[Title 32 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2000 Edition]
[From the U.S. Government Printing Office]
[[Page i]]
32
Parts 1 to 190
Revised as of July 1, 2000
National Defense
Containing a Codification of documents of general
applicability and future effect
As of July 1, 2000
With Ancillaries
Published by
Office of the Federal Register
National Archives and Records
Administration
As a Special Edition of the Federal Register
[[Page ii]]
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2000
For sale by U.S. Government Printing Office
Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328
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Table of Contents
Page
Explanation................................................. v
Title 32:
Subtitle A--Department of Defense:
Chapter I-- Office of the Secretary of Defense 5
Finding Aids:
Table of CFR Titles and Chapters........................ 931
Alphabetical List of Agencies Appearing in the CFR...... 949
List of CFR Sections Affected........................... 959
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 32 CFR 2.1 refers
to title 32, part 2,
section 1.
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EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
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name of the issuing agency. Each chapter is further subdivided into
parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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LEGAL STATUS
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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
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Many agencies have begun publishing numerous OMB control numbers as
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OBSOLETE PROVISIONS
Provisions that become obsolete before the revision date stated on
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CFR INDEXES AND TABULAR GUIDES
A subject index to the Code of Federal Regulations is contained in a
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[[Page vii]]
The Office of the Federal Register also offers a free service on the
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Raymond A. Mosley,
Director,
Office of the Federal Register.
July 1, 2000.
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THIS TITLE
Title 32--National Defense is composed of six volumes. The parts in
these volumes are arranged in the following order: parts 1-190, parts
191-399, parts 400-629, parts 630-699, parts 700-799, and part 800 to
End. The contents of these volumes represent all current regulations
codified under this title of the CFR as of July 1, 2000.
The current regulations issued by the Department of Defense appear
in the volumes containing parts 1-189 and parts 190-399; those issued by
the Department of the Army appear in the volumes containing parts 400-
629 and parts 630-699; those issued by the Department of the Navy appear
in the volume containing parts 700-799, and those issued by the
Department of the Air Force, Defense Logistics Agency, Selective Service
System, National Counterintelligence Center, Central Intelligence
Agency, Information Security Oversight Office, National Security
Council, Office of Science and Technology Policy, Office for Micronesian
Status Negotiations, and Office of the Vice President of the United
States appear in the volume containing parts 800 to end.
For this volume, Jonn V. Lilyea was Chief Editor. The Code of
Federal Regulations is published under the direction of Frances D.
McDonald, assisted by Alomha S. Morris.
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[[Page 1]]
TITLE 32--NATIONAL DEFENSE
(This book contains parts 1 to 190)
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Part
SUBTITLE A--Department of Defense:
chapter i--Office of the Secretary of Defense............... 2
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Subtitle A--Department
of Defense
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CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE
(Parts 1 to 190)
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Editorial Note: Cross reference to the Department of Defense Federal
Acquisition Regulations, see 48 CFR chapter 2.
SUBCHAPTER A--ACQUISITION
Part Page
1
[Reserved]
2 Pilot program policy........................ 11
3 Transactions other than contracts, grants,
or cooperative agreements for prototype
projects................................ 13
4-20
[Reserved]
SUBCHAPTER B--DOD GRANT AND AGREEMENT REGULATIONS
21 DoD grants and agreements--General matters.. 15
22 DoD grants and agreements--Award and
administration.......................... 22
25 Governmentwide debarment and suspension
(nonprocurement) and governmentwide
requirements for drug-free workplace
(grants)................................ 55
28 New restrictions on lobbying................ 74
32 Administrative requirements for grants and
agreements with institutions of higher
education, hospitals, and other non-
profit organizations.................... 86
33 Uniform administrative requirements for
grants and cooperative agreements to
State and local governments............. 115
34 Administrative requirements for grants and
agreements with for-profit organizations 143
SUBCHAPTER C--PERSONNEL, MILITARY AND CIVILIAN
40 Standards of conduct cross-references....... 163
42 Interception of wire and oral communications
for law enforcement purposes............ 164
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43 Personal commercial solicitation on DoD
installations........................... 175
44 Screening the Ready Reserve................. 182
45 Certificate of release or discharge from
active duty (DD Form 214/5 Series)...... 187
46 Federal voting assistance program........... 201
47 Active duty service for civilian or
contractual groups...................... 204
48 Retired serviceman's family protection plan. 209
51 The Department of Defense Military Equal
Opportunity Program..................... 219
53 Wearing of the uniform...................... 223
54 Allotments for child and spousal support.... 224
55 Physical examinations and annual
certificates of physical condition...... 228
56 Nondiscrimination on the basis of handicap
in programs and activities assisted or
conducted by the Department of Defense.. 229
57 Provision of early intervention and special
education services to eligible DoD
dependents in overseas areas............ 249
58 Human Immunodeficiency Virus (HIV-1)........ 270
59 Voluntary military pay allotments........... 277
61 Medical malpractice claims against military
and civilian personnel of the Armed
Forces.................................. 280
62 Alcohol and drug abuse by DoD personnel..... 280
62b Drunk and drugged driving by DoD personnel.. 283
63 Former spouse payments from retired pay..... 292
64 Management and mobilization of regular and
reserve retired military members........ 298
65 Accession of chaplains for the military
services................................ 303
67 Educational requirements for appointment of
reserve component officers to a grade
above first lieutenant or lieutenant
(junior grade).......................... 307
68 Provision of free public education for
eligible children pursuant to section 6,
Public Law 81-874....................... 309
69 School boards for Department of Defense
domestic dependent elementary and
secondary schools....................... 315
70 Discharge review board (DRB) procedures and
standards............................... 319
71 Eligibility requirements for education of
minor dependents in overseas areas...... 354
72 Voluntary education programs in overseas
areas................................... 359
73 Training simulators and devices............. 361
74 Appointment of doctors of osteopathy as
medical officers........................ 364
75 Conscientious objectors..................... 365
76 Mobilization of the Ready Reserve........... 373
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77 Program to encourage public and community
service................................. 379
78 Voluntary State tax withholding from retired
pay..................................... 389
79 Contributions to State retirement programs
for National Guard technicians.......... 392
80 Provision of early intervention services to
eligible infants and toddlers with
disabilities and their families, and
special education children with
disabilities within the section 6 school
arrangements............................ 394
81 Paternity claims and adoption proceedings
involving members and former members of
the Armed Forces........................ 417
85 Health promotion............................ 418
86 Criminal history background checks on
individuals in child care services...... 423
88 Transition assistance for military personnel 434
89 Civilian pay allotments..................... 437
93 Acceptance of service of process; release of
official information in litigation; and
testimony by NSA personnel as witnesses. 441
94 Naturalization of aliens serving in the
Armed Forces of the United States and of
alien spouses and/or alien adopted
children of military and civilian
personnel ordered overseas.............. 445
96 Acquisition and use of criminal history
record information by the military
services................................ 448
97 Release of official information in
litigation and testimony by DoD
personnel as witnesses.................. 450
98 Defense hotline program..................... 453
99 Procedures for States and localities to
request indemnification................. 465
100 Unsatisfactory performance of ready reserve
obligation.............................. 466
101 Participation in Reserve training programs.. 471
102 Uniform Reserve, training and retirement
categories.............................. 474
103 Enlistment, appointment, and assignment of
individuals in Reserve components....... 492
104 Civilian employment and reemployment rights
of applicants for, and Service members
and former Service members of the
Uniformed Services...................... 493
105 Employment and volunteer work of spouses of
military personnel...................... 504
107 Personal services authority for direct
health care providers................... 505
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110 Standardized rates of subsistence allowance
and commutation instead of uniforms for
members of the Senior Reserve Officers'
Training Corps.......................... 507
111 Reserve Officers' Training Corps program for
secondary educational institutions...... 513
112 Indebtedness of military personnel.......... 519
113 Indebtedness procedures of military
personnel............................... 522
114 Reserve components common personnel data
system (RCCPDS)......................... 539
115 Assignment to and transfer between Reserve
categories, and discharge from Reserve
status.................................. 579
132 Initial active duty for training in Reserve
components.............................. 581
142 Copyrighted sound and video recordings...... 583
143 DoD policy on organizations that seek to
represent or organize members of the
Armed Forces in negotiation or
collective bargaining................... 584
144 Service by members of the Armed Forces on
State and local juries.................. 587
145 Cooperation with the Office of Special
Counsel of the Merit Systems Protection
Board................................... 588
146 Compliance of DoD members, employees, and
family members outside the United States
with court orders....................... 594
147 Adjudicative guidelines for determining
eligibility for access to classified
information............................. 596
148 National policy and implementation of
reciprocity of facilities............... 609
149 Policy on technical surveillance
countermeasures......................... 612
SUBCHAPTER D--REGULATIONS PERTAINING TO MILITARY JUSTICE
150 Courts of criminal appeals rules of practice
and procedure........................... 615
151 Status of forces policies and information... 623
152 Review of the manual for courts-martial..... 629
SUBCHAPTER E--SECURITY
154 Department of Defense personnel security
program regulation...................... 632
155 Defense industrial personnel security
clearance program....................... 695
156 Department of Defense personnel security
program (DoDPSP)........................ 702
157 Dissemination of DoD technical information.. 704
158 Guidelines for systematic declassification
review of classified information in
permanently valuable DoD records........ 708
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159 DoD information security program............ 715
159a Information security program regulation..... 717
SUBCHAPTER F--DEFENSE CONTRACTING
160 Defense acquisition regulatory system....... 792
162 Productivity Enhancing Capital Investment
(PECI).................................. 794
165 Recoupment of nonrecurring costs on sales of
U.S. items.............................. 798
168a National defense science and engineering
graduate fellowships.................... 802
169 Commercial activities program............... 803
169a Commercial activities program procedures.... 807
171 Implementation of Wildfire Suppression
Aircraft Transfer Act of 1996........... 849
172 Disposition of proceeds from DoD sales of
surplus personal property............... 852
173 Competitive information certificate and
profit reduction clause................. 858
SUBCHAPTER G--CLOSURES AND REALIGNMENT
174 Revitalizing base closure communities....... 862
175 Revitalizing base closure communities--Base
closure community assistance............ 863
176 Revitalizing base closure communities and
community assistance--Community
redevelopment and homeless assistance... 878
SUBCHAPTER H--CIVIL DEFENSE
185 Military support to civil authorities (MSCA) 888
186 The DoD Explosives Safety Board............. 899
SUBCHAPTERS I-K [RESERVED]
SUBCHAPTER L--ENVIRONMENT
187 Environmental effects abroad of major
Department of Defense actions........... 903
188 Environmental effects in the United States
of DoD actions.......................... 912
189 Mineral exploration and extraction on DoD
lands................................... 918
190 Natural Resources Management Program........ 920
[[Page 11]]
SUBCHAPTER A--ACQUISITION
PART 1 [RESERVED]
PART 2--PILOT PROGRAM POLICY--Table of Contents
Sec.
2.1 Purpose.
2.2 Statutory relief for participating programs.
2.3 Regulatory relief for participating programs.
2.4 Designation of participating programs.
2.5 Criteria for designation of participating programs.
Authority: 10 U.S.C. 2340 note.
Source: 62 FR 17549, Apr. 10, 1997, unless otherwise noted.
Sec. 2.1 Purpose.
Section 809 of Public Law 101-510, ``National Defense Authorization
Act for Fiscal Year 1991,'' as amended by section 811 of Public Law 102-
484, ``National Defense Authorization Act for Fiscal Year 1993'' and
Public Law 103-160, ``National Defense Authorization Act for Fiscal Year
1994,'' authorizes the Secretary of Defense to conduct the Defense
Acquisition Pilot Program. In accordance with section 809 of Public Law
101-510, the Secretary may designate defense acquisition programs for
participation in the Defense Acquisition Pilot Program.
(a) The purpose of the pilot programs is to determine the potential
for increasing the efficiency and effectiveness of the acquisition
process. Pilot programs shall be conducted in accordance with the
standard commercial, industrial practices. As used in this policy, the
term ``standard commercial, industrial practice'' refers to any
acquisition management practice, process, or procedure that is used by
commercial companies to produce and sell goods and services in the
commercial marketplace. This definition purposely implies a broad range
of potential activities to adopt commercial practices, including
regulatory and statutory streamlining, to eliminate unique Government
requirements and practices such as government-unique contracting
policies and practices, government-unique specifications and standards,
and reliance on cost determination rather than price analysis.
(b) Standard commercial, industrial practices include, but are not
limited to:
(1) Innovative contracting policies and practices;
(2) Performance and commercial specifications and standards;
(3) Innovative budget policies;
(4) Establishing fair and reasonable prices without cost data;
(5) Maintenance of long-term relationships with quality suppliers;
(6) Acquisition of commercial and non-developmental items (including
components); and
(7) Other best commercial practices.
Sec. 2.2 Statutory relief for participating programs.
(a) Within the limitations prescribed, the applicability of any
provision of law or any regulation prescribed to implement a statutory
requirement may be waived for all programs participating in the Defense
Acquisition Pilot Program, or separately for each participating program,
if that waiver or limit is specifically authorized to be waived or
limited in a law authorizing appropriations for a program designated by
statute as a participant in the Defense Acquisition Pilot Program.
(b) Only those laws that prescribe procedures for the procurement of
supplies or services; a preference or requirement for acquisition from
any source or class of sources; any requirement related to contractor
performance; any cost allowability, cost accounting, or auditing
requirements; or any requirement for the management of, testing to be
performed under, evaluation of, or reporting on a defense acquisition
program may be waived.
(c) The requirements in section 809 of Public Law 101-510, as
amended by section 811 of Public Law 102-484, the requirements in any
law enacted on or after the enactment of Public Law 101-510 (except to
the extent that a waiver or limitation is specifically authorized for
such a defense acquisition program by statute), and any provision of law
that ensures the financial integrity of
[[Page 12]]
the conduct of a Federal Government program or that relates to the
authority of the Inspector General of the Department of Defense may not
be considered for waiver.
Sec. 2.3 Regulatory relief for participating programs.
(a) A program participating in the Defense Acquisition Pilot Program
will not be subject to any regulation, policy, directive, or
administrative rule or guideline relating to the acquisition activities
of the Department of Defense other than the Federal Acquisition
Regulation (FAR) \1\, the Defense FAR Supplement (DFARS) \2\, or those
regulatory requirements added by the Under Secretary of Defense for
Acquisition and Technology, the Head of the Component, or the DoD
Component Acquisition Executive.
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\1\ Copies of this Department of Defense publication may be obtained
from the Government Printing Office, Superintendent of Documents,
Washington, DC 20402.
\2\ See footnote 1 to Sec. 2.3(a).
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(b) Provisions of the FAR and/or DFARS that do not implement
statutory requirements may be waived by the Under Secretary of Defense
for Acquisition and Technology using appropriate administrative
procedures. Provisions of the FAR and DFARS that implement statutory
requirements may be waived or limited in accordance with the procedures
for statutory relief previously mentioned.
(c) Regulatory relief includes relief from use of government-unique
specifications and standards. Since a major objective of the Defense
Acquisition Pilot Program is to promote standard, commercial industrial
practices, functional performance and commercial specifications and
standards will be used to the maximum extent practical. Federal or
military specifications and standards may be used only when no practical
alternative exists that meet the user's needs. Defense acquisition
officials (other than the Program Manager or Commodity Manager) may only
require the use of military specifications and standards with advance
approval from the Under Secretary of Defense for Acquisition and
Technology, the Head of the DoD Component, or the DoD Component
Acquisition Executive.
Sec. 2.4 Designation of participating programs.
(a) Pilot programs may be nominated by a DoD Component Head or
Component Acquisition Executive for participation in the Defense
Acquisition Pilot Program. The Under Secretary of Defense for
Acquisition and Technology shall determine which specific programs will
participate in the pilot program and will transmit to the Congressional
defense committees a written notification of each defense acquisition
program proposed for participation in the pilot program. Programs
proposed for participation must be specifically designated as
participants in the Defense Acquisition Pilot Program in a law
authorizing appropriations for such programs and provisions of law to be
waived must be specifically authorized for waiver.
(b) Once included in the Defense Acquisition Pilot Program, decision
and approval authority for the participating program shall be delegated
to the lowest level allowed in the acquisition regulations consistent
with the total cost of the program (e.g., under DoD Directive 5000.1,
\3\ an acquisition program that is a major defense acquisition program
would be delegated to the appropriate Component Acquisition Executive as
an acquisition category IC program)
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\3\ Copies may be obtained, at cost, from the National Technical
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
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(c) At the time of nomination approval, the Under Secretary of
Defense for Acquisition and Technology will establish measures to judge
the success of a specific program, and will also establish a means of
reporting progress towards the measures.
Sec. 2.5 Criteria for designation of participating programs.
(a) Candidate programs must have an approved requirement, full
program funding assured prior to designation, and low risk. Nomination
of a candidate program to participate in the Defense Acquisition Pilot
Program should occur as early in the program's life-cycle as possible.
Developmental programs will only be considered on an exception basis.
[[Page 13]]
(b) Programs in which commercial or non-developmental items can
satisfy the military requirement are preferred as candidate programs. A
nominated program will address which standard commercial, industrial
practices will be used in the pilot program and how those practices will
be applied.
(c) Nomination of candidate programs must be accompanied by a list
of waivers being requested to Statutes, FAR, DFARS, DoD Directives \4\
and Instructions,\5\ and where applicable, DoD Component regulations.
Waivers being requested must be accompanied by rationale and
justification for the waiver. The justification must include:
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\4\ See footnote 3 to Sec. 2.4(b).
\5\ See footnote 3 to Sec. 2.4(b).
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(1) The provision of law proposed to be waived or limited.
(2) The effects of the provision of law on the acquisition,
including specific examples.
(3) The actions taken to ensure that the waiver or limitation will
not reduce the efficiency, integrity, and effectiveness of the
acquisition process used for the defense acquisition program; and
(4) A discussion of the efficiencies or savings, if any, that will
result from the waiver or limitation.
(d) No nominated program shall be accepted until the Under Secretary
of Defense has determined that the candidate program is properly
planned.
PART 3--TRANSACTIONS OTHER THAN CONTRACTS, GRANTS, OR COOPERATIVE AGREEMENTS FOR PROTOTYPE PROJECTS--Table of Contents
Sec.
3.1 Purpose.
3.2 Applicability.
3.3 Definitions.
3.4 Policy.
Authority: Section 801, Pub. L. 106-65.
Source: 65 FR 35576, June 5, 2000, unless otherwise noted.
Effective Date Note: At 65 FR 35576, June 5, 2000, part 3 was added,
effective July 5, 2000.
Sec. 3.1 Purpose.
This part implements section 801 of the National Defense
Authorization Act for Fiscal Year 2000 (Pub. L. 106-65). It establishes
the requirement for the inclusion of a clause in transactions other than
contracts, grants or cooperative agreements for prototype projects
awarded under authority of 10 U.S.C. 2371 that provides Comptroller
General access to records when payments total an amount in excess of
$5,000,000.
Sec. 3.2 Applicability.
This part applies to the Secretary of a Military Department, the
Directors of the Defense Agencies, and any other official designated by
the Secretary of Defense to enter into transactions other than
contracts, grants or cooperative agreements for prototype projects that
are directly relevant to weapons or weapon systems proposed to be
acquired or developed by the Department of Defense, under authority of
10 U.S.C. 2371. Such transactions are commonly referred to as ``other
transaction'' agreements and are hereafter referred to as agreements.
Sec. 3.3 Definitions.
Contracting activity. An element of an agency designated by the
agency head and delegated broad authority regarding acquisition
functions. It also means elements designated by the director of a
defense agency that has been delegated contracting authority through its
agency charter.
Head of the contracting activity. The official who has overall
responsibility for managing the contracting activity.
Sec. 3.4 Policy.
(a) Except as provided in paragraph (b) of this section, a clause
must be included in solicitations and agreements for prototype projects
awarded under authority of 10 U.S.C. 2371, that provide for total
government payments in excess of $5,000,000 to allow Comptroller General
access to records that directly pertain to such agreements.
(b) The clause referenced in paragraph (a) of this section will not
apply with respect to a party or entity, or
[[Page 14]]
subordinate element of a party or entity, that has not entered into any
other contract, grant, cooperative agreement or ``other transaction''
agreement that provides for audit access by a government entity in the
year prior to the date of the agreement.
(c) The head of the contracting activity (HCA) that is carrying out
the agreement may waive the applicability of the Comptroller General
access requirement if the HCA determines it would not be in the public
interest to apply the requirement to the agreement. The waiver will be
effective with respect to the agreement only if the HCA transmits a
notification of the waiver to the Committees on Armed Services of the
Senate and the House of Representatives, the Comptroller General, and
the Director, Defense Procurement before entering into the agreement.
The notification must include the rationale for the determination.
(d) The HCA must notify the Director, Defense Procurement of
situations where there is evidence that the Comptroller General Access
requirement caused companies to refuse to participate or otherwise
restricted the Department's access to companies that typically do not do
business with the Department.
(e) In no case will the requirement to examine records under the
clause referenced in paragraph (a) of this section apply to an agreement
where more than three years have passed after final payment is made by
the government under such an agreement.
(f) The clause referenced in paragraph (a) of this section must
provide for the following:
(1) The Comptroller General of the General of the United States, in
the discretion of the Comptroller General, shall have access to and the
right to examine records of any party to the agreement or any entity
that participates in the performance of this agreement that directly
pertain to, and involve transactions relating to, the agreement.
(2) Excepted from the Comptroller General Access requirement is any
party to this agreement or any entity that participates in the
performance of the agreement, or any subordinate element of such party
or entity, that has not entered into any other contract, grant,
cooperative agreement, or ``other transaction'' agreement that provides
for audit access by a government entity in the year prior to the date of
the agreement.
(3) This clause shall not be construed to require any party or
entity, or any subordinate element of such party or entity, that
participates in the performance of the agreement, to create or maintain
any record that is not otherwise maintained in the ordinary course of
business or pursuant to a provision of law.
(4) The Comptroller General shall have access to the records
described in this clause until three years after the date the final
payment is made by the United States under this agreement.
(5) The recipient of the agreement shall flow down this provision to
any entity that participates in the performance of the agreement.
PARTS 4-20 [RESERVED]
[[Page 15]]
--Table of Contents
SUBCHAPTER B--DoD GRANT AND AGREEMENT REGULATIONS
PART 21--DoD GRANTS AND AGREEMENTS--GENERAL MATTERS--Table of Contents
Subpart A--Defense Grant and Agreement Regulatory System
Sec.
21.100 Scope.
21.105 Authority, purpose, and issuance.
21.110 Applicability and relationship to acquisition regulations.
21.115 Compliance and implementation.
21.120 Publication and maintenance.
21.125 Deviations.
21.130 Definitions.
Subpart B--Authorities and Responsibilities
21.200 Purpose.
21.205 DoD Components' authorities.
21.210 Vesting and delegation of authority.
21.215 Contracting activities.
21.220 Grants officers.
Subpart C--Information Reporting on Grants, Cooperative Agreements, and
Other Nonprocurement Instruments
21.300 Purpose.
21.305 Defense Assistance Awards Data System.
21.310 Catalog of Federal Domestic Assistance.
21.315 Uniform grants and agreements numbering system.
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Source: 63 FR 12160, Mar. 12, 1998, unless otherwise noted.
Subpart A--Defense Grant and Agreement Regulatory System
Sec. 21.100 Scope.
The purposes of this part, which is one portion of the DoD Grant and
Agreement Regulations (DoDGARs), are to:
(a) Provide general information about the DoDGARs.
(b) Set forth general policies and procedures related to DoD
Components' overall management of functions related to grants and
cooperative agreements.
Sec. 21.105 Authority, purpose, and issuance.
(a) DoD Directive 3210.6\1\ established the Defense Grant and
Agreement Regulatory System (DGARS). The directive authorized
publication of policies and procedures comprising the DGARS in the DoD
Grant and Agreement Regulations (DoDGARs), in DoD instructions, and in
other DoD publications, as appropriate. Thus, the DoDGARs are one
element of the DGARS.
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\1\ Copies may be obtained, at cost, from the National Technical
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
Authorized users may also obtain copies from the Defense Technical
Information Center, 8725 John J. Kingman Rd., Suite 0944, Fort Belvoir,
VA 22060-6218.
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(b) The purposes of the DoDGARs, in conjunction with other elements
of the DGARS, are to provide uniform policies and procedures for grants
and cooperative agreements awarded by DoD Components, in order to meet
DoD needs for:
(1) Efficient program execution, effective program oversight, and
proper stewardship of Federal funds.
(2) Compliance with relevant statutes; Executive orders; and
applicable guidance, such as Office of Management and Budget (OMB)
circulars.
(3) Collection from DoD Components, retention, and dissemination of
management and fiscal data related to grants and agreements.
(c) The Director of Defense Research and Engineering, or his or her
designee:
(1) Develops and implements DGARS policies and procedures.
(2) Issues and maintains the DoD Grant and Agreement Regulations and
other DoD publications that comprise the DGARS.
Sec. 21.110 Applicability and relationship to acquisition regulations.
(a) Applicability to grants and cooperative agreements. The DoD
Grant and Agreement Regulations (DoDGARs) apply to all DoD grants and
cooperative agreements.
[[Page 16]]
(b) Applicability to other nonprocurement instruments. (1) In
accordance with DoD Directive 3210.6, the DoDGARs may include rules that
apply to other nonprocurement instruments, when specifically required in
order to implement a statute, Executive order, or Governmentwide rule
that applies to other nonprocurement instruments, as well as to grants
and cooperative agreements. For example, the rule on nonprocurement
debarment and suspension in 32 CFR part 25, subparts A through E,
applies to all nonprocurement transactions, including grants,
cooperative agreements, contracts of assistance, loans and loan
guarantees (see definition of ``primary covered transaction'' at 32 CFR
25.110(a)(1)(i)).
(2) The following is a list of DoDGARs rules that apply not only to
grants and cooperative agreements, but also to other types of
nonprocurement instruments:
(i) Requirements for reporting to the Defense Assistance Award Data
System, in subpart C of this part.
(ii) The rule on nonprocurement debarment and suspension in 32 CFR
part 25, subparts A through E.
(iii) Drug-free workplace requirements in 32 CFR part 25, subpart F.
(iv) Restrictions on lobbying in 32 CFR part 28.
(v) Administrative requirements for grants, cooperative agreements,
and other financial assistance to:
(A) Universities and other nonprofit organizations, in 32 CFR part
32.
(B) State and local governments, in 32 CFR part 33.
(3) Grants officers should be aware that each rule that applies to
other types of nonprocurement instruments (i.e., other than grants and
cooperative agreements) states its applicability to such instruments.
However, grants officers must exercise caution when determining the
applicability of some Governmentwide rules that are included in the
DoDGARs, because a term may be defined differently in a Governmentwide
rule than it is defined elsewhere in the DoDGARs. For example, the
Governmentwide implementation of the Drug-Free Workplace Act of 1988 (32
CFR part 25, subpart F) states that it applies to grants, but defines
``grants'' to include cooperative agreements and other forms of
financial assistance.
(c) Relationship to acquisition regulations. The Federal Acquisition
Regulation (FAR) (48 CFR parts 1-53), the Defense Federal Acquisition
Regulation Supplement (DFARS) (48 CFR parts 201-270), and DoD Component
supplements to the FAR and DFARS apply to DoD Components' procurement
contracts used to acquire goods and services for the direct benefit or
use of the Federal Government. Policies and procedures in the FAR and
DFARS do not apply to grants, cooperative agreements, or other
nonprocurement transactions unless the DoDGARs specify that they apply.
Sec. 21.115 Compliance and implementation.
The Head of each DoD Component that awards or administers grants and
cooperative agreements, or his or her designee:
(a) Is responsible for ensuring compliance with the DoDGARs within
that DoD Component.
(b) May authorize the issuance of regulations, procedures, or
instructions that are necessary to implement DGARS policies and
procedures within the DoD Component, or to supplement the DoDGARs to
satisfy needs that are specific to the DoD Component, as long as such
regulations, procedures, or instructions do not impose additional costs
or administrative burdens on recipients or potential recipients. Heads
of DoD Components or their designees shall establish policies and
procedures in areas where uniform policies and procedures throughout the
DoD Component are required, such as for:
(1) Requesting class deviations from the DoDGARs (see Sec. 21.125)
or exemptions from the provisions of 31 U.S.C. 6301 et seq., that govern
the appropriate use of contracts, grants, and cooperative agreements
(see 32 CFR 22.220).
(2) Designating one or more Grant Appeal Authorities to resolve
claims, disputes, and appeals (see 32 CFR 22.815).
(3) Reporting data on assistance awards and programs, as required by
31 U.S.C. chapter 61 (see subpart C of this part).
[[Page 17]]
(4) Prescribing requirements for use and disposition of real
property acquired under awards, if the DoD Component makes any awards to
institutions of higher education or to other nonprofit organizations
under which real property is acquired in whole or in part with Federal
funds (see 32 CFR 32.32).
Sec. 21.120 Publication and maintenance.
(a) The DoDGARs are published as chapter I, subchapter B, title 32
of the Code of Federal Regulations (CFR) and in a separate loose-leaf
edition. The loose-leaf edition is divided into parts, subparts, and
sections, to parallel the CFR publication. Cross-references within the
DoDGARs are stated as CFR citations (e.g., a reference to Sec. 21.115 in
part 21 would be to 32 CFR 21.115).
(b) Updates to the DoDGARs are published in the Federal Register.
When finalized, updates also are published as Defense Grant and
Agreement Circulars, with revised pages for the separate, loose-leaf
edition.
(c) Revisions to the DoDGARs are recommended to the Director of
Defense Research and Engineering (DDR&E) by a standing working group.
The DDR&E, Director of Defense Procurement, and each Military Department
shall be represented on the working group. Other DoD Components that use
grants or cooperative agreements may also nominate representatives. The
working group meets when necessary.
Sec. 21.125 Deviations.
(a) The Head of the DoD Component or his or her designee may
authorize individual deviations from the DoDGARs, which are deviations
that affect only one grant or cooperative agreement, if such deviations
are not prohibited by statute, executive order or regulation.
(b) Class deviations that affect more than one grant or cooperative
agreement must be approved in advance by the Director, Defense Research
and Engineering (DDR&E) or his or her designee. Note that OMB
concurrence also is required for deviations from two parts of the
DoDGARs, 32 CFR parts 32 and 33, in accordance with 32 CFR 32.4 and
33.6, respectively.
(c) Copies of justifications and agency approvals for individual
deviations and written requests for class deviations shall be submitted
to: Deputy Director, Defense Research and Engineering, ATTN: Research,
3080 Defense Pentagon, Washington DC 20301-3080.
(d) Copies of requests and approvals for individual and class
deviations shall be maintained in award files.
Sec. 21.130 Definitions.
Acquisition. The acquiring (by purchase, lease, or barter) of
property or services for the direct benefit or use of the United States
Government (see more detailed definition at 48 CFR 2.101). In accordance
with 31 U.S.C. 6303, procurement contracts are the appropriate legal
instruments for acquiring such property or services.
Assistance. The transfer of a thing of value to a recipient to carry
out a public purpose of support or stimulation authorized by a law of
the United States (see 31 U.S.C. 6101(3)). Grants and cooperative
agreements are examples of legal instruments used to provide assistance.
Contract. See the definition for procurement contract in this
section.
Contracting activity. An activity to which the Head of a DoD
Component has delegated broad authority regarding acquisition functions,
pursuant to 48 CFR 1.601.
Contracting officer. A person with the authority to enter into,
administer, and/or terminate contracts and make related determinations
and findings. A more detailed definition of the term appears at 48 CFR
2.101.
Cooperative agreement. A legal instrument which, consistent with 31
U.S.C. 6305, is used to enter into the same kind of relationship as a
grant (see definition ``grant''), except that substantial involvement is
expected between the Department of Defense and the recipient when
carrying out the activity contemplated by the cooperative agreement. The
term does not include ``cooperative research and development
agreements'' as defined in 15 U.S.C. 3710a.
Deviation. The issuance or use of a policy or procedure that is
inconsistent with the DoDGARs.
[[Page 18]]
DoD Components. The Office of the Secretary of Defense, the Military
Departments, the Defense Agencies, and DoD Field Activities.
Grant. A legal instrument which, consistent with 31 U.S.C. 6304, is
used to enter into a relationship:
(1) The principal purpose of which is to transfer a thing of value
to the recipient to carry out a public purpose of support or stimulation
authorized by a law of the United States, rather than to acquire
property or services for the Department of Defense's direct benefit or
use.
(2) In which substantial involvement is not expected between the
Department of Defense and the recipient when carrying out the activity
contemplated by the grant.
Grants officer. An official with the authority to enter into,
administer, and/or terminate grants or cooperative agreements.
Nonprocurement instrument. A legal instrument other than a
procurement contract. Examples include instruments of financial
assistance, such as grants or cooperative agreements, and those of
technical assistance, which provide services in lieu of money.
Procurement contract. A legal instrument which, consistent with 31
U.S.C. 6303, reflects a relationship between the Federal Government and
a State, a local government, or other recipient when the principal
purpose of the instrument is to acquire property or services for the
direct benefit or use of the Federal Government. See the more detailed
definition for contract at 48 CFR 2.101.
Recipient. An organization or other entity receiving a grant or
cooperative agreement from a DoD Component.
Subpart B--Authorities and Responsibilities
Sec. 21.200 Purpose.
This subpart describes the sources and flow of authority to use
grants and cooperative agreements, and assigns the broad
responsibilities associated with DoD Components' use of such
instruments.
Sec. 21.205 DoD Components' authorities.
(a) In accordance with 31 U.S.C. 6301 et seq., DoD Components shall
use grants and cooperative agreements as legal instruments reflecting
assistance relationships between the United States Government and
recipients.
(b) Unlike the use of a procurement contract (for which Federal
agencies have inherent, Constitutional authority), use of a grant or
cooperative agreement to carry out a program requires authorizing
legislation, the intent of which supports the use of an assistance
instrument (e.g., the intent of the legislation authorizing a program
supports a judgment that the principal purpose of the program is
assistance, rather than acquisition). DoD Components may award grants
and cooperative agreements under a number of statutory authorities that
fall into three categories:
(1) Authorities that statutes provide to the Secretary of Defense.
These authorities generally are delegated by the Secretary of Defense to
Heads of DoD Components, usually through DoD directives, instructions,
or policy memoranda that are not part of the Defense Grant and Agreement
Regulatory System. Examples of statutory authorities in this category
are:
(i) Authority under 10 U.S.C. 2391 to make grants or conclude
cooperative agreements to assist State and local governments in planning
and carrying out community adjustments and economic diversification
required by changes in military installations or in DoD contracts or
spending that may have a direct and significant adverse consequence on
the affected community.
(ii) Authority under 10 U.S.C. 2413 to enter into cooperative
agreements with entities that furnish procurement technical assistance
to businesses.
(2) Authorities that statutes may provide directly to Heads of DoD
Components. When a statute authorizes the head of a DoD Component to use
a grant or cooperative agreement or to carry out a program with a
principal purpose of assistance, use of that authority requires no
delegation by the Secretary of Defense. For example, 10 U.S.C. 2358
authorizes the Secretaries
[[Page 19]]
of the Military Departments, in addition to the Secretary of Defense, to
perform research and development projects through grants and cooperative
agreements. A Military Department's use of the authority of 10 U.S.C.
2358 therefore requires no delegation by the Secretary of Defense.
(3) Authorities that arise indirectly as the result of statute. For
example, authority to use a grant or cooperative agreement may result
from:
(i) A federal statute authorizing a program that is consistent with
an assistance relationship (i.e., the support or stimulation of a public
purpose, rather than the acquisition of a good or service for the direct
benefit of the Department of Defense). In accordance with 31 U.S.C.
chapter 63, such a program would appropriately be carried out through
the use of grants or cooperative agreements.
(ii) Exemptions requested by the Department of Defense and granted
by the Office of Management and Budget under 31 U.S.C. 6307, as
described in 32 CFR 22.220.
Sec. 21.210 Vesting and delegation of authority.
(a) The authority and responsibility for awarding grants and
cooperative agreements is vested in the Head of each DoD Component that
has such authority.
(b) The Head of each such DoD Component, or his or her designee, may
delegate to the heads of contracting activities (HCAs) within that
Component, authority to award grants or cooperative agreements, to
appoint grants officers (see Sec. 21.220(c)), and to broadly manage the
DoD Component's functions related to grants and cooperative agreements.
An HCA is the same official (or officials) designated as the head of the
contracting activity for procurement contracts, as defined at 48 CFR
2.101--the intent is that overall management responsibilities for a DoD
Component's functions related to nonprocurement instruments be assigned
only to officials that have similar responsibilities for procurement
contracts.
Sec. 21.215 Contracting activities.
When designated by the Head of the DoD Component or his or her
designee (see 32 CFR 21.210(b)), the HCA is responsible for the grants
and cooperative agreements made by or assigned to that activity. He or
she shall supervise and establish internal policies and procedures for
that activity's assistance awards.
Sec. 21.220 Grants officers.
(a) Authority. Only grants officers are authorized to sign grants or
cooperative agreements, or to administer or terminate such legal
instruments on behalf of the Department of Defense. Grants officers may
bind the Government only to the extent of the authority delegated to
them.
(b) Responsibilities. Grants officers should be allowed wide
latitude to exercise judgment in performing their responsibilities.
Grants officers are responsible for ensuring that:
(1) Individual grants and cooperative agreements are used
effectively in the execution of DoD programs, and are awarded and
administered in accordance with applicable laws, Executive orders,
regulations, and DoD policies.
(2) Sufficient funds are available for obligation.
(3) Recipients of grants and cooperative agreements receive
impartial, fair, and equitable treatment.
(c) Selection, appointment and termination of appointment of grants
officers. Each DoD Component that awards grants or enters into
cooperative agreements shall have a formal process (see Sec. 21.210(b))
to select and appoint grants officers and terminate their appointments.
DoD Components are not required to maintain a selection process for
grants officers separate from the selection process for contracting
officers, and written statements of appointment or termination for
grants officers may be integrated into the necessary documentation for
contracting officers, as appropriate.
(1) Selection. In selecting grants officers, appointing officials
shall consider the complexity and dollar value of the grants and
cooperative agreements to
[[Page 20]]
be assigned and judge whether candidates possess the necessary
experience, training, education, business acumen, judgment, and
knowledge of contracts and assistance instruments to function
effectively as grants officers.
(2) Appointment. Statements of appointment shall be in writing and
shall clearly state the limits of grants officers' authority, other than
limits contained in applicable laws or regulations. Information on the
limits of a grants officer's authority shall be readily available to the
public and agency personnel.
(3) Termination. Written statements of termination are required,
unless the written statement of appointment provides for automatic
termination. No termination shall be retroactive.
Subpart C--Information Reporting on Grants, Cooperative Agreements, and
Other Nonprocurement Instruments
Sec. 21.300 Purpose.
This subpart prescribes policies and procedures for compiling and
reporting data related to grants, cooperative agreements, and other
nonprocurement instruments subject to information reporting requirements
of 31 U.S.C. chapter 61.
Sec. 21.305 Defense Assistance Awards Data System.
(a) Purposes of the system. Data from the Defense Assistance Awards
Data System (DAADS) are used to provide:
(1) DoD inputs to meet statutory requirements for Federal
Governmentwide reporting of data related to obligations of funds by
grant, cooperative agreement, or other nonprocurement instrument.
(2) A basis for meeting Governmentwide requirements to report to the
Federal Assistance Awards Data System maintained by the Department of
Commerce and for preparing other recurring and special reports to the
President, the Congress, the General Accounting Office, and the public.
(3) Information to support policy formulation and implementation and
to meet management oversight requirements related to the use of grants,
cooperative agreements, and other nonprocurement instruments.
(b) Responsibilities. (1) The Deputy Director, Defense Research and
Engineering (DDDR&E), or his or her designee, shall issue the manual
described in paragraph (b)(2)(ii) of this section.
(2) The Director for Information Operations and Reports, Washington
Headquarters Services (DIOR, WHS) shall, consistent with guidance issued
by the DDDR&E:
(i) Process DAADS information on a quarterly basis and prepare
recurring and special reports using such information.
(ii) Prepare, update, and disseminate ``Department of Defense
Assistance Awards Data System,'' an instruction manual for reporting
information to DAADS. The manual, which shall be issued by the office of
the DDR&E, shall specify procedures, formats, and editing processes to
be used by DoD Components, including magnetic tape layout and error
correction schedules.
(3) The following offices shall serve as central points for
collecting DAADS information from contracting activities within the DoD
Components:
(i) For the Army: As directed by the U.S. Army Contracting Support
Agency.
(ii) For the Navy: As directed by the Office of Naval Research.
(iii) For the Air Force: As directed by SAF/AQCP.
(iv) For the Office of the Secretary of Defense, Defense Agencies,
and DoD Field Activities: Each Defense Agency shall identify a central
point for collecting and reporting DAADS information to the DIOR, WHS,
at the address given in paragraph (c)(2) of this section. DIOR, WHS
shall serve as the central point for offices and activities within the
Office of the Secretary of Defense and for DoD Field Activities.
(4) The office that serves, in accordance with paragraph (b)(3) of
this section, as the central point for collecting DAADS information from
contracting activities within each DoD Component shall:
(i) Establish internal procedures to ensure reporting by contracting
activities that use grants, cooperative agreements or other
nonprocurement instruments subject to 31 U.S.C. chapter 61.
[[Page 21]]
(ii) Collect information required by DD Form 2566, ``DoD Assistance
Award Action Report,'' from those contracting activities, and report it
to DIOR, WHS, in accordance with paragraph (d) of this section.
(iii) Submit to the DDDR&E, at the address given in Sec. 21.125(c),
any recommended changes to the DAADS or to the instruction manual
described in paragraph (b)(2)(ii) of this section.
(c) Reporting procedures. The data required by the DD Form 2566
shall be:
(1) Collected for each individual grant, cooperative agreement, or
other nonprocurement action that is subject to 31 U.S.C. chapter 61 and
involves the obligation or deobligation of Federal funds. Each action is
reported as an obligation under a specific program listed in the Catalog
of Federal Domestic Assistance (CFDA, see Sec. 21.310). The program to
be shown is the one that provided the funds being obligated (i.e., if a
grants officer in one DoD Component obligates appropriations of a second
DoD Component's program, the grants officer would show the CFDA program
of the second DoD Component on the DD Form 2566).
(2) Reported on a quarterly basis to DIOR, WHS by the offices that
are designated pursuant to paragraph (b)(3) of this section. For the
first three quarters of the Federal fiscal year, the data are due by
close-of-business (COB) on the 15th day after the end of the quarter
(i.e., first-quarter data are due by COB on January 15th, second-quarter
data by COB April 15th, and third-quarter data by COB July 15th).
Fourth-quarter data are due by COB October 25th, the 25th day after the
end of the quarter. If any due date falls on a weekend or holiday, the
data are due on the next regular workday. The mailing address for DIOR,
WHS is 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-
4302.
(3) Reported on a computer tape, floppy diskette or by other means
permitted by the instruction manual described in paragraph (b)(2)(ii) of
this section. The data shall be reported in the format specified in the
instruction manual.
(d) Report control symbol. DoD Components' reporting of DAADS data
is used by DoD to satisfy Governmentwide requirements to report to the
Federal Assistance Awards Data System, which is assigned Interagency
Report Control Number 0252-DOC-QU.
Sec. 21.310 Catalog of Federal Domestic Assistance.
(a) Purpose and scope of the reporting requirement. (1) Under the
Federal Program Information Act (31 U.S.C. 6101 et seq.), as implemented
through OMB Circular A-89,\2\ the Department of Defense is required to
provide certain information about its domestic assistance programs to
OMB and the General Services Administration (GSA). GSA makes this
information available to the public by publishing it in the Catalog of
Federal Domestic Assistance (CFDA) and maintaining the Federal
Assistance Programs Retrieval System, a computerized data base of the
information.
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\2\ Contact the Office of Management and Budget, EOP Publications,
725 17th St. N.W., New Executive Office Building, Washington, D.C.
20503.
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(2) The CFDA covers all domestic assistance programs and activities,
regardless of the number of awards made under the program, the total
dollar value of assistance provided, or the duration. In addition to
programs using grants and cooperative agreements, covered programs
include those providing assistance in other forms, such as payments in
lieu of taxes or indirect assistance resulting from Federal operations.
(b) Responsibilities. (1) Each DoD Component that provides domestic
financial assistance shall:
(i) Report to the Director for Information Operations and Reports,
Washington Headquarters Services (DIOR, WHS) all new programs and
changes as they occur, or as DIOR, WHS requests annual updates to
existing CFDA information.
(ii) Identify to the DIOR, WHS a point-of-contact who will be
responsible for reporting such program information and for responding to
inquiries related to it.
(2) The DIOR, WHS shall act as the Department of Defense's single
office for collecting, compiling and reporting
[[Page 22]]
such program information to OMB and GSA.
Sec. 21.315 Uniform grants and agreements numbering system.
DoD Components shall assign identifying numbers to all
nonprocurement instruments subject to this subpart, including grants and
cooperative agreements. The numbering system parallels the procurement
instrument identification (PII) numbering system specified in 48 CFR
204.70 (in the ``Defense Federal Acquisition Regulation Supplement''),
as follows:
(a) The first six alphanumeric characters of the assigned number
shall be identical to those specified by 48 CFR 204.7003(a)(1) to
identify the DoD Component and contracting activity.
(b) The seventh and eighth positions shall be the last two digits of
the fiscal year in which the number is assigned to the grant,
cooperative agreement, or other nonprocurement instrument.
(c) The 9th position shall be a number: ``1'' for grants; ``2'' for
cooperative agreements; and ``3'' for other nonprocurement instruments.
(d) The 10th through 13th positions shall be the serial number of
the instrument. DoD Components and contracting activities need not
follow any specific pattern in assigning these numbers and may create
multiple series of letters and numbers to meet internal needs for
distinguishing between various sets of awards.
PART 22--DoD GRANTS AND AGREEMENTS--AWARD AND ADMINISTRATION--Table of Contents
Subpart A--General
Sec.
22.100 Purpose, relation to other parts, and organization.
22.105 Definitions.
Subpart B--Selecting the Appropriate Instrument
22.200 Purpose.
22.205 Distinguishing assistance from procurement.
22.210 Authority for providing assistance.
22.215 Distinguishing grants and cooperative agreements.
22.220 Exemptions.
Subpart C--Competition
22.300 Purpose.
22.305 General policy and requirement for competition.
22.310 Statutes concerning certain research, development, and
facilities construction grants.
22.315 Merit-based, competitive procedures.
22.320 Special competitions.
22.325 Historically Black colleges and universities (HBCUs) and other
minority institutions (MIs).
Subpart D--Recipient Qualification Matters--General Policies and
Procedures
22.400 Purpose.
22.405 Policy.
22.410 Grants officers' responsibilities.
22.415 Standards.
22.420 Pre-award procedures.
Subpart E--National Policy Matters
22.505 Purpose.
22.510 Certifications, representations, and assurances.
22.515 Provisions of annual appropriations acts.
22.520 Military recruiting on campus.
22.525 Paperwork Reduction Act.
22.530 Metric system of measurement.
Subpart F--Award
22.600 Purpose.
22.605 Grants officers' responsibilities.
22.610 Award instruments.
Subpart G--Field Administration
22.700 Purpose.
22.705 Policy.
22.710 Assignment of grants administration offices.
22.715 Grants administration office functions.
Subpart H--Post-Award Administration
22.800 Purpose and relation to other parts.
22.805 Post-award requirements in other parts.
22.810 Payments.
22.815 Claims, disputes, and appeals.
22.820 Debt collection.
22.825 Closeout audits.
Appendix A to Part 22--Proposal Provision for Required Certifications.
Appendix B to Part 22--Suggested Award Provisions for National Policy
Requirements That Often Apply.
Appendix C to Part 22--Administrative Requirements and Issues To Be
Addressed in Award Terms and Conditions.
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
[[Page 23]]
Source: 63 FR 12164, Mar. 12, 1998, unless otherwise noted.
Subpart A--General
Sec. 22.100 Purpose, relation to other parts, and organization.
(a) This part outlines grants officers' and DoD Components'
responsibilities related to the award and administration of grants and
cooperative agreements.
(b) In doing so, it also supplements other parts of the DoD Grant
and Agreement Regulations (DoDGARs) that are either Governmentwide rules
or DoD implementation of Governmentwide guidance in Office of Management
and Budget (OMB) Circulars. Those other parts of the DoDGARs, which are
referenced as appropriate in this part, are:
(1) Governmentwide rules on debarment, suspension and drug-free
workplace requirements, in 32 CFR part 25.
(2) The Governmentwide rule on lobbying restrictions, in 32 CFR part
28.
(3) Administrative requirements for grants and agreements awarded to
specific types of recipients:
(i) For State and local governmental organizations, in the
Governmentwide rule at 32 CFR part 33.
(ii) For institutions of higher education and other nonprofit
organizations, at 32 CFR part 32.
(iii) For for-profit organizations, at 32 CFR part 34.
(c) The organization of this part parallels the award and
administration process, from pre-award through post-award matters. It
therefore is organized in the same manner as the parts of the DoDGARs
(32 CFR parts 32, 33, and 34) that prescribe administrative requirements
for specific types of recipients.
Sec. 22.105 Definitions.
Other than the terms defined in this section, terms used in this
part are defined in 32 CFR 21.130.
Administrative offset. An action whereby money payable by the United
States Government to, or held by the Government for, a recipient is
withheld to satisfy a delinquent debt the recipient owes the Government.
Advanced research. Advanced technology development that creates new
technology or demonstrates the viability of applying existing technology
to new products and processes in a general way. Advanced research is
most closely analogous to precompetitive technology development in the
commercial sector (i.e., early phases of research and development on
which commercial competitors are willing to collaborate, because the
work is not so coupled to specific products and processes that the
results of the work must be proprietary). It does not include
development of military systems and hardware where specific requirements
have been defined. It is typically funded in Advanced Technology
Development (Budget Activity 3 and Research Category 6.3A) programs
within Research, Development, Test and Evaluation (RDT&E).
Applied research. Efforts that attempt to determine and exploit the
potential of scientific discoveries or improvements in technology such
as new materials, devices, methods and processes. It typically is funded
in Applied Research (Budget Activity 2 and Research Category 6.2)
programs within Research, Development, Test and Evaluation (RDT&E).
Applied research normally follows basic research but may not be fully
distinguishable from the related basic research. The term does not
include efforts whose principal aim is the design, development, or
testing of specific products, systems or processes to be considered for
sale or acquisition; these efforts are within the definition of
``development.''
Basic research. Efforts directed toward increasing knowledge and
understanding in science and engineering, rather than the practical
application of that knowledge and understanding. It typically is funded
within Basic Research (Budget Activity 1 and Research Category 6.1)
programs within Research, Development, Test and Evaluation (RDT&E). For
the purposes of this part, basic research includes:
(1) Research-related, science and engineering education, including
graduate fellowships and research traineeships.
(2) Research instrumentation and other activities designed to
enhance
[[Page 24]]
the infrastructure for science and engineering research.
Claim. A written demand or written assertion by one of the parties
to a grant or cooperative agreement seeking as a matter of right, the
payment of money in a sum certain, the adjustment or interpretation of
award terms, or other relief arising under or relating to a grant or
cooperative agreement. A routine request for payment that is not in
dispute when submitted is not a claim. The submission may be converted
to a claim by written notice to the grants officer if it is disputed
either as to liability or amount, or is not acted upon in a reasonable
time.
Debt. Any amount of money or any property owed to a Federal Agency
by any person, organization, or entity except another United States
Federal Agency. Debts include any amounts due from insured or guaranteed
loans, fees, leases, rents, royalties, services, sales of real or
personal property, or overpayments, penalties, damages, interest, fines
and forfeitures, and all other claims and similar sources. Amounts due a
nonappropriated fund instrumentality are not debts owed the United
States, for the purposes of this subchapter.
Delinquent debt. A debt:
(1) That the debtor fails to pay by the date specified in the
initial written notice from the agency owed the debt, normally within 30
calendar days, unless the debtor makes satisfactory payment arrangements
with the agency by that date; and
(2) With respect to which the debtor has elected not to exercise any
available appeals or has exhausted all agency appeal processes.
Development. The systematic use of scientific and technical
knowledge in the design, development, testing, or evaluation of
potential new products, processes, or services to meet specific
performance requirements or objectives. It includes the functions of
design engineering, prototyping, and engineering testing.
Electronic commerce. The conduct of business through the use of
automation and electronic media, in lieu of paper transactions, direct
personal contact, telephone, or other means. For grants and cooperative
agreements, electronic commerce can include the use of electronic data
interchange, electronic mail, electronic bulletin board systems, and
electronic funds transfer for: program announcements or solicitations;
applications or proposals; award documents; recipients' requests for
payment; payment authorizations; and payments.
Electronic data interchange. The exchange of standardized
information communicated electronically between business partners,
typically between computers. It is DoD policy that DoD Component EDI
applications conform to the American National Standards Institute
(ANSI), Accredited Standards Committee (ASC) X-12 standard.\1\
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\1\ Available from Accredited Standards Committee, X-12 Secretariat,
Data Interchange Standards Association, 1800 Diagonal Road, Suite 355,
Alexandria, VA 22314-2852; Attention: Manager Maintenance and
Publications.
---------------------------------------------------------------------------
Electronic funds transfer. A system that provides the authority to
debit or credit accounts in financial institutions by electronic means
rather than source documents (e.g., paper checks). Processing typically
occurs through the Federal Reserve System and/or the Automated Clearing
House (ACH) computer network. It is DoD policy that DoD Component EFT
transmissions conform to the American National Standards Institute
(ANSI), Accredited Standards Committee (ASC) X-12 standard.
Historically Black colleges and universities. Institutions of higher
education determined by the Secretary of Education to meet the
requirements of 34 CFR 608.2. Each DoD Component's contracting
activities and grants officers may obtain a list of historically Black
colleges and universities from that DoD Component's Small and
Disadvantaged Business Utilization office.
Institution of higher education. An educational institution that
meets the criteria in section 1201(a) of the Higher Education Act of
1965 (20 U.S.C. 1141(a)). Note, however, that institution of higher
education has a different meaning in Sec. 22.520, as given at
Sec. 22.520(b)(2).
Minority institutions. Institutions of higher education that meet
the criteria for minority institutions specified in 10
[[Page 25]]
U.S.C. 2323. Each DoD Component's contracting activities and grants
officers may obtain copies of a current list of institutions that
qualify as minority institutions under 10 U.S.C. 2323 from that DoD
Component's Small and Disadvantaged Business Utilization office (the
list of minority institutions changes periodically, based on Department
of Education data on institutions' enrollments of minority students).
Research. Basic, applied, and advanced research, as defined in this
section.
Subaward. An award of financial assistance in the form of money, or
property in lieu of money, made under a DoD grant or cooperative
agreement by a recipient to an eligible subrecipient. The term includes
financial assistance for substantive program performance by the
subrecipient of a portion of the program for which the DoD grant or
cooperative agreement was made. It does not include the recipient's
procurement of goods and services needed to carry out the program.
Subpart B--Selecting the Appropriate Instrument
Sec. 22.200 Purpose.
This subpart provides the bases for determining the appropriate type
of instrument in a given situation.
Sec. 22.205 Distinguishing assistance from procurement.
Before using a grant or cooperative agreement, the grants officer
shall make a positive judgment that an assistance instrument, rather
than a procurement contract, is the appropriate instrument, based on the
following:
(a) Purpose. (1) The grants officer must judge that the principal
purpose of the activity to be carried out under the instrument is to
stimulate or support a public purpose (i.e., to provide assistance),
rather than acquisition (i.e., to acquire goods and services for the
direct benefit of the United States Government). If the principal
purpose is acquisition, then the grants officer shall judge that a
procurement contract is the appropriate instrument, in accordance with
31 U.S.C. chapter 63 (``Using Procurement Contracts and Grant and
Cooperative Agreements''). Assistance instruments shall not be used in
such situations, except:
(i) When a statute specifically provides otherwise; or
(ii) When an exemption is granted, in accordance with Sec. 22.220.
(2) For research and development, the appropriate use of grants and
cooperative agreements therefore is almost exclusively limited to the
performance of selected basic, applied, and advanced research projects.
Development projects nearly always shall be performed by contract or
other acquisition transaction because their principal purpose is the
acquisition of specific deliverable items (e.g., prototypes or other
hardware) for the benefit of the Department of Defense.
(b) Fee or profit. Payment of fee or profit is consistent with an
activity whose principal purpose is the acquisition of goods and
services for the direct benefit or use of the United States Government,
rather than an activity whose principal purpose is assistance.
Therefore, the grants officer shall use a procurement contract, rather
than an assistance instrument, in all cases where:
(1) Fee or profit is to be paid to the recipient of the instrument;
or
(2) The instrument is to be used to carry out a program where fee or
profit is necessary to achieving program objectives.
Sec. 22.210 Authority for providing assistance.
(a) Before a grant or cooperative agreement may be used, the grants
officer must:
(1) Identify the program statute, the statute that authorizes the
DoD Component to carry out the activity the principal purpose of which
is assistance (see 32 CFR 21.205(b)).
(2) Review the program statute to determine if it contains
requirements that affect the:
(i) Solicitation, selection, and award processes. For example,
program statutes may authorize assistance to be provided only to certain
types of recipients; may require that recipients meet certain other
criteria to be eligible to receive assistance; or require that a
specific process shall be used to review recipients' proposals.
[[Page 26]]
(ii) Terms and conditions of the award. For example, some program
statutes require a specific level of cost sharing or matching.
(b) The grants officer shall ensure that the award of DoD
appropriations through a grant or cooperative agreement for a research
project meets the standards of 10 U.S.C. 2358, DoD's broad authority to
carry out research, even if the research project is authorized under a
statutory authority other than 10 U.S.C. 2358. The standards of 10
U.S.C. 2358 are that, in the opinion of the Head of the DoD Component or
his or her designee, the projects must be:
(1) Necessary to the responsibilities of the DoD Component.
(2) Related to weapons systems and other military needs or of
potential interest to the DoD Component.
Sec. 22.215 Distinguishing grants and cooperative agreements.
(a) Once a grants officer judges, in accordance with Secs. 22.205
and 22.210, that either a grant or cooperative agreement is the
appropriate instrument, the grants officer shall distinguish between the
two instruments as follows:
(1) Grants shall be used when the grants officer judges that
substantial involvement is not expected between the Department of
Defense and the recipient when carrying out the activity contemplated in
the agreement.
(2) Cooperative agreements shall be used when the grants officer
judges that substantial involvement is expected. The grants officer
should document the nature of the substantial involvement that led to
selection of a cooperative agreement. Under no circumstances are
cooperative agreements to be used solely to obtain the stricter controls
typical of a contract.
(b) In judging whether substantial involvement is expected, grants
officers should recognize that ``substantial involvement'' is a
relative, rather than an absolute, concept, and that it is primarily
based on programmatic factors, rather than requirements for grant or
cooperative agreement award or administration. For example, substantial
involvement may include collaboration, participation, or intervention in
the program or activity to be performed under the award.
Sec. 22.220 Exemptions.
Under 31 U.S.C. 6307, ``the Director of the Office of Management and
Budget may exempt an agency transaction or program'' from the
requirements of 31 U.S.C. chapter 63. Grants officers shall request such
exemptions only in exceptional circumstances. Each request shall specify
for which individual transaction or program the exemption is sought; the
reasons for requesting an exemption; the anticipated consequences if the
exemption is not granted; and the implications for other agency
transactions and programs if the exemption is granted. The procedures
for requesting exemptions shall be:
(a) In cases where 31 U.S.C. chapter 63 would require use of a
contract and an exemption from that requirement is desired:
(1) The grants officer shall submit a request for exemption, through
appropriate channels established by his or her DoD Component (see 32 CFR
21.115(b)(1)), to the Director of Defense Procurement (DDP).
(2) The DDP, after coordination with the Director of Defense
Research and Engineering (DDR&E), shall transmit the request to OMB or
notify the DoD Component that the request has been disapproved.
(b) In other cases, the DoD Component shall submit a request for the
exemption through appropriate channels to the DDR&E. The DDR&E shall
transmit the request to OMB or notify the DoD Component that the request
has been disapproved.
(c) Where an exemption is granted, documentation of the approval
shall be maintained in the award file.
Subpart C--Competition
Sec. 22.300 Purpose.
This subpart establishes DoD policy and implements statutes related
to the use of competitive procedures in the award of grants and
cooperative agreements.
[[Page 27]]
Sec. 22.305 General policy and requirement for competition.
(a) It is DoD policy to maximize use of competition in the award of
grants and cooperative agreements. This also conforms with:
(1) 31 U.S.C. 6301(3), which encourages the use of competition in
awarding all grants and cooperative agreements.
(2) 10 U.S.C. 2374(a), which sets out Congressional policy that any
new grant for research, development, test, or evaluation be awarded
through merit-based selection procedures.
(b) Grants officers shall use merit-based, competitive procedures
(as defined by Sec. 22.315) to award grants and cooperative agreements:
(1) In every case where required by statute (e.g., 10 U.S.C. 2361,
as implemented in Sec. 22.310, for certain grants to institutions of
higher education).
(2) To the maximum extent practicable in all cases where not
required by statute.
Sec. 22.310 Statutes concerning certain research, development, and facilities construction grants.
(a) Definitions specific to this section. For the purposes of
implementing the requirements of 10 U.S.C. 2374 in this section, the
following terms are defined:
(1) Follow-on grant. A grant that provides for continuation of
research and development performed by a recipient under a preceding
grant. Note that follow-on grants are distinct from incremental funding
actions during the period of execution of a multi-year award.
(2) New grant. A grant that is not a follow-on grant.
(b) Statutory requirement to use competitive procedures. (1) A
grants officer shall not award a grant by other than merit-based,
competitive procedures (as defined by Sec. 22.315) to an institution of
higher education for the performance of research and development or for
the construction of research or other facilities, unless:
(i) In the case of a new grant for research and development, there
is a statute meeting the criteria in paragraph (c)(1) of this section;
(ii) In the case of a follow-on grant for research and development,
or of a grant for the construction of research or other facilities,
there is a statute meeting the criteria in paragraph (c)(2) of this
section; and
(iii) The Secretary of Defense submits to Congress a written notice
of intent to make the grant. The grant may not be awarded until 180
calendar days have elapsed after the date on which Congress received the
notice of intent. Contracting activities must submit a draft notice of
intent with supporting documentation through channels to the Deputy
Director, Defense Research and Engineering.
(2) Because subsequently enacted statutes may, by their terms,
impose different requirements than set out in paragraph (b)(1) of this
section, grants officers shall consult legal counsel on a case-by-case
basis, when grants for the performance of research and development or
for the construction of research or other facilities are to be awarded
to institutions of higher education by other than merit-based
competitive procedures.
(c) Subsequent statutes. In accordance with 10 U.S.C. 2361 and 10
U.S.C. 2374, a provision of law may not be construed as requiring the
award of a grant through other than the merit-based, competitive
procedures described in Sec. 22.315, unless:
(1) Institutions of higher education--new grants for research and
development. In the case of a new grant for research and development to
an institution of higher education, such provision of law specifically:
(i) Identifies the particular institution of higher education
involved;
(ii) States that such provision of law modifies or supersedes the
provisions of 10 U.S.C. 2361 (a requirement that applies only if the
statute authorizing or requiring award by other than competitive
procedures was enacted after September 30, 1989); and
(iii) States that the award to the institution of higher education
involved is required by such provision of law to be made in
contravention of the policy set forth in 10 U.S.C. 2374(a).
(2) Institutions of higher education--follow-on grants for research
and development and grants for the construction of any research or other
facility. In the case of any such grant to an institution of
[[Page 28]]
higher education, such provision of law specifically:
(i) Identifies the particular institution of higher education
involved; and
(ii) States that such provision of law modifies or supersedes the
provisions of 10 U.S.C. 2361 (a requirement that applies only if the
statute authorizing or requiring award by other than competitive
procedures was enacted after September 30, 1989).
(3) Other entities--new grants for research and development--(i)
General. In the case of a new grant for research and development to an
entity other than an institution of higher education, such provision of
law specifically:
(A) Identifies the particular entity involved;
(B) States that the award to that entity is required by such
provision of law to be made in contravention of the policy set forth in
10 U.S.C. 2374(a).
(ii) Exception. The requirement of paragraph (c)(3)(i) of this
section does not apply to any grant that calls upon the National Academy
of Sciences to:
(A) Investigate, examine, or experiment upon any subject of science
or art of significance to the Department of Defense or any Military
Department; and
(B) Report on such matters to the Congress or any agency of the
Federal Government.
Sec. 22.315 Merit-based, competitive procedures.
Competitive procedures are methods that encourage participation in
DoD programs by a broad base of the most highly qualified performers.
These procedures are characterized by competition among as many eligible
proposers as possible, with a published or widely disseminated notice.
Competitive procedures include, as a minimum:
(a) Notice to prospective proposers. The notice may be a notice of
funding availability or Broad Agency Announcement published in the
Federal Register or Commerce Business Daily, respectively, or a notice
that is made available broadly by electronic means. Alternatively, it
may take the form of a specific notice that is distributed to eligible
proposers (a specific notice must be distributed to at least two
eligible proposers to be considered as part of a competitive procedure).
Notices must include, as a minimum, the following information:
(1) Programmatic area(s) of interest, in which proposals or
applications are sought.
(2) Eligibility criteria for potential recipients (see subpart D of
this part).
(3) Criteria that will be used to select the applications or
proposals that will be funded, and the method for conducting the
evaluation.
(4) The type(s) of funding instruments (e.g., grants, cooperative
agreements, other assistance instruments, or procurement contracts) that
are anticipated to be awarded pursuant to the announcement.
(5) Instructions for preparation and submission of a proposal or
application, including the time by which it must be submitted.
(b) At least two eligible, prospective proposers.
(c) Impartial review of the merits of applications or proposals
received in response to the notice, using the evaluation method and
selection criteria described in the notice. For research and development
awards, in order to be considered as part of a competitive procedure,
the two principal selection criteria, unless statute provides otherwise,
must be the:
(1) Technical merits of the proposed research and development; and
(2) Potential relationship of the proposed research and development
to Department of Defense missions.
Sec. 22.320 Special competitions.
Some programs may be competed for programmatic or policy reasons
among specific classes of potential recipients. An example would be a
program to enhance U.S. capabilities for academic research and research-
coupled graduate education in defense-critical, science and engineering
disciplines, a program that would be competed specifically among
institutions of higher education. All such special competitions shall be
consistent with program representations in the President's budget
submission to Congress and with subsequent Congressional authorizations
and appropriations for the programs.
[[Page 29]]
Sec. 22.325 Historically Black colleges and universities (HBCUs) and other minority institutions (MIs).
Increasing the ability of HBCUs and MIs to participate in federally
funded, university programs is an objective of Executive Order 12876 (3
CFR, 1993 Comp., p. 671) and 10 U.S.C. 2323. Grants officers shall
include appropriate provisions in Broad Agency Announcements (BAAs) or
other announcements for programs in which awards to institutions of
higher education are anticipated, in order to promote participation of
HBCUs and MIs in such programs. Also, whenever practicable, grants
officers shall reserve appropriate programmatic areas for exclusive
competition among HBCUs and MIs when preparing announcements for such
programs.
Subpart D--Recipient Qualification Matters--General Policies and
Procedures
Sec. 22.400 Purpose.
The purpose of this subpart is to specify policies and procedures
for grants officers' determination of recipient qualifications prior to
award.
Sec. 22.405 Policy.
(a) General. Grants officers normally shall award grants or
cooperative agreements only to qualified recipients that meet the
standards in Sec. 22.415. This practice conforms with the Governmentwide
policy, stated at 32 CFR 25.115(a), to do business only with responsible
persons.
(b) Exception. In exceptional circumstances, grants officers may
make awards to recipients that do not fully meet the standards in
Sec. 22.415 and include special award conditions that are appropriate to
the particular situation, in accordance with 32 CFR 32.14, 33.12, or
34.4.
Sec. 22.410 Grants officers' responsibilities.
The grants officer is responsible for determining a recipient's
qualification prior to award. The grants officer's signature on the
award document shall signify his or her determination that either:
(a) The potential recipient meets the standards in Sec. 22.415 and
is qualified to receive the grant or cooperative agreement; or
(b) An award is justified to a recipient that does not fully meet
the standards, pursuant to Sec. 22.405(b). In such cases, grants
officers shall document in the award file the rationale for making an
award to a recipient that does not fully meet the standards.
Sec. 22.415 Standards.
To be qualified, a potential recipient must:
(a) Have the management capability and adequate financial and
technical resources, given those that would be made available through
the grant or cooperative agreement, to execute the program of activities
envisioned under the grant or cooperative agreement.
(b) Have a satisfactory record of executing such programs or
activities (if a prior recipient of an award).
(c) Have a satisfactory record of integrity and business ethics.
(d) Be otherwise qualified and eligible to receive a grant or
cooperative agreement under applicable laws and regulations (see
Sec. 22.420(c)).
Sec. 22.420 Pre-award procedures.
(a) The appropriate method to be used and amount of effort to be
expended in deciding the qualification of a potential recipient will
vary. In deciding on the method and level of effort, the grants officer
should consider factors such as:
(1) DoD's past experience with the recipient;
(2) Whether the recipient has previously received cost-type
contracts, grants, or cooperative agreements from the Federal
Government; and
(3) The amount of the prospective award and complexity of the
project to be carried out under the award.
(b) There is no DoD-wide requirement to obtain a pre-award credit
report, audit, or any other specific piece of information. On a case-by-
case basis, the grants officer will decide whether there is a need to
obtain any such information to assist in deciding whether the recipient
meets the standards in Sec. 22.415 (a), (b), and (c).
[[Page 30]]
(1) Should the grants officer in a particular case decide that a
pre-award credit report, audit, or survey is needed, he or she should
consult first with the appropriate grants administration office
(identified in Sec. 22.710), and decide whether pre-existing surveys or
audits of the recipient, such as those of the recipient's internal
control systems under OMB Circular A-133 \2\ will satisfy the need (see
Sec. 22.715(a)(1)).
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\2\ Contact the Office of Management and Budget, EOP Publications,
725 17th St. NW, New Executive Office Building, Washington, DC 20503.
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(2) If, after consulting with the grants administration office, the
grants officer decides to obtain a credit report, audit, or other
information, and the report or other information discloses that a
potential recipient is delinquent on a debt to an agency of the United
States Government, then:
(i) The grants officer shall take such information into account when
determining whether the potential recipient is qualified with respect to
the grant or cooperative agreement; and
(ii) If the grants officer decides to make the award to the
recipient, unless there are compelling reasons to do otherwise, the
grants officer shall delay the award of the grant or cooperative
agreement until payment is made or satisfactory arrangements are made to
repay the debt.
(c) In deciding whether a recipient is otherwise qualified and
eligible in accordance with the standard in Sec. 22.415(d), the grants
officer shall ensure that the potential recipient:
(1) Is not identified on the Governmentwide ``List of Parties
Excluded from Federal Procurement and Nonprocurement Programs'' as being
debarred, suspended, or otherwise ineligible to receive the award. The
grants officer shall check the list of such parties for:
(i) Potential recipients of prime awards, as described at 32 CFR
25.505(d);
(ii) A recipient's principals (e.g., officers, directors, or other
key employees, as defined at 32 CFR 25.105); and
(iii) Potential recipients of subawards, where DoD Component
approval of such principals or lower-tier recipients is required under
the terms of the award (see 32 CFR 25.505(e)).
(2) Has provided all certifications and assurances required by
Federal statute, Executive order, or codified regulation, unless they
are to be addressed in award terms and conditions at the time of award
(see Sec. 22.510).
(3) Meets any eligibility criteria that may be specified in the
statute authorizing the specific program under which the award is being
made (see Sec. 22.210(a)(2)).
(d) Grants officers shall obtain each recipient's Taxpayer
Identification Number (TIN, which may be the Social Security Number for
an individual and Employer Identification Number for a business or non-
profit entity) and notify the recipient that the TIN is being obtained
for purposes of collecting and reporting on any delinquent amounts that
may arise out of the recipient's relationship with the Government.
Obtaining the TIN and so notifying the recipient is a statutory
requirement of 31 U.S.C. 7701, as amended by the Debt Collection
Improvement Act of 1996 (section 31001(i)(1), Pub. L. 104-134).
Subpart E--National Policy Matters
Sec. 22.505 Purpose.
The purpose of this subpart is to supplement other regulations that
implement national policy requirements, to the extent that it is
necessary to provide additional guidance to DoD grants officers. The
other regulations that implement national policy requirements include:
(a) The other parts of the DoDGARs (32 CFR parts 32, 33, and 34)
that implement the Governmentwide guidance in OMB Circulars A-102 \3\
and A-110 \4\ on administrative requirements for grants and cooperative
agreements. Those parts address some national policy matters that appear
in the OMB Circulars.
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\3\ See footnote 2 to Sec. 22.420(b)(1).
\4\ See footnote 2 to Sec. 22.420(b)(1).
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(b) DoD regulations other than the DoDGARs.
(c) Other Federal agencies' regulations.
[[Page 31]]
Sec. 22.510 Certifications, representations, and assurances.
(a) Certifications--(1) Policy. Certifications of compliance with
national policy requirements are to be obtained from recipients only for
those national policies where a statute, Executive order, or codified
regulation specifically states that a certification is required. Other
national policy requirements may be addressed by obtaining
representations or assurances (see paragraph (b) of this section).
Grants officers should utilize methods for obtaining certifications, in
accordance with Executive Order 12866 (3 CFR, 1993 Comp., p. 638), that
minimize administration and paperwork.
(2) Procedures. (i) When necessary, grants officers may obtain
individual, written certifications.
(ii) Whenever possible, and to the extent consistent with statute
and codified regulation, grants officers should identify the
certifications that are required for the particular type of recipient
and program, and consolidate them into a single certification provision
that cites them by reference.
(A) Appendix A to this part lists the common certifications and
cites their applicability. Because some certifications (e.g., the
certification on lobbying in Appendix A to this part) are required by
law to be submitted at the time of proposal, rather than at the time of
award, Appendix A to this part includes language that may be used for
incorporating common certifications by reference into a proposal.
(B) If a grants officer elects to have proposers incorporate
certifications by reference into their proposals, he or she must do so
in one of the two following ways. When required by statute or codified
regulation, the solicitation must include the full text of the
certifications that proposers are to provide by reference. In other
cases, the grants officer may include language in the solicitation that
informs the proposers where the full text may be found (e.g., in
documents or computer network sites that are readily available to the
public) and offers to provide it to proposers upon request.
(C) Grants officers may incorporate certifications by reference in
award documents when doing so is consistent with statute and codified
regulation. Note that a statute requires submission of the lobbying
certification in Appendix A to this part at the time of proposal, and
that 32 CFR 25.510(a) requires submission of certifications regarding
debarment and suspension at the time of proposal. The provision that a
grants officer would use to incorporate certifications in award
documents, when consistent with statute and codified regulation, would
be similar to the provision in Appendix A to this part, except that it
would be modified to state that the recipient is providing the required
certifications by signing the award document or by accepting funds under
the award.
(b) Representations and assurances. Many national policies, either
in statute or in regulation, require recipients of grants and
cooperative agreements to make representations or provide assurances
(rather than certifications) that they are in compliance with the
policies. As discussed in Sec. 22.610(b), Appendix B to this part
suggests award terms and conditions that may be used to address several
of the more commonly applicable national policy requirements. These
terms and conditions may be used to obtain required assurances and
representations, if the grants officer wishes to do so at the time of
award, rather than through the use of the standard application form (SF-
424 \5\) or other means at the time of proposal.
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\5\ For copies of Standard Forms listed in this part, contact
regional grants administration offices of the Office of Naval Research.
Addresses for the offices are listed in the ``DoD Directory of Contract
Administration Services Components,'' DLAH 4105.4, which can be obtained
either from: Defense Logistics Agency, Publications Distribution
Division (DASC-WDM), 8725 John J. Kingman Rd., Suite 0119, Fort Belvoir,
VA 22060-6220; or from the Defense Contract Management Command home page
at http://www.dcmc.dcrb.dla.mil.''
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Sec. 22.515 Provisions of annual appropriations acts.
An annual appropriations act can include general provisions stating
national policy requirements that apply to the use of funds (e.g.,
obligation
[[Page 32]]
through a grant or cooperative agreement) appropriated by the act.
Because these requirements are of limited duration (the period during
which a given year's appropriations are available for obligation), and
because they can vary from year to year and from one agency's
appropriations act to another agency's, the grants officer must know the
agency(ies) and fiscal year(s) of the appropriations being obligated by
a given grant or cooperative agreement, and may need to consult legal
counsel if he or she does not know the requirements applicable to those
appropriations.
Sec. 22.520 Military recruiting on campus.
(a) Purpose. The purpose of this section is to implement section 558
of the National Defense Authorization Act for Fiscal Year 1995 (Pub. L.
103-337), as it specifically affects grants and cooperative agreements
(note that section 558 appears as a note to 10 U.S.C. 503). This section
thereby supplements DoD's primary implementation of section 558, in 32
CFR part 216, ``Military Recruiting and Reserve Officer Training Corps
Program Access to Institutions of Higher Education.''
(b) Definitions specific to this section. In this section:
(1) Directory information has the following meaning, given in
section 558(c) of Pub. L. 103-337. It means, with respect to a student,
the student's name, address, telephone listing, date and place of birth,
level of education, degrees received, and the most recent previous
educational institution enrolled in by the student.
(2) Institution of higher education has a different meaning in this
section than it does in the rest of this part. The meaning of the term
in other sections of this part is given at Sec. 22.105. In this section,
``institution of higher education'' (IHE) has the following meaning,
given at 32 CFR 216.3. The term means a domestic college, university, or
subelement thereof providing postsecondary school courses of study,
including foreign campuses of such domestic institutions. The term
includes junior colleges, community colleges, and institutions providing
courses leading to undergraduate and post-graduate degrees. The term
does not include entities that operate exclusively outside the United
States, its territories, and possessions. A subelement of an IHE is a
discrete (although not necessarily autonomous) organizational entity
that may establish policy or practices affecting military recruiting and
related actions (e.g., an undergraduate school, law school, medical
school, or other graduate school).
(c) Statutory requirement. No funds available to the Department of
Defense may be provided by grant to any institution of higher education
that either has a policy of denying or that effectively prevents the
Secretary of Defense from obtaining, for military recruiting purposes,
entry to campuses or access to students on campuses or access to
directory information pertaining to students.
(d) Policy--(1) Applicability to subordinate elements of
institutions of higher education. 32 CFR part 216, DoD's primary
implementation of section 558, establishes procedures by which the
Department of Defense identifies institutions of higher education that
have a policy or practice described in paragraph (c) of this section. In
cases where those procedures lead to a determination that specific
subordinate elements of an institution of higher education have such a
policy or practice, rather than the institution as a whole, 32 CFR part
216 provides that the prohibition on use of DoD funds applies only to
those subordinate elements.
(2) Applicability to cooperative agreements. As a matter of DoD
policy, the restrictions of section 558, as implemented by 32 CFR part
216, apply to cooperative agreements, as well as grants.
(3) Deviations. Grants officers may not deviate from any provision
of this section without obtaining the prior approval of the Director of
Defense Research and Engineering. Requests for deviations shall be
submitted, through appropriate channels, to: Director for Research,
ODDR&E(R), 3080 Defense Pentagon, Washington, DC 20301-3080.
(e) Grants officers' responsibilities. A grants officer shall:
(1) Not award any grant or cooperative agreement to an institution
of higher education that has been identified pursuant to the procedures
of 32
[[Page 33]]
CFR part 216. Such institutions are identified on the Governmentwide
``List of Parties Excluded from Federal Procurement and Nonprocurement
Programs,'' as being ineligible to receive awards of DoD funds (note
that 32 CFR 25.505(d) requires the grants officer to check the list
prior to determining that a recipient is qualified to receive an award).
(2) [Reserved].
(3) Not consent to any subaward of DoD funds to such an
organization, under a grant or cooperative agreement to any recipient,
if such subaward requires the grants officer's consent.
(4) Include the clause in paragraph (f) of this section in each
grant or cooperative agreement with an institution of higher education.
Note that this requirement does not flow down (i.e., recipients are not
required to include the clause in subawards).
(5) If an institution of higher education refuses to accept the
clause in paragraph (f) of this section:
(i) Determine that the institution is not qualified with respect to
the award. The grants officer may award to an alternative recipient.
(ii) Transmit the name of the institution, through appropriate
channels, to the Director for Accession Policy, Office of the Assistant
Secretary of Defense for Force Management Policy, OASD(FMP), 4000
Defense Pentagon, Washington, DC 20301-4000. This will allow OASD(FMP)
to decide whether to initiate an evaluation of the institution under 32
CFR part 216, to determine whether it is an institution that has a
policy or practice described in paragraph (c) of this section.
(f) Clause for award documents. The following clause is to be
included in grants and cooperative agreements with institutions of
higher education:
``As a condition for receipt of funds available to the Department of
Defense (DoD) under this award, the recipient agrees that it is not an
institution of higher education (as defined in 32 CFR part 216) that has
a policy of denying, and that it is not an institution of higher
education that effectively prevents, the Secretary of Defense from
obtaining for military recruiting purposes: (A) Entry to campuses or
access to students on campuses; or (B) access to directory information
pertaining to students. If the recipient is determined, using the
procedures in 32 CFR part 216, to be such an institution of higher
education during the period of performance of this agreement, and
therefore to be in breach of this clause, the Government will cease all
payments of DoD funds under this agreement and all other DoD grants and
cooperative agreements to the recipient, and it may suspend or terminate
such grants and agreements unilaterally for material failure to comply
with the terms and conditions of award.''
Sec. 22.525 Paperwork Reduction Act.
Grants officers shall include appropriate award terms or conditions,
if a recipient's activities under an award will be subject to the
Paperwork Reduction Act of 1995 (44 U.S.C. 3500, et seq.):
(a) Generally, the Act only applies to Federal agencies--it requires
agencies to obtain clearance from the Office of Management and Budget
before collecting information using forms, schedules, questionnaires, or
other methods calling either for answers to:
(1) Identical questions from ten or more persons other than
agencies, instrumentalities, or employees of the United States.
(2) Questions from agencies, instrumentalities, or employees of the
United States which are to be used for statistical compilations of
general public interest.
(b) The Act applies to similar collections of information by
recipients of grants or cooperative agreements only when:
(1) A recipient collects information at the specific request of the
awarding Federal agency; or
(2) The terms and conditions of the award require specific approval
by the agency of the information collection or the collection
procedures.
Sec. 22.530 Metric system of measurement.
(a) Statutory requirement. The Metric Conversion Act of 1975, as
amended by the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C.
205) and implemented by Executive Order 12770 (3 CFR, 1991 Comp., p.
343), states that:
(1) The metric system is the preferred measurement system for U.S.
trade and commerce.
[[Page 34]]
(2) The metric system of measurement will be used, to the extent
economically feasible, in federal agencies' procurements, grants, and
other business-related activities.
(3) Metric implementation shall not be required to the extent that
such use is likely to cause significant inefficiencies or loss of
markets to United States firms.
(b) Responsibilities. DoD Components shall ensure that the metric
system is used, to the maximum extent practicable, in measurement-
sensitive activities supported by programs that use grants and
cooperative agreements, and in measurement-sensitive outputs of such
programs.
Subpart F--Award
Sec. 22.600 Purpose.
This subpart sets forth grants officers' responsibilities relating
to the award document and other actions at the time of award.
Sec. 22.605 Grants officers' responsibilities.
At the time of award, the grants officer is responsible for ensuring
that:
(a) The award instrument contains the appropriate terms and
conditions, in accordance with Sec. 22.610.
(b) Information about the award is provided to the office
responsible for preparing reports for the Defense Assistance Award Data
System (DAADS), to ensure timely and accurate reporting of data required
by 31 U.S.C. 6101-6106 (see 32 CFR part 21, subpart C).
(c)(1) In addition to the copy of the award document provided to the
recipient, a copy is forwarded to the office designated to administer
the grant or cooperative agreement, and another copy is forwarded to the
finance and accounting office designated to make the payments to the
recipient.
(2) For any award subject to the electronic funds transfer (EFT)
requirement described in Sec. 22.810(b)(2), the grants officer shall
include a prominent notification of that fact on the first page of the
copies forwarded to the recipient, the administrative grants officer,
and the finance and accounting office. On the first page of the copy
forwarded to the recipient, the grants officer also shall include a
prominent notification that the recipient, to be paid, must submit a
Payment Information Form (Standard Form SF-3881\6\) to the responsible
DoD payment office, if that payment office does not currently have the
information (e.g., bank name and account number) needed to pay the
recipient by EFT.
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\6\ See footnote 5 to Sec. 22.510(b).
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Sec. 22.610 Award instruments.
(a) Each award document shall include terms and conditions that:
(1) Address programmatic requirements (e.g., a statement of work or
other appropriate terms or conditions that describe the specific goals
and objectives of the project). The grants officer shall develop such
terms and conditions in coordination with program officials.
(2) Provide for the recipient's compliance with:
(i) Pertinent Federal statutes or Executive orders that apply
broadly to Federal or DoD assistance awards.
(ii) Any program-specific requirements that are prescribed in the
program statute (see Sec. 22.210(a)(2)), or appropriation-specific
requirements that are stated in the pertinent Congressional
appropriations (see Sec. 22.515).
(iii) Pertinent portions of the DoDGARs or other Federal
regulations, including those that implement the Federal statutes or
Executive orders described in paragraphs (a)(2) (i) and (ii) of this
section.
(3) Specify the grants officer's instructions for post-award
administration, for any matter where the post-award administration
provisions in 32 CFR part 32, 33, or 34 give the grants officer options
for handling the matter. For example, under 32 CFR 32.24(b), the grants
officers must choose among possible methods for the recipient's
disposition of program income. It is essential that the grants officer
identify the option selected in each case, to provide clear instructions
to the recipient and the grants officer responsible for post-award
administration of the grant or cooperative agreement.
(b) To assist grants officers:
[[Page 35]]
(1) Appendix B to this part provides model clauses to implement
certain Federal statutes, Executive orders, and regulations (see
paragraph (a)(2)(i) of this section) that frequently apply to DoD grants
and cooperative agreements. Grants officers may incorporate the model
clauses into award terms and conditions, as appropriate. It should be
noted that Appendix B to this part is an aid, and not an exhaustive list
of all requirements that apply in all cases. Depending on the
circumstances of a given award, other statutes, Executive orders, or
codified regulations also may apply (e.g., Appendix B to this part does
not list program-specific requirements described in paragraph (a)(2)(ii)
of this section).
(2) Appendix C to this part is a list of administrative requirements
that apply to awards to different types of recipients. It also
identifies post-award administration issues that the grants officer must
address in the award terms and conditions.
Subpart G--Field Administration
Sec. 22.700 Purpose.
This subpart prescribes policies and procedures for administering
grants and cooperative agreements. It does so in conjunction with 32 CFR
parts 32, 33, and 34, which prescribe administrative requirements for
particular types of recipients.
Sec. 22.705 Policy.
(a) DoD policy is to have each recipient deal with a single office,
to the maximum extent practicable, for post-award administration of its
grants and cooperative agreements. This reduces burdens on recipients
that can result when multiple DoD offices separately administer grants
and cooperative agreements they award to a given recipient. It also
minimizes unnecessary duplication of field administration services.
(b) To further reduce burdens on recipients, the office responsible
for performing field administration services for grants and cooperative
agreements to a particular recipient shall be, to the maximum extent
practicable, the same office that is assigned responsibility for
performing field administration services for contracts awarded to that
recipient.
(c) Contracting activities and grants officers therefore shall use
cross-servicing arrangements whenever practicable and, to the maximum
extent possible, delegate responsibility for post-award administration
to the cognizant grants administration offices identified in
Sec. 22.710.
Sec. 22.710 Assignment of grants administration offices.
In accordance with the policy stated in Sec. 22.705(b), the DoD
offices (referred to in this part as ``grants administration offices'')
that are assigned responsibility for performing field administration
services for grants and cooperative agreements are (see the ``DoD
Directory of Contract Administration Services Components,'' DLAH
4105.4,\7\ for specific addresses of administration offices):
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\7\ Copies may be obtained either from the Defense Logistics Agency,
Publications Distribution Division (DASC-WDM), 8725 John J. Kingman Rd.,
Suite 0119, Fort Belvoir, VA 22060-6220, or from the Defense Contract
Management Command home page at http://www.dcmc.dcrb.dla.mil.
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(a) Regional offices of the Office of Naval Research, for grants and
cooperative agreements with:
(1) Institutions of higher education and laboratories affiliated
with such institutions, to the extent that such organizations are
subject to the university cost principles in OMB Circular A-21.\8\
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\8\ See footnote 2 to Sec. 22.420(b)(1).
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(2) Nonprofit organizations that are subject to the cost principles
in OMB Circular A-122,\9\ if their principal business with the
Department of Defense is research and development.
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\9\ See footnote 2 to Sec. 22.420(b)(1).
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(b) Field offices of the Defense Contract Management Command, for
grants and cooperative agreements with all other entities, including:
(1) For-profit organizations.
(2) Nonprofit organizations identified in Attachment C of OMB
Circular A-122 that are subject to for-profit cost principles in 48 CFR
part 31.
(3) Nonprofit organizations subject to the cost principles in OMB
Circular A-122, if their principal business with the
[[Page 36]]
Department of Defense is other than research and development.
(4) State and local governments.
Sec. 22.715 Grants administration office functions.
The primary responsibility of cognizant grants administration
offices shall be to advise and assist grants officers and recipients
prior to and after award, and to help ensure that recipients fulfill all
requirements in law, regulation, and award terms and conditions.
Specific functions include:
(a) Conducting reviews and coordinating reviews, audits, and audit
requests. This includes:
(1) Advising grants officers on the extent to which audits by
independent auditors (i.e., public accountants or Federal auditors) have
provided the information needed to carry out their responsibilities. If
a recipient has had an independent audit in accordance with OMB Circular
A-133, and the audit report disclosed no material weaknesses in the
recipient's financial management and other management and control
systems, additional preaward or closeout audits usually will not be
needed (see Secs. 22.420(b) and 22.825(b)).
(2) Performing pre-award surveys, when requested by a grants
officer, after providing advice described in paragraph (a)(1) of this
section.
(3) Reviewing recipients' systems and compliance with Federal
requirements, in coordination with any reviews and compliance audits
performed by independent auditors under OMB Circular A-133, or in
accordance with the terms and conditions of the award. This includes:
(i) Reviewing recipients' financial management, property management,
and purchasing systems, to determine the adequacy of such systems.
(ii) Determining that recipients have drug-free workplace programs,
as required under 32 CFR part 25.
(4) Notifying the Office of the Assistant Inspector General for
Policy and Oversight (OAIG(P&O)), 400 Army-Navy Drive, Arlington, VA
22202, if either of the following is not available within a reasonable
period of time (e.g., six months) after the date on which a recipient of
DoD grants and agreements was to have submitted its audit report under
OMB Circular A-133 to the OAIG(P&O):
(i) The recipient's audit report under OMB Circular A-133.
(ii) The OAIG(P&O)'s desk review of the recipient's audit report, or
a letter stating that the OAIG(P&O) has decided not to conduct a desk
review.
(b) Performing property administration services for Government-owned
property, and for any property acquired by a recipient, with respect to
which the recipient has further obligations to the Government.
(c) Ensuring timely submission of required reports.
(d) Executing administrative closeout procedures.
(e) Establishing recipients' indirect cost rates, where the
Department of Defense is the cognizant or oversight Federal agency with
the responsibility for doing so.
(f) Performing other administration functions (e.g., receiving
recipients' payment requests and transmitting approved payment
authorizations to payment offices) as delegated by applicable cross-
servicing agreements or letters of delegation.
Subpart H--Post-Award Administration
Sec. 22.800 Purpose and relation to other parts.
This subpart sets forth grants officers' and DoD Components'
responsibilities for post-award administration, by providing DoD-
specific requirements on payments; debt collection; claims, disputes and
appeals; and closeout audits.
Sec. 22.805 Post-award requirements in other parts.
Grants officers responsible for post-award administration of grants
and cooperative agreements shall administer such awards in accordance
with the following parts of the DoDGARs, as supplemented by this
subpart:
(a) Awards to domestic recipients. Standard administrative
requirements for grants and cooperative agreements with domestic
recipients are specified in other parts of the DoDGARs, as follows:
[[Page 37]]
(1) For awards to domestic institutions of higher education and
other nonprofit organizations, requirements are specified in 32 CFR part
32, which is the DoD implementation of OMB Circular A-110.
(2) For awards to State and local governments, requirements are
specified in 32 CFR part 33, which is the DoD codification of the
Governmentwide common rule to implement OMB Circular A-102.
(3) For awards to domestic for-profit organizations, requirements
are specified in 32 CFR part 34, which is modeled on the requirements in
OMB Circular A-110.
(b) Awards to foreign recipients. DoD Components shall use the
administrative requirements specified in paragraph (a) of this section,
to the maximum extent practicable, for grants and cooperative agreements
to foreign recipients.
Sec. 22.810 Payments.
(a) Purpose. This section prescribes policies and grants officers'
post-award responsibilities, with respect to payments to recipients of
grants and cooperative agreements.
(b) Policy. (1) It is Governmentwide policy to minimize the time
elapsing between any payment of funds to a recipient and the recipient's
disbursement of the funds for program purposes (see 32 CFR 32.22(a) and
33.21(b), and the implementation of the Cash Management Improvement Act
at 31 CFR part 205).
(2) It also is a Governmentwide requirement to use electronic funds
transfer (EFT) in the payment of any grant for which an application or
proposal was submitted or renewed on or after July 26, 1996, unless the
recipient has obtained a waiver by submitting to the head of the
pertinent Federal agency a certification that it has neither an account
with a financial institution nor an authorized payment agent. This
requirement is in 31 U.S.C. 3332, as amended by the Debt Collection
Improvement Act of 1996 (section 31001(x)(1)(A), Pub. L. 104-134), and
as implemented by Department of Treasury regulations at 31 CFR part 208.
As a matter of DoD policy, this requirement applies to cooperative
agreements, as well as grants. Within the Department of Defense, the
Defense Finance and Accounting Service implements this EFT requirement,
and grants officers have collateral responsibilities at the time of
award, as described in Sec. 22.605(c), and in postaward administration,
as described in Sec. 22.810(c)(3)(iv).
(3) Expanding on these Governmentwide policies, DoD policy is for
DoD Components to use electronic commerce, to the maximum extent
practicable, in the portions of the payment process for grants and
cooperative agreements for which grants officers are responsible. In
cases where recipients submit each payment request to the grants
officer, this includes using electronic methods to receive recipients'
requests for payment and to transmit authorizations for payment to the
DoD payment office. Using electronic methods will improve timeliness and
accuracy of payments and reduce administrative burdens associated with
paper-based payments.
(c) Post-award responsibilities. In cases where the recipient
submits each payment request to the grants officer, the administrative
grants officer designated to handle payments for a grant or cooperative
agreement is responsible for:
(1) Handling the recipient's requests for payments in accordance
with DoD implementation of Governmentwide guidance (see 32 CFR 32.22,
33.21, or 34.12, as applicable).
(2) Reviewing each payment request to ensure that:
(i) The request complies with the award terms.
(ii) Available funds are adequate to pay the request.
(iii) The recipient will not have excess cash on hand, based on
expenditure patterns.
(3) Maintaining a close working relationship with the personnel in
the finance and accounting office responsible for making the payments. A
good working relationship is necessary, to ensure timely and accurate
handling of financial transactions for grants and cooperative
agreements. Administrative grants officers:
(i) Should be generally familiar with policies and procedures for
disbursing
[[Page 38]]
offices that are contained in Chapter 19 of Volume 10 of the DoD
Financial Management Regulation (the FMR, DoD 7000.14-R\10\).
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\10\ Copies may be obtained, at cost, from the National Technical
Information Service, 5285 Port Royal Road, Springfield, VA 22161.
Authorized users may also obtain copies from the Defense Technical
Information Center, 8725 John J. Kingman Rd., Suite 0944, Fort Belvoir,
VA 22060-6218.
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(ii) Shall forward authorizations to the designated payment office
expeditiously, so that payments may be made in accordance with the
timely payment guidelines in Chapter 19 of Volume 10 of the FMR. Unless
alternative arrangements are made with the payment office,
authorizations should be forwarded to the payment office at least 3
working days before the end of the period specified in the FMR. The
period specified in the FMR is:
(A) No more than seven calendar days after receipt of the
recipient's request by the administrative grants officer, whenever
electronic commerce is used (i.e., EDI to request and authorize payments
and electronic funds transfer (EFT) to make payments).
(B) No more than thirty calendar days after receipt of the
recipient's request by the administrative grants officer, when it is not
possible to use electronic commerce and paper transactions are used.
(C) No more than seven calendar days after each date specified, when
payments are authorized in advance based on a predetermined payment
schedule, provided that the payment schedule was received in the
disbursing office at least 30 calendar days in advance of the date of
the scheduled payment.
(iii) Shall ensure that the recipients' Taxpayer Identification
Number (TIN) is included with each payment authorization forwarded to
the payment office. This is a statutory requirement of 31 U.S.C. 3325,
as amended by the Debt Collection Improvement Act of 1996 (section
31001(y), Pub. L. 104-134).
(iv) For each award that is required to be paid by EFT (see
Sec. 22.605(c) and (Sec. 22.810(b)(2)), shall prominently indicate that
fact in the payment authorization.
Sec. 22.815 Claims, disputes, and appeals.
(a) Award terms. Grants officers shall include in grants and
cooperative agreements a term or condition that incorporates the
procedures of this section for:
(1) Processing recipient claims and disputes.
(2) Deciding appeals of grants officers' decisions.
(b) Submission of claims--(1) Recipient claims. If a recipient
wishes to submit a claim arising out of or relating to a grant or
cooperative agreement, the grants officer shall inform the recipient
that the claim must:
(i) Be submitted in writing to the grants officer for decision;
(ii) Specify the nature and basis for the relief requested; and
(iii) Include all data that supports the claim.
(2) DoD Component claims. Claims by a DoD Component shall be the
subject of a written decision by a grants officer.
(c) Alternative Dispute Resolution (ADR)--(1) Policy. DoD policy is
to try to resolve all issues concerning grants and cooperative
agreements by mutual agreement at the grants officer's level. DoD
Components therefore are encouraged to use ADR procedures to the maximum
extent practicable. ADR procedures are any voluntary means (e.g., mini-
trials or mediation) used to resolve issues in controversy without
resorting to formal administrative appeals (see paragraph (e) of this
section) or to litigation.
(2) Procedures. (i) The ADR procedures or techniques to be used may
either be agreed upon by the Government and the recipient in advance
(e.g., when agreeing on the terms and conditions of the grant or
cooperative agreement), or may be agreed upon at the time the parties
determine to use ADR procedures.
(ii) If a grants officer and a recipient are not able to resolve an
issue through unassisted negotiations, the grants officer shall
encourage the recipient to enter into ADR procedures. ADR procedures may
be used prior to submission of a recipient's claim or at any time prior
to the Grant Appeal Authority's decision on a recipient's appeal (see
paragraph (e)(3)(iii) of this section).
[[Page 39]]
(d) Grants officer decisions. (1) Within 60 calendar days of receipt
of a written claim, the grants officer shall either:
(i) Prepare a written decision, which shall include the reasons for
the decision; shall identify all relevant data on which the decision is
based; shall identify the cognizant Grant Appeal Authority and give his
or her mailing address; and shall be included in the award file; or
(ii) Notify the recipient of a specific date when he or she will
render a written decision, if more time is required to do so. The notice
shall inform the recipient of the reason for delaying the decision
(e.g., the complexity of the claim, a need for more time to complete ADR
procedures, or a need for the recipient to provide additional
information to support the claim).
(2) The decision of the grants officer shall be final, unless the
recipient decides to appeal. If a recipient decides to appeal a grants
officer's decision, the grants officer shall encourage the recipient to
enter into ADR procedures, as described in paragraph (c) of this
section.
(e) Formal administrative appeals--(1) Grant appeal authorities.
Each DoD Component that awards grants or cooperative agreements shall
establish one or more Grant Appeal Authorities to decide formal,
administrative appeals in accordance with paragraph (e)(3) of this
section. Each Grant Appeal Authority shall be either:
(i) An individual at a grade level in the Senior Executive Service,
if civilian, or at the rank of Flag or General Officer, if military; or
(ii) A board chaired by such an individual.
(2) Right of appeal. A recipient has the right to appeal a grants
officer's decision to the Grant Appeal Authority (but note that ADR
procedures, as described in paragraph (c) of this section, are the
preferred means for resolving any appeal).
(3) Appeal procedures--(i) Notice of appeal. A recipient may appeal
a decision of the grants officer within 90 calendar days of receiving
that decision, by filing a written notice of appeal to the Grant Appeal
Authority and to the grants officer. If a recipient elects to use an ADR
procedure, the recipient is permitted an additional 60 calendar days to
file the written notice of appeal to the Grant Appeal Authority and
grants officer.
(ii) Appeal file. Within 30 calendar days of receiving the notice of
appeal, the grants officer shall forward to the Grant Appeal Authority
and the recipient the appeal file, which shall include copies of all
documents relevant to the appeal. The recipient may supplement the file
with additional documents it deems relevant. Either the grants officer
or the recipient may supplement the file with a memorandum in support of
its position. The Grant Appeal Authority may request additional
information from either the grants officer or the recipient.
(iii) Decision. The appeal shall be decided solely on the basis of
the written record, unless the Grant Appeal Authority decides to conduct
fact-finding procedures or an oral hearing on the appeal. Any fact-
finding or hearing shall be conducted using procedures that the Grant
Appeal Authority deems appropriate.
(f) Representation. A recipient may be represented by counsel or any
other designated representative in any claim, appeal, or ADR proceeding
brought pursuant to this section, as long as the representative is not
otherwise prohibited by law or regulation from appearing before the DoD
Component concerned.
(g) Non-exclusivity of remedies. Nothing in this section is intended
to limit a recipient's right to any remedy under the law.
Sec. 22.820 Debt collection.
(a) Purpose. This section prescribes procedures for establishing
debts owed by recipients of grants and cooperative agreements, and
transferring them to payment offices for collection.
(b) Resolution of indebtedness. The grants officer shall attempt to
resolve by mutual agreement any claim of a recipient's indebtedness to
the United States arising out of a grant or cooperative agreement (e.g.,
by a finding that a recipient was paid funds in excess of the amount to
which the recipient was entitled under the terms and conditions of the
award).
[[Page 40]]
(c) Grants officer's decision. In the absence of such mutual
agreement, any claim of a recipient's indebtedness shall be the subject
of a grants officer decision, in accordance with Sec. 22.815(b)(2). The
grants officer shall prepare and transmit to the recipient a written
notice that:
(1) Describes the debt, including the amount, the name and address
of the official who determined the debt (e.g., the grants officer under
Sec. 22.815(d)), and a copy of that determination.
(2) Informs the recipient that:
(i) Within 30 calendar days of the grants officer's decision, the
recipient shall either pay the amount owed to the grants officer (at the
address that was provided pursuant to paragraph (c)(1) of this section)
or inform the grants officer of the recipient's intention to appeal the
decision.
(ii) If the recipient elects not to appeal, any amounts not paid
within 30 calendar days of the grants officer's decision will be a
delinquent debt.
(iii) If the recipient elects to appeal the grants officer's
decision the recipient has 90 calendar days, or 150 calendar days if ADR
procedures are used, after receipt of the grants officer's decision to
file the appeal, in accordance with Sec. 22.815(e)(3)(i).
(iv) The debt will bear interest, and may include penalties and
other administrative costs, in accordance with the debt collection
provisions in Chapters 29, 31, and 32 of Volume 5 and Chapters 18 and 19
of Volume 10 of the DoD Financial Management Regulation (DoD 7000.14-R).
No interest will be charged if the recipient pays the amount owed within
30 calendar days of the grants officer's decision. Interest will be
charged for the entire period from the date the decision was mailed, if
the recipient pays the amount owed after 30 calendar days.
(d) Follow-up. Depending upon the response from the recipient, the
grants officer shall proceed as follows:
(1) If the recipient pays the amount owed within 30 calendar days to
the grants officer, the grants officer shall forward the payment to the
responsible payment office.
(2) If within 30 calendar days the recipient elects to appeal the
grants officer's decision, further action to collect the debt is
deferred, pending the outcome of the appeal. If the final result of the
appeal is a determination that the recipient owes a debt to the Federal
Government, the grants officer shall send a demand letter to the
recipient and transfer responsibility for further debt collection to a
payment office, as described in paragraph (d)(3) of this section.
(3) If within 30 calendar days the recipient has neither paid the
amount due nor provided notice of intent to file an appeal of the grants
officer's decision, the grants officer shall send a demand letter to the
recipient, with a copy to the payment office that will be responsible
for collecting the delinquent debt. The payment office will be
responsible for any further debt collection activity, including issuance
of additional demand letters (see Chapter 19 of volume 10 of the DoD
Financial Management Regulation, DoD 7000.14-R). The grants officer's
demand letter shall:
(i) Describe the debt, including the amount, the name and address of
the official that determined the debt (e.g., the grants officer under
Sec. 22.815(d)), and a copy of that determination.
(ii) Notify the recipient that the debt is a delinquent debt that
bears interest from the date of the grants officer's decision, and that
penalties and other administrative costs may be assessed.
(iii) Identify the payment office that is responsible for the
collection of the debt, and notify the recipient that it may submit a
proposal to that payment office to defer collection, if immediate
payment is not practicable.
(e) Administrative offset. In carrying out the responsibility for
collecting delinquent debts, a disbursing officer may need to consult
grants officers, to determine whether administrative offset against
payments to a recipient owing a delinquent debt would interfere with
execution of projects being carried out under grants or cooperative
agreements. Disbursing officers may also ask grants officers whether it
is feasible to convert payment methods under grants or cooperative
agreements from advance payments to reimbursements, to facilitate use of
administrative offset. Grants officers therefore should be familiar with
guidelines
[[Page 41]]
for disbursing officers, in Chapter 19 of Volume 10 of the Financial
Management Regulation (DoD 7000.14-R), concerning withholding and
administrative offset to recover delinquent debts.
Sec. 22.825 Closeout audits.
(a) Purpose. This section establishes DoD policy for obtaining
audits at closeout of individual grants and cooperative agreements. It
thereby supplements the closeout procedures specified in:
(1) 32 CFR 32.71 and 32.72, for awards to institutions of higher
education and other nonprofit organizations.
(2) 32 CFR 33.50 and 33.51, for awards to State and local
governments.
(3) 32 CFR 34.61 and 34.62, for awards to for-profit entities.
(b) Policy. Grants officers shall use their judgment on a case-by-
case basis, in deciding whether to obtain an audit prior to closing out
a grant or cooperative agreement (i.e., there is no specific DoD
requirement to obtain an audit prior to doing so). Factors to be
considered include:
(1) The amount of the award.
(2) DoD's past experience with the recipient, including the presence
or lack of findings of material deficiencies in recent:
(i) Audits of individual awards; or
(ii) Systems-wide financial audits and audits of the compliance of
the recipient's systems with Federal requirements, under OMB Circular A-
133, where that Circular is applicable. (See Sec. 22.715(a)(1)).
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addressed in award terms and conditions
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[65 FR 14411, Mar. 16, 2000]
[[Page 55]]
PART 25--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)--Table of Contents
Subpart A--General
Sec.
25.100 Purpose.
25.105 Definitions.
25.110 Coverage.
25.115 Policy.
Subpart B--Effect of Action
25.200 Debarment or suspension.
25.205 Ineligible persons.
25.210 Voluntary exclusion.
25.215 Exception provision.
25.220 Continuation of covered transactions.
25.225 Failure to adhere to restrictions.
Subpart C--Debarment
25.300 General.
25.305 Causes for debarment.
25.310 Procedures.
25.311 Investigation and referral.
25.312 Notice of proposed debarment.
25.313 Opportunity to contest proposed debarment.
25.314 Debarring official's decision.
25.315 Settlement and voluntary exclusion.
25.320 Period of debarment.
25.325 Scope of debarment.
Subpart D--Suspension
25.400 General.
25.405 Causes for suspension.
25.410 Procedures.
25.411 Notice of suspension.
25.412 Opportunity to contest suspension.
25.413 Suspending official's decision.
25.415 Period of suspension.
25.420 Scope of suspension.
Subpart E--Responsibilities of GSA, Agencies and Participants
25.500 GSA responsibilities.
25.505 Military Departments and Defense Agencies' responsibility.
25.510 Participants' responsibilities.
Subpart F--Drug-Free Workplace Requirements (Grants)
25.600 Purpose.
25.605 Definitions.
25.610 Coverage.
25.615 Grounds for suspension of payments, suspension or termination of
grants, or suspension or debarment.
25.616 Determinations of grantee violations.
25.620 Effect of violation.
25.625 Exception provision.
25.630 Certification requirements and procedures.
25.635 Reporting of and employee sanctions for convictions of criminal
drug offenses.
Appendix A to Part 25--Certification Regarding Debarment, Suspension,
and Other Responsibility Matters--Primary Covered Transactions
Appendix B to Part 25--Certification Regarding Debarment, Suspension,
Ineligibility and Voluntary Exclusion--Lower Tier Covered
Transactions
Appendix C to Part 25--Certification Regarding Drug-Free Workplace
Requirements
Authority: 41 U.S.C. 701 et seq.; sec. 2455, Pub. L. 103-355, 108
Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 3 CFR, 1986 Comp.; 189;
E.O. 12689, 3 CFR, 1989 Comp., p. 235.
Source: 53 FR 19190 and 19204, May 26, 1988, unless otherwise noted.
Redesignated at 57 FR 6199, Feb. 21, 1992.
Cross Reference: See also Office of Management and Budget notice
published at 55 FR 21697, May 25, 1990, and 60 FR 33036, June 26, 1995.
Subpart A--General
Sec. 25.100 Purpose.
(a) Executive Order (E.O.) 12549 provides that, to the extent
permitted by law, Executive departments and agencies shall participate
in a governmentwide system for nonprocurement debarment and suspension.
A person who is debarred or suspended shall be excluded from Federal
financial and nonfinancial assistance and benefits under Federal
programs and activities. Debarment or suspension of a participant in a
program by one agency shall have governmentwide effect.
(b) These regulations implement section 3 of E.O. 12549 and the
guidelines promulgated by the Office of Management and Budget under
section 6 of the E.O. by:
(1) Prescribing the programs and activities that are covered by the
governmentwide system;
(2) Prescribing the governmentwide criteria and governmentwide
minimum due process procedures that each agency shall use;
(3) Providing for the listing of debarred and suspended
participants, participants declared ineligible (see
[[Page 56]]
definition of ``ineligible'' in Sec. 25.105), and participants who have
voluntarily excluded themselves from participation in covered
transactions;
(4) Setting forth the consequences of a debarment, suspension,
determination of ineligibility, or voluntary exclusion; and
(5) Offering such other guidance as necessary for the effective
implementation and administration of the governmentwide system.
(c) These regulations also implement Executive Order 12689 (3 CFR,
1989 Comp., p. 235) and 31 U.S.C. 6101 note (Public Law 103-355, sec.
2455, 108 Stat. 3327) by--
(1) Providing for the inclusion in the List of Parties Excluded from
Federal Procurement and Nonprocurement Programs all persons proposed for
debarment, debarred or suspended under the Federal Acquisition
Regulation, 48 CFR Part 9, subpart 9.4; persons against which
governmentwide exclusions have been entered under this part; and persons
determined to be ineligible; and
(2) Setting forth the consequences of a debarment, suspension,
determination of ineligibility, or voluntary exclusion.
(d) Although these regulations cover the listing of ineligible
participants and the effect of such listing, they do not prescribe
policies and procedures governing declarations of ineligibility.
[60 FR 33040, 33053, June 26, 1995]
Sec. 25.105 Definitions.
The following definitions apply to this part:
Adequate evidence. Information sufficient to support the reasonable
belief that a particular act or omission has occurred.
Affiliate. Persons are affiliates of each other if, directly or
indirectly, either one controls or has the power to control the other,
or, a third person controls or has the power to control both. Indicia of
control include, but are not limited to: interlocking management or
ownership, identity of interests among family members, shared facilities
and equipment, common use of employees, or a business entity organized
following the suspension or debarment of a person which has the same or
similar management, ownership, or principal employees as the suspended,
debarred, ineligible, or voluntarily excluded person.
Agency. Any executive department, military department or defense
agency or other agency of the executive branch, excluding the
independent regulatory agencies.
(a) The meaning of agency in Subpart F of this part, Drug-Free
Workplace Requirements, is given at Sec. 25.605(b)(6) and is different
than the meaning given in this section for subparts A through E of this
part. Agency in Subpart F of this part means the Department of Defense
or a Military Department only, and does not include any Defense Agency.
(b) [Reserved]
Civil judgment. The disposition of a civil action by any court of
competent jurisdiction, whether entered by verdict, decision,
settlement, stipulation, or otherwise creating a civil liability for the
wrongful acts complained of; or a final determination of liability under
the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-12).
Conviction. A judgment or conviction of a criminal offense by any
court of competent jurisdiction, whether entered upon a verdict or a
plea, including a plea of nolo contendere.
Debarment. An action taken by a debarring official in accordance
with these regulations to exclude a person from participating in covered
transactions. A person so excluded is ``debarred.''
Debarring official. An official authorized to impose debarment. The
debarring official is either:
(a) The agency head, or
(b) An official designated by the agency head.
(c) DoD Components' debarring officials for nonprocurement
transactions are the same officials identified in 48 CFR part 209,
subpart 209.4, as debarring officials for procurement contracts.
Indictment. Indictment for a criminal offense. An information or
other filing by competent authority charging a criminal offense shall be
given the same effect as an indictment.
Ineligible. Excluded from participation in Federal nonprocurement
programs pursuant to a determination of
[[Page 57]]
ineligibility under statutory, executive order, or regulatory authority,
other than Executive Order 12549 and its agency implementing
regulations; for exemple, excluded pursuant to the Davis-Bacon Act and
its implementing regulations, the equal employment opportunity acts and
executive orders, or the environmental protection acts and executive
orders. A person is ineligible where the determination of ineligibility
affects such person's eligibility to participate in more than one
covered transaction.
Legal proceedings. Any criminal proceeding or any civil judicial
proceeding to which the Federal Government or a State or local
government or quasi-governmental authority is a party. The term includes
appeals from such proceedings.
List of Parties Excluded from Federal Procurement and Nonprocurement
Programs. A list compiled, maintained and distributed by the General
Services Administration (GSA) containing the names and other information
about persons who have been debarred, suspended, or voluntarily excluded
under Executive Orders 12549 and 12689 and these regulations or 48 CFR
part 9, subpart 9.4, persons who have been proposed for debarment under
48 CFR part 9, subpart 9.4, and those persons who have been determined
to be ineligible.
Notice. A written communication served in person or sent by
certified mail, return receipt requested, or its equivalent, to the last
known address of a party, its identified counsel, its agent for service
of process, or any partner, officer, director, owner, or joint venturer
of the party. Notice, if undeliverable, shall be considered to have been
received by the addressee five days after being properly sent to the
last address known by the agency.
Participant. Any person who submits a proposal for, enters into, or
reasonably may be expected to enter into a covered transaction. This
term also includes any person who acts on behalf of or is authorized to
commit a participant in a covered transaction as an agent or
representative of another participant.
Person. Any individual, corporation, partnership, association, unit
of government or legal entity, however organized, except: foreign
governments or foreign governmental entities, public international
organizations, foreign government owned (in whole or in part) or
controlled entities, and entities consisting wholly or partially of
foreign governments or foreign governmental entities.
Preponderance of the evidence. Proof by information that, compared
with that opposing it, leads to the conclusion that the fact at issue is
more probably true than not.
Principal. Officer, director, owner, partner, key employee, or other
person within a participant with primary management or supervisory
responsibilities; or a person who has a critical influence on or
substantive control over a covered transaction, whether or not employed
by the participant. Persons who have a critical influence on or
substantive control over a covered transaction are:
(a) Principal investigators.
(b) Reserved.
Proposal. A solicited or unsolicited bid, application, request,
invitation to consider or similar communication by or on behalf of a
person seeking to participate or to receive a benefit, directly or
indirectly, in or under a covered transaction.
Respondent. A person against whom a debarment or suspension action
has been initiated.
State. Any of the States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, any territory or possession
of the United States, or any agency of a State, exclusive of
institutions of higher education, hospitals, and units of local
government. A State instrumentality will be considered part of the State
government if it has a written determination from a State government
that such State considers that instrumentality to be an agency of the
State government.
Suspending official. An official authorized to impose suspension.
The suspending official is either:
(a) The agency head, or
(b) An official designated by the agency head.
(c) DoD Components' suspending officials for nonprocurement
transactions are the same officials identified in 48
[[Page 58]]
CFR part 209, subpart 209.4, as suspending officials for procurement
contracts.
Suspension. An action taken by a suspending official in accordance
with these regulations that immediately excludes a person from
participating in covered transactions for a temporary period, pending
completion of an investigation and such legal, debarment, or Program
Fraud Civil Remedies Act proceedings as may ensue. A person so excluded
is ``suspended.''
Voluntary exclusion or voluntarily excluded. A status of
nonparticipation or limited participation in covered transactions
assumed by a person pursuant to the terms of a settlement.
[53 FR 19190 and 19204, May 26, 1988. Redesignated at 57 FR 6199, Feb.
21, 1992, and amended at 60 FR 33041, 33053, June 26, 1995]
Sec. 25.110 Coverage.
(a) These regulations apply to all persons who have participated,
are currently participating or may reasonably be expected to participate
in transactions under Federal nonprocurement programs. For purposes of
these regulations such transactions will be referred to as ``covered
transactions.''
(1) Covered transaction. For purposes of these regulations, a
covered transaction is a primary covered transaction or a lower tier
covered transaction. Covered transactions at any tier need not involve
the transfer of Federal funds.
(i) Primary covered transaction. Except as noted in paragraph (a)(2)
of this section, a primary covered transaction is any nonprocurement
transaction between an agency and a person, regardless of type,
including: grants, cooperative agreements, scholarships, fellowships,
contracts of assistance, loans, loan guarantees, subsidies, insurance,
payments for specified use, donation agreements and any other
nonprocurement transactions between a Federal agency and a person.
Primary covered transactions also include those transactions specially
designated by the U.S. Department of Housing and Urban Development in
such agency's regulations governing debarment and suspension.
(ii) Lower tier covered transaction. A lower tier covered
transaction is:
(A) Any transaction between a participant and a person other than a
procurement contract for goods or services, regardless of type, under a
primary covered transaction.
(B) Any procurement contract for goods or services between a
participant and a person, regardless of type, expected to equal or
exceed the Federal procurement small purchase threshold fixed at 10
U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $25,000) under a primary
covered transaction.
(C) Any procurement contract for goods or services between a
participant and a person under a covered transaction, regardless of
amount, under which that person will have a critical influence on or
substantive control over that covered transaction. Such persons are:
(1) Principal investigators.
(2) Providers of federally-required audit services.
(2) Exceptions. The following transactions are not covered:
(i) Statutory entitlements or mandatory awards (but not subtier
awards thereunder which are not themselves mandatory), including
deposited funds insured by the Federal Government;
(ii) Direct awards to foreign governments or public international
organizations, or transactions with foreign governments or foreign
governmental entities, public international organizations, foreign
government owned (in whole or in part) or controlled entities, entities
consisting wholly or partially of foreign governments or foreign
governmental entities;
(iii) Benefits to an individual as a personal entitlement without
regard to the individual's present responsibility (but benefits received
in an individual's business capacity are not excepted);
(iv) Federal employment;
(v) Transactions pursuant to national or agency-recognized
emergencies or disasters;
(vi) Incidental benefits derived from ordinary governmental
operations; and
(vii) Other transactions where the application of these regulations
would be prohibited by law.
(b) Relationship to other sections. This section describes the types
of transactions to which a debarment or suspension under the regulations
will
[[Page 59]]
apply. Subpart B, ``Effect of Action,'' Sec. 25.200, ``Debarment or
suspension,'' sets forth the consequences of a debarment or suspension.
Those consequences would obtain only with respect to participants and
principals in the covered transactions and activities described in
Sec. 25.110(a). Sections 25.325, ``Scope of debarment,'' and 25.420,
``Scope of suspension,'' govern the extent to which a specific
participant or organizational elements of a participant would be
automatically included within a debarment or suspension action, and the
conditions under which affiliates or persons associated with a
participant may also be brought within the scope of the action.
(c) Relationship to Federal procurement activities. In accordance
with E.O. 12689 and section 2455 of Public Law 103-355, any debarment,
suspension, proposed debarment or other governmentwide exclusion
initiated under the Federal Acquisition Regulation (FAR) on or after
August 25, 1995 shall be recognized by and effective for Executive
Branch agencies and participants as an exclusion under this regulation.
Similarly, any debarment, suspension or other governmentwide exclusion
initiated under this regulation on or after August 25, 1995 shall be
recognized by and effective for those agencies as a debarment or
suspension under the FAR.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199, Feb. 21, 1992; 60 FR 33041, 33053, June 26, 1995]
Sec. 25.115 Policy.
(a) In order to protect the public interest, it is the policy of the
Federal Government to conduct business only with responsible persons.
Debarment and suspension are discretionary actions that, taken in
accordance with Executive Order 12549 and these regulations, are
appropriate means to implement this policy.
(b) Debarment and suspension are serious actions which shall be used
only in the public interest and for the Federal Government's protection
and not for purposes of punishment. Agencies may impose debarment or
suspension for the causes and in accordance with the procedures set
forth in these regulations.
(c) When more than one agency has an interest in the proposed
debarment or suspension of a person, consideration shall be given to
designating one agency as the lead agency for making the decision.
Agencies are encouraged to establish methods and procedures for
coordinating their debarment or suspension actions.
Subpart B--Effect of Action
Sec. 25.200 Debarment or suspension.
(a) Primary covered transactions. Except to the extent prohibited by
law, persons who are debarred or suspended shall be excluded from
primary covered transactions as either participants or principals
throughout the Executive Branch of the Federal Government for the period
of their debarment, suspension, or the period they are proposed for
debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency shall
enter into primary covered transactions with such excluded persons
during such period, except as permitted pursuant to Sec. 25.215.
(b) Lower tier covered transactions. Except to the extent prohibited
by law, persons who have been proposed for debarment under 48 CFR part
9, subpart 9.4, debarred or suspended shall be excluded from
participating as either participants or principals in all lower tier
covered transactions (see Sec. 25.110(a)(1)(ii)) for the period of their
exclusion.
(c) Exceptions. Debarment or suspension does not affect a person's
eligibility for--
(1) Statutory entitlements or mandatory awards (but not subtier
awards thereunder which are not themselves mandatory), including
deposited funds insured by the Federal Government;
(2) Direct awards to foreign governments or public international
organizations, or transactions with foreign governments or foreign
governmental entities, public international organizations, foreign
government owned (in whole or in part) or controlled entities, and
entities consisting wholly or partially of foreign governments or
foreign governmental entities;
(3) Benefits to an individual as a personal entitlement without
regard to the individual's present responsibility
[[Page 60]]
(but benefits received in an individual's business capacity are not
excepted);
(4) Federal employment;
(5) Transactions pursuant to national or agency-recognized
emergencies or disasters;
(6) Incidental benefits derived from ordinary governmental
operations; and
(7) Other transactions where the application of these regulations
would be prohibited by law.
[60 FR 33041, 33053, June 26, 1995]
Sec. 25.205 Ineligible persons.
Persons who are ineligible, as defined in Sec. 25.105(i), are
excluded in accordance with the applicable statutory, executive order,
or regulatory authority.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.210 Voluntary exclusion.
Persons who accept voluntary exclusions under Sec. 25.315 are
excluded in accordance with the terms of their settlements. Military
Departments and Defense Agencies shall, and participants may, contact
the original action agency to ascertain the extent of the exclusion.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.215 Exception provision.
Military Departments & Defense Agencies may grant an exception
permitting a debarred, suspended, or voluntarily excluded person, or a
person proposed for debarment under 48 CFR part 9, subpart 9.4, to
participate in a particular covered transaction upon a written
determination by the agency head or an authorized designee stating the
reason(s) for deviating from the Presidential policy established by
Executive Order 12549 and Sec. 25.200. However, in accordance with the
President's stated intention in the Executive Order, exceptions shall be
granted only infrequently. Exceptions shall be reported in accordance
with Sec. 25.505(a).
[60 FR 33041, 33053, June 26, 1995]
Sec. 25.220 Continuation of covered transactions.
(a) Notwithstanding the debarment, suspension, proposed debarment
under 48 CFR part 9, subpart 9.4, determination of ineligibility, or
voluntary exclusion of any person by an agency, agencies and
participants may continue covered transactions in existence at the time
the person was debarred, suspended, proposed for debarment under 48 CFR
part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A
decision as to the type of termination action, if any, to be taken
should be made only after thorough review to ensure the propriety of the
proposed action.
(b) Agencies and participants shall not renew or extend covered
transactions (other than no-cost time extensions) with any person who is
debarred, suspended, proposed for debarment under 48 CFR part 9, subpart
9.4, ineligible or voluntary excluded, except as provided in
Sec. 25.215.
[60 FR 33041, 33053, June 26, 1995]
Sec. 25.225 Failure to adhere to restrictions.
(a) Except as permitted under Sec. 25.215 or Sec. 25.220, a
participant shall not knowingly do business under a covered transaction
with a person who is--
(1) Debarred or suspended;
(2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or
(3) Ineligible for or voluntarily excluded from the covered
transaction.
(b) Violation of the restriction under paragraph (a) of this section
may result in disallowance of costs, annulment or termination of award,
issuance of a stop work order, debarment or suspension, or other
remedies as appropriate.
(c) A participant may rely upon the certification of a prospective
participant in a lower tier covered transaction that it and its
principals are not debarred, suspended, proposed for debarment under 48
CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the
covered transaction (See Appendix B of these regulations), unless it
knows that the certification is erroneous. An agency has the burden of
proof that a participant did knowingly
[[Page 61]]
do business with a person that filed an erroneous certification.
[60 FR 33041, 33053, June 26, 1995]
Subpart C--Debarment
Sec. 25.300 General.
The debarring official may debar a person for any of the causes in
Sec. 25.305, using procedures established in Secs. 25.310 through
25.314. The existence of a cause for debarment, however, does not
necessarily require that the person be debarred; the seriousness of the
person's acts or omissions and any mitigating factors shall be
considered in making any debarment decision.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.305 Causes for debarment.
Debarment may be imposed in accordance with the provisions of
Secs. 25.300 through 25.314 for:
(a) Conviction of or civil judgment for:
(1) Commission of fraud or a criminal offense in connection with
obtaining, attempting to obtain, or performing a public or private
agreement or transaction;
(2) Violation of Federal or State antitrust statutes, including
those proscribing price fixing between competitors, allocation of
customers between competitors, and bid rigging;
(3) Commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements,
receiving stolen property, making false claims, or obstruction of
justice; or
(4) Commission of any other offense indicating a lack of business
integrity or business honesty that seriously and directly affects the
present responsibility of a person.
(b) Violation of the terms of a public agreement or transaction so
serious as to affect the integrity of an agency program, such as:
(1) A willful failure to perform in accordance with the terms of one
or more public agreements or transactions;
(2) A history of failure to perform or of unsatisfactory performance
of one or more public agreements or transactions; or
(3) A willful violation of a statutory or regulatory provision or
requirement applicable to a public agreement or transaction.
(c) Any of the following causes:
(1) A nonprocurement debarment by any Federal agency taken before
October 1, 1988, the effective date of these regulations, or a
procurement debarment by any Federal agency taken pursuant to 48 CFR
subpart 9.4;
(2) Knowingly doing business with a debarred, suspended, ineligible,
or voluntarily excluded person, in connection with a covered
transaction, except as permitted in Sec. 25.215 or Sec. 25.220;
(3) Failure to pay a single substantial debt, or a number of
outstanding debts (including disallowed costs and overpayments, but not
including sums owed the Federal Government under the Internal Revenue
Code) owed to any Federal agency or instrumentality, provided the debt
is uncontested by the debtor or, if contested, provided that the
debtor's legal and administrative remedies have been exhausted;
(4) Violation of a material provision of a voluntary exclusion
agreement entered into under Sec. 25.315 or of any settlement of a
debarment or suspension action; or
(5) Violation of any requirement of subpart F of this part, relating
to providing a drug-free workplace, as set forth in Sec. 25.615 of this
part.
(d) Any other cause of so serious or compelling a nature that it
affects the present responsibility of a person.
[53 FR 19190 and 19204, May 26, 1988, as amended at 54 FR 4950, 4960,
Jan. 31, 1989. Redesignated and amended at 57 FR 6199 and 6200, Feb. 21,
1992]
Sec. 25.310 Procedures.
Military Departments and Defense Agencies shall process debarment
actions as informally as practicable, consistent with the principles of
fundamental fairness, using the procedures in Secs. 25.311 through
25.314.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
[[Page 62]]
Sec. 25.311 Investigation and referral.
Information concerning the existence of a cause for debarment from
any source shall be promptly reported, investigated, and referred, when
appropriate, to the debarring official for consideration. After
consideration, the debarring official may issue a notice of proposed
debarment.
Sec. 25.312 Notice of proposed debarment.
A debarment proceeding shall be initiated by notice to the
respondent advising:
(a) That debarment is being considered;
(b) Of the reasons for the proposed debarment in terms sufficient to
put the respondent on notice of the conduct or transaction(s) upon which
it is based;
(c) Of the cause(s) relied upon under Sec. 25.305 for proposing
debarment;
(d) Of the provisions of Secs. 25.311 through 25.314, and any other
Military Departments and Defense Agencies procedures, if applicable,
governing debarment decisionmaking; and
(e) Of the potential effect of a debarment.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.313 Opportunity to contest proposed debarment.
(a) Submission in opposition. Within 30 days after receipt of the
notice of proposed debarment, the respondent may submit, in person, in
writing, or through a representative, information and argument in
opposition to the proposed debarment.
(b) Additional proceedings as to disputed material facts. (1) In
actions not based upon a conviction or civil judgment, if the debarring
official finds that the respondent's submission in opposition raises a
genuine dispute over facts material to the proposed debarment,
respondent(s) shall be afforded an opportunity to appear with a
representative, submit documentary evidence, present witnesses, and
confront any witness the agency presents.
(2) A transcribed record of any additional proceedings shall be made
available at cost to the respondent, upon request, unless the respondent
and the agency, by mutual agreement, waive the requirement for a
transcript.
Sec. 25.314 Debarring official's decision.
(a) No additional proceedings necessary. In actions based upon a
conviction or civil judgment, or in which there is no genuine dispute
over material facts, the debarring official shall make a decision on the
basis of all the information in the administrative record, including any
submission made by the respondent. The decision shall be made within 45
days after receipt of any information and argument submitted by the
respondent, unless the debarring official extends this period for good
cause.
(b) Additional proceedings necessary. (1) In actions in which
additional proceedings are necessary to determine disputed material
facts, written findings of fact shall be prepared. The debarring
official shall base the decision on the facts as found, together with
any information and argument submitted by the respondent and any other
information in the administrative record.
(2) The debarring official may refer disputed material facts to
another official for findings of fact. The debarring official may reject
any such findings, in whole or in part, only after specifically
determining them to be arbitrary and capricious or clearly erroneous.
(3) The debarring official's decision shall be made after the
conclusion of the proceedings with respect to disputed facts.
(c) (1) Standard of proof. In any debarment action, the cause for
debarment must be established by a preponderance of the evidence. Where
the proposed debarment is based upon a conviction or civil judgment, the
standard shall be deemed to have been met.
(2) Burden of proof. The burden of proof is on the agency proposing
debarment.
(d) Notice of debarring official's decision. (1) If the debarring
official decides to impose debarment, the respondent shall be given
prompt notice:
(i) Referring to the notice of proposed debarment;
(ii) Specifying the reasons for debarment;
[[Page 63]]
(iii) Stating the period of debarment, including effective dates;
and
(iv) Advising that the debarment is effective for covered
transactions throughout the executive branch of the Federal Government
unless an agency head or an authorized designee makes the determination
referred to in Sec. 25.215.
(2) If the debarring official decides not to impose debarment, the
respondent shall be given prompt notice of that decision. A decision not
to impose debarment shall be without prejudice to a subsequent
imposition of debarment by any other agency.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.315 Settlement and voluntary exclusion.
(a) When in the best interest of the Government, Military
Departments and Defense Agencies may, at any time, settle a debarment or
suspension action.
(b) If a participant and the agency agree to a voluntary exclusion
of the participant, such voluntary exclusion shall be entered on the
Nonprocurement List (see subpart E).
Sec. 25.320 Period of debarment.
(a) Debarment shall be for a period commensurate with the
seriousness of the cause(s). If a suspension precedes a debarment, the
suspension period shall be considered in determining the debarment
period.
(1) Debarment for causes other than those related to a violation of
the requirements of subpart F of this part generally should not exceed
three years. Where circumstances warrant, a longer period of debarment
may be imposed.
(2) In the case of a debarment for a violation of the requirements
of subpart F of this part (see Sec. 25.305(c)(5)), the period of
debarment shall not exceed five years.
(b) The debarring official may extend an existing debarment for an
additional period, if that official determines that an extension is
necessary to protect the public interest. However, a debarment may not
be extended solely on the basis of the facts and circumstances upon
which the initial debarment action was based. If debarment for an
additional period is determined to be necessary, the procedures of
Secs. 25.311 through 25.314 shall be followed to extend the debarment.
(c) The respondent may request the debarring official to reverse the
debarment decision or to reduce the period or scope of debarment. Such a
request shall be in writing and supported by documentation. The
debarring official may grant such a request for reasons including, but
not limited to:
(1) Newly discovered material evidence;
(2) Reversal of the conviction or civil judgment upon which the
debarment was based;
(3) Bona fide change in ownership or management;
(4) Elimination of other causes for which the debarment was imposed;
or
(5) Other reasons the debarring official deems appropriate.
[53 FR 19190 and 19204, May 26, 1988, as amended at 54 FR 4950, 4960,
Jan. 31, 1989. Redesignated and amended at 57 FR 6199 and 6200, Feb. 21,
1992]
Sec. 25.325 Scope of debarment.
(a) Scope in general. (1) Debarment of a person under these
regulations constitutes debarment of all its divisions and other
organizational elements from all covered transactions, unless the
debarment decision is limited by its terms to one or more specifically
identified individuals, divisions or other organizational elements or to
specific types of transactions.
(2) The debarment action may include any affiliate of the
participant that is specifically named and given notice of the proposed
debarment and an opportunity to respond (see Secs. 25.311 through
25.314).
(b) Imputing conduct. For purposes of determining the scope of
debarment, conduct may be imputed as follows:
(1) Conduct imputed to participant. The fraudulent, criminal or
other seriously improper conduct of any officer, director, shareholder,
partner, employee, or other individual associated with a participant may
be imputed to the participant when the conduct occurred in connection
with the individual's performance of duties for or on behalf of the
[[Page 64]]
participant, or with the participant's knowledge, approval, or
acquiescence. The participant's acceptance of the benefits derived from
the conduct shall be evidence of such knowledge, approval, or
acquiescence.
(2) Conduct imputed to individuals associated with participant. The
fraudulent, criminal, or other seriously improper conduct of a
participant may be imputed to any officer, director, shareholder,
partner, employee, or other individual associated with the participant
who participated in, knew of, or had reason to know of the participant's
conduct.
(3) Conduct of one participant imputed to other participants in a
joint venture. The fraudulent, criminal, or other seriously improper
conduct of one participant in a joint venture, grant pursuant to a joint
application, or similar arrangement may be imputed to other participants
if the conduct occurred for or on behalf of the joint venture, grant
pursuant to a joint application, or similar arrangement may be imputed
to other participants if the conduct occurred for or on behalf of the
joint venture, grant pursuant to a joint application, or similar
arrangement or with the knowledge, approval, or acquiescence of these
participants. Acceptance of the benefits derived from the conduct shall
be evidence of such knowledge, approval, or acquiescence.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Subpart D--Suspension
Sec. 25.400 General.
(a) The suspending official may suspend a person for any of the
causes in Sec. 25.405 using procedures established in Secs. 25.410
through 25.413.
(b) Suspension is a serious action to be imposed only when:
(1) There exists adequate evidence of one or more of the causes set
out in Sec. 25.405, and
(2) Immediate action is necessary to protect the public interest.
(c) In assessing the adequacy of the evidence, the agency should
consider how much information is available, how credible it is given the
circumstances, whether or not important allegations are corroborated,
and what inferences can reasonably be drawn as a result. This assessment
should include an examination of basic documents such as grants,
cooperative agreements, loan authorizations, and contracts.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.405 Causes for suspension.
(a) Suspension may be imposed in accordance with the provisions of
Secs. 25.400 through 25.413 upon adequate evidence:
(1) To suspect the commission of an offense listed in
Sec. 25.305(a); or
(2) That a cause for debarment under Sec. 25.305 may exist.
(b) Indictment shall constitute adequate evidence for purposes of
suspension actions.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.410 Procedures.
(a) Investigation and referral. Information concerning the existence
of a cause for suspension from any source shall be promptly reported,
investigated, and referred, when appropriate, to the suspending official
for consideration. After consideration, the suspending official may
issue a notice of suspension.
(b) Decisionmaking process. Military Departments and Defense
Agencies shall process suspension actions as informally as practicable,
consistent with principles of fundamental fairness, using the procedures
in Secs. 25.411 through 25.413.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.411 Notice of suspension.
When a respondent is suspended, notice shall immediately be given:
(a) That suspension has been imposed;
(b) That the suspension is based on an indictment, conviction, or
other adequate evidence that the respondent has committed irregularities
seriously reflecting on the propriety of further
[[Page 65]]
Federal Government dealings with the respondent;
(c) Describing any such irregularities in terms sufficient to put
the respondent on notice without disclosing the Federal Government's
evidence;
(d) Of the cause(s) relied upon under Sec. 25.405 for imposing
suspension;
(e) That the suspension is for a temporary period pending the
completion of an investigation or ensuing legal, debarment, or Program
Fraud Civil Remedies Act proceedings;
(f) Of the provisions of Secs. 25.411 through 25.413 and any other
Military Departments and Defense Agencies procedures, if applicable,
governing suspension decisionmaking; and
(g) Of the effect of the suspension.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.412 Opportunity to contest suspension.
(a) Submission in opposition. Within 30 days after receipt of the
notice of suspension, the respondent may submit, in person, in writing,
or through a representative, information and argument in opposition to
the suspension.
(b) Additional proceedings as to disputed material facts. (1) If the
suspending official finds that the respondent's submission in opposition
raises a genuine dispute over facts material to the suspension,
respondent(s) shall be afforded an opportunity to appear with a
representative, submit documentary evidence, present witnesses, and
confront any witness the agency presents, unless:
(i) The action is based on an indictment, conviction or civil
judgment, or
(ii) A determination is made, on the basis of Department of Justice
advice, that the substantial interests of the Federal Government in
pending or contemplated legal proceedings based on the same facts as the
suspension would be prejudiced.
(2) A transcribed record of any additional proceedings shall be
prepared and made available at cost to the respondent, upon request,
unless the respondent and the agency, by mutual agreement, waive the
requirement for a transcript.
Sec. 25.413 Suspending official's decision.
The suspending official may modify or terminate the suspension (for
example, see Sec. 25.320(c) for reasons for reducing the period or scope
of debarment) or may leave it in force. However, a decision to modify or
terminate the suspension shall be without prejudice to the subsequent
imposition of suspension by any other agency or debarment by any agency.
The decision shall be rendered in accordance with the following
provisions:
(a) No additional proceedings necessary. In actions: based on an
indictment, conviction, or civil judgment; in which there is no genuine
dispute over material facts; or in which additional proceedings to
determine disputed material facts have been denied on the basis of
Department of Justice advice, the suspending official shall make a
decision on the basis of all the information in the administrative
record, including any submission made by the respondent. The decision
shall be made within 45 days after receipt of any information and
argument submitted by the respondent, unless the suspending official
extends this period for good cause.
(b) Additional proceedings necessary. (1) In actions in which
additional proceedings are necessary to determine disputed material
facts, written findings of fact shall be prepared. The suspending
official shall base the decision on the facts as found, together with
any information and argument submitted by the respondent and any other
information in the administrative record.
(2) The suspending official may refer matters involving disputed
material facts to another official for findings of fact. The suspending
official may reject any such findings, in whole or in part, only after
specifically determining them to be arbitrary or capricious or clearly
erroneous.
(c) Notice of suspending official's decision. Prompt written notice
of the suspending official's decision shall be sent to the respondent.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
[[Page 66]]
Sec. 25.415 Period of suspension.
(a) Suspension shall be for a temporary period pending the
completion of an investigation or ensuing legal, debarment, or Program
Fraud Civil Remedies Act proceedings, unless terminated sooner by the
suspending official or as provided in paragraph (b) of this section.
(b) If legal or administrative proceedings are not initiated within
12 months after the date of the suspension notice, the suspension shall
be terminated unless an Assistant Attorney General or United States
Attorney requests its extension in writing, in which case it may be
extended for an additional six months. In no event may a suspension
extend beyond 18 months, unless such proceedings have been initiated
within that period.
(c) The suspending official shall notify the Department of Justice
of an impending termination of a suspension, at least 30 days before the
12-month period expires, to give that Department an opportunity to
request an extension.
Sec. 25.420 Scope of suspension.
The scope of a suspension is the same as the scope of a debarment
(see Sec. 25.325), except that the procedures of Secs. 25.410 through
25.413 shall be used in imposing a suspension.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Subpart E--Responsibilities of GSA, Agency and Participants
Sec. 25.500 GSA responsibilities.
(a) In accordance with the OMB guidelines, GSA shall compile,
maintain, and distribute a list of all persons who have been debarred,
suspended, or voluntarily excluded by agencies under Executive Order
12549 and these regulations, and those who have been determined to be
ineligible.
(b) At a minimum, this list shall indicate:
(1) The names and addresses of all debarred, suspended, ineligible,
and voluntarily excluded persons, in alphabetical order, with cross-
references when more than one name is involved in a single action;
(2) The type of action;
(3) The cause for the action;
(4) The scope of the action;
(5) Any termination date for each listing; and
(6) The agency and name and telephone number of the agency point of
contact for the action.
Sec. 25.505 Military Departments and Defense Agencies' responsibilities.
(a) The agency shall provide GSA with current information concerning
debarments, suspension, determinations of ineligibility, and voluntary
exclusions it has taken. Until February 18, 1989, the agency shall also
provide GSA and OMB with information concerning all transactions in
which Military Departments and Defense Agencies has granted exceptions
under Sec. 25.215 permitting participation by debarred, suspended, or
voluntarily excluded persons.
(b) Unless an alternative schedule is agreed to by GSA, the agency
shall advise GSA of the information set forth in Sec. 25.500(b) and of
the exceptions granted under Sec. 25.215 within five working days after
taking such actions.
(c) The agency shall direct inquiries concerning listed persons to
the agency that took the action.
(d) Agency officials shall check the Nonprocurement List before
entering covered transactions to determine whether a participant in a
primary transaction is debarred, suspended, ineligible, or voluntarily
excluded (Tel. ).
(e) Agency officials shall check the Nonprocurement List before
approving principals or lower tier participants where agency approval of
the principal or lower tier participant is required under the terms of
the transaction, to determine whether such principals or participants
are debarred, suspended, ineligible, or voluntarily excluded.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.510 Participants' responsibilities.
(a) Certification by participants in primary covered transactions.
Each participant shall submit the certification in
[[Page 67]]
appendix A to this part for it and its principals at the time the
participant submits its proposal in connection with a primary covered
transaction, except that States need only complete such certification as
to their principals. Participants may decide the method and frequency by
which they determine the eligibility of their principals. In addition,
each participant may, but is not required to, check the Nonprocurement
List for its principals (Tel. ). Adverse information on the
certification will not necessarily result in denial of participation.
However, the certification, and any additional information pertaining to
the certification submitted by the participant, shall be considered in
the administration of covered transactions.
(b) Certification by participants in lower tier covered
transactions. (1) Each participant shall require participants in lower
tier covered transactions to include the certification in appendix B to
this part for it and its principals in any proposal submitted in
connection with such lower tier covered transactions.
(2) A participant may rely upon the certification of a prospective
participant in a lower tier covered transaction that it and its
principals are not debarred, suspended, ineligible, or voluntarily
excluded from the covered transaction by any Federal agency, unless it
knows that the certification is erroneous. Participants may decide the
method and frequency by which they determine the eligiblity of their
principals. In addition, a participant may, but is not required to,
check the Nonprocurement List for its principals and for participants
(Tel. ).
(c) Changed circumstances regarding certification. A participant
shall provide immediate written notice to Military Departments and
Defense Agencies if at any time the participant learns that its
certification was erroneous when submitted or has become erroneous by
reason of changed circumstances. Participants in lower tier covered
transactions shall provide the same updated notice to the participant to
which it submitted its proposals.
Subpart F--Drug-Free Workplace Requirements (Grants)
Source: 55 FR 21688, 21697, May 25, 1990, unless otherwise noted.
Redesignated at 57 FR 6199, Feb. 21, 1992.
Sec. 25.600 Purpose.
(a) The purpose of this subpart is to carry out the Drug-Free
Workplace Act of 1988 by requiring that--
(1) A grantee, other than an individual, shall certify to the agency
that it will provide a drug-free workplace;
(2) A grantee who is an individual shall certify to the agency that,
as a condition of the grant, he or she will not engage in the unlawful
manufacture, distribution, dispensing, possession or use of a controlled
substance in conducting any activity with the grant.
(b) Requirements implementing the Drug-Free Workplace Act of 1988
for contractors with the agency are found at 48 CFR subparts 9.4, 23.5,
and 52.2.
Sec. 25.605 Definitions.
(a) Except as amended in this section, the definitions of
Sec. 25.105 apply to this subpart.
(b) For purposes of this subpart--
(1) Controlled substance means a controlled substance in schedules I
through V of the Controlled Substances Act (21 U.S.C. 812), and as
further defined by regulation at 21 CFR 1308.11 through 1308.15;
(2) Conviction means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal
or State criminal drug statutes;
(3) Criminal drug statute means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing, use, or
possession of any controlled substance;
(4) Drug-free workplace means a site for the performance of work
done in connection with a specific grant at which employees of the
grantee are prohibited from engaging in the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled substance;
[[Page 68]]
(5) Employee means the employee of a grantee directly engaged in the
performance of work under the grant, including:
(i) All direct charge employees;
(ii) All indirect charge employees, unless their impact or
involvement is insignificant to the performance of the grant; and,
(iii) Temporary personnel and consultants who are directly engaged
in the performance of work under the grant and who are on the grantee's
payroll.
This definition does not include workers not on the payroll of the
grantee (e.g., volunteers, even if used to meet a matching requirement;
consultants or independent contractors not on the payroll; or employees
of subrecipients or subcontractors in covered workplaces);
(6) Federal agency or agency means any United States executive
department, military department, government corporation, government
controlled corporation, any other establishment in the executive branch
(including the Executive Office of the President), or any independent
regulatory agency;
(7) Grant means an award of financial assistance, including a
cooperative agreement, in the form of money, or property in lieu of
money, by a Federal agency directly to a grantee. The term grant
includes block grant and entitlement grant programs, whether or not
exempted from coverage under the grants management government-wide
common rule on uniform administrative requirements for grants and
cooperative agreements. The term does not include technical assistance
that provides services instead of money, or other assistance in the form
of loans, loan guarantees, interest subsidies, insurance, or direct
appropriations; or any veterans' benefits to individuals, i.e., any
benefit to veterans, their families, or survivors by virtue of the
service of a veteran in the Armed Forces of the United States;
(8) Grantee means a person who applies for or receives a grant
directly from a Federal agency (except another Federal agency);
(9) Individual means a natural person;
(10) State means any of the States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, or any agency of a State, exclusive of
institutions of higher education, hospitals, and units of local
government. A State instrumentality will be considered part of the State
government if it has a written determination from a State government
that such State considers the instrumentality to be an agency of the
State government.
[55 FR 21688 and 21697, May. 25, 1990. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.610 Coverage.
(a) This subpart applies to any grantee of the agency.
(b) This subpart applies to any grant, except where application of
this subpart would be inconsistent with the international obligations of
the United States or the laws or regulations of a foreign government. A
determination of such inconsistency may be made only by the agency head
or his/her designee.
(1) Heads of Defense Agencies, Heads of DoD Field Activities, and
their designees are authorized to make such determinations on behalf of
the Secretary of Defense.
(2) [Reserved]
(c) The provisions of subparts A, B, C, D and E of this part apply
to matters covered by this subpart, except where specifically modified
by this subpart. In the event of any conflict between provisions of this
subpart and other provisions of this part, the provisions of this
subpart are deemed to control with respect to the implementation of
drug-free workplace requirements concerning grants.
[53 FR 19190 and 19204, May 26, 1988. Redesignated and amended at 57 FR
6199, Feb. 21, 1992; 60 FR 33053, June 26, 1995]
[[Page 69]]
Sec. 25.615 Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment.
A grantee shall be deemed in violation of the requirements of this
subpart if the agency head or his or her official designee determines,
in writing, that--
(a) The grantee has made a false certification under Sec. 25.630;
(b) With respect to a grantee other than an individual--
(1) The grantee has violated the certification by failing to carry
out the requirements of paragraphs (A)(a)-(g) and/or (B) of the
certification (Alternate I to Appendix C) or
(2) Such a number of employees of the grantee have been convicted of
violations of criminal drug statutes for violations occurring in the
workplace as to indicate that the grantee has failed to make a good
faith effort to provide a drug-free workplace.
(c) With respect to a grantee who is an individual--
(1) The grantee has violated the certification by failing to carry
out its requirements (Alternate II to Appendix C); or
(2) The grantee is convicted of a criminal drug offense resulting
from a violation occurring during the conduct of any grant activity.
[55 FR 21688 and 21697, May 25, 1990. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.616 Determinations of grantee violations.
Heads of Defense Agencies, Heads of DoD Field Activities, and their
designees are authorized to make determinations of grantee violations
under Sec. 25.615.
[60 FR 33053, June 26, 1995]
Sec. 25.620 Effect of violation.
(a) In the event of a violation of this subpart as provided in
Sec. 25.615, and in accordance with applicable law, the grantee shall be
subject to one or more of the following actions:
(1) Suspension of payments under the grant;
(2) Suspension or termination of the grant; and
(3) Suspension or debarment of the grantee under the provisions of
this part.
(b) Upon issuance of any final decision under this part requiring
debarment of a grantee, the debarred grantee shall be ineligible for
award of any grant from any Federal agency for a period specified in the
decision, not to exceed five years (see Sec. 25.320(a)(2) of this part).
[55 FR 21688 and 21697, May 25, 1990. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 25.625 Exception provision.
The agency head may waive with respect to a particular grant, in
writing, a suspension of payments under a grant, suspension or
termination of a grant, or suspension or debarment of a grantee if the
agency head determines that such a waiver would be in the public
interest. This exception authority cannot be delegated to any other
official.
Sec. 25.630 Certification requirements and procedures.
(a)(1) As a prior condition of being awarded a grant, each grantee
shall make the appropriate certification to the Federal agency providing
the grant, as provided in Appendix C to this part.
(2) Grantees are not required to make a certification in order to
continue receiving funds under a grant awarded before March 18, 1989, or
under a no-cost time extension of such a grant. However, the grantee
shall make a one-time drug-free workplace certification for a non-
automatic continuation of such a grant made on or after March 18, 1989.
(b) Except as provided in this section, all grantees shall make the
required certification for each grant. For mandatory formula grants and
entitlements that have no application process, grantees shall submit a
one-time certification in order to continue receiving awards.
(c) A grantee that is a State may elect to make one certification in
each Federal fiscal year. States that previously submitted an annual
certification are not required to make a certification for Fiscal Year
1990 until
[[Page 70]]
June 30, 1990. Except as provided in paragraph (d) of this section, this
certification shall cover all grants to all State agencies from any
Federal agency. The State shall retain the original of this statewide
certification in its Governor's office and, prior to grant award, shall
ensure that a copy is submitted individually with respect to each grant,
unless the Federal agency has designated a central location for
submission.
(d)(1) The Governor of a State may exclude certain State agencies
from the statewide certification and authorize these agencies to submit
their own certifications to Federal agencies. The statewide
certification shall name any State agencies so excluded.
(2) A State agency to which the statewide certification does not
apply, or a State agency in a State that does not have a statewide
certification, may elect to make one certification in each Federal
fiscal year. State agencies that previously submitted a State agency
certification are not required to make a certification for Fiscal Year
1990 until June 30, 1990. The State agency shall retain the original of
this State agency-wide certification in its central office and, prior to
grant award, shall ensure that a copy is submitted individually with
respect to each grant, unless the Federal agency designates a central
location for submission.
(3) When the work of a grant is done by more than one State agency,
the certification of the State agency directly receiving the grant shall
be deemed to certify compliance for all workplaces, including those
located in other State agencies.
(e)(1) For a grant of less than 30 days performance duration,
grantees shall have this policy statement and program in place as soon
as possible, but in any case by a date prior to the date on which
performance is expected to be completed.
(2) For a grant of 30 days or more performance duration, grantees
shall have this policy statement and program in place within 30 days
after award.
(3) Where extraordinary circumstances warrant for a specific grant,
the grant officer may determine a different date on which the policy
statement and program shall be in place.
Sec. 25.635 Reporting of and employee sanctions for convictions of criminal drug offenses.
(a) When a grantee other than an individual is notified that an
employee has been convicted for a violation of a criminal drug statute
occurring in the workplace, it shall take the following actions:
(1) Within 10 calendar days of receiving notice of the conviction,
the grantee shall provide written notice, including the convicted
employee's position title, to every grant officer, or other designee on
whose grant activity the convicted employee was working, unless a
Federal agency has designated a central point for the receipt of such
notifications. Notification shall include the identification number(s)
for each of the Federal agency's affected grants.
(2) Within 30 calendar days of receiving notice of the conviction,
the grantee shall do the following with respect to the employee who was
convicted.
(i) Take appropriate personnel action against the employee, up to
and including termination, consistent with requirements of the
Rehabilitation Act of 1973, as amended; or
(ii) Require the employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for such purposes by
a Federal, State, or local health, law enforcement, or other appropriate
agency.
(b) A grantee who is an individual who is convicted for a violation
of a criminal drug statute occurring during the conduct of any grant
activity shall report the conviction, in writing, within 10 calendar
days, to his or her Federal agency grant officer, or other designee,
unless the Federal agency has designated a central point for the receipt
of such notices. Notification shall include the identification number(s)
for each of the Federal agency's affected grants.
(Approved by the Office of Management and Budget under control number
0991-0002)
[[Page 71]]
Appendix A to Part 25--Certification Regarding Debarment, Suspension,
and Other Responsibility Matters--Primary Covered Transactions
Instructions for Certification
1. By signing and submitting this proposal, the prospective primary
participant is providing the certification set out below.
2. The inability of a person to provide the certification required
below will not necessarily result in denial of participation in this
covered transaction. The prospective participant shall submit an
explanation of why it cannot provide the certification set out below.
The certification or explanation will be considered in connection with
the department or agency's determination whether to enter into this
transaction. However, failure of the prospective primary participant to
furnish a certification or an explanation shall disqualify such person
from participation in this transaction.
3. The certification in this clause is a material representation of
fact upon which reliance was placed when the department or agency
determined to enter into this transaction. If it is later determined
that the prospective primary participant knowingly rendered an erroneous
certification, in addition to other remedies available to the Federal
Government, the department or agency may terminate this transaction for
cause or default.
4. The prospective primary participant shall provide immediate
written notice to the department or agency to which this proposal is
submitted if at any time the prospective primary participant learns that
its certification was erroneous when submitted or has become erroneous
by reason of changed circumstances.
5. The terms covered transaction, debarred, suspended, ineligible,
lower tier covered transaction, participant, person, primary covered
transaction, principal, proposal, and voluntarily excluded, as used in
this clause, have the meanings set out in the Definitions and Coverage
sections of the rules implementing Executive Order 12549. You may
contact the department or agency to which this proposal is being
submitted for assistance in obtaining a copy of those regulations.
6. The prospective primary participant agrees by submitting this
proposal that, should the proposed covered transaction be entered into,
it shall not knowingly enter into any lower tier covered transaction
with a person who is proposed for debarment under 48 CFR part 9, subpart
9.4, debarred, suspended, declared ineligible, or voluntarily excluded
from participation in this covered transaction, unless authorized by the
department or agency entering into this transaction.
7. The prospective primary participant further agrees by submitting
this proposal that it will include the clause titled ``Certification
Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-
Lower Tier Covered Transaction,'' provided by the department or agency
entering into this covered transaction, without modification, in all
lower tier covered transactions and in all solicitations for lower tier
covered transactions.
8. A participant in a covered transaction may rely upon a
certification of a prospective participant in a lower tier covered
transaction that it is not proposed for debarment under 48 CFR part 9,
subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded
from the covered transaction, unless it knows that the certification is
erroneous. A participant may decide the method and frequency by which it
determines the eligibility of its principals. Each participant may, but
is not required to, check the List of Parties Excluded from Federal
Procurement and Nonprocurement Programs.
9. Nothing contained in the foregoing shall be construed to require
establishment of a system of records in order to render in good faith
the certification required by this clause. The knowledge and information
of a participant is not required to exceed that which is normally
possessed by a prudent person in the ordinary course of business
dealings.
10. Except for transactions authorized under paragraph 6 of these
instructions, if a participant in a covered transaction knowingly enters
into a lower tier covered transaction with a person who is proposed for
debarment under 48 CFR part 9, subpart 9.4, suspended, debarred,
ineligible, or voluntarily excluded from participation in this
transaction, in addition to other remedies available to the Federal
Government, the department or agency may terminate this transaction for
cause or default.
Certification Regarding Debarment, Suspension, and Other Responsibility
Matters--Primary Covered Transactions
(1) The prospective primary participant certifies to the best of its
knowledge and belief, that it and its principals:
(a) Are not presently debarred, suspended, proposed for debarment,
declared ineligible, or voluntarily excluded by any Federal department
or agency;
(b) Have not within a three-year period preceding this proposal been
convicted of or had a civil judgment rendered against them for
commission of fraud or a criminal offense in connection with obtaining,
attempting to obtain, or performing a public (Federal, State or local)
transaction or contract under a public transaction; violation of Federal
or State antitrust statutes or commission of
[[Page 72]]
embezzlement, theft, forgery, bribery, falsification or destruction of
records, making false statements, or receiving stolen property;
(c) Are not presently indicted for or otherwise criminally or
civilly charged by a governmental entity (Federal, State or local) with
commission of any of the offenses enumerated in paragraph (1)(b) of this
certification; and
(d) Have not within a three-year period preceding this application/
proposal had one or more public transactions (Federal, State or local)
terminated for cause or default.
(2) Where the prospective primary participant is unable to certify
to any of the statements in this certification, such prospective
participant shall attach an explanation to this proposal.
[60 FR 33042, June 26, 1995]
Appendix B to Part 25--Certification Regarding Debarment, Suspension,
Ineligibility and Voluntary Exclusion--Lower Tier Covered Transactions
Instructions for Certification
1. By signing and submitting this proposal, the prospective lower
tier participant is providing the certification set out below.
2. The certification in this clause is a material representation of
fact upon which reliance was placed when this transaction was entered
into. If it is later determined that the prospective lower tier
participant knowingly rendered an erroneous certification, in addition
to other remedies available to the Federal Government the department or
agency with which this transaction originated may pursue available
remedies, including suspension and/or debarment.
3. The prospective lower tier participant shall provide immediate
written notice to the person to which this proposal is submitted if at
any time the prospective lower tier participant learns that its
certification was erroneous when submitted or had become erroneous by
reason of changed circumstances.
4. The terms covered transaction, debarred, suspended, ineligible,
lower tier covered transaction, participant, person, primary covered
transaction, principal, proposal, and voluntarily excluded, as used in
this clause, have the meaning set out in the Definitions and Coverage
sections of rules implementing Executive Order 12549. You may contact
the person to which this proposal is submitted for assistance in
obtaining a copy of those regulations.
5. The prospective lower tier participant agrees by submitting this
proposal that, should the proposed covered transaction be entered into,
it shall not knowingly enter into any lower tier covered transaction
with a person who is proposed for debarment under 48 CFR part 9, subpart
9.4, debarred, suspended, declared ineligible, or voluntarily excluded
from participation in this covered transaction, unless authorized by the
department or agency with which this transaction originated.
6. The prospective lower tier participant further agrees by
submitting this proposal that it will include this clause titled
``Certification Regarding Debarment, Suspension, Ineligibility and
Voluntary Exclusion-Lower Tier Covered Transaction,'' without
modification, in all lower tier covered transactions and in all
solicitations for lower tier covered transactions.
7. A participant in a covered transaction may rely upon a
certification of a prospective participant in a lower tier covered
transaction that it is not proposed for debarment under 48 CFR part 9,
subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded
from covered transactions, unless it knows that the certification is
erroneous. A participant may decide the method and frequency by which it
determines the eligibility of its principals. Each participant may, but
is not required to, check the List of Parties Excluded from Federal
Procurement and Nonprocurement Programs.
8. Nothing contained in the foregoing shall be construed to require
establishment of a system of records in order to render in good faith
the certification required by this clause. The knowledge and information
of a participant is not required to exceed that which is normally
possessed by a prudent person in the ordinary course of business
dealings.
9. Except for transactions authorized under paragraph 5 of these
instructions, if a participant in a covered transaction knowingly enters
into a lower tier covered transaction with a person who is proposed for
debarment under 48 CFR part 9, subpart 9.4, suspended, debarred,
ineligible, or voluntarily excluded from participation in this
transaction, in addition to other remedies available to the Federal
Government, the department or agency with which this transaction
originated may pursue available remedies, including suspension and/or
debarment.
Certification Regarding Debarment, Suspension, Ineligibility an
Voluntary Exclusion--Lower Tier Covered Transactions
(1) The prospective lower tier participant certifies, by submission
of this proposal, that neither it nor its principals is presently
debarred, suspended, proposed for debarment, declared ineligible, or
voluntarily excluded from participation in this transaction by any
Federal department or agency.
(2) Where the prospective lower tier participant is unable to
certify to any of the statements in this certification, such prospective
[[Page 73]]
participant shall attach an explanation to this proposal.
[60 FR 33042, June 26, 1995]
Appendix C to Part 25--Certification Regarding Drug-Free Workplace
Requirements
Instructions for Certification
1. By signing and/or submitting this application or grant agreement,
the grantee is providing the certification set out below.
2. The certification set out below is a material representation of
fact upon which reliance is placed when the agency awards the grant. If
it is later determined that the grantee knowingly rendered a false
certification, or otherwise violates the requirements of the Drug-Free
Workplace Act, the agency, in addition to any other remedies available
to the Federal Government, may take action authorized under the Drug-
Free Workplace Act.
3. For grantees other than individuals, Alternate I applies.
4. For grantees who are individuals, Alternate II applies.
5. Workplaces under grants, for grantees other than individuals,
need not be identified on the certification. If known, they may be
identified in the grant application. If the grantee does not identify
the workplaces at the time of application, or upon award, if there is no
application, the grantee must keep the identity of the workplace(s) on
file in its office and make the information available for Federal
inspection. Failure to identify all known workplaces constitutes a
violation of the grantee's drug-free workplace requirements.
6. Workplace identifications must include the actual address of
buildings (or parts of buildings) or other sites where work under the
grant takes place. Categorical descriptions may be used (e.g., all
vehicles of a mass transit authority or State highway department while
in operation, State employees in each local unemployment office,
performers in concert halls or radio studios).
7. If the workplace identified to the agency changes during the
performance of the grant, the grantee shall inform the agency of the
change(s), if it previously identified the workplaces in question (see
paragraph five).
8. Definitions of terms in the Nonprocurement Suspension and
Debarment common rule and Drug-Free Workplace common rule apply to this
certification. Grantees' attention is called, in particular, to the
following definitions from these rules:
Controlled substance means a controlled substance in Schedules I
through V of the Controlled Substances Act (21 U.S.C. 812) and as
further defined by regulation (21 CFR 1308.11 through 1308.15);
Conviction means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal
or State criminal drug statutes;
Criminal drug statute means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing, use, or
possession of any controlled substance;
Employee means the employee of a grantee directly engaged in the
performance of work under a grant, including: (i) All direct charge
employees; (ii) All indirect charge employees unless their impact or
involvement is insignificant to the performance of the grant; and, (iii)
Temporary personnel and consultants who are directly engaged in the
performance of work under the grant and who are on the grantee's
payroll. This definition does not include workers not on the payroll of
the grantee (e.g., volunteers, even if used to meet a matching
requirement; consultants or independent contractors not on the grantee's
payroll; or employees of subrecipients or subcontractors in covered
workplaces).
Certification Regarding Drug-Free Workplace Requirements
Alternate I. (Grantees Other Than Individuals)
A. The grantee certifies that it will or will continue to provide a
drug-free workplace by:
(a) Publishing a statement notifying employees that the unlawful
manufacture, distribution, dispensing, possession, or use of a
controlled substance is prohibited in the grantee's workplace and
specifying the actions that will be taken against employees for
violation of such prohibition;
(b) Establishing an ongoing drug-free awareness program to inform
employees about--
(1) The dangers of drug abuse in the workplace;
(2) The grantee's policy of maintaining a drug-free workplace;
(3) Any available drug counseling, rehabilitation, and employee
assistance programs; and
(4) The penalties that may be imposed upon employees for drug abuse
violations occurring in the workplace;
(c) Making it a requirement that each employee to be engaged in the
performance of the grant be given a copy of the statement required by
paragraph (a);
(d) Notifying the employee in the statement required by paragraph
(a) that, as a condition of employment under the grant, the employee
will--
(1) Abide by the terms of the statement; and
[[Page 74]]
(2) Notify the employer in writing of his or her conviction for a
violation of a criminal drug statute occurring in the workplace no later
than five calendar days after such conviction;
(e) Notifying the agency in writing, within ten calendar days after
receiving notice under paragraph (d)(2) from an employee or otherwise
receiving actual notice of such conviction. Employers of convicted
employees must provide notice, including position title, to every grant
officer or other designee on whose grant activity the convicted employee
was working, unless the Federal agency has designated a central point
for the receipt of such notices. Notice shall include the identification
number(s) of each affected grant;
(f) Taking one of the following actions, within 30 calendar days of
receiving notice under paragraph (d)(2), with respect to any employee
who is so convicted--
(1) Taking appropriate personnel action against such an employee, up
to and including termination, consistent with the requirements of the
Rehabilitation Act of 1973, as amended; or
(2) Requiring such employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for such purposes by
a Federal, State, or local health, law enforcement, or other appropriate
agency;
(g) Making a good faith effort to continue to maintain a drug-free
workplace through implementation of paragraphs (a), (b), (c), (d), (e)
and (f).
B. The grantee may insert in the space provided below the site(s)
for the performance of work done in connection with the specific grant:
Place of Performance (Street address, city, county, State, zip code)
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Check {time} if there are workplaces on file that are not identified
here.
Alternate II. (Grantees Who Are Individuals)
(a) The grantee certifies that, as a condition of the grant, he or
she will not engage in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance in conducting
any activity with the grant;
(b) If convicted of a criminal drug offense resulting from a
violation occurring during the conduct of any grant activity, he or she
will report the conviction, in writing, within 10 calendar days of the
conviction, to every grant officer or other designee, unless the Federal
agency designates a central point for the receipt of such notices. When
notice is made to such a central point, it shall include the
identification number(s) of each affected grant.
[55 FR 21690, 21697, May 25, 1990. Redesignated at 57 FR 6200, Feb. 21,
1992]
PART 28--NEW RESTRICTIONS ON LOBBYING--Table of Contents
Subpart A--General
Sec.
28.100 Conditions on use of funds.
28.105 Definitions.
28.110 Certification and disclosure.
Subpart B--Activities by Own Employees
28.200 Agency and legislative liaison.
28.205 Professional and technical services.
28.210 Reporting.
Subpart C--Activities by Other Than Own Employees
28.300 Professional and technical services.
Subpart D--Penalties and Enforcement
28.400 Penalties.
28.405 Penalty procedures.
28.410 Enforcement.
Subpart E--Exemptions
28.500 Secretary of Defense.
Subpart F--Agency Reports
28.600 Semi-annual compilation.
28.605 Inspector General report.
Appendix A to Part 28--Certification Regarding Lobbying
Appendix B to Part 28--Disclosure Form to Report Lobbying
Authority: Section 319, Public Law 102-121 (31 U.S.C. 1352); 5
U.S.C. section 301; 10 U.S.C. 113.
Source: 55 FR 6737 and 6752, Feb. 26, 1990. Redesignated at 57 FR
6199, Feb. 21, 1992.
Cross reference: See also Office of Management and Budget notice
published at 54 FR 52306, December 20, 1989.
Subpart A--General
Sec. 28.100 Conditions on use of funds.
(a) No appropriated funds may be expended by the recipient of a
Federal contract, grant, loan, or cooperative ageement to pay any person
for influencing or attempting to influence an officer or employee of any
agency, a
[[Page 75]]
Member of Congress, an officer or employee of Congress, or an employee
of a Member of Congress in connection with any of the following covered
Federal actions: the awarding of any Federal contract, the making of any
Federal grant, the making of any Federal loan, the entering into of any
cooperative agreement, and the extension, continuation, renewal,
amendment, or modification of any Federal contract, grant, loan, or
cooperative agreement.
(b) Each person who requests or receives from an agency a Federal
contract, grant, loan, or cooperative agreement shall file with that
agency a certification, set forth in Appendix A, that the person has not
made, and will not make, any payment prohibited by paragraph (a) of this
section.
(c) Each person who requests or receives from an agency a Federal
contract, grant, loan, or a cooperative agreement shall file with that
agency a disclosure form, set forth in Appendix B, if such person has
made or has agreed to make any payment using nonappropriated funds (to
include profits from any covered Federal action), which would be
prohibited under paragraph (a) of this section if paid for with
appropriated funds.
(d) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with that agency a statement, set forth in appendix A, whether that
person has made or has agreed to make any payment to influence or
attempt to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with that loan insurance or guarantee.
(e) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with that agency a disclosure form, set forth in Appendix B, if that
person has made or has agreed to make any payment to influence or
attempt to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with that loan insurance or guarantee.
Sec. 28.105 Definitions.
For purposes of this part:
(a) Agency, as defined in 5 U.S.C. 552(f), includes Federal
executive departments and agencies as well as independent regulatory
commissions and Government corporations, as defined in 31 U.S.C.
9101(1).
(b) Covered Federal action means any of the following Federal
actions:
(1) The awarding of any Federal contract;
(2) The making of any Federal grant;
(3) The making of any Federal loan;
(4) The entering into of any cooperative agreement; and,
(5) The extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.
Covered Federal action does not include receiving from an agency a
commitment providing for the United States to insure or guarantee a
loan. Loan guarantees and loan insurance are addressed independently
within this part.
(c) Federal contract means an acquisition contract awarded by an
agency, including those subject to the Federal Acquisition Regulation
(FAR), and any other acquisition contract for real or personal property
or services not subject to the FAR.
(d) Federal cooperative agreement means a cooperative agreement
entered into by an agency.
(e) Federal grant means an award of financial assistance in the form
of money, or property in lieu of money, by the Federal Government or a
direct appropriation made by law to any person. The term does not
include technical assistance which provides services instead of money,
or other assistance in the form of revenue sharing, loans, loan
guarantees, loan insurance, interest subsidies, insurance, or direct
United States cash assistance to an individual.
(f) Federal loan means a loan made by an agency. The term does not
include loan guarantee or loan insurance.
(g) Indian tribe and tribal organization have the meaning provided
in section 4 of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450B). Alaskan Natives are included
[[Page 76]]
under the definitions of Indian tribes in that Act.
(h) Influencing or attempting to influence means making, with the
intent to influence, any communication to or appearance before an
officer or employee or any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in
connection with any covered Federal action.
(i) Loan guarantee and loan insurance means an agency's guarantee or
insurance of a loan made by a person.
(j) Local government means a unit of government in a State and, if
chartered, established, or otherwise recognized by a State for the
performance of a governmental duty, including a local public authority,
a special district, an intrastate district, a council of governments, a
sponsor group representative organization, and any other instrumentality
of a local government.
(k) Officer or employee of an agency includes the following
individuals who are employed by an agency:
(1) An individual who is appointed to a position in the Government
under title 5, U.S. Code, including a position under a temporary
appointment;
(2) A member of the uniformed services as defined in section 101(3),
title 37, U.S. Code;
(3) A special Government employee as defined in section 202, title
18, U.S. Code; and,
(4) An individual who is a member of a Federal advisory committee,
as defined by the Federal Advisory Committee Act, title 5, U.S. Code
appendix 2.
(l) Person means an individual, corporation, company, association,
authority, firm, partnership, society, State, and local government,
regardless of whether such entity is operated for profit or not for
profit. This term excludes an Indian tribe, tribal organization, or any
other Indian organization with respect to expenditures specifically
permitted by other Federal law.
(m) Reasonable compensation means, with respect to a regularly
employed officer or employee of any person, compensation that is
consistent with the normal compensation for such officer or employee for
work that is not furnished to, not funded by, or not furnished in
cooperation with the Federal Government.
(n) Reasonable payment means, with respect to perfessional and other
technical services, a payment in an amount that is consistent with the
amount normally paid for such services in the private sector.
(o) Recipient includes all contractors, subcontractors at any tier,
and subgrantees at any tier of the recipient of funds received in
connection with a Federal contract, grant, loan, or cooperative
agreement. The term excludes an Indian tribe, tribal organization, or
any other Indian organization with respect to expenditures specifically
permitted by other Federal law.
(p) Regularly employed means, with respect to an officer or employee
of a person requesting or receiving a Federal contract, grant, loan, or
cooperative agreement or a commitment providing for the United States to
insure or guarantee a loan, an officer or employee who is employed by
such person for at least 130 working days within one year immediately
preceding the date of the submission that initiates agency consideration
of such person for receipt of such contract, grant, loan, cooperative
agreement, loan insurance commitment, or loan guarantee commitment. An
officer or employee who is employed by such person for less than 130
working days within one year immediately preceding the date of the
submission that initiates agency consideration of such person shall be
considered to be regularly employed as soon as he or she is employed by
such person for 130 working days.
(q) State means a State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, a territory or possession of
the United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and
powers.
Sec. 28.110 Certification and disclosure.
(a) Each person shall file a certification, and a disclosure form,
if required, with each submission that initiates agency consideration of
such person for:
[[Page 77]]
(1) Award of a Federal contract, grant, or cooperative agreement
exceeding $100,000; or
(2) An award of a Federal loan or a commitment providing for the
United States to insure or guarantee a loan exceeding $150,000.
(b) Each person shall file a certification, and a disclosure form,
if required, upon receipt by such person of:
(1) A Federal contract, grant, or cooperative agreement exceeding
$100,000; or
(2) A Federal loan or a commitment providing for the United States
to insure or guarantee a loan exceeding $150,000,
Unless such person previously filed a certification, and a disclosure
form, if required, under paragraph (a) of this section.
(c) Each person shall file a disclosure form at the end of each
calendar quarter in which there occurs any event that requires
disclosure or that materially affects the accuracy of the information
contained in any disclosure form previously filed by such person under
paragraphs (a) or (b) of this section. An event that materially affects
the accuracy of the information reported includes:
(1) A cumulative increase of $25,000 or more in the amount paid or
expected to be paid for influencing or attempting to influence a covered
Federal action; or
(2) A change in the person(s) or individual(s) influencing or
attempting to influence a covered Federal action; or,
(3) A change in the officer(s), employee(s), or Member(s) contacted
to influence or attempt to influence a covered Federal action.
(d) Any person who requests or receives from a person referred to in
paragraphs (a) or (b) of this section:
(1) A subcontract exceeding $100,000 at any tier under a Federal
contract;
(2) A subgrant, contract, or subcontract exceeding $100,000 at any
tier under a Federal grant;
(3) A contract or subcontract exceeding $100,000 at any tier under a
Federal loan exceeding $150,000; or,
(4) A contract or subcontract exceeding $100,000 at any tier under a
Federal cooperative agreement,
Shall file a certification, and a disclosure form, if required, to the
next tier above.
(e) All disclosure forms, but not certifications, shall be forwarded
from tier to tier until received by the person referred to in paragraphs
(a) or (b) of this section. That person shall forward all disclosure
forms to the agency.
(f) Any certification or disclosure form filed under paragraph (e)
of this section shall be treated as a material representation of fact
upon which all receiving tiers shall rely. All liability arising from an
erroneous representation shall be borne solely by the tier filing that
representation and shall not be shared by any tier to which the
erroneous representation is forwarded. Submitting an erroneous
certification or disclosure constitutes a failure to file the required
certification or disclosure, respectively. If a person fails to file a
required certification or disclosure, the United States may pursue all
available remedies, including those authorized by section 1352, title
31, U.S. Code.
(g) For awards and commitments in process prior to December 23,
1989, but not made before that date, certifications shall be required at
award or commitment, covering activities occurring between December 23,
1989, and the date of award or commitment. However, for awards and
commitments in process prior to the December 23, 1989 effective date of
these provisions, but not made before December 23, 1989, disclosure
forms shall not be required at time of award or commitment but shall be
filed within 30 days.
(h) No reporting is required for an activity paid for with
appropriated funds if that activity is allowable under either subpart B
or C.
Subpart B--Activities by Own Employees
Sec. 28.200 Agency and legislative liaison.
(a) The prohibition on the use of appropriated funds, in Sec. 28.100
(a), does not apply in the case of a payment of reasonable compensation
made to an officer or employee of a person requesting or receiving a
Federal contract, grant, loan, or cooperative agreement
[[Page 78]]
if the payment is for agency and legislative liaison activities not
directly related to a covered Federal action.
(b) For purposes of paragraph (a) of this section, providing any
information specifically requested by an agency or Congress is allowable
at any time.
(c) For purposes of paragraph (a) of this section, the following
agency and legislative liaison activities are allowable at any time only
where they are not related to a specific solicitation for any covered
Federal action:
(1) Discussing with an agency (including individual demonstrations)
the qualities and characteristics of the person's products or services,
conditions or terms of sale, and service capabilities; and,
(2) Technical discussions and other activities regarding the
application or adaptation of the person's products or services for an
agency's use.
(d) For purposes of paragraph (a) of this section, the following
agencies and legislative liaison activities are allowable only where
they are prior to formal solicitation of any covered Federal action:
(1) Providing any information not specifically requested but
necessary for an agency to make an informed decision about initiation of
a covered Federal action;
(2) Technical discussions regarding the preparation of an
unsolicited proposal prior to its official submission; and,
(3) Capability presentations by persons seeking awards from an
agency pursuant to the provisions of the Small Business Act, as amended
by Public Law 95-507 and other subsequent amendments.
(e) Only those activities expressly authorized by this section are
allowable under this section.
[55 FR 6737 and 6752, Feb. 26, 1990. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 28.205 Professional and technical services.
(a) The prohibition on the use of appropriated funds, in Sec. 28.100
(a), does not apply in the case of a payment of reasonable compensation
made to an officer or employee of a person requesting or receiving a
Federal contract, grant, loan, or cooperative agreement or an extension,
continuation, renewal, amendment, or modification of a Federal contract,
grant, loan, or cooperative agreement if payment is for professional or
technical services rendered directly in the preparation, submission, or
negotiation of any bid, proposal, or application for that Federal
contract, grant, loan, or cooperative agreement or for meeting
requirements imposed by or pursuant to law as a condition for receiving
that Federal contract, grant, loan, or cooperative agreement.
(b) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting of a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
[[Page 79]]
(c) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or reasonably expected to be required by law or regulation,
and any other requirements in the actual award documents.
(d) Only those services expressly authorized by this section are
allowable under this section.
[55 FR 6737 and 6752, Feb. 26, 1990. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 28.210 Reporting.
No reporting is required with respect to payments of reasonable
compensation made to regularly employed officers or employees of a
person.
Subpart C--Activities by Other Than Own Employees
Sec. 28.300 Professional and technical services.
(a) The prohibition on the use of appropriated funds, in Sec. 28.100
(a), does not apply in the case of any reasonable payment to a person,
other than an officer or employee of a person requesting or receiving a
covered Federal action, if the payment is for professional or technical
services rendered directly in the preparation, submission, or
negotiation of any bid, proposal, or application for that Federal
contract, grant, loan, or cooperative agreement or for meeting
requirements imposed by or pursuant to law as a condition for receiving
that Federal contract, grant, loan, or cooperative agreement.
(b) The reporting requirments in Sec. 28.110 (a) and (b) regarding
filing a disclosure form by each person, if required, shall not apply
with respect to professional or technical services rendered directly in
the preparation, submission, or negotiation of any commitment providing
for the United States to insure or guarantee a loan.
(c) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting of a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
(d) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or reasonably expected to be required by law or regulation,
and any other requirements in the actual award documents.
(e) Persons other than officers or employees of a person requesting
or receiving a covered Federal action include consultants and trade
associations.
(f) Only those services expressly authorized by this section are
allowable under this section.
[55 FR 6737 and 6752, Feb. 26, 1990. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
[[Page 80]]
Subpart D--Penalties and Enforcement
Sec. 28.400 Penalties.
(a) Any person who makes an expenditure prohibited herein shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such expenditure.
(b) Any person who fails to file or amend the disclosure form (see
Appendix B) to be filed or amended if required herein, shall be subject
to a civil penalty of not less than $10,000 and not more than $100,000
for each such failure.
(c) A filing or amended filing on or after the date on which an
administrative action for the imposition of a civil penalty is commenced
does not prevent the imposition of such civil penalty for a failure
occurring before that date. An administrative action is commenced with
respect to a failure when an investigating official determines in
writing to commence an investigation of an allegation of such failure.
(d) In determining whether to impose a civil penalty, and the amount
of any such penalty, by reason of a violation by any person, the agency
shall consider the nature, circumstances, extent, and gravity of the
violation, the effect on the ability of such person to continue in
business, any prior violations by such person, the degree of culpability
of such person, the ability of the person to pay the penalty, and such
other matters as may be appropriate.
(e) First offenders under paragraphs (a) or (b) of this section
shall be subject to a civil penalty of $10,000, absent aggravating
circumstances. Second and subsequent offenses by persons shall be
subject to an appropriate civil penalty between $10,000 and $100,000, as
determined by the agency head or his or her designee.
(f) An imposition of a civil penalty under this section does not
prevent the United States from seeking any other remedy that may apply
to the same conduct that is the basis for the imposition of such civil
penalty.
Sec. 28.405 Penalty procedures.
Agencies shall impose and collect civil penalties pursuant to the
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C.
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and
3812, insofar as these provisions are not inconsistent with the
requirements herein.
Sec. 28.410 Enforcement.
The head of each agency shall take such actions as are necessary to
ensure that the provisions herein are vigorously implemented and
enforced in that agency.
Subpart E--Exemptions
Sec. 28.500 Secretary of Defense.
(a) Exemption authority. The Secretary of Defense may exempt, on a
case-by-case basis, a covered Federal action from the prohibition
whenever the Secretary determines, in writing, that such an exemption is
in the national interest. The Secretary shall transmit a copy of each
such written exemption to Congress immediately after making such a
determination.
(b) Policy. It is the policy of the Department of Defense that
exemptions under paragraph (a) of this section shall be requested only
rarely and in exceptional circumstances.
(c) Procedures. Each DoD Component that awards or administers
Federal grants, Federal cooperative agreements, or Federal loans subject
to this part shall establish procedures whereby:
(1) A grants officer wishing to request an exemption for a grant,
cooperative agreement, or loan shall transmit such request through
appropriate channels to: Director for Research, ODDR&E(R), 3080 Defense
Pentagon, Washington, DC. 20301-3080.
(2) Each such request shall explain why an exemption is in the
national interest, a justification that must be transmitted to Congress
for each exemption that is approved.
[63 FR 12188, Mar. 12, 1998]
Subpart F--Agency Reports
Sec. 28.600 Semi-annual compilation.
(a) The head of each agency shall collect and compile the disclosure
reports (see appendix B) and, on May 31 and November 30 of each year,
submit to
[[Page 81]]
the Secretary of the Senate and the Clerk of the House of
Representatives a report containing a compilation of the information
contained in the disclosure reports received during the six-month period
ending on March 31 or September 30, respectively, of that year.
(b) The report, including the compilation, shall be available for
public inspection 30 days after receipt of the report by the Secretary
and the Clerk.
(c) Information that involves intelligence matters shall be reported
only to the Select Committee on Intelligence of the Senate, the
Permanent Select Committee on Intelligence of the House of
Representatives, and the Committees on Appropriations of the Senate and
the House of Representatives in accordance with procedures agreed to by
such committees. Such information shall not be available for public
inspection.
(d) Information that is classified under Executive Order 12356 or
any successor order shall be reported only to the Committee on Foreign
Relations of the Senate and the Committee on Foreign Affairs of the
House of Representatives or the Committees on Armed Services of the
Senate and the House of Representatives (whichever such committees have
jurisdiction of matters involving such information) and to the
Committees on Appropriations of the Senate and the House of
Representatives in accordance with procedures agreed to by such
committees. Such information shall not be available for public
inspection.
(e) The first semi-annual compilation shall be submitted on May 31,
1990, and shall contain a compilation of the disclosure reports received
from December 23, 1989 to March 31, 1990.
(f) Major agencies, designated by the Office of Management and
Budget (OMB), are required to provide machine-readable compilations to
the Secretary of the Senate and the Clerk of the House of
Representatives no later than with the compilations due on May 31, 1991.
OMB shall provide detailed specifications in a memorandum to these
agencies.
(g) Non-major agencies are requested to provide machine-readable
compilations to the Secretary of the Senate and the Clerk of the House
of Representatives.
(h) Agencies shall keep the originals of all disclosure reports in
the official files of the agency.
Sec. 28.605 Inspector General report.
(a) The Inspector General, or other official as specified in
paragraph (b) of this section, of each agency shall prepare and submit
to Congress each year, commencing with submission of the President's
Budget in 1991, an evaluation of the compliance of that agency with, and
the effectiveness of, the requirements herein. The evaluation may
include any recommended changes that may be necessary to strengthen or
improve the requirements.
(b) In the case of an agency that does not have an Inspector
General, the agency official comparable to an Inspector General shall
prepare and submit the annual report, or, if there is no such comparable
official, the head of the agency shall prepare and submit the annual
report.
(c) The annual report shall be submitted at the same time the agency
submits its annual budget justifications to Congress.
(d) The annual report shall include the following: All alleged
violations relating to the agency's covered Federal actions during the
year covered by the report, the actions taken by the head of the agency
in the year covered by the report with respect to those alleged
violations and alleged violations in previous years, and the amounts of
civil penalties imposed by the agency in the year covered by the report.
Appendix A to Part 28--Certification Regarding Lobbying
Certification for Contracts, Grants, Loans, and Cooperative Agreements
The undersigned certifies, to the best of his or her knowledge and
belief, that:
(1) No Federal appropriated funds have been paid or will be paid, by
or on behalf of the undersigned, to any person for influencing or
attempting to influence an officer or employee of an agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with the awarding of any Federal contract, the
making of any Federal grant, the making of any Federal loan, the
entering into of any cooperative agreement, and the
[[Page 82]]
extension, continuation, renewal, amendment, or modification of any
Federal contract, grant, loan, or cooperative agreement.
(2) If any funds other than Federal appropriated funds have been
paid or will be paid to any person for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress
in connection with this Federal contract, grant, loan, or cooperative
agreement, the undersigned shall complete and submit Standard Form-LLL,
``Disclosure Form to Report Lobbying,'' in accordance with its
instructions.
(3) The undersigned shall require that the language of this
certification be included in the award documents for all subawards at
all tiers (including subcontracts, subgrants, and contracts under
grants, loans, and cooperative agreements) and that all subrecipients
shall certify and disclose accordingly.
This certification is a material representation of fact upon which
reliance was placed when this transaction was made or entered into.
Submission of this certification is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31, U.S.
Code. Any person who fails to file the required certification shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.
Statement for Loan Guarantees and Loan Insurance
The undersigned states, to the best of his or her knowledge and
belief, that:
If any funds have been paid or will be paid to any person for
influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with this commitment
providing for the United States to insure or guarantee a loan, the
undersigned shall complete and submit Standard Form-LLL, ``Disclosure
Form to Report Lobbying,'' in accordance with its instructions.
Submission of this statement is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31, U.S.
Code. Any person who fails to file the required statement shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.
[[Page 83]]
Appendix B to Part 28--Disclosure Form to Report Lobbying
[GRAPHIC] [TIFF OMITTED] TC23OC91.000
[[Page 84]]
[GRAPHIC] [TIFF OMITTED] TC23OC91.001
[[Page 85]]
[GRAPHIC] [TIFF OMITTED] TC23OC91.002
[[Page 86]]
PART 32--ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS--Table of Contents
Subpart A--General
Sec.
32.1 Purpose.
32.2 Definitions
32.3 Effect on other issuances.
32.4 Deviations.
32.5 Subawards.
Subpart B--Pre-Award Requirements
32.10 Purpose.
32.11 Pre-award policies.
32.12 Forms for applying for Federal assistance.
32.13 Debarment and suspension.
32.14 Special award conditions.
32.15 Metric system of measurement.
32.16 Resource Conservation and Recovery Act (RCRA).
32.17 Certifications and representations.
Subpart C--Post-Award Requirements
Financial and Program Management
32.20 Purpose of financial and program management.
32.21 Standards for financial management systems.
32.22 Payment.
32.23 Cost sharing or matching.
32.24 Program income.
32.25 Revision of budget and program plans.
32.26 Non-Federal audits.
32.27 Allowable costs.
32.28 Period of availability of funds.
Property Standards
32.30 Purpose of property standards.
32.31 Insurance coverage.
32.32 Real property.
32.33 Federally-owned and exempt property.
32.34 Equipment.
32.35 Supplies.
32.36 Intangible property.
32.37 Property trust relationship.
Procurement Standards
32.40 Purpose of procurement standards.
32.41 Recipient responsibilities.
32.42 Codes of conduct.
32.43 Competition.
32.44 Procurement procedures.
32.45 Cost and price analysis.
32.46 Procurement records.
32.47 Contract administration.
32.48 Contract provisions.
32.49 Resource Conservation and Recovery Act.
Reports and Records
32.50 Purpose of reports and records.
32.51 Monitoring and reporting program performance.
32.52 Financial reporting.
32.53 Retention and access requirements for records.
Termination and Enforcement
32.60 Purpose of termination and enforcement.
32.61 Termination.
32.62 Enforcement.
Subpart D--After-the-Award Requirements
32.70 Purpose.
32.71 Closeout procedures.
32.72 Subsequent adjustments and continuing responsibilities.
32.73 Collection of amounts due.
Appendix A to Part 32--Contract Provisions
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Source: 63 FR 12188, Mar. 12, 1998, unless otherwise noted.
Subpart A--General
Sec. 32.1 Purpose.
(a) General. This part implements OMB Circular A-110 \1\ and
establishes uniform administrative requirements for awards and subawards
to institutions of higher education, hospitals, and other non-
governmental, non-profit organizations.
---------------------------------------------------------------------------
\1\ For copies of the Circular, contact the Office of Management and
Budget, EOP Publications, 725 17th St. NW, New Executive Office
Building, Washington, DC 20503.
---------------------------------------------------------------------------
(b) Relationship to other parts. This part is an integral part of
the DoD Grant and Agreement Regulations (DoDGARs), which comprise this
subchapter of the Code of Federal Regulations. This part includes
references to other parts of the DoDGARs that implement Governmentwide
guidance and provide uniform internal policies and procedures for DoD
Components that make or administer awards. Although parts 21 and 22 of
this subchapter do not impose any direct requirements on recipients, and
recipients therefore are not required to be familiar with those parts,
the information in those parts
[[Page 87]]
concerning internal policies and procedures should be helpful to
recipients of DoD awards.
(c) Prime awards. DoD Components shall apply the provisions of this
part to awards to recipients that are institutions of higher education,
hospitals, and other non-profit organizations. DoD Components shall not
impose additional or inconsistent requirements, except as provided in
Secs. 32.4 and 32.14, or unless specifically required by Federal statute
or executive order.
(d) Subawards. Any legal entity that receives an award from a DoD
Component shall apply the provisions of this part to subawards with
institutions of higher education, hospitals, and other non-profit
organizations. Thus, a governmental or for-profit organization, whose
prime award from a DoD Component is subject to 32 CFR part 33 or part
34, respectively, applies this part to subawards with institutions of
higher education, hospitals, or other non-profit organizations. It
should be noted that subawards are for the performance of substantive
work under awards, and are distinct from contracts for procuring goods
and services. It should be further noted that non-profit organizations
that implement Federal programs for the States are also subject to State
requirements.
Sec. 32.2 Definitions.
The following are definitions of terms used in this part. Grants
officers are cautioned that terms may be defined differently in this
part than they are in other parts of the DoD Grant and Agreement
Regulations, because this part implements OMB Circular A-110 and uses
definitions as stated in that Circular. In such cases, the definition
given in this section applies to the term as it is used in this part,
and the definition given in other parts applies to the term as it is
used in those parts. For example, suspension is defined in this section
to mean temporary withdrawal of Federal sponsorship under an award, but
is defined at 32 CFR 25.105 to be an action taken to exclude a person
from participating in a grant, cooperative agreement, or other covered
transaction.
Accrued expenditures. The charges incurred by the recipient during a
given period requiring the provision of funds for:
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subrecipients, and
other payees; and
(3) Other amounts becoming owed under programs for which no current
services or performance is required.
Accrued income. The sum of:
(1) Earnings during a given period from:
(i) Services performed by the recipient; and
(ii) Goods and other tangible property delivered to purchasers.
(2) Amounts becoming owed to the recipient for which no current
services or performance is required by the recipient.
Acquisition cost of equipment. The net invoice price of the
equipment, including the cost of modifications, attachments,
accessories, or auxiliary apparatus necessary to make the property
usable for the purpose for which it was acquired. Other charges, such as
the cost of installation, transportation, taxes, duty or protective in-
transit insurance, shall be included or excluded from the unit
acquisition cost in accordance with the recipient's regular accounting
practices.
Advance. A payment made by Treasury check or other appropriate
payment mechanism to a recipient upon its request either before outlays
are made by the recipient or through the use of predetermined payment
schedules.
Award. Financial assistance that provides support or stimulation to
accomplish a public purpose. Awards include grants and other agreements
in the form of money or property in lieu of money, by the Federal
Government to an eligible recipient. The term does not include:
Technical assistance, which provides services instead of money; other
assistance in the form of loans, loan guarantees, interest subsidies, or
insurance; direct payments of any kind to individuals; and, contracts
which are required to be entered into and administered under procurement
laws and regulations.
Cash contributions. The recipient's cash outlay, including the
outlay of
[[Page 88]]
money contributed to the recipient by third parties.
Closeout. The process by which the grants officer administering an
award made by a DoD Component determines that all applicable
administrative actions and all required work of the award have been
completed by the recipient and DoD Component.
Contract. A procurement contract under an award or subaward, and a
procurement subcontract under a recipient's or subrecipient's contract.
Cost sharing or matching. That portion of project or program costs
not borne by the Federal Government.
Date of completion. The date on which all work under an award is
completed or the date on the award document, or any supplement or
amendment thereto, on which Federal sponsorship ends.
Disallowed costs. Those charges to an award that the grants officer
administering an award made by a DoD Component determines to be
unallowable, in accordance with the applicable Federal cost principles
or other terms and conditions contained in the award.
DoD Component. A Military Department, Defense Agency, DoD field
activity, or organization within the Office of the Secretary of Defense
that provides or administers an award to a recipient.
Equipment. Tangible nonexpendable personal property including exempt
property charged directly to the award having a useful life of more than
one year and an acquisition cost of $5,000 or more per unit. However,
consistent with recipient policy, lower limits may be established.
Excess property. Property under the control of any DoD Component
that, as determined by the head thereof, is no longer required for its
needs or the discharge of its responsibilities.
Exempt property. Tangible personal property acquired in whole or in
part with Federal funds, where the DoD Component has statutory authority
to vest title in the recipient without further obligation to the Federal
Government. An example of exempt property authority is contained in the
Federal Grant and Cooperative Agreement Act (31 U.S.C. 6306), for
property acquired under an award to conduct basic or applied research by
a non-profit institution of higher education or non-profit organization
whose principal purpose is conducting scientific research.
Federal funds authorized. The total amount of Federal funds
obligated by a DoD Component for use by the recipient. This amount may
include any authorized carryover of unobligated funds from prior funding
periods when permitted by agency regulations or agency implementing
instructions.
Federal share (of real property, equipment, or supplies). That
percentage of the property's acquisition costs and any improvement
expenditures paid with Federal funds.
Funding period. The period of time when Federal funding is available
for obligation by the recipient.
Intangible property and debt instruments. Property that includes,
but is not limited to, trademarks, copyrights, patents and patent
applications and such property as loans, notes and other debt
instruments, lease agreements, stock and other instruments of property
ownership, whether considered tangible or intangible.
Obligations. The amounts of orders placed, contracts and grants
awarded, services received and similar transactions during a given
period that require payment by the recipient during the same or a future
period.
Outlays or expenditures. Charges made to the project or program.
They may be reported on a cash or accrual basis. For reports prepared on
a cash basis, outlays are the sum of cash disbursements for direct
charges for goods and services, the amount of indirect expense charged,
the value of third party in-kind contributions applied and the amount of
cash advances and payments made to subrecipients. For reports prepared
on an accrual basis, outlays are the sum of cash disbursements for
direct charges for goods and services, the amount of indirect expense
incurred, the value of in-kind contributions applied, and the net
increase (or decrease) in the amounts owed by the recipient for goods
and other property received, for services performed by employees,
contractors, subrecipients and other payees and other amounts becoming
owed under programs for which no current services or performance are
required.
[[Page 89]]
Personal property. Property of any kind except real property. It may
be tangible, having physical existence, or intangible, having no
physical existence, such as copyrights, patents, or securities.
Prior approval. Written approval by an authorized official
evidencing prior consent.
Program income. Gross income earned by the recipient that is
directly generated by a supported activity or earned as a result of the
award (see exclusions in Sec. 32.24(e) and (h)). Program income
includes, but is not limited to, income from fees for services
performed, the use or rental of real or personal property acquired under
federally-funded projects, the sale of commodities or items fabricated
under an award, license fees and royalties on patents and copyrights,
and interest on loans made with award funds. Interest earned on advances
of Federal funds is not program income. Except as otherwise provided in
program regulations or the terms and conditions of the award, program
income does not include the receipt of principal on loans, rebates,
credits, discounts, etc., or interest earned on any of them.
Project costs. All allowable costs, as set forth in the applicable
Federal cost principles, incurred by a recipient and the value of the
contributions made by third parties in accomplishing the objectives of
the award during the project period.
Project period. The period established in the award document during
which Federal sponsorship begins and ends.
Property. Real property and personal property (equipment, supplies,
intangible property and debt instruments), unless stated otherwise.
Real property. Land, including land improvements, structures and
appurtenances thereto, but excluding movable machinery and equipment.
Recipient. An organization receiving financial assistance directly
from DoD Components to carry out a project or program. The term includes
public and private institutions of higher education, public and private
hospitals, and other quasi-public and private non-profit organizations
such as, but not limited to, community action agencies, research
institutes, educational associations, and health centers. The term also
includes consortia comprised of any combination of universities, other
nonprofit organizations, governmental organizations, for-profit
organizations, and other entities, to the extent that the consortia are
legally incorporated as nonprofit organizations. The term does not
include Government-owned contractor-operated facilities or research
centers providing continued support for mission-oriented, large-scale
programs that are Government-owned or controlled, or are designated as
federally-funded research and development centers.
Research and development. All research activities, both basic and
applied, and all development activities that are supported at
universities, colleges, and other non-profit institutions. Research is
defined as a systematic study directed toward fuller scientific
knowledge or understanding of the subject studied. Development is the
systematic use of knowledge and understanding gained from research
directed toward the production of useful materials, devices, systems, or
methods, including design and development of prototypes and processes.
The term research also includes activities involving the training of
individuals in research techniques where such activities utilize the
same facilities as other research and development activities and where
such activities are not included in the instruction function.
Small award. An award not exceeding the simplified acquisition
threshold fixed at 41 U.S.C. 403(11) (currently $100,000).
Subaward. An award of financial assistance in the form of money, or
property in lieu of money, made under an award by a recipient to an
eligible subrecipient or by a subrecipient to a lower tier subrecipient.
The term includes financial assistance when provided by any legal
agreement, even if the agreement is called a contract, but does not
include procurement of goods and services nor does it include any form
of assistance which is excluded from the definition of ``award'' in this
section.
Subrecipient. The legal entity to which a subaward is made and which
is
[[Page 90]]
accountable to the recipient for the use of the funds provided.
Supplies. All personal property excluding equipment, intangible
property, and debt instruments as defined in this section, and
inventions of a contractor conceived or first actually reduced to
practice in the performance of work under a funding agreement (``subject
inventions''), as defined in 37 CFR part 401, ``Rights to Inventions
Made by Nonprofit Organizations and Small Business Firms Under
Government Grants, Contracts, and Cooperative Agreements.''
Suspension. An action by a DoD Component that temporarily withdraws
Federal sponsorship under an award, pending corrective action by the
recipient or pending a decision to terminate the award by the DoD
Component. Suspension of an award is a separate action from suspension
of a participant under 32 CFR part 25.
Termination. The cancellation of an award, in whole or in part, at
any time prior to the date of completion.
Third party in-kind contributions. The value of non-cash
contributions provided by non-Federal third parties. Third party in-kind
contributions may be in the form of real property, equipment, supplies,
and the value of goods and services directly benefiting and specifically
identifiable to the project or program.
Unliquidated obligations. The amount of obligations incurred by the
recipient:
(1) That have not been paid, if financial reports are prepared on a
cash basis.
(2) For which an outlay has not been recorded, if reports are
prepared on an accrued expenditure basis.
Unobligated balance. The portion of the funds authorized by a DoD
Component that has not been obligated by the recipient and is determined
by deducting the cumulative obligations from the cumulative funds
authorized.
Unrecovered indirect cost. The difference between the amount awarded
and the amount which could have been awarded under the recipient's
approved negotiated indirect cost rate.
Working capital advance. A procedure whereby funds are advanced to
the recipient to cover its estimated disbursement needs for a given
initial period.
Sec. 32.3 Effect on other issuances.
For awards subject to this part, all administrative requirements of
codified program regulations, program manuals, handbooks and other
nonregulatory materials which are inconsistent with the requirements of
this part shall be superseded, except to the extent they are required by
statute, or authorized in accordance with the deviations provision in
Sec. 32.4.
Sec. 32.4 Deviations.
(a) Individual deviations. Individual deviations affecting only one
award may be approved by DoD Components in accordance with procedures
stated in 32 CFR 21.125(a) and (c).
(b) Small awards. DoD Components may apply less restrictive
requirements than the provisions of this part when awarding small
awards, except for those requirements which are statutory.
(c) Other class deviations. (1) For classes of awards other than
small awards, the Director of Defense Research and Engineering (DDR&E),
or his or her designee, may grant exceptions from the requirements of
this part:
(i) With the written concurrence of the Office of the Management and
Budget (OMB). The DDR&E, or his or her designee, shall provide written
notification to OMB of the Department of Defense's intention to grant a
class deviation; and
(ii) When exceptions are not prohibited by statute.
(2) DoD Components shall request approval for such deviations in
accordance with 32 CFR 21.125(b) and (c). However, in the interest of
maximum uniformity, exceptions from the requirements of this part shall
be permitted only in unusual circumstances.
Sec. 32.5 Subawards.
Unless sections of this part specifically exclude subrecipients from
coverage, the provisions of this part shall be applied to subrecipients
performing
[[Page 91]]
work under awards if such subrecipients are institutions of higher
education, hospitals or other non-profit organizations. State and local
government subrecipients are subject to the provisions of 32 CFR part
33. Subrecipients that are for-profit organizations are subject to 32
CFR part 34.
Subpart B--Pre-Award Requirements
Sec. 32.10 Purpose.
Sections 32.11 through 32.17 prescribe application forms and
instructions and other pre-award matters.
Sec. 32.11 Pre-award policies.
(a) Use of grants, cooperative agreements, and contracts. (1) OMB
Circular A-110 states that:
(i) In each instance, the Federal awarding agency shall decide on
the appropriate award instrument (i.e., grant, cooperative agreement, or
contract).
(ii) The Federal Grant and Cooperative Agreement Act (31 U.S.C.
6301-6308) governs the use of grants, cooperative agreements, and
contracts. Under that Act:
(A) A grant or cooperative agreement shall be used only when the
principal purpose of a transaction is to accomplish a public purpose of
support or stimulation authorized by Federal statute.
(B) Contracts shall be used when the principal purpose is
acquisition of property or services for the direct benefit or use of the
Federal Government.
(C) The statutory criterion for choosing between grants and
cooperative agreements is that for the latter, ``substantial involvement
is expected between the executive agency and the State, local
government, or other recipient when carrying out the activity
contemplated in the agreement.''
(2) In selecting the appropriate award instruments, DoD Components'
grants officers shall comply with the DoD implementation of the Federal
Grant and Cooperative Agreement Act at 32 CFR 21.205(a) and 32 CFR part
22, subpart B.
(b) Public notice and priority setting. As a matter of
Governmentwide policy, Federal awarding agencies shall notify the public
of intended funding priorities for programs that use discretionary
awards, unless funding priorities are established by Federal statute.
For DoD Components, compliance with competition policies and statutory
requirements implemented in 32 CFR part 22, subpart C, shall constitute
compliance with this Governmentwide policy.
Sec. 32.12 Forms for applying for Federal assistance.
(a) DoD Components shall comply with the applicable report clearance
requirements of 5 CFR part 1320, ``Controlling Paperwork Burdens on the
Public,'' with regard to all forms used in place of or as a supplement
to the Standard Form 424 2 (SF-424) series.
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\2\ For copies of Standard Forms listed in this part, contact
regional grants administration offices of the Office of Naval Research.
Addresses for the offices are listed in the ``DoD Directory of Contract
Administration Services Components,'' DLAH 4105.4, which can be obtained
from: Defense Logistics Agency, Publications Distribution Division
(DASC-WDM), 8725 John J. Kingman Rd., Suite 0119, Fort Belvoir, VA
22060-6220.
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(b) Applicants shall use the SF-424 series or those forms and
instructions prescribed by DoD Components.
(c) For Federal programs covered by E.O. 12372 (3 CFR, 1982 Comp.,
p. 197), ``Intergovernmental Review of Federal Programs,'' the applicant
shall complete the appropriate sections of the SF-424 (Application for
Federal Assistance) indicating whether the application was subject to
review by the State Single Point of Contact (SPOC). The name and address
of the SPOC for a particular State can be obtained from the DoD
Component or the Catalog of Federal Domestic Assistance. The SPOC shall
advise the applicant whether the program for which application is made
has been selected by that State for review.
(d) DoD Components that do not use the SF-424 form should indicate
whether the application is subject to review by the State under E.O.
12372.
Sec. 32.13 Debarment and suspension.
DoD Components and recipients shall comply with the nonprocurement
debarment and suspension common rule at 32 CFR part 25. This common rule
[[Page 92]]
restricts subawards and contracts with certain parties that are
debarred, suspended or otherwise excluded from or ineligible for
participation in Federal assistance programs or activities.
Sec. 32.14 Special award conditions.
(a) DoD Components may impose additional requirements as needed,
over and above those provided in this part, if an applicant or
recipient:
(1) Has a history of poor performance;
(2) Is not financially stable;
(3) Has a management system that does not meet the standards
prescribed in this part;
(4) Has not conformed to the terms and conditions of a previous
award; or
(5) Is not otherwise responsible.
(b) Before imposing additional requirements, DoD Components shall
notify the applicant or recipient in writing as to:
(1) The nature of the additional requirements;
(2) The reason why the additional requirements are being imposed;
(3) The nature of the corrective action needed;
(4) The time allowed for completing the corrective actions; and
(5) The method for requesting reconsideration of the additional
requirements imposed.
(c) Any special conditions shall be promptly removed once the
conditions that prompted them have been corrected.
(d) Grants officers:
(1) Should coordinate the imposition and removal of special award
conditions with the cognizant grants administration office identified in
32 CFR 22.710.
(2) Shall include in the award file the written notification to the
recipient, described in paragraph (b) of this section, and the
documentation required by 32 CFR 22.410(b).
Sec. 32.15 Metric system of measurement.
The Metric Conversion Act, as amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 205) declares that the metric system is
the preferred measurement system for U.S. trade and commerce, and for
Federal agencies' procurements, grants, and other business-related
activities. DoD grants officers shall comply with requirements
concerning the use of the metric system at 32 CFR 22.530.
Sec. 32.16 Resource Conservation and Recovery Act (RCRA).
Recipients' procurements shall comply with applicable requirements
of the Resource Conservation and Recovery Act (RCRA), as described at
Sec. 32.49.
Sec. 32.17 Certifications and representations.
(a) OMB Circular A-110 authorizes and encourages each Federal
agency, unless prohibited by statute or codified regulation, to allow
recipients to submit certifications and representations required by
statute, executive order, or regulation on an annual basis, if the
recipients have ongoing and continuing relationships with the agency.
The Circular further states that annual certifications and
representations, when used, shall be signed by responsible officials
with the authority to ensure recipients' compliance with the pertinent
requirements.
(b) DoD grants officers shall comply with the provisions concerning
certifications and representations at 32 CFR 22.510. Those provisions
ease burdens on recipients to the extent possible, given current
statutory and regulatory impediments to obtaining all certifications on
an annual basis. The provisions thereby also comply with the intent of
OMB Circular A-110, to use less burdensome methods for obtaining
certifications and representations, as such methods become feasible.
Subpart C--Post-Award Requirements
Financial and Program Management
Sec. 32.20 Purpose of financial and program management.
Sections 32.21 through 32.28 prescribe standards for financial
management systems, methods for making payments and rules for:
satisfying cost sharing and matching requirements, accounting for
program income, budget revision approvals, making audits, determining
allowability of cost, and establishing fund availability.
[[Page 93]]
Sec. 32.21 Standards for financial management systems.
(a) DoD Components shall require recipients to relate financial data
to performance data and develop unit cost information whenever
practical. For awards that support research, it should be noted that it
is generally not appropriate to develop unit cost information.
(b) Recipients' financial management systems shall provide for the
following.
(1) Accurate, current and complete disclosure of the financial
results of each federally-sponsored project or program in accordance
with the reporting requirements set forth in Sec. 32.52. If a DoD
Component requires reporting on an accrual basis from a recipient that
maintains its records on other than an accrual basis, the recipient
shall not be required to establish an accrual accounting system. These
recipients may develop such accrual data for its reports on the basis of
an analysis of the documentation on hand.
(2) Records that identify adequately the source and application of
funds for federally-sponsored activities. These records shall contain
information pertaining to Federal awards, authorizations, obligations,
unobligated balances, assets, outlays, income and interest.
(3) Effective control over and accountability for all funds,
property and other assets. Recipients shall adequately safeguard all
such assets and assure they are used solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award.
Whenever appropriate, financial information should be related to
performance and unit cost data. As discussed in paragraph (a) of this
section, unit cost data is generally not appropriate for awards that
support research.
(5) Written procedures to minimize the time elapsing between the
transfer of funds to the recipient from the U.S. Treasury and the
issuance or redemption of checks, warrants or payments by other means
for program purposes by the recipient. To the extent that the provisions
of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern,
payment methods of State agencies, instrumentalities, and fiscal agents
should be consistent with CMIA Treasury-State Agreements or the CMIA
default procedures codified at 31 CFR part 205, ``Withdrawal of Cash
from the Treasury for Advances under Federal Grant and Other Programs.''
(6) Written procedures for determining the reasonableness,
allocability and allowability of costs in accordance with the provisions
of the applicable Federal cost principles (see Sec. 32.27) and the terms
and conditions of the award.
(7) Accounting records including cost accounting records that are
supported by source documentation.
(c) Where the Federal Government guarantees or insures the repayment
of money borrowed by the recipient, the DoD Component, at its
discretion, may require adequate bonding and insurance if the bonding
and insurance requirements of the recipient are not deemed adequate to
protect the interest of the Federal Government.
(d) The DoD Component may require adequate fidelity bond coverage
where the recipient lacks sufficient coverage to protect the Federal
Government's interest.
(e) Where bonds are required in the situations described above, the
bonds shall be obtained from companies holding certificates of authority
as acceptable sureties, as prescribed in 31 CFR part 223, ``Surety
Companies Doing Business with the United States.''
Sec. 32.22 Payment.
(a) Payment methods shall minimize the time elapsing between the
transfer of funds from the United States Treasury and the issuance or
redemption of checks, warrants, or payment by other means by the
recipients. Payment methods of State agencies or instrumentalities shall
be consistent with Treasury-State agreements under the Cash Management
Improvement Act (CMIA) (31 U.S.C. 3335 and 6503) or default procedures
in 31 CFR part 205.
(b) Recipients are to be paid in advance, provided they maintain or
demonstrate the willingness to maintain:
(1) Written procedures that minimize the time elapsing between the
transfer of funds and disbursement by the recipient; and
[[Page 94]]
(2) Financial management systems that meet the standards for fund
control and accountability as established in Sec. 32.21. Cash advances
to a recipient organization shall be limited to the minimum amounts
needed and be timed to be in accordance with the actual, immediate cash
requirements of the recipient organization in carrying out the purpose
of the approved program or project. The timing and amount of cash
advances shall be as close as is administratively feasible to the actual
disbursements by the recipient organization for direct program or
project costs and the proportionate share of any allowable indirect
costs.
(c) Whenever possible, advances shall be consolidated to cover
anticipated cash needs for all awards made by the DoD Component to the
recipient.
(1) Advance payment mechanisms include, but are not limited to,
Treasury check and electronic funds transfer.
(2) Advance payment mechanisms are subject to 31 CFR part 205.
(3) Recipients shall be authorized to submit requests for advances
and reimbursements at least monthly when electronic fund transfers are
not used.
(d) Requests for Treasury check advance payment shall be submitted
on SF-270,\3\ ``Request for Advance or Reimbursement,'' or other forms
as may be authorized by OMB. This form is not to be used when Treasury
check advance payments are made to the recipient automatically through
the use of a predetermined payment schedule or if inconsistent with DoD
procedures for electronic funds transfer.
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\3\ See footnote 2 to Sec. 32.12(a).
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(e) Reimbursement is the preferred method when the requirements in
paragraph (b) of this section cannot be met. DoD Components may also use
this method on any construction agreement, or if the major portion of
the construction project is accomplished through private market
financing or Federal loans, and the Federal assistance constitutes a
minor portion of the project.
(1) When the reimbursement method is used, the responsible DoD
payment office generally makes payment within 30 calendar days after
receipt of the billing by the office designated to receive the billing,
unless the billing is improper (for further information about timeframes
for payments, see 32 CFR 22.810(c)(3)(ii)).
(2) Recipients shall be authorized to submit requests for
reimbursement at least monthly when electronic funds transfers are not
used.
(f) If a recipient cannot meet the criteria for advance payments and
the grants officer, in consultation with the program manager, has
determined that reimbursement is not feasible because the recipient
lacks sufficient working capital, the award may provide for cash on a
working capital advance basis. Under this procedure, the award shall
provide for advancing cash to the recipient to cover its estimated
disbursement needs for an initial period generally geared to the
awardee's disbursing cycle. Thereafter, the award shall provide for
reimbursing the recipient for its actual cash disbursements. The working
capital advance method of payment shall not be used for recipients
unwilling or unable to provide timely advances to their subrecipient to
meet the subrecipient's actual cash disbursements.
(g) To the extent available, recipients shall disburse funds
available from repayments to and interest earned on a revolving fund,
program income, rebates, refunds, contract settlements, audit recoveries
and interest earned on such funds before requesting additional cash
payments.
(h) Unless otherwise required by statute, grants officers shall not
withhold payments for proper charges made by recipients at any time
during the project period unless:
(1) A recipient has failed to comply with the project objectives,
the terms and conditions of the award, or Federal reporting
requirements; or
(2) The recipient or subrecipient is delinquent in a debt to the
United States under OMB Circular A-129, ``Managing Federal Credit
Programs'' (see definitions of ``debt'' and ``delinquent debt,'' at 32
CFR 22.105). Under such conditions, the grants officer may, upon
reasonable notice, inform the recipient that payments shall not be made
for obligations incurred after a specified date until the conditions are
corrected or the indebtedness to
[[Page 95]]
the Federal Government is liquidated (also see 32 CFR 22.420(b)(2) and
22.820).
(i) Standards governing the use of banks and other institutions as
depositories of funds advanced under awards are as follows:
(1) Except for situations described in paragraph (i)(2) of this
section, DoD Components shall not require separate depository accounts
for funds provided to a recipient or establish any eligibility
requirements for depositories for funds provided to a recipient.
However, recipients must be able to account for the receipt, obligation
and expenditure of funds.
(2) Advances of Federal funds shall be deposited and maintained in
insured accounts whenever possible.
(j) Consistent with the national goal of expanding the opportunities
for women-owned and minority-owned business enterprises, recipients
shall be encouraged to use women-owned and minority-owned banks (a bank
which is owned at least 50 percent by women or minority group members).
(k) Recipients shall maintain advances of Federal funds in interest
bearing accounts, unless:
(1) The recipient receives less than $120,000 in Federal awards per
year;
(2) The best reasonably available interest bearing account would not
be expected to earn interest in excess of $250 per year on Federal cash
balances; or
(3) The depository would require an average or minimum balance so
high that it would not be feasible within the expected Federal and non-
Federal cash resources.
(l)(1) Interest earned on Federal advances deposited in interest
bearing accounts shall be remitted annually to Department of Health and
Human Services, Payment Management System, PO Box 6021, Rockville, MD
20852.
(2) In keeping with Electronic Funds Transfer rules (31 CFR part
206), interest should be remitted to the HHS Payment Management System
through an electronic medium such as the FEDWIR Deposit System.
Electronic remittances should be in the format and should include any
data that are specified by the grants officer as being necessary to
facilitate direct deposit in HHS' account at the Department of the
Treasury.
(3) Recipients that do not have electronic remittance capability
should use a check.
(4) Interest amounts up to $250 per year may be retained by the
recipient for administrative expense.
(m) Except as noted elsewhere in this part, only the following forms
shall be authorized for the recipients in requesting advances and
reimbursements. DoD Components shall not require more than an original
and two copies of these forms.
(1) SF-270, Request for Advance or Reimbursement. Each DoD Component
shall adopt the SF-270 as a standard form for all nonconstruction
programs when electronic funds transfer or predetermined advance methods
are not used. DoD Components, however, have the option of using this
form for construction programs in lieu of the SF-271,\4\ ``Outlay Report
and Request for Reimbursement for Construction Programs.''
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\4\ See footnote 2 to Sec. 32.12(a).
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(2) SF-271, Outlay Report and Request for Reimbursement for
Construction Programs. Each DoD Component shall adopt the SF-271 as the
standard form to be used for requesting reimbursement for construction
programs. However, a DoD Component may substitute the SF-270 when the
DoD Component determines that it provides adequate information to meet
Federal needs.
Sec. 32.23 Cost sharing or matching.
(a) All contributions, including cash and third party in-kind, shall
be accepted as part of the recipient's cost sharing or matching when
such contributions meet all of the following criteria:
(1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other federally-
assisted project or program.
(3) Are necessary and reasonable for proper and efficient
accomplishment of project or program objectives.
(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another award,
except
[[Page 96]]
where authorized by Federal statute to be used for cost sharing or
matching.
(6) Are provided for in the approved budget when required by the DoD
Component.
(7) Conform to other provisions of this part, as applicable.
(b) Unrecovered indirect costs (see definition in Sec. 32.2) may be
included as part of cost sharing or matching.
(c) Values for recipient contributions of services and property
shall be established in accordance with the applicable cost principles.
If a DoD Component authorizes recipients to donate buildings or land for
construction/facilities acquisition projects or long-term use, the value
of the donated property for cost sharing or matching shall be the lesser
of:
(1) The certified value of the remaining life of the property
recorded in the recipient's accounting records at the time of donation;
or
(2) The current fair market value. However, when there is sufficient
justification, the DoD Component may approve the use of the current fair
market value of the donated property, even if it exceeds the certified
value at the time of donation to the project. The DoD Component may
accept the use of any reasonable basis for determining the fair market
value of the property.
(d) Volunteer services furnished by professional and technical
personnel, consultants, and other skilled and unskilled labor may be
counted as cost sharing or matching if the service is an integral and
necessary part of an approved project or program. Rates for volunteer
services shall be consistent with those paid for similar work in the
recipient's organization. In those instances in which the required
skills are not found in the recipient organization, rates shall be
consistent with those paid for similar work in the labor market in which
the recipient competes for the kind of services involved. In either
case, paid fringe benefits that are reasonable, allowable, and allocable
may be included in the valuation.
(e) When an employer other than the recipient furnishes the services
of an employee, these services shall be valued at the employee's regular
rate of pay (plus an amount of fringe benefits that are reasonable,
allowable, and allocable, but exclusive of overhead costs), provided
these services are in the same skill for which the employee is normally
paid.
(f) Donated supplies may include such items as office supplies,
laboratory supplies or workshop and classroom supplies. Value assessed
to donated supplies included in the cost sharing or matching share shall
be reasonable and shall not exceed the fair market value of the property
at the time of the donation.
(g) The method used for determining cost sharing or matching for
donated equipment, buildings and land for which title passes to the
recipient may differ according to the purpose of the award, if the
purpose of the award is to:
(1) Assist the recipient in the acquisition of equipment, buildings
or land, the total value of the donated property may be claimed as cost
sharing or matching; or
(2) Support activities that require the use of equipment, buildings
or land, normally only depreciation or use charges for equipment and
buildings may be made. However, the full value of equipment or other
capital assets and fair rental charges for land may be allowed, provided
that the DoD Component has approved the charges.
(h) The value of donated property shall be determined in accordance
with the usual accounting policies of the recipient, with the following
qualifications.
(1) The value of donated land and buildings shall not exceed its
fair market value at the time of donation to the recipient as
established by an independent appraiser (e.g., certified real property
appraiser or General Services Administration representative) and
certified by a responsible official of the recipient.
(2) The value of donated equipment shall not exceed the fair market
value of equipment of the same age and condition at the time of
donation.
(3) The value of donated space shall not exceed the fair rental
value of comparable space as established by an independent appraisal of
comparable space and facilities in a privately-owned building in the
same locality.
[[Page 97]]
(4) The value of loaned equipment shall not exceed its fair rental
value.
(i) The following requirements pertain to the recipient's supporting
records for in-kind contributions from third parties:
(1) Volunteer services shall be documented and, to the extent
feasible, supported by the same methods used by the recipient for its
own employees.
(2) The basis for determining the valuation for personal service and
property shall be documented.
Sec. 32.24 Program income.
(a) DoD Components shall apply the standards set forth in this
section in requiring recipient organizations to account for program
income related to projects financed in whole or in part with Federal
funds.
(b) Except as provided in paragraph (h) of this section, program
income earned during the project period shall be retained by the
recipient and, in accordance with the terms and conditions of the award,
shall be used in one or more of the following ways:
(1) Added to funds committed to the project by the DoD Component and
recipient and used to further eligible project or program objectives.
(2) Used to finance the non-Federal share of the project or program.
(3) Deducted from the total project or program allowable cost in
determining the net allowable costs on which the Federal share of costs
is based.
(c) When a program regulation or award authorizes the disposition of
program income as described in paragraphs (b)(1) or (b)(2) of this
section, program income in excess of any limits stipulated shall be used
in accordance with paragraph (b)(3) of this section.
(d) In the event that program regulations or the terms and
conditions of the award do not specify how program income is to be used,
paragraph (b)(3) of this section shall apply automatically to all
projects or programs except research. For awards that support research,
paragraph (b)(1) of this section shall apply automatically unless the
terms and conditions specify another alternative or the recipient is
subject to special award conditions, as indicated in Sec. 32.14.
(e) Unless program regulations or the terms and conditions of the
award provide otherwise, recipients shall have no obligation to the
Federal Government regarding program income earned after the end of the
project period.
(f) If authorized by program regulations or the terms and conditions
of the award, costs incident to the generation of program income may be
deducted from gross income to determine program income, provided these
costs have not been charged to the award.
(g) Proceeds from the sale of property shall be handled in
accordance with the requirements of the Property Standards (see
Secs. 32.30 through 32.37).
(h) Unless program regulations or the terms and condition of the
award provide otherwise, recipients shall have no obligation to the
Federal Government with respect to program income earned from license
fees and royalties for copyrighted material, patents, patent
applications, trademarks, and inventions produced under an award. Note
that the Patent and Trademark Amendments (35 U.S.C. chapter 18) apply to
inventions made under an experimental, developmental, or research award.
Sec. 32.25 Revision of budget and program plans.
(a) The budget plan is the financial expression of the project or
program as approved during the award process. It may include either the
sum of the Federal and non-Federal shares, or only the Federal share,
depending upon DoD Component requirements. It shall be related to
performance for program evaluation purposes whenever appropriate.
(b) Recipients are required to report deviations from budget and
program plans, and request prior approvals for budget and program plan
revisions, in accordance with this section.
(c) For nonconstruction awards, recipients shall request prior
approvals from the cognizant grants officer for one or more of the
following program or budget related reasons.
(1) Change in the scope or the objective of the project or program
(even if there is no associated budget revision requiring prior written
approval).
[[Page 98]]
(2) Change in a key person specified in the application or award
document.
(3) The absence for more than three months, or a 25 percent
reduction in time devoted to the project, by the approved project
director or principal investigator.
(4) The need for additional Federal funding.
(5) The transfer of amounts budgeted for indirect costs to absorb
increases in direct costs, or vice versa, if approval is required by the
DoD Component. DoD Components should require this prior approval only in
exceptional circumstances. The requirement in each such case must be
stated in the award document.
(6) The inclusion, unless waived by the DoD Component, of costs that
require prior approval in accordance with OMB Circular A-21,\5\ ``Cost
Principles for Institutions of Higher Education,'' OMB Circular A-
122,\6\ ``Cost Principles for Non-Profit Organizations,'' or Appendix E
to 45 CFR part 74, ``Principles for Determining Costs Applicable to
Research and Development under Grants and Contracts with Hospitals,'' or
48 CFR part 31, ``Contract Cost Principles and Procedures,'' as
applicable. However, it should be noted that many of the prior approvals
in these cost principles are appropriately waived only after
consultation with the cognizant federal agency responsible for
negotiating the recipient's indirect costs.
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\5\ See footnote 1 to Sec. 32.1(a).
\6\ See footnote 1 to Sec. 32.1(a).
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(7) The transfer of funds allotted for training allowances (direct
payment to trainees) to other categories of expense.
(8) Unless described in the application and funded in the approved
awards, the subaward, transfer or contracting out of any work under an
award. This provision does not apply to the purchase of supplies,
material, equipment or general support services.
(9) If required by the DoD Component, the transfer of funds among
direct cost categories that is described in paragraph (e) of this
section.
(d) (1) Except for requirements listed in paragraphs (c)(1) and
(c)(4) of this section, OMB Circular A-110 authorizes DoD Components, at
their option, to waive cost-related and administrative prior written
approvals required by this part and OMB Circulars A-21 and A-122 (but
see cautionary note at end of paragraph (c)(5) of this section).
(2) The two prior approvals listed in paragraphs (d)(2)(i) and (ii)
of this section are automatically waived unless the award document
states otherwise. DoD Components should override this automatic waiver
and require the prior approvals, especially for research awards, only in
exceptional circumstances. Absent an override in the award terms and
conditions, recipients need not obtain prior approvals before:
(i) Incurring pre-award costs 90 calendar days prior to award
(incurring pre-award costs more than 90 calendar days prior to award
would still require the prior approval of the DoD Component). All pre-
award costs are incurred at the recipient's risk (i.e., the DoD
Component is under no obligation to reimburse such costs if for any
reason the recipient does not receive an award or if the award is less
than anticipated and inadequate to cover such costs).
(ii) Carrying forward unobligated balances to subsequent funding
periods.
(3) Under certain conditions, a DoD Component may authorize a
recipient to initiate, without prior approval, a one-time, no-cost
extension (i.e., an extension in the expiration date of an award that
does not require additional Federal funds) for a period of up to twelve
months, as long as the no-cost extension does not involve a change in
the approved objectives or scope of the project. The conditions for
waiving this prior approval requirement are that the DoD Component must:
(i) Judge that the recipient's subsequently initiating a one-time,
no-cost extension would not cause the DoD Component to fail to comply
with DoD funding policies (for further information on the location of
DoD funding policies, grants officers may refer to Appendix C to 32 CFR
part 22).
(ii) Require a recipient that wishes to initiate a one-time, no-cost
extension to so notify the office that made the award at least 10
calendar days before the original expiration date of the award.
[[Page 99]]
(e) The DoD Component may, at its option, restrict the transfer of
funds among direct cost categories, functions and activities for awards
in which the Federal share of the project exceeds $100,000 and the
cumulative amount of such transfers exceeds or is expected to exceed 10
percent of the total budget as last approved by the DoD Component. As a
matter of DoD policy, requiring prior approvals for such transfers
generally is not appropriate for grants to support research. No DoD
Component shall permit a transfer that would cause any Federal
appropriation or part thereof to be used for purposes other than those
consistent with the original intent of the appropriation.
(f) For construction awards, recipients shall request prior written
approval promptly from grants officers for budget revisions whenever:
(1) The revision results from changes in the scope or the objective
of the project or program;
(2) The need arises for additional Federal funds to complete the
project; or
(3) A revision is desired which involves specific costs for which
prior written approval requirements may be imposed consistent with
applicable OMB cost principles listed in Sec. 32.27.
(g) When a DoD Component makes an award that provides support for
both construction and nonconstruction work, the DoD Component may
require the recipient to request prior approval from the grants officer
before making any fund or budget transfers between the two types of work
supported.
(h) No other prior approval requirements for specific items may be
imposed unless a deviation has been approved, in accordance with the
deviation procedures in Sec. 32.4(c).
(i) For both construction and nonconstruction awards, DoD Components
shall require recipients to notify the grants officer in writing
promptly whenever the amount of Federal authorized funds is expected to
exceed the needs of the recipient for the project period by more than
$5000 or five percent of the Federal award, whichever is greater. This
notification shall not be required if an application for additional
funding is submitted for a continuation award.
(j) When requesting approval for budget revisions, recipients shall
use the budget forms that were used in the application unless the grants
officer indicates a letter of request suffices.
(k) Within 30 calendar days from the date of receipt of the request
for budget revisions, the grants officer shall review the request and
notify the recipient whether the budget revisions have been approved. If
the revision is still under consideration at the end of 30 calendar
days, the grants officer shall inform the recipient in writing of the
date when the recipient may expect the decision.
Sec. 32.26 Non-Federal audits.
(a) Recipients and subrecipients that are institutions of higher
education or other non-profit organizations (including hospitals) shall
be subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-
133,\7\ ``Audits of States, Local Governments, and Non-Profit
Organizations.''
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\7\ See footnote 1 to Sec. 32.1(a).
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(b) State and local governments that are subrecipients shall be
subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133,
``Audits of States, Local Governments, and Non-Profit Organizations.''
(c) Hospitals that are subrecipients and are not covered by the
audit provisions of revised OMB Circular A-133 shall be subject to the
audit requirements specified in award terms and conditions.
(d) For-profit organizations that are subrecipients shall be subject
to the audit requirements specified in 32 CFR 34.16.
Sec. 32.27 Allowable costs.
(a) General. For each kind of recipient or subrecipient of a cost-
type assistance award, or each contractor receiving a. cost-type
contract under an assistance award, there is a set of Federal principles
for determining allowable costs. Allowability of costs shall be
determined in accordance with the
[[Page 100]]
cost principles applicable to the entity incurring the costs.
(b) Governmental organizations. Allowability of costs incurred by
State, local or federally-recognized Indian tribal governments that may
be subrecipients or contractors under awards subject to this part is
determined in accordance with the provisions of OMB Circular A-87,\8\
``Cost Principles for State and Local Governments.''
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\8\ See footnote 1 to Sec. 32.1(a).
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(c) Non-profit organizations. The allowability of costs incurred by
non-profit organizations that may be recipients or subrecipients of
awards subject to this part, or contractors under such awards, is
determined in accordance with the provisions of OMB Circular A-122,
``Cost Principles for Non-Profit Organizations.''
(d) Higher educational institutions. The allowability of costs
incurred by institutions of higher education that may be recipients,
subrecipients, or contractors is determined in accordance with the
provisions of OMB Circular A-21, ``Cost Principles for Educational
Institutions.''
(e) Hospitals. The allowability of costs incurred by hospitals that
are recipients, subrecipients, or contractors is determined in
accordance with the provisions of Appendix E to 45 CFR part 74,
``Principles for Determining Costs Applicable to Research and
Development Under Grants and Contracts with Hospitals.''
(f) For-profit organizations. The allowability of costs incurred by
subrecipients or contractors that are either for-profit organizations or
non-profit organizations listed in Attachment C to Circular A-122 is
determined in accordance with the provisions of the Federal Acquisition
Regulation (FAR) at 48 CFR part 31; however, the grants officer or the
award terms and conditions may in rare cases authorize a determination
of allowable costs that are in accordance with uniform cost accounting
standards and comply with cost principles acceptable to the Department
of Defense.
Sec. 32.28 Period of availability of funds.
Where a funding period is specified, a recipient may charge to the
award only allowable costs resulting from obligations incurred during
the funding period and any pre-award costs (see Sec. 32.25(d)(2)(i))
authorized by the DoD Component.
Property Standards
Sec. 32.30 Purpose of property standards.
Sections 32.31 through 32.37 set forth uniform standards governing
management and disposition of property furnished by the Federal
Government and property whose cost was charged to a project supported by
a Federal award. DoD Components shall require recipients to observe
these standards under awards and shall not impose additional
requirements, unless specifically required by Federal statute. The
recipient may use its own property management standards and procedures
provided it observes the provisions of Secs. 32.31 through 32.37.
Sec. 32.31 Insurance coverage.
Recipients shall, 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. Federally-owned property
need not be insured unless required by the terms and conditions of the
award.
Sec. 32.32 Real property.
Each DoD Component that makes awards under which real property is
acquired in whole or in part with Federal funds shall prescribe
requirements for recipients concerning the use and disposition of such
property. Unless otherwise provided by statute, such requirements, at a
minimum, shall contain the following:
(a) Title to real property shall vest in the recipient subject to
the condition that the recipient shall use the real property for the
authorized purpose of the project as long as it is needed and shall not
encumber the property without approval of the DoD Component.
(b) The recipient shall obtain written approval by the grants
officer for the use of real property in other federally sponsored
projects when the recipient determines that the property is no longer
needed for the purpose of the original project. Use in other projects
[[Page 101]]
shall be limited to those under federally sponsored projects (i.e.,
awards) or programs that have purposes consistent with those authorized
for support by the DoD Component.
(c) When the real property is no longer needed as provided in
paragraphs (a) and (b) of this section, the recipient shall request
disposition instructions from the DoD Component or its successor Federal
agency. The responsible Federal agency shall observe one or more of the
following disposition instructions:
(1) The recipient may be permitted to retain title without further
obligation to the Federal Government after it compensates the Federal
Government for that percentage of the current fair market value of the
property attributable to the Federal participation in the project.
(2) The recipient may be directed to sell the property under
guidelines provided by the DoD Component and pay the Federal Government
for that percentage of the current fair market value of the property
attributable to the Federal participation in the project (after
deducting actual and reasonable selling and fix-up expenses, if any,
from the sales proceeds). When the recipient is authorized or required
to sell the property, proper sales procedures shall be established that
provide for competition to the extent practicable and result in the
highest possible return.
(3) The recipient may be directed to transfer title to the property
to the Federal Government or to an eligible third party provided that,
in such cases, the recipient shall be entitled to compensation for its
attributable percentage of the current fair market value of the
property.
Sec. 32.33 Federally-owned and exempt property.
(a) Federally-owned property. (1) Title to federally-owned property
remains vested in the Federal Government. Recipients shall submit
annually an inventory listing of federally-owned property in their
custody to the DoD Component that made the award. Upon completion of the
award or when the property is no longer needed, the recipient shall
report the property to the DoD Component for further Federal agency
utilization.
(2) If the DoD Component that made the award has no further need for
the property, it shall be declared excess and either:
(i) Reported to the General Services Administration, in accordance
with the Federal Property and Administrative Services Act of 1949 (40
U.S.C. 483(b)(2)), as implemented by General Services Administration
regulations at 41 CFR 101-47.202; or
(ii) Disposed of by alternative methods pursuant to other specific
statutory authority. For example, DoD Components are authorized by the
Federal Technology Transfer Act (15 U.S.C. 3710(i)), to donate research
equipment to educational and non-profit organizations for the conduct of
technical and scientific education and research activities--donations
under this Act shall be in accordance with the DoD implementation of
E.O. 12999 (3 CFR, 1996 Comp., p. 180), ``Educational Technology:
Ensuring Opportunity for All Children in the Next Century,'' as
applicable. Appropriate instructions shall be issued to the recipient by
the DoD Component.
(b) Exempt property. (1) When statutory authority exists, a DoD
Component may vest title to property acquired with Federal funds in the
recipient without further obligation to the Federal Government and under
conditions the DoD Component considers appropriate. For example, under
31 U.S.C. 6306, DoD Components may so vest title to tangible personal
property under a grant or cooperative agreement for basic or applied
research in a nonprofit institution of higher education or a nonprofit
organization whose primary purpose is conducting scientific research.
Such property is ``exempt property.''
(2) As a matter of policy, DoD Components shall make maximum use of
the authority of 31 U.S.C. 6306 to vest title to exempt property in
institutions of higher education, without further obligation to the
Government, to enhance the university infrastructure for future
performance of defense research and related, science and engineering
education.
[[Page 102]]
(3) DoD Components may establish conditions, in regulation or in
award terms and conditions, for vesting title to exempt property. Should
a DoD Component not establish conditions, title to exempt property upon
acquisition shall vest in the recipient without further obligation to
the Federal Government.
Sec. 32.34 Equipment.
(a) Title to equipment acquired by a recipient with Federal funds
shall vest in the recipient, subject to conditions of this section.
(b) The recipient shall not use equipment acquired with Federal
funds to provide services to non-Federal outside organizations for a fee
that is less than private companies charge for equivalent services,
unless specifically authorized by Federal statute, for as long as the
Federal Government retains an interest in the equipment.
(c) The recipient shall use the equipment in the project or program
for which it was acquired as long as needed, whether or not the project
or program continues to be supported by Federal funds and shall not
encumber the property without approval of the DoD Component that made
the award. When no longer needed for the original project or program,
the recipient shall use the equipment in connection with its other
federally-sponsored activities, in the following order of priority:
(1) First, activities sponsored by the DoD Component that funded the
original project.
(2) Second, activities sponsored by other DoD Components.
(3) Then, activities sponsored by other Federal agencies.
(d) During the time that equipment is used on the project or program
for which it was acquired, the recipient shall make it available for use
on other projects or programs if such other use will not interfere with
the work on the project or program for which the equipment was
originally acquired. First preference for such other use shall be given
to other projects or programs sponsored by the DoD Component that
financed the equipment; second preference shall be given to projects or
programs sponsored by other DoD Components; and third preference shall
be given to projects or programs sponsored by other Federal agencies. If
the property is owned by the Federal Government, use on other activities
not sponsored by the Federal Government shall be permissible if
authorized by the DoD Component that financed the property. User charges
shall be treated as program income.
(e) When acquiring replacement equipment, the recipient may use the
equipment to be replaced as trade-in or sell the equipment and use the
proceeds to offset the costs of the replacement equipment subject to the
approval of the DoD Component that financed the equipment.
(f) The recipient's property management standards for equipment
acquired with Federal funds and federally-owned property shall include
all of the following:
(1) Records for equipment and federally-owned property shall be
maintained accurately and shall include the following information:
(i) A description of the equipment or federally-owned property.
(ii) Manufacturer's serial number, model number, Federal stock
number, national stock number, or other identification number.
(iii) Source of the equipment or federally-owned property, including
the award number.
(iv) Whether title vests in the recipient or the Federal Government.
(v) Acquisition date (or date received, if the property was
furnished by the Federal Government) and cost.
(vi) Information from which one can calculate the percentage of
Federal participation in the cost of the equipment (not applicable to
property furnished by the Federal Government).
(vii) Location and condition of the equipment or federally-owned
property and the date the information was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data, including date of disposal and sales
price or the method used to determine current fair market value where a
recipient compensates the DoD Component that made the award for its
share.
(2) Property owned by the Federal Government shall be identified to
indicate Federal ownership.
[[Page 103]]
(3) A physical inventory of equipment and federally-owned property
shall be taken and the results reconciled with the equipment records at
least once every two years. Any differences between quantities
determined by the physical inspection and those shown in the accounting
records shall be investigated to determine the causes of the difference.
The recipient shall, in connection with the inventory, verify the
existence, current utilization, and continued need for the equipment or
federally-owned property.
(4) A control system shall be in effect to insure adequate
safeguards to prevent loss, damage, or theft of the equipment or
federally-owned property. Any loss, damage, or theft of equipment or
federally-owned property shall be investigated and fully documented; if
the property was owned by the Federal Government, the recipient shall
promptly notify the DoD Component.
(5) Adequate maintenance procedures shall be implemented to keep the
equipment or federally-owned property in good condition.
(6) Where the recipient is authorized or required to sell the
equipment, proper sales procedures shall be established which provide
for competition to the extent practicable and result in the highest
possible return.
(g) When the recipient no longer needs the equipment, the equipment
may be used for other activities in accordance with the following
standards.
(1) For equipment with a current per unit fair market value of
$5,000 or more, the recipient may retain the equipment for other uses
provided that compensation is made to the DoD Component that originally
made the award or its successor. The amount of compensation shall be
computed by applying the percentage of Federal participation in the cost
of the original project or program to the current fair market value of
the equipment.
(2) If the recipient has no need for the equipment, the recipient
shall request disposition instructions from the DoD Component. The DoD
Component shall issue instructions to the recipient no later than 120
calendar days after the recipient's request and the following procedures
shall govern:
(i) The grants officer, in consultation with the program manager,
shall judge whether the age and nature of the equipment warrant a
screening procedure to determine whether the equipment is useful to a
DoD Component or other Federal agency. If a screening procedure is
warranted:
(A) The DoD Component shall determine whether the equipment can be
used to meet DoD requirements.
(B) If no DoD requirement exists, the availability of the equipment
shall be reported to the General Services Administration by the DoD
Component to determine whether a requirement for the equipment exists in
other Federal agencies.
(ii) If so instructed or if disposition instructions are not issued
within 120 calendar days after the recipient's request, the recipient
shall sell the equipment and reimburse the DoD Component that made the
award an amount computed by applying to the sales proceeds the
percentage of Federal participation in the cost of the original project
or program. However, the recipient shall be permitted to deduct and
retain from the Federal share $500 or ten percent of the proceeds,
whichever is less, for the recipient's selling and handling expenses.
(iii) If the recipient is instructed to ship the equipment
elsewhere, the recipient shall be reimbursed by the Federal Government
by an amount which is computed by applying the percentage of the
recipient's participation in the cost of the original project or program
to the current fair market value of the equipment, plus any reasonable
shipping or interim storage costs incurred.
(iv) If the recipient is instructed to otherwise dispose of the
equipment, the recipient shall be reimbursed by the DoD Component that
made the award for such costs incurred in its disposition.
(h) The DoD Component may reserve the right to transfer the title to
the Federal Government or to a third party named by the Federal
Government when such third party is otherwise eligible under existing
statutes. Such transfer shall be subject to the following standards.
[[Page 104]]
(1) The equipment shall be appropriately identified in the award or
otherwise made known to the recipient in writing. For exempt property,
in accordance with Sec. 32.33(b)(3), note that this identification must
occur by the time of award, or title to the property vests in the
recipient without further obligation to the Government.
(2) The DoD Component shall issue disposition instructions within
120 calendar days after receipt of a final inventory. The final
inventory shall list all equipment acquired with award funds and
federally-owned property. If the DoD Component fails to issue
disposition instructions for equipment within the 120 calendar day
period, the recipient shall apply the standards of paragraph (g) of this
section.
(3) When the DoD Component exercises its right to take title, the
equipment shall be subject to the provisions for federally-owned
property.
Sec. 32.35 Supplies.
(a) Title to supplies shall vest in the recipient upon acquisition.
If there is a residual inventory of unused supplies exceeding $5,000 in
total aggregate value upon termination or completion of the project or
program and the supplies are not needed for any other federally-
sponsored project or program, the recipient shall retain the supplies
for use on non-Federal sponsored activities or sell them, but shall, in
either case, compensate the Federal Government for its share. The amount
of compensation shall be computed in the same manner as for equipment.
(b) The recipient shall not use supplies acquired with Federal funds
to provide services to non-Federal outside organizations for a fee that
is less than private companies charge for equivalent services, unless
specifically authorized by Federal statute as long as the Federal
Government retains an interest in the supplies.
Sec. 32.36 Intangible property.
(a) The recipient may copyright any work that is subject to
copyright and was developed, or for which ownership was purchased, under
an award. DoD Components reserve a royalty-free, nonexclusive and
irrevocable right to reproduce, publish, or otherwise use the work for
Federal purposes, and to authorize others to do so.
(b) Recipients are subject to applicable regulations governing
patents and inventions, including Governmentwide regulations issued by
the Department of Commerce at 37 CFR part 401, ``Rights to Inventions
Made by Nonprofit Organizations and Small Business Firms Under
Government Grants, Contracts and Cooperative Agreements.''
(c) The Federal Government has the right to:
(1) Obtain, reproduce, publish or otherwise use the data first
produced under an award; and
(2) Authorize others to receive, reproduce, publish, or otherwise
use such data for Federal purposes.
(d)(1) In addition, in response to a Freedom of Information Act
(FOIA) request for research data relating to published research findings
produced under an award that were used by the Federal Government in
developing an agency action that has the force and effect of law, the
DoD Component that made the award shall request, and the recipient shall
provide, within a reasonable time, the research data so that they can be
made available to the public through the procedures established under
the FOIA. If the DoD Component that made the award obtains the research
data solely in response to a FOIA request, the agency may charge the
requester a reasonable fee equaling the full incremental cost of
obtaining the research data. This fee should reflect costs incurred by
the agency, the recipient, and applicable subrecipients. This fee is in
addition to any fees the agency may assess under the FOIA (5 U.S.C.
552(a)(4)(A)).
(2) The following definitions apply for purposes of this paragraph
(d):
(i) Research data is defined as the recorded factual material
commonly accepted in the scientific community as necessary to validate
research findings, but not any of the following: preliminary analyses,
drafts of scientific papers, plans for future research, peer reviews, or
communications with colleagues. This ``recorded'' material excludes
physical objects (e.g., laboratory samples). Research data also do not
include:
[[Page 105]]
(A) Trade secrets, commercial information, materials necessary to be
held confidential by a researcher until they are published, or similar
information which is protected under law; and
(B) Personnel and medical information and similar information the
disclosure of which would constitute a clearly unwarranted invasion of
personal privacy, such as information that could be used to identify a
particular person in a research study.
(ii) Published is defined as either when:
(A) Research findings are published in a peer-reviewed scientific or
technical journal; or
(B) A Federal agency publicly and officially cites the research
findings in support of an agency action that has the force and effect of
law.
(iii) Used by the Federal Government in developing an agency action
that has the force and effect of law is defined as when an agency
publicly and officially cites the research findings in support of an
agency action that has the force and effect of law.
(e) Title to intangible property and debt instruments acquired under
an award or subaward (rather than developed or produced under the award
or subaward) vests upon acquisition in the recipient. The recipient
shall use that property for the originally-authorized purpose, and the
recipient shall not encumber the property without approval of the DoD
Component that made the award. When no longer needed for the originally
authorized purpose, disposition of the intangible property shall occur
in accordance with the provisions of Sec. 32.34(g).
[63 FR 12188, Mar. 12, 1998, as amended at 65 FR 14407, 14416, Mar. 16,
2000]
Sec. 32.37 Property trust relationship.
Real property, equipment, intangible property and debt instruments
that are acquired or improved with Federal funds shall be held in trust
by the recipient as trustee for the beneficiaries of the project or
program under which the property was acquired or improved. DoD
Components may require recipients to record liens or other appropriate
notices of record to indicate that personal or real property has been
acquired or improved with Federal funds and that use and disposition
conditions apply to the property.
Procurement Standards
Sec. 32.40 Purpose of procurement standards.
Sections 32.41 through 32.48 set forth standards for use by
recipients in establishing procedures for the procurement of supplies
and other expendable property, equipment, real property and other
services with Federal funds. These standards are furnished to ensure
that such materials and services are obtained in an effective manner and
in compliance with the provisions of applicable Federal statutes and
executive orders.
Sec. 32.41 Recipient responsibilities.
The standards contained in this section do not relieve the recipient
of the contractual responsibilities arising under its contract(s). The
recipient is the responsible authority, without recourse to the DoD
Component that made the award, regarding the settlement and satisfaction
of all contractual and administrative issues arising out of procurements
entered into in support of an award or other agreement. This includes
disputes, claims, protests of award, source evaluation or other matters
of a contractual nature. Matters concerning violation of statute are to
be referred to such Federal, State or local authority as may have proper
jurisdiction.
Sec. 32.42 Codes of conduct.
The recipient shall maintain written standards of conduct governing
the performance of its employees engaged in the award and administration
of contracts. No employee, officer, or agent shall participate in the
selection, award, or administration of a contract supported by Federal
funds if a real or apparent conflict of interest would be involved. Such
a conflict would arise when the employee, officer, or agent, any member
of his or her immediate family, his or her partner, or an organization
which employs or is about to employ any of the parties indicated herein,
has a financial or other interest in the firm selected for an award. The
officers, employees, and agents of the
[[Page 106]]
recipient shall neither solicit nor accept gratuities, favors, or
anything of monetary value from contractors, or parties to
subagreements. However, recipients may set standards for situations in
which the financial interest is not substantial or the gift is an
unsolicited item of nominal value. The standards of conduct shall
provide for disciplinary actions to be applied for violations of such
standards by officers, employees, or agents of the recipient.
Sec. 32.43 Competition.
All procurement transactions shall be conducted in a manner to
provide, to the maximum extent practical, open and free competition. The
recipient shall be alert to organizational conflicts of interest as well
as noncompetitive practices among contractors that may restrict or
eliminate competition or otherwise restrain trade. In order to ensure
objective contractor performance and eliminate unfair competitive
advantage, contractors that develop or draft specifications,
requirements, statements of work, invitations for bids and/or requests
for proposals shall be excluded from competing for such procurements.
Awards shall be made to the bidder or offeror whose bid or offer is
responsive to the solicitation and is most advantageous to the
recipient, price, quality and other factors considered. Solicitations
shall clearly set forth all requirements that the bidder or offeror
shall fulfill in order for the bid or offer to be evaluated by the
recipient. Any and all bids or offers may be rejected when it is in the
recipient's interest to do so.
Sec. 32.44 Procurement procedures.
(a) All recipients shall establish written procurement procedures.
These procedures shall provide, at a minimum, that:
(1) Recipients avoid purchasing unnecessary items;
(2) Where appropriate, an analysis is made of lease and purchase
alternatives to determine which would be the most economical and
practical procurement; and
(3) Solicitations for goods and services provide for all of the
following:
(i) A clear and accurate description of the technical requirements
for the material, product or service to be procured. In competitive
procurements, such a description shall not contain features which unduly
restrict competition.
(ii) Requirements which the bidder/offeror must fulfill and all
other factors to be used in evaluating bids or proposals.
(iii) A description, whenever practicable, of technical requirements
in terms of functions to be performed or performance required, including
the range of acceptable characteristics or minimum acceptable standards.
(iv) The specific features of ``brand name or equal'' descriptions
that bidders are required to meet when such items are included in the
solicitation.
(v) The acceptance, to the extent practicable and economically
feasible, of products and services dimensioned in the metric system of
measurement.
(vi) Preference, to the extent practicable and economically
feasible, for products and services that conserve natural resources and
protect the environment and are energy efficient.
(b) Positive efforts shall be made by recipients to utilize small
businesses, minority-owned firms, and women's business enterprises,
whenever possible. Recipients of Federal awards shall take all of the
following steps to further this goal:
(1) Ensure that small businesses, minority-owned firms, and women's
business enterprises are used to the fullest extent practicable.
(2) Make information on forthcoming opportunities available and
arrange time frames for purchases and contracts to encourage and
facilitate participation by small businesses, minority-owned firms, and
women's business enterprises.
(3) Consider in the contract process whether firms competing for
larger contracts intend to subcontract with small businesses, minority-
owned firms, and women's business enterprises.
(4) Encourage contracting with consortiums of small businesses,
minority-owned firms and women's business enterprises when a contract is
too large
[[Page 107]]
for one of these firms to handle individually.
(5) Use the services and assistance, as appropriate, of such
organizations as the Small Business Administration and the Department of
Commerce's Minority Business Development Agency in the solicitation and
utilization of small businesses, minority-owned firms and women's
business enterprises.
(c) The type of procuring instruments used (e.g., fixed price
contracts, cost reimbursable contracts, purchase orders, and incentive
contracts) shall be determined by the recipient but shall be appropriate
for the particular procurement and for promoting the best interest of
the program or project involved. The ``cost-plus-a-percentage-of-cost''
or ``percentage of construction cost'' methods of contracting shall not
be used.
(d) Contracts shall be made only with responsible contractors who
possess the potential ability to perform successfully under the terms
and conditions of the proposed procurement. Consideration shall be given
to such matters as contractor integrity, record of past performance,
financial and technical resources or accessibility to other necessary
resources. In certain circumstances, contracts with certain parties are
restricted by the DoD implementation, in 32 CFR part 25, of E.O.s 12549
(3 CFR, 1986 Comp., p. 189) and 12689 (3 CFR, 1989 Comp., p. 235),
``Debarment and Suspension.''
(e) Recipients shall, on request, make available for the DoD
Component's pre-award review, procurement documents such as request for
proposals or invitations for bids, independent cost estimates, etc.,
when any of the following conditions apply:
(1) A recipient's procurement procedures or operation fails to
comply with the procurement standards in this part.
(2) The procurement is expected to exceed the simplified acquisition
threshold fixed at 41 U.S.C. 403 (11) (currently $100,000) and is to be
awarded without competition or only one bid or offer is received in
response to a solicitation.
(3) The procurement, which is expected to exceed the simplified
acquisition threshold, specifies a ``brand name'' product.
(4) The proposed award over the simplified acquisition threshold is
to be awarded to other than the apparent low bidder under a sealed bid
procurement.
(5) A proposed contract modification changes the scope of a contract
or increases the contract amount by more than the amount of the
simplified acquisition threshold.
Sec. 32.45 Cost and price analysis.
Some form of cost or price analysis shall be made and documented in
the procurement files in connection with every procurement action. Price
analysis may be accomplished in various ways, including the comparison
of price quotations submitted, market prices and similar indicia,
together with discounts. Cost analysis is the review and evaluation of
each element of cost to determine reasonableness, allocability and
allowability.
Sec. 32.46 Procurement records.
Procurement records and files for purchases in excess of the
simplified acquisition threshold shall include the following at a
minimum:
(a) Basis for contractor selection;
(b) Justification for lack of competition when competitive bids or
offers are not obtained; and
(c) Basis for award cost or price.
Sec. 32.47 Contract administration.
A system for contract administration shall be maintained to ensure
contractor conformance with the terms, conditions and specifications of
the contract and to ensure adequate and timely follow up of all
purchases. Recipients shall evaluate contractor performance and
document, as appropriate, whether contractors have met the terms,
conditions and specifications of the contract.
Sec. 32.48 Contract provisions.
The recipient shall include, in addition to provisions to define a
sound and complete agreement, the following provisions in all contracts.
The following provisions shall also be applied to subcontracts:
[[Page 108]]
(a) Contracts in excess of the simplified acquisition threshold
shall contain contractual provisions or conditions that allow for
administrative, contractual, or legal remedies in instances in which a
contractor violates or breaches the contract terms, and provide for such
remedial actions as may be appropriate.
(b) All contracts in excess of the simplified acquisition threshold
shall contain suitable provisions for termination by the recipient,
including the manner by which termination shall be effected and the
basis for settlement. In addition, such contracts shall describe
conditions under which the contract may be terminated for default as
well as conditions where the contract may be terminated because of
circumstances beyond the control of the contractor.
(c) Except as otherwise required by statute, an award that requires
the contracting (or subcontracting) for construction or facility
improvements shall provide for the recipient to follow its own
requirements relating to bid guarantees, performance bonds, and payment
bonds unless the construction contract or subcontract exceeds $100,000.
For those contracts or subcontracts exceeding $100,000, the DoD
Component may accept the bonding policy and requirements of the
recipient, provided the grants officer has made a determination that the
Federal Government's interest is adequately protected. If such a
determination has not been made, the minimum requirements shall be as
follows:
(1) A bid guarantee from each bidder equivalent to five percent of
the bid price. The ``bid guarantee'' shall consist of a firm commitment
such as a bid bond, certified check, or other negotiable instrument
accompanying a bid as assurance that the bidder shall, upon acceptance
of his bid, execute such contractual documents as may be required within
the time specified.
(2) A performance bond on the part of the contractor for 100 percent
of the contract price. A ``performance bond'' is one executed in
connection with a contract to secure fulfillment of all the contractor's
obligations under such contract.
(3) A payment bond on the part of the contractor for 100 percent of
the contract price. A ``payment bond'' is one executed in connection
with a contract to assure payment as required by statute of all persons
supplying labor and material in the execution of the work provided for
in the contract.
(4) Where bonds are required in the situations described in
Secs. 32.40 through 32.49, the bonds shall be obtained from companies
holding certificates of authority as acceptable sureties pursuant to 31
CFR part 223, ``Surety Companies Doing Business with the United
States.''
(d) All negotiated contracts (except those for less than the
simplified acquisition threshold) awarded by recipients shall include a
provision to the effect that the recipient, the Department of Defense,
the Comptroller General of the United States, or any of their duly
authorized representatives, shall have access to any books, documents,
papers and records of the contractor which are directly pertinent to a
specific program for the purpose of making audits, examinations,
excerpts and transcriptions.
(e) All contracts, including those for amounts less than the
simplified acquisition threshold, by recipients and their contractors
shall contain the procurement provisions of Appendix A to this part, as
applicable.
Sec. 32.49 Resource Conservation and Recovery Act.
Under the Resource Conservation and Recovery Act (RCRA) (section
6002, Pub. L. 94-580, 42 U.S.C. 6962), any State agency or agency of a
political subdivision of a State which is using appropriated Federal
funds must comply with section 6002. Section 6002 requires that
preference be given in procurement programs to the purchase of specific
products containing recycled materials identified in guidelines
developed by the Environmental Protection Agency (EPA) (40 CFR parts
247-254). Accordingly, State and local institutions of higher education,
hospitals, and non-profit organizations that receive direct Federal
awards or other Federal funds shall give preference in their procurement
programs funded with Federal funds to the purchase of
[[Page 109]]
recycled products pursuant to the EPA guidelines.
Reports and Records
Sec. 32.50 Purpose of reports and records.
Sections 32.51 through 32.53 set forth the procedures for monitoring
and reporting on the recipient's financial and program performance and
the necessary standard reporting forms. They also set forth record
retention requirements.
Sec. 32.51 Monitoring and reporting program performance.
(a) Recipients are responsible for managing and monitoring each
project, program, subaward, function or activity supported by the award.
Recipients shall monitor subawards to ensure subrecipients have met the
audit requirements as delineated in Sec. 32.26.
(b) The award terms and conditions shall prescribe the frequency
with which the performance reports shall be submitted. Except as
provided in paragraph (f) of this section, performance reports shall not
be required more frequently than quarterly or less frequently than
annually. Annual reports shall be due 90 calendar days after the award
year; quarterly or semi-annual reports shall be due 30 calendar days
after the reporting period. DoD Components may require annual reports
before the anniversary dates of multiple year awards in lieu of these
requirements. The final performance reports are due 90 calendar days
after the expiration or termination of the award.
(c) If inappropriate, a final technical or performance report shall
not be required after completion of the project.
(d) When required, performance reports shall generally contain, for
each award, brief information on each of the following:
(1) A comparison of actual accomplishments with the goals and
objectives established for the period, the findings of the investigator,
or both. Whenever appropriate and the output of programs or projects can
be readily quantified, such quantitative data should be related to cost
data for computation of unit costs. However, unit costs are generally
inappropriate for research (see Sec. 32.21 (a) and (b)(4)).
(2) Reasons why established goals were not met, if appropriate.
(3) Other pertinent information including, when appropriate,
analysis and explanation of cost overruns or high unit costs.
(e) Recipients shall not be required to submit more than the
original and two copies of performance reports.
(f) Recipients shall immediately notify the grants officer of
developments that have a significant impact on the award-supported
activities. Also, notification shall be given in the case of problems,
delays, or adverse conditions which materially impair the ability to
meet the objectives of the award. This notification shall include a
statement of the action taken or contemplated, and any assistance needed
to resolve the situation.
(g) DoD Components' representatives may make site visits, as needed.
(h) DoD Components shall comply with applicable clearance
requirements of 5 CFR part 1320 when requesting performance data from
recipients.
Sec. 32.52 Financial reporting.
(a) The following forms or such other forms as may be approved by
OMB are authorized for obtaining financial information from recipients:
(1) SF-269 \9\ or SF-269A,\10\ Financial Status Report. (i) DoD
Components shall require recipients to use the SF-269 or SF-269A to
report the status of funds for all nonconstruction projects or programs.
A DoD Component may, however, have the option of not requiring the SF-
269 or SF-269A when the SF-270, Request for Advance or Reimbursement, or
SF-272,\11\ Report of Federal Cash Transactions, is determined to
provide adequate information to meet agency needs, except that a final
SF-269 or SF-269A shall be required at the completion of the project
when the SF-270 is used only for advances.
---------------------------------------------------------------------------
\9\ See footnote 2 to Sec. 32.12(a).
\10\ See footnote 2 to Sec. 32.12(a).
\11\ See footnote 2 to Sec. 32.12(a).
---------------------------------------------------------------------------
(ii) The DoD Component shall prescribe whether the report shall be
on a cash or accrual basis. If the award requires accrual information
and the recipient's accounting records are not normally kept on the
accrual basis, the
[[Page 110]]
recipient shall not be required to convert its accounting system, but
shall develop such accrual information through best estimates based on
an analysis of the documentation on hand.
(iii) The DoD Component shall determine the frequency of the
Financial Status Report for each project or program, considering the
size and complexity of the particular project or program. However, the
report shall not be required more frequently than quarterly or less
frequently than annually. A final report shall be required at the
completion of the award.
(iv) The DoD Component shall require recipients to submit the SF-269
or SF-269A (an original and no more than two copies) no later than 30
calendar days after the end of each specified reporting period for
quarterly and semi-annual reports, and 90 calendar days for annual and
final reports. Extensions of reporting due dates may be approved by the
grants officer upon request of the recipient.
(2) SF-272, Report of Federal Cash Transactions. (i) When funds are
advanced to recipients the DoD Component shall require each recipient to
submit the SF-272 and, when necessary, its continuation sheet, SF-
272a.\12\ The grants officer shall use this report to monitor cash
advanced to recipients and to obtain disbursement information for each
award to the recipients.
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\12\ See footnote 2 to Sec. 32.12(a).
---------------------------------------------------------------------------
(ii) DoD Components may require forecasts of Federal cash
requirements in the ``Remarks'' section of the report.
(iii) When practical and deemed necessary, DoD Components may
require recipients to report in the ``Remarks'' section the amount of
cash advances received in excess of three working days. Recipients shall
provide short narrative explanations of actions taken to reduce the
excess balances.
(iv) Recipients shall be required to submit not more than the
original and two copies of the SF-272 15 calendar days following the end
of each quarter. DoD Components may require a monthly report from those
recipients receiving advances totaling $1 million or more per year.
(v) DoD Components may waive the requirement for submission of the
SF-272 for any one of the following reasons:
(A) When monthly advances do not exceed $25,000 per recipient,
provided that such advances are monitored through other forms contained
in this section;
(B) If, in the grants officer's opinion, the recipient's accounting
controls are adequate to minimize excessive Federal advances; or
(C) When electronic payment mechanisms or SF-270 forms provide
adequate data.
(b) When the DoD Component needs additional information or more
frequent reports, the following shall be observed:
(1) When additional information is needed to comply with legislative
requirements, grants officers shall issue instructions to require
recipients to submit such information under the ``Remarks'' section of
the reports.
(2) When a grants officer, after consultation with the Federal
agency assigned cognizance for a recipient's audit and audit resolution,
determines that the recipient's accounting system does not meet the
standards in Sec. 32.21, additional pertinent information to further
monitor awards may be obtained upon written notice to the recipient
until such time as the system is brought up to standard. The grants
officer, in obtaining this information, shall comply with applicable
report clearance requirements of 5 CFR part 1320.
(3) Grants officers are encouraged to shade out any line item on any
report if not necessary.
(4) DoD Components are encouraged to accept the identical
information from the recipients in machine readable format or computer
printouts or electronic outputs in lieu of prescribed formats.
(5) DoD Components may provide computer or electronic outputs to
recipients when it expedites or contributes to the accuracy of
reporting.
Sec. 32.53 Retention and access requirements for records.
(a) This section sets forth requirements for record retention and
access
[[Page 111]]
to records for awards to recipients. DoD Components shall not impose any
other record retention or access requirements upon recipients.
(b) Financial records, supporting documents, statistical records,
and all other records pertinent to an award shall be retained for a
period of three years from the date of submission of the final
expenditure report. The only exceptions are the following:
(1) If any litigation, claim, or audit is started before the
expiration of the 3-year period, the records shall be retained until all
litigation, claims or audit findings involving the records have been
resolved and final action taken.
(2) Records for real property and equipment acquired with Federal
funds shall be retained for 3 years after final disposition.
(3) When records are transferred to or maintained by the DoD
Component that made the award, the 3-year retention requirement is not
applicable to the recipient.
(4) Indirect cost rate proposals, cost allocations plans, and
related records, for which retention requirements are specified in
paragraph (g) of this section.
(c) Copies of original records may be substituted for the original
records if authorized by the grants officer.
(d) The grants officer shall request that recipients transfer
certain records to DoD Component custody when he or she determines that
the records possess long term retention value. However, in order to
avoid duplicate recordkeeping, a grants officer may make arrangements
for recipients to retain any records that are continuously needed for
joint use.
(e) DoD Components, the Inspector General, Comptroller General of
the United States, or any of their duly authorized representatives, have
the right of timely and unrestricted access to any books, documents,
papers, or other records of recipients that are pertinent to the awards,
in order to make audits, examinations, excerpts, transcripts and copies
of such documents. This right also includes timely and reasonable access
to a recipient's personnel for the purpose of interview and discussion
related to such documents. The rights of access in this paragraph are
not limited to the required retention period, but shall last as long as
records are retained.
(f) Unless required by statute, no DoD Component shall place
restrictions on recipients that limit public access to the records of
recipients that are pertinent to an award, except when the DoD Component
can demonstrate that such records shall be kept confidential and would
have been exempted from disclosure pursuant to the Freedom of
Information Act (5 U.S.C. 552) if the records had belonged to the DoD
Component making the award.
(g) Indirect cost rate proposals, cost allocations plans, etc.
Paragraphs (g)(1) and (g)(2) of this section apply to the following
types of documents, and their supporting records: indirect cost rate
computations or proposals, cost allocation plans, and any similar
accounting computations of the rate at which a particular group of costs
is chargeable (such as computer usage chargeback rates or composite
fringe benefit rates).
(1) If submitted for negotiation. If the recipient submits an
indirect-cost proposal, plan, or other computation to the Federal agency
responsible for negotiating the recipient's indirect cost rate, as the
basis for negotiation of the rate, or the subrecipient submits such a
proposal, plan, or computation to the recipient, then the 3-year
retention period for its supporting records starts on the date of such
submission.
(2) If not submitted for negotiation. If the recipient is not
required to submit to the cognizant Federal agency or the subrecipient
is not required to submit to the recipient the proposal, plan, or other
computation for negotiation purposes, then the 3-year retention period
for the proposal, plan, or other computation and its supporting records
starts at the end of the fiscal year (or other accounting period)
covered by the proposal, plan, or other computation.
(h) If the information described in this section is maintained on a
computer, recipients shall retain the computer data on a reliable medium
for the time periods prescribed. Recipients may transfer computer data
in machine readable form from one reliable
[[Page 112]]
computer medium to another. Recipients' computer data retention and
transfer procedures shall maintain the integrity, reliability, and
security of the original computer data. Recipients shall also maintain
an audit trail describing the data transfer. For the record retention
time periods prescribed in this section, recipients shall not destroy,
discard, delete, or write over such computer data.
Termination and Enforcement
Sec. 32.60 Purpose of termination and enforcement.
Sections 32.61 and 32.62 set forth uniform suspension, termination
and enforcement procedures.
Sec. 32.61 Termination.
(a) Awards may be terminated in whole or in part only as follows:
(1) By the grants officer, if a recipient materially fails to comply
with the terms and conditions of an award;
(2) By the grants officer with the consent of the recipient, in
which case the two parties shall agree upon the termination conditions,
including the effective date and, in the case of partial termination,
the portion to be terminated; or
(3) By the recipient upon sending to the grants officer written
notification setting forth the reasons for such termination, the
effective date, and, in the case of partial termination, the portion to
be terminated. The recipient must provide such notice at least 30
calendar days prior to the effective date of the termination. However,
if the grants officer determines in the case of partial termination that
the reduced or modified portion of the award will not accomplish the
purposes for which the award was made, he or she may terminate the award
in its entirety.
(b) If costs are allowed under an award, the responsibilities of the
recipient referred to in Sec. 32.71, including those for property
management as applicable, shall be considered in the termination of the
award, and provision shall be made for continuing responsibilities of
the recipient after termination, as appropriate.
Sec. 32.62 Enforcement.
(a) Remedies for noncompliance. If a recipient materially fails to
comply with the terms and conditions of an award, whether stated in a
Federal statute, regulation, assurance, application, or notice of award,
the grants officer may, in addition to imposing any of the special
conditions outlined in Sec. 32.14, take one or more of the following
actions, as appropriate in the circumstances:
(1) Temporarily withhold cash payments pending correction of the
deficiency by the recipient or more severe enforcement action by the
grants officer and DoD Component.
(2) Disallow (that is, deny both use of funds and any applicable
matching credit for) all or part of the cost of the activity or action
not in compliance.
(3) Wholly or partly suspend or terminate the current award.
(4) Withhold further awards for the project or program.
(5) Take other remedies that may be legally available.
(b) Hearings and appeals. In taking an enforcement action, the DoD
Component shall provide the recipient an opportunity for hearing,
appeal, or other administrative proceeding to which the recipient is
entitled under any statute or regulation applicable to the action
involved. Award terms or conditions will incorporate the procedures of
32 CFR 22.815 for processing recipient claims and disputes and for
deciding appeals of grants officers' decisions.
(c) Effects of suspension and termination. Costs of a recipient
resulting from obligations incurred by the recipient during a suspension
or after termination of an award are not allowable unless the grants
officer expressly authorizes them in the notice of suspension or
termination or subsequently. Other recipient costs during suspension or
after termination which are necessary and not reasonably avoidable are
allowable if the costs:
(1) Result from obligations which were properly incurred by the
recipient before the effective date of suspension or termination, are
not in anticipation of it, and in the case of a termination, are
noncancellable; and
[[Page 113]]
(2) Would be allowable if the award were not suspended or expired
normally at the end of the funding period in which the termination takes
effect.
(d) Relationship to debarment and suspension. The enforcement
remedies identified in this section, including suspension and
termination, do not preclude a recipient from being subject to debarment
and suspension under 32 CFR part 25.
Subpart D--After-the-Award Requirements
Sec. 32.70 Purpose.
Sections 32.71 through 32.73 contain closeout procedures and other
procedures for subsequent disallowances and adjustments.
Sec. 32.71 Closeout procedures.
(a) Recipients shall submit, within 90 calendar days after the date
of completion of the award, all financial, performance, and other
reports required by the terms and conditions of the award. The grants
officer may approve extensions when requested by the recipient.
(b) Unless the grants officer authorizes an extension, a recipient
shall liquidate all obligations incurred under the award not later than
90 calendar days after the funding period or the date of completion as
specified in the terms and conditions of the award or in agency
implementing instructions.
(c) The responsible grants officer and payment office shall expedite
completion of steps needed to close out awards and make prompt, final
payments to a recipient for allowable reimbursable costs under the award
being closed out.
(d) The recipient shall promptly refund any balances of unobligated
cash that the DoD Component has advanced or paid and that is not
authorized to be retained by the recipient for use in other projects.
OMB Circular A-129\13\ governs unreturned amounts that become delinquent
debts (see 32 CFR 22.820).
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\13\ See footnote 1 to Sec. 32.1(a).
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(e) When authorized by the terms and conditions of the award, the
grants officer shall make a settlement for any upward or downward
adjustments to the Federal share of costs after closeout reports are
received.
(f) The recipient shall account for any real and personal property
acquired with Federal funds or received from the Federal Government in
accordance with Secs. 32.31 through 32.37.
(g) In the event a final audit has not been performed prior to the
closeout of an award, the DoD Component shall retain the right to
recover an appropriate amount after fully considering the
recommendations on disallowed costs resulting from the final audit.
Sec. 32.72 Subsequent adjustments and continuing responsibilities.
(a) The closeout of an award does not affect any of the following:
(1) The right of the Department of Defense to disallow costs and
recover funds on the basis of a later audit or other review.
(2) The obligation of the recipient to return any funds due as a
result of later refunds, corrections, or other transactions.
(3) Audit requirements in Sec. 32.26.
(4) Property management requirements in Secs. 32.31 through 32.37.
(5) Records retention as required in Sec. 32.53.
(b) After closeout of an award, a relationship created under an
award may be modified or ended in whole or in part with the consent of
the grants officer and the recipient, provided the responsibilities of
the recipient referred to in Sec. 32.73(a), including those for property
management as applicable, are considered and provisions made for
continuing responsibilities of the recipient, as appropriate.
Sec. 32.73 Collection of amounts due.
(a) Any funds paid to a recipient in excess of the amount to which
the recipient is finally determined to be entitled under the terms and
conditions of the award constitute a debt to the Federal Government.
(b) OMB Circular A-110 informs each Federal agency that:
(1) If a debt is not paid within a reasonable period after the
demand for payment, the Federal agency may reduce the debt by:
[[Page 114]]
(i) Making administrative offset against other requests for
reimbursement.
(ii) Withholding advance payments otherwise due to the recipient.
(iii) Taking other action permitted by statute.
(2) Except as otherwise provided by law, the Federal awarding agency
shall charge interest on an overdue debt in accordance with 4 CFR
Chapter II, ``Federal Claims Collection Standards.''
(c) DoD grants officers shall follow the procedures in 32 CFR 22.820
for issuing demands for payment and transferring debts to DoD payment
offices for collection. Recipients will be informed about pertinent
procedures and timeframes through the written notices of grants
officers' decisions and demands for payment.
Appendix A to Part 32--Contract Provisions
All contracts awarded by a recipient, including those for amounts
less than the simplified acquisition threshold, shall contain the
following provisions as applicable:
1. Equal Employment Opportunity--All contracts shall contain a
provision requiring compliance with E.O. 11246 (3 CFR, 1964-1965 Comp.,
p. 339), ``Equal Employment Opportunity,'' as amended by E.O. 11375 (3
CFR, 1966-1970 Comp., p. 684), ``Amending Executive Order 11246 Relating
to Equal Employment Opportunity,'' and as supplemented by regulations at
41 CFR ch. 60, ``Office of Federal Contract Compliance Programs, Equal
Employment Opportunity, Department of Labor.''
2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C.
276c)--All contracts and subawards in excess of $2000 for construction
or repair awarded by recipients and subrecipients shall include a
provision for compliance with the Copeland ``Anti-Kickback'' Act (18
U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR
part 3, ``Contractors and Subcontractors on Public Building or Public
Work Financed in Whole or in Part by Loans or Grants from the United
States''). The Act provides that each contractor or subrecipient shall
be prohibited from inducing, by any means, any person employed in the
construction, completion, or repair of public work, to give up any part
of the compensation to which he is otherwise entitled. The recipient
shall report all suspected or reported violations to the responsible DoD
Component.
3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--This Act
applies to procurements under awards only when the Federal program
legislation specifically makes it apply (i.e., Davis-Bacon does not by
itself apply to procurements under awards). In cases where another
statute does make the Davis-Bacon Act apply, all construction contracts
awarded by the recipients and subrecipients of more than $2,000 shall
include a provision for compliance with the Davis-Bacon Act (40 U.S.C.
276a to a-7) and as supplemented by Department of Labor regulations (29
CFR part 5, ``Labor Standards Provisions Applicable to Contracts
Governing Federally Financed and Assisted Construction''). Under this
Act, contractors shall be required to pay wages to laborers and
mechanics at a rate not less than the minimum wages specified in a wage
determination made by the Secretary of Labor. In addition, contractors
shall be required to pay wages not less than once a week. The recipient
shall place a copy of the current prevailing wage determination issued
by the Department of Labor in each solicitation and the award of a
contract shall be conditioned upon the acceptance of the wage
determination. The recipient shall report all suspected or reported
violations to the Federal awarding agency.
4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
333)--Where applicable, all contracts awarded by recipients in excess of
$100,000 for construction or other purposes that involve the employment
of mechanics or laborers shall include a provision for compliance with
sections 102 and 107 of the Contract Work Hours and Safety Standards Act
(40 U.S.C. 327-333), as supplemented by Department of Labor regulations
(29 CFR part 5). Under section 102 of the Act, each contractor shall be
required to compute the wages of every mechanic and laborer on the basis
of a standard work week of 40 hours. Work in excess of the standard work
week is permissible provided that the worker is compensated at a rate of
not less than 1\1/2\ times the basic rate of pay for all hours worked in
excess of 40 hours in the work week. Section 107 of the Act is
applicable to construction work and provides that no laborer or mechanic
shall be required to work in surroundings or under working conditions
which are unsanitary, hazardous or dangerous. These requirements do not
apply to the purchases of supplies or materials or articles ordinarily
available on the open market, or contracts for transportation or
transmission of intelligence.
5. Rights to Inventions Made Under a Contract, Grant or Cooperative
Agreement--Contracts, grants, or cooperative agreements for the
performance of experimental, developmental, or research work shall
provide for the rights of the Federal Government and the recipient in
any resulting invention in accordance with 37 CFR part 401, ``Rights to
Inventions Made by Nonprofit Organizations
[[Page 115]]
and Small Business Firms Under Government Grants, Contracts and
Cooperative Agreements.''
6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water
Pollution Control Act (33 U.S.C. 1251 et seq.), as amended--Contracts
and subawards of amounts in excess of $100,000 shall contain a provision
that requires the recipient to agree to comply with all applicable
standards, orders or regulations issued pursuant to the Clean Air Act
(42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as
amended (33 U.S.C. 1251 et seq.). Violations shall be reported to the
responsible DoD Component and the Regional Office of the Environmental
Protection Agency (EPA).
7. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--Contractors who
apply or bid for an award of $100,000 or more shall file the required
certification. Each tier certifies to the tier above that it will not
and has not used Federal appropriated funds to pay any person or
organization for influencing or attempting to influence an officer or
employee of any agency, a member of Congress, officer or employee of
Congress, or an employee of a member of Congress in connection with
obtaining any Federal contract, grant or any other award covered by 31
U.S.C. 1352. Each tier shall also disclose any lobbying with non-Federal
funds that takes place in connection with obtaining any Federal award.
Such disclosures are forwarded from tier to tier up to the recipient.
8. Debarment and Suspension (E.O.s 12549 and 12689)--Contract awards
that exceed the simplified acquisition threshold and certain other
contract awards shall not be made to parties listed on the General
Services Administration's Lists of Parties Excluded from Federal
Procurement and Nonprocurement Programs in accordance with E.O.s 12549
(3 CFR, 1986 Comp., p. 189) and 12689 (3 CFR, 1989 Comp., p. 235),
``Debarment and Suspension.'' This list contains the names of parties
debarred, suspended, or otherwise excluded by agencies, and contractors
declared ineligible under statutory or regulatory authority other than
E.O. 12549. Contractors with awards that exceed the simplified
acquisition threshold shall provide the required certification regarding
its exclusion status and that of its principals.
PART 33--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS--Table of Contents
Subpart A--General
Sec.
33.1 Purpose and scope of this part.
33.2 Scope of subpart.
33.3 Definitions.
33.4 Applicability.
33.5 Effect on other issuances.
33.6 Additions and exceptions.
Subpart B--Pre-Award Requirements
33.10 Forms for applying for grants.
33.11 State plans.
33.12 Special grant or subgrant conditions for ``high-risk'' grantees.
Subpart C--Post-Award Requirements
Financial Administration
33.20 Standards for financial management systems.
33.21 Payment.
33.22 Allowable costs.
33.23 Period of availability of funds.
33.24 Matching or cost sharing.
33.25 Program income.
33.26 Non-Federal audit.
Changes, Property, and Subawards
33.30 Changes.
33.31 Real property.
33.32 Equipment.
33.33 Supplies.
33.34 Copyrights.
33.35 Subawards to debarred and suspended parties.
33.36 Procurement.
33.37 Subgrants.
Reports, Records Retention, and Enforcement
33.40 Monitoring and reporting program performance.
33.41 Financial reporting.
33.42 Retention and access requirements for records.
33.43 Enforcement.
33.44 Termination for convenience.
Subpart D--After-the-Grant Requirements
33.50 Closeout.
33.51 Later disallowances and adjustments.
33.52 Collections of amounts due.
Subpart E--Entitlements [Reserved]
Authority: 5 U.S.C. 301; 10 U.S.C. 113.
Source: 53 FR 8070, 8087, Mar. 11, 1988. Redesignated at 57 FR 6200,
Feb. 21, 1992.
Subpart A--General
Sec. 33.1 Purpose and scope of this part.
This part establishes uniform administrative rules for Federal
grants and cooperative agreements and subawards
[[Page 116]]
to State, local and Indian tribal governments.
Sec. 33.2 Scope of subpart.
This subpart contains general rules pertaining to this part and
procedures for control of exceptions from this part.
Sec. 33.3 Definitions.
As used in this part:
Accrued expenditures mean the charges incurred by the grantee during
a given period requiring the provision of funds for:
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subgrantees,
subcontractors, and other payees; and
(3) Other amounts becoming owed under programs for which no current
services or performance is required, such as annuities, insurance
claims, and other benefit payments.
Accrued income means the sum of:
(1) Earnings during a given period from services performed by the
grantee and goods and other tangible property delivered to purchasers,
and
(2) Amounts becoming owed to the grantee for which no current
services or performance is required by the grantee.
Acquisition cost of an item of purchased equipment means the net
invoice unit price of the property including the cost of modifications,
attachments, accessories, or auxiliary apparatus necessary to make the
property usable for the purpose for which it was acquired. Other charges
such as the cost of installation, transportation, taxes, duty or
protective in-transit insurance, shall be included or excluded from the
unit acquisition cost in accordance with the grantee's regular
accounting practices.
Administrative requirements mean those matters common to grants in
general, such as financial management, kinds and frequency of reports,
and retention of records. These are distinguished from ``programmatic''
requirements, which concern matters that can be treated only on a
program-by-program or grant-by-grant basis, such as kinds of activities
that can be supported by grants under a particular program.
Awarding agency means:
(1) With respect to a grant, the Federal agency, and
(2) With respect to a subgrant, the party that awarded the subgrant.
Cash contributions means the grantee's cash outlay, including the
outlay of money contributed to the grantee or subgrantee by other public
agencies and institutions, and private organizations and individuals.
When authorized by Federal legislation, Federal funds received from
other assistance agreements may be considered as grantee or subgrantee
cash contributions.
Contract means (except as used in the definitions for ``grant'' and
``subgrant'' in this section and except where qualified by ``Federal'')
a procurement contract under a grant or subgrant, and means a
procurement subcontract under a contract.
Cost sharing or matching means the value of the third party in-kind
contributions and the portion of the costs of a federally assisted
project or program not borne by the Federal Government.
Cost-type contract means a contract or subcontract under a grant in
which the contractor or subcontractor is paid on the basis of the costs
it incurs, with or without a fee.
Equipment means tangible, nonexpendable, personal property having a
useful life of more than one year and an acquisition cost of $5,000 or
more per unit. A grantee may use its own definition of equipment
provided that such definition would at least include all equipment
defined above.
Expenditure report means:
(1) For nonconstruction grants, the SF-269 ``Financial Status
Report'' (or other equivalent report);
(2) For construction grants, the SF-271 ``Outlay Report and Request
for Reimbursement'' (or other equivalent report).
Federally recognized Indian tribal government means the governing
body or a governmental agency of any Indian tribe, band, nation, or
other organized group or community (including any Native village as
defined in section 3 of the Alaska Native Claims Settlement
[[Page 117]]
Act, 85 Stat. 688) certified by the Secretary of the Interior as
eligible for the special programs and services provided by him through
the Bureau of Indian Affairs.
Government means a State or local government or a federally
recognized Indian tribal government.
Grant means an award of financial assistance, including cooperative
agreements, in the form of money, or property in lieu of money, by the
Federal Government to an eligible grantee. The term does not include
technical assistance which provides services instead of money, or other
assistance in the form of revenue sharing, loans, loan guarantees,
interest subsidies, insurance, or direct appropriations. Also, the term
does not include assistance, such as a fellowship or other lump sum
award, which the grantee is not required to account for.
Grantee means the government to which a grant is awarded and which
is accountable for the use of the funds provided. The grantee is the
entire legal entity even if only a particular component of the entity is
designated in the grant award document.
Local government means a county, municipality, city, town, township,
local public authority (including any public and Indian housing agency
under the United States Housing Act of 1937) school district, special
district, intrastate district, council of governments (whether or not
incorporated as a nonprofit corporation under State law), any other
regional or interstate government entity, or any agency or
instrumentality of a local government.
Obligations means the amounts of orders placed, contracts and
subgrants awarded, goods and services received, and similar transactions
during a given period that will require payment by the grantee during
the same or a future period.
OMB means the United States Office of Management and Budget.
Outlays (expenditures) mean charges made to the project or program.
They may be reported on a cash or accrual basis. For reports prepared on
a cash basis, outlays are the sum of actual cash disbursement for direct
charges for goods and services, the amount of indirect expense incurred,
the value of in-kind contributions applied, and the amount of cash
advances and payments made to contractors and subgrantees. For reports
prepared on an accrued expenditure basis, outlays are the sum of actual
cash disbursements, the amount of indirect expense incurred, the value
of inkind contributions applied, and the new increase (or decrease) in
the amounts owed by the grantee for goods and other property received,
for services performed by employees, contractors, subgrantees,
subcontractors, and other payees, and other amounts becoming owed under
programs for which no current services or performance are required, such
as annuities, insurance claims, and other benefit payments.
Percentage of completion method refers to a system under which
payments are made for construction work according to the percentage of
completion of the work, rather than to the grantee's cost incurred.
Prior approval means documentation evidencing consent prior to
incurring specific cost.
Real property means land, including land improvements, structures
and appurtenances thereto, excluding movable machinery and equipment.
Share, when referring to the awarding agency's portion of real
property, equipment or supplies, means the same percentage as the
awarding agency's portion of the acquiring party's total costs under the
grant to which the acquisition costs under the grant to which the
acquisition cost of the property was charged. Only costs are to be
counted--not the value of third-party in-kind contributions.
State means any of the several States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, or any agency or instrumentality of a
State exclusive of local governments. The term does not include any
public and Indian housing agency under United States Housing Act of
1937.
Subgrant means an award of financial assistance in the form of
money, or property in lieu of money, made under a grant by a grantee to
an eligible subgrantee. The term includes financial
[[Page 118]]
assistance when provided by contractual legal agreement, but does not
include procurement purchases, nor does it include any form of
assistance which is excluded from the definition of ``grant'' in this
part.
Subgrantee means the government or other legal entity to which a
subgrant is awarded and which is accountable to the grantee for the use
of the funds provided.
Supplies means all tangible personal property other than
``equipment'' as defined in this part.
Suspension means depending on the context, either:
(1) Temporary withdrawal of the authority to obligate grant funds
pending corrective action by the grantee or subgrantee or a decision to
terminate the grant, or
(2) An action taken by a suspending official in accordance with
agency regulations implementing E.O. 12549 to immediately exclude a
person from participating in grant transactions for a period, pending
completion of an investigation and such legal or debarment proceedings
as may ensue.
Termination means permanent withdrawal of the authority to obligate
previously-awarded grant funds before that authority would otherwise
expire. It also means the voluntary relinquishment of that authority by
the grantee or subgrantee. ``Termination'' does not include:
(1) Withdrawal of funds awarded on the basis of the grantee's
underestimate of the unobligated balance in a prior period;
(2) Withdrawal of the unobligated balance as of the expiration of a
grant;
(3) Refusal to extend a grant or award additional funds, to make a
competing or noncompeting continuation, renewal, extension, or
supplemental award; or
(4) Voiding of a grant upon determination that the award was
obtained fraudulently, or was otherwise illegal or invalid from
inception.
Terms of a grant or subgrant mean all requirements of the grant or
subgrant, whether in statute, regulations, or the award document.
Third party in-kind contributions mean property or services which
benefit a federally assisted project or program and which are
contributed by non-Federal third parties without charge to the grantee,
or a cost-type contractor under the grant agreement.
Unliquidated obligations for reports prepared on a cash basis mean
the amount of obligations incurred by the grantee that has not been
paid. For reports prepared on an accrued expenditure basis, they
represent the amount of obligations incurred by the grantee for which an
outlay has not been recorded.
Unobligated balance means the portion of the funds authorized by the
Federal agency that has not been obligated by the grantee and is
determined by deducting the cumulative obligations from the cumulative
funds authorized.
Sec. 33.4 Applicability.
(a) General. Subparts A through D of this part apply to all grants
and subgrants to governments, except where inconsistent with Federal
statutes or with regulations authorized in accordance with the exception
provision of Sec. 33.6, or:
(1) Grants and subgrants to State and local institutions of higher
education or State and local hospitals.
(2) The block grants authorized by the Omnibus Budget Reconciliation
Act of 1981 (Community Services; Preventive Health and Health Services;
Alcohol, Drug Abuse, and Mental Health Services; Maternal and Child
Health Services; Social Services; Low-Income Home Energy Assistance;
States' Program of Community Development Block Grants for Small Cities;
and Elementary and Secondary Education other than programs administered
by the Secretary of Education under title V, subtitle D, chapter 2,
section 583--the Secretary's discretionary grant program) and titles I-
III of the Job Training Partnership Act of 1982 and under the Public
Health Services Act (section 1921), Alcohol and Drug Abuse Treatment and
Rehabilitation Block Grant and part C of title V, Mental Health Service
for the Homeless Block Grant).
(3) Entitlement grants to carry out the following programs of the
Social Security Act:
[[Page 119]]
(i) Aid to Needy Families with Dependent Children (title IV-A of the
Act, not including the Work Incentive Program (WIN) authorized by
section 402(a)19(G); HHS grants for WIN are subject to this part);
(ii) Child Support Enforcement and Establishment of Paternity (title
IV-D of the Act);
(iii) Foster Care and Adoption Assistance (title IV-E of the Act);
(iv) Aid to the Aged, Blind, and Disabled (titles I, X, XIV, and
XVI-AABD of the Act); and
(v) Medical Assistance (Medicaid) (title XIX of the Act) not
including the State Medicaid Fraud Control program authorized by section
1903(a)(6)(B).
(4) Entitlement grants under the following programs of The National
School Lunch Act:
(i) School Lunch (section 4 of the Act),
(ii) Commodity Assistance (section 6 of the Act),
(iii) Special Meal Assistance (section 11 of the Act),
(iv) Summer Food Service for Children (section 13 of the Act), and
(v) Child Care Food Program (section 17 of the Act).
(5) Entitlement grants under the following programs of The Child
Nutrition Act of 1966:
(i) Special Milk (section 3 of the Act), and
(ii) School Breakfast (section 4 of the Act).
(6) Entitlement grants for State Administrative expenses under The
Food Stamp Act of 1977 (section 16 of the Act).
(7) A grant for an experimental, pilot, or demonstration project
that is also supported by a grant listed in paragraph (a)(3) of this
section;
(8) Grant funds awarded under subsection 412(e) of the Immigration
and Nationality Act (8 U.S.C. 1522(e)) and subsection 501(a) of the
Refugee Education Assistance Act of 1980 (Pub. L. 96-422, 94 Stat.
1809), for cash assistance, medical assistance, and supplemental
security income benefits to refugees and entrants and the administrative
costs of providing the assistance and benefits;
(9) Grants to local education agencies under 20 U.S.C. 236 through
241-1(a), and 242 through 244 (portions of the Impact Aid program),
except for 20 U.S.C. 238(d)(2)(c) and 240(f) (Entitlement Increase for
Handicapped Children); and
(10) Payments under the Veterans Administration's State Home Per
Diem Program (38 U.S.C. 641(a)).
(b) Entitlement programs. Entitlement programs enumerated above in
Sec. 33.4(a) (3) through (8) are subject to subpart E.
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 33.5 Effect on other issuances.
All other grants administration provisions of codified program
regulations, program manuals, handbooks and other nonregulatory
materials which are inconsistent with this part are superseded, except
to the extent they are required by statute, or authorized in accordance
with the exception provision in Sec. 33.6.
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 33.6 Additions and exceptions.
(a) For classes of grants and grantees subject to this part, Federal
agencies may not impose additional administrative requirements except in
codified regulations published in the Federal Register.
(b) Exceptions for classes of grants or grantees may be authorized
only by OMB.
(c) Exceptions on a case-by-case basis and for subgrantees may be
authorized by the affected Federal agencies.
Subpart B--Pre-Award Requirements
Sec. 33.10 Forms for applying for grants.
(a) Scope. (1) This section prescribes forms and instructions to be
used by governmental organizations (except hospitals and institutions of
higher education operated by a government) in applying for grants. This
section is not applicable, however, to formula grant programs which do
not require applicants to apply for funds on a project basis.
(2) This section applies only to applications to Federal agencies
for grants,
[[Page 120]]
and is not required to be applied by grantees in dealing with applicants
for subgrants. However, grantees are encouraged to avoid more detailed
or burdensome application requirements for subgrants.
(b) Authorized forms and instructions for governmental
organizations. (1) In applying for grants, applicants shall only use
standard application forms or those prescribed by the granting agency
with the approval of OMB under the Paperwork Reduction Act of 1980.
(2) Applicants are not required to submit more than the original and
two copies of preapplications or applications.
(3) Applicants must follow all applicable instructions that bear OMB
clearance numbers. Federal agencies may specify and describe the
programs, functions, or activities that will be used to plan, budget,
and evaluate the work under a grant. Other supplementary instructions
may be issued only with the approval of OMB to the extent required under
the Paperwork Reduction Act of 1980. For any standard form, except the
SF-424 facesheet, Federal agencies may shade out or instruct the
applicant to disregard any line item that is not needed.
(4) When a grantee applies for additional funding (such as a
continuation or supplemental award) or amends a previously submitted
application, only the affected pages need be submitted. Previously
submitted pages with information that is still current need not be
resubmitted.
Sec. 33.11 State plans.
(a) Scope. The statutes for some programs require States to submit
plans before receiving grants. Under regulations implementing Executive
Order 12372, ``Intergovernmental Review of Federal Programs,'' States
are allowed to simplify, consolidate and substitute plans. This section
contains additional provisions for plans that are subject to regulations
implementing the Executive order.
(b) Requirements. A State need meet only Federal administrative or
programmatic requirements for a plan that are in statutes or codified
regulations.
(c) Assurances. In each plan the State will include an assurance
that the State shall comply with all applicable Federal statutes and
regulations in effect with respect to the periods for which it receives
grant funding. For this assurance and other assurances required in the
plan, the State may:
(1) Cite by number the statutory or regulatory provisions requiring
the assurances and affirm that it gives the assurances required by those
provisions,
(2) Repeat the assurance language in the statutes or regulations, or
(3) Develop its own language to the extent permitted by law.
(d) Amendments. A State will amend a plan whenever necessary to
reflect: (1) New or revised Federal statutes or regulations or (2) a
material change in any State law, organization, policy, or State agency
operation. The State will obtain approval for the amendment and its
effective date but need submit for approval only the amended portions of
the plan.
Sec. 33.12 Special grant or subgrant conditions for ``high-risk'' grantees.
(a) A grantee or subgrantee may be considered ``high risk'' if an
awarding agency determines that a grantee or subgrantee:
(1) Has a history of unsatisfactory performance, or
(2) Is not financially stable, or
(3) Has a management system which does not meet the management
standards set forth in this part, or
(4) Has not conformed to terms and conditions of previous awards, or
(5) Is otherwise not responsible; and if the awarding agency
determines that an award will be made, special conditions and/or
restrictions shall correspond to the high risk condition and shall be
included in the award.
(b) Special conditions or restrictions may include:
(1) Payment on a reimbursement basis;
(2) Withholding authority to proceed to the next phase until receipt
of evidence of acceptable performance within a given funding period;
(3) Requiring additional, more detailed financial reports;
(4) Additional project monitoring;
[[Page 121]]
(5) Requiring the grantee or subgrantee to obtain technical or
management assistance; or
(6) Establishing additional prior approvals.
(c) If an awarding agency decides to impose such conditions, the
awarding official will notify the grantee or subgrantee as early as
possible, in writing, of:
(1) The nature of the special conditions/restrictions;
(2) The reason(s) for imposing them;
(3) The corrective actions which must be taken before they will be
removed and the time allowed for completing the corrective actions and
(4) The method of requesting reconsideration of the conditions/
restrictions imposed.
Subpart C--Post-Award Requirements
Financial Administration
Sec. 33.20 Standards for financial management systems.
(a) A State must expand and account for grant funds in accordance
with State laws and procedures for expending and accounting for its own
funds. Fiscal control and accounting procedures of the State, as well as
its subgrantees and cost-type contractors, must be sufficient to--
(1) Permit preparation of reports required by this part and the
statutes authorizing the grant, and
(2) Permit the tracing of funds to a level of expenditures adequate
to establish that such funds have not been used in violation of the
restrictions and prohibitions of applicable statutes.
(b) The financial management systems of other grantees and
subgrantees must meet the following standards:
(1) Financial reporting. Accurate, current, and complete disclosure
of the financial results of financially assisted activities must be made
in accordance with the financial reporting requirements of the grant or
subgrant.
(2) Accounting records. Grantees and subgrantees must maintain
records which adequately identify the source and application of funds
provided for financially-assisted activities. These records must contain
information pertaining to grant or subgrant awards and authorizations,
obligations, unobligated balances, assets, liabilities, outlays or
expenditures, and income.
(3) Internal control. Effective control and accountability must be
maintained for all grant and subgrant cash, real and personal property,
and other assets. Grantees and subgrantees must adequately safeguard all
such property and must assure that it is used solely for authorized
purposes.
(4) Budget control. Actual expenditures or outlays must be compared
with budgeted amounts for each grant or subgrant. Financial information
must be related to performance or productivity data, including the
development of unit cost information whenever appropriate or
specifically required in the grant or subgrant agreement. If unit cost
data are required, estimates based on available documentation will be
accepted whenever possible.
(5) Allowable cost. Applicable OMB cost principles, agency program
regulations, and the terms of grant and subgrant agreements will be
followed in determining the reasonableness, allowability, and
allocability of costs.
(6) Source documentation. Accounting records must be supported by
such source documentation as cancelled checks, paid bills, payrolls,
time and attendance records, contract and subgrant award documents, etc.
(7) Cash management. Procedures for minimizing the time elapsing
between the transfer of funds from the U.S. Treasury and disbursement by
grantees and subgrantees must be followed whenever advance payment
procedures are used. Grantees must establish reasonable procedures to
ensure the receipt of reports on subgrantees' cash balances and cash
disbursements in sufficient time to enable them to prepare complete and
accurate cash transactions reports to the awarding agency. When advances
are made by letter-of-credit or electronic transfer of funds methods,
the grantee must make drawdowns as close as possible to the time of
making disbursements. Grantees must monitor cash drawdowns by their
subgrantees to assure that they conform substantially to the same
[[Page 122]]
standards of timing and amount as apply to advances to the grantees.
(c) An awarding agency may review the adequacy of the financial
management system of any applicant for financial assistance as part of a
preaward review or at any time subsequent to award.
Sec. 33.21 Payment.
(a) Scope. This section prescribes the basic standard and the
methods under which a Federal agency will make payments to grantees, and
grantees will make payments to subgrantees and contractors.
(b) Basic standard. Methods and procedures for payment shall
minimize the time elapsing between the transfer of funds and
disbursement by the grantee or subgrantee, in accordance with Treasury
regulations at 31 CFR part 205.
(c) Advances. Grantees and subgrantees shall be paid in advance,
provided they maintain or demonstrate the willingness and ability to
maintain procedures to minimize the time elapsing between the transfer
of the funds and their disbursement by the grantee or subgrantee.
(d) Reimbursement. Reimbursement shall be the preferred method when
the requirements in paragraph (c) of this section are not met. Grantees
and subgrantees may also be paid by reimbursement for any construction
grant. Except as otherwise specified in regulation, Federal agencies
shall not use the percentage of completion method to pay construction
grants. The grantee or subgrantee may use that method to pay its
construction contractor, and if it does, the awarding agency's payments
to the grantee or subgrantee will be based on the grantee's or
subgrantee's actual rate of disbursement.
(e) Working capital advances. If a grantee cannot meet the criteria
for advance payments described in paragraph (c) of this section, and the
Federal agency has determined that reimbursement is not feasible because
the grantee lacks sufficient working capital, the awarding agency may
provide cash or a working capital advance basis. Under this procedure
the awarding agency shall advance cash to the grantee to cover its
estimated disbursement needs for an initial period generally geared to
the grantee's disbursing cycle. Thereafter, the awarding agency shall
reimburse the grantee for its actual cash disbursements. The working
capital advance method of payment shall not be used by grantees or
subgrantees if the reason for using such method is the unwillingness or
inability of the grantee to provide timely advances to the subgrantee to
meet the subgrantee's actual cash disbursements.
(f) Effect of program income, refunds, and audit recoveries on
payment. (1) Grantees and subgrantees shall disburse repayments to and
interest earned on a revolving fund before requesting additional cash
payments for the same activity.
(2) Except as provided in paragraph (f)(1) of this section, grantees
and subgrantees shall disburse program income, rebates, refunds,
contract settlements, audit recoveries and interest earned on such funds
before requesting additional cash payments.
(g) Withholding payments. (1) Unless otherwise required by Federal
statute, awarding agencies shall not withhold payments for proper
charges incurred by grantees or subgrantees unless--
(i) The grantee or subgrantee has failed to comply with grant award
conditions or
(ii) The grantee or subgrantee is indebted to the United States.
(2) Cash withheld for failure to comply with grant award condition,
but without suspension of the grant, shall be released to the grantee
upon subsequent compliance. When a grant is suspended, payment
adjustments will be made in accordance with Sec. 33.43(c).
(3) A Federal agency shall not make payment to grantees for amounts
that are withheld by grantees or subgrantees from payment to contractors
to assure satisfactory completion of work. Payments shall be made by the
Federal agency when the grantees or subgrantees actually disburse the
withheld funds to the contractors or to escrow accounts established to
assure satisfactory completion of work.
(h) Cash depositories. (1) Consistent with the national goal of
expanding the opportunities for minority business enterprises, grantees
and subgrantees are
[[Page 123]]
encouraged to use minority banks (a bank which is owned at least 50
percent by minority group members). A list of minority owned banks can
be obtained from the Minority Business Development Agency, Department of
Commerce, Washington, DC 20230.
(2) A grantee or subgrantee shall maintain a separate bank account
only when required by Federal-State agreement.
(i) Interest earned on advances. Except for interest earned on
advances of funds exempt under the Intergovernmental Cooperation Act (31
U.S.C. 6501 et seq.) and the Indian Self-Determination Act (23 U.S.C.
450), grantees and subgrantees shall promptly, but at least quarterly,
remit interest earned on advances to the Federal agency. The grantee or
subgrantee may keep interest amounts up to $100 per year for
administrative expenses.
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 33.22 Allowable costs.
(a) Limitation on use of funds. Grant funds may be used only for:
(1) The allowable costs of the grantees, subgrantees and cost-type
contractors, including allowable costs in the form of payments to fixed-
price contractors; and
(2) Reasonable fees or profit to cost-type contractors but not any
fee or profit (or other increment above allowable costs) to the grantee
or subgrantee.
(b) Applicable cost principles. For each kind of organization, there
is a set of Federal principles for determining allowable costs.
Allowable costs will be determined in accordance with the cost
principles applicable to the organization incurring the costs. The
following chart lists the kinds of organizations and the applicable cost
principles.
------------------------------------------------------------------------
For the costs of a-- Use the principles in--
------------------------------------------------------------------------
State, local or Indian tribal government.. OMB Circular A-87.
Private nonprofit organization other than OMB Circular A-122.
an (1) institution of higher education,
(2) hospital, or (3) organization named
in OMB Circular A-122 as not subject to
that circular.
Educational institutions.................. OMB Circular A-21.
For-profit organization other than a 48 CFR part 31. Contract
hospital and an organization named in OBM Cost Principles and
Circular A-122 as not subject to that Procedures, or uniform cost
circular. accounting standards that
comply with cost principles
acceptable to the Federal
agency.
------------------------------------------------------------------------
Sec. 33.23 Period of availability of funds.
(a) General. Where a funding period is specified, a grantee may
charge to the award only costs resulting from obligations of the funding
period unless carryover of unobligated balances is permitted, in which
case the carryover balances may be charged for costs resulting from
obligations of the subsequent funding period.
(b) Liquidation of obligations. A grantee must liquidate all
obligations incurred under the award not later than 90 days after the
end of the funding period (or as specified in a program regulation) to
coincide with the submission of the annual Financial Status Report (SF-
269). The Federal agency may extend this deadline at the request of the
grantee.
Sec. 33.24 Matching or cost sharing.
(a) Basic rule: Costs and contributions acceptable. With the
qualifications and exceptions listed in paragraph (b) of this section, a
matching or cost sharing requirement may be satisfied by either or both
of the following:
(1) Allowable costs incurred by the grantee, subgrantee or a cost-
type contractor under the assistance agreement. This includes allowable
costs borne by non-Federal grants or by others cash donations from non-
Federal third parties.
(2) The value of third party in-kind contributions applicable to the
period to which the cost sharing or matching requirements applies.
(b) Qualifications and exceptions--(1) Costs borne by other Federal
grant agreements. Except as provided by Federal statute, a cost sharing
or matching requirement may not be met by costs borne by another Federal
grant. This prohibition does not apply to income earned by a grantee or
subgrantee from a contract awarded under another Federal grant.
[[Page 124]]
(2) General revenue sharing. For the purpose of this section,
general revenue sharing funds distributed under 31 U.S.C. 6702 are not
considered Federal grant funds.
(3) Cost or contributions counted towards other Federal costs-
sharing requirements. Neither costs nor the values of third party in-
kind contributions may count towards satisfying a cost sharing or
matching requirement of a grant agreement if they have been or will be
counted towards satisfying a cost sharing or matching requirement of
another Federal grant agreement, a Federal procurement contract, or any
other award of Federal funds.
(4) Costs financed by program income. Costs financed by program
income, as defined in Sec. 33.25, shall not count towards satisfying a
cost sharing or matching requirement unless they are expressly permitted
in the terms of the assistance agreement. (This use of general program
income is described in Sec. 33.25(g).)
(5) Services or property financed by income earned by contractors.
Contractors under a grant may earn income from the activities carried
out under the contract in addition to the amounts earned from the party
awarding the contract. No costs of services or property supported by
this income may count toward satisfying a cost sharing or matching
requirement unless other provisions of the grant agreement expressly
permit this kind of income to be used to meet the requirement.
(6) Records. Costs and third party in-kind contributions counting
towards satisfying a cost sharing or matching requirement must be
verifiable from the records of grantees and subgrantee or cost-type
contractors. These records must show how the value placed on third party
in-kind contributions was derived. To the extent feasible, volunteer
services will be supported by the same methods that the organization
uses to support the allocability of regular personnel costs.
(7) Special standards for third party in-kind contributions. (i)
Third party in-kind contributions count towards satisfying a cost
sharing or matching requirement only where, if the party receiving the
contributions were to pay for them, the payments would be allowable
costs.
(ii) Some third party in-kind contributions are goods and services
that, if the grantee, subgrantee, or contractor receiving the
contribution had to pay for them, the payments would have been an
indirect costs. Costs sharing or matching credit for such contributions
shall be given only if the grantee, subgrantee, or contractor has
established, along with its regular indirect cost rate, a special rate
for allocating to individual projects or programs the value of the
contributions.
(iii) A third party in-kind contribution to a fixed-price contract
may count towards satisfying a cost sharing or matching requirement only
if it results in:
(A) An increase in the services or property provided under the
contract (without additional cost to the grantee or subgrantee) or
(B) A cost savings to the grantee or subgrantee.
(iv) The values placed on third party in-kind contributions for cost
sharing or matching purposes will conform to the rules in the succeeding
sections of this part. If a third party in-kind contribution is a type
not treated in those sections, the value placed upon it shall be fair
and reasonable.
(c) Valuation of donated services--(1) Volunteer services. Unpaid
services provided to a grantee or subgrantee by individuals will be
valued at rates consistent with those ordinarily paid for similar work
in the grantee's or subgrantee's organization. If the grantee or
subgrantee does not have employees performing similar work, the rates
will be consistent with those ordinarily paid by other employers for
similar work in the same labor market. In either case, a reasonable
amount for fringe benefits may be included in the valuation.
(2) Employees of other organizations. When an employer other than a
grantee, subgrantee, or cost-type contractor furnishes free of charge
the services of an employee in the employee's normal line of work, the
services will be valued at the employee's regular rate of pay exclusive
of the employee's fringe benefits and overhead costs. If the services
[[Page 125]]
are in a different line of work, paragraph (c)(1) of this section
applies.
(d) Valuation of third party donated supplies and loaned equipment
or space. (1) If a third party donates supplies, the contribution will
be valued at the market value of the supplies at the time of donation.
(2) If a third party donates the use of equipment or space in a
building but retains title, the contribution will be valued at the fair
rental rate of the equipment or space.
(e) Valuation of third party donated equipment, buildings, and land.
If a third party donates equipment, buildings, or land, and title passes
to a grantee or subgrantee, the treatment of the donated property will
depend upon the purpose of the grant or subgrant, as follows:
(1) Awards for capital expenditures. If the purpose of the grant or
subgrant is to assist the grantee or subgrantee in the acquisition of
property, the market value of that property at the time of donation may
be counted as cost sharing or matching,
(2) Other awards. If assisting in the acquisition of property is not
the purpose of the grant or subgrant, paragraphs (e)(2) (i) and (ii) of
this section apply:
(i) If approval is obtained from the awarding agency, the market
value at the time of donation of the donated equipment or buildings and
the fair rental rate of the donated land may be counted as cost sharing
or matching. In the case of a subgrant, the terms of the grant agreement
may require that the approval be obtained from the Federal agency as
well as the grantee. In all cases, the approval may be given only if a
purchase of the equipment or rental of the land would be approved as an
allowable direct cost. If any part of the donated property was acquired
with Federal funds, only the non-Federal share of the property may be
counted as cost-sharing or matching.
(ii) If approval is not obtained under paragraph (e)(2)(i) of this
section, no amount may be counted for donated land, and only
depreciation or use allowances may be counted for donated equipment and
buildings. The depreciation or use allowances for this property are not
treated as third party in-kind contributions. Instead, they are treated
as costs incurred by the grantee or subgrantee. They are computed and
allocated (usually as indirect costs) in accordance with the cost
principles specified in Sec. 33.22, in the same way as depreciation or
use allowances for purchased equipment and buildings. The amount of
depreciation or use allowances for donated equipment and buildings is
based on the property's market value at the time it was donated.
(f) Valuation of grantee or subgrantee donated real property for
construction/acquisition. If a grantee or subgrantee donates real
property for a construction or facilities acquisition project, the
current market value of that property may be counted as cost sharing or
matching. If any part of the donated property was acquired with Federal
funds, only the non-Federal share of the property may be counted as cost
sharing or matching.
(g) Appraisal of real property. In some cases under paragraphs (d),
(e) and (f) of this section, it will be necessary to establish the
market value of land or a building or the fair rental rate of land or of
space in a building. In these cases, the Federal agency may require the
market value or fair rental value be set by an independent appraiser,
and that the value or rate be certified by the grantee. This requirement
will also be imposed by the grantee on subgrantees.
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 33.25 Program income.
(a) General. Grantees are encouraged to earn income to defray
program costs. Program income includes income from fees for services
performed, from the use or rental of real or personal property acquired
with grant funds, from the sale of commodities or items fabricated under
a grant agreement, and from payments of principal and interest on loans
made with grant funds. Except as otherwise provided in regulations of
the Federal agency, program income does not include interest on grant
funds, rebates, credits, discounts, refunds, etc. and interest earned on
any of them.
[[Page 126]]
(b) Definition of program income. Program income means gross income
received by the grantee or subgrantee directly generated by a grant
supported activity, or earned only as a result of the grant agreement
during the grant period. ``During the grant period'' is the time between
the effective date of the award and the ending date of the award
reflected in the final financial report.
(c) Cost of generating program income. If authorized by Federal
regulations or the grant agreement, costs incident to the generation of
program income may be deducted from gross income to determine program
income.
(d) Governmental revenues. Taxes, special assessments, levies,
fines, and other such revenues raised by a grantee or subgrantee are not
program income unless the revenues are specifically identified in the
grant agreement or Federal agency regulations as program income.
(e) Royalties. Income from royalties and license fees for
copyrighted material, patents, and inventions developed by a grantee or
subgrantee is program income only if the revenues are specifically
identified in the grant agreement or Federal agency regulations as
program income. (See Sec. 33.34.)
(f) Property. Proceeds from the sale of real property or equipment
will be handled in accordance with the requirements of Secs. 33.31 and
33.32.
(g) Use of program income. Program income shall be deducted from
outlays which may be both Federal and non-Federal as described below,
unless the Federal agency regulations or the grant agreement specify
another alternative (or a combination of the alternatives). In
specifying alternatives, the Federal agency may distinguish between
income earned by the grantee and income earned by subgrantees and
between the sources, kinds, or amounts of income. When Federal agencies
authorize the alternatives in paragraphs (g) (2) and (3) of this
section, program income in excess of any limits stipulated shall also be
deducted from outlays.
(1) Deduction. Ordinarily program income shall be deducted from
total allowable costs to determine the net allowable costs. Program
income shall be used for current costs unless the Federal agency
authorizes otherwise. Program income which the grantee did not
anticipate at the time of the award shall be used to reduce the Federal
agency and grantee contributions rather than to increase the funds
committed to the project.
(2) Addition. When authorized, program income may be added to the
funds committed to the grant agreement by the Federal agency and the
grantee. The program income shall be used for the purposes and under the
conditions of the grant agreement.
(3) Cost sharing or matching. When authorized, program income may be
used to meet the cost sharing or matching requirement of the grant
agreement. The amount of the Federal grant award remains the same.
(h) Income after the award period. There are no Federal requirements
governing the disposition of program income earned after the end of the
award period (i.e., until the ending date of the final financial report,
see paragraph (a) of this section), unless the terms of the agreement or
the Federal agency regulations provide otherwise.
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 33.26 Non-Federal audit.
(a) Basic rule. Grantees and subgrantees are responsible for
obtaining audits in accordance with the Single Audit Act Amendments of
1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of
States, Local Governments, and Non-Profit Organizations.'' The audits
shall be made by an independent auditor in accordance with generally
accepted government auditing standards covering financial audits.
(b) Subgrantees. State or local governments, as those terms are
defined for purposes of the Single Audit Act Amendments of 1996, that
provide Federal awards to a subgrantee, which expends $300,000 or more
(or other amount as specified by OMB) in Federal awards in a fiscal
year, shall:
(1) Determine whether State or local subgrantees have met the audit
requirements of the Act and whether subgrantees covered by OMB Circular
A-
[[Page 127]]
110, ``Uniform Administrative Requirements for Grants and Agreements
with Institutions of Higher Education, Hospitals, and Other Non-Profit
Organizations,'' have met the audit requirements of the Act. Commercial
contractors (private for-profit and private and governmental
organizations) providing goods and services to State and local
governments are not required to have a single audit performed. State and
local governments should use their own procedures to ensure that the
contractor has complied with laws and regulations affecting the
expenditure of Federal funds;
(2) Determine whether the subgrantee spent Federal assistance funds
provided in accordance with applicable laws and regulations. This may be
accomplished by reviewing an audit of the subgrantee made in accordance
with the Act, Circular A-110, or through other means (e.g., program
reviews) if the subgrantee has not had such an audit;
(3) Ensure that appropriate corrective action is taken within six
months after receipt of the audit report in instance of noncompliance
with Federal laws and regulations;
(4) Consider whether subgrantee audits necessitate adjustment of the
grantee's own records; and
(5) Require each subgrantee to permit independent auditors to have
access to the records and financial statements.
(c) Auditor selection. In arranging for audit services, Sec. 33.36
shall be followed.
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992; 62 FR 45939, 45943, Aug. 29, 1997]
Changes, Property, and Subawards
Sec. 33.30 Changes.
(a) General. Grantees and subgrantees are permitted to rebudget
within the approved direct cost budget to meet unanticipated
requirements and may make limited program changes to the approved
project. However, unless waived by the awarding agency, certain types of
post-award changes in budgets and projects shall require the prior
written approval of the awarding agency.
(b) Relation to cost principles. The applicable cost principles (see
Sec. 33.22) contain requirements for prior approval of certain types of
costs. Except where waived, those requirements apply to all grants and
subgrants even if paragraphs (c) through (f) of this section do not.
(c) Budget changes--(1) Nonconstruction projects. Except as stated
in other regulations or an award document, grantees or subgrantees shall
obtain the prior approval of the awarding agency whenever any of the
following changes is anticipated under a nonconstruction award:
(i) Any revision which would result in the need for additional
funding.
(ii) Unless waived by the awarding agency, cumulative transfers
among direct cost categories, or, if applicable, among separately
budgeted programs, projects, functions, or activities which exceed or
are expected to exceed ten percent of the current total approved budget,
whenever the awarding agency's share exceeds $100,000.
(iii) Transfer of funds allotted for training allowances (i.e., from
direct payments to trainees to other expense categories).
(2) Construction projects. Grantees and subgrantees shall obtain
prior written approval for any budget revision which would result in the
need for additional funds.
(3) Combined construction and nonconstruction projects. When a grant
or subgrant provides funding for both construction and nonconstruction
activities, the grantee or subgrantee must obtain prior written approval
from the awarding agency before making any fund or budget transfer from
nonconstruction to construction or vice versa.
(d) Programmatic changes. Grantees or subgrantees must obtain the
prior approval of the awarding agency whenever any of the following
actions is anticipated:
(1) Any revision of the scope or objectives of the project
(regardless of whether there is an associated budget revision requiring
prior approval).
(2) Need to extend the period of availability of funds.
(3) Changes in key persons in cases where specified in an
application or a grant award. In research projects, a
[[Page 128]]
change in the project director or principal investigator shall always
require approval unless waived by the awarding agency.
(4) Under nonconstruction projects, contracting out, subgranting (if
authorized by law) or otherwise obtaining the services of a third party
to perform activities which are central to the purposes of the award.
This approval requirement is in addition to the approval requirements of
Sec. 33.36 but does not apply to the procurement of equipment, supplies,
and general support services.
(e) Additional prior approval requirements. The awarding agency may
not require prior approval for any budget revision which is not
described in paragraph (c) of this section.
(f) Requesting prior approval. (1) A request for prior approval of
any budget revision will be in the same budget formal the grantee used
in its application and shall be accompanied by a narrative justification
for the proposed revision.
(2) A request for a prior approval under the applicable Federal cost
principles (see Sec. 33.22) may be made by letter.
(3) A request by a subgrantee for prior approval will be addressed
in writing to the grantee. The grantee will promptly review such request
and shall approve or disapprove the request in writing. A grantee will
not approve any budget or project revision which is inconsistent with
the purpose or terms and conditions of the Federal grant to the grantee.
If the revision, requested by the subgrantee would result in a change to
the grantee's approved project which requires Federal prior approval,
the grantee will obtain the Federal agency's approval before approving
the subgrantee's request.
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6200, Feb. 21, 1992]
Sec. 33.31 Real property.
(a) Title. Subject to the obligations and conditions set forth in
this section, title to real property acquired under a grant or subgrant
will vest upon acquisition in the grantee or subgrantee respectively.
(b) Use. Except as otherwise provided by Federal statutes, real
property will be used for the originally authorized purposes as long as
needed for that purposes, and the grantee or subgrantee shall not
dispose of or encumber its title or other interests.
(c) Disposition. When real property is no longer needed for the
originally authorized purpose, the grantee or subgrantee will request
disposition instructions from the awarding agency. The instructions will
provide for one of the following alternatives:
(1) Retention of title. Retain title after compensating the awarding
agency. The amount paid to the awarding agency will be computed by
applying the awarding agency's percentage of participation in the cost
of the original purchase to the fair market value of the property.
However, in those situations where a grantee or subgrantee is disposing
of real property acquired with grant funds and acquiring replacement
real property under the same program, the net proceeds from the
disposition may be used as an offset to the cost of the replacement
property.
(2) Sale of property. Sell the property and compensate the awarding
agency. The amount due to the awarding agency will be calculated by
applying the awarding agency's percentage of participation in the cost
of the original purchase to the proceeds of the sale after deduction of
any actual and reasonable selling and fixing-up expenses. If the grant
is still active, the net proceeds from sale may be offset against the
original cost of the property. When a grantee or subgrantee is directed
to sell property, sales procedures shall be followed that provide for
competition to the extent practicable and result in the highest possible
return.
(3) Transfer of title. Transfer title to the awarding agency or to a
third-party designated/approved by the awarding agency. The grantee or
subgrantee shall be paid an amount calculated by applying the grantee or
subgrantee's percentage of participation in the purchase of the real
property to the current fair market value of the property.
[[Page 129]]
Sec. 33.32 Equipment.
(a) Title. Subject to the obligations and conditions set forth in
this section, title to equipment acquired under a grant or subgrant will
vest upon acquisition in the grantee or subgrantee respectively.
(b) States. A State will use, manage, and dispose of equipment
acquired under a grant by the State in accordance with State laws and
procedures. Other grantees and subgrantees will follow paragraphs (c)
through (e) of this section.
(c) Use. (1) Equipment shall be used by the grantee or subgrantee in
the program or project for which it was acquired as long as needed,
whether or not the project or program continues to be supported by
Federal funds. When no longer needed for the original program or
project, the equipment may be used in other activities currently or
previously supported by a Federal agency.
(2) The grantee or subgrantee shall also make equipment available
for use on other projects or programs currently or previously supported
by the Federal Government, providing such use will not interfere with
the work on the projects or program for which it was originally
acquired. First preference for other use shall be given to other
programs or projects supported by the awarding agency. User fees should
be considered if appropriate.
(3) Notwithstanding the encouragement in Sec. 33.25(a) to earn
program income, the grantee or subgrantee must not use equipment
acquired with grant funds to provide services for a fee to compete
unfairly with private companies that provide equivalent services, unless
specifically permitted or contemplated by Federal statute.
(4) When acquiring replacement equipment, the grantee or subgrantee
may use the equipment to be replaced as a trade-in or sell the property
and use the proceeds to offset the cost of the replacement property,
subject to the approval of the awarding agency.
(d) Management requirements. Procedures for managing equipment
(including replacement equipment), whether acquired in whole or in part
with grant funds, until disposition takes place will, as a minimum, meet
the following requirements:
(1) Property records must be maintained that include a description
of the property, a serial number or other identification number, the
source of property, who holds title, the acquisition date, and cost of
the property, percentage of Federal participation in the cost of the
property, the location, use and condition of the property, and any
ultimate disposition data including the date of disposal and sale price
of the property.
(2) A physical inventory of the property must be taken and the
results reconciled with the property records at least once every two
years.
(3) A control system must be developed to ensure adequate safeguards
to prevent loss, damage, or theft of the property. Any loss, damage, or
theft shall be investigated.
(4) Adequate maintenance procedures must be developed to keep the
property in good condition.
(5) If the grantee or subgrantee is authorized or required to sell
the property, proper sales procedures must be established to ensure the
highest possible return.
(e) Disposition. When original or replacement equipment acquired
under a grant or subgrant is no longer needed for the original project
or program or for other activities currently or previously supported by
a Federal agency, disposition of the equipment will be made as follows:
(1) Items of equipment with a current per-unit fair market value of
less than $5,000 may be retained, sold or otherwise disposed of with no
further obligation to the awarding agency.
(2) Items of equipment with a current per unit fair market value in
excess of $5,000 may be retained or sold and the awarding agency shall
have a right to an amount calculated by multiplying the current market
value or proceeds from sale by the awarding agency's share of the
equipment.
(3) In cases where a grantee or subgrantee fails to take appropriate
disposition actions, the awarding agency may direct the grantee or
subgrantee to take excess and disposition actions.
[[Page 130]]
(f) Federal equipment. In the event a grantee or subgrantee is
provided federally-owned equipment:
(1) Title will remain vested in the Federal Government.
(2) Grantees or subgrantees will manage the equipment in accordance
with Federal agency rules and procedures, and submit an annual inventory
listing.
(3) When the equipment is no longer needed, the grantee or
subgrantee will request disposition instructions from the Federal
agency.
(g) Right to transfer title. The Federal awarding agency may reserve
the right to transfer title to the Federal Government or a third part
named by the awarding agency when such a third party is otherwise
eligible under existing statutes. Such transfers shall be subject to the
following standards:
(1) The property shall be identified in the grant or otherwise made
known to the grantee in writing.
(2) The Federal awarding agency shall issue disposition instruction
within 120 calendar days after the end of the Federal support of the
project for which it was acquired. If the Federal awarding agency fails
to issue disposition instructions within the 120 calendar-day period the
grantee shall follow Sec. 33.32(e).
(3) When title to equipment is transferred, the grantee shall be
paid an amount calculated by applying the percentage of participation in
the purchase to the current fair market value of the property.
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6201, Feb. 21, 1992]
Sec. 33.33 Supplies.
(a) Title. Title to supplies acquired under a grant or subgrant will
vest, upon acquisition, in the grantee or subgrantee respectively.
(b) Disposition. If there is a residual inventory of unused supplies
exceeding $5,000 in total aggregate fair market value upon termination
or completion of the award, and if the supplies are not needed for any
other federally sponsored programs or projects, the grantee or
subgrantee shall compensate the awarding agency for its share.
Sec. 33.34 Copyrights.
The Federal awarding agency reserves a royalty-free, nonexclusive,
and irrevocable license to reproduce, publish or otherwise use, and to
authorize others to use, for Federal Government purposes:
(a) The copyright in any work developed under a grant, subgrant, or
contract under a grant or subgrant; and
(b) Any rights of copyright to which a grantee, subgrantee or a
contractor purchases ownership with grant support.
Sec. 33.35 Subawards to debarred and suspended parties.
Grantees and subgrantees must not make any award or permit any award
(subgrant or contract) at any tier to any party which is debarred or
suspended or is otherwise excluded from or ineligible for participation
in Federal assistance programs under Executive Order 12549, ``Debarment
and Suspension.''
Sec. 33.36 Procurement.
(a) States. When procuring property and services under a grant, a
State will follow the same policies and procedures it uses for
procurements from its non-Federal funds. The State will ensure that
every purchase order or other contract includes any clauses required by
Federal statutes and executive orders and their implementing
regulations. Other grantees and subgrantees will follow paragraphs (b)
through (i) in this section.
(b) Procurement standards. (1) Grantees and subgrantees will use
their own procurement procedures which reflect applicable State and
local laws and regulations, provided that the procurements conform to
applicable Federal law and the standards identified in this section.
(2) Grantees and subgrantees will maintain a contract administration
system which ensures that contractors perform in accordance with the
terms, conditions, and specifications of their contracts or purchase
orders.
(3) Grantees and subgrantees will maintain a written code of
standards of conduct governing the performance of their employees
engaged in the award and administration of contracts. No
[[Page 131]]
employee, officer or agent of the grantee or subgrantee shall
participate in selection, or in the award or administration of a
contract supported by Federal funds if a conflict of interest, real or
apparent, would be involved. Such a conflict would arise when:
(i) The employee, officer or agent,
(ii) Any member of his immediate family,
(iii) His or her partner, or
(iv) An organization which employs, or is about to employ, any of
the above, has a financial or other interest in the firm selected for
award. The grantee's or subgrantee's officers, employees or agents will
neither solicit nor accept gratuities, favors or anything of monetary
value from contractors, potential contractors, or parties to
subagreements. Grantee and subgrantees may set minimum rules where the
financial interest is not substantial or the gift is an unsolicited item
of nominal intrinsic value. To the extent permitted by State or local
law or regulations, such standards or conduct will provide for
penalties, sanctions, or other disciplinary actions for violations of
such standards by the grantee's and subgrantee's officers, employees, or
agents, or by contractors or their agents. The awarding agency may in
regulation provide additional prohibitions relative to real, apparent,
or potential conflicts of interest.
(4) Grantee and subgrantee procedures will provide for a review of
proposed procurements to avoid purchase of unnecessary or duplicative
items. Consideration should be given to consolidating or breaking out
procurements to obtain a more economical purchase. Where appropriate, an
analysis will be made of lease versus purchase alternatives, and any
other appropriate analysis to determine the most economical approach.
(5) To foster greater economy and efficiency, grantees and
subgrantees are encouraged to enter into State and local
intergovernmental agreements for procurement or use of common goods and
services.
(6) Grantees and subgrantees are encouraged to use Federal excess
and surplus property in lieu of purchasing new equipment and property
whenever such use is feasible and reduces project costs.
(7) Grantees and subgrantees are encouraged to use value engineering
clauses in contracts for construction projects of sufficient size to
offer reasonable opportunities for cost reductions. Value engineering is
a systematic and creative anaylsis of each contract item or task to
ensure that its essential function is provided at the overall lower
cost.
(8) Grantees and subgrantees will make awards only to responsible
contractors possessing the ability to perform successfully under the
terms and conditions of a proposed procurement. Consideration will be
given to such matters as contractor integrity, compliance with public
policy, record of past performance, and financial and technical
resources.
(9) Grantees and subgrantees will maintain records sufficient to
detail the significant history of a procurement. These records will
include, but are not necessarily limited to the following: rationale for
the method of procurement, selection of contract type, contractor
selection or rejection, and the basis for the contract price.
(10) Grantees and subgrantees will use time and material type
contracts only--
(i) After a determination that no other contract is suitable, and
(ii) If the contract includes a ceiling price that the contractor
exceeds at its own risk.
(11) Grantees and subgrantees alone will be responsible, in
accordance with good administrative practice and sound business
judgment, for the settlement of all contractual and administrative
issues arising out of procurements. These issues include, but are not
limited to source evaluation, protests, disputes, and claims. These
standards do not relieve the grantee or subgrantee of any contractual
responsibilities under its contracts. Federal agencies will not
substitute their judgment for that of the grantee or subgrantee unless
the matter is primarily a Federal concern. Violations of law will be
referred to the local, State, or Federal authority having proper
jurisdiction.
(12) Grantees and subgrantees will have protest procedures to handle
and
[[Page 132]]
resolve disputes relating to their procurements and shall in all
instances disclose information regarding the protest to the awarding
agency. A protestor must exhaust all administrative remedies with the
grantee and subgrantee before pursuing a protest with the Federal
agency. Reviews of protests by the Federal agency will be limited to:
(i) Violations of Federal law or regulations and the standards of
this section (violations of State or local law will be under the
jurisdiction of State or local authorities) and
(ii) Violations of the grantee's or subgrantee's protest procedures
for failure to review a complaint or protest. Protests received by the
Federal agency other than those specified above will be referred to the
grantee or subgrantee.
(c) Competition. (1) All procurement transactions will be conducted
in a manner providing full and open competition consistent with the
standards of Sec. 33.36. Some of the situations considered to be
restrictive of competition include but are not limited to:
(i) Placing unreasonable requirements on firms in order for them to
qualify to do business,
(ii) Requiring unnecessary experience and excessive bonding,
(iii) Noncompetitive pricing practices between firms or between
affiliated companies,
(iv) Noncompetitive awards to consultants that are on retainer
contracts,
(v) Organizational conflicts of interest,
(vi) Specifying only a ``brand name'' product instead of allowing
``an equal'' product to be offered and describing the performance of
other relevant requirements of the procurement, and
(vii) Any arbitrary action in the procurement process.
(2) Grantees and subgrantees will conduct procurements in a manner
that prohibits the use of statutorily or administratively imposed in-
State or local geographical preferences in the evaluation of bids or
proposals, except in those cases where applicable Federal statutes
expressly mandate or encourage geographic preference. Nothing in this
section preempts State licensing laws. When contracting for
architectural and engineering (A/E) services, geographic location may be
a selection criteria provided its application leaves an appropriate
number of qualified firms, given the nature and size of the project, to
compete for the contract.
(3) Grantees will have written selection procedures for procurement
transactions. These procedures will ensure that all solicitations:
(i) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such
description shall not, in competitive procurements, contain features
which unduly restrict competition. The description may include a
statement of the qualitative nature of the material, product or service
to be procured, and when necessary, shall set forth those minimum
essential characteristics and standards to which it must conform if it
is to satisfy its intended use. Detailed product specifications should
be avoided if at all possible. When it is impractical or uneconomical to
make a clear and accurate description of the technical requirements, a
``brand name or equal'' description may be used as a means to define the
performance or other salient requirements of a procurement. The specific
features of the named brand which must be met by offerors shall be
clearly stated; and
(ii) Identify all requirements which the offerors must fulfill and
all other factors to be used in evaluating bids or proposals.
(4) Grantees and subgrantees will ensure that all prequalified lists
of persons, firms, or products which are used in acquiring goods and
services are current and include enough qualified sources to ensure
maximum open and free competition. Also, grantees and subgrantees will
not preclude potential bidders from qualifying during the solicitation
period.
(d) Methods of procurement to be followed--(1) Procurement by small
purchase procedures. Small purchase procedures are those relatively
simple and informal procurement methods for securing services, supplies,
or other property that do not cost more than the simplified acquisition
threshold fixed at 41 U.S.C. 403(11) (currently set at $100,000). If
small purchase procedures are used,
[[Page 133]]
price or rate quotations shall be obtained from an adequate number of
qualified sources.
(2) Procurement by sealed bids (formal advertising). Bids are
publicly solicited and a firm-fixed-price contract (lump sum or unit
price) is awarded to the responsible bidder whose bid, conforming with
all the material terms and conditions of the invitation for bids, is the
lowest in price. The sealed bid method is the preferred method for
procuring construction, if the conditions in Sec. 33.36(d)(2)(i) apply.
(i) In order for sealed bidding to be feasible, the following
conditions should be present:
(A) A complete, adequate, and realistic specification or purchase
description is available;
(B) Two or more responsible bidders are willing and able to compete
effectively and for the business; and
(C) The procurement lends itself to a firm fixed price contract and
the selection of the successful bidder can be made principally on the
basis of price.
(ii) If sealed bids are used, the following requirements apply:
(A) The invitation for bids will be publicly advertised and bids
shall be solicited from an adequate number of known suppliers, providing
them sufficient time prior to the date set for opening the bids;
(B) The invitation for bids, which will include any specifications
and pertinent attachments, shall define the items or services in order
for the bidder to properly respond;
(C) All bids will be publicly opened at the time and place
prescribed in the invitation for bids;
(D) A firm fixed-price contract award will be made in writing to the
lowest responsive and responsible bidder. Where specified in bidding
documents, factors such as discounts, transportation cost, and life
cycle costs shall be considered in determining which bid is lowest.
Payment discounts will only be used to determine the low bid when prior
experience indicates that such discounts are usually taken advantage of;
and
(E) Any or all bids may be rejected if there is a sound documented
reason.
(3) Procurement by competitive proposals. The technique of
competitive proposals is normally conducted with more than one source
submitting an offer, and either a fixed-price or cost-reimbursement type
contract is awarded. It is generally used when conditions are not
appropriate for the use of sealed bids. If this method is used, the
following requirements apply:
(i) Requests for proposals will be publicized and identify all
evaluation factors and their relative importance. Any response to
publicized requests for proposals shall be honored to the maximum extent
practical;
(ii) Proposals will be solicited from an adequate number of
qualified sources;
(iii) Grantees and subgrantees will have a method for conducting
technical evaluations of the proposals received and for selecting
awardees;
(iv) Awards will be made to the responsible firm whose proposal is
most advantageous to the program, with price and other factors
considered; and
(v) Grantees and subgrantees may use competitive proposal procedures
for qualifications-based procurement of architectural/engineering (A/E)
professional services whereby competitors' qualifications are evaluated
and the most qualified competitor is selected, subject to negotiation of
fair and reasonable compensation. The method, where price is not used as
a selection factor, can only be used in procurement of A/E professional
services. It cannot be used to purchase other types of services though
A/E firms are a potential source to perform the proposed effort.
(4) Procurement by noncompetitive proposals is procurement through
solicitation of a proposal from only one source, or after solicitation
of a number of sources, competition is determined inadequate.
(i) Procurement by noncompetitive proposals may be used only when
the award of a contract is infeasible under small purchase procedures,
sealed bids or competitive proposals and one of the following
circumstances applies:
(A) The item is available only from a single source;
(B) The public exigency or emergency for the requirement will not
permit a delay resulting from competitive solicitation;
[[Page 134]]
(C) The awarding agency authorizes noncompetitive proposals; or
(D) After solicitation of a number of sources, competition is
determined inadequate.
(ii) Cost analysis, i.e., verifying the proposed cost data, the
projections of the data, and the evaluation of the specific elements of
costs and profits, is required.
(iii) Grantees and subgrantees may be required to submit the
proposed procurement to the awarding agency for pre-award review in
accordance with paragraph (g) of this section.
(e) Contracting with small and minority firms, women's business
enterprise and labor surplus area firms. (1) The grantee and subgrantee
will take all necessary affirmative steps to assure that minority firms,
women's business enterprises, and labor surplus area firms are used when
possible.
(2) Affirmative steps shall include:
(i) Placing qualified small and minority businesses and women's
business enterprises on solicitation lists;
(ii) Assuring that small and minority businesses, and women's
business enterprises are solicited whenever they are potential sources;
(iii) Dividing total requirements, when economically feasible, into
smaller tasks or quantities to permit maximum participation by small and
minority business, and women's business enterprises;
(iv) Establishing delivery schedules, where the requirement permits,
which encourage participation by small and minority business, and
women's business enterprises;
(v) Using the services and assistance of the Small Business
Administration, and the Minority Business Development Agency of the
Department of Commerce; and
(vi) Requiring the prime contractor, if subcontracts are to be let,
to take the affirmative steps listed in paragraphs (e)(2) (i) through
(v) of this section.
(f) Contract cost and price. (1) Grantees and subgrantees must
perform a cost or price analysis in connection with every procurement
action including contract modifications. The method and degree of
analysis is dependent on the facts surrounding the particular
procurement situation, but as a starting point, grantees must make
independent estimates before receiving bids or proposals. A cost
analysis must be performed when the offeror is required to submit the
elements of his estimated cost, e.g., under professional, consulting,
and architectural engineering services contracts. A cost analysis will
be necessary when adequate price competition is lacking, and for sole
source procurements, including contract modifications or change orders,
unless price resonableness can be established on the basis of a catalog
or market price of a commercial product sold in substantial quantities
to the general public or based on prices set by law or regulation. A
price analysis will be used in all other instances to determine the
reasonableness of the proposed contract price.
(2) Grantees and subgrantees will negotiate profit as a separate
element of the price for each contract in which there is no price
competition and in all cases where cost analysis is performed. To
establish a fair and reasonable profit, consideration will be given to
the complexity of the work to be performed, the risk borne by the
contractor, the contractor's investment, the amount of subcontracting,
the quality of its record of past performance, and industry profit rates
in the surrounding geographical area for similar work.
(3) Costs or prices based on estimated costs for contracts under
grants will be allowable only to the extent that costs incurred or cost
estimates included in negotiated prices are consistent with Federal cost
principles (see Sec. 33.22). Grantees may reference their own cost
principles that comply with the applicable Federal cost principles.
(4) The cost plus a percentage of cost and percentage of
construction cost methods of contracting shall not be used.
(g) Awarding agency review. (1) Grantees and subgrantees must make
available, upon request of the awarding agency, technical specifications
on proposed procurements where the awarding agency believes such review
is needed to ensure that the item and/or
[[Page 135]]
service specified is the one being proposed for purchase. This review
generally will take place prior to the time the specification is
incorporated into a solicitation document. However, if the grantee or
subgrantee desires to have the review accomplished after a solicitation
has been developed, the awarding agency may still review the
specifications, with such review usually limited to the technical
aspects of the proposed purchase.
(2) Grantees and subgrantees must on request make available for
awarding agency pre-award review procurement documents, such as requests
for proposals or invitations for bids, independent cost estimates, etc.
when:
(i) A grantee's or subgrantee's procurement procedures or operation
fails to comply with the procurement standards in this section; or
(ii) The procurement is expected to exceed the simplified
acquisition threshold and is to be awarded without competition or only
one bid or offer is received in response to a solicitation; or
(iii) The procurement, which is expected to exceed the simplified
acquisition threshold, specifies a ``brand name'' product; or
(iv) The proposed award is more than the simplified acquisition
threshold and is to be awarded to other than the apparent low bidder
under a sealed bid procurement; or
(v) A proposed contract modification changes the scope of a contract
or increases the contract amount by more than the simplified acquisition
threshold.
(3) A grantee or subgrantee will be exempt from the pre-award review
in paragraph (g)(2) of this section if the awarding agency determines
that its procurement systems comply with the standards of this section.
(i) A grantee or subgrantee may request that its procurement system
be reviewed by the awarding agency to determine whether its system meets
these standards in order for its system to be certified. Generally,
these reviews shall occur where there is a continuous high-dollar
funding, and third-party contracts are awarded on a regular basis.
(ii) A grantee or subgrantee may self-certify its procurement
system. Such self-certification shall not limit the awarding agency's
right to survey the system. Under a self-certification procedure,
awarding agencies may wish to rely on written assurances from the
grantee or subgrantee that it is complying with these standards. A
grantee or subgrantee will cite specific procedures, regulations,
standards, etc., as being in compliance with these requirements and have
its system available for review.
(h) Bonding requirements. For construction or facility improvement
contracts or subcontracts exceeding the simplified acquisition
threshold, the awarding agency may accept the bonding policy and
requirements of the grantee or subgrantee provided the awarding agency
has made a determination that the awarding agency's interest is
adequately protected. If such a determination has not been made, the
minimum requirements shall be as follows:
(1) A bid guarantee from each bidder equivalent to five percent of
the bid price. The ``bid guarantee'' shall consist of a firm commitment
such as a bid bond, certified check, or other negotiable instrument
accompanying a bid as assurance that the bidder will, upon acceptance of
his bid, execute such contractual documents as may be required within
the time specified.
(2) A performance bond on the part of the contractor for 100 percent
of the contract price. A ``performance bond'' is one executed in
connection with a contract to secure fulfillment of all the contractor's
obligations under such contract.
(3) A payment bond on the part of the contractor for 100 percent of
the contract price. A ``payment bond'' is one executed in connection
with a contract to assure payment as required by law of all persons
supplying labor and material in the execution of the work provided for
in the contract.
(i) Contract provisions. A grantee's and subgrantee's contracts must
contain provisions in paragraph (i) of this section. Federal agencies
are permitted to require changes, remedies, changed conditions, access
and records retention, suspension of work, and other
[[Page 136]]
clauses approved by the Office of Federal Procurement Policy.
(1) Administrative, contractual, or legal remedies in instances
where contractors violate or breach contract terms, and provide for such
sanctions and penalties as may be appropriate. (Contracts more than the
simplified acquisition threshold)
(2) Termination for cause and for convenience by the grantee or
subgrantee including the manner by which it will be effected and the
basis for settlement. (All contracts in excess of $10,000)
(3) Compliance with Executive Order 11246 of September 24, 1965,
entitled ``Equal Employment Opportunity,'' as amended by Executive Order
11375 of October 13, 1967, and as supplemented in Department of Labor
regulations (41 CFR chapter 60). (All construction contracts awarded in
excess of $10,000 by grantees and their contractors or subgrantees)
(4) Compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C.
874) as supplemented in Department of Labor regulations (29 CFR Part 3).
(All contracts and subgrants for construction or repair)
(5) Compliance with the Davis-Bacon Act (40 U.S.C. 276a to 276a-7)
as supplemented by Department of Labor regulations (29 CFR Part 5).
(Construction contracts in excess of $2000 awarded by grantees and
subgrantees when required by Federal grant program legislation)
(6) Compliance with Sections 103 and 107 of the Contract Work Hours
and Safety Standards Act (40 U.S.C. 327-330) as supplemented by
Department of Labor regulations (29 CFR Part 5). (Construction contracts
awarded by grantees and subgrantees in excess of $2000, and in excess of
$2500 for other contracts which involve the employment of mechanics or
laborers)
(7) Notice of awarding agency requirements and regulations
pertaining to reporting.
(8) Notice of awarding agency requirements and regulations
pertaining to patent rights with respect to any discovery or invention
which arises or is developed in the course of or under such contract.
(9) Awarding agency requirements and regulations pertaining to
copyrights and rights in data.
(10) Access by the grantee, the subgrantee, the Federal grantor
agency, the Comptroller General of the United States, or any of their
duly authorized representatives to any books, documents, papers, and
records of the contractor which are directly pertinent to that specific
contract for the purpose of making audit, examination, excerpts, and
transcriptions.
(11) Retention of all required records for three years after
grantees or subgrantees make final payments and all other pending
matters are closed.
(12) Compliance with all applicable standards, orders, or
requirements issued under section 306 of the Clean Air Act (42 U.S.C.
1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive
Order 11738, and Environmental Protection Agency regulations (40 CFR
part 15). (Contracts, subcontracts, and subgrants of amounts in excess
of $100,000)
(13) Mandatory standards and policies relating to energy efficiency
which are contained in the state energy conservation plan issued in
compliance with the Energy Policy and Conservation Act (Pub. L. 94-163,
89 Stat. 871).
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6201, Feb. 21, 1992; 60 FR 19639, Apr. 19, 1995]
Sec. 33.37 Subgrants.
(a) States. States shall follow State law and procedures when
awarding and administering subgrants (whether on a cost reimbursement or
fixed amount basis) of financial assistance to local and Indian tribal
governments. States shall:
(1) Ensure that every subgrant includes any clauses required by
Federal statute and executive orders and their implementing regulations;
(2) Ensure that subgrantees are aware of requirements imposed upon
them by Federal statute and regulation;
(3) Ensure that a provision for compliance with Sec. 33.42 is placed
in every cost reimbursement subgrant; and
(4) Conform any advances of grant funds to subgrantees substantially
to the same standards of timing and
[[Page 137]]
amount that apply to cash advances by Federal agencies.
(b) All other grantees. All other grantees shall follow the
provisions of this part which are applicable to awarding agencies when
awarding and administering subgrants (whether on a cost reimbursement or
fixed amount basis) of financial assistance to local and Indian tribal
governments. Grantees shall:
(1) Ensure that every subgrant includes a provision for compliance
with this part;
(2) Ensure that every subgrant includes any clauses required by
Federal statute and executive orders and their implementing regulations;
and
(3) Ensure that subgrantees are aware of requirements imposed upon
them by Federal statutes and regulations.
(c) Exceptions. By their own terms, certain provisions of this part
do not apply to the award and administration of subgrants:
(1) Section 33.10;
(2) Section 33.11;
(3) The letter-of-credit procedures specified in Treasury
Regulations at 31 CFR part 205, cited in Sec. 33.21; and
(4) Section 33.50.
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6201, Feb. 21, 1992]
Reports, Records, Retention, and Enforcement
Sec. 33.40 Monitoring and reporting program performance.
(a) Monitoring by grantees. Grantees are responsible for managing
the day-to-day operations of grant and subgrant supported activities.
Grantees must monitor grant and subgrant supported activities to assure
compliance with applicable Federal requirements and that performance
goals are being achieved. Grantee monitoring must cover each program,
function or activity.
(b) Nonconstruction performance reports. The Federal agency may, if
it decides that performance information available from subsequent
applications contains sufficient information to meet its programmatic
needs, require the grantee to submit a performance report only upon
expiration or termination of grant support. Unless waived by the Federal
agency this report will be due on the same date as the final Financial
Status Report.
(1) Grantees shall submit annual performance reports unless the
awarding agency requires quarterly or semi-annual reports. However,
performance reports will not be required more frequently than quarterly.
Annual reports shall be due 90 days after the grant year, quarterly or
semi-annual reports shall be due 30 days after the reporting period. The
final performance report will be due 90 days after the expiration or
termination of grant support. If a justified request is submitted by a
grantee, the Federal agency may extend the due date for any performance
report. Additionally, requirements for unnecessary performance reports
may be waived by the Federal agency.
(2) Performance reports will contain, for each grant, brief
information on the following:
(i) A comparison of actual accomplishments to the objectives
established for the period. Where the output of the project can be
quantified, a computation of the cost per unit of output may be required
if that information will be useful.
(ii) The reasons for slippage if established objectives were not
met.
(iii) Additional pertinent information including, when appropriate,
analysis and explanation of cost overruns or high unit costs.
(3) Grantees will not be required to submit more than the original
and two copies of performance reports.
(4) Grantees will adhere to the standards in this section in
prescribing performance reporting requirements for subgrantees.
(c) Construction performance reports. For the most part, on-site
technical inspections and certified percentage-of-completion data are
relied on heavily by Federal agencies to monitor progress under
construction grants and subgrants. The Federal agency will require
additional formal performance reports only when considered necessary,
and never more frequently than quarterly.
[[Page 138]]
(d) Significant developments. Events may occur between the scheduled
performance reporting dates which have significant impact upon the grant
or subgrant supported activity. In such cases, the grantee must inform
the Federal agency as soon as the following types of conditions become
known:
(1) Problems, delays, or adverse conditions which will materially
impair the ability to meet the objective of the award. This disclosure
must include a statement of the action taken, or contemplated, and any
assistance needed to resolve the situation.
(2) Favorable developments which enable meeting time schedules and
objectives sooner or at less cost than anticipated or producing more
beneficial results than originally planned.
(e) Federal agencies may make site visits as warranted by program
needs.
(f) Waivers, extensions. (1) Federal agencies may waive any
performance report required by this part if not needed.
(2) The grantee may waive any performance report from a subgrantee
when not needed. The grantee may extend the due date for any performance
report from a subgrantee if the grantee will still be able to meet its
performance reporting obligations to the Federal agency.
Sec. 33.41 Financial reporting.
(a) General. (1) Except as provided in paragraphs (a) (2) and (5) of
this section, grantees will use only the forms specified in paragraphs
(a) through (e) of this section, and such supplementary or other forms
as may from time to time be authorized by OMB, for:
(i) Submitting financial reports to Federal agencies, or
(ii) Requesting advances or reimbursements when letters of credit
are not used.
(2) Grantees need not apply the forms prescribed in this section in
dealing with their subgrantees. However, grantees shall not impose more
burdensome requirements on subgrantees.
(3) Grantees shall follow all applicable standard and supplemental
Federal agency instructions approved by OMB to the extend required under
the Paperwork Reduction Act of 1980 for use in connection with forms
specified in paragraphs (b) through (e) of this section. Federal
agencies may issue substantive supplementary instructions only with the
approval of OMB. Federal agencies may shade out or instruct the grantee
to disregard any line item that the Federal agency finds unnecessary for
its decisionmaking purposes.
(4) Grantees will not be required to submit more than the original
and two copies of forms required under this part.
(5) Federal agencies may provide computer outputs to grantees to
expedite or contribute to the accuracy of reporting. Federal agencies
may accept the required information from grantees in machine usable
format or computer printouts instead of prescribed forms.
(6) Federal agencies may waive any report required by this section
if not needed.
(7) Federal agencies may extend the due date of any financial report
upon receiving a justified request from a grantee.
(b) Financial Status Report--(1) Form. Grantees will use Standard
Form 269 or 269A, Financial Status Report, to report the status of funds
for all nonconstruction grants and for construction grants when required
in accordance with Sec. 33.41(e)(2)(iii).
(2) Accounting basis. Each grantee will report program outlays and
program income on a cash or accrual basis as prescribed by the awarding
agency. If the Federal agency requires accrual information and the
grantee's accounting records are not normally kept on the accural basis,
the grantee shall not be required to convert its accounting system but
shall develop such accrual information through and analysis of the
documentation on hand.
(3) Frequency. The Federal agency may prescribe the frequency of the
report for each project or program. However, the report will not be
required more frequently than quarterly. If the Federal agency does not
specify the frequency of the report, it will be submitted annually. A
final report will be required upon expiration or termination of grant
support.
(4) Due date. When reports are required on a quarterly or semiannual
basis, they will be due 30 days after the
[[Page 139]]
reporting period. When required on an annual basis, they will be due 90
days after the grant year. Final reports will be due 90 days after the
expiration or termination of grant support.
(c) Federal Cash Transactions Report--(1) Form. (i) For grants paid
by letter or credit, Treasury check advances or electronic transfer of
funds, the grantee will submit the Standard Form 272, Federal Cash
Transactions Report, and when necessary, its continuation sheet,
Standard Form 272a, unless the terms of the award exempt the grantee
from this requirement.
(ii) These reports will be used by the Federal agency to monitor
cash advanced to grantees and to obtain disbursement or outlay
information for each grant from grantees. The format of the report may
be adapted as appropriate when reporting is to be accomplished with the
assistance of automatic data processing equipment provided that the
information to be submitted is not changed in substance.
(2) Forecasts of Federal cash requirements. Forecasts of Federal
cash requirements may be required in the ``Remarks'' section of the
report.
(3) Cash in hands of subgrantees. When considered necessary and
feasible by the Federal agency, grantees may be required to report the
amount of cash advances in excess of three days' needs in the hands of
their subgrantees or contractors and to provide short narrative
explanations of actions taken by the grantee to reduce the excess
balances.
(4) Frequency and due date. Grantees must submit the report no later
than 15 working days following the end of each quarter. However, where
an advance either by letter of credit or electronic transfer of funds is
authorized at an annualized rate of one million dollars or more, the
Federal agency may require the report to be submitted within 15 working
days following the end of each month.
(d) Request for advance or reimbursement--(1) Advance payments.
Requests for Treasury check advance payments will be submitted on
Standard Form 270, Request for Advance or Reimbursement. (This form will
not be used for drawdowns under a letter of credit, electronic funds
transfer or when Treasury check advance payments are made to the grantee
automatically on a predetermined basis.)
(2) Reimbursements. Requests for reimbursement under nonconstruction
grants will also be submitted on Standard Form 270. (For reimbursement
requests under construction grants, see paragraph (e)(1) of this
section.)
(3) The frequency for submitting payment requests is treated in
Sec. 33.41(b)(3).
(e) Outlay report and request for reimbursement for construction
programs--(1) Grants that support construction activities paid by
reimbursement method. (i) Requests for reimbursement under construction
grants will be submitted on Standard Form 271, Outlay Report and Request
for Reimbursement for Construction Programs. Federal agencies may,
however, prescribe the Request for Advance or Reimbursement form,
specified in Sec. 33.41(d), instead of this form.
(ii) The frequency for submitting reimbursement requests is treated
in Sec. 33.41(b)(3).
(2) Grants that support construction activities paid by letter of
credit, electronic funds transfer or Treasury check advance. (i) When a
construction grant is paid by letter of credit, electronic funds
transfer or Treasury check advances, the grantee will report its outlays
to the Federal agency using Standard Form 271, Outlay Report and Request
for Reimbursement for Construction Programs. The Federal agency will
provide any necessary special instruction. However, frequency and due
date shall be governed by Sec. 33.41(b) (3) and (4).
(ii) When a construction grant is paid by Treasury check advances
based on periodic requests from the grantee, the advances will be
requested on the form specified in Sec. 33.41(d).
(iii) The Federal agency may substitute the Financial Status Report
specified in Sec. 33.41(b) for the Outlay Report and Request for
Reimbursement for Construction Programs.
[[Page 140]]
(3) Accounting basis. The accounting basis for the Outlay Report and
Request for Reimbursement for Construction Programs shall be governed by
Sec. 33.41(b)(2).
[53 FR 8070 and 8087, Mar. 11, 1988. Redesignated and amended at 57 FR
6199 and 6201, Feb. 21, 1992]