooperative Agreements with For-Profit Organizations, to Title 10 of 
the Code of Federal Regulations effective October 1, 2003, published 
August 21, 2003 (68 FR 50646). Today the Department is proposing to add

[[Page 27796]]

certain requirements found in subpart D, and to revise others.
    This proposed rule would add provisions concerning: (1) The 
Department's title to and interest in property purchased by financial 
assistance recipients with Federal funds; (2) the Department's ability 
to monitor and control the use of Federal funds, property purchased 
with those funds, and any intellectual property developed with such 
funds; (3) the related issues of novation (that is, the transfer of a 
financial assistance agreement from one recipient entity to another) 
and of change of control of a recipient (that is, a transfer of control 
of the recipient entity from one individual, group of individuals or 
entity, to another); (4) reporting by recipients regarding the 
utilization of inventions developed with Federal funds; and (5) export 
controls applicable to inventions and technology developed with Federal 
funds, and support for U.S. manufacturing of inventions and technology 
developed with Federal funds.
    In particular, the Department's proposed revision to 10 CFR 
600.321, which governs the title, use, and disposition of real 
property, as defined at 10 CFR 600.302, and equipment purchased by the 
recipient of Federal funds, would add clarity for both the Department 
and recipients. The meanings of portions of 10 CFR 600.321 have been 
questioned by parties to bankruptcy proceedings and in other contexts. 
Those questions have concerned the Government's title to and interest 
in property, or the proceeds from the sale of property purchased in 
whole or in part with Federal funds. In particular, recipients of the 
Department's financial assistance that later declare bankruptcy and 
acquirers of those recipients' real property and equipment have 
questioned whether the Department's claim to real property and 
equipment purchased with the Department's funding is an unsecured claim 
as opposed to either a secured claim or a right in title to a portion 
of the proceeds generated from any sale of the real property and 
equipment. This revision seeks to provide more clarity with regard to 
this issue, not only for purposes of efficiency in bankruptcy, but for 
any disposition of real property and equipment purchased with federal 
funds.
    In addition, the Department's proposed revisions would better 
enable it to understand and influence the use and manufacture of 
inventions developed with Federal funds. The Department's proposed 
revisions also make clear its discretion to (a) continue funding a 
recipient that undergoes a change of control as that term is defined in 
this regulation (which may thereby affect the entity's ability to carry 
out the project funded by the financial assistance agreement), and (b) 
consent to a request from a recipient to transfer its financial 
assistance agreement to a third party. These revisions will increase 
the Department's ability to manage its disbursements and to exercise 
discretion with regard to both the entities to which funding is 
provided and domestic manufacturing.
    Contracting officers, as defined at 10 CFR 600.3, would be required 
to include the changes of this proposed rule in all announcements of 
opportunities for Federal funding issued by DOE on or after the 
effective date of any final rule. Contracting officers may include the 
changes of any final rule in funding opportunity announcements issued 
before the effective date of that final rule at their discretion, 
provided award of the resulting financial assistance agreement(s) is 
planned on or after the effective date. All financial assistance 
agreements currently subject to 10 CFR part 600, subpart D would be 
affected. As such, contracting officers would incorporate the changes 
of this proposed rule into affected financial assistance agreements 
before making continuation or renewal awards, obligating funds in 
future budget periods, as defined at 10 CFR 600.3, or adding additional 
terms or conditions to the award.

II. Summary of the Proposed Rule

    Subpart D of 10 CFR part 600 contains the administrative 
requirements for financial assistance agreements with for-profit 
organizations.
    This proposed rule would add a paragraph to Sec.  600.304(a) to 
list change of control and noncompliance with real property or 
equipment requirements as circumstances that would allow the Department 
to impose special award conditions.
    The changes proposed to Sec.  600.321 would update the provisions 
describing Government title to and interest in real property and 
equipment purchased with Federal funds, and amend certain provisions 
regarding the use of such property. The revised section would require, 
among other things, recipients of awards with a Federal share exceeding 
$1,000,000 to file a Uniform Commercial Code (UCC) financing statement 
for equipment purchased under the financial assistance agreement, and 
would state the Department's discretion to require such a filing for 
equipment purchased by a recipient of less than $1,000,000. Small 
Business Innovation Research and Small Business Technology Transfer 
programs would be excluded from this requirement pursuant to Sec.  
600.321. Such a statement would provide public notice of the 
conditional nature of the recipient's title to such property, and the 
Government's continuing interest in such property. Any real property or 
equipment offered as cost share would be subject to the same 
requirements as property purchased directly with Federal funds. The 
proposed rule would also modify Sec.  600.321(a) to change written 
approval requirements for the purchase of real property. Prior written 
approval is required under the current regulations only if the Federal 
funds used to acquire the property exceed $5,000. The updated rule also 
adds language to Sec. Sec.  600.321(b)(1) and 600.321(g) to reflect 
that the contracting officer may make the determination as to whether 
property is no longer needed for the purposes of the project. The 
updated rule adds language at Sec.  600.321(b)(2) to clarify that 
contracting officer approval must be in writing for the recipient to 
encumber property. The rule would also add a new paragraph at Sec.  
600.321(c) specifying remedies for failure to comply with the terms of 
Sec.  600.321 and new language at Sec.  600.321(d) to clarify the 
government's interest in property purchased under the award. The rule 
currently states that the government has an ``interest'' in property; 
it now says that the government has ``an undivided reversionary 
interest in the share of the property equal to the federal 
participation in the project.''
    The proposed rule would add a new Sec.  600.326 requiring 
recipients to report on the utilization of subject inventions, as 
defined at 35 U.S.C. 201(e). The new section would require recipients 
to submit periodic reports on the use and manufacture of subject 
inventions at the request of DOE or at least annually for ten years 
after the initial reporting subject inventions to DOE.
    The proposed rule also would add a new Sec.  600.327 setting forth 
requirements to comply with existing export controls and to support DOE 
manufacturing goals. This new section would require that any technology 
transfer must be consistent with U.S. export laws. These export laws 
are as described at 78 FR 35195 (June 12, 2013). This section would 
also give DOE authority to require U.S. Manufacturing Plans, which are 
voluntary commitments by awardees to meet a certain level of U.S. 
manufacture, as part of proposals to the extent permissible under the 
law, for financial assistance agreements for research, development, 
and/or demonstration

[[Page 27797]]

projects. The section also would provide that a waiver or modification 
of these commitments may be sought, and would describe the 
considerations that DOE may weigh in considering whether to approve 
such a request. Depending on the level of technological or commercial 
readiness of a particular technology, and the desire to develop a U.S. 
manufacturing presence for that technology, a DOE funding Program may 
place more or less weight on U.S. manufacture commitments in connection 
with technology development plans.
    The proposed rule would add a new Sec.  600.354 establishing 
procedures for change of control of a recipient of an award with a 
Federal share of more than $10,000,000. This amount was chosen to focus 
on demonstration project and large R&D projects, without necessarily 
including smaller assistance agreements. The new section would require 
the recipient to notify the contracting officer within 30 days of its 
knowledge of a change of control as defined in the proposed rule. When 
a change of control occurs, the contracting officer would have 
authority to impose special award conditions pursuant to 10 CFR 
600.304.
    The proposed rule would also add a Sec.  600.355 establishing 
procedures for, and clarifying the Department's discretion with regard 
to, novation of financial assistance agreements. The new section would 
explicitly provide that financial assistance agreements are not 
assignable absent written consent from the contracting officer. The new 
regulation would state that if the contracting officer determines that 
it is not in the best interests of the Government to consent to a 
novation, then the original recipient would remain subject to the terms 
of the financial assistance agreement.

III. Procedural Requirements

A. Review Under Executive Orders 12866 and 13563

    This regulatory action has been determined to be a significant 
regulatory action under Executive Order 12866, Regulatory Planning and 
Review, 58 FR 51735, October 4, 1993.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011 (76 FR 3821, Jan. 21, 2011). 
Executive Order 13563 is supplemental to and explicitly reaffirms the 
principles, structures, and definitions governing regulatory review 
established in Executive Order 12866. To the extent permitted by law, 
agencies are required by Executive Order 13563 to: (1) Propose or adopt 
a regulation only upon a reasoned determination that its benefits 
justify its costs (recognizing that some benefits and costs are 
difficult to quantify); (2) tailor regulations to impose the least 
burden on society, consistent with obtaining regulatory objectives, 
taking into account, among other things, and to the extent practicable, 
the costs of cumulative regulations; (3) select, in choosing among 
alternative regulatory approaches, those approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety, and other advantages; distributive impacts; and equity); 
(4) to the extent feasible, specify performance objectives, rather than 
specifying the behavior or manner of compliance that regulated entities 
must adopt; and (5) identify and assess available alternatives to 
direct regulation, including providing economic incentives to encourage 
the desired behavior, such as user fees or marketable permits, or 
providing information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, the Office of Information and Regulatory Affairs has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. DOE believes that today's NOPR is 
consistent with these principles, including the requirement that, to 
the extent permitted by law, agencies adopt a regulation only upon a 
reasoned determination that its benefits justify its costs and, in 
choosing among alternative regulatory approaches, those approaches 
maximize net benefits.

B. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, Section 3(a) of Executive Order 12988, 
Civil Justice Reform, 61 FR 4729, February 7, 1996, imposes on 
executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; (3) provide a clear legal standard 
for affected conduct rather than a general standard; and (4) promote 
simplification and burden reduction. With regard to the review required 
by Section 3(a), Section 3(b) of Executive Order 12988 specifically 
requires that executive agencies make every reasonable effort to ensure 
that the regulation: (1) Clearly specifies the preemptive effect, if 
any; (2) clearly specifies any effect on existing Federal law or 
regulation; (3) provides a clear legal standard for affected conduct 
while promoting simplification and burden reduction; (4) specifies the 
retroactive effect, if any; (5) adequately defines key terms; and (6) 
addresses other important issues affecting clarity and general 
draftsmanship under any guidelines issued by the Attorney General. 
Section 3(c) of Executive Order 12988 requires executive agencies to 
review regulations in light of applicable standards in section 3(a) and 
section 3(b) to determine whether they are met or that it is 
unreasonable to meet one or more of them. DOE has completed the 
required review and determined that, to the extent permitted by law, 
these regulations meet the relevant standards of Executive Order 12988.

C. Review Under the Regulatory Flexibility Act

    This proposed rule has been reviewed under the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., which requires preparation of an 
initial regulatory flexibility analysis for any rule that must be 
proposed for public comment and is likely to have a significant 
economic impact on a substantial number of small entities. This 
proposed rule will not have a significant impact on small entities as 
it applies to only for-profit entities (eliminating small non-profits, 
individuals or other small entities not set up as a for-profit). It 
also eliminates small for-profit entities receiving awards through SBIR 
and STTR programs. Historically the awards made by DOE under subchapter 
D are to businesses considered large in their industry or field. 
Accordingly, DOE certifies that this proposed rule would not have a 
significant economic impact on a substantial number of small entities, 
and, therefore, no regulatory flexibility analysis has been prepared.

D. Review Under the Paperwork Reduction Act

    The proposed rule would require the preparation and submission of a 
UCC financing statement for awards where the Federal share exceeds $1 
million. This collection of information is required for the Department 
to protect the taxpayers by clarifying the rights to real property and 
equipment purchased under financial assistance awards.
    Under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., an 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless the collection has been 
reviewed and assigned a control

[[Page 27798]]

number by Office of Management and Budget (OMB).
    The collection of information for DOE financial assistance awards 
has been approved by OMB under control number 1910-0400. Public 
reporting burden for the approved collection of information is 
estimated to average 13.88 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. The Department is submitting to the Office 
of Management and Budget (OMB), simultaneously with the publication of 
this proposed rule, information explaining the proposed amendments to 
the current collection of information for review and approval under the 
Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

E. Review Under the National Environmental Policy Act

    DOE has concluded that promulgation of this proposed rule falls 
into a class of actions which would not individually or cumulatively 
have significant impact on the human environment, as determined by 
DOE's regulations, 10 CFR part 1021, subpart D, implementing the 
National Environmental Policy Act (NEPA) of 1969, 42 U.S.C. 4321 et 
seq. Specifically, this proposed rule is categorically excluded from 
NEPA review because the amendments to 10 CFR part 600 subpart D would 
be strictly procedural (categorical exclusion A6). Therefore, this 
proposed rule does not require an environmental impact statement or 
environmental assessment pursuant to NEPA.

F. Review Under Executive Order 13132

    Executive Order 13132, 64 FR 43255, August 4, 1999, imposes certain 
requirements on agencies formulating and implementing policies or 
regulations that preempt state law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the states and carefully assess the 
necessity for such actions. DOE has examined today's proposed rule and 
has determined that it would not preempt state law and would not have a 
substantial direct effect on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government. No further 
action is required by Executive Order 13132.

G. Review Under the Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995, Public Law 104-4, 
requires a federal agency to perform a detailed assessment of costs and 
benefits of any rule imposing a federal mandate with costs to state, 
local or tribal governments, or to the private sector, of $100 million 
or more in any single year. This rulemaking does not impose a federal 
mandate on state, local or tribal governments or on the private sector.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999, Public Law 105-277, requires federal agencies to issue a 
Family Policymaking Assessment for any rule or policy that may affect 
family well-being. This proposed rule would have no impact on family 
well-being.

I. Review Under Executive Order 13211

    Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use, 66 FR 28355, 
May 22, 2001, requires federal agencies to prepare and submit to the 
Office of Information and Regulatory Affairs (OIRA), OMB, a Statement 
of Energy Effects for any significant energy action. A ``significant 
energy action'' is defined as any action by an agency that promulgates 
or is expected to lead to promulgation of a final rule, and that: (1) 
Is a significant regulatory action under Executive Order 12866, or any 
successor order; and (2) is likely to have a significant adverse effect 
on the supply, distribution, or use of energy, or (3) is designated by 
the Administrator of OIRA as a significant energy action. For any 
significant energy action, the agency must give a detailed statement of 
any adverse effects on energy supply, distribution, or use should the 
proposal be implemented, and of reasonable alternatives to the action 
and their expected benefits on energy supply, distribution, and use.
    This proposed rule is not a significant energy action. Accordingly, 
DOE has not prepared a Statement of Energy Effects.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    The Treasury and General Government Appropriations Act, 2001, 44 
U.S.C. 3516, note, provides for agencies to review most disseminations 
of information to the public under implementing guidelines established 
by each agency pursuant to general guidelines issued by OMB. OMB's 
guidelines were published at 67 FR 8452, February 22, 2002, and DOE's 
guidelines were published at 67 FR 62446, October 7, 2002. DOE has 
reviewed today's proposed rulemaking under the OMB and DOE guidelines 
and has concluded that it is consistent with applicable policies in 
those guidelines.

List of Subjects in 10 CFR Part 600

    Accounting, Administrative practice and procedure, Grant programs, 
Reporting and recordkeeping requirements.

    Issued in Washington, DC, on May 7, 2014.
Paul Bosco,
Director, Office of Acquisition and Project Management, Department of 
Energy.
Barbara H. Stearrett,
Director, Office of Acquisition Management, National Nuclear Security 
Administration.

    For the reasons stated in the preamble, the Department of Energy 
proposes to amend part 600 of chapter II, title 10 of the Code of 
Federal Regulations to read as follows:

PART 600--FINANCIAL ASSISTANCE RULES

0
1. The authority citation for part 600 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.

0
2. Amend Sec.  600.304 by revising paragraphs (a)(4) and (5) and adding 
paragraphs (a)(6) and (7) to read as follows:


Sec.  600.304  Special award conditions.

    (a) * * *
    (4) Has not conformed to the terms and conditions of a previous 
award;
    (5) Has a change of control as defined in Sec.  600.354;
    (6) Fails to comply with real property and equipment requirements 
at Sec.  600.321(b); or
    (7) Is not otherwise responsible.
* * * * *
0
3. Revise Sec.  600.321 to read as follows:


Sec.  600.321  Real property and equipment.

    (a) Prior approvals for acquisition with Federal funds. Recipients 
may purchase real property or equipment with an acquisition cost per 
unit of $5,000 or more in whole or in part with Federal funds only with 
the prior written approval of the contracting officer or in accordance 
with express award terms.
    (b) Title. Unless a statute specifically authorizes and the award 
specifies that title to property vests unconditionally in the 
recipient, title to real property or equipment vests in the recipient, 
subject

[[Page 27799]]

to all terms and conditions of the award and that the recipient shall:
    (1) Use the real property or equipment for the authorized purposes 
of the project until funding for the project ceases, or until the real 
property or equipment is no longer needed for the purposes of the 
project, as may be determined by the contracting officer;
    (2) Not encumber or permit any encumbrance on the real property or 
equipment without the prior written approval of the contracting 
officer;
    (3) Use and dispose of the real property or equipment in accordance 
with paragraphs (e), (f) and (g) of this section; and
    (4) Properly record, and consent to the Department's ability to 
properly record if the recipient fails to do so, UCC financing 
statement(s) for all equipment purchased with Federal funds (Financial 
assistance awards made under the Small Business Innovation Research/
Small Business Technology Transfer (SBIR/STTR) program are exempt from 
this requirement unless otherwise specified within the grant 
agreement); such a filing is required when the Federal share of the 
financial assistance agreement is more than $1,000,000, and the 
Contracting Officer may require it in his or her discretion when the 
Federal share is less than $1,000,000. These financing statement(s) 
must be approved in writing by the contracting officer prior to the 
recording, and they shall provide notice that the recipient's title to 
all equipment (not real property) purchased with Federal funds under 
the financial assistance agreement is conditional pursuant to the terms 
of this section, and that the Government retains an undivided 
reversionary interest in the equipment. The UCC financing statement(s) 
must be filed before the contracting officer may reimburse the 
recipient for the Federal share of the equipment unless otherwise 
provided for in the relevant financial assistance agreement. The 
recipient shall further make any amendments to the financing statements 
or additional recordings, including appropriate continuation 
statements, as necessary or as the contracting officer may direct.
    (c) Remedies. If the recipient fails at any time to comply with any 
of the conditions or requirements of paragraph (b) of this section, 
then the contracting officer may:
    (1) Notify the recipient of noncompliance in accordance with Sec.  
600.352, which may lead to suspension or termination of the award;
    (2) Impose special award conditions pursuant to Sec.  600.304;
    (3) Issue instructions to the recipient for disposition of the 
property in accordance with paragraph (g) of this section;
    (4) In the case of a failure to properly record UCC financing 
statement(s) in accordance with paragraph (b)(4) of this section, 
effect such a recording; and
    (5) Apply other remedies that may be legally available.
    (d) Title to and Federal interest in real property or equipment 
offered as cost-share. As provided in Sec.  600.313, a recipient may 
offer the fair market value of real property or equipment that is 
purchased with recipient's funds or that is donated by a third party to 
meet a portion of any required cost sharing or matching. If a resulting 
award includes such property as a portion of the recipient's cost 
share, the recipient holds conditional title to the property and the 
Government has an undivided reversionary interest in the share of the 
property value equal to the Federal participation in the project. The 
property is treated as if it had been acquired in part with Federal 
funds, and is subject to the provisions of paragraph (b) of this 
section and to the provisions of Sec.  600.323.
    (e) Insurance. Recipients must, at a minimum, provide the 
equivalent insurance coverage for real property and equipment acquired 
with Federal funds as provided to property owned by the recipient.
    (f) Additional Uses During and After the Project Period. Unless a 
statute and the award terms expressly provide for the vesting of 
unconditional title to real property or equipment with the recipient, 
the real property or equipment acquired wholly or in part with Federal 
funds is subject to the following:
    (1) During the Project Period, the recipient must make real 
property and equipment available for use on other projects or programs, 
if such other use does not interfere with the work on the project or 
program for which the real property or equipment was originally 
acquired. Use of the real property or equipment on other projects is 
subject to the following order of priority:
    (i) Activities sponsored by DOE grants, cooperative agreements, or 
other assistance awards;
    (ii) Activities sponsored by other Federal agencies' grants, 
cooperative agreements, or other assistance awards;
    (iii) Activities under Federal procurement contracts or activities 
not sponsored by any Federal agency. If so used, use charges must be 
assessed to those activities. For real property or equipment, the use 
charges must be at rates equivalent to those for which comparable real 
property or equipment may be leased.
    (2) After Federal funding for the project ceases, or if, as may be 
determined by the contracting officer, the real property or equipment 
is no longer needed for the purposes of the project, or if the 
recipient suspends work on the project, the recipient may use the real 
property or equipment for other projects, if:
    (i) There are Federally sponsored projects for which the real 
property or equipment may be used;
    (ii) The recipient obtains written approval from the contracting 
officer to do so. The contracting officer must ensure that there is a 
formal change of accountability for the real property or equipment to a 
currently funded Federal award; and
    (iii) The recipient's use of the real property or equipment for 
other projects is in the same order of priority as described in 
paragraph (e)(1) of this section.
    (iv) If the only use for the real property or equipment is for 
projects that have no Federal sponsorship, the recipient must proceed 
with disposition of the real property or equipment in accordance with 
paragraph (g) of this section.
    (g) Disposition. (1) If, as determined by the contracting officer, 
an item of real property or equipment is no longer needed for Federally 
sponsored projects, or if the recipient has suspended work on the 
project, the recipient has the following options:
    (i) If the property is equipment with a current per unit fair 
market value of less than $5,000, it may be retained, sold, or 
otherwise disposed of with no further obligation to DOE.
    (ii) If the property is equipment (rather than real property) and 
with the written approval of the contracting officer, the recipient may 
replace it with an item that is needed currently for the project by 
trading in or selling to offset the costs of the replacement equipment.
    (iii) The recipient may elect to retain title, without further 
obligation to the Federal Government, by compensating the Federal 
Government for that percentage of the current fair market value of the 
real property or equipment that is attributable to the Federal 
participation in the project.
    (iv) If the recipient does not elect to retain title to real 
property or equipment or does not request approval to use equipment as 
trade-in or offset for replacement equipment, the recipient must 
request disposition instructions from the responsible agency.

[[Page 27800]]

    (2) If a recipient requests disposition instructions, the 
contracting officer must:
    (i) For either real property or equipment, issue instructions to 
the recipient for disposition of the property no later than 120 
calendar days after the recipient's request. The contracting officer's 
options for disposition are to direct the recipient to:
    (A) Transfer title to the real property or equipment to the Federal 
Government or to a third party designated by the contracting officer 
provided that, in such cases, the recipient is entitled to compensation 
for its attributable percentage of the current fair market value of the 
real property or equipment, plus any reasonable shipping or interim 
storage costs incurred; or
    (B) Sell the real property or equipment and pay the Federal 
Government for that percentage of the current fair market value of the 
property that is attributable to the Federal participation in the 
project (after deducting actual and reasonable selling and fix-up 
expenses, if any, from the sale proceeds). If the recipient is 
authorized or required to sell the real property or equipment, the 
recipient must use competitive procedures that result in the highest 
practicable return.
    (3) If the contracting officer fails to issue disposition 
instructions within 120 calendar days of the recipient's request, the 
recipient must dispose of the real property or equipment through the 
option described in paragraph (g)(2)(i)(B) of this section.
0
4. Add Sec.  600.326 to subpart D to read as follows:


Sec.  600.326  Reporting on utilization of subject inventions.

    (a) Unless otherwise instructed, a recipient that obtains title to 
an invention made under an award shall submit annual reports on the 
utilization or efforts to obtain utilization of the invention for at 
least 10 years from the date the invention was first disclosed to DOE 
(Utilization Reports). Utilization Reports shall include at least the 
following information:
    (1) Status of development;
    (2) Date of first commercial sale or use;
    (3) Gross royalties received by the recipient;
    (4) The location of any manufacture of products embodying the 
subject invention; and
    (5) Any such other data and information as DOE may reasonably 
specify.
    (b) To the extent data or information supplied in a Utilization 
Report is considered by the recipient to be privileged and confidential 
and is so marked by the recipient, DOE agrees that, to the extent 
permitted by law, it shall not disclose such information to persons 
outside the Government.
0
5. Add Sec.  600.327 to subpart D to read as follows:


Sec.  600.327  Export Control and U.S. Manufacturing and 
Competitiveness.

    (a) Export Control. Any recipient of any award for research, 
development and/or demonstration must comply with all applicable U.S. 
laws regarding export control.
    (b) U.S. Manufacturing and Competitiveness. It is the policy of DOE 
to ensure that DOE-funded research, development, and/or demonstration 
projects foster domestic manufacturing. Funding opportunity 
announcements (FOAs), therefore, may require that applicants submit a 
``U.S. Manufacturing Plan'' in their applications. Such FOAs may 
encourage U.S. Manufacturing Plans to include proposals by recipients 
and any sub-recipients to manufacture DOE-funded technologies in the 
United States; however, the FOAs will also state that these plans 
should not include requirements regarding the source of inputs used 
during the manufacturing process. Regardless of whether such plans will 
be part of the merit review criteria or a program policy factor, and to 
the extent legally permissible, all awards subject to this subpart, 
including subawards, for research, development, and/or demonstration, 
must include a provision that provides plans by the recipient and any 
subrecipients to support manufacturing in the United States of 
technology developed under the award. The recipient and any 
subrecipients must agree to make those plans binding on any assignee or 
licensee or any entity otherwise acquiring rights to any subject 
invention or developed technology covered under the award. A recipient, 
subrecipient, assignee, licensee, or any entity otherwise acquiring the 
rights to any subject invention or developed technology may request a 
waiver or modification of U.S. manufacturing plans from DOE. DOE will 
determine whether to approve such a waiver in light of equitable 
considerations, including, for example, whether the requester 
satisfactorily shows that the planned support is not economically 
feasible and whether there is a satisfactory alternative net benefit to 
the U.S. economy if the requested waiver or modification is approved.
0
6. Add Sec.  600.354 to subpart D under the undesignated center heading 
``Post-Award Requirements'' to read as follows:


Sec.  600.354  Change of control.

    (a) Change of control is defined as any of the following:
    (1) Any event by which any individual or entity other than the 
recipient becomes the beneficial owner of more than 50% of the total 
voting power of the voting stock of the recipient;
    (2) The recipient merges with or into any entity other than in a 
transaction in which the shares of the recipient's voting stock are 
converted into a majority of the voting stock of the surviving entity;
    (3) The sale, lease or transfer of all or substantially all of the 
assets of the recipient to any individual or entity other than the 
recipient in one or a series of related transactions;
    (4) The adoption of a plan relating to the liquidation or 
dissolution of the recipient; or
    (5) Where the recipient is a wholly-owned subsidiary at the time of 
award or novation, and the recipient's parent entity undergoes a change 
of control as defined in this section.
    (b) When the Federal share of the financial assistance agreement is 
more than $10,000,000 or DOE requests the information in writing, the 
recipient must provide the contracting officer with documentation 
identifying all parties who exercise control in the recipient at the 
time of award.
    (c) When there is a change of control of a recipient, or the 
recipient has reason to know a change of control is likely, the 
recipient must notify the contracting officer within 30 days of its 
knowledge of such change of control. Such notification must include, at 
a minimum, copies of documents necessary to reflect the transaction 
that resulted or will result in the change of control, and 
identification of all entities, individuals or other parties to such 
transaction. Failure to notify the contracting officer of a change of 
control is grounds for suspension or termination of the award for 
failure to comply with the terms and conditions of the award.
    (d) The contracting officer must authorize a change of control for 
the purposes of the award. Failure to receive the contracting officer's 
authorization for a change of control may lead to a suspension of the 
award, termination for failure to comply with the terms and conditions 
of the award, or imposition of special award conditions pursuant to 10 
CFR 600.304. Special award conditions may include but are not limited 
to:

[[Page 27801]]

    (1) Additional reporting requirements related to the change of 
control; and
    (2) Suspension of payments due to the recipient.
0
7. Add Sec.  600.355 to subpart D under the undesignated center heading 
``Post-Award Requirements'' to read as follows:


Sec.  600.355  Novation of Financial Assistance Agreements.

    (a) Financial assistance agreements are not assignable absent 
written consent from the contracting officer. At his or her sole 
discretion, the contracting officer may, through novation, recognize a 
third party as the successor in interest to a financial assistance 
agreement if such recognition is in the Government's interest, conforms 
with all applicable laws and the third party's interest in the 
agreement arises out of the transfer of:
    (1) All of the recipient's assets; or
    (2) The entire portion of the assets necessary to perform the 
project described in the agreement.
    (b) When the contracting officer determines that it is not in the 
Government's interest to consent to the novation of a financial 
assistance agreement from the original recipient to a third party, the 
original recipient remains subject to the terms of the financial 
assistance agreement, and the Department may exercise all legally 
available remedies under 10 CFR 600.25, or that may be otherwise 
available, should the original recipient not perform.
    (c) The contracting officer may require submission of any 
documentation in support of a request for novation, including but not 
limited to documents identified in 48 CFR Subpart 42.12. The 
contracting officer may use the format in 48 CFR 42.1204 as guidance 
for novation agreements identified in paragraph (a) of this section.

[FR Doc. 2014-11117 Filed 5-14-14; 8:45 am]
BILLING CODE 6450-01-P