[Federal Register Volume 80, Number 171 (Thursday, September 3, 2015)]
[Rules and Regulations]
[Pages 53235-53240]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21693]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 80, No. 171 / Thursday, September 3, 2015 /
Rules and Regulations
[[Page 53235]]
DEPARTMENT OF ENERGY
2 CFR Part 910
RIN 1991-AC02
Administrative Requirements for Grants and Cooperative Agreements
AGENCY: Department of Energy.
ACTION: Final rule.
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SUMMARY: The Department of Energy (DOE) is adopting, a rule amending
the administrative requirements for grants and cooperative agreements
with for-profit organizations. The regulations modify title provisions,
and requirements related to the handling of real property and equipment
acquired with federal funds. The regulations 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: Effective: October 5, 2015.
FOR FURTHER INFORMATION CONTACT: Ellen Colligan, Procurement Analyst,
U.S. Department of Energy, Office of Acquisition Management, Contract
and Financial Assistance Policy Division MA-611, Telephone: (202) 287-
1776. Email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary
II. Procedural Requirements
A. Review under Executive Order 12866
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
K. Review under Executive Order 13609
L. Approval by the Office of the Secretary of Energy
M. Congressional Notification
I. Summary
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 added
requirements specifying changes and additions to its Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards. On May 15, 2014, a Notice of Proposed Rulemaking
(NOPR) was published in the Federal Register (79 FR 27795) that
detailed changes to the rules for for-profit recipients.
DOE is amending the rule by adding 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.
DOE received no comments from members of the public in response to
the NOPR. Nevertheless, DOE made the following technical changes to the
text of the rule to address the codification of the Uniform
Administrative Requirements, Cost Principles and Audit Requirements for
Federal Awards at 2 CFR part 200 and the relocation of the Department's
Administrative Requirements for Grants and Cooperative Agreements from
10 CFR part 600 to 2 CFR part 910 (79 FR 76024). As a result, the
regulatory text proposed as amendments to part 600 are adopted
unchanged as amendments to part 910.
(1) The text proposed as Sec. 600.304 is renumbered and adopted as
Sec. 910.372.
(2) The text proposed as Sec. 600.321 is renumbered and adopted as
Sec. 910.360.
(3) The text proposed as Sec. 600.326 is renumbered and adopted as
Sec. 910.364.
(4) The text proposed as Sec. 600.327 is renumbered and adopted as
Sec. 910.366.
(5) The text proposed as Sec. 600.354 is renumbered and adopted as
Sec. 910.368.
(6) The text proposed as Sec. 600.355 is renumbered and adopted as
Sec. 910.370.
III. Procedural Requirements
A. Review Under Executive Orders 12866 and 13563
Today's 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). Accordingly, this rule was
reviewed by the Office of Information and Regulatory Affairs within the
Office of Management and Budget.
DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011 (76 FR 3281 (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
[[Page 53236]]
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 Final Rule 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; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
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 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
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of a regulatory flexibility analysis for any rule that by
law must be proposed for public comment, unless the agency certifies
that the rule, if promulgated, will not have a significant economic
impact on a substantial number of small entities. This rule will not
have a significant impact on small entities as it applies to only for-
profit entities (excluding small non-profits, individuals or other
small entities not set up as a for-profit.) This rule also excludes
small for-profit entities receiving awards through SBIR and STTR
programs from many requirements. Historically the awards made by DOE
under Subchapter D are to businesses considered large in their industry
or field. Accordingly, DOE certifies that this 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
This 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.
The collection of information for DOE financial assistance awards
has been approved by OMB under control number 1910-0400. Collection of
the UCC-1 form is covered by this control number.
E. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this 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 rule is categorically excluded from NEPA review
because the amendments to the DEAR are strictly procedural (categorical
exclusion A6). Therefore, this 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 rule and has
determined that it does not preempt State law and does 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 (Pub. L. 104-4) generally
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. 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 (Pub. L. 105-277), requires Federal agencies to issue a
Family Policymaking Assessment for any rule or policy that may affect
family well-being. This rule will have no impact on family well-being.
Accordingly, DOE has concluded that it is not necessary to prepare a
Family Policymaking Assessment.
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), Office of
Management and Budget, 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
[[Page 53237]]
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
proposed 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. Today's 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 notice under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13609
Executive Order 13609 of May 1, 2012, ``Promoting International
Regulatory Cooperation,'' requires that, to the extent permitted by law
and consistent with the principles and requirements of Executive Order
13563 and Executive Order 12866, each Federal agency shall:
(a) If required to submit a Regulatory Plan pursuant to Executive
Order 12866, include in that plan a summary of its international
regulatory cooperation activities that are reasonably anticipated to
lead to significant regulations, with an explanation of how these
activities advance the purposes of Executive Order 13563 and this
order;
(b) Ensure that significant regulations that the agency identifies
as having significant international impacts are designated as such in
the Unified Agenda of Federal Regulatory and Deregulatory Actions, on
RegInfo.gov, and on Regulations.gov;
(c) In selecting which regulations to include in its retrospective
review plan, as required by Executive Order 13563, consider:
(i) Reforms to existing significant regulations that address
unnecessary differences in regulatory requirements between the United
States and its major trading partners, consistent with section 1 of
this order, when stakeholders provide adequate information to the
agency establishing that the differences are unnecessary; and
(ii) Such reforms in other circumstances as the agency deems
appropriate; and
(d) For significant regulations that the agency identifies as
having significant international impacts, consider, to the extent
feasible, appropriate, and consistent with law, any regulatory
approaches by a foreign government that the United States has agreed to
consider under a regulatory cooperation council work plan.
DOE has reviewed this rule under the provisions of Executive Order
13609 and determined that the rule complies with all requirements set
forth in the order.
L. Approval by the Office of the Secretary of Energy
The Office of the Secretary of Energy has approved issuance of this
rule.
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The report will
state that it has been determined that the rule is not a ``major rule''
as defined by 5 U.S.C. 804(2).
List of Subjects in 2 CFR Part 910
Accounting, Administrative practice and procedure, Grant programs,
Reporting and recordkeeping requirements.
Issued in Washington, DC, on: August 21, 2015.
Patrick M. Ferraro
Director, Office of Acquisition Management.
Joseph F. Waddell,
Director, Office of Acquisition Management, National Nuclear Security
Administration.
For the reasons stated in the preamble, the Department of Energy is
amending part 910 of chapter II, title 2 of the Code of Federal
Regulations to read as follows:
PART 910--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
1. 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.
0
2. Revise Sec. 910.360 to read as follows:
Sec. 910.360 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 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,
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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 2 CFR
200.338, which may lead to suspension or termination of the award;
(2) Impose special award conditions pursuant to 2 CFR 200.205 and
200.207 as amended by 2 CFR 910.372;
(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 2 CFR 200.306(h), depending upon
the purpose of the Federal award, 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 2 CFR 200.311 and 200.313.
(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.
(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
3. Add Sec. 910.364 to subpart D to read as follows:
Sec. 910.364 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
[[Page 53239]]
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
4. Add Sec. 910.366 to subpart D to read as follows:
Sec. 910.366 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
5. Add Sec. 910.368 to subpart D to read as follows:
Sec. 910.368 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 2
CFR 910.372. Special award conditions may include but are not limited
to:
(1) Additional reporting requirements related to the change of
control; and
(2) Suspension of payments due to the recipient.
0
6. Add Sec. 910.370 to subpart D to read as follows:
Sec. 910.370 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 2 CFR 200.338 through 200.342, 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.
0
7. Add Sec. 910.372 to subpart D to read as follows:
Sec. 910.372 Special award conditions.
(a) In addition to the requirements of 2 CFR 200.205, the following
actions may require the use of Specific Conditions as identified in 2
CFR 200.207:
[[Page 53240]]
(1) Has not conformed to the terms and conditions of a previous
award;
(2) Has a change of control as defined in Sec. 910.368;
(3) Fails to comply with real property and equipment requirements
at Sec. 910.360; or
(4) Is not otherwise responsible.
[FR Doc. 2015-21693 Filed 9-2-15; 8:45 am]
BILLING CODE 6450-01-P